SYLA Acquires Painting Franchise Business, Making Full-scale Entry into the Painting Industry

SYLA Technologies Co., Ltd. (Head office: Shibuya-ku, Tokyo; CEO: Hiroyuki Sugimoto; NASDAQ: SYT) (“SYLA” or “the Company”) announces that its wholly owned subsidiary, SYLA Co., Ltd. (Head office: Shibuya-ku, Tokyo; CEO: Yoshiyuki Yuto) ("SYLA Co."), has acquired the franchise business of ETP Inc. (“ETP”), a Japanese construction painting franchise company. By integrating ETP's franchise business, SYLA makes a significant entry into the painting industry, diversifying its service portfolio within the construction sector. This acquisition underscores SYLA's dedication to providing more comprehensive and innovative solutions to its valued customers.



Full-scale entry into the painting industry
SYLA’s acquisition of the construction painting franchise business is intended to expand and strengthen the business of the whole group. While leveraging its track record and expertise in the general construction sector, SYLA aims to make a bold entry into the painting industry. The strategy involves not only providing localized services in collaboration with franchisees but also driving cost reduction and operational efficiency, pursuing an unprecedented approach to the painting business.

Strategic business alliance with a major paint manufacturer
In conjunction with the acquisition of ETP’s franchise business, SYLA has entered into a business alliance with a major paint manufacturer listed on the Tokyo Stock Exchange. This partnership extends beyond a conventional OEM agreement, aiming to intensify collaboration and enhance the design, technology, and competitiveness within our core business—the condominium development sector. This initiative positions us to deliver high quality workmanship to our customers, expanding our presence in the condominium market.

Background of the painting business acquisition
1. Cost efficiency and in-house proficiency
SYLA’s active participation in the painting industry is an effective measure to reduce construction costs and enhance in-house expertise. This approach will also elevate construction precision, leading to heightened customer satisfaction.
2. Expansion into the detached house remodeling
The acquisition of the painting franchise business will facilitate SYLA’s entry into the detached house remodeling field as a new venture. This expansion into a new business dimension enables SYLA to pursue a fresh approach to home remodeling by integrating its wealth of expertise cultivated in the condominium development business.

Expected synergies
1. Streamlined construction costs
The acquisition of the painting franchise business is anticipated to effectively reduce construction expenses. Concurrently, the collaboration between SYLA’s construction division and ETP’s franchisees will optimize the construction painting process, enhancing overall quality while ensuring sustained cost competitiveness.
2. Cost savings in major renovations of properties managed by SYLA
Through the incorporation of the painting franchise business, substantial cost savings are expected in the context of major renovations for properties managed by SYLA. This strategic move will enhance the value of the properties while providing economic benefits to the customers.
3. Heightened SYLA brand recognition at new franchise openings
Collaborative efforts with paint business franchisees are poised to further enhance the brand recognition of SYLA. This concerted approach will foster deeper connections with local communities, thereby enhancing credibility.

SYLA’s growth strategy
1. Expansion of the painting franchise
SYLA aims to expand the franchise business nationwide, allowing the Company to provide its services to meet the specific needs of each region and contribute to the development of local economies.
2. Enhancement of painting x technology
In response to technological advancements and evolving customer needs, SYLA will further enhance the integration of technology in the painting industry. By developing a DX-enabled platform, the Company aims to elevate transparency and efficiency in the construction process, fostering improved communication with customers.

Through this strategic acquisition, SYLA envisions not only entering into the painting industry but also emerging as a leading company in the construction and remodeling sector, reaping diverse benefits from this synergy. Looking ahead, the Company’s focus remains steadfast on prioritizing technological innovation, fostering strong ties with local communities, and ensuring customer satisfaction to guarantee sustainable growth.

About SYLA Co., Ltd.
SYLA Co. is an operator of the largest membership real estate crowdfunding platform in Japan, Rimawari-kun, and a developer of investment condominiums. Rimawari-kun aims to realize a society where real estate investment becomes a familiar asset-building method, based on the concept of "social contribution, regional development, and support for someone’s dreams and challenges.” As an investment condominium developer, SYLA Co. created its own condominium series, SYFORME, targeting the 23 wards of Tokyo and the Yokohama and Kawasaki areas. SYLA Co. provides comprehensive solutions including development, sales, leasing, building management of investment condominiums, as well as sales and renovation of used condominiums. Through its one-stop service, SYLA Co. responds quickly to ever-changing needs, providing customers with long-term, stable earnings with its truly valuable compact condominiums. SYLA Co.’s parent company, SYLA Technologies, was listed on NASDAQ on March 31, 2023.

Company Profile of ETP Inc.
Head Office: 3-28-4, Hakata Ekimae, Hakata-ku, Fukuoka City, Fukuoka, Japan
Representative Director and CEO: Masaharu Keuchi
Establishment: March 26, 2018
Business: Franchise business and paint development business
Website: https://starpaint.jp/