TOSEI CORPORATION

Business Details

Sources office buildings, commercial facilities, rental condominiums and other properties with deteriorated asset value through diverse methods (direct purchase, real estate M&A, acquisition of secured receivables, etc.), applies a "Value-Up Plan" consisting of four elements—improved design, enhanced security, eco-friendliness, and improved profitability—and sells the resulting "restructured real estate" to investors, real estate funds, and corporations. The company also engages in the "Restyling Business," acquiring whole-building rental condominiums, adding value, and selling them as unit sales. In the first half of FY2026 (ending March 2026), revenue was ¥56,250 million, accounting for approximately 65% of consolidated revenue, making it the core business driving the Group's performance.

Recent Overview

H1 revenue surged 93.2% YoY, achieving 95.7% of the full-year plan

In the first half of FY2026 (ending November 2026) (December 1, 2025 to May 31, 2026), the Real Estate Restructuring Business achieved substantial revenue and profit growth, with revenue of ¥56,250 million (up 93.2% YoY) and segment profit of ¥11,859 million (up 113.8% YoY). Sales of office buildings and rental condominiums particularly drove performance, with 38 value-up properties and 82 used unit condominiums sold. The progress rate against the full-year operating profit plan reached 95.7%, leading the Group's overall performance. On the sourcing side, the company acquired 20 buildings including income-producing office buildings and rental condominiums, 8 land parcels, and 132 used unit condominiums, continuing to build up future revenue sources.

Key Products

Growth Drivers

• Continued robust real estate investment demand from domestic and foreign investors (domestic real estate investment for January-March 2026 exceeded ¥2 trillion for the second consecutive year as a first quarter)
• Tightening supply-demand balance and rising rents in the Tokyo metropolitan office building and rental condominium markets, pushing up sale prices of value-up properties (average vacancy rate of 2.2% in Tokyo's five central wards, average rent up 8.2% YoY)
• Competitive property acquisition through diverse sourcing methods (direct purchase, real estate M&A, acquisition of secured receivables, etc.)
• Differentiation through expansion of sustainability-oriented and environmentally conscious products under the medium-term management plan "Further Evolution 2026"
• Improved profitability of value-up properties due to strengthening rental demand in the Tokyo metropolitan rental condominium market (average asking rent up 11.0% YoY in April 2026)

Risks

• Risk of declining real estate investment demand amid rising interest rates (potential for continued policy rate hikes by the Bank of Japan)
• Rising value-up construction costs due to persistently high construction costs, impacting profit margins (reinforced concrete construction costs up 16.0% YoY)
• Fluctuations in interim/quarterly performance due to concentration or dispersion of property sale timing (potential for limited additional gains in the second half following achievement of 95.7% of the full-year plan in H1)
• Risk of supply delays for construction materials and equipment due to supply chain disruptions amid escalating tensions in the Middle East
• Rising acquisition costs for high-quality properties due to intensifying sourcing competition