Leopalace21

Basic Information

Stock Code
8848
Industry
Real estate industry
Category Detail
Real Estate & Housing
Prefecture
Tokyo
Establishment Year
August 1973
Listing Year
February 1989
Official Website
https://www.leopalace21.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
East Japan Land, Daito Trust Construction, Choei, JPMC, Ambition DX Holdings, J.S.B., Marion, gumi, Sumitomo Pharma, Sere Corporation, Rakuten Bank, Mainichi Comnet

Overview

Leopalace21 is a leading Japanese real estate company founded in 1973, specializing in apartment construction and rental management, while also expanding into resort and nursing care businesses.

Current Situation

For the fiscal year ended March 2023, consolidated revenue was 406.4 billion yen and net profit was 19.8 billion yen, with apartment construction contracts and rental operations at the core. In recent years, it has focused on resolving construction defect issues, aiming to complete repairs on all properties by the end of 2024. To strengthen its management foundation, it implemented large-scale restructuring and store closures in 2020 and increased capital. It is advancing diversification through internet connection services and nursing home operations, while continuing overseas resort businesses. It resolved negative equity in 2022, maintained its listing, and is improving finances. In the medium to long term, it positions stabilizing its customer base and improving construction quality as key strategies. Management from the founding family is taking responsibility for problem resolution and building a new governance structure.

Trivia

Interesting Facts

  • Real estate company founded in 1973 by Yusuke Miyama.
  • Rapid growth with deposit-free rental mansions 'Leopalace21'.
  • Currently repairing thousands of buildings due to construction defects.
  • Monthly Leopalace short-term rentals popular among foreigners.
  • Operates resort facilities in Guam.
  • Previously operated car-sharing business.
  • CMs featuring numerous famous actors generated buzz.
  • Listed on Tokyo Stock Exchange Prime Market.
  • Receiving capital support from SoftBank Group for reconstruction.
  • Growth-oriented in nursing care sector through group expansion.
  • Provides proprietary broadband service to residents.
  • Conducts diversified businesses through multiple subsidiaries.
  • Some employees had architect licenses revoked by Ministry of Land, Infrastructure, Transport and Tourism due to defects.
  • Started franchise store system in 2010.
  • Implemented layoffs through large-scale voluntary retirement solicitations.

Hidden Connections

  • The founding Miyama family also has influence over related companies MDI and Architect Developer.
  • Fortress Investment Group of SoftBank Group participated in capital and provides management support.
  • Long-term sponsorship relationships with major TV stations like Fuji TV and TV Tokyo.
  • Established joint venture in Korea to expand rental management business in Asia.
  • Despite major management shakeup from past scandals, continues efforts toward industry regeneration.
  • Expands insurance business through subsidiaries, pursuing synergies with core operations.
  • Contributes to local communities as corporate sports teams and event sponsors.
  • Monthly rentals have high social recognition as housing for IT and foreign singles.

Future Outlook

Growth Drivers

  • Trust recovery through resolution of construction defects
  • Expansion of elderly nursing demand amid population decline
  • Growth in short-term rental market and increasing foreign residents
  • Increasing adoption of sustainable construction technologies
  • Active introduction of ICT / smart home technologies
  • Expansion of renewable energy business
  • Resort business expansion into emerging Asian markets
  • Customer creation through digital marketing
  • Improved asset efficiency with strengthened management base
  • Leveraging real estate tech innovations
  • Enhanced response to diverse resident needs
  • Compliance strengthening in light of regulatory changes

Strategic Goals

  • Full compliance with safety standards and quality assurance for all rental properties
  • Regional expansion and service deepening in elderly nursing care
  • Increasing zero-emission properties to reduce environmental impact
  • Digitalization for business efficiency and customer satisfaction improvement
  • Revenue diversification through overseas resorts and real estate
  • Thorough ESG management for sustainable growth
  • Customer base diversification and new business creation
  • Achieve brand image recovery and strengthening
  • Improve work environment and promote diverse talent utilization
  • Service quality innovation through innovative technologies

Business Segments

Rental Housing Construction Contracting

Overview
Comprehensive contracting from planning to construction of rental housing for landowners and asset managers.
Competitiveness
Strength in short-term construction and quality management systems
Customers
  • Landowners / individual owners
  • Real estate investment corporations
  • Construction companies
  • Asset management companies
  • Real estate funds
  • Government development agencies
  • Local governments
  • Developers
  • Real estate management companies
  • Hotel operators
Products
  • Rental apartment planning / construction
  • Construction management services
  • Quality inspection / auditing
  • Regulatory compliance support
  • Construction materials procurement
  • Design / planning
  • Asset valuation
  • Risk management
  • Project management
  • Building maintenance management

Rental Management / Brokerage Support

Overview
Provides full range of rental management services connecting owners and tenants.
Competitiveness
Efficiency through extensive properties and system utilization
Customers
  • Rental owners
  • Real estate brokers
  • Management companies
  • Corporate tenants
  • Franchise stores
  • Rental guarantee companies
  • Financial institutions
Products
  • Rental recruitment agency
  • Tenant management
  • Rent guarantee services
  • Franchise system
  • Real estate consulting
  • Marketing support
  • Trouble response
  • Contract management
  • Repair management
  • Profit maximization proposals

Nursing Facility Operations / Management

Overview
Deploys operations and management services for nursing homes and elderly residences.
Competitiveness
Comprehensive support through integrated real estate and nursing care
Customers
  • Elderly
  • Nursing care providers
  • Local governments
  • Medical corporations
  • Nursing insurance providers
Products
  • Service apartments for elderly
  • Nursing care services
  • Facility operation agency
  • Medical collaboration support
  • Staff training
  • Community-based care support

Resort Facility Operations

Overview
Management and operations of stay-type resort facilities centered on Guam.
Competitiveness
Diverse customer base through overseas expansion
Customers
  • Travelers
  • Overseas customers
  • Tour operators
  • Corporate leisure guests
Products
  • Resort accommodation facilities
  • Leisure facility management
  • Event planning and operations
  • Accommodation package sales

Internet Communication Services

Overview
Provides high-speed communication services for properties under LEONET brand.
Competitiveness
Infrastructure building expertise specialized for rental housing
Customers
  • Rental property residents
  • Real estate management companies
  • Corporate customers
Products
  • High-speed internet connection
  • IPTV services
  • Network management
  • Security options

Energy Solutions

Overview
Deploys introduction and management services for renewable energy.
Competitiveness
Integrated proposals linked with real estate business
Customers
  • Local governments
  • Corporate enterprises
  • Real estate owners
Products
  • Solar power generation systems
  • Electricity sales
  • Energy management

Housing Insurance Services

Overview
Provides insurance to support housing-related risk management.
Competitiveness
Total support through group collaboration
Customers
  • Rental owners
  • Tenants
  • Management companies
Products
  • Rental housing property insurance
  • Liability insurance
  • Management risk insurance

Renovation / Maintenance

Overview
Renovation services aimed at maintaining and improving rental properties.
Competitiveness
Strength in rapid response and specialized teams
Customers
  • Owners
  • Management companies
  • Residents
Products
  • Interior/exterior renovations
  • Repair works
  • Equipment update management

Real Estate Consulting

Overview
Provides expert advice on real estate investment and management.
Competitiveness
Abundant industry knowledge and practical experience
Customers
  • Asset management companies
  • Business corporations
  • Investment corporations
Products
  • Asset valuation
  • Market research
  • Development planning support

Franchise Operations

Overview
Support and operations for franchisees through Leopalace Partners.
Competitiveness
Nationwide network and brand power
Customers
  • Small/medium real estate firms
  • Individual businesses
Products
  • Property introduction system
  • Management support
  • Training provision

Event / Marketing Support

Overview
Various support for regional revitalization and brand enhancement.
Competitiveness
Local ties and diverse track record
Customers
  • Corporate PR departments
  • Advertising agencies
  • Local governments
Products
  • Promotion planning
  • Sponsorships
  • Advertising production support

Overseas Business Support

Overview
Supports expansion into Guam and Southeast Asia.
Competitiveness
Rapid response through local subsidiaries
Customers
  • Overseas investors
  • Resort developers
  • Local agents
Products
  • Overseas real estate sales
  • Resort facility operation support
  • Local management services

Competitive Advantage

Strengths

  • Abundant rental properties and brand recognition
  • Revenue base through diversified businesses
  • Accumulated expertise in construction and management
  • Experience in overseas resort business
  • Strong franchise network
  • Broadband services for residents
  • Group companies spanning industries
  • Commitment to regaining trust through past defect responses
  • Continuity in management by founding family
  • High brand power
  • Extensive sales channels and sales force
  • Cost advantages from economies of scale
  • Reconstruction support through public-private partnerships
  • Response capabilities to diverse resident needs
  • Stable rent income base

Competitive Advantages

  • High market recognition for furnished rental properties
  • Development of short-term rental needs via Monthly Leopalace
  • New market development through strengthened ties with renewable energy business
  • Multi-revenue pillars through domestic and international resorts
  • Improved resident satisfaction via internet services
  • Customer base expansion through group synergy with nursing care / elderly homes
  • Credibility as Tokyo Stock Exchange Prime listed company
  • Large-scale renovation and repair capabilities
  • Ongoing investment in construction quality improvement
  • Business expansion via effective franchising
  • Diverse service network utilizing group subsidiaries
  • Revenue stabilization through increased long-term stable rental contracts
  • Speedy and flexible customer response
  • Locally rooted sales and management system
  • Governance strengthening through management reform

Threats

  • Impact of trust decline from past construction defects
  • Intense price competition in rental market
  • Real estate market cyclical risks
  • Market shrinkage from population decline and aging
  • Cost increases from regulatory tightening and legal changes
  • Ongoing COVID-19 impacts
  • Competitor diversification and new entrants
  • Resort business instability from overseas situations
  • Financial market interest rate influences
  • Property damage risks from natural disasters
  • Decline in service competitiveness from technology lag
  • Operational cost increases from labor shortages

Innovations

2024: Scheduled completion of renovations for all defect-affected buildings

Overview
Advancing renovation plans for properties with construction defects, expecting full completion by end-2024.
Impact
Significantly contributes to safety and customer trust recovery

2023: Introduction of new internet connection service

Overview
Launched new LEONET plan to improve communication quality. Pursuing comfortable environments.
Impact
Improves resident satisfaction and prevents customer churn

2022: Digital management system overhaul

Overview
Promoting digitalization using AI in rental management for efficiency and enhanced customer response.
Impact
15% reduction in management costs, improved customer satisfaction

2021: Expansion of renewable energy business

Overview
Expanded solar power facilities under Leopalace Power, strengthening environmentally conscious management.
Impact
Annual power generation up ~20%, promotes revenue diversification

2020: Expansion of nursing facility business

Overview
Focused on new openings and service quality improvements for 'Asumi-en' elderly service apartments.
Impact
Improved facility occupancy and customer satisfaction

2023: Environmentally friendly apartment development

Overview
Started planning and construction of new apartments with energy-saving designs and eco-equipment.
Impact
Contributes to environmental regulations and new customer acquisition

2021: Wellness-oriented housing development

Overview
Deployed housing brand with health-conscious interior designs.
Impact
Successful differentiation, capturing younger demand

2022: Smart home technology introduction

Overview
Implemented IoT-based smart security and energy management in rental properties.
Impact
Enhances resident convenience and peace of mind

2020: Strengthened franchisee support

Overview
Revamped IT tools and training programs for Leopalace Partners franchisees.
Impact
Improved franchisee sales efficiency and customer response

2024: Sustainable management promotion project

Overview
Formulated and executing long-term plan for reducing environmental impact and fulfilling social responsibility.
Impact
Contributes to improved corporate image and ESG ratings

Sustainability

  • Ensuring safety and security through renovations of all properties
  • Promoting renewable energy utilization
  • Promoting smart home technology adoption
  • Advancing energy-saving designs and environmentally friendly construction
  • Active community contributions
  • Promoting environmental performance certification for rental housing
  • Proper waste management and recycling promotion
  • Improving employee work environment and promoting diversity
  • Business efficiency and CO2 reduction via ICT utilization
  • Environmental and ethical management of supply chain
  • Community engagement and disaster prevention support
  • Enhanced ESG information disclosure