2991.T

• Company Philosophy and Positioning:

  • Core mission: Pursue happiness for all employees both materially and spiritually, while contributing to the progress and development of humanity and society.
  • Strategic goal: Become a Private Realtor that realizes clients' life plans by leveraging cutting-edge technology and proprietary databases to circulate, regenerate, and operate real estate.
  • Market positioning: Unlike large established developers that focus on new development, or small regional/segment-specialized brokers that only handle specific property types, Landnet focuses exclusively on existing (used) real estate and aims to handle all property types across all regions of Japan, from Sapporo in the north to Ishigaki Island in the south. This full-coverage positioning is unique to the company and allows it to serve all client needs, including inheritance-related real estate transactions.

• Core Competitive Advantages:

  • DX-enabled efficiency via core system "RCP":
    • Client-facing DX: Sequentially digitizing all contract types (sales, lease, outsourcing, construction) via electronic agreements; LSEED crowdfunding is fully digitized, with a dedicated website for LSEED real estate investment and plans to launch a dedicated mobile app, with future plans to add apps for LSEED Home and LSEED Rental Management.
    • Employee-facing DX: Leverages a proprietary nationwide database covering all property types to deliver fast, accurate property appraisals, which is a key competitive advantage. The in-house system development team allows for rapid responses to client needs, for example enabling early redemption after 3 months for 1-year LSEED crowdfunding products.
  • Direct procurement: 69% of all properties are procured directly from owners, cutting out middlemen, allowing for reasonable procurement prices, reducing unsold inventory, and improving inventory turnover.
  • Fast inventory turnover: Total inventory for sale stood at 26.612 billion yen as of the 2nd quarter FY2026, with inventory turnover days of 105 days, which is significantly faster than peer companies. Turnover days have increased slightly as the mix shifts to higher-priced family-type properties that require longer processing timelines, but remains far faster than industry averages.
  • Fast upskilling for employees via full information sharing: All negotiation history and property information is shared across all employees, allowing new hires to quickly access full background on any property. Unlike peers that silo procurement, sales, and calling teams, Landnet has single employees manage both procurement and sales of a property, which builds comprehensive expertise over time and helps control inventory risk. Sales per employee has remained stable at 2 billion yen per person even as headcount has grown.

• Growth Initiatives:

  • Product mix expansion: Shifting the core mix from one-room condominiums to family-type condominiums, and actively expanding into single-family homes and apartment buildings, with a focus on the 100 million yen to 200 million yen price range that matches current end-user demand.
  • Enhanced customer guarantees: Proprietary "Anshin Hoshou" (Safety Guarantee) offers 3 years of defect liability (versus the standard 2 years for the industry), plus up to 3 years of equipment warranty, and rent default guarantee for up to 6 months for investment properties.
  • Geographic expansion: Recently opened an Okinawa branch to continue expanding geographic reach.
  • LSEED Crowdfunding growth: Currently sells 120 million yen per month, with plans to increase this to 150 million yen per month, extend the maximum fund term from 1 year to 3 years, and expand to cover more property types, all while maintaining a customer-focused approach that only offers products that align with client interest.

• Full-year FY2026 guidance is maintained, with full-year sales targeted at approximately 110.5 billion yen (51.4 billion yen in H1, 59.1 billion yen in H2) and full-year ordinary profit targeted at 4 billion yen. As of the 2nd quarter, ordinary profit reached 1.57 billion yen (39.8% of full-year target), and pre-tax profit reached 43.9% of the full-year target. Management confirms the full-year target remains achievable.
• Seasonal patterns mean family-type property sales are concentrated in the second half of the fiscal year (February to May, with closing concentrated in the period leading up to the July year-end), so most full-year profit growth will be realized in the second half, which is consistent with the company's normal business cycle.
• Inventory of 26.612 billion yen of properties for sale accumulated in the first half is expected to contribute to sales and profit in the third and fourth quarters.
• Management expects the share of used real estate in Japan's overall real estate market will rise from the current 42.3% to 60-70% over the long term, creating sustained growth opportunities for the company's core business.
• Management expects to exceed 10,000 managed rental units by the end of the full fiscal year.

1. Real Estate Sales Business: Accounts for 98.7% of total revenue. For the first half of FY2026 July Term, total segment sales reached 51.4 billion yen, with 1.57 billion yen in ordinary profit as of the 2nd quarter. Within the core condominium segment: 54.1% of transaction volume is family-type condominiums (1,814 units), which account for 73% of total gross profit; 1R/one-room condominiums account for the remaining 45.9% of transaction volume (1,536 units) and 27% of gross profit. The company is actively expanding into single-family homes and apartment buildings, with plans to eventually add full buildings and full condominium complexes to the product mix. Total transaction volume across all property types hit 1,811 units for the half-year period. By region, 57.2% of transactions are in the Tokyo metropolitan area, 11.8% in the Kinki region, and 12.1% in the Kyushu region. 2. Real Estate Rental Management Business: Accounts for 1.3% of total revenue. Managed units reached 9,773 units as of the 2nd quarter, with the company on track to exceed 10,000 managed units by the end of the full fiscal year. The business maintains an occupancy rate of 98.64%. 3. LSEED Crowdfunding (Real Estate Investment Crowdfunding): Currently offers 10 thousand yen minimum investment products, with monthly sales totaling approximately 120 million yen (split into two 60 million yen offerings). Held real estate for crowdfunding totals approximately 4.6 billion yen as of the 2nd quarter, with inventory now largely sufficient to meet near-term demand.

• Recent price appreciation in prime urban areas (especially 23 wards of Tokyo) driven in part by foreign investment has created elevated risk for high-priced properties over 700 million yen. Management has adopted a deliberate strategy to avoid deep exposure to this high-risk segment, focusing instead on the 100 million yen to 200 million yen end-user focused segment.
  • The company has experienced past failures in high-risk/overheated market segments, but has incorporated these lessons into its current risk control framework: the policy of having the same employee manage both procurement and sales ensures that the decision-maker directly bears the cost of unsold inventory, leading to more cautious and informed procurement decisions.
• As the property mix shifts to higher-priced family-type properties, inventory turnover days have trended gradually upward, though it remains far faster than peer averages.
• First half sales growth was slower than planned for some property categories, though this is consistent with the seasonal sales pattern for family-type properties, and management expects this to be made up in the second half.
• Management notes that current real estate price appreciation has been led by rising new construction prices, and expects that some form of policy response to address price levels is likely over time, and has adjusted its strategy accordingly.
• Regional price trends are mixed: Tokyo 23 wards continue to see price gains, but Chiba, Saitama, and Kanagawa prefectures have seen prices plateau, as has the Nagoya market, while Fukuoka remains strong.

Q: Could you share the current status and future outlook for the LSEED crowdfunding product?

A: The most recently launched funds have a 1-year holding term, with early redemption allowed after 3 months (early redemption is blocked in the final 3 months before fund maturity). Clients can redeem their holdings similar to breaking a fixed term deposit, and receive proportional dividend yields for the holding period. We are evaluating extending the standard term from 1 year to around 3 years. Currently, we sell approximately 120 million yen per month split into two 60 million yen offerings, and we are targeting increasing this to 150 million yen per month split into two offerings, and we plan to continue this operating model going forward. We are also evaluating expanding the product range to include other property types including one-room condominiums, apartments, full buildings, and full condominium complexes, and we will only add new products based on demonstrated client interest, rather than pushing unsolicited products.

Q: How do you use proptech tools like VR viewings and AR furniture simulation in your business?

A: Personally, I am skeptical about how genuinely useful VR viewings and AR furniture simulation are for client experience. We are confident that LSEED crowdfunding delivers genuine satisfaction to clients. For LSEED investment, LSEED crowdfunding, and LSEED Rental Management, our top priority for app development is simplifying communication between landlords and tenants via digital tools. Internally, we handle 500 to 700 new contracts per month, so we are working to introduce AI to automate contract creation to further improve client service. Our overarching goal is to improve client satisfaction across sales, rental, renovation, and crowdfunding segments.

Q: Do you still need a physical seal (hanko) for real estate contracts?

A: All contracts can now be completed electronically online, so a physical real seal is no longer required. The process is completed by clicking an approval button, and all executed documents are sent to clients via email after completion. We also plan to add a feature to save all client documents in their personal mypage account on our platform.

Q: How is Landnet responding to the recent rise in used condominium transaction prices in major cities like Tokyo, Osaka, and Fukuoka?

A: It is true that prices have risen in Tokyo's 23 wards, but prices have plateaued in Chiba, Saitama, and Kanagawa prefectures. Fukuoka remains strong, while Nagoya has plateaued. As a company, we do not encourage rapid price growth; we prefer stable price growth aligned with increases in rent and wages, which is the most sustainable outcome. Currently, high new construction prices have pushed demand to the used market, raising used prices, and driving demand shift to regional and suburban areas. We have also seen demand shift from condominiums to single-family homes, which has seen price growth since the COVID-19 pandemic after decades of stable prices. We believe some policy response to address current price levels is likely, given the current environment including talk of new regulations on foreign investment. As a result, we have deliberately chosen not to deepen our exposure to high-priced properties over 700 million to 1 billion yen, which carry higher risk from speculative foreign investment. Instead, we focus on the current 100 million to 200 million yen price range, which matches end-user demand (up from 50 million yen historically). This price range allows us to fully understand market conditions and offer appropriate priced properties to clients, rather than pushing high-margin but high-risk properties to unassuming clients.

Q: Is your strategy of avoiding overheated high-priced segments a deliberate, cautious policy?

A: We have made missteps in the past, but we have fully learned from those failures. To control inventory growth, we have a consistent policy of having the same employee manage both procurement and sales of a property. This means the decision-maker directly feels the pain if a property cannot be sold even after price cuts, which changes their future behavior and prevents excessive risk-taking. We continue to expand the company's footprint while incorporating lessons from past mistakes.

Q: Will the first half inventory build contribute to second half results?

A: Yes, the accumulated inventory will be recognized as sales in the third and fourth quarters, consistent with our seasonal cycle.

Q: Does the sales pattern for family-type properties you described refer to closing timelines?

A: That is correct. While contract signing can happen in December or January, the full process of purchase, renovation, and sale is typically completed between March and May. Since our fiscal year ends in July, activity and revenue recognition naturally ramps up toward the end of the fiscal year, which is a normal seasonal pattern not driven by aggressive accounting.

Q: What is the background for the high employee approval rating on OpenWork, which ranks in the top 4% of all companies?

A: We are very happy to receive this high rating. We operate on a performance-based culture but prioritize work-life balance, including a full two-day weekend every week, and this structure contributes to young employees feeling they are growing and maintains high morale. We aim for a workplace that is challenging but also enjoyable, and we will continue to review our policies to avoid complacency as we grow.

Q: How does your integrated model of providing sales, brokerage, rental management, and renovation in-house benefit profitability and customer acquisition?

A: The rental management and renovation segments are growing steadily, and cross-business synergies with the sales segment are strengthening. This allows us to build long-term relationships with clients after their first transaction with us, which stabilizes earnings and drives further sales growth.

Q: What is your outlook for the procurement environment and sales price trends for your used condominium regeneration business?

A: Our construction division that handles condominium regeneration is now finally stable and operating on a consistent trajectory. We will continue to leverage our core procurement strength and improve the productivity of our renovation operations. We aim to expand the number of buy-renovate-sell transactions to deliver more high-value renovated homes to clients.

Q: Can you share specific examples of how DX and core system use have improved operational efficiency and closing rates?

A: DX has dramatically speeded up the process from appraisal request to purchase decision, which has allowed us to scale direct procurement and expand our product mix much faster than would otherwise be possible. Electronic contracting also improves efficiency, and our in-house development capability allows us to launch new products like the crowdfunding platform much faster than if we relied on external vendors, making it easier to meet client needs. We are also specifically focused on improving profit margins for rented family-type condominiums used for crowdfunding, and securing acquisition capital for these properties, which we expect to be a meaningful driver of future profit.