Japan´s second-largest real estate developer, Mitsubishi Estate Co., posted a big rise in first-half group net profit on Friday and slightly raised its full-year forecast despite a looming record glut of office space.
Mitsubishi Estate saw its group net profit rise 178.5 percent year-on-year to 19.38 billion yen ($160.9 million) in the half year to September 30, helped by special profits of more than 20 billion yen on sales of some of its properties in Tokyo.
It said earnings by its building leasing operations also improved, partially on reduced write-offs on fixed assets and improvements overseas, helping to counter weak results in its domestic housing development operations.
Mitsubishi also slightly raised its forecast of full-year net profit to 34 billion yen from 33.5 billion yen, which would mark a turnaround from a 71 billion yen net loss last year after asset revaluations in preparation for more strict accounting rules.
Mitsubishi Estate´s first-half group operating profit edged up 0.8 percent to 33.97 billion yen despite a 9.0 percent drop in sales to 276.98 billion.
While Mitsubishi and Japan´s other major real estate players have suffered sliding revenues in the face of a stagnant housing market, a sputtering economy and an exodus of foreign and info-tech companies from Tokyo, they are seen as better-placed than their smaller rivals to weather the tough times.
Some 2.18 million square metres (23.47 million sq ft) of new office space are to become available in Tokyo in 2003. That record supply will challenge a sector already battered by a relentless slide in land prices since the bursting of Japan´s asset bubble more than a decade ago.