Message from the CEO Message from the CEO

Promote business model transformationfor “future environment design company”

After the first year of MIRARTH HOLDINGS

The company celebrated its 50th anniversary in September 2022, and in October of the same year, we shifted to a holding company structure and changed our trade name from Takara Leben Co., Ltd. to MIRARTH HOLDINGS, Inc.. The fiscal year ending March 2024, the first period under the new structure, was the third term of the four-year medium-term management plan that began in the fiscal year ending March 2022. Net sales were 185.1 billion yen and operating income was 15.4 billion yen, resulting in an increase in sales and profits, and operating income exceeded the initial plan for the fiscal year ending March 2024 and recorded a record high, which was a good landing in terms of numbers. In addition, in the seven pillars of the Medium-Term Management Plan, "Further Expansion of Core Businesses," it is safe to say that we are making steady progress in all of these pillars, such as the condominium business in Vietnam and Thailand, and the new detached house sales business in the Philippines. 　It has been 10 years since I was appointed president in April 2014. Conscious of the transformation from condominium developers, we have been actively diversifying our business in order to create a business portfolio that is not too dependent on the new condominium sales business. Recognizing the necessity of swift and flexible management decisions and further Strengthening Governance, we shifted to a holding company structure in October 2022 and changed our trade name on the occasion of the 50th anniversary of our founding in September 2022.
Our new company name, MIRARTH, which combines the words "Mirai" (future) and "Earth," expresses our determination to evolve beyond the framework of a comprehensive real estate developer into a “future environment design company”.
Ten years ago, New built-for-sale condominium business sales accounted for more than 90% of total sales. Since then, we have actively promoted businesses other than condominiums, resulting in approximately 50% of total sales in the New built-for-sale condominium business in the fiscal year ending March 2024. In particular, we have aggressively expanded our Asset Management Business to manage renewable energy-powered Energy Business, J-REIT and private funds.
We are also planning to increase sales and profits for the fiscal year ending March 2025, the final year of the Medium-Term Management Plan, and I believe that we have created a positive trend that will lead to the next new Medium-Term Management Plan. However, since Real Estate Business 's business areas are not limited to condominiums, sales and operating income account for nearly 90% of the total, which is still a large situation, so we believe that further reform of the profit structure is necessary. From here, we present a roadmap for the fiscal year ending March 2030 to increase the operating profit ratio to 50% for Real Estate Business, 30% for Energy Business, 20% for Asset Management Business and others, and to achieve the same ratio of Real Estate Business and Energy Business on an EBITDA basis.

Pursuing valuable housing supply

The Group, which started as a small construction shop in 1972, went public in 2001 and has continued to grow for 50 years, thanks to its strengths in speed and out-of-the-box ideas based on an integrated system of development, planning, sales, and management. From a medium- to long-term perspective, the declining birthrate and declining population will make the environment of the housing supply market, which is the mainstay of the market, more severe. However, since real estate is our core business, we believe that we must continue to pursue the supply of valuable housing as an independent developer.
In the medium to long term, it is also important to make use of Japan's knowledge overseas, especially in regions where economic growth is expected due to demographic changes, such as Southeast Asia. As I have already mentioned, we are participating in Real Estate Business in Vietnam and Thailand, including collaboration with local companies, and in January 2024, we started a detached house sales business in Laguna Province, a bedroom town on the outskirts of Manila in the Philippines. With a total development area of approximately 6.5 hectares and a total of 657 units, the project will target the young people who will support the future of the Philippine economy and provide high-quality housing at affordable prices. This is the third housing supply project in an overseas country, and we will continue to invest in Southeast Asia by diversifying our investments to several countries while carefully selecting projects.
There's a lot more you can do with Real Estate Business. First, we will secure stable earnings in the stock-fee business, which is derived from the flow business, which is centered on the New built-for-sale condominium business. We will promote Real estate rental, which is to earn rental income from rental properties, and Real estate management, which is to accumulate management income from nearly 80,000 contracted properties. In addition, in order to derive into Asset Management Business, we will focus on the development of profitable properties as a fund business and the value enhancement of existing profitable properties as well as scrap and build.

To be a company worthy of our purpose

At the time of the transition to a holding company structure, we formulated "Our Purpose" and set "To design sustainable environments for a happier future for both people and our planet.," which is based on Takara Leben 's Vision "THINK HAPPINESS AND MAKE THE HAPPINESS." and Mission "Creating Together," based on the business expansion of the entire Group. In order to evolve into the “future environment design company” I mentioned earlier, we need to find a way to be a company that is appropriate for our purpose.
Energy Business is the catalyst for that evolving phase. At first, I didn't plan to expand this business in the long term. However, in order to achieve carbon neutrality by 2050, many companies and local governments are strengthening their decarbonization efforts, and further market expansion is expected in the future. Our initiatives are highly social businesses, and we will grow them into important segments to realize our purpose.
In February 2024, we launched a biomass fuel project using cashew nut shells as a raw material in Cambodia. While building a strong relationship with the Cambodian government, we will diversify power generation sources in Energy Business, contribute to the domestic energy supply source Japan contribute to the creation of employment in Cambodia, and contribute to industrial development, and realize a circular economy.
In October 2023, we formulated the long-term vision "Be the Takara of the community." as a vision to achieve by the fiscal year ending March 2030 in order to clarify the penetration of purpose management and its connection with business domains based on the practice of purpose management. It is a term that shows how each employee understands and faces the policies and needs unique to each region and how to contribute to society and the community through business in order to make the future of people and the earth happy from the work that each employee is working on.
Real Estate Business, which began as a consolidation in the Tokyo metropolitan area, has now expanded to more than 40 prefectures nationwide. The core of this will be the New built-for-sale condominium business, but we will also expand into the Liquidation business, which develops income-generating real estate such as houses, offices, and logistics warehouses and sells them to real estate funds. In other words, we would like to be useful in various ways to address social issues in the regions where we operate, such as Real Estate Business and hotel business.

Human Resource Strategy in "Be the Takara of the community."

This long-term vision was created through many discussions and thought-out discussions centered on the members of the Director Association. When we think about what is important, as long as many of the Group's businesses are BtoC, the customer will come first in the universal spirit. And just like our customers, our employees are our most valuable assets. There is nothing worse for a company than the resignation of a person you have nurtured. It is important to reduce turnover and increase employee engagement and loyalty. We are a company based on our employees, and if our employees are excited and work while maintaining their well-being, it will lead to the happiness of the company and our customers. "Be the Takara of the community." contains the message that we want our employees, rather than the company, to become a treasure for the community.
The working environment is also changing. For example, since 2001, the energy exerted on employees has changed in order to improve business performance, such as the phase in which the company was listed on JASDAQ, the Second Section of the Tokyo Stock Exchange, and the First Section (now Prime), and the phase of growth after the experience of the Lehman shock in 2008. Since I took office as president 10 years ago, sales and the number of employees have increased dramatically, and we need to change our human resources strategy from when we were working as hard as we did back then.
In the past, even if we had a company motto and vision, I don't think we were able to train our employees based on it. Although our purpose and long-term vision have just been established, we will continue to educate our employees that are firmly linked to the ideal company we are aiming for. In the midst of this trend, MIRARTH INNOVATIONLABO (MIRARTH Innovation Lab, commonly known as MIRAILAB) was launched. It was established by participants in rank-based training for non-managerial and leadership positions, and is based on the idea that in order for the company to survive for 100 years, it is necessary to "develop young employees," "promote cross-departmental relationships," and "create an environment in which employees want to continue working." We aim to create an environment in which new graduates can work with a clear vision of goals and a sense of fulfillment in three years, foster a culture of understanding and cross-departmental communication, and encourage employees to take annual paid leave.
Until then, I don't think there was much awareness of making such an idea a reality within the company. A young employee thinks about the future of the company and makes a proposal to the management to bring about change on their own. In order to be a company that makes employees think, "Let's do our best at this company," management must also change their mindset. Of course, not all suggestions and opinions are adopted, but I feel that the openness is improving.
What I consider to be a challenge for the future is to unearth hidden qualities and abilities from among the assets of our approximately 1,400 employees and make the most of them within the Group. Takara Leben was the first group company to introduce a talent management system that converts various information such as the skills, abilities, transfers, and evaluations of each employee into data and centrally manages it, but in fiscal 2023 it expanded it to the entire group. We will promote strategic personnel affairs that understand all employees.

Towards the next medium-term management plan

In the new medium-term management plan from the fiscal year ending March 2026, as I have mentioned, we will aim to provide housing with increased value while placing the axis of growth on Energy Business based on the roadmap for the fiscal year ending March 2030, as I have mentioned so far.
Investors are asked to explain the biomass fuel conversion business using Energy Business cashew nut shells as raw materials. After the fruit was processed as edible cashew nuts, many of the shells were discarded. We believe that this is a meaningful project in that it uses discarded shells as fuel for biomass power generation. In addition, Miyazaki Prefecture is developing a biomass power plant using wood chips. These are highly specialized fields, but we will continue to take on challenges.
In Real Estate Business, we believe that it is important to maintain the current sales volume of about 2,200 units in the condominium business, and to steadily supply and expand the area. In addition, the axis of growth of Real Estate Business is Liquidation. Currently, we are actively developing new residences for REITs, and we aim to increase the ratio of value increase from the current 5% to 20% in the fiscal year ending March 2030 by promoting the acquisition of existing real estate that can be recovered in a short period of time and selling it with added value.
In addition to renewable energy and REITs, Asset Management Business also manages private funds. By the fiscal year ending March 2030, we aim to accumulate up to 700 billion yen.
In this way, in the next medium-term management plan, we intend to focus on the value-up type instead of the development type, including M&A to buy time.

To Our Stakeholders

We are still seen as a condominium developer. I'm not denying that, but in the future, we must create a track record that we can proudly say that we are a comprehensive real estate developer and that we are “future environment design company”.
Energy Business isn't the only design for the future environment. One of them is to sustainably revitalize the region through Real Estate Business.
There is a term called regional revitalization. In rural areas, the population is declining, the population is aging, and the central city area is hollowing out. We are boldly taking on the challenge and confronting these phenomena in various parts of the Japan in our core business, Real Estate Business, and in this respect, each employee has already become a "Takara of the local community." From there, as a company and as an employee, we must build relationships with local people and face local issues. In order to "revitalize the region" by revitalizing a narrower area than a rural area, all employees will aim to be "Be the Takara of the community." and create a track record as a “future environment design company”.
We will strive to improve our corporate value together with our stakeholders, and we look forward to your continued support.