Agre Urban Design <3467> develops detached housing mainly in the Tokyo and Kanagawa regions, operating the Agresio brand.

The segments are divided into the housing business, which handles everything from land procurement to design, construction, sales, and after-sales support in a consistent manner (80.8% of revenue in the first half of the fiscal year ending March 2025), the asset solution business mainly involved in the construction and sale of profit-oriented apartments for investors and the sale of land for apartments (18.6% of the same), and the lodging business that provides consulting for opening and operating lodging facilities utilizing vacant houses and vacation homes. In the company's housing business, it appears that 97.1% of buyers responded with "satisfied" or "very satisfied" regarding the properties, achieving high satisfaction primarily due to attentive customer service and building performance, design, and equipment specifications. Additionally, the asset solution business has been fully initiated since the fiscal year ending March 2022, focusing on procurement in the Yamate area, with prices for profit-oriented apartments ranging from 0.5 billion yen to 2 billion yen, and sales prices for profit-oriented rental apartments ranging from 0.1 billion yen to 0.15 billion yen. The lodging business has made Housebird Inc., which was providing consulting for the opening of inns and hotels, a subsidiary.

For the cumulative revenue in the first half of the fiscal year ending March 2025, it reached 13,479 million yen, a 59.0% increase compared to the same period last year, and the operating profit landed at 1,081 million yen, a 7.6 times increase. The main housing business created a new sales department starting in April 2024 and consolidated the sales division spread across four bases, which improved the gross profit margin, and the focus on central urban areas also raised the average price per building to 77.04 million yen (previous period 65.1 million yen, excluding tax). Additionally, the number of sold buildings was 139 (an increase of 22 compared to the same period last year), and the backlog of orders stood at 49 buildings worth 3,673 million yen (an increase of 15 buildings, and an increase of 1,199 million yen). The asset solution business also saw increases in revenue and delivery numbers compared to the same period last year, and the wooden apartment project initiated this term reportedly secured contracts simultaneously with the start of sales. The procurement preparation amount for the next term is expected to remain around 5,200 million yen, with plans to further accumulate the procurement amount focusing on rare land in metropolitan areas. For the full term, revenue is projected to increase by 11.8% to 30,860 million yen, and operating profit is expected to rise by 40.9% to 2,269 million yen.

"The self-consistent system" has become the company's competitive advantage, as the newly established sales department that centrally manages sales across the company, which previously belonged to various branches, has led to further improvements in profit margins in the core housing business. Furthermore, the target areas have been changed to regions closer to the city center and popular residential areas inside and outside the circular Route 8, resulting in attractive product creation (good procurement, good planning, design, and construction) leading to an increase in selling prices and enhanced competitiveness in procurement due to the effects of cost reduction (selling costs and construction costs).

The forecast for the housing market in 2040 assumes a reduction from 0.26 million units to 0.12 million units throughout japan, but a market of 0.12 million units will continue to exist. As of 2022, the total number of detached house units in the metropolitan areas is 60,000 units, with the company holding only 300 units, resulting in a market share of approximately 0.5%. There is significant room for growth if competitive advantages are enhanced. The asset solution business will not only launch products that leverage synergies with Housebird but will also expand investment products such as self-constructed wooden apartments and RC mansions. Although the current share of the lodging business in total revenue is low, it plans to steadily increase in the medium to long term by leveraging its good profit margins and the broad target areas. With the increase in inbound tourism, the lodging business is expected to attract attention moving forward. Regarding shareholder returns, the dividend payout ratio has been raised from 30% to 35%. The basic policy is to maintain stable dividends, setting the payout amount at 35% of net income for the current period. The current dividend yield is nearly 5%, and as performance continues to recover, it will be important to keep an eye on the company's future trends.