Strategic focus on hourly office space for corporate customers

「In light of these changes in the market environment, we clarified that our focus is the corporate office sector and repositioned our services from simple space rental to solutions.」

「In the previous consolidated fiscal year, the company assumed the “fabbit” business, which operates rental offices, coworking spaces, and virtual offices, through a company split by way of a simplified absorption-type company split. During the current interim consolidated accounting period, it opened “TKP fabbit Shibuya,” combining rental conference rooms and shared offices, in Shibuya.」

「The company resolved to assume the rental office, coworking space, virtual office, conference room, event space, and franchise businesses, and entered into absorption-type company split agreements with each company on the same date. The effective date of the absorption-type company split is 28 February 2025.」

「We continue to anticipate strong demand for rental conference rooms and are actively opening new facilities.」

「New facilities, including large-scale properties, were opened successfully, with expansion into Fukuoka, Chiba, Akihabara, and Shinagawa, including large halls and building-wide facilities. The company has continued actively opening facilities, including TKP Akihabara Conference Center, a large building-wide hub covering 975 tsubo; two facilities in Shinagawa, a priority area for openings, TKP Garden City PREMIUM Shinagawa HEART covering 337 tsubo and TKP Garden City PREMIUM Shinagawa Takanawaguchi covering 969 tsubo.」

「We continue to anticipate strong demand for rental conference rooms and are actively opening new facilities. Under the medium-term management plan covering the fiscal years ending February 2024 through February 2026, we aim to open more than 10,000 tsubo annually. More than 7,000 tsubo of openings have already been decided for the current fiscal year, with a particular focus recently on opening large halls capable of accommodating 100 to 1,000 people, such as TKP Elgala Hall in Fukuoka and TKP Tokyo Bay Makuhari Hall within TKP Garden City Makuhari in Chiba.」

「Going forward, we plan to use the sale proceeds to concentrate management resources on strengthening the business, including actively promoting new openings in anticipation of a full-scale recovery in demand, and on new businesses centered on the theme of “revitalization.”」

「With a view to the post-COVID-19 period, we will concentrate management resources on further developing TKP’s asset-light and highly versatile business foundation and seek to enhance and maximize corporate value.」

「As demand for rental conference rooms is expected to enter a full-scale recovery with the end of the COVID-19 pandemic and the normalization of social and economic activity, we will actively promote new openings and reform our portfolio of properties under contract. By making maximum use of the adaptability and flexibility in real estate market conditions provided by our asset-light business model, one of our strengths, we will shift to properties in areas with stronger business demand and with more favorable terms, thereby improving customer satisfaction and substantially enhancing performance.」

「Going forward, we will prioritize arrangements previously implemented with property owners, including sharing initial costs and contracts with variable rent structures such as rent based on a percentage of sales, and will focus on openings with controlled costs.」

「Under these circumstances, we focused and concentrated our business, reducing the food and beverage division, which was particularly heavily affected by measures to prevent the spread of COVID-19, including declarations of a state of emergency. At the same time, we reduced costs, mainly fixed costs, and secured liquidity by selling real estate holdings.」

「The meeting-room business, the core of TKP's operations, opened 12 new facilities (+4,826 tsubo) in the fiscal year ending February 2021, while 46 facilities (△11,797 tsubo) were closed due to lease expirations, reduced demand amid the COVID-19 pandemic and other factors, leaving 251 facilities in operation as of the end of February 2021.」

「We have offered 24 facilities under the joint brand “CIRQ” with Escrit Inc., which operates bridal venues, since October 2020, the third quarter. As our near-term opening policy during the pandemic, we have restrained standalone openings of TKP rental conference rooms and adopted a strategy of expanding available office space without incurring any initial costs by actively using other companies' idle facilities through alliances with bridal companies and others. Going forward, we will make a full-scale entry into the high-demand satellite office market to improve utilization and profitability.」

「As its near-term opening policy during the pandemic, the company has restrained standalone openings of TKP rental conference rooms and adopted a strategy of expanding available office space without incurring any initial costs by actively using other companies' idle facilities through alliances with bridal companies and others.」

「We implemented a policy of focusing and concentrating our business and worked to reduce fixed costs, while also developing COVID-19 countermeasure guidelines and promoting sales of satellite offices and COVID-19-compliant conference rooms.」

「In an emergency such as the COVID-19 pandemic, we will concentrate resources on hourly rental offices for corporate customers, where demand is expected to remain steady, as our core business, and implement initiatives that respond to changes in the operating environment.」