Risk of Higher Fixed Costs and Deteriorating Profitability from Long-Term Lease Agreements for Care Facilities
First written in FY2017. 4 of 8 entries say "Restated". Latest entry: FY2025-H1.
The whole theme swung hardest in 2024: 5 of 15 companies on the "Worse" side.
2 other companies' latest entry also says "Other".
- FY2025-H1New long-term lease agreement renewedAnnual report
「The lease terms under these agreements are long-term contracts of 30 years, with a possible 10-year extension after the end of the relevant period.」
The company entered into 30-year long-term lease agreements for 4 facilities, with a possible 10-year extension after the end of the term. This updates the contractual record relating to long-term fixed costs and profitability exposure. - FY2023RestatedAnnual report
「The majority of the Group's nursing-care facilities are leased, including sale-and-leaseback transactions involving facilities developed in-house, and a lease agreement is executed with the landlord for each facility. The lease terms are generally 20 to 30 years, with renewals available, and rents are generally revised through consultation every 2 to 5 years.」
The company reaffirmed that leased facilities account for the majority of its nursing-care facilities, with lease terms of 20 to 30 years and rent revisions every 2 to 5 years. - FY2021SoftenedAnnual report
「The majority of the Group's nursing-care facilities are leased, including sale-and-leaseback transactions involving facilities developed in-house, and a lease agreement is executed with the landlord for each facility. The lease terms are generally 20 to 30 years, with renewals available, and rents are generally revised through consultation every 2 to 5 years.」
The explicit disclosure of 72 leased facilities in the previous fiscal year was changed to the expression "the majority," eliminating the quantitative disclosure of the number of facilities. The explanations of lease terms and rent revisions remain unchanged. - FY2020RestatedAnnual report
「Of the Group's nursing-care facilities, 72 are leased, including sale-and-leaseback transactions involving facilities developed in-house, and a lease agreement is executed with the landlord for each facility. The lease terms are generally 20 to 30 years, with renewals available, and rents are generally revised through consultation every 2 to 5 years.」
The company reaffirmed its exposure to fixed costs and profitability associated with 72 leased facilities, lease terms of 20 to 30 years and rent revisions every 2 to 5 years. - FY2019Updated the number of leased facilitiesAnnual report
「Of the Group's nursing-care facilities, 72 are leased, including sale-and-leaseback transactions involving facilities developed in-house, and a lease agreement is executed with the landlord for each facility. The lease terms are generally 20 to 30 years, with renewals available, and rents are generally revised through consultation every 2 to 5 years.」
The company disclosed that 72 nursing-care facilities are leased, updating the exposure to fixed costs and profitability associated with lease terms of 20 to 30 years and rent revisions every 2 to 5 years. - FY2019-Q3RestatedAnnual report
「The lease terms under these agreements are long-term contracts of 20 years, with a possible 10-year extension after the end of the relevant period.」
The new sale-and-leaseback agreement also has a 20-year term, reaffirming the exposure to fixed costs and profitability associated with long-term leases for nursing-care facilities. - FY2018-Q3RestatedAnnual report
「The lease terms under these agreements are long-term contracts of 20 years, with a possible 10-year extension after the end of the relevant period.」
The new sale-and-leaseback agreement also has a 20-year term, reaffirming the exposure to fixed costs and profitability associated with long-term leases for nursing-care facilities. - FY2017First statedAnnual report
「Of the Group's nursing-care facilities, 56 are leased, including sale-and-leaseback transactions involving facilities developed in-house, and a lease agreement is executed with the landlord for each facility. The lease terms are generally 20 to 30 years, with renewals available, and rents are generally revised through consultation every 2 to 5 years.」
The company disclosed the risk that, while long-term contracts ensure continuity of facility operations, profitability could deteriorate if occupancy rates or prevailing rents decline.