2998.T

• Mission & Competitive Positioning

  • Core mission: "Change real estate investment, change society" — digitize the under-digitized real estate investment process to expand access to middle-risk, middle-return real estate investment for retail investors, closing the gap between high institutional allocation (60-80%) and low retail penetration (only 2.3% of Japanese individuals have real estate investment experience).
  • Unique competitive advantage: In-house development of system, product, and marketing capabilities (all three functions typically outsourced by peers), with an experienced team across real estate, IT, and finance. Operates a vertically integrated platform: front-end investment products for all investor segments (retail entry via CREAL, experienced investors via CREAL PB, institutional/affluent via private funds), supported by back-end pipeline and value-add from Clearal Hotels and Clearal Partners.

• New Business Launches

  • 3/4 Article of the Real Estate Specified Joint Business Act schemes launched in August 2025 after receiving license in June 2025. Q2 completed 2 funds (Abiko healthcare property, Gotanda office), and Q3 has already completed 2 additional funds (Akasaka hotel, 2 Osaka residences) with all offerings fully subscribed. This scheme allows 3% upfront fee recognition at fund formation (vs. all gains recognized at sale under the 1/2 Article scheme), creating a more stable, less timing-dependent revenue structure, and does not require required subordinate equity from CREAL.
  • Launched new premium apartment hotel brand "VAYS" targeting the underserved high price-point segment, focused on privacy and high-quality amenities, complementing the existing mid-price "LACER" brand. Target is 50 new properties over 4 years. Clearal Hotels drives group synergy by turning around underperforming hotel assets to feed into CREAL/ CREAL ST and CREAL PRO pipelines, and passing high-risk greenfield development to CREAL PRO before moving stabilized assets to CREAL as an exit.

• Digital & Marketing Strategy

  • Three-pronged DX×AI×Marketing strategy: In-house development of upcoming real estate security token product "CREAL ST" on track for launch next year, with lower initial and running costs from in-house system build. Future alternative investment platform "CREAL Fund" planned to expand beyond real estate to cover a full range of alternative assets for retail investors.
  • AI automates property underwriting and pricing: AI automatically extracts and analyzes data from PDF property offers to generate pricing recommendations, increasing deal throughput, improving accuracy, and cutting labor costs. Further development will add real-time market data integration and automated internal report generation.
  • Proprietary micro-influencer strategy: Custom-built in-house management system eliminates ASP fees, allowing more micro-influencers to partner while increasing influencer take-home pay, aiming to build the largest micro-influencer network in Japan's online investment space.

• Balance Sheet Improvement

  • 3/4 Article funds hold assets on third-party SPC balance sheets, qualifying for off-balance sheet treatment for CREAL. This will reduce total assets, improve equity ratio and return on assets, with 64% of current total assets scheduled to move off-balance sheet over time as existing properties are sold and new funds are structured via SPC.

• Full-year 2026 March fiscal year: Company is on track to meet guidance, with CREAL already exceeding 20 billion yen in profit against a 30 billion yen full-year target, with upside potential. CREAL PRO is on track to come in very close to its 30 billion yen full-year target, consistent with the back-loaded plan. CREAL PB is progressing in line with budget. Selling, general and administrative expenses are in line with budget, with the increase driven by planned upfront investment for ST, hotel business, hiring, and marketing.
  • 5-year mid-term target: Achieve 250 billion yen in annual GMV and 10 billion yen in net profit by FY2030 March fiscal year, driven by the dual growth pillars of 3/4 Article schemes and upcoming CREAL ST.
  • CREAL targets 40 billion yen full-year GMV; management expects full target achievement as operations move into steady state after the initial launch downtime.

1. CREAL: Gross profit grew 3.2x year-over-year, driven by successful property sales under the 1/2 Article of the Real Estate Specified Joint Business Act and upfront fee recognition from newly launched 3/4 Article schemes. 5.2 billion yen in total funding was raised across 2 completed 3/4 Article funds in Q2, with an average fund size of 2.1 billion yen, doubling from 1 year prior. Cumulative investor count exceeded 110,000, with 60% progress toward the full-year target of 35,000 new investors. As of the half-year, 26.9% progress toward the full-year 40 billion yen GMV target was achieved, while 3 properties (1 hotel, 2 residences) were sold at a combined take rate exceeding 30%. 27.6 billion yen in remaining property sale pipeline is carried into the second half. 2. CREAL PRO: Reported a year-over-year decline in profit, as the business is heavily back-loaded (most deals close in H2). Full-year gross profit progress is at 40.4%, with other profit lines at ~30% progress. The segment's revenue is primarily fee-based, including transaction fees (brokerage, upfront fund fees), asset management fees, and occasional on-balance sheet capital gains. It holds a ~100 billion yen expected AUM pipeline focused heavily on hotel development projects, most scheduled to close in Q4. 3. CREAL PB: Delivered profit above plan, with steady growth in unit sales of investment residential properties. Expansion into Osaka prefecture properties lifted gross margin to hit the segment's 20% gross profit growth target. 4. Clearal Partners (included in 'Other'): Continued growing managed unit count, achieving revenue and profit growth. 5. Clearal Hotels (included in 'Other'): Reported higher gross profit driven by growing revenue from operated hotels, with total current operating inventory of 10 properties / 226 rooms.

• For 3/4 Article schemes, bank financing coordination is a near-term bottleneck, as many banks are processing their first non-recourse loans to crowdfunded real estate projects, leading to longer processing timelines. Management expects this bottleneck to ease as banks gain experience with the model.
  • High-end hotel segment demand is dependent on continued inbound tourism growth, though management notes inbound demand remains strong as of the call.

Q: Can existing 1/2 Article scheme properties be exited as security tokens (ST), and is this a viable exit path? / A: Management confirms they are actively evaluating this option. Currently, 1/2 Article properties are primarily sold to CREAL PRO investors to grow CREAL PRO's stable revenue. ST would act as an additional stable exit option that would also build out CREAL ST's pipeline, increasing exit stability for the crowdfunding business. The company is proceeding carefully to address conflict of interest concerns while working toward a mutually beneficial outcome for all stakeholders.

Q: What is the current status and early feedback on the newly launched 3/4 Article scheme business? / A: The business is off to a very strong start: 2 funds launched in Q2, and 2 more already fully subscribed in Q3, with all offerings closing very quickly. Investor demand is strong, as levered yields are roughly 6%, ~1% higher than the previous 1/2 Article structure. The only current challenge is slower-than-expected bank financing coordination, as many banks are doing this type of deal for the first time. Management expects this friction to resolve as banks gain experience with the model.

Q: What is your strategy for increasing long-term stable revenue, and will you hold high-quality properties yourself for recurring rental income? / A: Management confirms increasing the share of stable recurring income is a core strategic priority. High-quality, well-located properties operated by Clearal Hotels may be held long-term instead of sold, for example the company's Senbokugahara resort villa hotel project. The company has also applied for a license to offer open-end long-term funds, which would allow it to operate perpetual REIT-like funds that hold properties long-term to generate continuous stable income for investors and recurring fees for CREAL. This initiative is progressing and will add to long-term stable revenue over time.