01Procurement of New Properties in the Purchase and Resale Business

In its Second Medium-Term Management Plan for the three years beginning in 2022, the Group proposed “strengthening the earnings base for business expansion,” with plans to expand its business with a focus on the real estate purchase and resale business, and has been expanding its sales area for further business growth. In addition, amid the recent severe market conditions where real estate prices continue to soar, it has become necessary to collect a wide range of information and make decisions with a sense of speed when acquiring new properties.
In 2023, we opened the Osaka Branch as our first foray into the west Japan area, and in 2024 we opened new sales offices in four cities: Sapporo, Nagoya, Fukuoka, and Sendai. This has greatly expanded the sales area and strengthened the handling of diverse asset types. Each sales office strives to collect a wealth of property information through community-based activities. In addition, we are actively advancing the purchase of new properties by improving our purchasing decision-making capabilities using IT and by making decisions quickly.
In the Third Medium-Term Management Plan starting in 2025, we will promote the following measures to further strengthen and grow the purchase and resale business, our core business. We will further accelerate the acquisition of new properties by improving sales productivity, expanding sales channels, increasing the number of asset types we handle, and continuing to expand our sales area.

02Increasing Inventory Turnover Rate of Real Estate for Sale

In the FY2025, the real estate market is expected to remain strong as domestic and international investor demand remains firm, against the backdrop of the revitalization of inbound demand, etc. On the other hand, the real estate market is predicted to face many uncertainties, such as rising interest rates, increased construction costs due to soaring material prices, and the impact of policies by the new U.S. administration. In this environment, we recognize that we can respond quickly to market changes by shortening real estate holding periods and increasing inventory turnover.
By transferring the construction business from a subsidiary to the Company in 2024 and establishing a more robust construction system, the Group has striven to shorten the time required for interior and exterior construction and to commercialize at an early stage. In addition, we continue to improve the environment for providing information to investors and end-users by enhancing the functionality of the property introduction website for brokerage firms and using real estate tech to improve the efficiency of sales activities and increase customers’ willingness to buy, and this will lead to early sales.

03 Increasing Profitability by Reducing Construction Costs

The cost of construction is tending to increase due to soaring material prices caused by prolonged international unrest and the weak yen, as well as soaring labor costs resulting from the shortage of personnel in the transportation and construction industries that has continued since last year.
The Group constantly strives to optimize procurement and outsourcing costs by expanding the number of material suppliers and construction subcontractors. In addition, the Group strives to maintain and improve profit margins by reducing unit labor costs through a review of business operations, reducing costs by standardizing prices and quality, and shortening construction periods.

04 Expanding Stable Earnings to Support Growth

Consolidated sales in our mainstay business—the Real Estate Trading Business—account for around 90% of total sales and segment profit of at least 80%. Securing stable earnings in preparation for future changes in real estate market conditions is a pressing issue.
As an opportunity to secure long-term stable earnings, we are working to acquire high-quality assets and increase the number of units we manage. With regard to the acquisition of high-quality assets, we decide to acquire them after assessing real estate trends and giving consideration to the level of cash flow and cash in hand for each fiscal year. In terms of increasing our number of managed units, we will coordinate with the sales department to acquire contracts so that we can obtain commissions from asset owners when selling our own real estate properties. In addition, we have entered the asset management business toward expanding the Group’s earnings, and work to diversify risk and ensure stable earnings by diversifying exit strategies.

05 Proactive Investment in Both Existing and New Businesses

The Group aims to build a well-balanced business portfolio by investing more aggressively than ever in its core real estate purchase and resale business, while at the same time cautiously and aggressively entering new growth areas in light of changes in the external environment.
Most recently, we aim to expand earnings from our growth businesses—the real estate development and real estate specified joint business—and build them into new business pillars. In the real estate development business, it continues to be difficult to secure profitability due to soaring material prices and rising labor costs. However, we will work to develop high value-added products not only by selecting the best locations and improving quality, but also by planning in consideration of the environment. In the real estate specified joint business, we will work to increase the annual number of compositions and expand the composition quota by diversifying composition products and schemes, enhancing exit strategies, and expanding the sales network.
We will also enter the real estate asset management business with the aim of expanding the Group’s earnings. In the real estate asset management business, we will work to expand the operational balance by creating private placement funds in stages over the next several years.
For new businesses, we will form business alliances with other firms and utilize strategic investment, including M&A, in consideration of the time it takes before commercialization or monetization, rather than driving the businesses internally and alone.

06 Strengthening and Promoting Sustainability Management

The Group recognizes the importance of addressing climate change and other environmental challenges, hiring and training human resources, and strengthening organizational capabilities in order to achieve sustainable growth. By promoting sustainability management based on these principles, we hope to be a company that creates new value and earns the unwavering trust of society and our stakeholders.
In response to environmental challenges, we will promote initiatives for environmentally friendly business activities needed in response to the transition to a decarbonized society. Specifically, we will actively promote the use of renewable energy and improve the energy-saving performance of buildings, further reducing environmental impact. In addition, we endorse the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board (FSB), and will continue to make transparent disclosures based on the TCFD recommendations to deepen our efforts to protect the environment.
With respect to strengthening human resources and organizational capabilities, we are working to enhance the recruitment of new graduates and career professionals, as well as to improve employee productivity. We are doing this by enhancing internal and external education and training programs, developing core human resources through on-the-job training, and helping our members acquire specialized skills. We are also working to promote diversity, create an environment in which diverse human resources can maximize their abilities, and foster a corporate culture that encourages them to take on new challenges, thereby enhancing our organizational capabilities. To support these efforts, we conduct company-wide organizational culture surveys on an ongoing basis, reflecting the views of employees while also striving to improve engagement.

07 Enhancement of Corporate Governance

In order to maximize corporate value, the Group recognizes the importance of ensuring the transparency and soundness of management and of responding quickly and appropriately to changes in the environment. We regard corporate governance as one of the important management issues, and we will strengthen governance functions by strengthening supervision and checks of executive officers, ensuring transparency through information disclosure, and promoting the development of a management system for business execution.
We are striving to further enhance our corporate governance system and improve our corporate value over the medium- to long-term by strengthening supervision and checks by outside directors, speeding up management decision-making and realizing flexible business execution, as well as addressing sustainability issues to realize a sustainable society. This is seen in the voluntary Nomination and Compensation Committee established in November 2021, the introduction of an executive officer system in January 2022, and the Sustainability Committee established in July of the same year.
With respect to the composition of the Board of Directors, diversity is sought including in gender, internationality, professional experience, and age, and at least one-third (or a majority in the case of Prime market-listed companies) of the Board must be independent outside directors. In addition, according to the “The Intensive Policy for Gender Equality and the Empowerment of Women (The Basic Policy on Gender Equality and Empowerment of Women)” announced by the Japanese government, the ratio of female executives in Prime market-listed companies should be 30% or more by 2030, and companies are required to incorporate diverse values and perspectives into their operations to achieve growth.
The Company’s criteria for the appointment of officers is that they possess outstanding character, insight, ability, and a wealth of experience. The Company recognized that the previous all-male, all-Japanese composition of its Board of Directors was an issue; however, in March 2024, the Company appointed a female outside audit & supervisory board member, and in March 2025, a female outside director. We will continue our efforts to ensure diversity, paying attention to gender and internationality, as well as to the balance of knowledge, experience, and abilities.
The Company selected the Prime market as a result of the April 2022 market segmentation review. Subsequently, based on the state of compliance with the criteria to maintain its listing, and as a result of discussing plans for future compliance, the Standard market was selected in October 2023. With the goal of re-listing on the Prime market, we will continue to improve our business performance, promote IR activities, return profits to shareholders, and strengthen corporate governance in order to stably meet the criteria for maintaining our listing.

08 Improvement of Capital Efficiency

The Group’s basic management strategy is to expand its business scale and maintain a high level of financial soundness, while executing investments in its core and growing businesses and enhancing shareholder returns. In addition, as a response to “management conscious of capital cost and stock price,” the Company is required to improve its capital costs and capital returns, and to promote dialogue with shareholders.
As a measure to improve capital returns, we will work to sustainably increase ROE above cost of shareholders’ equity, while maintaining financial reserves to respond to changes in the environment and being conscious of the balance between capital and debt. Also, as a measure to improve market valuation, we will promote appropriate information disclosure to shareholders and investors and active dialogue with them, with the goal of achieving a P/B ratio above 1.0x.

09 Rising Interest Rates

In 2024, in March the Bank of Japan lifted its negative interest rate policy, and in July raised the guidepost for the uncollateralized overnight call rate, its policy interest rate, by 0.25%.
In the Group’s business model, a rise in interest rate is expected to increase borrowing costs for property purchase funds, decrease customers’ desire to purchase property due to higher interest rates on mortgages and other loans, and lower demand in the real estate market. Although no major impact from additional interest rate hikes is expected at this time, we will closely monitor interest rate trends and ensure business stability by diversifying funding sources, reviewing pricing with an eye on demand trends, improving inventory turnover, etc.