Japan housing & real estate: Points to watch in Apr–Jun results and future investment perspectives

研报英文原文证据摘录

Japan housing & real estate: Points to watch in Apr–Jun results and future investment perspectives

th the impact of rising interest rates

and cost inflation. We also expect attention to focus on measures to ensure real estate

liquidity as rising interest rates depress the investment appeal of physical real estate. We

estimate that operating profits fell y-y in Apr–Jun at companies including Nomura Real

Estate Holdings [3231], Tokyu Fudosan Holdings [3289], and Mitsui Fudosan [8801].

However, this was due to the timing of sales bookings on income-generating real estate

and condos, and it is not a factor that should affect full-year earnings forecasts. We

estimate that profits rose at Mitsubishi Estate [8802] on the booking of gains on the sale of

overseas real estate. We think that Sumitomo Realty & Development [8830] performed

well versus full-year profit guidance in Apr–Jun, with condo sales and profits skewed

towards the Apr–Jun quarter, as in previous years. With share prices falling and stocks

looking increasingly undervalued, we are interested to see whether companies reporting

strong performance versus full-year guidance announce additional shareholder returns.

Housing & housing fixtures companies unlikely to generate strong earnings

Among housing and housing fixture companies, we estimate that Apr–Jun operating

profits rose at Toto [5332] on strong demand for SPE components and the disappearance

of prior-year rationalization losses in China, but fell at Lixil [5938] and Rinnai [5947]

because of higher costs. We also think profits fell at Sumitomo Forestry [1911], which has

high profit exposure to the US housing market, because of the slow recovery in the US

housing market. The company acquired a major US listed homebuilder in May 2026 and