Inventory and Real Estate Risk Associated with the Land-Sourced Contracting Model
First written in FY2016. 24 of 32 entries say "Worsened", first in FY2018. Latest entry: 2026-10-15.
First-corporation moved to the "Worse" side of this theme in 2018, 4 years before the typical company in this theme (2022).
The whole theme swung hardest in 2020: 8 of 23 companies on the "Worse" side.
13 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「The main factors were decreases of ¥2,775.407 million in cash and deposits and ¥792.612 million in for-sale real estate, while work in progress for-sale real estate and accounts receivable from completed construction contracts and other receivables increased by ¥9,500.435 million and ¥978.008 million, respectively.」
Work in progress for-sale real estate increased by ¥9,500.435 million from the end of the previous fiscal year to ¥17,066.363 million, while assets pledged as collateral increased to ¥10,913.683 million. - FY2026-H1WorsenedAnnual report
「The main factors were decreases of ¥1,889.659 million in cash and deposits and ¥1,942.289 million in for-sale real estate, while notes and accounts receivable, including accounts receivable from completed construction contracts, and work in progress for-sale real estate increased by ¥5,431.940 million and ¥7,249.348 million, respectively.」
Work in progress for-sale real estate increased by ¥7,249.348 million from the end of the previous consolidated fiscal year to ¥14,815.276 million. Total assets pledged as collateral also increased to ¥10,356.339 million, increasing inventory and collateral exposure associated with the build-to-order model. - FY2025-H1WorsenedAnnual report
「The main factors were decreases of ¥1,133.771 million in cash and deposits, ¥1,146.963 million in electronically recorded monetary claims, and ¥648.235 million in for-sale real estate, while notes and accounts receivable, including accounts receivable from completed construction contracts, and work in progress for-sale real estate increased by ¥5,208.752 million and ¥1,815.791 million, respectively.」
Work in progress for-sale real estate increased by ¥1,815.791 million to ¥10,352.686 million, increasing inventory exposure associated with the build-to-order model. - FY2024WorsenedAnnual report
「The main factors were increases of ¥1,363.632 million in work in progress for-sale real estate, ¥689.261 million in for-sale real estate, and ¥1,415.078 million in electronically recorded monetary claims, while notes and accounts receivable, including accounts receivable from completed construction contracts, and cash and deposits decreased by ¥625.021 million and ¥944.903 million, respectively.」
Work in progress for-sale real estate increased by ¥1,363.632 million from the end of the previous consolidated fiscal year to ¥8,536.895 million, while total assets pledged as collateral increased to ¥5,154.333 million. - FY2024-Q3WorsenedAnnual report
「Work in progress for-sale real estate: ¥3,679.234 million, ¥3,839.851 million; total: ¥3,679.234 million, ¥3,839.851 million.」
Work in progress for-sale real estate increased from ¥7,173.262 million at the end of the previous consolidated fiscal year to ¥8,988.579 million, while the amount pledged as collateral increased from ¥3,679.234 million to ¥3,839.851 million. Inventory and collateral exposure increased. - FY2024-Q2WorsenedAnnual report
「Assets pledged as collateral were as follows: previous consolidated fiscal year, work in progress for-sale real estate, ¥3,679.234 million; for-sale real estate, nil; total, ¥3,679.234 million. Second quarter of the current consolidated fiscal year, work in progress for-sale real estate, ¥4,094.891 million; for-sale real estate, ¥237.964 million; total, ¥4,332.856 million.」
Work in progress for-sale real estate increased from ¥7,173.262 million at the end of the previous consolidated fiscal year to ¥8,631.992 million, while assets pledged as collateral increased from ¥3,679.234 million to ¥4,332.856 million. Inventory and collateral exposure has increased. - FY2024-Q1WorsenedAnnual report
「Assets pledged as collateral were as follows: previous consolidated fiscal year, work in progress for-sale real estate, ¥3,679.234 million; first quarter of the current consolidated fiscal year, work in progress for-sale real estate, ¥4,999.119 million.」
Work in progress for-sale real estate increased from ¥7,173.262 million at the end of the previous consolidated fiscal year to ¥8,890.587 million, while assets pledged as collateral increased from ¥3,679.234 million to ¥4,999.119 million. Inventory and collateral exposure has increased. - FY2023WorsenedAnnual report
「Total assets at the end of the consolidated fiscal year amounted to ¥21,466.967 million. The main components were work in progress for-sale real estate of ¥7,173.262 million, notes and accounts receivable, including accounts receivable from completed construction contracts, of ¥6,278.538 million, and cash and deposits of ¥5,062.508 million.」
Work in progress for-sale real estate amounted to ¥7,173.26 million, and inventory and advances exposure associated with the build-to-order model was disclosed on a full-year consolidated basis. Work in progress for-sale real estate pledged as collateral amounted to ¥3,679.23 million. - FY2023-Q3WorsenedAnnual report
「Assets pledged as collateral were as follows: previous fiscal year, work in progress for-sale real estate, ¥2,454.475 million; third quarter of the current fiscal year, work in progress for-sale real estate, ¥3,283.415 million.」
For-sale real estate increased by ¥1,547.088 million from the end of the previous fiscal year, and work in progress for-sale real estate increased by ¥404,? million. Work in progress for-sale real estate pledged as collateral also increased to ¥3,283.415 million. Inventory and collateral exposure has increased. - FY2023-Q2WorsenedAnnual report
「The main factors were a decrease of ¥2,306.399 million in cash and deposits, while notes and accounts receivable, including accounts receivable from completed construction contracts, for-sale real estate, and work in progress for-sale real estate increased by ¥2,372.209 million, ¥1,614.254 million, and ¥697.229 million, respectively.」
For-sale real estate increased by ¥1,614.254 million and work in progress for-sale real estate by ¥697.229 million, increasing inventory exposure associated with the build-to-order model. Work in progress for-sale real estate pledged as collateral also amounted to ¥3,598.924 million. - FY2023-Q1WorsenedAnnual report
「This was mainly attributable to a ¥425.240 million decrease in cash and deposits, while work in progress for sale increased by ¥1,706.699 million and notes and accounts receivable—trade, accrued revenue from completed construction contracts and other items increased by ¥239.958 million.」
Work in progress for-sale real estate increased by ¥1,706.699 million from the end of the previous fiscal year, increasing inventory exposure associated with the build-to-order model. - FY2022MitigatedAnnual report
「The main factor was an increase of ¥646.003 million in cash and deposits and ¥225.655 million in accounts receivable from completed construction contracts, while for-sale real estate decreased by ¥810.178 million.」
For-sale real estate decreased by ¥810.178 million from the end of the previous fiscal year, reducing inventory exposure. - FY2022-Q3Updated inventory and collateral compositionAnnual report
「For-sale real estate: ¥910.135 million, ¥1,982.457 million; work in progress for-sale real estate: ¥3,953.588 million, ¥2,454.475 million; total: ¥4,863.724 million, ¥4,436.933 million.」
Total assets pledged as collateral decreased from ¥4,863.724 million at the end of the previous fiscal year to ¥4,436.933 million, while the collateral amount for for-sale real estate increased and that for work in progress for-sale real estate decreased. The composition of inventory and collateral has changed. - FY2022-Q2Real estate inventory declined, work in progress increased, and collateral decreasedAnnual report
「For-sale real estate: ¥910.135 million, nil; work in progress for-sale real estate: ¥3,953.588 million, ¥3,965.727 million; total: ¥4,863.724 million, ¥3,965.727 million.」
For-sale real estate is no longer pledged as collateral, and total assets pledged as collateral decreased from ¥4,863.724 million to ¥3,965.727 million. Meanwhile, work in progress for-sale real estate increased, changing the composition of inventory. - FY2022-Q1Updated inventory and collateral compositionAnnual report
「Assets pledged as collateral were as follows: for-sale real estate, nil; work in progress for-sale real estate, ¥3,954.715 million; total, ¥3,954.715 million.」
For-sale real estate is no longer pledged as collateral, while work in progress for-sale real estate pledged as collateral amounted to ¥3,954.715 million. The composition and scale of assets pledged as collateral have changed from the previous fiscal year-end total of ¥4,863.724 million. - FY2021Updated inventory composition and operating cash flowAnnual report
「The main factor was an increase of ¥2,549.899 million in work in progress for-sale real estate, while accounts receivable from completed construction contracts and for-sale real estate decreased by ¥271.305 million and ¥2,883.306 million, respectively.」
Work in progress for-sale real estate increased while for-sale real estate declined, resulting in a ¥356.172 million increase in cash from operating activities attributable to total inventories. The composition of inventory exposure has changed. - FY2021-Q3WorsenedAnnual report
「This was mainly attributable to a ¥2,018.831 million decrease in cash and deposits, while notes and accounts receivable—trade, accrued revenue from completed construction contracts and other items increased by ¥2,199.302 million, work in progress for sale increased by ¥2,250.895 million, and real estate for sale increased by ¥463.589 million.」
Work in progress for-sale real estate and for-sale real estate increased, while assets pledged as collateral rose to a total of ¥7,672.207 million and secured debt increased to a total of ¥6,430 million. Exposure related to inventory and borrowings has increased. - FY2021-Q2WorsenedAnnual report
「Assets pledged as collateral were as follows: for-sale real estate, ¥2,839.086 million; work in progress for-sale real estate, ¥4,676.874 million; total, ¥7,515.961 million.」
Work in progress for-sale real estate increased from ¥3,594.222 million at the end of the previous fiscal year to ¥6,355.569 million, while real estate pledged as collateral also increased to a total of ¥7,515.961 million. Exposure related to inventory and borrowings has increased. - FY2020WorsenedAnnual report
「Total assets at the end of the fiscal year amounted to ¥17,941.305 million, an increase of ¥6,719.448 million from the end of the previous fiscal year. The main factors were increases of ¥936.144 million in accounts receivable from completed construction contracts, ¥1,955.580 million in for-sale real estate, and ¥3,594.222 million in work in progress for-sale real estate.」
For-sale real estate and work in progress for-sale real estate increased due to purchases of business-use land and other assets, increasing inventory exposure associated with the build-to-order model. - FY2020-Q3WorsenedAnnual report
「Work in progress for-sale real estate of ¥1,065.076 million and for-sale real estate of ¥5,532.497 million were recorded.」
Work in progress for-sale real estate of ¥1,065 million and for-sale real estate of ¥5,532 million were recorded. For-sale real estate increased by ¥3,234 million from the end of the previous fiscal year. In addition, real estate totaling ¥3,886 million has been pledged as collateral for borrowings, increasing inventory exposure. - FY2020-Q2MaterialisedAnnual report
「In addition, due to prolonged negotiations over land and changes to delivery timing, the sale of business-use land planned for the cumulative second quarter is expected to be delayed until the third quarter or later.」
Due to prolonged negotiations over land and changes to delivery timing, the planned sale of business-use land is expected to be delayed until the third quarter or later. For-sale real estate has also increased by ¥807 million from the end of the previous fiscal year. - FY2018WorsenedAnnual report
「In cases ③ and ④, we may acquire business-use land in advance of selecting a developer, in view of our current financial position. However, if an impairment loss becomes necessary due to inventory remaining unsold for an extended period or deteriorating real estate market conditions, this could affect our financial position and operating results.」
The disclosure now explicitly states that business-use land may be acquired before a developer is selected, and expands the explanation of the risk of impairment losses resulting from inventory remaining unsold for an extended period or worsening market conditions. - FY2016First statedAnnual report
「To reduce inventory risk, the Company generally enters into contracts relating to development sites only after selecting a developer. In cases ③ and ④ above, however, the sites remain the Company’s inventory until handover is completed.」
The Company recognizes the risk of an unsuccessful sale to the intended buyer, prolonged inventory holding periods and valuation losses resulting from deteriorating real estate market conditions.