Hiromichi Iwasa, Chairman of the Board and Chief Executive Officer
Masanobu Komoda, President and Chief Executive Officer
Mitsui Fudosan Group launched the second stage of our medium-term business plan Innovation 2017 (Stage II) in FY2015. Our objectives are clear: to be a leader that creates markets and grows continuously, and to secure a solid position globally. In order to achieve our vision for the next decade, we will create value by implementing three strategies: customer-centered management, business model innovation, and full implementation of Group management.
Our Group recorded record-high consolidated results for FY2015 with operating profit of 1,567.9 billion yen and net profit exceeding 200 billion yen. While these results have been buoyed by the bullish real estate market, I believe that our steady pursuit of the growth strategies outlined in Innovation 2017 (Stage II) has paved the way for these achievements and a solid start in FY2015, Year One of the second stage of our medium-term business plan.
With a special focus on the Nihonbashi-Yaesu Area, the Group is steadily advancing numerous neighborhood creation projects around Japan. The designation of Hibiya Project (tentative name), OH-1 (Otemachi 1-Chome Block 2) Project (tentative name) and Yaesu 2-Chome North District Category-Urban Redevelopment Project is just one example of how our creation of attractive neighborhoods with enhanced global competitiveness has earned government recognition. While further promoting mixed-use in neighborhood creation, we are seeking to identify the needs of office workers and visitors and responding with offices and supporting functions that feature innovation in both facilities and services – building magnetic communities that attract people, information, and investment from around the world.
With our eyes set on 2020 and beyond, our Group is looking at how our expertise in neighborhood creation can contribute to the creation of new business and industry. In the Nihonbashi area – home to the head offices of many major pharmaceutical companies, we are redoubling efforts to advance our Nihonbashi Life Science Innovation Promotion Project. We have already established multiple life science centers in Nihonbashi, and have successfully obtained the cooperation of industry and academic organizations and attracted venture businesses to this new hub of innovation. In June 2016, Life Science Innovation Network Japan, Inc. (LINK-J) was founded in collaboration with interested members of academia, and has commenced full-scale activities to promote open innovation through industry-academia-government collaboration to accelerate the creation of new industries. In February 2016, with the aim of enhancing our efforts in co-creation with new ventures with the ultimate goal of creating new industries to strengthen and expand our business, we announced the establishment of 31VENTURES Global Innovation Fund I – our first corporate venture capital fund. While pursuing investment in third-party venture capital opportunities, we will support existing venture businesses that have already launched operations, and we will build a platform that accelerates investment in promising startups.
In the retail facility business, FY2015 witnessed the opening of 5 new facilities in Japan including LaLaport FUJIMI and EXPOCITY, and 2 large-scale retail facilities overseas as well as the renewal of LaLaport SHINMISATO, LaLaport IWATA and other existing facilities. At the same time, measures to improve inbound demand at each facility are making steady progress. Also from the perspective of mixed use, retail facilities are expected to play a major role in urban-type neighborhood creation, and we are aiming at an MD offering that only the breadth and strength of our Group’s tenant relations can build. In the future, our retail facility business will continue to evolve, anticipating shifts in customer needs and responding to the advance of e-commerce and other changes in the business environment.
The Group’s logistics facility business continues to steadily seize new business opportunities. Our network has grown to a total of 22 facilities – either already in operation or under development, and we also have successfully listed our logistics REIT.
In our housing business, the integration of the Group’s residential leasing business under Mitsui Fudosan Residential Co., Ltd. in October 2015, aimed at not only strengthening our stock through consolidation, but also generating new synergies that exploit economies of scale and other advantages. Moreover, as we prepare to meet the challenges of a society with a declining population, our housing business will not pointlessly pursue quantitative expansion, but instead tackle the expansion of our stock business by leveraging high-quality previously owned residential properties. With this objective in mind, we will fully utilize the customer base of each company in our housing business group, and, in synch with changing lifestyle trends, we will further evolve as a one-stop service capable of responding to a broad diversity of residential living-related needs.
The hotel and resort business has enjoyed continuing favorable market conditions thanks to the increase in inbound tourists and other factors. With Mitsui Garden Hotels as our core hotel brand, we are advancing toward our target of 10,000 rooms in operation by 2020, and steadily pursuing new business opportunities as they arise.
In FY2015, our Group’s overseas business achieved significant growth in terms of both area and products. In New York, we broke ground on the 55 Hudson Yards Project (tentative name) – a large-scale office complex development in midtown Manhattan, and completed construction of 160 Madison Avenue - our first overseas lease-type residential property. In London, we launched sales of residences in the Television Centre. In Asia, we opened MITSUI OUTLET PARK KLIA SEPANG and MITSUI OUTLET PARK LINKOU. The success of these and other projects has contributed to the steady penetration of the Mitsui Fudosan brand in these areas. While continuing to foster the relationships established with blue-chip partners around the world, we are setting our sights on identifying and exploiting new business opportunities. We are targeting dramatic growth in our overseas business, and in order achieve our goal, we will promptly grasp and agilely respond to local economic trends and market needs, and tackle the building of an organization that can advance our business in new dimensions and accelerate the cultivation of overseas human resources.
In the over seven decades since the founding of our Group, our ability to grasp the changing times and then respond with innovative business models has paved the way for our success in new markets. Domestically, in order to respond to the changing needs of our customers, Mitsui Fudosan is now evolving from a “real estate solution partner” into a “business and living solution partner”. We are pursuing business model innovation that not only provides the “hardware” of facilities and space, but also the “software” of services and know-how that enrich every moment with comfort and quality. With the aim of achieving dramatic overseas growth, the Group will combine its strengths as a comprehensive developer with the strengths of partners who know the markets in their respective countries to build a highly stable portfolio with abundant growth potential.
The accelerating evolution of ICT, the advance of diversity, and other factors are driving ongoing change and increasing diversification in work- and life-styles. In order to respond to the diversification of customer values, Mitsui Fudosan Group must also diversify itself, and become a corporate group that can generate new synergies and chemistries through the innovative combination of manifold talent. From this perspective, the Group is making an unprecedented commitment to the development of human resources, for example, encouraging our female employees to play a more active and important role and the appointment of global human assets to key positions.
With the achievement of the objectives set forth in Innovation 2017 (Stage II) as our destination, our entire Group is united and working as one. Mitsui Fudosan Group shall continue to evolve to reach our goals of becoming a corporate group that can maintain sustainable growth into the next era and beyond.
Chairman of the Board and Chief Executive Officer
President and Chief Executive Officer