While Leopalace21 Corporation reported a net profit of Y9.5 billion for fiscal 2008, this figure was Y3.1 billion less than forecast. The company said that its main apartment rental business servicing manufacturers and temporary employment agencies who provide housing for workers has been hit hard as companies are not renewing contracts with temporary workers.
The weakening of this market is particularly worrisome for the 2×4 industry as 70% of the 2×4 starts in Japan are for rental apartments. In fact, all of the growth in 2×4 has been the result of the strength of rental apartment builders like Daitoh Kentaku. Weakening demand by renters for new units will mean falling starts and severely weaker demand for SPF in Japan.
Click the link below to see a video of what one of these rental apartments looks like.