Investor Relations

Leasing

Office Building

Sumitomo Realty made its full-scale entry into the office building leasing business in the latter half of the 1970s. Ever since, we have continued to develop excellent office buildings focusing on redevelopment projects in central Tokyo. We weathered the bursting of Japan´s economic bubble in the 1990s and the Lehman crisis in the 2000s without selling off buildings we own and steadily increased the number of buildings. As a result, Sumitomo Realty has become the No. 1 owner of office buildings in Tokyo with more than 220 buildings in central Tokyo.

Overview of the Fiscal Year

The Tokyo office building market, where more than 90% of our leasing portfolio is concentrated, experienced continued strong new demand from relocations and floor space expansions of existing tenants, against the backdrop of companies´ vigorous recruitment plans and improvement of the working environment in response to work style reform. Vacancy rates remained low and rents for renewed leases continued on an upward trend.
  Reflecting such an environment, the segment recorded revenue and profit growth for the March 2019 fiscal year based on improved vacancy rate and higher rents from existing buildings as well as full-year contribution from new buildings completed during the previous fiscal year, including Sumitomo Fudosan Osaki Garden Tower. The segment´s revenue from operations and operating income both reached record-high levels for the fourth consecutive year.
  The vacancy rate for existing buildings decreased below 3% for the first time in 18 years, to 2.8% (4.9% at the end of the previous fiscal year). Buildings completed during the fiscal year under review, including Sumitomo Fudosan Onarimon Tower and Sumitomo Fudosan Shibuya Tower, are already fully occupied and in operation. Buildings scheduled for completion in the next fiscal year and subsequent years, including Sumitomo Fudosan Akihabara First Building and Sumitomo Fudosan Kojimachi Garden Tower, are approaching 100% occupancy.
Thus, tenant acquisition for new buildings is on a good track, at a pace exceeding initial expectations.

Outlook

For the March 2020 fiscal year, we forecast a 2.2% year-on-year increase in revenue from operations to ¥390.0 billion and an 8.7% year-on-year increase in operating income to ¥163.0 billion, owing to rent increases and lower vacancy rates for existing buildings as well as full-year contribution from new buildings, including Sumitomo Fudosan Onarimon Tower and Sumitomo Fudosan Shibuya Tower. We aim to achieve record-high earnings for the fifth consecutive year.

TOPICS

All-weather event area available throughout the year"Sankaku Hiroba" (triangular plaza) of Shinjuku Sumitomo Building will debut in June 2020

Our flagship Shinjuku Sumitomo Building is located near Shinjuku Station, which is the world´s busiest railway station, used by more than three million people each day. A large-scale refurbishment plan is underway for the Shinjuku Sumitomo Building and "Sankaku Hiroba" (triangular plaza), a huge event space, will open in June 2020.
  With capacity sufficient for some 2,000 people, Sankaku Hiroba will be an all-weather atrium unaffected by the weather or the temperature outside while maintaining the look and feel of an outdoor venue. Taking advantage of the lofty structure with a height equivalent to that of a six-story building, Sankaku Hiroba will be suitable for diverse large-scale events, such as sports and festivals. It will also contribute to urban disaster mitigation in the event of an earthquake or other disaster, providing shelter for people unable to return home.
  In addition to Sankaku Hiroba, taking advantage of the location near Shinjuku Station, plans also call for development of an international conference center for business conferences and large-scale international events. Through this project, the Shinjuku Sumitomo Building will contribute to further vitalization of Shinjuku as a bustling urban hub.
  This project was approved by the Ministry of Land, Infrastructure, Transport and Tourism as a private urban reconstruction project plans in August 2017. Certified by the Prime Minister of Japan as a project for a national strategic special zone, this project is highly regarded as one that will contribute to enhancement of the international business environment and attractiveness for tourists while also strengthening urban disaster mitigation capabilities.