Company Overview

1. Company Overview

The company group currently consists of four entities: CREAL <2998>, its consolidated subsidiary CREAL Partners Inc., CREAL ASIA Pte Ltd, and CREAL Hotels Inc. The name "CREAL" is derived from "Clear Real Estate" and aims to resolve the industry's closed nature, information asymmetry, and opacity to instill a sense of security and safety in real estate investment for investors through enhanced information transparency and the convenience of online investing.

This refers to the disparity in information held and obtainable between so-called professionals like real estate companies and institutions and general individual investors.

Following the deregulation of the Special Joint Venture Act in 2017, the company obtained the first and second licenses for electronic trading business as real estate specific joint business operators in October 2018, enabling the provision of crowdfunding services for real estate investment through the internet. In November of the same year, the company launched an online market service for real estate funds under the brand name "CREAL." This marked the substantial Start of the company's current business model and has become a driving force for high growth.

Fed by the closed nature of the industry, opacity of information, and lack of funding and expertise, real estate investment was previously a high barrier for individual investors. The company has opened doors widely by innovating the asset management process through DX. Since then, utilizing cutting-edge fintech with AI and DX, by leveraging the insights of founding members and board members, collaborating with renowned domestic and overseas companies, and developing alliance services, the company has expanded its offerings. Moreover, it provides numerous investment opportunities in ESG real estate that balance asset management with social contribution, as well as initiatives that mitigate investor risks, such as priority-subordinated investment methods, earning the trust of a wide customer base from individual investors to institutions.

The real estate investment industry has lagged in DX compared to other sectors like securities and insurance, still clinging to fax culture. The company aims to significantly transform real estate investment by promoting DX across many operation processes such as sourcing (real estate procurement), operation, and exit (real estate sales).

Specifically, it builds the conventional real estate investment processes like sourcing, operation & rental management reporting, and exit into a unique platform through DX. In sourcing, the company employs not only traditional methods relying on individual network connections but also AI to enable 24/7 sourcing and fair evaluation. In operation & rental management reporting, it transforms the previously manual method of sending paper materials into a system that allows for quick and low-cost income statements and management reports online. In exit, instead of relying solely on personal networks, N-to-N matching is facilitated using the web and app. Furthermore, enabling small-scale online investments through crowdfunding has expanded real estate investment from traditional institutional investors and wealthy individuals to all types of investors, including individual ones.

2. History

The company was established in May 2011 under the name Bridge Sea Co., Ltd., and changed its name to Bridge Sea Capital Co., Ltd. in October 2017. In November 2018, the company launched its core online real estate fund market service "CREAL." In March 2021, the company changed to its current name and was listed on the Tokyo Stock Exchange’s Growth Market in April 2022.

The investment amount in real estate crowdfunding expanded 79.4 times over five years.

3. Trends in the online real estate investment market.

In March 2019, the Ministry of Land, Infrastructure, Transport and Tourism formulated the "Guidelines for Electronic Transaction Business of the Real Estate Specific Joint Enterprise Law" to further promote the utilization of real estate crowdfunding based on the Specific Joint Enterprise Law. They also amended related rules and notifications, along with other improvements to related systems. In September 2023, a practical guidebook related to real estate crowdfunding was published to ensure that businesses conducting crowdfunding based on the Specific Joint Enterprise Law can establish appropriate business management systems and practice investor protection. This guidebook explains the necessary organizational and management systems by practical phases, as well as organizing business risks, trouble factors, necessary measures, and points, and introduces marketing ideas, strategies, and know-how to succeed in practice.

With government support, real estate crowdfunding based on the Specific Joint Enterprise Law has grown from 26 cases with an investment amount of 1.27 billion yen in the 2018 fiscal year to 530 cases (a 1.26 times increase compared to the previous year) with an investment amount of 100.78 billion yen (a 1.67 times increase) in the 2023 fiscal year, resulting in an average annual growth rate of 139.8% for investment amounts and 82.8% for the number of cases, showing remarkable growth. Currently, the market in Japan is centered around individuals, but it is expected that, similar to Overseas, corporations will also enter the market in the future, predicting further scale expansion.

(Writer: FISCO analyst Tomoichi Murase)