Company history

Nomura Real Estate was incorporated in April 1957 with ¥10m of capital and one purpose: to own and manage the head office building of its parent, Nomura Securities. Its entire market was one customer. Through the late 1950s, as Nomura pushed a retail branch network across Japan, the volume of work at the new company was simply a function of how many branches the broker opened — a dependency that would outlast the holding-company era.

The decisive split came in January 1970. Nomura consolidated the leasing and management of offices, company housing and dormitories into Nomura Real Estate Development, and created a second company, Nomura Jutaku Sangyo — today’s Nomura Real Estate — to take everything else. The distinction was between a business whose orders arrive from a parent and one that has to find its own land, buy it, and carry the risk of whether it sells. Support businesses followed over the next two decades — building management in 1977, fitness clubs in 1989, cleaning in 1990, condominium management in 1991 — assembling in-house the operating services the group would later count as a segment in its own right.

The bubble carried development volume up more than 20% a year by floor area; its collapse left the company, like every other developer, holding land and buildings worth less than their cost. The rebuild ran through a brand. In December 2002 Nomura unified its condominiums under Proud, launching Proud Kugayama in 2003, and within a few years the industry was calling the company “Nomura Real Estate, the Proud people” — recognition earned not from a parent but from individual buyers in the Tokyo market. Brokerage was hived off into Nomura Real Estate Urban Net in 2000, private-fund management in 2001 and REIT management in 2003, and the shape of the modern portfolio was in place.

In June 2004 Nomura Real Estate Holdings was established, and that October it began operating as a holding company when Nomura Real Estate Development contributed the entire share capital of Nomura Real Estate in kind. The point was capital, not strategy: an equity ratio under 9% is thin for a business that buys land and sits on it, and how much it could borrow was setting how much it could build. Reorganizing the shareholdings and taking in outside investors changed how the business was fuelled rather than what it did. Listing on the TSE First Section followed in October 2006 — forty-nine years after the company was created to look after a broker’s building, it became something the market itself would price.

The first use of that new access was not land but companies. In July 2007 the group bought Geo Akamatsu (now Nomura Real Estate Commerce) for its retail-facility planning and leasing capability, and in December 2008 took 65% of Toshiba Fudosan, a business grown out of managing Toshiba’s dormitories and offices and holding assets on the scale of Yokohama Business Park. Both purchases reached places the company’s own land-buying could not: retail operating know-how, and buildings that never come to market.

The timing was not chosen. Months after roughly $774.2M (¥80bn) of consideration was committed, the financial crisis arrived, and ordinary profit for the year to March 2009 fell about 60%. The leased assets kept producing rent, which bought the company time to wait for the cycle — an argument that judging an acquisition by the profit and loss immediately after it is too early a test.

Nakai Kameizo took over as president in April 2011, and Kutsukake Eiji in April 2015 — both, like their successor, career Nomura Securities men running a property group from the outside. Nakai’s priority was the balance sheet: a target of a 30% equity ratio by March 2016, reached from 26.8% in 2012 at 30.1%, while revenue rose 26% to ¥569.5bn and ordinary profit more than doubled to ¥72.6bn. A construction planning office set up in 2013 put a permanent, specialist team opposite the general contractors as building costs climbed.

The portfolio settled into five parallel businesses — residential (Proud, and from 2012 the suburban, family-oriented OHANA), urban development (the PMO office series), property and facility management, brokerage and CRE, and investment management. Kutsukake introduced a company-defined “business profit” in the year to March 2019, adding equity-method income and acquisition-related amortization back to operating profit, in order to show investors what a strategy built on joint investments and acquisitions was actually earning.

What this era is remembered for by shareholders is consistency: dividends rose every year from ¥70 in the year to March 2018 through ¥97.5 by March 2023, with buybacks of ¥4–10bn budgeted almost annually and a total payout ratio reaching 44.3%. The engine underneath had quietly shifted — in the year to March 2019 urban development turned ¥169.6bn of revenue into ¥37.6bn of segment profit, a 22.2% margin, while housing’s ¥374.5bn produced only ¥25.1bn at 6.7% as competition for land squeezed it. Housing was still 57% of revenue. Rental buildings were carrying the profit.

The 2019 medium-term plan was overtaken by the pandemic and by a domestic housing market that had stopped growing. In April 2022 the group replaced it with a nine-year plan running to March 2031: keep housing and leasing as the core, but name overseas, operating services and data centres as the growth areas, and allocate ¥3tn of net investment across the period, with sustainability targets stated alongside the financial ones for the first time. Overseas was carved out as a reportable segment and immediately demonstrated why it is hard — a ¥0.5bn loss in its first year, ¥2.4bn of profit the next, a ¥1.2bn loss after that, and ¥1.7bn of profit in the year to March 2025 as project disposals began to land.

Arai Satoshi — Nomura Securities 1988, later its deputy president — became president in April 2023, the third Nomura Securities alumnus in a row, and has consistently framed the strategy as bringing finance and property closer together. His 2030 vision, “Life & Time Developer,” points at designing customers’ living time rather than only their buildings; the 2022 acquisition of UDS, which runs community and placemaking services, was a down payment on it.

The physical expression is Blue Front Shibaura, a twin-tower redevelopment of some 550,000 m² of floor area — the largest single project in the group’s history. The S tower completed in February 2025 with offices, a hotel and retail, and its contribution to consolidated business profit begins in earnest from the year to March 2026. The year to March 2025 set records across the board: ¥757.6bn of revenue, ¥118.9bn of operating profit at a 15.7% margin, ¥74.8bn of net profit, ROE of 10.4%, against ¥2.69tn of assets and ¥1.27tn of interest-bearing debt. Dividends were forecast to rise for a fourteenth consecutive year and the shares were split five-for-one in April 2025. Sixty-eight years after it was formed to look after one building, the company’s open problem is the one it started with: finding a second pillar so that the first does not have to carry everything.