Sumitomo Realty & Development raised its profit forecast for the year to March 2027 on 10 November, and pointed to Tokyo office rents as the reason. Its own figures support that for leasing. They also show property sales accounting for a larger share of the raise, and the company's boldest numbers, a ¥100 dividend and ¥400bn ordinary profit within five years, are targets, not forecasts.
What the guidance revision says
The company now expects operating profit of ¥330.0bn, up from ¥320.0bn in its May forecast, ordinary profit of ¥315.0bn, up from ¥300.0bn, and net profit of ¥230.0bn, up from ¥223.0bn. Revenue guidance was trimmed to ¥1.06tn from ¥1.07tn.
| Item | May forecast | Nov forecast | Prior year actual |
|---|---|---|---|
| Operating profit | ¥320.0bn | ¥330.0bn | ¥299.2bn |
| Ordinary profit | ¥300.0bn | ¥315.0bn | ¥289.2bn |
| Net profit | ¥223.0bn | ¥230.0bn | ¥212.5bn |
| Leasing operating profit | ¥224.0bn | ¥234.0bn | ¥210.2bn |
| Property sales operating profit | ¥81.0bn | ¥93.0bn | ¥76.2bn |
| Step operating profit | ¥22.0bn | ¥15.0bn | ¥23.6bn |
Leasing operating profit is forecast at ¥234.0bn, ¥10.0bn above the May forecast. Property sales operating profit rose by ¥12.0bn to ¥93.0bn, which the company attributes to continued demand for condominiums led by end-users and further margin improvement. The Step brokerage business was cut by ¥7.0bn and housing by ¥1.5bn.
What the rent evidence shows
The company says rent revisions on existing leases averaged +12% in April-September, against +7% for the previous year. It says this already delivers rent increases of more than ¥10bn a year. The gap between what sitting tenants pay and current new-lease rents is about ¥80bn, by the company's estimate, and covers offices and rental apartments together. The company says new-lease rents in the market are rising more than 10% a year, but notes its new-rent figures come from representative buildings in each ward and are not average rents.
The leasing segment reported operating profit of ¥117.9bn for the half-year, against ¥104.3bn a year earlier. Vacancy in existing office buildings fell to 3.3% at the end of September from 5.4% a year earlier, and the company says signed floor area continues to exceed cancelled area. All of this is one landlord's disclosure, not an independent rent index.
Net profit outran operations
Half-year operating profit rose 8.4% to ¥181.5bn, but net profit rose 18.4% to ¥140.1bn. Gains on sales of investment securities reached ¥30.3bn, against ¥11.5bn a year earlier, while interest expense rose to ¥16.9bn from ¥12.9bn. The company says it is selling shares to offset a growing interest burden. It puts interest-bearing debt at about ¥4tn, 95% of it ten-year borrowing, mostly at fixed rates.
Dividend: decision and target
The year-end dividend forecast is ¥28, which with the ¥27 interim makes ¥55 for the year. The May forecast was ¥52, and the company calls the new figure an ¥11 rise on the previous year. The prior-year figure is on a split-adjusted basis after the two-for-one split effective 1 January 2026.
The company now plans to direct about 60% of each year's profit increase to dividends, up from about 35%. It aims for ¥100 a year within five years and for ordinary profit of ¥400bn within five years and ¥500bn within ten. Those are management goals, and the company's own forecast caveat applies: actual results may differ.