■Business Overview

Wada Kosan ＜8931＞ discloses business details by dividing them into 4 parts: condominium sales, detached house sales, other real estate sales, and real estate rental income. According to the results for the interim period ending 2025/2, condominium sales are the company's main business, accounting for 73.5% of sales and 64.5% of gross profit. Also, detached house sales account for 4.5% of sales, 3.3% of gross profit, other real estate sales account for 13.5% of sales, 16.8% of gross profit, real estate rental income 8.2% of sales, 14.5% of gross profit, and others account for 0.3% of sales and 1.0% of gross profit. As for real estate rental income, large costs are sometimes unnecessary for rental properties, and profit margins are higher compared to other businesses.

The details of each business are as follows.

1. Condominium sales

It is the main business that accounts for approximately 80% of the company's sales. Since 1991, it is the brand name “Wacore” derived from Wada Kosan Residence, and has mainly been involved in the development of small and medium-sized condominiums, with the Kobe City/Hanshin section and surrounding area, which is one of Japan's leading residential areas. Also, in other businesses, they are unified by prefixing the brand name with “Wacole.”

Based on the concept of “premium unique,” in addition to aiming for condominiums in harmony with the cityscape based on safety and security as a “city tradition,” they are developing homes that pursue planning capabilities, such as incorporating the latest housing equipment with an emphasis on functionality and comfort. The company develops condominiums with an emphasis on quality, and aims to create condominiums with an emphasis on asset value and safety, and considering resale value from the time of development.

Conventionally, the development of medium-sized condominiums with around 50 units has been the main focus, but in recent years they have also been working on large condominiums with 100 or more units. Also, the number of properties near urban stations has increased, and the area has been expanded to Osaka Prefecture, Himeji City, etc. Furthermore, by permanently installing condominium galleries throughout the business area, we aim to improve price competitiveness and profit margins. Furthermore, since the company does not have an in-house sales department and outsources all sales, it is adopting a strategy to appeal to customers with product power such as planning and design, using “creating selected condominiums” as a keyword.

Since the start of business in 1991/3, the cumulative supply record of “Wacole” has risen to 564 buildings 21,871 units (construction start basis) as of the end of 2024/8, and in 2023 it boasts 3rd place in the number of supply buildings in the Kinki area, 1st in the number of supply buildings in Kobe city for 26 consecutive years (1998 to 2023), and number 1 in the number of supply units in Kobe city (2023). From purchase to completion and delivery, it is an average of 2 to 2.5 years for 50 to 100 properties, but price fluctuation risks are avoided by selling 1 to 2 months after starting construction and proceeding with contracts. A stable market environment continues, and the company's condominiums capture the needs of a wide range of people by planning diverse floor plans, leading to early contracts.

2. Detached house for sale

It is a business that carries out small to medium scale residential land development and sells detached houses. The brand name “Wakolenoie” has been new since 2009, and it emphasizes added value such as design and planning ability by utilizing the land purchase network cultivated through condominium sales, mainly in the Hokuseku region, mainly between Kobe and Hanshin. In order to differentiate ourselves from other companies, we are proceeding with business development with the goal of steadily accumulating the number of units supplied per year, even if it is a small-scale development of about 5 units, based on cityscape development. In a detached house, the average time from purchase to completion and delivery is 6 months to 1 year. Examples of projects include Wakore Neue Sakasegawa Nogami Gardens (Takarazuka-shi, Hyogo, total number of units: 8 units) and Wakolenoye Suzurandai-minami-cho (Kita-ku, Kobe-shi, total number of units: 20).

3. Other real estate sales

It is a business that mainly plans, develops, and sells small-scale profitable condominiums. The brand name is “Wakolevita” for RC (reinforced concrete) steel-framed profitable condominiums, and “Wakoleviano” for wooden profitable apartments. Also, in the process of promoting effective use of owned real estate, in cases where an increase in the value of the real estate can be expected due to sales, substrates for condominiums and detached houses are also being sold. In steel-framed profitable condominiums and wooden profitable apartments, it is average to own for about 1 year from purchase to completion, and 2 to 3 years after completion to obtain rental income and then sell. Examples of projects include Wakolevita Suma Seaside Park (Suma-ku, Kobe-shi, 40 units in total) and Wakoleviano Suma-Tenjincho (Suma-ku, Kobe-shi, total number of units 15).

4. Real estate rental income

It is a stable profit business that has continued since its establishment, and it operates stores, offices, parking lots, etc. with a focus on residences. We mainly own rental apartments with an emphasis on transportation convenience within a radius of 1 km from the station, mainly in Kobe City and the Hanshin area, and earn rental income. It emphasizes equipment and functionality, and offers unique condominiums such as pet-friendly condominiums and designer condominiums. We are also developing newly built properties in-house, and we are considering cases where we will switch to condominium development projects in the future. We are also developing rental condominiums using the value up method (purchasing an existing rental property and increasing asset value through renovation work), which is expected to reduce construction costs and shorten construction periods compared to new construction.

It maintains a high level of occupancy rate of 95% or more (excluding parking lots), and its asset structure as of the end of 2024/8 is 76.6% for residences, 17.6% for stores and offices, etc., 0.5% for parking, and 5.3% for trunk rooms, etc. Examples of owned properties include Wakolevita Sumiyoshi Higashimachi (Higashinada-ku, Kobe-shi, total number of units 12), Wakore Kobe Sannomiya Building (Chuo-ku, Kobe-shi, B1-2F is a store, 3-9F is an office), etc.

5. others

“Other” includes income (cancellation fee income, insurance agency fee revenue, brokerage fees, etc.) generated incidental in connection with the company's business.

(Written by FISCO Visiting Analyst Shigeki Kuni)