Background
Over the four-year period from FY2020 to FY2023, the Heiwa Real Estate Group advanced its medium-term management plan, Challenge & Progress, positioning itself to strive for new heights as a company contributing to district revitalization.
We progressed with revitalization of the Nihonbashi Kabutocho and Kayabacho district, as well as large-scale redevelopment projects in Sapporo, and transitioned to a business model centered on creating added value through both external and internal growth. Meanwhile, our commitment to sustainability initiatives led us to actively address social issues. As a result, we anticipate achieving all key performance indicators, including consolidated operating profit exceeding ¥12 billion, earnings per share over ¥200, and a return on equity (ROE) over 6%. These achievements represent a significant leap forward for the Group over the past four years.
Conversely, the urban landscape and lifestyles are undergoing major changes due to various factors,
including the diversification and qualitative shifts in workstyles, expanded demand from inbound tourism, population decline, a dwindling birthrate and an aging society, and intensified competition between cities and between regions. Additionally, heightened expectations for improved capital efficiency, the advancement of sustainability management, progress in digital technology, and the increasing threat of natural disasters are all contributing to the rapidly evolving operating environment.
In light of these significant external changes, we have developed a long-term vision for the Group toward 2040 to clarify our desired future state.
Reflecting on the Group’s past initiatives, we have endeavored to revitalize districts through continuous and long-term Bazukuri* initiatives, guided by the belief that enhancing each individual aspect of an area will bring significant improvement. The future of the Group lies in expanding these efforts both qualitatively and quantitatively
to build environments that draw people in, transcending the traditional role of a developer. By maintaining this momentum, we aim to achieve dynamic growth and enrich the future. These are my ideals encapsulated in our long-term vision.
* Bazukuri includes operations such as construction of buildings, creation of community and opportunities.
Formulation of the Heiwa Real Estate Group Long-term Vision “WAY 2040”
Our Vision for 2040
The Group has adopted the slogan, “Pursue perpetual dynamic growth to become the Bazukuri Company,” as our vision paving the way to 2040.
Notice Regarding Formulation of Heiwa Real Estate Group Long-term Vision “WAY 2040”
Growth Strategies
- Expand redevelopment business: Deploy Bazukuri endeavors that draw people in throughout Japan
Harnessing our unique presence in major cities across the country, we will not only drive redevelopment in the Nihonbashi Kabutocho and Kayabacho district, and Sapporo, but also promote redevelopment in other areas, creating environments that draw people in. As a Bazukuri Company, we will address social issues such as achieving a decarbonized society while striving to expand our revenue base.
- Cultivate profit growth while enhancing capital efficiency: Expand leasing business, promote reinvestment by realizing gains from property sales, and diversify into new business areas
As a Bazukuri Company, we aim to expand our redevelopment projects both qualitatively and quantitatively, and accumulate lease assets, which provide a stable revenue base. Additionally, we aim to recover a portion of our invested capital by generating new added value and realizing latent gains, then reinvesting this in subsequent redevelopment projects to enhance capital efficiency.
To facilitate the smooth operation of this business model, we will strive to improve capital efficiency by utilizing Group vehicles as exit strategies and expanding asset management revenue through an increase in assets under management, among other measures.
Further, to achieve dynamic growth, we will expand into new business areas that contribute to the realization of our long-term vision.
- Boost social value: Promote sustainability initiatives
We aim to achieve net-zero greenhouse gas (GHG) emissions, balancing profit growth with addressing social issues at an elevated level, as we work toward resolving global challenges.
- Strengthen business foundations: Maximize human capital for accelerated growth
To achieve our long-term vision, we will enhance organizational capacity and maximize human capital by promoting internal human resource development and acquiring human resources externally.
Quantitative Targets
- Consolidated operating profit of at least ¥25 billion in 2040 (Achieve around double the consolidated operating profit level in FY2023)
- Sustainable ROE exceeding cost of capital (ROE target is set for each medium-term management plan)
- Net-zero GHG emissions by 2050
Entire Document of Long-term Vision