Proactive Revision of “Management Strategy for Sustainable Growth”

1. Earnings targets
Viewing ¥300 billion in ordinary profit in the next medium-term management plan as acheckpoint, and aiming at reaching an even higher milestone of ¥400 billion
 Mainstay businesses steadily recovering and improving, expecting to achieve an ordinary
profit of ¥300 billion in the next management plan One of the largest urban redevelopment in Japan, “Roppongi 5-chome West Project” has been
approved; Acquired a large-scale mixed-use development site in the heart of Mumbai, India
Aiming for(Billion yen)¥400 billion

400
400
350

Surpassing¥300 billion

300
300

in next plan

250

COVID-19

200
200
150
100
100
500

FY'10'11

5th Plan'12'13'14

6th Plan'15'16'17'18

7th Plan'19'20

8th Plan

'21

'22

'23

'24
(予)
9th Plan

'25

'26

'27

10th Plan

Sumitomo Realty & Development Co., Ltd. (1)Proactive Revision of “Management Strategy for Sustainable Growth”

2. Proactive revision of management strategy, aimed at achieving
an ordinary profit of ¥300 billion(1) “Doubling the dividend two years ahead of the previous schedule,” accelerating thepace of the annual dividend increase from ¥7 to ¥10 per share With the recovery and improvement of outlook in our leasing business putting us on the clear path tosurpassing ¥300 billion in ordinary profit, we intend to further boost shareholder returns
 Achieving “¥100 per share within 7 years” two years ahead, reaching “¥100 per share for fiscal 2027”
 Expecting ¥70 per share for fiscal 2024, increasing dividend for the
11th consecutive year
2 years ahead¥100 per share

Previous target (announced in May 2023)
Double the dividend within 7 yearsto ¥100 per share

Profit(Billion yen)

(FY 2027)

100300200

Dividends

150
10030

20500

Previoustarget

70

250

453560522017

2019

754530Profit2015

9060

Increase¥10 per year

Dividend increase for 11 consecutive terms
FY2013

Dividend (Yen)

2021

2023

Previous target(announced in May 2023)

Increase ¥7 per year
2025

2027

2029

150

Sumitomo Realty & Development Co., Ltd. (2)Proactive Revision of “Management Strategy for Sustainable Growth”

2. Proactive revision of management strategy, aimed at achieving
an ordinary profit of ¥300 billion(2) Making progress in reducing strategic shareholdings, aiming to achieve the reduction
target of 10% or less, three years ahead of the original schedule The ratio of the book value of strategic shareholdings to shareholders’ equity has been steadilydecreasing: 14.2% at the end of fiscal 2023
 Selling shares with diminished significance for holding in a planned manner ➡ Utilizing the gains
from the sale of shares to support our sustainable growth(Billion yen)Book value of listed shares and shareholders’ equity
300

30%

Ratio
250200Target at the time of 9th Plan23%(announced in May 2022)

23%

Reduce to 10% or lessby FY 2030
18%

150

16%

0FY2015
6th Plan

14%

2019

2021
8th10%
10％

FY 2027

10% or lessBook value of listed shares(Left scale)2017
7th20%
15%

100
50

25%

2023
9th2025

3 yearsahead
2027

10th2029
11th

5%
0%

Sumitomo Realty & Development Co., Ltd. (3)Proactive Revision of “Management Strategy for Sustainable Growth”

2. Proactive revision of management strategy, aimed at achieving
an ordinary profit of ¥300 billion(3) Not renewing advance warning takeover defense measures
Progress in“review of corporate takeover rules”

The scale of our business and profitability
have expanded and stabilized

Discussions on ensuring the fairness andtransparency of acquisition procedures

Expecting to surpass ¥300 billion in ordinary
profit in the 10th Plan, and aiming at reaching aneven higher milestone of ¥400 billion

METI: Reviewing the guidelines for takeovers• Mainstay businesses such as office buildings andcondominiums steadily recovering and improving,expecting to achieve an ordinary profit of ¥300
billion in the next Management Planat the “Fair Acquisition Study Group”
FSA: Reviewing the tender offer system andconsidering to tighten the large
shareholding reporting rule• One of the largest urban redevelopment in Japan,“Roppongi 5-chome West Project” has been
approved; Acquired a large-scale mixed-use
development site in the heart of Mumbai, India

June 2025
Not renewing“Advance warning takeover defense measures”
Sumitomo Realty & Development Co., Ltd. (4)Proactive Revision of “Management Strategy for Sustainable Growth”

2. Proactive revision of management strategy, aimed at achieving
an ordinary profit of ¥300 billion(4) Continuing active investment in human capital Aiming for “employee-first management,” as well as “integrated groupmanagement”
 A salary system that is similar to a role-based system, where annual salaries are
determined based on the responsibilities and achievements of employees 90% of our employees and 60% of the managerial personnel are individuals who
were hired through mid-career hiring with high motivation
 A highly diverse workforce is a driving force for the growth of the GroupIn addition to the evaluation system based on
ability and achievement of individual employees,
we will continue to actively invest in human capital,
including investments in digital transformation (DX) and education,
to enhance productivity.
Sumitomo Realty & Development Co., Ltd. (5)Proactive Revision of “Management Strategy for Sustainable Growth”

2. Proactive revision of management strategy, aimed at achieving
an ordinary profit of ¥300 billion(5) Doubling the amount of funds for Green Financing from a total of ¥1 trillion to¥2 trillion
 78 of our buildings with a total gross floor area of over 1.1 million tsubo (*1 tsubo ≈ 3.3 sqm)
acquiring the “DBJ Green Building Certification”
 Doubling the financing quota to ¥2 trillion due to its popularity and the rapid
approach to the quota
 Continuing to develop superior properties with environmental considerations andstriving to maintain and enhance their performance◆ Third-party environmental recognitions for leasing assets (acquisition of DBJ Green Building
Certification) The constant “environmental and social awareness” of our properties was highly recognized
Properties that have acquired ★5* DBJ Green Building Certification isa certification system established by
the Development Bank of Japan toevaluate real estate for itsperformance and initiatives regarding“environmental and socialawareness” beyond its “profitability.”

Shinjuku Grand Tower

Osaki Garden Tower

Shinjuku Garden Tower

Tokyo Nihombashi Tower

Azabujuban Building

Roppongi Grand Tower

Ariake Garden

Sumitomo Realty & Development Co., Ltd. (6)Proactive Revision of “Management Strategy for Sustainable Growth”

3. Viewing ¥300 billion as a checkpoint, and aiming at reaching an evenhigher milestone of ¥400 billion
Tokyo

Mumbai, India- Primary Growth Engine -- Second Growth Engine -Roppongi 5-chome, Yaesu,Tsukiji (Ginza East), Roppongi 3chome, Ikebukuro, and Iidabashi
Gross floor area: 2 million sqm
Investment amount: ¥2 trillion

2 projects in BKC
A project in Worli
Gross floor area: 1.3 million sqm
Investment amount: ¥700 billion

Growth and development projects with a total investment of ¥2.7
trillion for a total gross floor area of over 3.3 million sqm
across Tokyo and Mumbai

Achieving an ordinary profit of¥400 billion
Sumitomo Realty & Development Co., Ltd. (7)Proactive Revision of “Management Strategy for Sustainable Growth”

3. Viewing ¥300 billion as a checkpoint, and aiming at reaching an evenhigher milestone of ¥400 billion
Topic 1: One of the largest urban redevelopment in Japan, “Roppongi 5-chomeWest Project” has been approved One of Japan’s largest redevelopment projects with a total gross floor area of
1.08 million sqm (an overall project cost of around ¥800 billion) A core office-focused tower of 66 floors above ground and a height of 327
meters with a gross floor area of 800,000 sqm
 With approximately 1,000 residential units, hotels, and retail facilities* Urban redevelopment project jointly undertaken with Mori Building Co., Ltd.

Source: Tokyo Metropolitan Government documents

Sumitomo Realty & Development Co., Ltd. (8)Proactive Revision of “Management Strategy for Sustainable Growth”

3. Viewing ¥300 billion as a checkpoint, and aiming at reaching an evenhigher milestone of ¥400 billion

Topic 2: Acquired a large-scale mixed-use development site in the heart of Mumbai, India

 Acquired a large-scale mixed-use development site in Worli, with a developable gross floor area ofover 1 million sqm, in addition to two properties in BKC
 Building a significant foothold in establishing our position as a comprehensive developer
continuously engaged in integrated mixed-use development of areasProjectsite

Central area of Worli

Project 1 in BKC(Acquired in Jul 2019)

Location
Site acquisition value(Yen equivalent)*1
Type of ownership
Site area
Building scale*2Use*1 1 INR = 1.7 JPY

Bandra East, Mumbai, Maharashtra State
22.38 billion INR
20.67 billion INR(38.0 billion JPY)
(35.1 billion JPY)
Leasehold for 80 years
Leasehold for 80 years
12,486 sqm
11,885 sqm(Approx. 3,780 tsubo)(Approx. 3,595 tsubo)
Approx. 130,000 sqm
Approx. 130,000 sqm(Approx. 40,000 tsubo)(Approx. 40,000 tsubo)
Office building for lease*2 Gross floor area

Project 2 in BKC(Acquired in Nov 2022)

Project in Worli(Acquired in Oct 2023)

Worli, Mumbai
46.7 billion INR(79.5 billion JPY)
Freehold
80,903 sqm(Approx. 24,473 tsubo)
Over 1 million sqm(Over 300,000 tsubo)
Super high-rise mixed-use
Office building for leasedevelopment project
Sumitomo Realty & Development Co., Ltd. (9)Proactive Revision of “Management Strategy for Sustainable Growth”

3. Viewing ¥300 billion as a checkpoint, and aiming at reaching an evenhigher milestone of ¥400 billion

Topic 2: Acquired a large-scale mixed-use development site in the heart of Mumbai, India

 In Mumbai, efforts are underway to enhance infrastructure, and the city’s development
is expected to further progress“Indian Shinkansen”(high-speed railway)
Connecting Mumbai andAhmedabad in about 2 hours,
covering approximately 500 km
distance
Mumbai Trans Harbour Link
Connecting the center of Mumbai
to the new airport underconstruction in Navi Mumbai
across the eastern shore, with a
total extension of about 22 km(opened in January 2024)
Sea Bridge Bypass“Coastal Road”
A sea bridge bypass whereextension work is progressing on
the western coast of the peninsula
to avoid traffic congestionin the city
(partially opened in March 2024)

Project 1 in BKC
Exterior rendering

Metro Line 3Connecting major business areasfrom the current airport area toNariman Point via BKC and Worli(scheduled to open in 2024)

Project site

Central area of WorliSumitomo Realty & Development Co., Ltd. (10)Proactive Revision of “Management Strategy for Sustainable Growth”

3. Viewing ¥300 billion as a checkpoint, and aiming at reaching an evenhigher milestone of ¥400 billion

Topic 3: Reborn Shinjuku Sumitomo Building completed in 1974, celebrating its 50thanniversary

 Complete update of building facilities and enhancement of seismic resistance through"renovation" instead of rebuilding “Sankaku Hiroba” (triangular plaza), an all-weather large scale event space Our flagship building with the cumulative cash flow over the past 50 years exceeding ¥400 billion,
generating over ¥10 billion annual cash flows from leasing
Shinjuku Sumitomo Building (52 floors above / 4 below ground)
Completion
Site area： 14,446.46 sqm： March 1974
Renovation
Gross floor area ： 180,195.16 sqm： June 2020
Sankaku Hiroba： Approx. 3,250 sqm• An all-weather atrium (Ceiling height: approx. 25 meters)• Capable of temporarily accommodating approx. 2,800 stranded
commuters in the event of disaster

Sankaku Hiroba

Sumitomo Realty & Development Co., Ltd. (11)

APPENDIX to Proactive Revision of “Management Strategy for Sustainable Growth”

The office building leasing business in central Tokyo has generated
stable profits over the long term, and retaining those properties isalso advantageous in terms of investment efficiency.
1.

Efficient and intricate network of public infrastructure and a constant supply of large-scale
redevelopment buildings with the latest specifications through a “scrap and build” process,where old buildings are demolished to make way for new constructions, have made Tokyo an
unwavering city center with its value remaining steadfast.

2.

Companies from a diverse range of industries and sizes from major corporation to startups
are concentrated and clustered in Tokyo, constantly bringing various new demands for officespace. Our leasing portfolio with buildings in various sizes throughout Tokyo is ideal toaccommodate such needs, and has been the source of stable profits over the long term.

3.

Investments in the office buildings in Tokyo stand as a business that ensures sufficientprofitability without relying on gains from selling assets.
(Shinjuku Sumitomo Building completed 50 years ago is a “goose that lays the golden eggs,”
generating cash flows from leasing exceeding ¥10 billion annually, and hastily selling it would
equate to killing such goose.)
As the potential locations suitable for business are limited in city centers and securing
opportunities to develop properties with strong business prospects is not easy, it is difficult
to “sell for a profit and then buy back at a lower price.”

4.

The advantages of the Tokyo office market

Sumitomo Realty & Development Co., Ltd. (12)

APPENDIX: 4. The Advantages of the Tokyo Office Market

1. Tokyo is the world’s largest office market(1) Largest market in the world; larger than New York and London(2) 20% of existing stock do not meet the current seismic standards, and net annual supply
increase is approx. 1% due to redevelopment through rebuilding being the primary approach

Sumitomo Realty & Development Co., Ltd. (13)

APPENDIX: 4. The Advantages of the Tokyo Office Market

2. Structural factors of demand growth(1) A market unparalleled in the world, where large corporations concentrate,encompassing all industries(2) Concentration of start-up companies

Sumitomo Realty & Development Co., Ltd. (14)

APPENDIX: 4. The Advantages of the Tokyo Office Market

2. Structural factors of demand growth(3) Unwavering city center with extensive urban transportation infrastructure(4) Structural and continuous population influxSumitomo Realty & Development Co., Ltd. (15)

APPENDIX: 4. The Advantages of the Tokyo Office Market

3. The advantages of the Tokyo offices have become even more
pronounced after the COVID-19 pandemic(1) During the pandemic, the vacancy rate rose to 6% primarily due to cost containment,
but supply and demand balanced out within six months(2) Contrasts between the U.S. and Japan in the trend of returning to the office after thepandemic

Sumitomo Realty & Development Co., Ltd. (16)