Operating Results by Business

The situation of the Fiscal Year Ended March 31, 2011

In the leasing business, net sales and operating income fell from the fiscal year ended March 31, 2010, as factors including a decline in rent income from existing properties and the adverse effect of the sale of properties in the previous fiscal year more than offset the increase in rent income from new properties completed and acquired in the fiscal year under review and from properties completed in the previous fiscal year, such as JA Building and Keidanren Kaikan completed by the Otemachi 1–Chome Urban Area Redevelopment Project Type 1 (Chiyoda–ku, Tokyo).
As the average vacancy rate for office buildings in the market remained high, the vacancy rate for office buildings owned by the Group in the five wards of central Tokyo was 3.6%, and the rate nationwide was 5.7% at the end of March 2011.
In the new building development business, projects underway include the Urbannet Tenjin Building (Fukuoka–shi, Fukuoka), Umekita (Osaka Station North District) Phase 1 Development Area Project (Osaka–shi, Osaka), Otemachi 1–Chome No. 2 Urban Area Redevelopment Project Type 1 (Chiyoda–ku, Tokyo), Urbannet Kanda Building (Chiyoda–ku, Tokyo) and Upper–Level Section Redevelopment Project associated with the reconstruction of the Shibaura Water Reclamation Center (Minato–ku, Tokyo). The Urbannet Shijo–Karasuma Building (Kyoto–shi, Kyoto) and others were completed in fiscal year under review.
As a result of these activities, the leasing business recorded net sales of ¥92,608 million (down ¥5,484 million, or 5.6% year on year), operating expenses of ¥63,381 million (down ¥3,188 million, or 4.8%), and operating income of ¥29,226 million (down ¥2,295 million, or 7.3%).

• Composition of Net Sales
  
• Vacancy Rates
  

• Net Sales
  
• Operating Income
  

The situation of the Fiscal Year Ended March 31, 2011

In the residential property sales business, the Company focused on the sale of condominiums, aiming to create high–quality residences that complete residents’ lives and maintain asset values. A total of 717 condominiums including those completed in prior years were delivered in the fiscal year ended March 31, 2011, including Wellith Takanawa (Minato–ku, Tokyo) and Wellith Lions The Central (Nagoya–shi, Aichi), which were completed in the fiscal year. In the fiscal year under review, new sales of condominiums such as Wellith Ueno Ikenohata (Taito–ku, Tokyo) and Wellith Tokumaru (Itabashi–ku, Tokyo) commenced. In terms of detached houses, Wellith Court Honfujisawa (Fujisawa–shi, Kanagawa) was sold. With respect to building lot sales, Common Stage Korigaoka (Hirakata–shi, Osaka) and others were delivered.
As a result, the Company posted net sales of ¥41,725 million (up ¥81 million, or 0.2% year on year), operating expenses of ¥41,192 million (down ¥10,950 million, or 21.0%), and operating income of ¥533 million (an operating loss of ¥10,498 million for the previous fiscal year).

• Composition of Net Sales
  

• Net Sales
  
• Operating Income
  

The situation of the Fiscal Year Ended March 31, 2011

Net sales in other business were ¥16,383 million (up ¥1,829 million, or 12.6% year on year), operating expenses were ¥15,170 million (up ¥1,975 million, or 15.0%), and operating income was ¥1,212 million (down ¥146 million, or 10.8%).

• Net Sales
  
• Operating Income