8830 JP

Sumitomo Realty & Development Co. Ltd.

Finance/Real Estate, Macro


Presented:09/11/2014
Price:¥4,026.00
Cap:$15.90B
Current Price:¥4,627.00
Cap:$18.32B

Presented

Date09/11/2014
Price¥4,026.00
Market Cap$15.90B
Ent Value$39.31B
P/E Ratio24.5x
Book ValueN/A
Div Yield0%
Shares O/S474.02M
Ave Daily Vol2,090,000
Short IntN/A

Current

Price¥4,627.00
Market Cap$18.32B
Sumitomo Realty & Development Co., Ltd. operates in the real estate industry. It operates through five segments: Leasing Business, Sales Business, Construction Business, Brokerage Business, and Other Business. The Leasing Business segment leases and manages office buildings, condominiums, residences, and other properties. The Sales Business segment develops and sells condominiums, detached houses, and land lots. The Construction Business segment is involved in the construction of housing, condominiums, and buildings, as well as in the home remodeling and related activities. The Brokerage Business segment provides real estate brokerage and sales services. The Other Business segment operates fitness and restaurant businesses. The company was formerly known as Izumi Real Estate Co., Ltd. and changed its name to Sumitomo Realty & Development Co., Ltd. in 1957. Sumitomo Realty & Development Co., Ltd. was founded in 1949 and is headquartered in Tokyo, Japan.

Publicly traded companies mentioned herein: Sumitomo Realty & Development Co LTD (8830 JP)

Highlights

The presenter is long shares of Sumitomo Realty & Development – Japan’s third largest developer – and characterized the basis for the investment as “a very simple reflation story.” Depending on how one chooses to measure deflation, Japan has been experiencing deflation economy-wide for the better part of two decades. The backdrop is nearly perfect for real estate prices to rise on the island; land suitable for commercial development is finite and scarce in Tokyo. With rents rising (+2.8% last quarter), and low cap rates (~4%, below 2007 levels) and vacancies (<6% and falling), he stressed that, “People need/ want real estate assets as a hedge against monetary policy.”

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Idea Discussion

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