End of the First Year of the Tenth Medium-Term Management Plan – Addressing Future Challenges

Performance Overview and Market Environment

The fiscal year ending March 2026 marked the 13th consecutive period of record high net profit. The Tokyo office market experienced rent increases due to a supply-demand imbalance, with the company's new lease contract average rent rising approximately 10% YoY. Rent revisions achieved increases exceeding 20% at maximum and approximately 7% on average, securing revenue growth while absorbing interest rate rise risks. To counteract rising construction costs and longer construction periods, the company leverages long-standing partnerships with general contractors and subcontractors to promote efficient cost management.

Business Strategy and Future Challenge Response

While the supply of new condominiums has significantly decreased, the company maintains a stable supply by holding completed inventory of over 6,000 units, equivalent to about 3 years' worth. In the Indian Mumbai project, investments of around 1 trillion yen are underway, with multiple development projects progressing smoothly. Dividends increased by 9 yen due to profit upside, reaching a payout ratio of 35%, with a policy of continuing to increase dividends by more than 8 yen annually until reaching a payout ratio of 35%. Preparations are also underway to transition to a company with an Audit & Supervisory Committee by June 2027. The shareholding policy stock sale has reduced the acquisition price ratio to 7.8%, focusing funds on sustainable growth strategies. The company's effective ROE remains at 10.6%, aiming for stable earnings and high profit growth.