Annual Report>2005>Outline of the JFE Group>JFE Urban Development Corporation

Outline of the JFE Group

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JFE Urban Development Corporation

Noriaki Shigemi President

Backed by the JFE Group's extensive technical capabilities, JFE Urban Development Corporation engages in a wide variety of projects revolving around its three core activities -- development of large scale complexes, supply of condominiums, and asset utilization. Through the development and management of comfortable and highly creative facilities that add welcome color to people's daily lives -- from home life through workstyles to gathering together for leisure purposes -- we aim to provide an urban environment in which people can enjoy their lives to the full.

Noriaki Shigemi
President

Business Overview: Achieving sales and profit growth as consumers become more selective towards properties

In the year ended March 2005, the business environment was characterized by a continued large supply of newly built condominiums in Tokyo and adjacent prefectures, and the maintenance of a high average level of contract conclusions during the first month they were offered for sale. However, there was a widening gap between properties in terms of whether or not they sold well, and sales competition became increasingly fierce. Amid this environment, we proceeded steadily with the development of large parcels of our own land, and stepped up the marketing of condominiums. As a result, consolidated net sales rose by 20.4% to 31.5 billion, operating income was up by 64.8% to 2.4 billion, and ordinary income grew by 63.6% to 2.2 billion.

Fundamental Strategy: Promoting the development and effective use of large plots of land


No. of Condominium Units
No. of Condominium Units
In the year ended March 2004, we commenced full-scale activities in connection with the Yokohama Yamanouchi Development Project, which entails the development of a waterside urban complex with 926 condominiums in high-rise structures, commercial facilities and office buildings on seven hectares of idle land on the site of Yokohama's former Asano Dockyard. The reporting period saw the start of the construction of the Cotton Harbor Towers condominium complex, and also the start of sales. (As of May 2005, all 926 units had been sold.) In the Watarida District of the city of Kawasaki we have also started on the THINK (Techno Hub Innovation Kawasaki) project, focusing on both the development of the facilities and the attraction of new tenants. This is a plan to make effective use of existing research facilities (floor area of approximately 50,000 square meters) by converting them into a science park.

Keihin Building (Core building of THINK)   Diagram of the THINK development
Keihin Building (Core building of THINK)   Diagram of the THINK development

Strengthening the condominium business

JFE Urban Development is developing condominiums to meet the requirements of a variety of lifestyles through its unique Grand Scena series of developments based on a concept of high-quality condominium buildings constructed to highly original designs, targeted at the estimated three million people in the Tokyo area who are the children of the baby-boomer generation. During the term, we sold 1,210 units, principally in the Grand Scena series.

Progress under Medium-Term Business Plan: Earnings growth primarily from development of large parcels of company land and condominium sales in Tokyo metropolitan area

The company did not meet its consolidated sales target, but did meet other financial targets, including those for consolidated ordinary income and consolidated ratio of ordinary income to net sales (ROS). In the final year of the first Medium-Term Business Plan, we will devote even greater efforts to ensuring that its targets are attained.

CONSOLIDATED OPERATING RESULTS
Billions of yen
  (Years ended/ending March 31) 2003
Actual (approximate)
2004
Actual
2005
Actual
2006*
Forecast
2006
Plan's original target
 
  Ordinary income 0.3 1.3 2.2 2.3 4.0  
  Return on sales (ROS) 1.0% 5.0% 7.0% 7.2% 8.5%  
  *Estimated figures for the year ending March 2006 are those declared as of May 12, 2005.

Issues to Address: Steady progress in the Yokohama Yamanouchi Development Project

In the Yokohama Yamanouchi Development Project we will continue our steady progress in the sectors of the ultrahigh-rise condominiums already started, and ensure the prompt start of operations in sectors not yet started. At the same time, we will devise concepts for nonresidential developments, and proceed with our marketing to prospective tenants. In the THINK project, we aim to increase earnings by attracting new tenants, and in our condominium development business we will continue to acquire new properties, principally in Tokyo and nearby areas of surrounding prefectures, and to supply original, high-quality products. Through these efforts, we aim both to increase earnings and to enhance our project-implementation capabilities.

Rendering of the Yokohama Yamanouchi Development Project
Rendering of the Yokohama Yamanouchi Development Project