Good morning to everyone. This is Horie, President of Tokyu Corporation. I would like to thank you for your precious time, despite your busy schedule, to attend our financial results briefing. I hope you will bear with me now for a bit long briefing I'm going to make. I will first explain an overview of FY 2024 financial results and our business outlook for FY 2025. Following that, I will discuss our management indices and the numerical targets for FY 2026 and beyond, our efforts to enhance corporate value in the real estate business, and the key topics for each business segment. Now please turn to page four. Let me now highlight the main points for FY 2024, which has just finished. Operating revenue, JPY 1.0549 trillion. Operating profit, JPY 103.4 billion, and net profit was JPY 79.6 billion. Hotel and Resort business, and the Life Service business performed strongly.
Operating revenue was up JPY 17.1 billion. Operating profit was up JPY 8.5 billion, up 9% year-on-year. Net profit, on top of the increased operating profit and due to the reduced impairment loss, rose by JPY 15.7 billion or up 24% year-on-year. Compared to our forecast as of November, the overall real estate business also performed well, leading to the operating profit up JPY 2.4 billion, and the net profit up JPY 5.6 billion. Now, page five, please. This shows the management indices for FY 2024. At the top, EPS, earnings per share, was JPY 134.81, up JPY 28.69 year-on-year. ROE came in at 9.8%, while ROA, or we define it as business profit to total assets, was 3.8%. In addition, our interest bearing of debt to Tokyu EBITDA multiples was 6x , achieving both financial soundness and ROE. Now please turn to page six.
I will go through the performance highlights by segment vis-à-vis the previous fiscal year. In Life Service business, we recorded a profit increase of JPY 6.2 billion, driven primarily by a significant profit improvement at the Tokyu Power Supply. Hotel and Resort business performed strongly, supported by the improved hospitality services and the strong inbound demand, resulting in a significant increase in room rates and the profit increase to JPY 4.4 billion. Real Estate business profit rose by JPY 1.1 billion, while real estate sales declined due to the reactionary effects from the previous year. Both the Leasing and the Property Management business, the three business, performed well. Transportation business posted a profit decline of JPY 3 billion. Although the Tokyu Railways passenger volume increased by 3% year-on-year, rising costs related to securing human resources led to a decline in profitability. Now, page seven, please. This shows a comparison with our November forecast.
In the Real Estate business, operating profit increased by JPY 3.4 billion, mainly driven by the strong performance of the leasing business. Life Service business grew in profit by JPY 1.5 billion. Now please turn to page eight. This slide shows the trends in operating revenue and operating profit since FY 2019. Thanks to the structural reforms implemented after the COVID-19 pandemic, along with organic growth initiatives and the value creation efforts, operating profit for FY 2024 reached a record high following FY 2023. The next page shows the changes by segment, so please refer to them at your leisure time. Page 10, please. Allow me now to explain the full year forecast for FY 2025. While uncertainty surrounding the global economy is increasing due to factors such as the U.S. policy on tariffs, we continue to anticipate growing mobility demand and the sustained inbound tourism.
These factors, along with profit contributions from ongoing management efforts, have been incorporated into our forecast. At the same time, we will continue to respond to changes in the external environment, including inflation, rising construction costs, and interest rate hikes. The assumption and the key KPIs for each business segment are listed in the center section under the forecast for each business. In transportation business, we project an up 2.4% year-on-year increase in the number of passengers carried for Tokyu Railways. In hotel business, we have factored in an increase in ADR. Meanwhile, in the Real Estate Sales business, we expect a decline in condominium sales. Additionally, we project an increase in personnel expenses of approximately JPY 9 billion year-on-year due to our efforts to improve employee compensation. Next page, please. This shows our forecast for FY 2025.
We project operating revenue being JPY 1.072 trillion, operating profit being JPY 100 billion, and the net profit being JPY 80 billion. Compared to the previous fiscal year, driven by a rise in the passengers carried in the transportation business and an increase in room rates in the Hotel and Resort business, we expect a JPY 17 billion improvement in operating revenue. On the other hand, due to a decline in the number of condominiums units delivered in the Real Estate business, we expect a JPY 3.4 billion decrease in operating profit. Excluding the Real Estate Sales business, we are targeting an internal growth of 3.7% year-on-year, with operating profit reaching JPY 89.6 billion. For net profit, we are aiming for an increase of JPY 300 million over FY 2024 by implementing various initiatives and continued management efforts.
Compared to the updated medium-term management plan announced in November last year, operating profit is expected to be JPY 5 billion higher. Compared to the original plan, this represents an increase of JPY 15 billion. While we have factored in a decline in real estate sales profit and higher labor costs, we aim to achieve operating profit of JPY 100 billion through internal growth of our existing businesses. As for net profit, the forecast level represents a year-on-year growth and is JPY 15 billion higher than the figure announced previously. Next page, please. Management indices. EPS, earnings per share, is projected to be JPY 139.23, up JPY 4.42 from FY 2024. Of this, thanks to the impact of the JPY 40 billion share buyback conducted in FY 2024, EPS was up JPY 5.42.
ROE is expected to be 9.3%, and ROA, or the business profit to total assets, is projected at 3.7%. Interest-bearing debt, Tokyu EBITDA multiple, is estimated to remain at 6.1 x, which is in line with both the previous fiscal year and the last medium-term management plan. Page 13. Here now we present the key points of our earnings forecast. Please review them in detail later. Now page 14. Next, I will explain our shareholder return policy. For FY 2024, considering that our performance exceeded expectations and the repurchase of JPY 40 billion worth of share buyback, we will increase the year-end dividend by JPY 1 from the previous forecast, resulting in an annual dividend of JPY 24 per share. For FY 2025, the annual dividend is planned to be JPY 28 per share.
Regarding the medium to long-term dividend payout ratio target of 30%, we consider it important to show a clear path to achieving this target while also taking into account the total return ratio. While maintaining high levels of investment, we aim to steadily increase profits and use those earnings as the source to raise dividend levels. Additionally, we have resolved to go for the share buyback up to JPY 10 billion or 6.5 million shares. On page 16, I will explain the management indices and the numerical targets from FY 2026 onward. Please go to page 16. We have updated the planned figure for FY 2026 from those announced last November and have newly announced our targets for FY 2027. At the top row, the EPS, earnings per share, is projected to be JPY 141 for FY 2026 and JPY 143 for FY 2027, reflecting our intention for steady growth.
Page 17. Regarding the profit at each stage, operating profit is projected at JPY 105 billion for FY 2026 and JPY 110 billion for FY 2027. Additionally, net profit attributable to owners of parent is expected to be JPY 81 billion in FY 2026 and JPY 82 billion in FY 2027. We intend to steadily grow profits and realize EPS growth going forward. Please proceed to page 19. I will now explain our investment plan and cash flows. The total investment amount over the three years of the medium-term management plan was initially set at JPY 510 billion, but it has been increased by JPY 10 billion for railway business investment, making the total JPY 520 billion. Growth investments and existing business investments are on an increasing trend due to rising construction costs. However, due to some postponements in the implementation timing, the total amount remains unchanged from the plan.
Additionally, the cash flow plan shown in the lower section has also been updated. On the cash flow side, operating cash flow has increased by JPY 30 billion due to higher profit levels, reaching JPY 500 billion, resulting in a total cash flow of JPY 640 billion. On the cash out side, in addition to the JPY 520 billion in investments, JPY 20 billion was spent on acquiring investment units of Tokyu Real Estate Investment Corporation and shareholder returns increased by JPY 60 billion due to share buybacks and higher dividends totaling JPY 100 billion. Please turn to page 20. Allow me to explain our approach to enhance our corporate value in the Real Estate business. First, regarding the enhancement of value in our Real Estate business, we have recently received feedbacks wishing us to strengthen our real estate operations through asset turnover.
While we appreciate this perspective, Tokyu intends to enhance corporate value by positioning the real estate leasing business as our core. There is some data indicating that companies with a higher proportion of leasing business tend to have higher P/E ratios compared to those primarily focused on property sales. By centering on the Leasing business, we can achieve stable profit levels, which in turn strengthen our ability to execute large-scale redevelopment projects and allow us to offer the stock market stable and high level of corporate value. Additionally, based on our concept of cyclical reinvestment, we are focusing intensive investments in the areas such as Shibuya and along the Tokyu railway lines. Through these investments, we enhance local appeal by improving facilities, functions, and the software infrastructure.
This helps us to attract the widest types of population, residents, visitors, and workers, which in turn raise the area value and subsequently the value of the real estates located in those areas. In other words, we believe we are capable of directly enhancing the value of our properties located in Shibuya and along our railway lines. By focusing on leasing as our core business, we are able to capture the benefits of increased rents and others, which are a direct outcome of this property value enhancement. Our cyclical reinvestment model enables the continuous growth of our corporate value as a result of these efforts. Furthermore, a robust financial base is essential for steadily advancing large-scale redevelopment projects in Shibuya and along the Tokyu railway lines. We believe that having appropriate unrealized gains are going to be the key to ensuring this financial strength.
Redevelopment projects span long-term time frames and involve the coordination of diverse stakeholders of interests regarding resilience against various business risks. Currently, the factors such as surging construction costs are making large-scale redevelopment increasingly difficult. In this context, maintaining adequate unrealized gains allow us to secure our financial foundation and steadily move forward with major redevelopments, thereby expanding our corporate value. Examples include the Shibuya Upper West Project, the Miyamasuzaka District Type 1 Urban Redevelopment Project, and phase II of Shibuya Scramble Square, all announced since March. In addition, Tokyu does not rely solely on the real estate business for investment returns. We operate a regional conglomerate model that generates earnings through a diverse range of businesses and services. Redevelopment-driven population inflows enhance the profitability of non-real estate business as well.
Starting with our owned real estate, we generate synergies across businesses, earning additional returns beyond real estate and thereby improving investment yield. We also strategically combine real estate sales as part of our approach. While real estate leasing remains our core, we view capital gains from sales as a useful tool to improve ROE, accelerate capital recycling, and promote cyclical reinvestment. Our strategy includes contributions to the Tokyu Real Estate Investment Corporation, our main sponsor. By strategically combining property sales, we aim to secure appropriate returns. Moreover, we are also focused on turnover-based businesses such as condominium sales. These businesses not only generate profits but also contribute to attracting population into the area, distinguishing our approach from that of the traditional pure-play developers. Next page, 22.
While some points may overlap with the previous explanations, this page focuses specifically on the real estate business to explain how we secure total returns and enhance value through the cyclical reinvestment. In the real estate business, we secure overall returns by combining various operations such as leasing, sales, and fee-based businesses like property management. In addition to maintaining appropriate unrealized gains on our owned properties, we also secure a sound financial foundation through selective property sales. This enables us to promote large-scale redevelopment without being affected by external factors such as fluctuations in the real estate market. Through cyclical reinvestment, reinvesting returns from the leasing, sales, and management into the Shibuya and areas along the Tokyu railway lines, we aim to increase the number of people connected to these areas, enhance the area's value, and thereby increase the value of the properties we own in those locations.
This is the core of our value creation strategy. Moreover, the expansion of the facilities and functions resulting from cyclical reinvestment leads to increased associated population. This in turn has positive ripple effects on our other businesses and facilities, including railways and buses, enabling us to generate additional returns such as increased business cash flows, which will enable us to realize the continued efforts to increase our asset value. This is our basic model to enhance the corporate value centering around real estate business. Please go to page 23. Next, I would like to explain our approach to asset sales, which we strategically combine within our business model. We have been strategically selling real estate properties, including transfer to Tokyu Real Estate Investment Corporation, with the aim of accelerating cyclical reinvestment and improving ROE.
The properties selected for sales are primarily those that have completed value enhancement through our involvement and are chosen from the standpoint of optimizing our asset portfolio. Since 2010, over the past 15 years, we have conducted asset sales totaling approximately JPY 300 billion. Under the current medium-term management plan, we are planning asset sales totaling JPY 70 billion over three years. In the first year, FY 2024, we have already carried out sales of approximately JPY 20 billion. Regarding our future sales, we plan to retain ownership of properties in the Shibuya area in principle. This is because some of these assets are located directly above train stations or have mixed-use functions, making them less liquid. Because further rent and value increases are expected as surrounding redevelopment progress, we, in principle, continue to own them.
On the other hand, we will consider partial interest sales to partners who share our vision for enhancing the value of the Shibuya area, as well as strategic collaboration with Tokyu REIT. In addition, we will consider the sale of equity interests during the redevelopment phase and after completion, aiming to ensure appropriate returns and asset efficiency across the company. Next, let us quantitatively examine the characteristics of our real estate business. First, on the left side, we show the breakdown of operating profits in the Real Estate business. In the graph on the left, the green section represents the Real Estate Leasing business, which provides a stable profit contribution. Moving forward, profit growth will be driven by ongoing redevelopment projects. Combined with this is the fee-based business shown in pink, such as property management, which helps us to enhance overall yield.
The Management business has expanded profits as the amount of managed floor space has increased. In addition, we include the Sales business shown in gray. While this segment shows volatility year by year, it still contributes to overall yield improvement. From FY 2025 onward, we expect the profit from the real estate sales business to account for approximately 10% of the company's total operating profit, resulting in the baseline profit structure that does not overly rely on sales. On the right side, we present the trend in inventory balances of subdivided land and buildings, the foundation of the Real Estate Sales business. With a focus on both domestic and overseas residential sales, as well as a growing emphasis on asset turnover-based office building sales, both the balance and the proportion of these inventories have shown an upward trend over time.
On the other hand, the Real Estate Sales assets accounted for approximately 12% of total real estate segment assets as of end of FY 2024. This is about half the average of the major real estate developers, which is around 20% or up to 22%, indicating a resilient structure in the event of real estate price corrections. While we aim to expand our real estate sales business with a focus on ROE levels, we will maintain a relatively high proportion of leasing operations, thereby continuing to build and manage a stable real estate business portfolio. Page 25, please. From here, I will explain the main topics of each business segment. First, let me explain transportation business, focusing on Tokyu Railways. As mentioned earlier, operating profit for Tokyu Railways decreased by JPY 3.2 billion compared to the previous fiscal year.
This decrease was mainly due to increased costs as we proactively carried out capital investments, hiring efforts, and improvements in employee compensation to ensure business sustainability and long-term competitiveness. Increases in power and energy costs also contributed. As for railway demand, we expect a continued increase in passenger carriage of up 2.4% in FY 2025, surpassing the inflation rate. Regarding future profit level, we aim to maintain the current level of around JPY 25 billion by enhancing business efficiency while strengthening our competitiveness and capturing further demand. Now, let's move on to the Real Estate business. The real estate leasing segment continues to perform steadily with increased rental income, leading to a year-on-year rise in profits. The top left chart shows the revenue structure of our Real Estate Leasing business. By use type, commercial and office properties account for about 80% of revenue.
By area, over 90% of our leasing income is generated in Shibuya and along Tokyu railway lines. Areas experiencing growth in related population, forming a highly desirable portfolio. Notably, our exposure to regional cities is extremely limited. In the bottom left, commercial and hotel rents are increasing, driven by higher percentage-based rent components. On the right, office rent levels are being actively revised upward, supported by the low vacancy rate. In the second half of FY 2024, more than 70% of tenants in the Shibuya area agreed to rent increases. In many cases, we have implemented rent increases of 10%-15%. As a result, our average office rent in the Shibuya area has risen by approximately 13% compared to the pre-COVID levels, significantly exceeding the average growth rate of Tokyo's five central wards.
This is not merely the result of tight supply-demand conditions, but rather a reflection of our proactive efforts in enhancing the attractiveness of the area through a development of facilities, introduction of new functions, and the implementation of various SaaS initiatives that draw people into the area. Next, I would like to explain how area value is being enhanced through the redevelopment of Shibuya. As shown on the map on the left, many redevelopment projects have already opened around Shibuya Station. In addition, several more projects led by our company and other developers are in the pipeline. Given that the Shibuya Ward has the smallest leasable office area among Tokyo's five central wards, we indeed welcome this wave of development. Among these, we are advancing the redevelopment projects in the most competitive areas, those directly connected to Shibuya Station or located in its immediate vicinity.
Since the redevelopment began in earnest in 2009, total real estate-related investment in the Shibuya Station area through 2040 is going to be, according to our estimation, approximately JPY 2 trillion, including public sector projects. Roughly half of that is going to be done by Tokyu Corporation. As such, Shibuya is a highly attractive area where multiple real estate developers, including Tokyu Corporation, are actively involved in redevelopment. As redevelopment has progressed, the area's appeal and value has steadily risen. For example, the working population has increased by about 33% over the past decade. The increase in population and area value has also had positive ripple effects across our other businesses, including railways and buses. On the following pages, I will introduce our upcoming development plans. Rather than focusing solely on individual projects, we are committed to enhancing the value of the entire Shibuya area.
Allow me to repeat a point. Improving the overall value of the area surely leads to an increase in the value of our real estate portfolio. Page 29. Let me now explain the development plans currently being performed in the Shibuya area. The upper section lists the ongoing projects. Due to the recent surge in construction costs, the total investment amount is now projected to be around JPY 600 billion, somewhat higher than previously estimated. Shibuya Upper West Project is a joint development between the Tokyu Group and LCRE, the development arm of LVMH. This world-class facility will include commercial space, hotel, luxury rental residences, and a museum. The project is scheduled to open in FY 2029. Page 30, please. Let me explain about the Shibuya Scramble Square Central and West Buildings.
Together with the East Building, which is already open, the three towers will form a large-scale mixed-use complex with a total floor area of approximately 270,000 sq m, creating one of the largest commercial facilities in the Tokyo metropolitan area directly above the Shibuya Station. The opening is scheduled for FY 2031. In conjunction with the building construction, we will also be developing a pedestrian network around Shibuya Station. A multi-level pedestrian network will be built to connect the north, south, east, and west areas of Shibuya at ground level and deck level, dramatically improving accessibility to and from Shibuya Station and its surrounding areas. This will significantly enhance connectivity among Shibuya's various buildings and facilities, further increasing the area's value and strengthening synergies towards the diverse businesses and services we operate under our regional conglomerate model. Let me explain the Miyamasuzaka District Type 1 Urban Redevelopment Project.
This project is located in a highly accessible area adjacent to the east side of Shibuya Station, facing both the Miyamasuzaka Slope and Meiji-dori Avenue. We will develop facilities that are currently lacking in the Shibuya area, such as a large-scale hall, world-class lodging facilities, and public-private industrial support centers. This large-scale development aims to transform Shibuya into a world-leading international business exchange city. The opening is scheduled in FY 2031. Allow me to explain the development plans in the Tokyu Line area. In November 2024, the Redevelopment Association for the Saginuma Station District Type 1 Urban Redevelopment Project was established, among other initiatives progressing along the railway lines. By advancing these projects, we aim to increase the population along the Tokyu Line areas and enhance the profitability of the businesses we operate there. Page 33.
Next is an overview of our residential sales business, both at home and abroad. In Japan, we are working to secure business opportunities mainly along our railway lines, with the goal of attracting more people to live in those areas. Overseas, particularly in Vietnam, we will steadily generate profits through our development projects. In FY 2025, we expect to deliver about 320 units domestically and around 800 units internationally. Page 34. Let me explain our overseas business. As announced in last year's medium-term three-year management plan, overseas expansion is positioned as one of our growth strategies. We are leveraging our urban development expertise gained in Japan to carry out projects in Vietnam, Thailand, and Australia. As of the end of FY 2024, asset balance by country are approximately JPY 90 billion in Vietnam, JPY 15 billion in Thailand, and JPY 20 billion in Australia.
Where the total overseas assets accounted for about 5% of our consolidated total assets. In Binh Duong New City, in Binh Duong Province, Vietnam, currently 18% of total area of 110 hectares has been developed so far. We expect further acceleration, primarily through the residential sales along with expansion into leasing and free-based business. In Australia, we are promoting a large-scale development of around 2,300 hectares in Yanchep, a suburb of Perth, which the railway connected to Perth and in the low book value of the investment. This is a very promising project for the future. I will now explain the strategy for the commercial facility and operations business within our retail segment. In March this year, we announced a reorganization of the commercial facility and operations business within our Tokyu Corporation and its consolidated subsidiaries.
This reorganization aims to strengthen our competitiveness in the commercial facility operations by building an integrated group-wide structure for planning and managing such facilities. In regards to the commercial facilities management, the consumer values have been increasingly diversified, including a greater emphasis on the experimental consumption and the time performance efficiency. Competition to acquire customers has intensified due to an oversupply situation. Business environment is going through a big change. While our retail business has accumulated extensive knowhow in operating various formats such as shopping centers and department stores, we recognize challenges in achieving efficient operations and generating synergy within each area. In response to these issues, we aim to strengthen competitiveness through the integration of commercial facility and operations functions, enabling us to continue offering facilities that are chosen by consumers. Specifically, we will provide services tailored to each region's characteristics and needs.
For example, treating the entire Tokyu railway line area as one unified mall and integrating marketing, leasing, and the promotional functions for each area. In addition, we will leverage our unique operational knowhow to create competitiveness and attractiveness in these retail spaces. Specifically, we will implement a quad operation approach to retail development, combining self-operated sales area, consignment sales, lease tenants, and franchise formats to build attractive retail environment. For example, in directly managed areas such as wine and fashion accessories, we will use our expertise to create distinctive sales floors. For consignment sales in categories like beauty and food, we will apply our editing and curation capabilities, drawing on department store knowhow. This will be combined with a shopping center and operation to attract high-traffic tenants, and through the franchising, we will directly operate well-known brands, thereby developing a unique and appealing Tokyo-style retail spaces.
Through these initiatives, we aim to increase tenant sales in our commercial facilities by 10% by FY 2030 compared to FY 2024. Let me explain our Hotel business. The Hotel business performed well, driven by the provision of high-quality services and the capture of the inbound demand. In FY 2024, we achieved over JPY 100 billion in sales for the first time, and the GOP, shown in the upper graph, also reached a record high. Major hotels in the central areas such as Shibuya and Shinjuku led this performance, with ADR exceeding JPY 50,000, and these hotels accounted for about half of the hotel GOP. The lower left shows our inbound guest composition. Foreign guests made up approximately 45% of total hotel stays, and in the Shibuya area, this figure was 82%, significantly higher than the industry average. This indicates that a greater number of international travelers choose our hotels.
Going forward, we aim to further grow our performance by offering value that matches our pricing through renovations and other enhancements. Page 37. This is the last page. I would like to explain our ESG initiatives. We have been selected as a constituent of two representative ESG investment indices, the FTSE4Good Index Series and the FTSE Blossom Japan Index. We are the very first railway company in the Kanto region to be selected for all the Japanese equity ESG indices adopted by the Government Pension Investment Fund, GPIF. At Miyakojima Tokyu Hotel & Resorts, we have installed solar power generation equipment on the hotel premises, enabling 25% of the hotel's electricity usage to be covered by the solar power. This promotes local production and consumption of renewable energy.
Moving forward, we will continue to position sustainable management as a fundamental principle, strengthen our ESG initiatives, enhance non-financial value, and strive to achieve sustainable corporate value growth. This concludes my presentation.