Risk of fixed-cost burdens from long-term facility leases and declining occupancy
First written in FY2016. 9 of 18 entries say "Worsened", first in FY2022. Latest entry: 2026-06-12.
Care Twentyone moved to the "Worse" side of this theme in 2023, 2 years after the typical company in this theme (2021).
The whole theme swung hardest in 2024: 5 of 15 companies on the "Worse" side.
2 other companies' latest entry also says "Materialised".
- FY2026-H1MaterialisedAnnual report
「Loss on closure of facilities 527,521 The loss on closure of facilities recorded as an extraordinary loss represents the reasonably estimated amount of various costs associated with terminating the building lease and supporting residents’ relocations in connection with the closure of the fee-based residential care facility for the elderly, Prezan Luxe Minami-Aoyama (scheduled to close on 30 September 2026).」
In connection with long-term facility leases, the company recorded ¥527.521 million as a loss on closure of facilities for contract termination costs, relocation support costs and other expenses associated with the closure of Prezan Luxe Minami-Aoyama, reflecting the fixed-cost burden as an actual loss. - 2026-05-20WorsenedOccurring Fact
「In connection with this matter, the Group expects to record various costs associated with terminating the building lease agreement and costs related to supporting residents' relocations as extraordinary losses in its consolidated results for the fiscal year ending October 2026.」
Indicates that costs of terminating the building lease agreement and supporting residents' relocations in connection with the facility closure are expected to be recorded as extraordinary losses, making the fixed-cost burden associated with long-term facility leases concrete. - FY2025WorsenedAnnual report
「As of the end of the consolidated fiscal year, security deposits paid amounted to ¥3,219.274 million, representing 10.4% of total assets. The contract terms are generally 20–25 years」
Although the balance of security deposits paid declined slightly, the ratio to total assets rose from 10.2% to 10.4%. Total non-cancellable operating lease payments also increased to ¥16,015 million, providing a more concrete measure of the long-term fixed-cost burden. - FY2025-H1WorsenedAnnual report
「Security deposits paid 3,235,345 3,256,759」
Security deposits paid increased from ¥3,235 million at the end of the previous fiscal year to ¥3,256 million, increasing the fixed funding burden associated with long-term facility leases. - FY2024MitigatedAnnual report
「As of the end of the consolidated fiscal year, security deposits paid amounted to ¥3,235.345 million, representing 10.2% of total assets. The contract terms are generally 20–25 years」
Long-term leases remain in place, while security deposits paid decreased from ¥3,328 million at the end of the previous fiscal year to ¥3,235 million. - FY2024-Q2WorsenedAnnual report
「This was mainly attributable to a ¥598 million increase in other tangible fixed assets, net, a ¥37 million increase in leasehold deposits, a ¥306 million decrease in lease assets, net, and a ¥249 million decrease in investment securities.」
Security deposits paid relating to long-term facility leases increased by ¥37 million from the end of the previous fiscal year, increasing the fixed funding burden. - FY2024-Q1WorsenedAnnual report
「Security deposits paid 3,328,336 3,366,592」
Security deposits paid increased from ¥3,328 million at the end of the previous consolidated fiscal year to ¥3,366 million, increasing the fixed funding burden associated with long-term facility leases. - FY2023-Q3WorsenedAnnual report
「This was mainly attributable to a ¥554 million increase in leasehold deposits, an ¥867 million increase in other tangible fixed assets, net, a ¥690 million decrease in lease assets, net, and a ¥575 million decrease in investment securities.」
Security deposits paid relating to long-term facility leases increased by ¥554 million year on year, increasing the fixed funding burden. - FY2023-Q2WorsenedAnnual report
「Security deposits paid increased from ¥2,701 million at the end of the previous consolidated fiscal year to ¥2,796 million.」
Security deposits paid relating to long-term facility leases increased by ¥542 million from the end of the previous fiscal year, increasing the fixed funding burden. - FY2023-Q1WorsenedAnnual report
「Security deposits paid increased from ¥2,701 million at the end of the previous consolidated fiscal year to ¥2,796 million.」
Security deposits paid relating to long-term facility leases increased by ¥95 million from the end of the previous fiscal year, increasing the fixed funding burden. - FY2022WorsenedAnnual report
「As of the end of the consolidated fiscal year, security deposits paid amounted to ¥2,701.908 million, representing 7.4% of total assets. The contract terms are generally 20–25 years」
Security deposits paid increased from ¥2,472 million in the previous fiscal year to ¥2,701 million, while the ratio to total assets rose from 6.6% to 7.4%. The company has quantified more clearly the fixed-cost and security deposit recovery risks associated with long-term leases. - FY2021RestatedAnnual report
「As of the end of the consolidated fiscal year, security deposits paid amounted to ¥2,472.908 million, representing 6.6% of total assets. The contract terms are generally 20–25 years」
The company continues to disclose, including the amounts, the fixed-cost and recovery risks associated with security deposits paid and 20–25-year long-term leases. - FY2019RestatedAnnual report
「The contract terms are generally 20–25 years, providing landlords with stable long-term income and enabling the company to lease and operate facilities on a stable, continuing basis. However, because it is difficult to close facilities or revise resident fees over a short period」
The company continues to indicate that long-term leases support stable operations, while fixed-cost burdens remain if occupancy rates decline. - FY2018RestatedAnnual report
「The contract terms are generally 20–25 years, providing landlords with stable long-term income and enabling the company to lease and operate facilities on a stable, continuing basis. However, because it is difficult to close facilities or revise resident fees over a short period」
The company continues to indicate that long-term leases support stable operations, while fixed-cost burdens remain if occupancy rates decline. - FY2017RestatedAnnual report
「The contract terms are generally 20–25 years, providing landlords with stable long-term income and enabling the company to lease and operate facilities on a stable, continuing basis. However, because it is difficult to close facilities or revise resident fees over a short period」
The company continues to indicate that long-term leases support stable operations, while fixed-cost burdens remain if occupancy rates decline. - FY2016First statedAnnual report
「Contract terms are generally 20 to 25 years, providing landlords with stable long-term income and allowing us to lease and operate facilities on a stable, ongoing basis. However, because it is difficult to close facilities or revise resident fees over a short period, a significant decline in utilization or a substantial fall in market rents and fees charged by competitors could affect our business development and performance.」
Describes the stable operations enabled by 20- to 25-year leases, while highlighting the difficulty of closing facilities or revising fees if utilization falls or market rents decline.