Diversification leveraging expertise in shared meeting room operations

「As described in “V. Accounting Information, 1. Consolidated Financial Statements, (1) Consolidated Financial Statements, Notes (Business Combinations and Related Matters),” we sold the Regus business, whose business model requires a heavier CAPEX burden than the rental meeting-room business, in order to establish a more efficient earnings structure.」

「Since joining our group in May 2019, 日本リージャスホールディングス has actively developed and operated its core serviced-office business. However, as our business was significantly affected by the unexpected spread of COVID-19, the large CAPEX required for new 日本リージャス openings compared with the rental meeting-room business, which has been our core business since our founding, became an issue.」

「The sub-franchise rollout is also progressing, with 2 agreements signed and operations launched by a sub-franchisee at 1 facility by the end of the second quarter of the fiscal year under review. We also plan to sign multiple additional sub-franchise agreements during the current fiscal year.」

「The sub-franchise rollout is also progressing steadily, with sub-franchise agreements signed in 2 areas in regional cities. In addition to opening directly operated facilities, we plan to open multiple facilities under the sub-franchise model and expand the network more rapidly.」

「日本リージャス's future opening plans include continuing to open locations proactively while responding flexibly to changes in real estate market conditions, as before. It will also newly launch a sub-franchise model, rather than relying solely on directly operated locations, and focus on expanding its network more rapidly.」

「日本リージャス opened 3 new facilities during the third quarter of the fiscal year under review, from 1 September 2021 to 30 November 2021, and operated 170 facilities as of the end of November 2021.」

「日本リージャス opened 3 new facilities in the second quarter of the fiscal year ending February 2022 and operated 167 facilities as of the end of August 2021.」

「日本リージャス社 opened 2 new facilities in the first quarter of the fiscal year ending February 2022, 1 of them jointly with TKP, and operated 164 facilities as of the end of May 2021.」

「As part of our future opening policy, in addition to new and recently built buildings, we will acquire high-quality older buildings and acquire and rebrand facilities operated by other companies, thereby lowering the break-even point and improving profitability. Although we already have the largest number of locations in Japan's serviced-office market, we will continue to seek further market-share growth.」

「Going forward, TKP will make a full-scale entry into the satellite-office market, where demand is increasing amid the COVID-19 pandemic, and will begin offering services under the Work X Office brand in March 2021. Its market advantage will be the provision of satellite offices with freely customisable office furniture at reasonable prices. Initially, it will convert existing space and operate across approximately 17,000 tsubo in Tokyo.」

「The serviced-office business of 日本リージャス社, which has been consolidated since the second quarter of the fiscal year ending February 2020, has continued to open new locations proactively as demand has increased during the COVID-19 pandemic. It opened 3 facilities (+948 tsubo) in the first quarter and 5 facilities (+1,371 tsubo) in the second quarter of the fiscal year ending February 2021, and operated 164 facilities as of the end of August 2020.」

「During the third quarter of the fiscal year under review, from 1 September 2019 to 30 November 2019, we jointly opened rental meeting rooms and serviced offices in Himeji, Hyogo Prefecture, and Matsuyama, Ehime Prefecture, the first such joint openings in each prefecture. The Regus Matsuyama Station Front Centre opened in January 2020.」

「We also acquired all issued shares of 日本リージャス社 from the IWG plc group, which operates serviced offices and coworking spaces globally under brands including Regus, on 31 May 2019, and entered into an agreement on 9 August 2019 to acquire all of the shares in 台湾リージャス社. In Japan, in addition to our traditional time-based rental services, centred on meeting-room and banquet-facility operations, our core business, we aim to make a full-scale entry into the short- to medium-term flexible-office market by leveraging the resources of 日本リージャス社. Overseas, we will seek to expand the business using the acquisition of 台湾リージャス社 as a foothold.」

「Because rental meeting rooms and serviced offices are complementary and highly compatible, we had been considering a full-scale entry into the short- to medium-term flexible-office market for some time. We resolved to proceed with this transaction and acquire the shares because we expected that expanding into this market would accelerate our growth and enable us to create further value.」

「Of the above, during the fiscal year under review, we acquired 100% of the shares of 株式会社3Lentrance and 株式会社メジャース and included the newly established subsidiary 株式会社SCENT in the scope of consolidation.」

「In addition to making 株式会社メジャース a subsidiary and entering the high-value-added event production business, we entered into a business and capital alliance with 株式会社大塚家具 and began a new initiative to revitalise commercial facilities other than office buildings and hotels as meeting rooms, banquet facilities and event halls.」

「In addition, we entered the coworking-office and serviced-office businesses through a business transfer.」

「We will seek to capture companies' outsourcing needs through diversification, including entering the building management services business, by leveraging the expertise accumulated through operating meeting rooms and hotel banquet facilities in Japan and overseas.」