Real Estate Development Project Delays, Cancellations and Additional Costs
First written in FY2016. 3 of 4 entries say "Mitigated", first in FY2022. Latest entry: FY2025.
The whole theme swung hardest in 2024: 3 of 6 companies on the "Worse" side.
2 other companies' latest entry also says "Mitigated".
- FY2025MitigatedAnnual report
「We deliberate based on a multifaceted risk assessment covering 16 divisions and 27 items, including legal risks, soil and groundwater contamination, ground risks, disaster risks such as flooding, environmental issues and the appropriateness of construction costs, including ESG considerations.」
It specified the investment review process for real estate development risks as an assessment covering 16 divisions and 27 items, demonstrating a framework under which investments may be declined not only for economic reasons but also because of environmental impacts and other factors. - FY2023MitigatedAnnual report
「When raising the hurdle rate, we also introduced investment decision criteria using ICP (internal carbon pricing), with the aim of strengthening not only profitability considerations but also the sustainability perspective.」
It raised the IRR hurdle rate for real estate development investments to 10% and strengthened its reviews to cover profitability, interest rates and environmental considerations by adding ICP to the investment decision criteria. - FY2022MitigatedAnnual report
「IRR is used as the primary indicator for real estate development projects, but projects are also deliberated based on a multifaceted risk assessment covering 16 divisions and 26 items, including whether the business is consistent with the Group's management philosophy, management strategy and brand image, as well as legal risks, soil and groundwater contamination, ground risks, disaster risks, environmental issues and the appropriateness of construction costs, including ESG considerations.」
To address the risks of delays, cancellations and additional costs in real estate development projects, it has introduced a multifaceted investment review covering 16 divisions and 26 items in addition to IRR. - FY2016First statedAnnual report
「During the course of a project, unforeseen costs may arise, or the project may be delayed or cancelled due to various circumstances, which could adversely affect business performance and other matters.」
It identifies the project risks of real estate development, which requires substantial costs and a long period of time.