Development Business Briefing and JIYUGAOKA MUSE SQUARE Visit

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Update

September 16, 2026 11:45 AM GMT

Kajima (1812) | Japan

Morgan Stanley MUFG Securities Co., Ltd.+

Ryo Yagi

Equity Analyst

Development Business Briefing

and JIYUGAOKA MUSE

SQUARE Visit

Kajima (1812.T, 1812 JT)

Construction | Japan

Stock Rating

Industry View

Price target

Shr price, close (Sep 16, 2026)

Mkt cap, curr, basic (bn)

Avg daily trading value (bn)

Overweight

Attractive

¥9,200

¥4,950

¥2,280.7

¥11.7

Key Takeaways

On September 16, Kajima hosted a development business briefing and a site visit

to JIYUGAOKA MUSE SQUARE. The event provided an update on the current

status of the development business and its future direction.

Domestic development business: Asset balance at the end of F3/26 stood at

¥490bn, while domestic development NP for F3/26 was ¥16.8bn. The company

owned 53 properties (~120,000 tsubo of floor space, with an occupancy rate of

95%). By asset type at the end of F3/26, the portfolio comprised offices 63%, retail

12%, residential 11%, hotels 7%, and logistics/other 7%. NOI yield was approximately

6%. Looking ahead, while rising construction costs are having an impact, office rents

and hotel room rates are increasing, and the company is investing with a target NOI

yield of 6% or higher. Offices remain the primary focus of its development pipeline,

although hotels exposure is extensive. The company also plans to expand its data

center business. With an eye toward the next medium-term plan, management

currently aims to achieve NP of more than ¥20bn (versus the current medium-term

plan target of an average ¥18.5bn over 3 years). Kajima REIT's asset size stood at

¥88.3bn as of end-March 2026, and management believes it needs to reach ¥100bn

in the near term and continue expanding thereafter.

JIYUGAOKA MUSE SQUARE: We toured the retail and residential areas. Kajima

developed the project by leveraging its strengths in building relationships with

landowners and implementing measures to reduce construction costs and improve

profitability. As a result, the project has delivered attractive buildings, enabling rents

…