Orange & Partners and Profits Form Business Alliance to Balance Real Estate's 'Asset Value' and 'Emotional Value'

Orange & Partners Inc. (Headquarters: Minato-ku, Tokyo; President & CEO: Kundo Koyama; hereafter 'Orange') has entered into a business alliance with Profits Inc. (Headquarters: Chiyoda-ku, Tokyo; CEO: Shinichiro Tanaka; hereafter 'Profits') to enhance profitability and asset value by improving the 'experiential value' and 'brand value' in real estate.

Under this alliance, the companies will focus on increasing real estate value for properties such as residences, offices, hotels, and existing property revitalizations, centered on 'regionality,' 'community,' and 'experience design.' Instead of merely providing space, they aim to create new real estate value by generating experiences that make people 'want to visit again' and 'recommend to others,' leading to improved occupancy and revisit rates, and the creation of rent premiums.

Through this partnership, Profits will take the lead in promoting projects focused on real estate acquisition, revitalization, and value enhancement, with an annual investment target of approximately 20 billion yen.

As their first project, the two companies collaborated on the development of 'TRAN.SCENDER® HÔTEL Yokohama' in Yokohama's Chinatown, which opened last November. Profits handled overall project and asset management, while Orange was responsible for everything from concept creation to experience design based on its 'Branded Placemaking' philosophy. By transforming a former large restaurant into a brand hub that adds new appeal to Yokohama's Chinatown, they are working to increase the property's asset value.

The goal of this partnership is not simple renovation. It is to build a new concept of real estate value that ultimately improves revenue and asset value by creating 'a reason to go' and 'an experience that makes you want to come back.' They will treat elements like naturally occurring word-of-mouth and social media posts, community-forming facilities, and accommodation experiences that convey regional culture and stories as crucial competitive advantages in real estate.

Furthermore, they aim to establish a new evaluation axis in real estate by translating the often subjectively discussed 'experiential value' into quantifiable metrics such as LTV (Life Time Value), repeat rates, length of stay, service sales, corporate usage ratio, and social media ripple effects, making it a value that can be used for investment decisions. 'Branded Placemaking' is a strategy to brand the 'place' itself by incorporating the history, culture, and stories of the location and brand into the experience, thereby increasing the economic value, recognition, and pride associated with the real estate facility.

Shinichiro Tanaka, CEO of Profits Inc., stated, 'We will challenge ourselves to connect themes such as profitability and social outcomes, the meaning of a place and its investment viability, and creating a sustainable fanbase that increases LTV rather than one-off promotions, so that real estate's role in society becomes an infrastructure that enriches people's emotions and experiences.'

Tomoki Hagio, Executive Vice President of Orange & Partners Inc., said, 'There is a shortage of projects and players that can develop while balancing economic rationality with enriching people and society,' and that they will further promote 'the branding of places' and 'the media-fication of places.'