Jowa's Strengths
The Jowa Group has three key strengths. The first is earnings stability derived from a business structure predominantly supported by a rental office building business. The second is high profitability derived from keeping highly productive, prime income properties leased up at high occupancy rates. The third is large unrealized gains derived from a portfolio of quality properties located mainly in Greater Tokyo. By virtue of these three strengths, the Jowa Group has built a solid management foundation and realized steady growth and high profitability.
1.Stability and high profitability as a real estate company with an accumulated stock of income-producing assets
Rental office building business's share of consolidated revenues(fiscal 2010)
The Jowa Group has adopted a business model based primarily on generating rental revenues from its portfolio of high-quality properties in prime locations in central Tokyo and other major cities.
The Jowa Group has achieved stable growth and realized high profitability in the form of a consolidated operating margin of around 30% based on long-term business relationships with its office building tenants.
2.High-quality asset portfolio
Share of operating assets located in Greater Tokyo
Share of Office Building Business's revenues derived from Tokyo Stock Exchange-listed groups and financial institutions
The Jowa Group owns an extremely high-quality asset portfolio. Some 85% of its properties are located in Greater Tokyo (and approximately 98% located in Greater Tokyo and government-designated cities).
Additionally, the Jowa Group has a high-quality customer base, with Tokyo Stock Exchange-listed groups and financial institutions accounting for around 82% of its tenants. Such tenants support the Jowa Group's long-term earnings stability.
(All percentages cited above are current as of March 31, 2011.)
3.Large unrealized gains
Market value of operating properties (as of March 31, 2011)
As of March 31, 2011, the Jowa Group's operating properties had an aggregate market value of ¥138.5 billion, ¥25.3 billion of which was unrealized gains in excess of the properties' aggregate book value of ¥113.2 billion. The extent of these unrealized gains attests to the extremely high quality of the Jowa Group's portfolio.
