Basic Policy on Corporate Management and Management Strategy for medium- and long- term
In the Group's office business, the vacancy rate has started to improve and market rents appeared to have bottomed out, with some rents rising. the residential business faces an operating environment where construction costs are rising while competition over the purchase of land for sale has intensified; under these circumstances efforts for future growth are necessary.
The Group has been working to strengthen its revenue base, expand business domains, thoroughly carry out financial control and establish a management foundation by fully enforcing a customer and market-centered orientation and pursuing innovation based on the "Medium-Term Vision 2018 - For Further Growth."
Bearing this in mind, in order to respond to changes in the environment surrounding the Group, the Group has formulated a corporate slogan "With Integrity, through Innovation," corporate philosophy, and action guidelines for a new mission statement to clarify the direction of future management and revised the Medium-Term Vision 2018 in the fiscal year under review and developed new business strategies, etc. to achieve the medium-term targets.
Strengthening the revenue base in the leasing business
In the office business, the Group will continuously work to strengthen the leasing sales capability and cost competitiveness. The Group will also strive to enhance its revenue base by implementing a strategic renewal to match the tenants' needs to response the business continuity plan (BCP) in flagship buildings and propose corporate real estate (CRE) strategies to the NTT Group, etc. In addition, the Group will also work on the expansion of development projects through participation in regional redevelopment projects in collaboration with other companies.
Expanding the business scale for the future growth
In the residential business, the Group will seek to expand the business domain by selling condominiums stably under the Wellith brand, including the continuous provision of serviced senior housing in cooperation with the NTT Group.
In the commercial property business, the Group will work on new businesses such as mixed-use property development and the development of hotels targeting foreign tourists in local cities such as Osaka and Kyoto, in addition to central Tokyo.
In the global business, the Group will strive to achieve a revenue base through the acquisition of office buildings in the United States, in addition to London in the United Kingdom, which was previously the focus of its activities. The Group will also promote its efforts to create business opportunities in growth markets, mainly in Southeast Asia.
Enforcing thorough financial control
The Group intends to carefully select investments for future growth, giving due consideration to market trends. The Group will also implement asset replacement in accordance with its asset portfolio strategy, including the sale of assets to a private REIT the Group will newly organize to secure funds for future development, and will strengthen its financial base by controlling interest-bearing debt.
Enhancing the management platform
The Group will act to enhance its management resources to establish a management infrastructure that is able to keep pace with business expansion. The Group will also continue to place management emphasis on shareholder value, as it has done in the past, by fully enforcing corporate governance.
To increase its enterprise value in the medium to long terms, the Company will control its businesses from multiple perspectives, using multiple indicators.
Specifically, the Company will work to improve the efficiency of assets and capital, paying attention to ROA and ROE, and will seek to secure creditworthiness and a sound financial standing, paying attention to the net interest-bearing debt to EBITDA ratio and the net debt/equity ratio.