Risks Related to Competition, Land and Labor Procurement from Concentration in the Tokyo Area

「The area has historically been highly competitive because small and mid-sized general contractors operate there alongside major general contractors. In addition, if factors arise such as a shortage of promising development sites, higher condominium supply prices due to rising land prices and construction costs, difficulty in securing personnel and subcontractors, or intensifying competition from new market entrants, the number of orders may decline, potentially affecting the group's financial condition and operating results.」

「In the construction industry, public construction investment remains firm, but the industry continues to require close monitoring due in part to the impact of soaring construction material prices.」

「The area has historically been highly competitive because small and mid-sized general contractors operate there alongside major general contractors. In addition, if factors arise such as a shortage of promising development sites, higher condominium supply prices due to rising land prices and construction costs, difficulty in securing personnel and subcontractors, or intensifying competition from new market entrants, the number of orders may decline, potentially affecting the company's financial condition and operating results.」

「In calendar 2019, condominium construction starts in the Tokyo metropolitan area, our main business area, comprising Tokyo, Kanagawa, Saitama and Chiba prefectures, recovered to 59,406 units, up 7.6% year on year, despite rising land prices and intensifying competition to acquire sites for newly built condominiums.」

「The number of condominium construction starts in the Tokyo metropolitan area, our main business area, comprising Tokyo, Kanagawa, Saitama and Chiba prefectures, was 55,195 units in calendar 2018, down 14.8% year on year and below the initial expectation of maintaining 60,000 units for 8 consecutive years. Factors included intensified competition among developers to acquire development sites, persistently high condominium prices and concerns over the consumption tax increase.」

「The company opened its Kyushu branch in April 2018 and expanded its operating area to Kyushu and surrounding areas, but its primary business area remains the Tokyo metropolitan area, comprising Tokyo, Kanagawa, Saitama and Chiba prefectures.」

「If factors arise such as a shortage of promising business sites, higher land prices, higher construction costs caused by Olympic demand and other factors, higher condominium supply prices, difficulty procuring personnel or partner companies, or intensified competition from new entrants, the number of orders may decline, which could affect the Company’s financial position and operating performance.」