Risk of inventory buildup, discounts and valuation losses on real estate held for sale and other assets
First written in FY2022. 9 of 15 entries say "Worsened", first in FY2023. Latest entry: 2026-10-19.
Home Position moved to the "Worse" side of this theme in 2023, 1 year after the typical company in this theme (2022).
The whole theme swung hardest in 2026: 20 of 35 companies on the "Worse" side.
14 other companies' latest entry also says "Worsened".
- FY2026-H1WorsenedAnnual report
「This was mainly due to an increase of ¥1,079.369 million in real estate under development for sale.」
Real estate for sale and related assets increased from ¥10,682.616 million at the end of the previous fiscal year to ¥11,060.297 million at the end of the interim period, increasing exposure to the risks of slow-moving inventory, price discounts, and valuation losses. - FY2025WorsenedAnnual report
「At the end of the fiscal year, the balance of real estate for sale and related assets was ¥10,682.616 million, representing approximately 73.8% of total assets.」
The balance of real estate for sale and related assets increased from ¥8,223.976 million in the previous fiscal year, while the inventory turnover period deteriorated from 6.5 months to 7.5 months. Exposure to the risks of slow-moving inventory, price discounts, and valuation losses has increased. - FY2025-H1WorsenedAnnual report
「The increase in real estate under development for sale and real estate for sale resulted from strengthening acquisitions in the Kanto region using funds raised through a third-party allotment.」
As a result of allocating funds raised through a third-party allotment to acquisitions in the Kanto region, inventories increased by a total of ¥1,728.578 million, expanding the amount held in real estate for sale and related assets. - FY2024MaterialisedAnnual report
「We had expected the industry-wide excess inventory in the Tokai area and some suburban properties that had continued from the previous fiscal year to be temporarily resolved toward the summer, as in the previous fiscal year. However, excess inventory persisted in some areas, delaying the recovery in selling prices. As a result of lower revenue and the recognition of inventory valuation losses due to declining selling prices, operating income, ordinary income, and net income for the fiscal year were significantly below the previous fiscal year.」
Prolonged excess inventory, a delayed recovery in selling prices, and the recognition of inventory valuation losses actually occurred and reduced profit. Meanwhile, the period-end inventory balance and inventory turnover period have improved. - FY2024-Q3MaterialisedAnnual report
「During the cumulative third quarter period, profit declined year on year, mainly due to the promotion of sales activities involving adjustments to selling prices in suburban areas.」
Although revenue increased as a result of sales activities involving adjusted prices in suburban areas, the effects of discounts and selling-price adjustments continue to appear as a decline in profit. - FY2024-Q2MaterialisedAnnual report
「We adjust inventory levels and selling prices in response to demand trends in each area, but industry-wide excess inventory has emerged in some suburban areas and elsewhere. Although revenue increased year on year as a result of promoting sales activities involving adjustments to inventory levels and selling prices for suburban properties, our main product category, profit declined.」
Excess inventory has emerged in suburban areas and elsewhere. Although revenue increased as a result of sales activities involving adjustments to inventory levels and selling prices, the impact has appeared as a decline in profit. - FY2024-Q1WorsenedAnnual report
「We adjust inventory levels and selling prices in response to demand trends in each area, but industry-wide excess inventory has emerged in some suburban areas and elsewhere. Sales of suburban properties, our main product category, have been weak, resulting in year-on-year declines in revenue and profit.」
While the company is adjusting inventory levels and selling prices, industry-wide excess inventory has emerged in suburban areas and elsewhere, and weak sales have resulted in declines in revenue and profit. Real estate held for sale and other assets increased from ¥11,920.512 million to ¥13,460.984 million, while their ratio to total assets rose from approximately 79.1% to approximately 84.3%. - FY2023WorsenedAnnual report
「The balance of real estate held for sale and other assets at the end of the fiscal year was ¥11,920.512 million, representing 79.1% of total assets.」
The balance of real estate held for sale and other assets increased from ¥10,278.466 million to ¥11,920.512 million, and its ratio to total assets was 79.1%. The company continues to explicitly identify the risks of stagnant inventory, discounts, and valuation losses. - FY2022First statedAnnual report
「The balance of real estate held for sale and other assets at the end of the fiscal year was ¥10,278.466 million, representing 77.4% of total assets. We believe that actively acquiring and holding real estate held for sale and other assets contributes to flexible sales in line with customer demand and helps avoid lost opportunities. On the other hand, declining customer demand or changes in customer preferences may result in funds being tied up in stagnant inventory, lower profit margins due to discounted sales, or the recognition of a substantial inventory valuation loss.」
As a consequence of its policy of actively holding real estate held for sale and other assets, the company explicitly identifies the possibility of stagnant inventory, discounts, and inventory valuation losses.