July 31 (Bloomberg) -- Mitsubishi Estate Co., Japan’s biggest developer by market value, said first-quarter profit more than doubled because of a recovery in apartment sales following the March 11 earthquake last year.
Net income increased to 11.9 billion yen ($152 million) in the three months ended June 30 from 4.46 billion yen a year earlier, the company said today. Revenue dropped 7.5 percent to 196.9 billion yen as commercial developments declined.
Mitsubishi Estate and competitors are facing record high vacancy rates in Tokyo, and supply of office space in the city is expected to reach a nine-year high. Tokyo’s office vacancy rate rose to 9.43 percent in June, according to Miki Shoji Co., while new supply will gain 42 percent this year, the highest since 2003, according to a survey by Mori Trust Co., a Tokyo-based developer.
Shares of Mitsubishi Estate fell 1 percent to 1,416 yen in Tokyo, trimming the year-to-date gain to 23 percent.
The developer sold 999 apartments in the three months ended June 30, compared with 442 units sold in the same period last year, according to the statement. Its residential business returned to a profit of 297 million yen from a loss of 6.2 billion yen.
Operating profit, or sales minus operating costs, fell 3.2 percent to 28.5 billion yen in the company’s sales and office leasing businesses, the company said today.
Revenue from the company’s commercial property development and investment division dropped to 2.6 billion yen in the quarter from 47.7 billion yen for the same period a year earlier.
Mitsubishi Estate’s office vacancy rate rose to 4.5 percent in June from 3.6 percent in March, according to the company’s website.
Mitsubishi Estate submitted a proposal to build two towers in Otemachi to the Tokyo Metropolitan government on July 26, said Ryuichiro Funo, a spokesman. The developer plans to start the construction of a 31-story office tower and a 18-story building that contains a hot-spring hotel in 2014, and the projects are expected to be completed by 2016, according to materials submitted to the government.
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