Tokyo Tatemono (8804.T): Q3 Results — In Line, Steady Progress, Third-Party Capital Utilization Advancing

Citi published its review of Tokyo Tatemono's (8804.T) third-quarter results, maintaining a Neutral rating and a ¥3,700 target price. Q3 operating profit came in at ¥22.0bn, below consensus but progressing in line with the company plan. Office vacancy fell to 1.0% from 1.1% at end-June, with rent increases of roughly 8-15%; condominium contract progress reached 95%, though completed unsold inventory rose to 386 units from 96, and about 50% of units scheduled for next-term recognition are already contracted. At the Kurehashi project (due for completion in FY2029), a large office-floor lease has been signed and a sale of office floors decided, showing progress in development using third-party capital; the Indonesia project, stalled for several years, has also been announced for transfer. Partial sales of projects under development plus the sale of the JA Building and Keidanren Kaikan point to improved capital efficiency and the crystallization of unrealized gains, a positive read ahead o