Sumitomo Realty & Development Co. unveiled plans to invest ¥2.5 trillion ($16.6 billion) in Tokyo and Mumbai developments over the next decade, defying industry caution about rising construction costs in Japan.
The Tokyo-based developer will allocate ¥2 trillion for large-scale redevelopment projects in the Roppongi and Yaesu districts, with the remaining ¥500 billion targeted for a mixed-use project in Mumbai. The investment roadmap comes just days after U.S. activist investor Elliott Investment Management disclosed a significant stake in the company.
Sumitomo Realty has positioned itself against the trend of some developers slowing redevelopment plans due to construction cost inflation. Instead, the company sees tightening supply of new office space creating business opportunities.
For the next three years through March 2028, the company aims to achieve ¥900 billion in pretax profit and ¥650 billion in net profit. Annual dividend increases of ¥10 per share are planned during this period, with investments and shareholder returns to be funded through operating cash flow.
Managing Executive Officer Tokiyuki Okada defended the company’s business model of holding properties rather than selling them, arguing that continued investment creates greater long-term shareholder value.
Sumitomo Realty also upgraded its profit guidance for the year ending Monday, forecasting ¥191 billion in net profit, up 8% year-on-year, citing higher office rents, hotel rates and condominium sales.
