Nomura Real Estate Holdings Inc. (3231),
Tokyo’s third-largest developer, plans to boost its home sales
by about 18 percent next year as a drop in housing inventories
signal a rebound after the March 11 earthquake.
The developer aims to sell 4,000 apartments for the year
ending March 2013, up from a 3,400 target for the current
business year, Kamezo Nakai, president of Nomura Real Estate,
said in an interview. The company was left with 42 unsold
apartments in the three months ended September, the lowest in
more than four years, according to its website.
Nomura Real Estate is expecting a rebound after it sold all
of the 250 units in the first phase of sales at a high-rise,
600-unit tower by Tokyo Bay earlier this month. The unit of
Japan’s biggest stockbrokerage has sufficient land holdings for
about 4 1/2 years of projects to supply 4,000 units annually and
meet the expected demand in the coming years, Nakai said.
“Our residential business is extremely sound based on the
number of inventories,” Nakai said on Dec. 27. “We have
acquired plenty of landbank that will enable us to supply new
apartments, depending on the market conditions.”
The company doubled the total number of apartments sold in
2010 from a year earlier and was ranked the third biggest by
sales in Tokyo, according to Real Estate Economic Institute Co.
Even as it gained market share in the condominium market in
Tokyo, the developer is seeking to reduce debt amid rising
uncertainties in the global market.
‘Unpredictable’
“Everything is unpredictable and can change anytime,”
said Nakai. “We would like to slightly decrease the size of our
balance sheet and strengthen our financial structure.”
The company may cut its interest-bearing loans by about a
quarter to 600 billion yen ($7.7 billion) over the next three
years, said Nakai. It also aims to reduce its debt-to-equity
ratio to about 1.7 times from about 2.5 times in a three-year
plan that will be released in May, he said.
The developer also may set up a structure to evaluate
various risks from pricing and interest rates to its projects
and investments from next year, Nakai said.
The developer’s shares were unchanged at 1,124 yen in Tokyo,
while the 44-member Topix Real Estate (TPREAL) Index fell 1.3 percent to
623.11, the lowest level in more than 2 1/2 years. Nomura’s
shares declined 24 percent this year, compared with the 26
percent retreat of the index.
Nomura Real Estate on Oct. 28 raised its net income forecast
by 15 percent to 15 billion yen for the year ending March 2012
on higher home sales, according to a statement. The company
expects sales to rise 12 percent to 438 billion yen, it said.
Rebound
The expectations of a rebound next year follow a forecast
for a 24 percent decline in apartment sales in the year ending
March, according to the company. Sales stalled immediately after
the March temblor before picking up. Nomura Real Estate also
plans to expand its homebuilding business with the aim of
developing 1,000 houses a year, Nakai said.
The number of apartments put up for sale in Tokyo next year
may reach the highest since 2007, according to an estimate by
the Real Estate Economic Institute on Dec. 20. New supply may
increase 18 percent in 2012 to 53,000 units from about 45,000
units this year because of delays of sales after the quake and
rising construction, it said.
Nomura Real Estate and other large builders are gaining
market share as small developers struggle. Japan’s seven-biggest
real estate companies, including Nomura Real Estate, took a 51
percent share of the condominium market in 2010, up from 30
percent three years earlier, according to Credit Suisse Group AG.
“Some people may think that buyers will refrain from
purchasing homes after the quake, but it’s the opposite,” Nakai
said. “People want to move in to apartments they deem safe.”
To contact the reporters on this story:
Kathleen Chu in Tokyo at
kchu2@bloomberg.net;
Katsuyo Kuwako in Tokyo at
kkuwako@bloomberg.net
To contact the editor responsible for this story:
Andreea Papuc at
apapuc1@bloomberg.net
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