(Updates with today’s share price in seventh paragraph.)
Oct. 13 (Bloomberg) -- Properst Co., a Japanese condominium builder which is emerging from bankruptcy, plans to quadruple the number of residential projects in Tokyo this year as part of efforts to boost profit. The stock rose the most in seven months.
Properst, which finished the legal process of corporate rehabilitation in February after filing for bankruptcy in May 2010, plans to increase development projects to about 12 in its current business year ending May 31 from three a year earlier, said President Masayuki Tsue. The Tokyo-based company plans to start building smaller apartment buildings with about 30 to 50 units and work jointly with partners who provide financial support, he said.
Properst is the only company in Japan to remain publicly traded after filing for bankruptcy, according to Tokyo Shoko Research Ltd., as the collapse of Lehman Brothers Holdings Inc. in September 2008 dented demand and reduced condominium prices. The company, which has been collecting fees by building and selling apartments for its partners in the last couple of years, plans to begin buying land to develop on its own, Tsue said.
“We have just been reborn,” said Tsue in an interview in Tokyo on Oct. 11. “We would like to work on projects on our own soon.”
As a first step, the company started to acquire land to develop for the first time in more than two years with investors in December, according to Tsue. Properst, which used Madonna to promote its high-rise apartment sales in central Tokyo in 2007, has already bought three land sites and has a plan to acquire nine more by the fiscal-year end jointly with partners, he said.
The developer’s liabilities totaled 55.4 billion yen ($719 million) at the time of bankruptcy, according to a company statement in May last year. A total of 26.2 billion yen in debt that the company owed was forgiven by its lenders, while 2.7 billion of liabilities were converted to equity through debt-to- equity swaps, the company said.
Properst shares, which more than tripled since the company filed for bankruptcy last year, surged 14 percent to 3,620 yen at the close on the Osaka Securities Exchange’s Jasdaq Standard market, the biggest gain since March 18.
Properst, which was established in 1987, has focused its business on property development in the Tokyo metropolitan area, ranging from small-sized apartments to condominiums in high-rise buildings. The company had a profit of 27.3 billion yen for the year ended May 31 compared with a loss of 28.3 billion yen a year earlier. It is forecasting a profit of 547 million yen for the year ending May 2012 on sales of 7 billion yen.
The company, which has about 40 staff, plans to add 10 more before the end of the year, Tsue said.
The number of condominiums offered for sale in Tokyo and surrounding areas rose 1.7 percent in August, the Real Estate Economic Research Institute said in a report released in Tokyo on Sept. 14.
--With assistance by Eijiro Ueno in Tokyo. Editors: Tomoko Yamazaki, Andreea Papuc
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