NIPPON KANZAI Holdings Co., Ltd.
(Securities Code: 9347/TSE Prime)

Financial Results for
the Fiscal Year
Ended March 31, 2023
May 30, 2023

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

Index3

Consolidated Financial Results for FY3/23

12

Consolidated Financial Forecasts for FY3/24

19

NIPPON KANZAI Group’s Medium-Term Growth Strategies

45

Reference (1) Company Information

60

Reference (2) Positioning in the Industry

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

2

Consolidated Financial Results for FY3/23

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

Consolidated Financial Results Highlights

Record highs for net sales, operating profit, and ordinary profit
Both net sales and profits exceeded the full-year forecasts（Rounded down to the nearest ¥ million）

Net Sales⚫
⚫

¥113,045 million ( +9.0% YoY)

Steady consignments of new management projects and renewal of existing contracts
Orders for construction-related work also increased

Operating Profit⚫
⚫

¥8,341 million (+11.2% YoY)

Increase in profits due to net sales growthProfits increased as a result of revised rates, scope of work and efforts to control SG&A expenses

Ordinary Profit⚫
⚫

¥8,662 million (+4.7% YoY)

Foreign exchange gains increased due to the weak yen
Recognition of investment losses based on the equity method

Profit Attributable to Owners of Parent⚫

¥5,658 million ( -8.4% YoY)

Despite a decline in profit due to increase in tax expenses, the result exceeded financial forecast
Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

4

Consolidated Financial Results Summary
FY3/22

Consolidated(\ million)

Actual

FY3/23
Ratio

ActualYoY Changes
Ratio

AmountRatio

Net Sales

103,737

100.0%

113,045100.0%

9,308

9.0%

Gross Profit

23,201

22.4%

24,776

21.9%

1,574

6.8%

15,701

15.1%

16,435

14.5%

734

4.7%

Operating Profit

7,500

7.2%

8,341

7.4%

840

11.2%

Ordinary Profit

8,276

8.0%

8,662

7.7%

386

4.7%

Profit Attributable to Owners of Parent

6,177

6.0%

5,658

5.0%

(518)

-8.4%

SG&A Expenses(¥ million)

Net Sales

Operating Profit Margin

120,000

113,045
106,300

110,000
100,000

96,47890,00080,000104,124

103,737

7.2%

7.2%

7.4%

97,9296.5%

6.4%

Full-Year

Full-Year

Full-Year

Full-Year

Full-Year

Full-Year

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/236.0%

70,00060,000

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

5

Analysis of Increases/Decreases in Consolidated Operating Profit(¥ million)• Increase in new
management projects• Increase in constructionrelated work
• Increase in net sales due
to renewal of contracts• Increase in personnel
expenses due tostrengthening theorganization

Increasein cost of sales

Increasein SG&A
expenses

Increasein net sales

Oper i

Pro i

COGS Ratio
0.45pp*

SGA Ratio-0.60pp*

YoY

YoY

+840

Oper iPro i*pp (percentage point)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

6

Overview of Consolidated Balance Sheets
Consolidated(\ million)
Current assets

FY3/22 End
Actual

FY3/23 End

Ratio

ActualYoY Changes

Ratio

AmountMain Factors for Increase/Decrease

Ratio

51,84963.1%

52,779

60.5%

929

1.8%

Cash and deposits

32,78939.9%32,386

37.2%

(402)

-1.2%

Notes and accounts receivable - trade, andcontract assets

14,29617.4%

15,925

18.3%

1,628

11.4%

Real estate for sale

2,907

3.5%

2,128

2.4%

(778)

-26.8%

30,291

36.9%

34,396

39.5%

4,104

13.6%

Property, plant and equipment

5,988

7.3%

6,385

7.3%

397

6.6%

Intangible assets

2,357

2.9%

2,400

2.8%

43

1.8%

Investments and other assets

21,946

26.7%

25,610

29.4%

3,663

16.7%

82,141100.0%

87,175100.0%

5,033

6.1%

13,626

16.6%

16,691

19.1%

3,064

22.5%

6,143

7.5%

7,146

8.2%

1,002

16.3%

561

0.7%

1,726

2.0%

1,165

207.6%

6,862

8.4%

5,004

5.7%

(1,857)-27.1%

375

0.5%

-

-

(375)

-100.0%

1,871

2.3%

291

0.3%

(1,580)-84.4%

20,48924.9%21,695

24.9%

1,206

5.9%

Sh reholders’ equi y59,092

71.9%

62,732

72.0%

3,639

6.2%

Share capital

3,000

3.7%

3,000

3.4%

-

-

Capital surplus

3,785

4.6%

3,785

4.3%

-

-

Retained earnings

55,08067.1%

58,720

67.4%

3,639

6.6%

Accumulated other comprehensive income

1,280

1.6%

1,608

1.8%

328

25.7%

Non-controlling interests

1,279

1.6%

1,138

1.3%

(140)

-11.0%

Total Net Assets

61,65275.1%

65,479

75.1%

3,827

6.2%

Total Liabilities and Net Assets

82,141100.0%

87,175100.0%

5,033

6.1%

Non-current assets

Total Assets
Current liabilities
Notes and accounts payable - trade
Income taxes payableNon-current liabilities
Long-term borrowings
Long-term non-recourse loans payable
Total Liabilities（￥ million）

Assets5,033⚫ Increase in notes and accounts receivable trade, and contract assets
1,628⚫ Increase in investment securities due topurchase of shares of affiliates, etc.
3,831

Liabilities

1,206⚫ Increase in income taxes payable

1,165

Net Assets

3,827⚫ Increase in retained earnings

3,639

Equity Ratio

73.8%(+0.3pp YoY)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

7

le assets

Overview of Consolidated Statement of Cash Flows
Consolidated

FY3/22

FY3/23

YoY Changes(\ million)

ActualActualAmountProfit before income taxes

8,376

8,662

286

620

695

75

7

(65)

(73)

979

(1,686)(2,665)(1,584)

713

2,297

575

744

168

Income taxes paid

(3,278)(1,487)

1,790

Other, net(1,241)

186

1,427

Depreciation
Decrease (increase) in retirement benefit (asset) liability
Decrease (increase) in trade receivables
Increase (decrease) in trade payables
Decrease (increase) in inventories

Cash Flows from Operating Activities

4,456

7,763

3,307

Purchase of property, plant and equipment, and intangible
assets

(984)

(755)

228

Purchase of investment securities(757)(4,306)(3,548)Proceeds from sale of investment securities

105

370

264

Purchase of shares of subsidiaries resulting in change inscope of consolidation

(511)

(27)

483

Other, net

307

208

(99)

(1,840)(4,511)(2,671)

Increase (decrease) in borrowings (incl. non-recourse loans)(843)(1,293)(449)

Dividends paid (incl. dividends paid to non-controlling interests)(2,117)(2,114)

3

(112)

(310)

(198)

(3,074)(3,717)(643)

Net increase (decrease) in cash and cash equivalents

(386)

(402)

(16)

Cash and cash equivalents at beginning of period

32,83032,444(386)

Cash and cash equivalents at end of period

32,44432,041(402)

Free Cash Flows

2,616

3,251

635

Cash Flows from Investing Activities

Other, net
Cash Flows from Financing Activities

Main Factors for Increase/Decrease（￥ million）

CF from Operating Activities

3,307⚫ Increase in trade payables⚫ Decrease in income taxes paid

2,297
1,790

CF from Investing Activities(2,671)⚫ Increase in purchase of investment securities(3,548)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

8

Business Segments and Main Group Companies■ Facilities Management and Operations¥77,691 mil.
Building Maintenance and Property
Management (excl. Security Service)¥54,565 mil.

■ Environmental Facilities Management¥12,936 mil.
Environmental Facility Management

NS Corporation Co., Ltd.
Japan Environmental Solutions Co., Ltd.
Okinawa Nippon Kanzai Co., Ltd.

Security Services¥23,126 mil.

Three-S Co., Ltd.

Nippon Kanzai Environment Service Co., Ltd.
Seiryu Maintenance Inc.

11.4%

68.7%

1.7%
2.1%

FY3/23
Net Sales¥113,045 mil.

■ Real Estate Fund Management¥1,950 mil.
Asset Management
Tokyo Capital Management Co., Ltd.
16.0%

■ Residential Management and¥18,130 mil.
Operations

48.3%

20.5%

■ Other¥2,337 mil.

Condominium Management
Japan Housing Management Co., Ltd.
Nippon Kanzai Housing Management Co., Ltd.
NJK Staff Service Co., Ltd.
(including Nippon Kanzai Residential Management Administrative Department
and Public Housing Management Division)

Other Businesses
NS Corporation Co., Ltd.
(Advertisement and Event Planning)
Neotrust Co., Ltd. (Payroll and social insurance BPO)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

9

Financial Results by Business Segment
FY3/22

Consolidated(\ million)

ActualNet Sales

FY3/23

Ratio/Margin

ActualYoY Changes

Ratio/Margin

AmountRatio

103,737

100.0%

113,045100.0%

9,308

9.0%

71,977

69.4%

77,691

68.7%

5,713

7.9%

Building Maintenance and Property Management

49,56347.8%

54,565

48.3%

5,001

10.1%

Security Service

22,413

21.6%

23,126

20.5%

712

3.2%

Residential Management and Operation Business

16,98016.4%

18,130

16.0%

1,149

6.8%

Environmental Facility Management Business

11,554

11.1%

12,936

11.4%

1,381

12.0%

Real Estate Fund Management Business

1,530

1.5%

1,950

1.7%

420

27.5%

Other Businesses

1,694

1.6%

2,337

2.1%

642

37.9%

7,500

7.2%

8,341

7.4%

840

11.2%

9,912

13.8%

10,649

13.7%

737

7.4%

Building Maintenance and Property Management

6,926

14.0%

7,597

13.9%

670

9.7%

Security Service

2,985

13.3%

3,051

13.2%

66

2.2%

Residential Management and Operation Business

1,693

10.0%

1,825

10.1%

132

7.8%

Environmental Facility Management Business

1,580

13.7%

1,697

13.1%

116

7.4%

Real Estate Fund Management Business

43

2.9%

60

3.1%

17

39.6%

Other Businesses

314

18.6%

369

15.8%

54

17.4%

(6,044)-(6,261)

-

(217)

-

Facilities Management and Operation Business

Segment Profit
Facilities Management and Operation Business

Adjustments**The adjusted amount of segment profit includes the elimination of intersegment transactions as well as SG&A expenses which are not attributable to any
particular segment.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

10

Performance of Main Business Segments
Facilities Management and Operations(¥ million)

Net Sales
75,22780,00067,873(¥ million)

Operating Profit Margin
73,76871,977

Environmental Facilities Management

77,691

13.4%

40,000
12.2%

13.8%

13.7%

12,936
9,828

10,641

11,34911,554

9,000
13.7%

12.5%

6,000

13.1%

13.0%
12.5%

20,000

3,000

11.9%

0

0
FY3/19FY3/20FY3/21

FY3/22

FY3/19FY3/23

Residential Management and Operations(¥ million)

Net Sales

Operating Profit Margin

20,000
16,257

16,885

16,227

16,98018,130

9.7%
9.1%

10.1%

FY3/21

FY3/22

FY3/23

Net Sales

Operating Profit Margin

5,000
4,000

10.0%

FY3/20Real Estate Fund Management and Other(¥ million)

15,00010,000Operating Profit Margin

15,00012,00060,000Net Sales

4,288

3,970
3,545
3,224

2,778

3,000

8.8%

2,000
12.2%

5,000

1,000

0

9.5%

10.2%

11.1%

FY3/20FY3/21

FY3/22

10.0%

0FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/19Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

FY3/2311

Consolidated Financial Forecasts for FY3/24

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

Consolidated Financial Forecasts SummaryMarket Background and Risks◼ As a result of the pandemic, offices are shifting from centralization to decentralization based on the promotionof working from home and the like. Vacancy rates remains high.
◼ Delay in construction due to soaring raw material prices and a shortage of semiconductor supply.

◼ Risk of exchange rate fluctuations due to soaring energy prices and the rapid depreciation of the yen as aresult of the prolonged situation in Ukraine.
◼ Concerns over securing staff and rising labor costs.

Consolidated(\ million)

Full-Year FY3/23
Actual1H FY3/24

Ratio

Forecast

2H FY3/24

Ratio

Forecast

Full-Year FY3/24

Ratio

Forecast

YoY Changes

Ratio

AmountRatio

Net Sales

113,045100.0%

55,800100.0%

62,800100.0%

118,600

100.0%

5,554

4.9%

Gross Profit

24,77621.9%

12,40022.2%

13,20021.0%

25,600

21.6%

823

3.3%

16,435

14.5%

8,500

15.2%

8,500

13.5%

17,000

14.3%

564

3.4%

Operating Profit

8,341

7.4%

3,900

7.0%

4,700

7.5%

8,600

7.3%

258

3.1%

Ordinary Profit

8,662

7.7%

4,200

7.5%

4,900

7.8%

9,100

7.7%

437

5.0%

Profit Attributable to Owners of Parent

5,658

5.0%

2,750

4.9%

3,250

5.2%

6,000

5.1%

341

6.0%

SG&A Expenses⚫ Operating profit is expected to increase from business line expansion and cost restraints.
⚫ For ordinary profit, share of profit of entities accounted for using equity method is expected to increase andnon-operating expenses are expected to be controlled.
Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

13

Increases/Decreases in Consolidated Ordinary Income Forecast(¥ million)

Dividend income
Share of profit ofentities accounted forusing equity method

Other

Net sales
increase
Cost of sales
increase
SG&A
expenses
increaseA u l）（Oper i Pro is（ore ）Oper i Pro i

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

s（ore ）
Ordi ry Pro i

14

Financial Forecasts by Business Segment
Consolidated

Full-Year FY3/23

1H FY3/24

Composition
Ratio/Margin

2H FY3/24

Composition
Ratio/Margin

Full-Year FY3/24

Composition
Ratio/Margin

YoY Changes

Composition
Ratio/Margin(\ million)

ActualNet Sales

113,045100.0%

55,800100.0%

62,800100.0%

118,600

100.0%

5,554

4.9%

77,691

68.7%

38,19068.4%

44,12070.3%

82,310

69.4%

4,618

5.9%

Building Maintenance and Property Management

54,56548.3%

26,70047.9%

31,99050.9%

58,690

49.5%

4,124

7.6%

Security Service

23,126

20.5%

11,49020.6%

12,13019.3%

23,620

19.9%

493

2.1%

Residential Management and Operation Business

18,130

16.0%

9,140

16.4%

9,460

15.1%

18,600

15.7%

469

2.6%

Environmental Facility Management Business

12,936

11.4%

6,830

12.2%

7,620

12.1%

14,450

12.2%

1,513

11.7%

Real Estate Fund Management Business

1,950

1.7%

450

0.8%

440

0.7%

890

0.8%

(1,060)-54.4%

Other Businesses

2,337

2.1%

1,190

2.1%

1,160

1.9%

2,350

2.0%

12

0.6%

8,341

7.4%

3,900

7.0%

4,700

7.5%

8,600

7.3%

258

3.1%

10,649

13.7%

5,293

13.9%

6,327

14.3%

11,620

14.1%

970

9.1%

Building Maintenance and Property Management

7,597

13.9%

3,750

14.0%

4,720

14.8%

8,470

14.4%

872

11.5%

Security Service

3,051

13.2%

1,543

13.4%

1,607

13.3%

3,150

13.3%

98

3.2%

Residential Management and Operation Business

1,825

10.1%

1,010

11.1%

900

9.5%

1,910

10.3%

84

4.6%

Environmental Facility Management Business

1,697

13.1%

840

12.3%

940

12.3%

1,780

12.3%

82

4.9%

Real Estate Fund Management Business

60

3.1%

10

2.2%

10

2.3%

20

2.3%

(40)

-67.2%

Other Businesses

369

15.8%

280

23.5%

100

8.6%

380

16.2%

10

2.9%

(6,261)-(3,533)-(3,577)-(7,110)

-

(848)

-

Facilities Management and Operation Business

Segment Profit
Facilities Management and Operation Business

Adjustments

Forecast

Forecast

Forecast

Amount

Ratio*The adjusted amount of segment profit includes the elimination of intersegment transactions as well as SG&A expenses which are not attributable to any
particular segment.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

15

Shareholder Return Policy◼

De ermi i divide d poli y is o e o NIPPON KANZAI’s mos imporprofit by appropriate distribution of results according to performance.

sks

d we re ur◼

For FY3/23, year-end dividends will be set at ¥27 per share based on full-year financial results.

◼

For FY3/24, interim and year-end dividends will be set at ¥27 each, with plans for total
dividends of ¥54 per share.
FY3/20FY3/21

FY3/22

FY3/23

FY3/24

ActualActualActualActualForecast

Interim Dividends

25.00

25.00

27.00

27.00

27.00

Year-End Dividends

25.00

27.00

27.00

27.00

27.00

Consolidated Dividend Payout Ratio

42.6%

37.8%

32.7%

35.7%

33.6%

Dividend on Equity Ratio (DOE)

3.7%

3.6%

3.5%

3.2%

－

Interim Dividends

(¥)
60.00

Year-End Dividends

Consolidated Dividend Payout Ratio

42.6%

37.8%

32.7%

35.7%

33.6%

25.00

27.00

27.00

27.00

27.00

25.00

25.00

27.00

27.00

27.00

ActualActualActualActualForecast

FY3/20FY3/21

FY3/22

FY3/23

FY3/24

40.00
20.00
0.00

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

16

Corporate Governance Measures

Promotion of Effective Asset Utilization in Accordance with the Corporate Governance Code⚫

Repositioning our portfolio of investment securities to enhance business development

Investment
securities

Securities held for non-business purposes ¥3,484 mil.

Securities held for business purposes¥5,150 mil.

Shares of affiliates¥10,851 mil.

FY3/23 End¥19,485 mil.

Reposition
withbusiness
purposesecurities

Our efficientutilization of assets
will contribute tobetter businessperformance andbetter income
statements

Current initiatives⚫

Ongoing negotiations with multiple companies to dispose of securities held for non-business purposes

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

17

NIPPON KANZAI’s Thou h s o SDGs
Corporate Vision: We continue to pursue “the best suited management for your building” with
our advanced technology and capability.
We promote work-life balance for all stakeholders including all employees and subcontractors to realize a society that allows for worklife balance.

1

2

Safe & Secure Urban Development

We support safe, secure and sustainable urban
development with our building management
expertise based on our advanced technologies andvarious certifications.

43

Environmental Activities

We realize a safe, secure, and pleasant society
taking global environment into consideration.

Work-Life Balance

We realize a social work-life balance.

5

Contributions to Local Communities

We improve community well-being through ourbuilding management operations.

Enhancement ofCompliance and Risk Management

We establish a governance structure that is soundand highly transparent.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

18

ＮIPPON KANZAI Group’s
Medium-Term Growth Strategies

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

NIPPON KANZAI Group’s Medium-Term Growth Strategies

Business Actions

Growth Strategies

1

2
3
4

Sales promotion to
the public sector(1) ●Create business opportunities bystrengthening PPP / PFI and designatedmanager systems（P.21-P.26）

Overseas expansion ofdomestic expertise(2) ●Invest in overseas companies●Reinforce our residential managementbusiness through cooperation withoverseas group companies（P.28-P.31）

Promotion of DX(3) ●IT approaches, visualization of facility
status, sharing and streamlining of facilities
management data, utilization of robotics,
standardization of system platforms, andDX of condominium management（P.33-P.41）

Promotion of M＆A andinvestment(4) ●Promote proactive M&A and investment
both domestically and abroad（P.43）

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

20

Growth Strategies (1):
Sales Promotion to the Public Sector◼ Background of PPP/PFI promotion
Current situation in Japan
Severe financial circumstances
Aging of public facilities
Population decline(aging society with low birthrate)

Cost efficiency of reconstruction, renovation, repair andoperation of public facilities works, wide-area management,
and facilities consolidation, etc. are necessary for maintaining
proper public services. Utilizing PPP/PFI is effective as a means forrealizing these.
PPP：Public Private Partnership
PFI ：Private Finance Initiative◼ Overview of type of Business Models
PFI
PPP(general term for
public-private
partnership)

Systems such as
designated managers, etc.
Comprehensive privatization

Business model in the public sector
undertaken by NIPPON KANZAI●PFI●Designated Manager●Comprehensive Management●Public Facilities Management
SupportLending public land to
private enterprises, etc.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

21

Growth Strategies (1):Track Record for Public Sector Businesses (excluding conventional general bidding)Continuous Efforts toward Expansion of Ancillary Businesses
PFI(¥ million)

Net Sales

Designated Manager

No. of Projects(No. of Projects)

5,000

50

(¥ million)

Net Sales

No. of Projects(No. of Projects)

8,000

200

4,555
4,203

7,000

4,104

3,845 3,845

4,000

7,255

40

3,824

3,418

3,327

5,136 5,150

3,113

3,000

32

32

30

28
2,000

23

23

24

24

24

150

5,357

5,136 5,058

5,000

4,484

4,000

107

25
20
3,000

93

92

97

100
92

106

100

97

81

2,000

1,000

6,001

5,782

6,000

50

10
1,000

0

0

0

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

022

Growth Strategies (1):Track Record in Comprehensive Management of Public Facilities

Comprehensive Management of Public Facilities
NIPPON KANZAI's track record in comprehensive management of public facilities is expanding from the current 19 projects nationwide,
and our market share ratio is the industry-leading. In FY3/23, we started operations at 6 local governments (Mishima, Yokkaichi ,Kusatsu, Munakata, Omuta, and Arao). Since local governments introducing comprehensive management are expected to increase
nationwide going forward, we are working on further share expansion.
* Comprehensive management is a form of contract for managerial work for multiple public
facilities of local governments such as equipment inspection and cleaning. Promoting
comprehensive management has significant advantages such as “impleme
io ofplanned capital investment with priori iz io ,” “re io l revitalization through cooperation
with local omp ies,” and “worklo d reduction of local government s ,” and we are
deploying it nationwide as a measure of our public facilities management strategy.
Munakata

Kusatsu(from Apr-2023)*181 facilities(from Apr-2023)*133 facilities

Numata(from Apr-2020)*123 facilities

Chikusei(from Apr-2019)*65 facilities

Kasuga(from Apr-2022)*10 facilities

AkashiImizu(from Apr-2018)*158 facilities(from Apr-2022)*105 facilities

Ichihara

Omuta(from Apr-2023)*68 facilities(from Apr-2022)*192 facilities

Ashiya(from Apr-2019)*53 facilities

Arao

Mishima(from Apr-2023)*45 facilities(from Apr-2023)*85 facilities

UrasoeShimada(from Apr-2020)*20 facilities(from Apr-2021)*70 facilities

Takasago(from Apr-2022)*50 facilities

Kobe(Eastern part)(from Apr-2022)*154 facilities* The number of target facilities for comprehensive management.

Osaka(Eastern area)(from Apr-2022)*247 facilities

Yokkaichi(from Apr-2023)*44 facilities

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

Kosai
(from Apr-2019)*80 facilities

23

Growth Strategies (1):Public Facilities Management Support Business

Publicity Strategy in Public Facilities Management
We aim to increase the awareness of NIPPON KANZAI through information dissemination via commercials, social
media, and seminars.
■Training, Synergy and Media Mix
・Training

By disseminating information through online salonsand PPP seminars, NIPPON KANZAI will support“Publi M i eres ed roups” o be ome “pio eers
= pr i io ers.”
・Synergy
Aiming to boost the comprehensive management
market, NIPPON KANZAI will create medium tolong term value, rather than ad-hoc measures.
・Media mix By combining several media, NIPPON KANZAI aims
to create complementary and synergistic effects
between them.
Expertise Interest(high)(high)For local
governments
employees

Expertise Interest
(low)
(low)
For a wide range oftargets, including
local residents andexperts

Operating online salonsPublic FM Online Salon was opened on
February 5, 2021.
We have prepared various contents andfeatures and are using it as a place forthe community of local government
employees working on public facilities
management.
(As of March 31, 2023, 152 people and121 local governments have beenregistered). *Increased 29 people and 21
local governments from January 15, 2022.

ｆacebook screen

Holding PPP seminars online
OnlineSalon

Since being certified as an MLIT PPP Agreement Partner company in
FY2018, we have held annual PPP seminars.

Online seminar・National PPP seminar
Magazine for government/ administrative authorities"JICHITAI WORKS"
Regional branding video (CM)

Held in July

Held in February

Held in February

PPP seminars in FY2022 (held simultaneously on-site and online)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

24

Growth Strategies (1):Collaborative Development by Acquiring Shares of JTB Asset Management

Concluded a Business Alliance Agreement with JTB Corporation
On July 1, 2022, NIPPON KANZAI invested 40% in JTB Asset Management Co., Ltd, a JTB subsidiary that provides space solutions,and on December 28, JTB and NIPPON KANZAI concluded a business alliance agreement for collaboration. By investing in JTB AssetManagement (40%), NIPPON KANZAI will not only share know-how and skills of the company and add them to NIPPON KANZAI’s
service menu but also enhance alliances with JTB group companies. This will lead to the further expansion of the “Are Solutions
Busi ess”, which is one of the 3 pillars in the JTB Group's medium-term management plan the “Pio eeri Ways to bring people, places
and possibilities together in a New Era," also help two companies achieve further development though the leveraging of their strengths.

■Purpose of the business alliance
JTB and NIPPON KANZAI have entered into a businessalliance with the aim of expanding and developing thebusiness of JTB Asset Management and strengthening
stronger cooperation between the two companies, including
their group companies.

Solutions that leads to regional revitalization,
including not only tourism but also thecreation of new businesses.

■Field of the business alliance
1. Designated administrator systems and PPP businesses
2. Comprehensive management businesses aimed atregional revitalization, etc.
3. Businesses related to the development of tourist
attractions and regional exchange centers, etc.
4. Expansion of sales channels through joint businesses
5. Other initiatives considered beneficial by both companies

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

25

Growth Strategies<track record> (1):P I Busi ess’s irs Co essio s-Type Contract

First Arena for Concessions in JapanNIPPON KANZAI participated in the consortium that was selected as a
candidate for the operating rights (concessions) holder for the “Ari ke
Arena Management Operations Proje ” announced by the Tokyo
Metropolitan Government on July 11, 2018. We are responsible formanagement and maintenance work.
This is the first attempt at arena management under a concessionstype contract in Japan. The objectives are to create sports trends forTokyo residents, making the best use of private company know-how,as well as starting a new culture by holding events like concerts.
Working toward improving services for Tokyo residents, we aim to
make the Ariake Arena a new sports and culture hub for Tokyo.
As a member of the proposing group, NIPPON KANZAI is involved in
the entire project. We will play a role in achieving stable businessexecution during the period of the project.
This facility was used as a competition venue at the 2020 Tokyo
Olympic and Paralympic Games.

Facilities overview
Name

Ariake Arena

Owner

Tokyo

Site area

Approx. 36,576 ㎡

Total floor space

Approx. 47,200 ㎡

Structure

Steel reinforced concrete, partial steel-frame steel
reinforced concrete / steel-frame

Height / no. of floors Approx. 37 meters, 5 floors above ground

Consortium companies
Representative

company
Members

DENTSU INC.
NTT DOCOMO, INC.
NIPPON KANZAI Co., Ltd.
AMUSE INC.
LIVE NATION JAPANDENTSU LIVE INC.
ASICS Japan Corp.

Partner companies

NTT FACILITIES, INC.
Xross Sports Marketing Co., Ltd.

*Artist rendering at the time of the convention in January 2019

Mitsubishi Research Institute, Inc.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

26

NIPPON KANZAI Group’s Medium-Term Growth Strategies

Business Actions

Growth Strategies

1

2
3
4

Sales promotion to
the public sector(1) ●Create business opportunities bystrengthening PPP / PFI and designatedmanager systems（P.21-P.26）

Overseas expansion ofdomestic expertise(2) ●Invest in overseas companies●Reinforce our residential managementbusiness through cooperation withoverseas group companies（P.28-P.31）

Promotion of DX(3) ●IT approaches, visualization of facility
status, sharing and streamlining of facilities
management data, utilization of robotics,
standardization of system platforms, andDX of condominium management（P.33-P.41）

Promotion of M＆A andinvestment(4) ●Promote proactive M&A and investment
both domestically and abroad（P.43）

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

27

Growth Strategies (2):Overseas Development (Overview of PICA Pty Ltd.)
Company Overview
PICA is the largest “Strata Management Comp y” in Australia and acts as
an agent for Owners Corporations. Using multiple brand names, such as“BCS” (Body Corporate Services), PICA mainly provides services to support
Owners Corporations which includes collecting delinquent management fees.
Leveraging off NIPPON KANZAI’s engineering capabilities, PICA has
introduced services related to physical aspects of buildings.

Background
NIPPON KANZAI acquired 50% of PICA shares from Fexco, a global fintechorganization, in March 2013. Currently NIPPON KANZAI and Fexco send
directors to PICA and manage it jointly. Founded in 1981, Fexco employs
over 2,300 people and now has operations in 29 countries across Europe, theMiddle East, Asia-Pacific, North America and Latin America.
Fexco website: http://www.fexco.com/

SydneyBusiness Environment after the Pandemic
Reception

Properties under Management

Company Name
Establishment
CapitalMain Business
Head Office
Major Branches
Employees
No. of Lots under Management

The business continued operation throughout the pandemic. Now that theeconomy re-opened and Australian labour market being highly competitive
with a record low unemployment rate of 3.5% in December 2022, staff
shortage, especially experienced strata manager shortage, is an urgent issue.
PICA is providing in-house training for people without industry experience,
utilizing remote capability and online functionalities, as well as reviewing
overall process and procedures for efficiency, to adjust post-pandemic work
environment.

Prudential Investment Company of Australia Pty Ltd.
October 4, 1948
AUD28 million (JPY2,500 million)*AUD1=JPY89.62 (as of December 31, 2022)
Strata management, debt collection
SydneyMajor cities of East Coast, include Sydney, Melbourne, Brisbane, Cairns etc.
Approx. 750 as of December 31, 2022
Approx. 194,000 lots, 11,000 Plans (Owners Corporations) as of December 31, 2020

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

28

Growth Strategies (2):Overseas Development (Overview of Keystone, LLC)
Company Overview
Keystone Pacific Property Management, LLC (hereinafter “Keys o e” is a gatedcommunities management company. Gated communities are developments
consisting of detached housing and high-end multi-unit homes in estates
surrounded by walls. Keystone provides homeowner associations with support
services including holding annual general meeting, accounting and financial
reporting and on-site management. It has a reputation for offering high-quality anddetailed services. Other than subsidiaries and affiliates of major nationwide
companies, Keystone is ranked within the top ten companies in Southern
California. Since 2019 onward, Keystone has made progress in expanding service
area coverage through M&A.

Irvine, California

Background

Head Office

Properties under Management

In January 2017, NIPPON KANZAI’s subsidiary, NIPPON KANZAI USA, Inc.
acquired an ownership interest from Keystone which is currently a nonconsolidated equity-method affiliate of NIPPON KANZAI.
NIPPON KANZAI will work to raise operational efficiencies and expand services
through renovation of the IT system, and target future growth through incorporating
the Comp y’s know-how, while expanding properties under management toinclude high-rise condominiums etc. In addition, Keystone acquired the businessrights of multiple companies within the same industry while expanding into newmarkets. The company plans to further grow the business in the future.

Business Environment after the Pandemic
The pandemic led to substantial increases in government spending and supply
chain interruptions, which has resulted in record levels of inflation. Inflation has
led to reduced home sales, increases in costs, including employee costs, andincreased customer turnover. Businesses must use technology to increase
efficiency and reduce staffing costs to maintain profitability.

Company Name
Establishment
Main BusinessCorporate Office
Major Branches
Employees
No. of Units under Management

Keystone Pacific Property Management, LLC
September 15, 2016
Residential community management
Irvine, California
Southern California, Denver, Colorado and Boise, Idaho
Approx. 316 as of December 31, 2022 (including Keystone Progressive)
Approx. 104,307 units, approx. 525 associations as of December 31, 2022
i ludihe Comp y’s subsidi ry, Keys o e Pro ressive

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

29

Growth Strategies (2):Overseas Development (Overview of Hawaiiana)
Company Overview

Honolulu,
Hawaii

Hawaiiana Holdings Incorporated (hereinafter “H w ii
” is the largest
AOAO “Asso i io of Apartment Ow ers” management company in theState of Hawaii. Hawaiiana provides apartment ow ers’ associations withsupport services including holding board meetings and annual general
meetings, as well as providing accounting and financial reporting.
Hawaiiana is a highly reputable yet locally operated company with a long
history in the industry. It operates on six islands including Oahu (home to
Honolulu), Maui, Hawaii and Kauai.

Background
NIPPON KANZAI acquired shares of Hawaiiana from Swell International
Inc., a locally operated real estate company, in March 2020 and throughwhich Hawaiiana became an equity-method affiliate of NIPPON KANZAI.
Hawaiiana and NIPPON KANZAI will work together to further improve thebusiness with global expertise cultivated and accumulated through
NIPPON KANZAI’s overseas expansion.

Properties under Management

Business Environment after the Pandemic
The outflow of labor to the mainland due to the Pandemic and rising realestate prices due to inflation have caused the number of transactions,which had temporarily recovered, to slump again from 2022, and sales
related to real estate transactions have declined. Management services
are stable, but competition is intense.

Company Name
Establishment
CapitalMain Business
Head Office
Branches
Employees
No. of Units under Management

Hawaiiana Holdings Incorporated
September 24, 2008
USD4.27 million (JPY570 million)*USD1=JPY132.71 (as of December 31, 2022)
AOAO management
Honolulu, Hawaii
Maui, West Maui, Kona, Kauai
Approx. 240 as of December 31, 2022
Approx. 110,000 units, 670 associations as of December 31, 2022

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

30

Growth Strategies (2):Overseas Development (Overview of PPG, Inc.)
Company Overview
Located in Honolulu, Hawaii, Pacific Property Group (hereinafter “PPG”
provides property management, leasing and sales brokerage services toover 20 commercial properties including a shopping center in Waikiki thathas well-known shops and restaurants as tenants. PPG is a small-sized
yet excellent local company that provides quality services. PPG values
personal relationship in marketing and due to this philosophy, PPG has
many long-time and repeat clients.
Honolulu,
HawaiiBackgroundOur resident officer in Hawaii was introduced to PPG and after due
consideration, NIPPON KANZAI’s subsidiary, NIPPON KANZAI USA, Inc.,
acquired 90% of shares from founder/president in March 2022. PPG is anequity-method non-consolidated subsidiary of NIPPON KANZAI.

Business Environment after the Pandemic
Due to the slow real estate market, the revenue from this sector has
dropped down. But the profit amount was not effected so much due to thecost system. Management sector is stable because of the stable staff
retention. But the market is more competitive.

Company Name
Establishment
CapitalMain Business
Head Office
Employees
No. of properties under Management

Pacific Property Group, Inc.
February 27, 2007
USD1,000 (JPY130,000) *USD1=JPY132.71 (as of December 31, 2022)
Commercial Property Management
Honolulu, Hawaii
11 as of December 31, 2022
Approx. 17 as of December 31, 2022

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

31

NIPPON KANZAI Group’s Medium-Term Growth Strategies

Business Actions

Growth Strategies

1

2
3
4

Sales promotion to
the public sector(1) ●Create business opportunities bystrengthening PPP / PFI and designatedmanager systems（P.21-P.26）

Overseas expansion ofdomestic expertise(2) ●Invest in overseas companies●Reinforce our residential managementbusiness through cooperation withoverseas group companies（P.28-P.31）

Promotion of DX(3) ●IT approaches, visualization of facility
status, sharing and streamlining of facilities
management data, utilization of robotics,
standardization of system platforms, andDX of condominium management（P.33-P.41）

Promotion of M＆A andinvestment(4) ●Promote proactive M&A and investment
both domestically and abroad（P.43）

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

32

Growth Strategies (3):Approach Based on IT -Digital TransformationWith IT approaches both externally and internally, and fusion of digital and analog,
we provide optimal services to customers.

DX forclients

DX forinternal use

Accumulating know-how and sharing of knowledge
Providing quick and optimal solutions
Standardizing HR development and work quality⚫

Remote monitoring of equipment operation status
Notification of irregular trends and irregular values
Early detection and response to facilities problems⚫

1

Use of building
knowledge⚫

2

Visualization ofequipment status⚫

3

Providing andsharing systems⚫

4

Conversion of work
records to data files⚫

5

Diversification ofwork styles⚫

6

productivity
Automation of office ⚫⚫ Improving
Allocating staff properly
work⚫ Creating time with clients

⚫
⚫

⚫
⚫

⚫
⚫

⚫
⚫

⚫

Aggregation and analysis of facilities-related data
Estimation of life cycle costs
Providing a work management portal

Digitization of on-site forms
Keeping digital data of inspection records
Electronic application for work request

Strengthening responsiveness to infectious
diseases and disasters
Effective use of travel time

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

⚫

⚫

⚫
⚫

⚫
⚫

⚫
⚫

⚫
⚫

Knowledge integration
environment
Accumulation in the coresystem

IoT for facilities monitoring
Operation of WAFM (WideArea Facilities
Management) center

Systemconstruction
and provision

NK Connect
Cross Point FM

On-site forms apps
Smart devices

Online meetings
Web transactions

Use of IT / ICT

Automation such as RPAs
Voice-to-text conversion
technology

33

Growth Strategies (3):Visualization of Facility Status -Operation of Wide-Area Facilities Management Center-

Fully redesigned Wide-Area FM Center (WAFM Center) in April 2023
*Design and construction cooperation: JTB Asset Management, Supervision: NIPPON KANZAI

WAFMWide Area Facilities Management System
Manage buildings 24/7 remotely• Remote management, machine security, and call center services complement each otherthroughout Japan.
• Accumulation of data collected on a daily basis such as response history, and provision of
feedback

East Japan
CustomerIoT Status Monitoring

Internet

Base station

MonthlyreportFacility Alarm Panel
Automatic Fire Alarm Panel
Maintenancehistory

Security Monitoring Panel
Order/Instruction

Regular and continuous data collection enables NIPPONKANZAI to provide detailed maintenance and equipment
improvements.

Engineering Staff

Integrated
monitoring
systemWest Japan
CustomerIoT Status Monitoring

Internet

Base station

Energymanagement

Facility Alarm Panel
Automatic Fire Alarm Panel
Security Monitoring Panel
Regular and continuous data collection enables NIPPONKANZAI to provide detailed maintenance and equipment
improvements.

WAFM function enhancement
project in progress

Order/Instruction
Engineering Staff

Response
history /Process
history

Creating the next roundof feedback

NIPPON KANZAI will continue to integrate people and IT technology to further enhance its functions
and emergency response capabilities, with the aim of improving safety and streamlining building
management functions.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

34

Growth Strategies (3):Provision and Sharing of Systems -Update of Facilities Information Sharing System and Application-

We provide the app that allows you to check the facility inspection information andmaintenance/management status on PCs and smartphones.

NK Connect

Facilities information sharing system
Work fulfillment confirmation &report application

INT

N T

• Sharing of information with customers and partner companies on the CloudCentralized management of various building information, work plans, andrepair plans• Use of work management application with smart devices
Promoting computerization of malfunctions report and forms in the field,
conversion of inspection records to data files

Work plan & repair plan management

Input
at Web browser

eportsConfirmation ofwork execution

Input
by Smartphone
Use of Application

Co versio o work
re ords o diles

Detailed work
reportInput
by Smartphone
Use of Application

Note: Details will be reported by linking the application created by NIPPON KANZAI and ConMas i-Reporter of Cimtops Corporation.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

35

Growth Strategies (3):Provision and Sharing of Systems -Public Facilities Management Systems: Cross Point FM*Cross Point FM supports automatic evaluation of public facilities, optimal placement
planning, operations management, the reduction of duties of staff in charge as well as
maintains and improves community services.
Formulating comprehensive
management plans for public facilities
・Discovery and taking inventory of public
assets・Formulation of operations management
plans
・Preparation and creation of facility
records

Plan

Decision-making of facility
operation policy・Facilities maintenance andrepairs implementation
・Decision-making of facilities
restructure policy
・Problem solving etc. such as
facilities malfunctions

Action

XP FM

Do

Portfolio evaluation ofeach facility
・Follow-up on each restructuring
and operations case・Simulations on degree of aging
and life cycle cost

Preparation and recording ofstock information
・Recording stock information andcost information
・Inspections and management inaccordance with the law
・Conducting daily inspections andrecording results
・Implementation plan support for
restructuring relocations, etc.

Check
Refining and supporting the effective
use of assets in the PDCA cycle*Cross Point FM is a system developed by Cross Point Consulting Co., Ltd., in which NIPPON KANZAI
has a stake, under a consigned R&D project of the Japan Science and Technology Agency (JST).

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

36

Growth Strategies (3):Provision and Sharing of Systems -DX of Housing Management-

Provision of new homeowner association services using IT tools
Our staff will support the internet settings.

Overview
In the past, management of homeowner associations
w s o du ed by he sso i io ’s bo rd members dthe property manager who met in person on site.
h o he Group’s homeow er sso i io
management companies have launched strata
management services called NRemotE for homeownerassociations in order to facilitate smooth operations forsituations where interpersonal contact has become
difficult due to the outbreak of the Covid 19. The
introduction of this service makes it possible to holdboard meetings and manage various tasks such as
contractual relations online.

The staff in charge supports the operation of the Association online.
Using NK Connect

Main functions
・Holding of online board meetings
・Executing management contract electronically
・Providing monthly financial reports online
・Digitalization of invoice, reports, etc.
・Online-based application service for owner/resident
information updates.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

37

Growth Strategies (3):Provision and Sharing of Systems -DX of Housing Management-

Completing payment of administrative overhead, etc. of
homeowner associations onlineo ora et an
Smart transfer approval

Overview

ransfer"Smart Payment Approval," which combines the system
integration function of GMO Aozora Net Bank with the property
management expertise of the NIPPON KANZAI Group, is an
online payment service that enables payments from
homeowner association corporate accounts. Previously, various
expenses were paid through a bank by the property managers
on behalf of the homeowner association. This method wasinefficient and there were cases where the payment approval
process was inadequate. However, by introducing this service,
it is possible to efficiently carry out various tasks such as
approvals and payments.

an accounts ofhomeowner associations

Admi is r io Divisio ,NIPPON KANZAI Co.,d.

M

Ch irm ,Co domi ium
eme Asso i io

ransferayees
infrastructure operators
contractors etc“Smart transfer approval ” streamlining of approvals
and transfer works
First to introduce the service: NIPPON KANZAI Group

Effects of introduction
・Efficient payment approval procedures between the homeownerassociations and property managers
・Thorough management of the evidence detailed setting of approvalroutes between homeowner associations and managementcompanies
・Reduction in the number of procedures, etc. at a bank

GMO Aozora Net Bank,News release November 1, 2022 issue

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

38

Growth Strategies (3):Digitization of Work Records - Supported by the On-Site IT Support Team
Promotion of operational efficiency through improvement of IT skills of on-site staff
Due to the decline in the working-age population, streamlining and digitizing on-site management have become urgent topics.
To enhance the IT environment and improve productivity, we aim to improve the IT skills of on-site staff and implement
support activities such as on-site visits and remote support by the IT support team. This is to achieve efficient business
operations.
Planning for on-sitelaunching supportand visitations

Patrol, check,
Interview
Accumulation ofvisiting records
Report on items to be
improved

Visiting record database

Visiting record

Improvement,
education
Remote support

ReportDigitization of visitation
records into a database

Preparation of report on
good points and areas
for improvement

Patrol of and remote support for manned
management sites throughout Japan

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

39

Growth Strategies (3):Introduction and Utilization of Robots

Challenging the integration of robot capabilities andhuman capabilities for building management
NIPPON KANZAI has introduced robots into building management services in a proactive manner because of recent
serious manpower shortage. We continue to monitor facilities that have introduced the robots to verify the effects andproactively propose the introduction to building owners in order to increase the number of buildings in operation.

Overview
We will select various conditions such as the purpose, scale,characteristics, working hours, and quality of the facility, and conduct trial
introductions and verification of robot work specifications that match thefacility conditions. Based on the verification results, we will select robots
that match the facility's purpose and introduce the actual machines.

Example offlowchart of
selecting models

Benefits of introduction
・Reduction of burden on staff through reducing workload
・Reduction of human error and accident occurrence rate
・Standardization of work quality
・Appealing to our tenants through the introduction of the latest technology

Track record
・Cleaning robot: 22 units in 16 buildings in operation(including outsourcing operation)
・Security robot: 2 units in 2 buildings in operation(as of April 30, 2023)<Example of introducing cleaning robots>
Office buildings, public facilities, hospitals, schools, etc.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

40

Growth Strategies (3):Standardization of the System Platform across the Entire Group

Standardization of the system platform across the entire group
NIPPON KANZAI Group is advancing the integration of the system platforms of each group company that had been
fragmented. By standardizing security and control levels and implementing efficient system operations, we will
strengthen the governance of the entire group.

Core system●POSSibility

Our core system POSSibility is a web system uniqueto the Group that enables management of contract
and operation status, preparation of invoice, ordering
procedures between the company andsubcontractors, etc.
We are currently integrating various IT systems
related to management of accounting, personnel
salary, attendance management, etc. as well.

Introduction of other systems●Response to invoice andElectronic Record Retention
Law

New system will be introduced in response to the Invoicing System and Electronic Record Retention Law
that is to be enforced from October 1, 2023. We will increase work efficiency through operating the systemin full scale from the second half of FY2023, in combination with digitalization of the invoice information
and unification of the management.

●Standardization ofpurchasing system

We are digitalizing the procedures for purchasing goods through applying the centralized purchasing topromote e-commerce. Although NIPPON KANZAI introduced the system in advance, we encourage theGroup companies to introduce it and aim for reducing the cost of the entire Group in the future throughincreasing work efficiency with e-commerce and collecting and analyzing the purchasing data.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

41

NIPPON KANZAI Group’s Medium-Term Growth Strategies

Business Actions

Growth Strategies

1

2
3
4

Sales promotion to
the public sector(1) ●Create business opportunities bystrengthening PPP / PFI and designatedmanager systems（P.21-P.26）

Overseas expansion ofdomestic expertise(2) ●Invest in overseas companies●Reinforce our residential managementbusiness through cooperation withoverseas group companies（P.28-P.31）

Promotion of DX(3) ●IT approaches, visualization of facility
status, sharing and streamlining of facilities
management data, utilization of robotics,
standardization of system platforms, andDX of condominium management（P.33-P.41）

Promotion of M＆A andinvestment(4) ●Promote proactive M&A and investment
both domestically and abroad（P.43）

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

42

Growth Strategies (3):Promotion of M&A and Investment

Promote M&A and investment by companies related to our groupboth domestically and abroad
The Group positions M&A and investment as important factors for expanding and growing our business. We willproactively promote M&A related business both domestically and abroad that have synergies with our group basedon the following fundamental policies.
Fundamental policies
1. M&A of and investment in blue-chip companies within strategic regions (expansion of domestic market and regional development)
2. M&A of and investment in residential management and relevant businesses in Western European countries (expansion into theoverseas market)

Recent track record (from 2020)
1. Mar. 2020 Acquired 50% share of Hawaiiana Holdings Incorporated, a residential management company in Hawaii, the United States.
2. Dec. 2020 Increased the ratio of investment in Keystone Pacific Property Management LCC., a gated communities managementcompany on the west coast of the United States, to 50%.
3. Aug. 2021 Acquired 100% share of Neotrust Co., Ltd., an outsourcing company that undertakes payroll and various clerical works.
4. Mar. 2022 Acquired 90% share of PPG, a property management company in Hawaii, U.S.A.
5. Jul. 2022 Acquired 40% share of JTB Asset Management Corp., a group company of JTB Corp. *1
6. Dec. 2022 Acquired 100% share of Seiryu Maintenance Inc. from SEKISUI CHEMICAL CO., LTD. *2<Supplementary note> *1 Business alliance with JTB Corp.
*2 NIPPON KANZAI Kankyo Service Co., Ltd., a subsidiary of NIPPON KANZAI, acquired the share.
S re hs ou side he omp y’s s les re re expe ed.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

43

The Transition to a Holding Company Structure

Overview of the transition to a holding company structure◼ Purpose of the transition• The purpose of transitioning to a holding company structure is to separate the group management function from the businessexecution function and strengthen its functionality by focusing on the former.
• By giving responsibility and authority to the operating companies, we endeavor to achieve business operations with greater
speed, aiming for more rapid responses to customer needs and operations that are more closely rooted in the operational
frontlines.
• Such operating companies under the holding company will be trained to accumulate management experiences, which willlead to the nurturing of human resources.

◼ The method and summary of the transition• A holding company, which will become a wholly owning parent company, will be established through the transferring of all theshares by a single stockholder.
• The holding company's shares will be listed on the prime market by a technical listing.
• NIPPON KANZAI Co., Ltd. will be delisted on March 30, 2023 and become a subsidiary of NIPPON KANZAI Holdings Co., Ltd.
• The date for the registration and listing of NIPPON KANZAI Holdings Co., Ltd. is April 3, 2023 (Monday).
Before reorganization
NIPPON KANZAI
Co., Ltd.

Subsidiaries, etc.

Company NameNIPPON KANZAI Holdings Co., Ltd.

Address(Headquarters)
2-1-10 Nihombashi, Chuo-ku, Tokyo, Japan(Registered office)9-16 Rokutanji-cho, Nishinomiya City, Hyogo Pref., Japan

Title and Name ofRepresentative

Shintaro Fukuda, President and Representative Director

Business Descriptions

The business management of the group companies that
operate office buildings, housing complexes, environmental
facilities and real estate fund management business, andbusiness incidental or related to thisShare Capital¥3,000 million

Number of Shares Issued

41,180,306 sharesFiscal Year End

March 31After reorganization

NIPPON KANZAI Holdings Co., Ltd.

NIPPON KANZAI
Co., Ltd.

Subsidiaries, etc.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

44

Reference (1)Company Information

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

Basic Information

NIPPON KANZAI Group respects each building andkeeps maintaining the value.
Business nameNIPPON KANZAI Holdings Co., Ltd.

Establishment

April 3, 2023

Share capital¥3,000 million

Representative

Shintaro Fukuda, President and Representative Director

Address ofheadquarters

2-1-10 Nihombashi, Chuo-ku, Tokyo, Japan

Address ofregistered office9-16 Rokutanji-cho, Nishinomiya City, Hyogo Pref., Japan

Business
Descriptions

The business management of the Group companies that
operate office buildings, housing complexes, environmental
facilities and real estate fund management business, andbusiness incidental or related to thisNumber of
employees

Consolidated: 10,381 (as of March 31, 2023)
Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

46

Business Site
Since establishment, we have offered one-stop solution forthe optimum operation management, taking advantage of the
five-decade experience, knowledge, nationwide network,
wide business area, and the latest building engineering.

Gated communities managementcompany in California, the United States
Keystone Pacific Property Management, LLC

he largest“ ssociationof partment wners”
management company in theState of Hawaii
Hawaiiana Holdings Incorporated
NIPPONKANZAI Holdings Co., Ltd.
日本管財ホールディングス㈱NIPPONKANZAI Co., Ltd.
日本管財㈱Three-S
Co., Ltd.
㈱スリーエス

Property managementcompany in Hawaii
Pacific Property Group, Inc.

NIPPONKANZAI Environment Service Co., Ltd.
㈱日本管財環境サービス
NipponKanzai Housing Management Co., Ltd.
日本管財住宅管理㈱日本住宅管理㈱Japan
Housing Management Co., Ltd.

東京キャピタルマネジメント㈱TokyoCapital Management Co., Ltd.
NSコーポレーション㈱NSCorporation Co., Ltd.

The largest strata
management company inAustralia
Prudential Investment Companyof Australia Pty Ltd (PICA)

Japan
Environmental Solutions., Ltd.
㈱日本環境ソリューション
Okinawa
NIPPON KANZAI Co., Ltd.
㈱沖縄日本管財
NeotrustCo., Ltd.
㈱ネオトラスト(as of March 31. 2023)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

47

History of NIPPON KANZAI
Apr. 2023

Oct. 1965

Current Chairman Takeshi Fukuda
founded NIPPON KANZAI Co., Ltd.
in Kobe City

Mar. 1988

Started total management business ofhigh-rise intelligent buildings

Fen. 1989

Shares were traded at the Over-The-Counter
Market of Japan Securities Dealers
Association

67/6

72/6

77/6

82/6

Aug. 1973

Started total management business forcondominiums

Apr. 1976

Started operation and maintenance businessfor public sewerage plants

Established NIPPON KANZAI Holdings Co.,Ltd.

Apr. 2014

Adopted a double headquarters system, one inTokyo and the other in Kansai

Apr. 2018

Started the first comprehensive management
operations in Kansai area

Jun. 2000

Was entrusted with PFI project and established a specificpurpose company

Aug. 2000

Started building diagnosis (due diligence service) business.

Mar. 2001

Listed on the 1st section of Osaka Securities Exchange(current Osaka Exchange).

Feb. 2002

Listed on the 1st section of Tokyo Stock Exchange

87/6

Jul. 1990
Nov. 1993
Aug. 1996

92/3

97/3

02/3

FY3/23
Net sales¥113,045 million

07/3

12/3

17/3

22/3

May 2003

Started asset management BusinessJul. 2004
Dec. 2006

Started establishing funds for institutional investors
Agreed with Galileo, an investor in Australia to establish A-REIT

Was entrusted with management of a land trust building
through a proposal-based competition
Listed on the 2nd section of Osaka Securities Exchange(current Osaka Exchange)
BEST System, a life-long building management system toenhance property values, was introduced to the market

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

48

Wide Business Field Related to Real EstateManagement of real estate

Building Maintenance (BM)Residential Management
•
•
•
•
•

Operation of real estate

Ownership of real estate

Property Management (PM)Asset Management (AM)

Operation of buildings with the
purpose of enhancing the real state
value

Facility management
Cleaning service
Security service
Business support
Response to homeownerassosiations

•
•
•
•
•
•

Tenant management
Accounting service
Reporting
Leasing Management
Construction Management (CM)Sales promotion

Acquisition, sales, financial
analysis, assessment of property
value, etc. of the real estate withthe purpose of investment

Life Cycle Cost Management• Building diagnosis• Long-term repair plan
• Repair, update, renovation

Energy Management• Energy-saving
diagnosis, analysis• Energy Conservation
Act-related consulting

Building Owner

Facility Management (FM)Company, organization

Business management activities thatcomprehensively plan, manage, and makeeffective use of all the facilities and environment
belonging to companies, organizations, etc. fromthe management perspective

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

49

Mid-Term Business Performance
Facilities Management and Operating Business
Real Estate Fund Management Business
Operating profit margin(¥ million)

Residential Management and Operation Business*
Other Businesses

Expansion of middle-riskand middle-return
businesses, such as PFI
90,00085,413
71,392

74,22873,42872,522Focus on consulting
businesses for local
governments

Switching of
unprofitable projects

120,000

Environmental Facility Management BusinessTemporary Staffing Business

90,07887,37992,490113,045
106,300

104,124

103,737

97,92996,47875,06566,38860,0007.2%

7.2%
30,000

6.0%

4.9%

5.0%

4.8%

5.3%

6.2%

5.8%

5.3%

6.0%

6.5%

6.0%

7.2%

7.4%

6.4%

0

Lehman shock(Sept. 2008)
Sept. 2009

Strong-yen
deflation
in JapanMar. 2011

Democratic
Great
Party of Japan East Japan
inaugurated Earthquake

US-China
trade friction

Abenomics

Dec. 2012

Apr. 2016

LiberalDemocratic
Party back asa ruling party

Kumamoto
Earthquake

May 2019

Jan. 2020

Jul. 2021

From
COVID-19 Tokyo Olympic
Heisei to outbreak and Paralympic
Reiwa
Games

*Residential Management and Operation Business before FY3/14 is included in
Facilities Management and Operation Business.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

50

Diversity of Operation Management Facilities (Building Operation Management Business)◼ Portfolio of operation management building⚫ Covering a wide range of applications, such as offices, large-scale commercial facilities, and public facilities⚫ Recently, showing a tendency to increase large-scale facilities such as commercial facilities and public facilities
Sports facilities 3.0%

-0.5p

Other 5.6%

+0.1p

Hotels/Accomodation 4.5%

Offices 25.4%

+0.4p

-1.2p

Plants/Warehouse 4.2%

-0.1p
Educational/Cultural facilities 9.0%

Composition ratioof net sales-0.2p(Nonconsolidated baseexcluding housing)

Commercial facilities 18.3%
Public facilities 14.3%

+1.0p

+1.1p
Welfare medical facilities 15.6%*Figures for properties under management are based ondata in NIPPON KANZAI data base "Building charts."

Increase and decrease compared tothe previous term (point)-0.7p

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

(as of March 31, 2023)

51

Geographical Distribution (Building Operation Management Business)(Unit: ¥ billion)

Hokkaido
2.39

Kinki
21.20

Tohoku
0.77

Chubu
6.56

Kyushu, Okinawa
4.85
Chugoku
1.46

Net sales ofproperties undermanagement

Kanto
24.10

Shikoku
0.90*Figures for properties under management are based ondata in NIPPON KANZAI data base "Building charts."(\ billion)

Composition
ratio (%)

YoY
Changes (%)

Hokkaido

2.39

3.8%

6.8%

Tohoku

0.77

1.2%

6.5%

Kanto

24.10

38.8%

9.3%

Chubu

6.56

10.5%

11.5%

Kinki

21.20

34.1%

6.9%

Chugoku

1.46

2.4%

6.8%

Shikoku

0.90

1.4%

-2.5%

Kyushu

4.85

7.8%

5.9%

Total

62.42

100.0%

8.0%

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

(as of March 31, 2023)

52

Geographical Distribution (Residential Management and Operation Business)(Unit: lots)：NIPPON KANZAI

：NKJ

：NJK

U.S.A
Managing approx. 100,000
lots in the south part ofCalifornia

Hokkaido
4,577
Kyushu,Okinawa
2,813

Tohoku
120
Chubu
6,130

Chugoku
2,722

HawaiiManaging approx. 110,000
lots in 6 islands including
Managing approx. 195,000 Oahu where Honolulu islots in the country, mainly
locatedin Sydney

Australia

Number of lots
undermanagement(lots)

Shikoku400

Kinki
64,890*NJK: NIPPON KANZAI HOUSING MANAGEMENT Co., Ltd.
NJK: JAPAN HOUSING MANAGEMENT CO.
*Numeri l v lue b sed o he drepor ed o “e rus ed busi ess re ords by pre e ure”
investigated by Condominium Management Companies Association.

Kanto
18,870NIPPONKANZAI

NKJ

YoY
Changes (%)

NJK

Hokkaido

-

4,577

-

0.0%

Tohoku

-

120

-

0.0%

Kanto

356

14,555

3,959

-1.7%

Chubu

874

5,256

-

21.3%

Kinki

2,937

23,29738,656

1.7%

Chugoku

266

195

2,261

-8.8%

Shikoku

361

-

39

0.0%

Kyushu

-

2,813

-

-0.1%

4,794

50,813

44,915

1.6%

Total

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

3 companies total: 100,522 (As of March 31, 2023)

53

Geographical Distribution (Environmental Facilities Management Business)(Unit: cases)

Hokkaido

4

Iwate
Yamaguchi
Hyogo
Fukuoka
Nagasaki
14
11
7 Saga 2
Okayama2

Toyama33

Miyagi

Fukui

4

4
Gunma

4

1

Kumamoto

5
Osaka
Ehime
5
11 Kochi
1 Tokushima
Oita

Okinawa2

Kagoshima 1

Ibaraki

5

Tokyo

Chiba

5

1
No. of properties
undermanagement

Water andseweragefacilities

Generalwaste
treatment
facilities

Biomass
power
generation
facilities

Total Composition
ratio(%)

Aichi

2

1

22

(as of April 1, 2023)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

54

Group Company Restructuring
Seiryu Maintenance Inc.
Nippon Kanzai Environment Service Co., Ltd. acquired
the shares and spun off the business (sub-subsidiary)

Pacific Property Group

Hawaiiana Holdings
Incorporated

Acquired the shares of a PM
company in the United States

Aug. 2021

Mar. 2020

Acquired the shares of a residential
management company in the United States

Nippon Kanzai Housing
Management Co., Ltd.

Mar. 2022
Neotrust Co., Ltd.
Acquired the shares and made it a subsidiary

Apr. 2019
Keystone
Progressive, LLC

Jul. 2017

Acquired the equity of aresidential managementcompany in the United States

Spun off the residential management businessJan. 2017

Japan Housing Management Co.
NJK Staff Service Co., Ltd.

Jun. 2013

Became a subsidiary through the merger of NKJ
Holdings Co., Ltd. in July 2021

Sept. 2015

Okinawa
Nippon Kanzai Co., Ltd.

Acquired the equity of a residential managementcompany in the United States

Spun off the business because of the company split

NS Corporation Co., Ltd.

Nov. 2008

Mar. 2013

Acquired the shares of Shiseido Kaihatsu Co., Ltd.

NIPPON KANZAI
Environment Service Co., Ltd.

Keystone Pacific Property
Management LLC

Prudential Investment Company ofAustralia Pty Ltd.
Acquired the shares of a condominium management company in Australia

Jan. 2006
Apr. 2007

Spun off Environmental Engineering BusinessTokyo CapitalManagement Co., Ltd.
Spun off Real Estate Fund Management BusinessCasa Co., Ltd.
(Current Japan Environmental
Solutions, Ltd)

Aug. 1999

Dec. 1978
Oct. 1965

Acquired a condominium management company and operated
energy-saving services afterward

Three-S Co., Ltd.
Established jointly with SECOM CO., LTD. as part ofthe business partnership on manned guarding

A company that was establishedin alliance with the other company
Spun off the business department
Other M&As

NIPPON KANZAI Co., Ltd.
(as of March 31, 2023)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

55

Alliance Strategy Taking Advantage of Independent Type (1)Aug. 2002

Jan. 2006

Sept. 2006

1960

Established Japan Property Solutions Co., Ltd., a property
management company jointly funded by with Mitsubishi Trust andBanking Corporation (current Mitsubishi UFJ Trust and Banking
Corporation)
Spun off Environment Environmental Engineering Business due
to company split. Nippon Kanzai Environment Service Co., Ltd.
started operations.
Acquired Lion Building Maintenance Co., Ltd/, a group company ofLion Corporation and changed the business name to Kanzai
Facility Co., Ltd.

1970

1980

Apr. 2007

Spun off Real Estate Fund Management Business due tocompany split. Tokyo Capital Management Co., Ltd.
started operations.

Jan. 2008

Changed the business name of Casa Co., Ltd., a consolidated
subsidiary, to Japan Environmental Solutions, Ltd and started
the water filtration business.

Nov. 2008

Acquired the shares of Shiseido Kaihatsu Co., Ltd., a groupcompany of Shiseido Company, Limited, and changed thebusiness name to NS Corporation Co., Ltd.

1990

2000

Jul. 1999 Established KN Facilities Co., Ltd., a total building managementcompany jointly funded with Kumagai Gumi Co., Ltd.
Aug. 1972

Separated the equipment maintenance work business andestablished NIPPON KANZAI Service Co., Ltd.

Dec. 1978 Concluded a business partnership on manned guarding with
Nihon Keibi Hosho Co., Ltd. (current SECOM CO., LTD.) andjointly established Three-S Co., Ltd.
Oct. 1965 Current Chairman Takeshi Fukuda founded
NIPPON KANZAI Co., Ltd. in Kobe City

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

56

Alliance Strategy Taking Advantage of Independent Type (2)Jan. 2017

Jul. 2017
Apr. 2012

Kanzai Facility Co., Ltd., a consolidated
subsidiary absorbed KN Facilities Co., Ltd.

Mar. 2013

Acquired 50% share of Prudential Investment Companyof Australia Pty Ltd., a strata management company inAustralia, and formed a capital alliance.

Oct. 2017

Jun. 2013

Apr. 2014

Dec. 2017

Acquired shares of NJK Holding Co., Ltd. and made ita wholly owned subsidiary.

Absorbed NIPPON KANZAI Service Co., Ltd.
Parking lot operation business of NIPPON KANZAI Service Co., Ltd.
was split and taken over by Japan Property Solutions Co., Ltd..

Apr. 2019

NKS Co., Ltd. absorbed Kanzai Facility Co., Ltd. andchanged the business name to NIPPON KANZAI service
Co., Ltd.

Keystone Pacific Property Management LCC., an affiliatedcompany in the United States, acquired the business right of
Keystone Progressive, LLC, a residential management company.

Sept. 2019

Acquired 100% share of SANEI WORK Co., Ltd., a company
newly established by a subsidiary of Nippon Television Work 24
Corporation.

2010

Mar. 2020
Apr. 2020
Dec. 2020
Jul. 2021

Aug. 2021

Acquired 40% equity of Keystone Pacific Property
Management LCC., a gated communities managementcompany in the United States.
Spun off the condominium management business due tocompany split. Nippon Kanzai Housing Management Co., Ltd.
started operations.
Transferred the property management business to Japan
Property Solutions Co., Ltd.

2020

Acquired 50% share of Hawaiiana Holdings Incorporated,a residential management company in Hawaii.
Absorbed SANEI WORK Co., Ltd.
Increased investment ratio to 50% after additionally acquiring
the equity of Keystone Pacific Property Management LCC.
Tokyo Capital Management Co., Ltd., a consolidated subsidiary,
merged with Japan Property Solutions Co., Ltd.
Following the merger of NKJ Holdings Co., Ltd., acquired 100%
share of Japan Housing Management Co., Ltd., Nippon Kanzai
Housing Management Co., Ltd., and NJK Staff Service Co., Ltd.
respectively to wholly own the companies.
Acquired 100% share of Neotrust Co., Ltd., and made it a wholly
subsidiary2022

Mar. 2022

Acquired 90% share of Pacific Property Group, a PM
company in Hawaii.

Jul. 2022

Acquired 40% share of JTB Asset Management Co., Ltd.,a group company of JTB Corp.

Dec. 2022

NIPPON KANZAI Environment Service Co., Ltd., a consolidated
subsidiary, acquired 100% of Seiryu Maintenance Inc. fromSekisui Chemical Co., Ltd. (made it a sub-subsidiary)

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

57

Major Consolidated Index
Net sales (million)
20.3%
97,929Total assets (million)

Operating profit margin
Gross profit margin
22.4%
21.9%
21.5%

20.1%
106,300

104,124

103,737

113,045

72,670

1.35
6.5%

6.4%

FY3/19FY3/20

7.2%

7.2%

7.4%

FY3/21

FY3/22

FY3/23

ROE

FY3/1977,024

Total assets turnover (times)
81,28082,141

1.28

1.26

FY3/21

FY3/22

1.38

FY3/20D/E ratio

ROA

67.2%
10.2%

10.1%
9.6%

1.30

FY3/23Equity ratio
73.5%

10.7%

87,175

73.8%

68.2%

63.6%

9.7%

11.1%

10.1%

9.6%

9.5%

9.2%
6.8%

9.1%

8.9%

4.9%

2.9%
FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/19FY3/20

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

FY3/21

FY3/22

FY3/2358

Share Price Trends
June 2018
Earthquake in north part of
Osaka, heavy rain inwestern Japan

July 2017
Heavy rain in northpart of Kyushu(Shares)

February 2022
Russian invasionof Ukraine

January 2020
COVID-19 infections(¥)
Trading volume (LHS)

NIPPON KANZAI (RHS)

TOPIX (RHS)

Delisting of
NIPPON KANZAI

500,000

3,000

1st issuance ofshare acquisition
right

400,000

2,500
NIPPONKANZAI

300,000

200,000

2,000

TOPIX

1,500

100,000

0
4/1/2017

1,000

4/1/2018

4/1/2019

4/1/2020

4/1/2021

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

4/1/2022500
4/1/2023

59

Reference (2)Positioning in the Industry

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

Industry Structure of Building Maintenance⚫

⚫

Main clients are the buildings owned/developed by theirparent company. Advantage in building managementbusinesses such as sales, accounting, clerical work,
negotiations with other companies, and securing of
profitability in cooperation with their parent company, in
addition to general building management works.
Ex. Mitsubishi Jisho Property Management Co., Ltd.,MITSUI FUDOSAN BUILDING MANAGEMENT
CO.,LTD., TOKYU COMMUNITY CORP.

⚫

Organizer-like company that integrates
functions of companies of each business
type⚫

NIPPON KANZAI is an independenttype top-level company that is able todeal with total management.

⚫

⚫

⚫

Advantage in maintenance and repair, being familiar
with products of their parent company (elevators,
escalators, electric devices, air-conditioning equipment,etc.) in addition to general building management works.
⚫

Real-estate
type

Electricity,
manufacturer
types

Ex. Mitsubishi Electric Building Solutions Corporation,
Hitachi Building Systems Co., Ltd., etc.

Independent
type

Main clients are the buildings constructed by theirparent company. Advantage in renovation,
reconstruction, and extension works in cooperation
with their parent company, in addition to generalbuilding management works.
Ex. Kajima Tatemono Sogo Kanri Co.,Ltd., TaiseiYuraku Real Estate Co.,Ltd., OBAYASHI FACILITIESCORPORATION, etc.

Generalconstruction,
sub-construction
types

⚫

Other
large-scalecompany
types

Main clients are the buildings
owned/developed by their parent company.
Many companies were management
departments spun off from their parent
company. Recently, however, there arecases in which such departments are sold as
non-core businesses.

⚫

Railway type: Ex. JR East Facility Management
Co.,Ltd., Tobu Building Management Co., Ltd.

⚫

Insurance type: Taisay Building Management
Co.,Ltd., Meiji Yasuda Real Estate Management
Company Limited⚫

Commerce type: AEON DELIGHT CO., LTD., etc.

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

61

Transition of Building Maintenance (1)◼

Transition of building management business and move of NIPPON KANZAI (1965-1990)
1965

1970

1980

First oil shock

Societysituation

Second oil shock1982 Fire of Hotel New Japan

1968 Kasumigaseki Building, the first high-rise building in Japan, was completed

Laws andtechnologies
related tomaintenancesecurity

1970 Act on Maintenance of Sanitation in Buildings was establishedAround 1984 Decentralization control,
concentration management method
1978 Sunshine 60 was completed
1979

Act on Rationalizing Energy Use(Energy Conservation Act)
From late 1980s to 1990s

Roles andfunctions of themaintenancemanagementcompany⚫ Professional skills responding to increasing
high-rise buildings

1965 Establishment of NIPPON KANZAI1967⚫ From total management tointegrated management works

1980

Started total building management of hospitals
1970Intelligent buildings

Building services that are becoming higher leveland more complicatedExpansion of comprehensive building maintenance

Major
move ofNIPPONKANZAI

Around 1981 Multi-package unit for buildings

Started total building management ofgovernment office buildings

Established Kyushu Branch

1988
Started integrated
1981 Established Tokyo Branchmanagement business of1984 Established Nagoya Branch
intelligent buildings

1973 Started total management of condominiums
1976 Established Osaka Branch

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

1989
Established Tohoku
Branch62

Transition of Building Maintenance (2)◼

Transition of building management business and move of NIPPON KANZAI (1990-present)
1990

2000

2010

2008 Lehman shock2011 Great East Japan Earthquake2016 Kumamoto Earthquake

Bubble burst

Societysituation

1995 The Great Hanshin-Awaji
Earthquake

Laws andtechnologies
related tomaintenancesecurity

2021 Tokyo Olympic and Paralympic Games

2001 The World Trade Center attack (9-11)2022 Russian invasion of Ukraine

Around 1990 OA floor method
1997

1998 Act on Securitization of Special Asset by Special Purpose Companies
Implementation of FMer 1999 Act on Promotion of Development of Public Facilities, etc. by Utilizing Private Funds, etc.
qualification test
2003 Revision of the Act on Rational Use of Energy
2009 Act on Securing Financial Soundness of Local Governments
Building services that are becoming higher level and more complicatedRoles andfunctions of themaintenancemanagement⚫ Response to land trust andcompany
redevelopment business⚫ SDGs, decarbonation⚫ Response to CRE and PRE⚫ Energy/power saving⚫ Response to ownership of real estate and⚫ Digitalization of management
separation of management (AM, PM)⚫ Response to PFI anddesignated maangers

1990 Entrusted with the management
work of large-scale land trust
building

Major
move ofNIPPONKANZAI

1995 Entrusted with the redevelopedbuilding management work inurban area

2000 Commercialized WAFM system. Started remotemonitoring of facilities
Entrusted with PFI business. Started building
due diligence service business1996 Commercialized BEST,a production management system

2002 Established OS Department
2003 Entrusted with asset management work ofreal estate after setting up securitizationof office buildings
2007 Entrusted with the management works ofdesignated manager systems

2012 Joined FM expo held in Dubai, as a starting
point of entering the overseas market
2014 To double-headquarters system
2017 Entrusted with facilities management
during the construction period of Toyosu
Fish Market
2018 Started comprehensive management
operations of Akashi City
2023 Establishment of NIPPON KANZAI Holdings

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63

Mechanism of Condominium Management Industry⚫

NIPPON KANZAI Co., Ltd.

⚫

DAIKYO ASTAGE INCORPORATED⚫

Nihon Housing Co., Ltd.

⚫

TOKYU COMMUNITY CORP.

⚫

Gojinsha Planning Research Center⚫

Mitsui Fudosan Residential Service Co., Ltd.

⚫

Mitsubishi Jisho Community Co., Ltd.

⚫

Sumitomo Fudosan Tatemono Service Co., Ltd⚫

DAIWA LIFENEXT CO., LTD.

⚫

Anabuki Housing Service Co., Ltd.

⚫

Global Community Co., Ltd.

Independent
type

Developer
type

Tradingcompany
type⚫

ITOCHU Urban Community Ltd.

⚫

Sumisho Tatemono Co., Ltd⚫

Sojitz LifeOne Corporation

Housingbuilder
type
Tradingcompany
type

Condominium management company
in Japan

Approx. 2,659 companies

Member company of Condominium
Management Companies Association

355 companies

No. of lots under management of
the member companies (per company)

Approx. 17,940 lots

(Source: Condominium Management Companies Association,
2022 Survey on condominium management commission)⚫

Haseko Community, Inc.

⚫

Taisei-Yuraku Real Estate Co.,Ltd.

⚫

Nippon Steel Community Service Co.Ltd

NIPPON KANZAI Group
Only independent-type building management company dealing withcondominium management that is listed on the Tokyo Stock Exchange
Prime section
No. 16 in the industry (100,522 lots) total lots of 3 Group companies(Source: Mansionkanri Shimbun, calculated by NIPPON KANZAI by groupcompany)

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64

Transition of Condominium Management Industry
Transition of laws and forms related to condominium management

Late1950s Started offering high-end condominium for high-income people
The main way of management was that a condominium company
concludes a management contract individually with a unit owner.

2000

Establishment of Act on Advancement of Proper Condominium
Management

2003

Revision to Condominium Standard Management Consignment
Contract
Condominium Standard Management Consignment Contract wasrevised associated with partial revision to Act on Advancement of
Proper Condominium Management

2009

Late 1970s Condominium took root in society
as urban-type housing

1950

1960

1970

1962 Establishment of laws concerning unit
ownership of buildings, etc.
Late 1960s Increase of popular-type condominium formoderate-income people
Management company affiliated with acondominium company emerged and building
maintenance companies entered the market.
Start of a management method: Unit owners
establish a homeowner association; and thehomeowner association and a managementcompany conclude the management contract.
Focus was placed on maintenance andinspections.

1980

1982

1990

2000

2010

2020

Formulation of the Condominium Standard Management
Consignment Contract for Mid- to High-rise condominiums(Template of the contract in the case of outsourcing abusiness to a management company)
2014

Establishment of Revised Act on Facilitation ofReconstruction of Condominiums
2021 Establishment of the regulations on explaining importantmatters via IT devices, associated with partial revision to
Act on Advancement of Proper Condominium Management

Establishment of the system in which local governments
approve condominium with a proper management plan
Revision to Condominium Standard Management
Consignment Contract

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

65

Legal Disclaimer

No information in this material is intended to solicit the purchase or sale of shares in NIPPON KANZAI.
Forward-looking statements contained in this material such as results forecasts and future prospects are
forecasts and estimates made by NIPPON KANZAI based on information available at the time of the preparationof the material and are subject to potential risks and uncertainties.
Please note that actual results may differ from the statements contained in this material due to various factors.
NIPPON KANZAI and the information provider accept no liability whatsoever for any damage arising from any
action taken by a user based on the information contained in this material.

NIPPON KANZAI Holdings Co., Ltd.
Public Relations, IR & Marketing Department
E-mail : kouhoirm@nkanzaihd.co.jp

Copyright (C) 2023 NIPPON KANZAI Holdings Co., Ltd.

66