AD Works Group Announces Strategic Company Split for Property Management Division

In a recent board meeting, AD Works Group, a well-established player in the real estate investment solutions sector, declared an organizational restructure involving its consolidated subsidiary, AD Partners. Scheduled to take effect on January 13, 2026, the company will execute an absorption-type company split, transferring its property management business focused on external owners to Architect Developer. Additionally, various property management business sectors will transition to another subsidiary, AD Works, under a separate yet concurrent absorption split.

Purpose of the Restructuring

The AD Works Group has emphasized its commitment to increasing corporate value as part of its growth strategy announced on February 13, 2025. The goal is to enhance Return on Equity (ROE) to a range of 13% to 14% by 2027, alongside efforts to reduce the cost of capital to meet shareholders' expectations. The upcoming splits are intended to optimize the business portfolio, focusing resources on promising growth sectors.

AD Partners has played a crucial role in managing properties for both external owners and within the group, forming part of the revenue-generating real estate value chain. However, it has faced challenges, primarily price competition and limited growth prospects in the external property management sector. Conversely, the group's in-house property management business presents a unique and valuable opportunity, justifying the need for restructuring to enhance operational efficiency and growth.

Key Details of the Company Split

The announced company split is set to further delineate the functions of both Architect Developer and AD Works, enhancing their operational efficiency. The split commenced on November 25, 2025, with a board resolution, followed by the signing of the company split agreement on the same day.

Timeline:

1. November 25, 2025 - Board Resolution for Company Split
2. December 23, 2025 (Projected) - Shareholders' Meeting Approval
3. January 13, 2026 (Projected) - Effective Date of Company Split

Mode of Split

The absorption-type split will designate AD Partners as the splitting company with Architect Developer as the receiving entity for the external property management business. Conversely, AD Works will inherit the assets related to the group's property management operations on the same effective date.

Although the financial terms associated with the ongoing absorption split remain under negotiation, it is anticipated that upwards of 1.81 billion yen will be allocated for the external ownership property management transfer, with final terms established by mid-2026. The internal group management transfer will not entail a monetary exchange to encourage streamlined operations.

Future Implications

The restructuring is poised to yield special profits for the 2026 fiscal year, effectively positioning the AD Works Group to capitalize on a strategic reallocation of resources, enhancing profitability and efficiency. The company's management anticipates the realization of 1.74 billion yen in special profits following the absorption split, further solidifying its commitment to meeting shareholder expectations.

In conclusion, the transition aims to lay the groundwork for increased corporate value by strategically positioning the company for sustained growth, enhancing service differentiation in property management and ultimately delivering greater returns to its stakeholders. With a rich history dating back to 1886, the AD Works Group continues to evolve while staying true to its roots, which were established with the vision of 'dyeing the world in vibrant colors' through innovative and sustainable business practices.

For more information about AD Works Group and their initiatives, please visit: ADWG.