[Company analysis] Sumitomo Realty & Development Co., Ltd. (住友不動産)

「Sumitomo Realty & Development Co., Ltd. (住友不動産)」is a major real estate development company, which can be comparable to「Mitsui Fudosan Co., Ltd.(三井不動産)」and「Mitsubishi Estate Co., Ltd.(三菱地所)」. It has strengths in the retail business such as sales and rentals and in particular, condominium business. This company owns and operates over 200 buildings, mainly in Tokyo. The number of consolidated employees is approximately 12,574.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Sumitomo Realty & Development Co., Ltd.
Company name (Japanese)	住友不動産
Date of establishment	Thursday, December 1, 1949
Headquarters location	〒163-0820 東京都新宿区西新宿二丁目4番1号
Capital	122,805
Consolidated sales	1,013,229
Consolidated operating profit	220,419
Consolidated total assets	5,127,464
Consolidated capital	1,208,116
Capital adequacy ratio	23.6%
Consolidated number of employees	12,574

 

 

 

2. Summary and Features

 
The predecessor of current「Sumitomo Realty & Development」is「Izumi Real Estate Co., Ltd.(泉不動産株式会社)」was established after the dismantling of Sumitomo Zaibatsu in 1949. In 1974, they constructed "Shinjuku Sumitomo Building(新宿住友ビル)" and then launched「Sumitomo Real Estate Sales Co., Ltd.(住友不動産販売株式会社)」and 「Sumitomo Real Estate Syscon Co., Ltd.(住友不動産シスコン株式会社)」, in order to expand the scale of the company. In 1982, they built the skyscraper "Shinjuku NS Building(新宿NSビル)" and moved the head office to this building.

 

「Sumitomo Real Estate」is one of the major real estate development companies in Japan and is very active in the retail business such as sales and rental. In 1996, they started a home remodeling business. Recently, the number of condominium units that this company supplied has reached No. 1 in Japan for the fourth consecutive year, and sales in the condominium business have been steadily increasing.

「Sumitomo Real Estate」has the third largest sales in the Japanese real estate industry. But the biggest feature is, their high operating margin. Actually,「Mitsubishi Estate(三菱地所)」and「Mori Building(森ビル)」, which mainly focus on the building business with high collection efficiency, also have a high operating margin based on office buildings. But in case of「Sumitomo Real Estate」, it has a portfolio that achieve very high operating margin without depending on office building business, Is characterized by having a high operating profit ratio.

It is said that Sumitomo Real Estate's unique sales policy is behind the above results. This company has a strategy of selling condominiums over a long period of time while avoiding price reductions as much as possible in order to maintain its brand power. As a result of focusing on their brand strategy in this way, they have maintained the highest level of operating income in their history for the sixth consecutive year since 2013.

 

 

 

3. Major Business

 

■ Real estate lease business

■ Real estate sales business

■ Completion construction business

■ Real estate distribution business

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated revenue		925,151	948,402	1,013,229
Consolidated operating profit		188,171	205,637	220,419
Consolidated total assets		4,980,039	5,186,901	5,127,464
Consolidated net assets		1,039,103	1,114,975	1,208,116
Breakdown of sales	Real estate lease business	333,604	350,210	378,090
	Real estate sales business	313,992	310,913	331,515
	Complete construction business	200,565	206,838	219,776
	Real estate distribution business	65,615	68,857	72,521
	Others	11,372	11,580	11,325