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Mitsubishi Estate First-Quarter Profit Declines 30% as Home Sales Slide
Mitsubishi Estate Co., Japan’s second-biggest developer, said first-quarter profit fell 30 percent on declining home sales.
Net income dropped to 6.77 billion yen ($78 million) in the three months ended June 30 from 9.64 billion yen in the same period a year ago, the company said in a statement distributed through the Tokyo Stock Exchange today. Sales fell 9.8 percent to 189 billion yen.
Japanese developers face record-high office vacancies in Tokyo and a slump in the city’s housing market as companies cut spending and the unemployment rate remains above 5 percent. Mitsubishi Estate today said its residential business had an operating loss of 1.65 billion yen in the first quarter compared with a profit of 2.36 billion yen last year.
Revenue at the company’s housing business declined 31 percent in the first quarter, it said. Mitsubishi Estate sold 848 apartments in the quarter, 42 percent less than last year.
Condominiums put up for sale in the Tokyo region declined for a fifth year in 2009 to 36,376 units, according to the Real Estate Economic Institute Co., a Tokyo-based industry researcher.
Office Leasing Business
Operating profit, or sales minus operating costs, in the company’s office leasing business fell 2.1 percent to 30 billion yen in the quarter. The company’s vacancy rate rose to a five- year high of 4.46 percent in June. Mitsubishi Estate owns more than 30 buildings in Tokyo’s central business district.
Tokyo’s office vacancy rate rose to 9.1 percent in June, the highest since Miki Shoji Co., a privately held office brokerage company, started compiling monthly data in January 2001.
The developer booked a one-time loss of 1.39 billion yen in the quarter for exiting a project based in Saitama prefecture near Tokyo, it said.
Mitsubishi Estate reiterated its full-year profit forecast of 63 billion yen on sales of 975 billion yen.
Shares of Mitsubishi Estate dropped 4.1 percent to 1,218 yen at the 3 p.m. close on the Tokyo Stock Exchange.
To contact the reporters on this story: Kathleen Chu in Tokyo at Kchu2@bloomberg.net; Katsuyo Kuwako in Tokyo at kkuwako@bloomberg.net
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