Tokyo: Mitsubishi Estate Co, Japan’s biggest developer by market value, posted a 35% jump in quarterly operating profit helped by a recovery in residential business, and retained its forecast for a 5% increase in full-year profit.
Mitsubishi and rival Mitsui Fudosan have recently succeeded in running down inventories of unsold apartments left over from the property crisis as home-seekers returned to the market with a fresh appetite for marked-down real estate.
But property developers still face falling revenues from office rentals as Tokyo’s office vacancies remain near a 15-year high of 7.8% as companies downsize businesses or opt for cheaper digs outside the central business district to pare spending.
Mitsubishi Estate, which owns the US Rockefeller Group and dozens of office buildings in Tokyo’s central Marunouchi business district, said its October-December operating profit came to ¥36.9 billion from ¥27.4 billion a year earlier.
For the full year to March, the company kept its operating profit forecast of ¥156 billion, which matches a consensus estimate in a poll of 22 analysts surveyed by Thomson Reuters I/B/E/S.
Mitsui Fudosan, due to report its quarterly results at 11:30 am, is also likely to show a recovery in its residential sales.
Shares of Mitsubishi Estate, owned nearly 40% by foreign investors, were up 1% at ¥1,599 shortly after the announcement.
Mitsubishi Estate’s shares have risen about 5% since the start of this year, outperforming a 2% rise in the benchmark Nikkei 225 index, as a solid recovery and increased property transactions in the REIT sector fanned hopes that Japan’s property market has bottomed out.