Nomura Real Estate Q1 Profit Slides 37% on Thin Condominium Handovers; Full-Year Guidance Held

Nomura Real Estate Holdings, Inc. (TSE: 3231), one of Japan's largest listed property developers, reported consolidated results for the first quarter of the fiscal year ending March 2027 — the three months from April 1 to June 30, 2026 — under Japanese GAAP. Revenue fell 13.7% to ¥191,064 million, operating profit dropped 30.6% to ¥25,540 million, ordinary profit fell 36.2% to ¥21,648 million, and profit attributable to owners of the parent slid 36.5% to ¥14,728 million. Earnings per share came to ¥17.23, down from ¥26.99. Comprehensive income, helped by valuation gains, was the one line to rise, up 37.1% to ¥18,013 million.

Business profit — the company's preferred earnings measure, which adds share of profit or loss of equity-method investees, amortisation of acquisition-related intangibles and gains or losses on sales of equity interests in overseas project companies to operating profit — fell 29.8% to ¥27,161 million from ¥38,679 million.

Urban Development leads the decline

The steepest fall came in Urban Development, where external revenue dropped to ¥47,418 million from ¥60,797 million and operating profit more than halved to ¥5,382 million from ¥11,044 million — a reminder of how lumpy income-property sales are quarter to quarter. Residential, the group's largest segment, saw revenue fall to ¥100,437 million from ¥118,208 million and operating profit ease to ¥15,463 million from ¥18,590 million, reflecting a lighter schedule of condominium handovers in the opening quarter.

Among the remaining segments, Brokerage & CRE was the only sizeable revenue gainer, at ¥14,720 million against ¥14,380 million, though its operating profit still eased to ¥4,436 million from ¥5,250 million. Property Management also grew revenue, to ¥23,417 million from ¥22,803 million, but operating profit fell to ¥1,181 million from ¥1,824 million on higher building-management costs. Asset Management was broadly flat, with revenue of ¥4,249 million and operating profit of ¥2,877 million.

Overseas swings deeper into the red

The Overseas segment produced just ¥755 million of external revenue and widened its operating loss to ¥2,925 million from ¥1,359 million a year earlier. On the business-profit line the swing is starker still: a ¥1,656 million loss against a ¥132 million profit last year, largely because the prior-year quarter benefited from sales of equity interests in overseas project companies that did not repeat. Unallocated corporate expenses of ¥2,503 million left the corporate and elimination line at −¥913 million, narrower than the prior year's −¥1,690 million.

Balance sheet steady, dividend lifted 10%

Total assets edged up to ¥2,836,892 million at June 30, 2026 from ¥2,811,989 million at the March year-end, as development inventory continued to build. Net assets were broadly unchanged at ¥802,282 million, with shareholders' equity of ¥801,665 million and an equity ratio of 28.3%, down slightly from 28.5%. The company had 917,942,685 shares issued and 61,545,182 in treasury — a figure that includes shares held by its officer-remuneration BIP trust and its share-grant ESOP trust — for a weighted average of 854,755,059 shares.

Despite the weak start, the board kept its plan to raise the payout: an interim dividend of ¥22.00 and a year-end dividend of ¥22.00, for an annual ¥44.00 against the ¥40.00 (¥18.00 plus ¥22.00) actually paid in the year to March 2026 — a 10% increase.

Guidance untouched, and heavily back-loaded

Management, led by President and Representative Director Satoshi Arai, left full-year guidance entirely unchanged: revenue of ¥1,080,000 million (+14.6%), operating profit of ¥140,000 million (+1.3%), business profit of ¥150,000 million (+1.8%), ordinary profit of ¥125,000 million (+0.2%) and profit attributable to owners of ¥86,000 million (+3.8%), for EPS of ¥100.48.

That leaves a demanding remainder of the year. First-quarter net profit represents only about 17% of the full-year target, and first-quarter revenue only about 18% of the ¥1.08 trillion goal. For a developer whose condominium handovers and income-property disposals are concentrated in the second half, that shape is normal rather than alarming — but it does concentrate the burden of delivery into the remaining nine months.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.