Financial Highlights

Financial Highlights
[Accounting standards: Japanese GAAP]

Overview of Operating Results

FY2023

Analysis of Operating Results

The Group’s business performance in the fiscal year ended March 31, 2024, owing to strong performance in sales of assets and the real estate sales agent business against the backdrop of a strong real estate market, strong performance in the hotel business as a result of having tapped into demand in Japan and overseas, etc., showed increases both in revenues and profit with ¥1,103.0 billion in operating revenue (up 9.7% from the previous fiscal year), ¥120.2 billion in operating profit (up 8.9%), and ¥110.4 billion in ordinary profit (up 10.9%).

In the fiscal year ended March 31, 2024, profit attributable to owners of parent increased substantially to ¥68.5 billion (up 42.1%), which is attributable to extraordinary losses of ¥31.3 billion having been recorded in the previous fiscal year mainly due to progress in business restructuring based on the medium-term management plan 2025.

In the fiscal year ended March 31, 2024, the Group achieved record highs, including the period before shifting to a holdings structure, for operating revenue, operating profit, ordinary profit and profit attributable to owners of parent. The Group also achieved operating profit target of ¥120.0 billion and profit target of ¥65.0 billion for the fiscal year ending March 31, 2026, the final fiscal year of the medium-term management plan, two years ahead of schedule.

Urban Development

In our Urban Development business, we recorded ¥365.4 billion in operating revenue (up 5.6% from the previous fiscal year) and ¥53.2 billion in operating profit (down 9.3%).

Overall, the segment saw an increase in revenues and a decreases in profit. Revenues increased due to the new opening of Shibuya Sakura Stage (Shibuya-ku, Tokyo) in Leasing (Office buildings), a certain amount of recovery for commercial facilities such as Tokyu Plaza in Leasing (Commercial facilities), and increased sales of assets in Other (excluding condominiums in residential business), despite decreases in revenues due to a decrease in asset sales in Other (excluding lease in office and commercial facility business) and a decrease in the number of condominium units sold in Condominiums, in the breakdown of operating revenue below.

In the office building market, leasing activity particularly in the Shibuya area, where a large proportion of the Company’s owned properties are located, was robust. Although the vacancy rate (office buildings and commercial facilities) as of March 31, 2024 temporarily rose to the high level of 4.8%, Shibuya Sakura Stage (Shibuya-ku, Tokyo), which was newly completed in November 2023, is expected to bring this rate down as tenants steadily move in. If Shibuya Sakura Stage is excluded, the vacancy rate (office buildings and commercial facilities) was maintained at a low level of 1.1%.

Sales of condominium units continued to show an underlying strength of demand and proceeded strongly. Regarding condominiums during the fiscal year under review, in addition to the recording of HARUMI FLAG (Chuo-ku, Tokyo) and BRANZ TOWER Osaka Honmachi (Osaka-shi, Osaka) as newly completed and delivered properties, sales of completed inventories have been progressing. The ratio of contracted amount for sale to the planned sales amount for the next fiscal year for condominium units became 74% (down 8 percentage points from the previous fiscal year).

Strategic Investment

In our Strategic Investment business, we recorded ¥108.0 billion in operating revenue (up 37.1% from the previous fiscal year) and ¥15.1 billion in operating profit (down 0.8%).

Overall, the segment saw an increase in revenues and a decrease in profit. Revenues increased mainly due to sales of assets of logistics facilities and an increase in the number of facilities in operation in the renewable energy business in Infrastructure & Industry, an increase in condominium units sold in Indonesia despite increased costs in North America in Overseas operations, in the breakdown of operating revenue below.

The renewable energy business is expanding steadily as the number of facilities in operation increased as planned. Total rated capacity after all facilities are put into operation (before taking our equity into account) is 1,751 MW (174 MW increase from the end of the previous fiscal year).

Property Management & Operation

In our Property Management & Operation business, we recorded ¥371.5 billion in operating revenue (up 10.2% from the previous fiscal year) and ¥22.8 billion in operating profit (up 85.8%).

Overall, the segment saw increases in revenues and profit. The segment achieved an increase in revenues mainly due to increased revenues from construction and openings of large properties for Office buildings in Property Management while inbound and domestic demand was captured for Hotels mainly with Tokyu Stay in Wellness and revenues increased from sales of Tokyu Harvest Club membership for Other in Wellness, in the breakdown of operating revenue below.

Real Estate Agents

In our Real Estate Agents business, we recorded ¥285.6 billion in operating revenue (up 8.6% from the previous fiscal year) and ¥38.5 billion in operating profit (up 14.4%).

Overall, the segment saw increases in revenues and profit. Revenues increased due to respective rises in number of transactions and in Real Estate Agents, the transaction amounts as a result of capitalizing on the booming real estate transaction market, in addition to increases in revenue recognized for development projects for Real estate sales, in the breakdown of operating revenue below.