Strategic capital planning for creating centennial companies

What is Vortex's "100-year corporate strategy"?

In order to bring the future with multitude of 100-year companies as possible, Vortex will use a real estate strategy that utilizes "Strata Title Office" to secure income and saleable assets that are not linked to its core business, thereby contribute to enhance corporate value and business continuity.

In Japan, there are long-lived companies that own real estate and utilize it as rental office business. These companies have been in their core business for a long time, securing stable earnings from rental income from their real estate.

The "rental office business" is easy to enter if one has a certain amount of capital while still operating one's core business, is not easily affected by the economy, and can maintain a high profit margin. Nowadays, in order to build a stable financial base to become a long-lived company, the "rental office business" is a necessity to generate positive non-operating profit/loss as a new business outside of the core business.

The fact is that "office leasing" is one of the most popular business within Japanese long-lived companies

The number of centennial companies in Japan has increased by approximately 18,000 over the past 14 years. The growth rate of the "office leasing industry" is particularly high, with the largest number of long-lived companies among all industries and business categories. This is because many of these firms were not in the rental office business as their primary business, but changed their business type as revenues from the rental office business increased over the years.

Incorporating the "rental office business" as a source of revenue not linked to the core business can be expected to significantly improve business continuity.

*Source: Prepared by our company based on data from major research organizations.

What are the advantages of having real estate leasing as a sub-business?

As the financials of long-lived companies clearly show, securing a source of revenue outside the main business is the same as having a subengine that supports the entire business. Therefore, even if the main engine, the core business, should suffer a downturn, the subengine, the rental business, will be able to weather the storm.

A long-lived company that has been in business for 100 years may find that its core business is no longer viable or that it needs to revamp the way it does business.

If we can get the sub-engine up and running in those pinch points, we can keep the business going strong until we can get the new business off the ground. Of course, as a second pillar that brings in revenue, it works in the direction of accelerating management when the core business is doing well.

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