TOKYO -- Sumitomo Realty & Development is expected to report a pretax profit gain of 6% to a record 139 billion yen ($1.15 billion) for the fiscal year ended in March.
That would top the Tokyo-based property developer's guidance by 1 billion yen, marking the second straight annual record.
Sales appeared to grow 3% to over 800 billion yen, beating expectations by about 8 billion yen.
Those numbers were the result of surging demand for office space by companies emboldened by improved profitability. In addition, lower interest rates and added tax breaks on mortgages boosted sales of condominiums, especially large ones in central Tokyo.
Not only did Sumitomo Realty retain tenants in its existing office buildings at numbers exceeding original expectations, higher rents at some of its buildings also pushed up earnings. Vacancies for the end of March likely stood at about 5%, which is around 1 point lower than a year earlier.
Japan's consumption tax increase last spring dampened demand for building remodeling, but office building rentals and condo sales made up for that slack.
Backed by strong demand for office buildings, Sumitomo Realty will likely see profit and revenue growth in fiscal 2015 as well.