Expanding Earnings through Sales and Acquisitions of Rental Properties

「Under these economic conditions, during the six-month consolidated accounting period the group sold part of its rental properties held, while」

「The company had aimed to actively sell properties held, securing revenue of ¥3,460 million through the sale of 8 properties, but sold only 6 properties for ¥2,345 million. This was the main reason revenue and profit at each stage fell short of target.」

「Under these economic conditions, during the six-month consolidated accounting period the group sold a total of 3 rental properties, while advancing preparations to sell rental properties held in order to secure gains on sale from the third quarter onward.」

「While working to strengthen stable earnings through the acquisition and sale of rental properties, the company sought out companies and projects with strong growth potential and social value, and worked to secure its future potential and profitability as an investment company through capital and business alliances.」

「The company newly acquired 7 rental properties with a total tax-exclusive acquisition price of ¥4,480 million, securing an annual rental income base of ¥1.1 billion. In parallel, it sold 1 rental property while proceeding with preparations to sell rental properties currently held.」

「The company newly acquired 6 rental properties with a total acquisition cost excluding tax of ¥3,720 million, securing annual rental income of ¥1.1 billion. At the same time, it prepared to sell rental properties held in order to secure gains on sale from the second quarter onward.」

「New acquisition of 4 rental properties and consideration of selling income-generating properties held」

「To strengthen stable earnings over the medium to long term, the company actively acquired rental properties with the goal of securing annual rental income of ¥1 billion, acquiring a total of 7 properties, including Cosmo Lead Hachioji.」

「Total capital expenditures made during the current consolidated fiscal year, including items recorded as lease assets, amounted to ¥1,960 million. The main components were ¥1,648 million for the acquisition of 4 rental properties and ¥300 million in intangible assets.」

「The group sold part of its income-generating properties during the second quarter, and during the third quarter also sold part of its income-generating properties and hotel properties it held.」

「In addition, following the partial sale of income-producing real estate, revenue was ¥1,069 million, down 35.6% year on year, and segment profit was ¥241 million, down 49.3%.」

「During the first three months of the current consolidated fiscal year, the group newly acquired rental properties and considered selling some of its income-generating properties.」

「As a result, the group sold part of its income-generating properties during the second quarter, while investment income from domestic and overseas businesses made a significant contribution. Revenue increased 197.9% year on year to ¥1,984 million.」

「During the current consolidated fiscal year, the company sold property held for sale for ¥270 million. As a result, the balance of rental and other real estate properties fell by ¥163 million from the end of the previous consolidated fiscal year to ¥9,262 million.」

「Against this economic backdrop, in the second quarter the Group actively pursued initiatives to strengthen stable earnings, including securing new revenue sources through business alliances, acquiring new rental properties, considering investments in companies in Japan and overseas, and measures to maintain and improve profitability at each location in the operating business.」

「During the fiscal year, the Group acquired 1 income-producing property for ¥357 million. In addition, income of ¥342 million from real estate investments and ¥351 million from investments in domestic and overseas companies contributed to results. Revenue was ¥1,370 million, up 74.5% year on year, and segment profit was ¥390 million, up 64.8%.」

「During the third quarter, although there were no new rental property acquisitions, income from investments in domestic and overseas companies contributed to revenue of ¥736 million, up 24.3% year on year, and segment profit of ¥269 million, up 48.6%.」

「During the second quarter, income from investments in overseas companies was recorded and 1 income-producing property was acquired for ¥357 million. However, there was no major investment recovery, and revenue declined 1.1% year on year to ¥339 million.」

「Against this economic backdrop, during the first quarter, the Group actively pursued initiatives to strengthen stable earnings capacity, including considering the acquisition of new rental properties and improving profitability at each location of its operations business.」

「During the current consolidated fiscal year, the company acquired ¥1,569 million of rental properties, bringing the balance of rental and other real estate properties to ¥9,601 million, a steady increase from the balance at the end of the previous consolidated fiscal year.」

「During the third quarter, the Group acquired 4 income-producing properties for ¥1,004 million, capitalizing on favorable conditions in the real estate market. In addition, investment in the industrial waste treatment business made in August of the current fiscal year contributed to earnings. As a result, revenue was ¥592 million, up 69.4% year on year, and segment profit was ¥181 million, up 844.0%.」

「During the second quarter, assets increased following the acquisition of 8 income-producing properties for ¥3,728 million, capitalizing on favorable conditions in the real estate market. As a result of the significant strengthening of earnings capacity, revenue was ¥343 million, up 69.9% year on year, and segment profit was ¥104 million, up 206.2%.」

「During the first quarter, income-producing properties increased by 7 properties and ¥3,903 million from the previous year, significantly strengthening earnings capacity. Revenue was ¥169 million, up 87.6% year on year, and segment profit was ¥51 million, up 303.9%.」

「During the current consolidated fiscal year, the company acquired ¥4,268 million of rental properties, bringing the balance of rental and other real estate properties to ¥8,401 million, nearly double the balance at the end of the previous consolidated fiscal year.」

「During the third quarter, rental income from the 4 income-producing apartment buildings acquired in the previous consolidated fiscal year, the 6 income-producing apartment buildings acquired during the third quarter, and R Hotel Inn Kitakyushu Airport contributed to revenue, which increased 30.2% year on year to ¥349 million, steadily strengthening the earnings base.」

「During the second quarter, the Group acquired 2 income-producing apartment buildings in Chuo Ward, Osaka, and Naka Ward, Nagoya, and recognized ¥29 million in acquisition costs. Segment profit was ¥34 million, down ¥10 million, or 24.2%, year on year.」

「The property in Chuo-ku, Osaka, acquired in the first quarter, is expected to contribute to revenue from the second quarter onward.」

「During the fiscal year, the Group acquired 4 rental apartment buildings in Sakyo Ward, Kyoto; Tennoji Ward, Osaka; Chuo Ward, Sapporo; and Nishi Ward, Sapporo, to strengthen its medium- to long-term earnings structure, contributing to increases in revenue and segment profit.」

「During the third quarter, rental income increased following the acquisition of 3 rental apartment buildings in Sakyo Ward, Kyoto; Tennoji Ward, Osaka; and Chuo Ward, Sapporo. Revenue was ¥268 million, up 7.3% year on year, while the burden of the acquisition costs resulted in segment profit of ¥78 million, down 3.3% year on year, representing higher revenue but lower profit.」

「In the second quarter, the company acquired rental apartment buildings in Sakyo-ku, Kyoto, Tennoji-ku, Osaka, and Chuo-ku, Sapporo. Revenue increased 15.7% year on year to ¥179 million, and segment profit increased 10.2% to ¥45 million, resulting in higher revenue and profit.」

「In the first quarter, the company newly acquired rental apartment buildings in Sakyo-ku, Kyoto and Tennoji-ku, Osaka. After incurring ¥9 million in expenses, revenue was ¥79 million, up 1.8% year on year, while segment profit was ¥16 million, down 31.4% year on year. Revenue increased but profit declined from the same period of the previous year.」

「During the period, in March 2016, the company sold 2 rental apartment buildings in Sapporo for total gains on sale of ¥104 million. It also newly acquired a rental apartment building in Nagoya in August 2015, with annual rental income of approximately ¥24 million, and a rental apartment building in Sapporo in March 2016, with annual rental income of approximately ¥20 million. Despite acquisition costs of ¥15 million, real estate rental revenue for the period increased to ¥117 million from ¥64 million in the previous period.」