Q1Please describe an overview of Hulic's business.
As of the end of December 2025, Hulic has a leasing portfolio of 250 buildings and properties throughout Japan, mainly office buildings in central Tokyo. Many of our properties are located within a three-minute walk from stations in Tokyo central 5 wards. This location advantage allows us to enjoy low vacancy rates of below 1%. We have achieved consecutive profit growth mainly through reconstruction of old properties and asset management business. In response to demographic trends and evolving societal needs, we are focusing on assets such as commercial facilities, hotels and luxury ryokans (Japanese-style inns), data centers, children’s education facilities, next-generation industries such as air logistics and R&D facilities, etc., while we do not engage in condominium development or sales. Also, to prepare for potential large-scale earthquakes and a possible eruption of Mt. Fuji, we aim to achieve 100% highly earthquake-resistant buildings by 2029 to meet tenants’ BCP needs. In addition, as part of our environmental initiatives, we are targeting 100% renewable energy use across all owned buildings by 2029.
Q2Since IPO of the Tokyo Stock Exchange in 2008, Hulic has achieved profit and dividend growth for 17 consecutive fiscal years. Could you explain your future growth strategy?
We set medium- and long-term profit growth as a top priority management goal among various performance measures, and we have continued to post record high profit levels. However, given the rapid changes and uncertainties in the current business environment, we believe that growth and stability cannot be achieved through a single-focus business or by extending past approaches. Accordingly, we have launched our Medium- and Long-term Management Plan (2026–2036), “Transformation, Evolution, and Growth,” aiming to drive profit growth through the expansion of our business domains. By incorporating diversified growth businesses centered on real estate, we seek to build a unique and resilient business portfolio and achieve stable and sustained growth, as well as shareholder value enhancement.
Q3You have stated that you will focus on new businesses. What specific types of businesses do you plan to pursue?
We intend to focus on businesses that can generate synergies with our real estate business, as well as businesses with growth potential despite declining population. We will drive profit growth by incorporating a diverse range of businesses, including “real estate asset management”, “tourism”, “child education”, “environment, infrastructure”, “senior, healthcare”, “next-generation industrial assets”, “sports & entertainment”, and “corporate investments and business collaboration”. For example, we established a joint venture with Realgate Inc. and made a full-scale entry into the renovation of old buildings, in February this year. We made Riso Kyoiku Co., Ltd. and Raysum Co., Ltd. our consolidated subsidiaries in 2024, followed by CookDeli, Inc. and Koken Boring Machine Co., Ltd. in 2025. We will continue to make disciplined investments in companies with distinctive business profiles, based on strict criteria, to expand consolidated earnings.
Q4Could you also explain your future strategy for the real estate business?
We plan to continue maintaining and increasing profits at a high level in our real estate business. We will actively invest in highly marketable properties and inflation-resilient assets with rent upside potential, while collaborating with Raysum to promote advanced value-added projects, etc. with high return and capital efficiency.
Regarding development and reconstruction, we will carefully assess the feasibility of each project in light of rising construction and labor costs and pursue projects selectively, focusing on prime urban locations and inflation-resistant assets such as data centers.
Q5Interest rates are rising in Japan. How do you view the real estate market?
With inflation becoming entrenched, the pace of rent increase is accelerating, and real estate prices are rising due to strong domestic and international investor demand. As a result, both the leasing and transaction markets remain robust. In Tokyo, where approximately 70% of our portfolio is concentrated, rent growth and declining vacancy rates continue, and we believe real estate prices will remain stable.
Q6Are you also engaged in international business?
We began international business on a trial basis in 2024, with cumulative investments reaching approximately 100.0 billion yen. Under our Medium- and Long-term Management Plan (2026–2036), we aim to further strengthen our international business and build an investment balance of 600.0 billion yen by 2036. We pursue joint investments in assets with real demand in areas with economic and population growth, partnering with Japanese companies with rich track records in international investments. By limiting each investment to approximately 10.0–70.0 billion yen, we mitigate risk and achieve “Hulic’s unique” approach enabling efficient, flexible and optimal investments globally.
Q7Could you tell us about your shareholder return policy?
Based on the cycle of “growth investment → stable profit growth → enhanced dividend returns,” we are further strengthening shareholder returns. Since our IPO, we have increased dividends for 17 consecutive fiscal years.
Under the previous Medium- and Long-term Management Plan, we raised the dividend payout ratio from 35% at the end of 2019 to 41% by the end of 2025. In the Medium- and Long-term Management Plan (2026–2036), we plan to gradually increase the dividend payout ratio to 45% by 2029 while steadily expanding absolute dividend amounts through sustained profit growth.
Q8For FY2025, Hulic reported a record high ordinary profit of 172.9 billion yen, increased by 18.5 billion yen year over year. Please discuss the future outlook for Hulic's business.
I see ordinary profit as our guiding management target. This is because it considers interest paid on borrowings as well as operating profit, which represents the profit from our core business, but excludes extraordinary items such as sales of investment securities and fixed assets.
In 2025, consolidated ordinary profit amounted to 172.9 billion yen, putting us on track to achieve the consolidated ordinary profit target of 180.0 billion yen set under the previous Medium- and Long-term Management Plan (2020–2029). Based on these results, the Medium- and Long-term Management Plan (2026–2036) has been formulated, and we have set targets for consolidated ordinary profit of 185.0 billion yen in 2026, 220.0 billion yen in 2029, and 300.0 billion yen in 2036. By maintaining a foundation in our real estate business while incorporating a diverse range of growth businesses, we aim to continue pursuing “Transformation, Evolution, and Growth.”
Q9In closing, please share your message.
The business environment surrounding our company is undergoing significant change, including the entrenchment of inflation, a return to a world with interest rates, rising construction costs, and declines in both population and labor force. Against this backdrop, we have formulated our Medium- and Long-term Management Plan (2026–2036), setting a profit target of consolidated ordinary profit of 300.0 billion yen by 2036, with the aim of expanding our business foundation and achieving stable and sustainable profit growth.
By anticipating change and staying half a step ahead of shifts in our growth stage and the broader social environment, we are committed to driving transformation with a strong sense of speed. Under the motto of “driving innovation” and “accelerating progress”, in other words, “transformation” and “speed”, we will continue to move forward as one unified organization toward our next stage of growth.
(February 3, 2026)