FY18/2 Q3 Corporate Presentation
January
13, 2018
2017
January 12,

Ichigo (2337)© 2018 Ichigo Inc. All rights reserved.

www.ichigo.gr.jp/en

Ichigo Preserves andImproves Real Estate© 2018 Ichigo Inc. All rights reserved.

© 2018 Ichigo Inc. All rights reserved.

Contents
FY18/2 Q3 Earnings‒ Operating Profit -8%, Net Income -15% YOY (9M)
‒ Segment Earnings Details‒ Financing Details

Appendices‒ Financial & Real Estate Data
‒ Power Up 2019 Mid-TermBusiness Plan

Powerful Value-Add Business Model Underpins Growth‒ Business Model (1) Stock + Flow Earnings‒ Business Model (2) Embedded Forward Earnings‒ Business Model (3) Value-Add Durable Value Growth‒ Capital-Efficient Asset Turnover‒ Value-Add Case: Tradepia Odaiba (Large-Scale Office)‒ 20-Year Earnings Stream from Tokyo’s Largest Solar Power Plant‒ Asset Management Growth‒ New Business Entry: Boutique Hotels‒ New Business Entry: Real Estate Owner Services‒ New Business Entry: Self-Storage‒ Value-Add Business Growth via New Subsidiary‒ Ongoing Dividend Growth‒ FY18/2 Share Buybacks© 2018 Ichigo Inc. All rights reserved.

FY18/2 Q3 Earnings© 2018 Ichigo Inc. All rights reserved.

5

Operating Profit -8%, Net Income -15% YOY (9M)
− Progress vs. Full-Year Forecast: Operating Profit 76.3%, Net Income 81.1%− Vs. FY17/2 Q3 (3M): Operating Profit +48.9%, Net Income +129.7% YOY− 43.2% GPM and 35.1% OPM Underscores Ongoing High Profitability(JPY million)

FY17/2 Q3Cumulative (9M)

FY18/2 Q3Cumulative (9M)

Revenue

93,83544,755-52.3%

75,50059.3%

Gross Profit

20,79019,332-7.0%

25,994

74.4%

Operating Profit

17,042

15,715-7.8%

20,60076.3%

Recurring Profit

15,375

14,461-5.9%

18,30079.0%

Net Income

12,837

10,945-14.7%

13,50081.1%

JPY 25.57

JPY 21.92-14.3%

JPY 26.98

81.2%

EPS

© 2018 Ichigo Inc. All rights reserved.

YOY

Full-Year
Forecast

vs. Full-Year
Forecast

6

Segment Earnings Details− Asset Management: Ongoing AM Fees Up 24% YOY− Value-Add: Rental Income Up Slightly, Gains on Sales Down YOY− Clean Energy: Achieved Full-Year Forecast in Q3 via Ichigo Showamura
Ogose Power Plant Launch Ahead of Schedule(JPY million)
Revenue
Segment

FY17/2 Q3Cumulative(9M)

FY18/2 Q3Cumulative
(9M)

YOY

Gross Profit
Full-Year
Forecast

vs. Forecast

FY17/2 Q3Cumulative(9M)

FY18/2 Q3Cumulative(9M)

Full-Year
Forecast

YOY

vs. Forecast

Earnings Drivers(Parentheses show YOY change in
Gross Profit)

Asset Management

3,556

1,911

-46.3%

2,485

76.9%

2,178

1,906

-12.5%

2,457

AM Fees 1,434 (+277)
Acquisition/Disposition Fees 76 (-335)
Performance Fees 364 (+203)
77.6% PM/BM Fees 0 (-366)
Note: Decrease in PM/BM Fees is due to Sale ofTakara Subsidiary

Value-Add

88,481

39,894-54.9%

69,71957.2%

17,797

16,310-8.4%

22,336

73.0% Gains on Value-Add Sales 9,026 (-1,530)

Clean Energy

1,783

2,843

+59.5%

3,216

88.4%

908

1,128

+24.3%

1,122

100.6% FIT Solar Power Sales 661 (-247)

Other

14

106

+639.8%78

135.9%

-93

-13

－

78

Total

93,83544,755-52.3%

75,50059.3%

20,79019,332-7.0%

25,994© 2018 Ichigo Inc. All rights reserved.

Rental Income 7,283 (+44)

Gains on Sales of Power Plants 467 (+467)－ Foreign Private Fund Disposition Expenses -13 (+80)

74.4%

7

Financing Details
Weighted Average Interest Rate
WeightedLoan
AverageLoan Term
Average
PeriodAverage Interest Rate and Loan Term

(Loan Term, Years)(Interest Rate)
2.5%

12
10.8 years
10.1 years

2.0%

1.96%

9.0 years

9
8.7 years

1.71%

1.5%

6
5.9 years
1.41%
1.24%
1.03%

1.0%
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2 Q3

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

6% (JPY 7.4B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

94%(JPY 113.5B)

3Term Structure of Loans
14% (JPY 4.1B)

Short-Term
Long-Term

86%(JPY 26.1B)© 2018 Ichigo Inc. All rights reserved.

8

Powerful Value-Add Business Model Underpins Growth© 2018 Ichigo Inc. All rights reserved.

9

Business Model (1) Stock + Flow Earnings
Stock Earnings (Primarily Rental Income, AM Fees, and FIT Solar Power Sales)
Flow Earnings (Primarily Profits on Value-Add Real Estate Sales )Fixed Expenses (Fixed SG&A + Interest Expense)(JPY million)

26,80625,994

19,863

19,332

14,011

12,949

8,973
9,949

12,166
4,553

Gross Profit

7,435

4,974

2,518

924
4,050

13,045

12,795

10,890

9,383

7,613
4,917
3,129
FY13/2

3,499

FY14/2© 2018 Ichigo Inc. All rights reserved.

4,342
FY15/24,876
FY16/2

5,382

FY17/26,045
3,885
FY18/2Q3 Actual

FY18/2(Forecast)10

Business Model (2) Embedded Forward Earnings
Full Economic Earnings from Value-Add are Generally Not Recognized
during the Current Accounting Period – Value-Add Thus Generates
Significant Unrealized Gains that are an “Earnings Bank” for Future Periods(JPY million)

36,79739,37428,056
19,64812,269FY14/2

FY15/2

FY16/2

FY17/2

FY18/2 Q3Appraisal Value-Based Unrealized Gains© 2018 Ichigo Inc. All rights reserved.

11

Business Model (3) Value-Add Durable Value Growth
Gains on Sales Consistently Exceed Appraisal Value-Based Unrealized Gains− Ichigo Value-Add generates durable ongoing value− Ichigo also has ongoing rental income earnings stream during Value-Add− Post-Value-Add, run efficient sales processes to maximize gains on sales

GPM
13.7%

Appraisal Value-Based Unrealized Gains
Gains on Sales (Gross Profit)

GPM
32.1%

GPM
23.0%

JPY 10.5B
JPY 7.2B

JPY 6.4B

JPY 3.3B
FY16/2© 2018 Ichigo Inc. All rights reserved.

JPY 9.0B

JPY 1.2B
FY17/2

FY18/2 Q3

12

Capital-Efficient Asset Turnover− Accelerating Ichigo Owners Asset Acquisitions as New Earnings Driver− Innovative Real Estate Acquisitions such as via M&A

Buy− Deploy cash
− Increase borrowings

ValueAdd(Acquisition Book Value)

Q3 Acquisitions Total 84 Assets, JPY 43.5B
RetailHotel− Receive cash
− Repay borrowings© 2018 Ichigo Inc. All rights reserved.

JPY 3.4B
JPY 10.4B

Ichigo Owners-Oriented Assets (JPY 500M – 1B)
39 Assets JPY 17.9B
Residence
1 AssetJPY 600M
OfficeReal Estate Acquisition via M&A
14 Assets
Centro
New Asset Types
Logistics
2 Assets
Self-Storage
21 Assets

Q3 SalesSell

2 Assets
5 Assets

JPY 5.6B
JPY 3.7B
JPY 1.7B(Book Value)

Total 12 Assets, JPY 19.1B

5 Assets
JPY 2.7B
Residence
4 Assets
JPY 13.2B
Office1 AssetJPY 300M
Hotel
1 AssetJPY 2.3B
Ground Lease
1 AssetJPY 400M
Land
Gross Profits on Sales JPY 9.0B
(Gross Profit Margin 32.1%, Total Sales Price JPY 28.1B)
13

Value-Add Case: Tradepia Odaiba (Large-Scale Office)Approx. One Year from Acquisition:
Occupancy: 91.0% → 98.4%
Average Rent per Tsubo (3.3m2) +11.4%
Rental Income (Monthly)

Operating Costs (Monthly)(JPY million)(JPY million)+20.5%-20.5%
Tradepia Odaiba

161

At Acquisition(Oct 2016)

195

23

Current(Contractual)

At Acquisition(Oct 2016)

Major Value-Add Actions

18

Current

 Improvements based on survey of all tenant
employees
・Increased cleaning service quality and renovatedcommon areas
・Increased lunch options and improved security
 Reduced maintenance costs while increasing
service standards
 Strengthened leasing activities

NOI Yield 4.1% → 6.0%

© 2018 Ichigo Inc. All rights reserved.

14

20-Year Earnings Stream from Tokyo’s Largest Solar Power Plant
Ichigo Showamura Ogose ECO Power Plant Q3 Operation Launch Ahead of
Schedule− Forecast Gross profits: JPY15.2B (JPY 760M p.a.)
Forecast Net income: JPY10.6B (JPY 530M p.a.)− Largest solar power plant in Tokyo region (43.3MW)− 20-year FIT: JPY 36

Total 44 （134MW) Operating and
In-Development Solar Power Plants;
Additional 50MW in Solar Pipeline (+15MW vs. H1)

Ichigo Showamura Ogose ECO Power Plant

41MW Wind Power Plants in Simulation & Design
No.

Location

Expected Output

Wind Data Survey

FIT

Expected Operation Start Date

1

Chiba

4.0MW

Completed

JPY 22

November 2022

2

Yamagata

7.5MW

In Progress

JPY 22

December 2019

3

Iwate

7.5MW

In Progress

TBD

TBD

4

Iwate

7.5MW

In Progress

TBD

TBD

5

Mie

7.5MW

In Progress

JPY 22

December 2020

6

Fukushima

7.0MW

In Progress

TBD

TBD

© 2018 Ichigo Inc. All rights reserved.

15

Asset Management Growth

OfficeIchigo Office(8975)

Hotel

Ichigo Hotel(3463)

Green Infrastructure

Ichigo Green(9282)

Asset Size

Asset Size

Asset Size

85 Offices JPY 196.9B

21 Hotels JPY 50.9B

15 Plants JPY 11.4B

FY18/2 Achievements

FY18/2 Achievements

FY18/2 Achievements

・Strategic portfolio restructuring –Acquired 3 prime office assets & sold 4
less attractive assets
・Launched Ichigo Lounge, a shared-use
space for tenants
・15 consecutive periods of dividend
growth – No. 1 vs. All-J-REITs

・Acquired 2 assets via cash-on-handand loans・Acquired 2 solar power plants from
Ichigo via cash-on-hand and loans

・Share buyback, second J-REIT among
all J-REITs to execute buyback
・Driving EPS growth via value-add capex

・Dividend exceeded forecast by 24.2%© 2018 Ichigo Inc. All rights reserved.

・Two-for-one stock split to support
liquidity and expand investor base16

New Business Entry: Boutique Hotels

Ichigo’s First Boutique Hotel: HOTEL THE KNOT YOKOHAMA
Value-Add that Transformed Old Hotel to Boutique Hotel with HighDesign Aesthetics – Guests Can Buy Designer Goods Used in Hotel
Launch CoverageTV・ “World Business Satellite” (TV Tokyo)
・ “King’s Brunch” (TBS)Magazines and Online Media・ CLUTCH Magazine
・ Casa BRUTUS
・ VOGUE JAPAN・ WWD Japanand others© 2018 Ichigo Inc. All rights reserved.

17

New Business Entry: Real Estate Owner Services

Accelerating Asset Acquisitions for Ichigo Owners Clients
Actively Acquiring Assets for Ichigo Clients in Strong Market− Acquired multiple residential, office, and retail assets in areas with strong clientdemand: Central Tokyo; the four southern Tokyo wards; the six western Tokyo
wards; and major regional cities*− FY18/2 Q3 (9M) acquisitions: 40 Assets, JPY18.5B (Generally JPY 0.5B-1B per
asset)− Asset sales to end-clients:
 FY18/2 Q3 (9M) sales: JPY 2.3B
 Ongoing AM service provision: 2 assets, JPY 2.2B

* Four southern Tokyo wards: Minato Ward, Shinagawa Ward, Meguro Ward, and Ota Ward
Six western Tokyo wards: Shinjuku Ward, Setagaya Ward, Shibuya Ward, Nakano Ward, Suginami Ward, and Nerima Ward
© 2018 Ichigo Inc. All rights reserved.

18

New Business Entry: Self-Storage

Accelerating Openings, Synergies with Phil Park
New Openings of Ichigo Self-Storage Facilities Massively Outpacing Industry
Growth of 4%-8% p.a.
− c. 1,900 storage rooms, 14 facilities (Dec 31, 2016)→ +64% YOY, c. 3,200 rooms, 25 facilities (Dec 31, 2017)− New facility examples: Second-floor facility with major postal courier on first floor Opening soon in a popular residential area based on request froma local land owner
 Scheduled opening examples:
Storage Plus Musashi-Kosugi Tokyo (March 2018)
Storage Plus Yokohama Kaminagaya (May 2018)

Storage Plus Kokubunji Nishi(Opened on Nov 30, 2017)

Synergies with Phil Park Supporting New Openings− Tie-up with Phil Company for elevated buildings
in parking lots
 Preferential rights to build self-storage facilities
on Phil Company assets
 Synergies with Ichigo Owners’ client service offerings
Phil Park Kichijoji© 2018 Ichigo Inc. All rights reserved.

19

Value-Add Business Growth via New Subsidiary
Established Ichigo Land Shinchiku (“Ichigo Land”) in October 2017 tofurther contribute to a sustainable society via Ichigo Value-Add− Will support further growth of Ichigo Value-Add business− Ichigo Land Value-Add model case: Central Tokyo Value-Add office building
sale in Q3 (Gain on Sale JPY 7.36B)

Initial Seed Asset: Mid-Size Value-Add Retail Building− Retail building (6 floors plus 2 basement floors) to be transferred to Ichigo
Land via a corporate divestiture− No impact on Ichigo’s consolidated financials, as the transaction is between
Ichigo and a 100% subsidiary
Contract Date: January 12, 2018
Completion Date: February 20, 2018 (expected)− Ichigo Land will focus on collaboration and cooperation with tenants and the
local community in optimizing Value-Add for local needs© 2018 Ichigo Inc. All rights reserved.

20

Ongoing Dividend Growth
Ichigo Dividend Policy: Growth, Certainty, and Stability− DOE (Dividend on Equity) payout ratio of >3%
 Stable and growing dividend unaffected by short-term earnings volatility− Progressive Dividend Policy
 Previous year’s dividend is floor for the current year’s dividend. Dividend will be raised(or kept flat) but not cut, providing shareholders with downside dividend protection.
The policy underscores Ichigo’s commitment to driving continued earnings growth for
its shareholders

5 Consecutive Years of Dividend
Growth, Plus 2 More Years in
Current Forecast/MTP

JPY 5

JPY 6

JPY 7

JPY 3
JPY 0

JPY 1*

JPY 1.1

JPY 1.3

FY12/2

FY13/2

FY14/2

FY15/2

FY16/2

FY17/2

FY18/2(Forecast)

FY19/2(Mid-Term Plan)* Adjusted to reflect 200:1 stock split© 2018 Ichigo Inc. All rights reserved.

21

FY18/2 Share Buybacks
Purpose: Grow Value for Ichigo’s Shareholders
Share Type
Buyback Method

Common shares
In-market purchases via trust bank

April Share Buyback
Number of Shares
Average Share Price
Amount

4,627,400
JPY 324
JPY 1.5B

October Share Buyback
Number of Shares
3,809,100
Average Share Price
JPY 394
AmountJPY 1.5B© 2018 Ichigo Inc. All rights reserved.

22

Appendix: Financial & Real Estate Data

© 2018 Ichigo Inc. All rights reserved.

23

Powerful Value-Add Business Model
Significant Synergies between Ichigo’s Value-Add and Asset Management
Businesses
Value-Add Business Model
Green
Infrastructure

Solar Plants
Buy

Ichigo Green(9282)
OfficeIchigo Office(8975)
Hotel

Ichigo Hotel(3463)© 2018 Ichigo Inc. All rights reserved.

Sell

Value-Add
Real
不動産
EstatePreserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
24

Value-Add Social SignificanceSustainable Real Estate Serving a Sustainable Society
End Demolish and Rebuild and Embrace Value-Add‒ Preserve and enhance high-function real estate‒ Lengthen useful life and improve quality of existing assets via Value-Add

Value‐Add
DemolishandRebuild© 2018 Ichigo Inc. All rights reserved.

Effective
Re-Use of
Key Social
Infrastructure

Preserve & Improve
・ Higher-Quality Tenant Services
・ Higher Functionality (Security, A/C)・ Upgrade Exteriors/Interior Spaces
・ Seismic Reinforcements

HighestEfficiency
LowestImpact25

Value-Add Sample Earnings Model
5.5% NOI yield, JPY 2B purchase, LTV 75%, 1.5% interest rate on
borrowings, JPY 50M Capex, 15% increase in NOI, 3-year Value-Add period
NOI at Acquisition(JPY 110M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 87.5M NOI/yearNOI÷ Initial Investment ＝17.5% NOI return during investment period
.

Debt
Asset

JPY1.5B

JPY
2.0B

NOI after Value-Add(JPY 126.5M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 104M NOI/year
NOI ÷ Total Investment (JPY 500M + JPY 50M) ＝18.9% NOI return during
investment period.

EquityJPY 0.5B

Value-Add for Capital Gain
The 15% increase in NOI at an equivalent cap rate increases the exit price by
15%: JPY 2B * 115% = JPY 2.3B
JPY 2.3B – (JPY 2B + JPY 50M) = JPY 250M capital gain.

Value-Add (Capex JPY 50M )© 2018 Ichigo Inc. All rights reserved.

ResultJPY 550M investment generates JPY 512M over 3 years → 31.1% p.a.

26

Consolidated Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 340.0B(Book Value JPY 300.7B + Unrealized Gains JPY 39.3B)

Non-Recourse Loans &Related Liabilities
Non-Recourse LoanRelated Assets

JPY 80.0B

Consolidated Risk-Based Balance Sheet: JPY 260.0B(Book Value JPY 220.6B + Unrealized Gains JPY 39.3B)

JPY 117.7B
Non-Recourse LoanRelated ICH Equity

JPY 37.7B
Cash & Cash Equivalents

JPY 35.6B

Corporate Loans

JPY 121.0B

Debt
JPY
214.8BJPY 35.6B
Operational Loan Investments
JPY 1.3B

Operational Loan Investments
JPY 1.3B

JPY 97.6B

Security Deposits Received
JPY 4.6B

Other JPY 9.1B

Fixed Assets

JPY 40.0B
Securities Investments
JPY 1.7B

Other JPY 6.4B

Unrealized Gains
JPY 39.3B

Corporate Loans

JPY 121.0B

Debt
JPY
134.7B

Real Estate for Sale

Real Estate for Sale

JPY 97.6B

Cash & Cash Equivalents

Shareholder
EquityJPY 85.9B
Unrealized Gains
JPY 39.3B

Security Deposits Received
JPY 4.6B

Other JPY 9.1B

Mark-toMarket
Shareholder
Equity Ratio

36.8%

Fixed Assets

JPY 40.0B
Securities Investments
JPY 1.7B

Other JPY 6.4B

Unrealized Gains
JPY 39.3B

Shareholder
EquityJPY 85.9B

Risk-Based
Shareholder
Equity Ratio

48.2%

Unrealized Gains
JPY 39.3B

Note: Risk-Based Balance Sheet excludes client and non-recourse assets and liabilities.
© 2018 Ichigo Inc. All rights reserved.

27

Significant Unrealized Gains on Balance Sheet
Total Unrealized Gains: JPY 39.3B (Appraisal Value Basis)
Real estate directly held by Ichigo(JPY million)

LocationBook Value as of
Cap Rate
Expected NOI
Nov 30, 2017
NOI/Book Value after Write-Down

Appraisal Value as of
Nov 30, 2017

Unrealized
Gains

Tokyo

107,890

6,027

6.0%

129,541+21,652

Outside Tokyo

103,400

6,802

6.9%

120,795+17,395

Total

211,290

12,8296.5%

250,336+39,046* Cap rate is the simple average of the cap rates for each asset. Excludes development assets (c. JPY 543 million)
which are not currently generating NOI and includes intangible fixed assets subject to appraisal (c. JPY 135 million).

Real estate held by Ichigo within Ichigo-managed funds (SPCs) where there are other non-Ichigo equity holders(JPY million)

Book Value as of
Nov 30, 2017

Appraisal Value as of
Nov 30, 2017

Unrealized Gains

Equity Investments(Non-consolidated)－

Equity Investments(Consolidated)

1,071

1,400

+328

Total

1,071

1,400

+328

© 2018 Ichigo Inc. All rights reserved.

－ －

－

28

Business Segments

Asset Management

Asset Management generates fee income via management of Ichigo
Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282), andproviding real estate services related to real estate acquisition,
operations, and disposition.

Value-Add

Value-Add preserves and improves real estate. Ichigo receives rental
income during the period in which it is carrying out its value-add,
along with earning profits on sale that reflect the real estate’s higher
value after the value-add is complete.

Clean Energy

Other© 2018 Ichigo Inc. All rights reserved.

Clean Energy is utility-scale solar power production that produces
clean energy and brings productive use to idle land.

Other is primarily legacy securities investments that are not related tothe above three segments.

29

Consolidated Balance Sheet(JPY million)
FY18/2 Q1
FY17/2

FY18/2 H1

B/S

FY18/2 Q3

B/S

OutsideInvestors'
Interest

B/S

Quarter-onQuarter

MarketValue

Unrealized
Gains

Unrealized
Gains on
ListedSecurities 2

Cash and Cash Equivalents

47,67845,54255,491

52,210592-3,281

52,210－－Operational Loan Investments (Value-Add)

1,324

1,324

1,324

1,324

－

－

1,830

+505

－

Operational Securities Investments

1,433

1,960

30

72

－

+41

72

－

－

Value-Add

84

658

－

－

－

－

－

－

－

Clean Energy

512

511

－

45

－

+45

45

－

－

Other

837

789

30

26

－

-4

26

－

－

167,805

170,799

170,243

184,351

3,014+14,108

218,756+33,605

－

－

996

－

－

－

－

－

－

－

45,65445,29952,08752,746－+658

58,001+5,255

－

30

－

－

－

－

－

－

－

－

Value-Add

25,92025,85832,292

31,996－-296

37,252+5,255－

Clean Energy

19,62019,356

19,716

20,675－+958

20,675－－

Other1

82

84

78

74

－

-4

74

－

－

Intangible Assets

1,956

1,391

1,509

1,884

－

+375

1,884

－

－

Securities Investments

1,426

1,416

1,407

1,769

－

+362

1,769

－

+368

Other

6,178

6,423

4,637

6,342

16

+1,705

6,342

－

－

273,459

275,154286,732

300,703

3,623+13,971

340,869+39,365+368

Real Estate for Sale (Value-Add)
Power Plants for Sale (Clean Energy)
Fixed Assets
Asset Management

Total Assets

1 Other refers to company assets that are not allocated to the three business segments
2 Unrealized Gains on Listed Securities shows gains versus acquisition cost

© 2018 Ichigo Inc. All rights reserved.

30

Consolidated Balance Sheet: Segment Breakdown(JPY million)
Cash andCash
Equivalents

Operational
Loan
Investments

Operational
Securities
Investments

Real Estatefor Sale

－

－

－

－

－

Value-Add

24,312

1,324－

184,351

Clean Energy

1,792

－

45

21

－

Company-Wide Assets

26,084

Total

52,210

Segment

Asset Management

Other© 2018 Ichigo Inc. All rights reserved.

Power
Plantsfor Sale

Fixed
AssetsIntangible
AssetsSecurities
Investments

Other
Assets

－

929

－

974

1,904

－

31,996

626

－

2,233

244,845－－

20,675

238

－

1,770

24,523

26

－

－

－

－

1,769

-72

1,744

－

－

－

－

74

90

－

1,435

27,685

1,324

72

184,351－

52,746

1,884

1,769

6,342

300,703

Total Assets

31Consolidated P&L: Gross Profit Segment Breakdown(JPY million)

Revenue
Segment

Gross Profit

FY17/2 Q3Cumulative (9M)

FY18/2 Q3Cumulative (9M)

3,556

1,911

Asset Management Fees

1,596

Other
Value-Add

YOY(Gross Profit)

FY17/2 Q3Cumulative (9M)

FY18/2 Q3Cumulative (9M)

-1,645

2,178

1,906

-272

-12.5%

1,545

-50

1,589

1,543

-45

-2.9%

1,959

365

-1,595

588

362

-226

-38.4%

88,481

39,894-48,587

17,797

16,310-1,486-8.4%

Rental Income

10,99011,752

+762

7,239

7,283

+44

+0.6%

Value-Add Asset Sales

77,491

28,142-49,349

10,557

9,026-1,530-14.5%

1,783

2,843

+1,060

908

1,128

+220

+24.3%

Other

14

106

+91

-93

-13

+80

－

Total

93,83544,755-49,080

20,79019,332-1,457-7.0%

Asset Management

Clean Energy© 2018 Ichigo Inc. All rights reserved.

ChangeChange32

Consolidated P&L: Results vs. Forecast(JPY million)

FY18/2 Q3 (9M)
Segment

Revenuevs. FullYear
Forecast

Gross
ProfitFY18/2 Full-Year Forecast (12M)

vs. FullYear
Forecast

Operating
Profitvs. FullYear
Forecast

Revenue

Gross
ProfitOperating
Profit

1,911

76.9%

1,906

77.6%

1,592

96.1%

2,485

2,457

1,656

1,545

66.8%

1,543

67.3%

－

－

2,315

2,293

－

365

215.0%

362

221.2%

－

－

170

164

－

39,89457.2%

16,31073.0%

13,44873.5%

69,71922,33618,304

Rental Income

11,752

71.8%

7,283

68.5%

－

－

16,37910,625－

Value-Add Asset Sales

28,142

52.8%

9,026

77.1%

－

－

53,34011,711

－

2,843

88.4%

1,128

100.6%

748

120.6%

3,216

1,122

620

Other

106

135.9%

-13

－

-60

－

78

78

-52

Total

44,755

59.3%

19,332

74.4%

15,73076.6%

75,50025,994

20,529

－

－

－

－

-14

－

－

－

70

44,755

59.3%

19,332

74.4%

15,71576.3%

75,50025,99420,600Asset Management
Asset Management Fees
Other
Value-Add

Clean Energy

Adjustm ent (including
offsets of inter-segm ent
transactions)Total© 2018 Ichigo Inc. All rights reserved.

33

Asset Management AUM Detail
Ichigo Office(8975)

FY13/2(12M)

FY14/2(12M)

FY15/2(12M)

FY16/2(12M)

FY17/2(12M)

FY18/2 Q3(9M)

JPY 104.3B

JPY 120.5B

JPY 123.8B

JPY 165.1B

JPY 194.5B

JPY 196.9B

0.63%

0.65%

0.65%

0.64%

0.69%

0.69%

JPY 663M

JPY 733M

JPY 759M

JPY 1,016M

JPY 1,291M

JPY 1,026M

AUM (Fiscal Year End)

–

–

–

JPY 20.4B

JPY 47.6B

JPY 50.9B

AM Fee % (Average)

–

–

–

0.59%

0.90%

0.89%

AM Fee Gross Profit (Actual)

–

–

–

JPY 30M

JPY 287M

JPY 338M

AUM (Fiscal Year End)

–

–

–

–

JPY 10.0B

JPY 11.4B

AM Fee % (Average)

–

–

–

–

0.21%

0.33%

AM Fee Gross Profit (Actual)

–

–

–

–

JPY 5MJPY 29M

JPY 169.7B

JPY 63.3B

JPY 21.5B

JPY 15.4B

JPY 6.4B

JPY 6.4B

0.15%

0.26%

0.37%

0.32%

0.25%

0.16%

JPY 285M

JPY 257M

JPY 114M

JPY 60M

JPY 27M

JPY 7MJPY 274.1B

JPY 183.8B

JPY 145.3B

JPY 200.9B

JPY 258.6B

JPY 265.8B

0.33%

0.47%

0.59%

0.61%

0.68%

0.70%

JPY 948M

JPY 989M

JPY 872M

JPY 1,106M

JPY 1,611M

JPY 1,401M

AUM (Fiscal Year End)AM Fee % (Average)
AM Fee Gross Profit (Actual)

Ichigo Hotel(3463)

Ichigo Green(9282)

Private Equity Real
Estate Funds(excluding
consolidated funds)

AUM (Fiscal Year End)AM Fee % (Average)
AM Fee Gross Profit (Actual)

Total(excluding
consolidated funds)

AUM (Fiscal Year End)AM Fee % (Average)
AM Fee Gross Profit (Actual)

1

1,2

1

1

1,2

1

1

1 Annualized
2 In addition to the above AM fee, operator fees received from Ichigo Green (0.4% p.a. of AUM) are recorded separately in the Clean Energy segment.

© 2018 Ichigo Inc. All rights reserved.

34

Asset Management – Ichigo REITs and YieldCo

REIT/YieldCo

Ichigo Office(8975)

Ichigo Hotel(3463)

Listing Date

Characteristics

Forecast Dividend Yield(Based on Closing Share Price on
December 29, 2017)85 assets JPY 196.9B

・Specialized Office REIT focused on midsize offices with return stability and upside
potential

5.0%

October 12, 2005
・15 Consecutive periods of dividend
growth, No.1 among all J-REITs

21 hotels JPY 50.9B

・Specialized Hotel REIT focused on driving
shareholder value via income stability andearnings growth

5.3%

November 30, 2015
・Portfolio growth via Ichigo'ssponsor support

・Offers investors an opportunity to invest inJapan's rapidly expanding green
infrastructure asset class
Ichigo Green(9282)

Portfolio

December 1, 2016

・Solar YieldCo focused on driving shareholder
value via income stability and earnings growth

15 power plants JPY 11.4B(29.43MW)

5.7%

・The second TSE-listed YieldCo* Forecast dividend yield is based on the most recent dividend forecast. Ichigo Green includes Dividend in Excess of Earnings (DEE) generated from operating cashflow.
© 2018 Ichigo Inc. All rights reserved.

35

Ichigo-Owned Real Estate Portfolio
Asset Location

Asset Type
Logistics
2%

GroundLease
1%(JPY billion)

Other
2%

Mixed
5%

Nagoya
2%
Other
11%

Sendai
3%

Hotel
28%

Residence
16%

Osaka
5%

Tokyo
51%

Kanto
13%
Retail19%

Office
27%

Tokyo
107.3

Fukuoka
15%

Kanto
26.8

Asset Size
Osaka
9.6

JPY 5B-10B
7%≧JPY 10B
13%

Sendai
6.1

Nagoya3.4

Fukuoka
31.1

Other
25.0

<JPY 1B21%

JPY 1B-5B
59%

Total Ichigo-Owned Assets: JPY 209.3B
Including Ichigo-Managed AUM: JPY 480.8B* Acquisition price basis.
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Book Value: JPY 211.8B© 2018 Ichigo Inc. All rights reserved.

36

Value-Add Asset Breakdown (1)162 Assets, JPY 209.3B, Forecast NOI JPY 12.8B (6.1% Yield)
No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/YearJPY 74M

Ichigo Equity
Investment

JPY 1,900M

Forecast Equity
Multiple 1

Forecast
IRR2

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

45 years

JPY 2B-3B

2005/06––

2

RetailReal Estate for Sale

Minato-ku, Tokyo

48 years

JPY 2B-3B

2005/10

JPY 147M

JPY 1,033M

–

–

3

RetailReal Estate for Sale

Minato-ku, Tokyo

32 years≧JPY 3B

2006/03

JPY 191M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

12 years

JPY 1B-2B

2006/09

JPY 73M

JPY 1,157M

–

–

5

OfficeReal Estate for Sale

Sendai9 years≧JPY 3B

2006/10

JPY 275M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka

9 years≧JPY 3B

2006/12JPY 391M

JPY 1,339M

–

–

9

Residence

Real Estate for Sale

Ota-ku, Tokyo

12 years<JPY 1B

2007/04

JPY 56M

JPY 403M––

10

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

37 years<JPY 1B

2007/06

JPY 85M

JPY 240M––

11

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

36 years<JPY 1B

2007/06

JPY 123M

JPY 233M––

12

RetailReal Estate for Sale

Chiyoda-ku, Tokyo

54 years

JPY 2B-3B

2007/06

JPY 252M

JPY 554M––

14

Ground Lease

Real Estate for Sale

Atsugi, Kanagawa－

JPY 1B-2B

2011/06

JPY 176M

JPY 147M––

15

Mixed (Office/Retail)Fixed Asset

Hiratsuka, Kanagawa

22 years<JPY 1B

2012/02

JPY 86M

JPY 172M––

16

RetailReal Estate for Sale

Yokohama

4 years<JPY 1B

2012/10

JPY 33M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo

6 years≧JPY 3B

2013/03

JPY 230M

JPY 340M––

18

RetailReal Estate for Sale

Shibuya-ku, Tokyo

31 years<JPY 1B

2013/05

JPY 46M

JPY 154M

–

–

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

37

Value-Add Asset Breakdown (2)Classification

Location

Building
Age

Acquisition
Date

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

No.

Asset Type19

Mixed (Office/Retail)Fixed Asset

Chofu, Tokyo

32 years

JPY 1B-2B

2013/06

JPY 122M

JPY 310M––

21

Residence

Real Estate for Sale

Minato-ku, Tokyo

2 years<JPY 1B

2013/06

JPY 45M

JPY 203M––

24

OfficeReal Estate for Sale

Chiyoda-ku, Tokyo

26 years

JPY 1B-2B

2013/08

JPY 86M

JPY 520M––

26

RetailFixed AssetKobe

17 years

JPY 1B-2B

2013/09

JPY 149M

JPY 616M––

10 years

JPY 1B-2B

2013/11

JPY 62M

JPY 92M––－

JPY 1B-2B

2014/03

JPY 115M

JPY 273M

7.52X

44.5%

Acquisition Price

Expected NOI/Year*

27

RetailFixed Asset

Tokorozawa, Saitama

29

Ground Lease

Real Estate for Sale

Fujisawa, Kanagawa

30

Mixed (Office/Retail)Real Estate for Sale

Shibuya-ku, Tokyo

33 years<JPY 1B

2014/03

JPY 39M

JPY 108M

6.95X

26.0%

31

OfficeReal Estate for Sale

Shibuya-ku, Tokyo

7 years

JPY 1B-2B

2014/04

JPY 61M

JPY 1,090M

1.25X

12.0%

32

RetailFixed Asset

Fukuoka

11 years

JPY 1B-2B

2014/04

JPY 60M

JPY 279M––

34

OfficeReal Estate for Sale

Shinagawa-ku, Tokyo

24 years

JPY 1B-2B

2014/05

JPY 133M

JPY 515M

2.27X

23.4%

35

Mixed (Office/Retail)Real Estate for Sale

Minato-ku, Tokyo

8 years

JPY 2B-3B

2014/05

JPY 162M

JPY 434M

3.08X

15.2%

37

RetailReal Estate for Sale

Minato-ku, Tokyo

45 years<JPY 1B

2014/07

JPY 39M

JPY 77M

10.47X

23.9%

38

Mixed (Office/Retail)Real Estate for Sale

Shinjuku-ku, Tokyo

42 years≧JPY 3B

2014/07

JPY 188M

JPY 645M

3.32X

21.1%

39

RetailFixed Asset

Fukuoka

13 years<JPY 1B

2014/07

JPY 47M

JPY 213M––

40

RetailFixed Asset

Fukuoka

32 years<JPY 1B

2014/09

JPY 52M

JPY 252M

–

–

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

38

Value-Add Asset Breakdown (3)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple1

Forecast
IRR2

41

Hotel

Real Estate for Sale

Utsunomiya, Tochigi

30 years

JPY 1B-2B

2014/09

JPY 144M

JPY 400M

1.97X

28.3%

42

RetailReal Estate for Sale

Fukuoka

17 years<JPY 1B

2014/09

JPY 54M

JPY 177M

5.54X

26.2%

43

RetailReal Estate for SaleOsaka

15 years

JPY 1B-2B

2014/09

JPY 102M

JPY 301M

4.64X

24.3%

44

RetailReal Estate for Sale

Machida, Tokyo

31 years<JPY 1B

2014/10

JPY 51M

JPY 82M

11.34X

43.9%

45

RetailReal Estate for Sale

Fukuoka

14 years

JPY 1B-2B

2014/11

JPY 76M

JPY 135M

10.70X

33.8%

46

Residence

Real Estate for Sale

Chiyoda-ku, Tokyo

14 years

JPY 2B-3B

2014/12JPY 116M

JPY 332M

2.18X

29.2%

47

Residence

Real Estate for Sale

Koto-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 90M

JPY 270M

1.56X

14.6%

48

Residence

Real Estate for Sale

Minato-ku, Tokyo

13 years

JPY 1B-2B

2014/12JPY 79M

JPY 238M

1.67X

16.6%

49

Residence

Real Estate for Sale

Minato-ku, Tokyo

12 years

JPY 1B-2B

2014/12JPY 64M

JPY 185M

1.63X

15.7%

50

Residence

Real Estate for Sale

Sumida-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 60M

JPY 163M

1.55X

15.2%

51

Residence

Real Estate for Sale

Ota-ku, Tokyo

15 years<JPY 1B

2014/12JPY 57M

JPY 150M

2.21X

35.7%

52

Residence

Real Estate for SaleOsaka

9 years<JPY 1B

2014/12JPY 58M

JPY 148M

1.86X

24.8%

53

Residence

Real Estate for Sale

Chuo-ku, Tokyo

14 years<JPY 1B

2014/12

JPY 40M

JPY 99M

2.96X

44.4%

55

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

12 years<JPY 1B

2014/12JPY 28M

JPY 82M

2.05X

25.8%

56

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 85M

JPY 270M

2.00X

23.2%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

39

Value-Add Asset Breakdown (4)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

57

Residence

Real Estate for Sale

Minato-ku, Tokyo

13 years

JPY 1B-2B

2014/12JPY 57M

JPY 186M

1.90X

21.0%

58

Residence

Real Estate for Sale

Shibuya-ku, Tokyo

12 years<JPY 1B

2014/12

JPY 49M

JPY 157M

1.89X

21.5%

59

Residence

Real Estate for Sale

Setagaya-ku, Tokyo

12 years<JPY 1B

2014/12

JPY 42M

JPY 117M

2.11X

27.2%

60

Residence

Real Estate for Sale

Shinjuku-ku, Tokyo

11 years<JPY 1B

2014/12JPY 19M

JPY 55M

1.80X

21.1%

61

Mixed (Office/Retail)Operational Loan

Shinjuku-ku, Tokyo

54 years

JPY 1B-2B

2014/12JPY 118M

JPY 57M

15.26X

51.7%

62

RetailReal Estate for Sale

Fukuoka

13 years<JPY 1B

2014/12

JPY 43M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

11 years

JPY 1B-2B

2014/12JPY 83M

JPY 129M

3.98X

23.8%

64

RetailReal Estate for Sale

Shinagawa-ku, Tokyo

63 years<JPY 1B

2015/01

JPY 17M

–

–

–

66

RetailReal Estate for Sale

Sendai13 years<JPY 1B

2015/02

JPY 49M

JPY 8M

42.58X

198.9%

68

RetailReal Estate for Sale

Shibuya-ku, Tokyo

16 years<JPY 1B

2015/04

JPY 39M

JPY 79M

5.65X

27.9%

69

Hotel

Real Estate for SaleOsaka

15 years

JPY 2B-3B

2015/05

JPY 194M

JPY 633M

1.56X

58.3%

70

Hotel

Real Estate for Sale

Aomori10 years<JPY 1B

2015/06

JPY 51M

JPY 113M

2.10X

20.2%

71

RetailReal Estate for Sale

Fujisawa, Kanagawa

2 years

JPY 1B-2B

2015/07

JPY 97M

JPY 126M

6.80X

37.3%

89

OfficeReal Estate for Sale

Musashino, Tokyo

28 years≧JPY 3B

2015/07

JPY 128M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

10 years

JPY 1B-2B

2015/07

JPY 91M

JPY 353M

1.82X

17.7%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

40

Value-Add Asset Breakdown (5)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

93

OfficeReal Estate for Sale

Fukuoka

15 years

JPY 1B-2B

2015/07

JPY 90M

JPY 358M

1.92X

18.8%

98

Hotel

Real Estate for SaleNaha, Okinawa

29 years

JPY 2B-3B

2015/11

JPY 232M

JPY 640M

1.91X

25.9%

105

Hotel

Real Estate for Sale

Kumamoto

33 years

JPY 1B-2B

2015/12JPY 142M

JPY 453M

1.61X

61.2%

109

Hotel

Real Estate for Sale

Nagoya, Aichi

9 years

JPY 2B-3B

2016/03

JPY 124M

JPY 525M

1.84X

37.7%

110

Hotel

Real Estate for Sale

Fukuoka

32 years≧JPY 3B

2016/03

JPY 273M

JPY 905M

2.05X

104.5%

111

Hotel

Real Estate for Sale

Yokohama

33 years

JPY 2B-3B

2016/03

JPY 192M

JPY 228M

5.32X

23.3%

112

Hotel

Real Estate for Sale

Yokohama

30 years≧JPY 3B

2016/03

JPY 249M

JPY 354M

10.64X

36.2%

113

Hotel

Real Estate for Sale

Yokohama

30 years≧JPY 3B

2016/03

JPY 223M

JPY 344M

5.84X

25.5%

114

Hotel

Real Estate for Sale

Fukuoka

27 years≧JPY 3B

2016/04

JPY 177M

JPY 550M

1.73X

72.6%

115

Hotel

Real Estate for Sale

Osaka

10 years

JPY 2B-3B

2016/04

JPY 117M

JPY 274M

2.96X

30.7%

116

RetailReal Estate for Sale

Sendai29 years<JPY 1B

2016/04

JPY 48M

JPY 86M

7.50X

28.4%

118

RetailReal Estate for Sale

Nagoya20 years

JPY 1B-2B

2016/06

JPY 84M

JPY 102M

7.71X

32.6%

119

RetailReal Estate for Sale

Shibuya-ku, Tokyo

30 years<JPY 1B

2016/06

JPY 31M

JPY 136M

3.91X

17.4%

120

Hotel

Real Estate for Sale

Shinjuku-ku, Tokyo

38 years≧JPY 3B

2016/09

JPY 288M

JPY 349M

2.70X

39.9%

121

OfficeReal Estate for Sale

Minato-ku, Tokyo

16 years≧JPY 3B

2016/10

JPY 1,352M

JPY 3,450M

2.87X

43.5%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

41

Value-Add Asset Breakdown (6)No.

Asset TypeClassification

Location

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

122

Hotel

Real Estate for Sale

Shima, Mie

19 years<JPY 1B

2017/01

JPY 47M

JPY 73M

5.49X

43.1%

123

Hotel

Real Estate for Sale

Shibuya-ku, Tokyo

22 years≧JPY 3B

2016/12JPY 152M

JPY 1,123M

1.25X

25.4%

124

Hotel

Real Estate for Sale

Asahikawa, Hokkaido

28 years<JPY 1B

2016/12JPY 74M

JPY 593M

1.48X

48.5%

125

Hotel

Real Estate for Sale

Kurashiki, Okayama

24 years

JPY 1B-2B

2016/12JPY 93M

JPY 484M

1.53X

53.0%

126

Hotel

Real Estate for Sale

Fukuoka

27 years

JPY 1B-2B

2016/12JPY 67M

JPY 505M

1.25X

25.4%

127

Hotel

Real Estate for Sale

Ishigaki, Okinawa

14 years

JPY 2B-3B

2017/02

JPY 162M

JPY 544M

1.80X

80.2%

128

Hotel

Real Estate for Sale

Mito, Ibaraki

24 years

JPY 1B-2B

2017/02

JPY 97M

JPY 602M

1.47X

47.0%

1
2

Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

42

Value-Add Asset Breakdown (7)No.

Asset TypeClassification

Location

130

RetailReal Estate for Sale

Taito-ku, Tokyo

131

Hotel

Real Estate for Sale

Fukuoka132

Residence

Real Estate for Sale

Minato-ku, Tokyo

133

Residence

Real Estate for Sale

Minato-ku, Tokyo

134

Residence

Real Estate for Sale

Chuo-ku, Tokyo

135

Logistics

Real Estate for Sale

Narashino, Chiba

136

Logistics

Real Estate for Sale

Narashino, Chiba

138

Hotel

Real Estate for Sale

Ogaki, Gifu

139

OfficeReal Estate for Sale

140

Hotel

141
142
143

Building
Age

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

24 years

JPY 1B-2B

2017/04

JPY 99M

JPY 297M

4.42X

21.1%

New

JPY 1B-2B

2017/04

JPY 101M

JPY 236M

2.07X

49.9%

14 years<JPY 1B

2017/04

JPY 51M

JPY 190M

2.66X

38.3%

15 years<JPY 1B

2017/04

JPY 46M

JPY 152M

3.85X

32.7%

15 years

JPY 1B-2B

2017/04

JPY 58M

JPY 197M

2.88X

26.2%

26 years

JPY 1B-2B

2017/04

JPY 114M

JPY 188M

6.18X

25.8%

26 years

JPY 1B-2B

2017/04

JPY 153M

JPY 203M

8.75X

32.8%

28 years

JPY 1B-2B

2017/05

JPY 137M–––

Shibuya-ku, Tokyo

1 year<JPY 1B

2017/05

JPY 28M

JPY 600M

1.15X

15.1%

Real Estate for Sale

Minato-ku, Tokyo

New≧JPY 3B

2017/06

JPY 228M

JPY 597M

2.27X

54.7%

Hotel

Real Estate for Sale

Osaka

New

JPY 1B-2B

2017/11

JPY 83M

JPY 334M

1.27X

27.4%

Hotel

Real Estate for Sale

Kanazawa

New

JPY 1B-2B

2017/11

JPY 117M

JPY 372M

2.12X

54.2%

RetailReal Estate for Sale

Fukuoka

33 years

JPY 1B-2B

2017/09

JPY 105M

JPY 223M

3.78X

19.9%

JPY 11,417M

JPY 38,063M

2.76X

35.2%

Sub-Total

95 Assets

JPY 188,534M
JPY 190,640M (Book Value)* Assets acquired in the current FY18/2 period12Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

43

Value-Add Asset Breakdown (8)Asset TypeNo.

No. of Assets

Acquisition Price

Acquisition
Date

Expected NOI/Year

Ichigo Equity
Investment

Forecast Equity
Multiple 1

Forecast
IRR2

A

Ichigo Owners (Office & Residence)

34 Assets

JPY 13,950M

FY18/2

JPY 843M

–

–

–

B

Centro (Primarily Office & Residence)

12 Assets

JPY 5,124M

FY18/2

JPY 388M

–

–

–

C

Self-Storage

21 Assets

JPY 1,730M

FY18/2

JPY 179M–––

JPY 12,829M

JPY 38,063M

2.76X

35.2%

Total

162 Assets

JPY 209,340M
JPY 211,833M (Book Value)

Assets acquired in FY18/2 Q1 (3M) Total 11 Assets

JPY 12,392M

JPY 833M

JPY 3,126M

2.65X

26.9%

Assets acquired in FY18/2 Q2 (3M) Total 38 Assets

JPY 12,159M

JPY 836M

JPY 597M

2.27X

54.7%

Assets acquired in FY18/2 Q3 (3M) Total 35 Assets

JPY 18,065M

JPY 1,109M

JPY 929M

2.21X

33.9%

Assets acquired in FY18/2 Q3 (9M) Total 84 Assets

JPY 42,617M

JPY 2,779M

JPY 4,653M

2.52X

30.4%

Assets acquired and sold in FY18/2 Total 4 Assets

JPY 1,510M

JPY 46M

–

1.13X

13.5%

* Assets acquired in the current FY18/2 period12Forecast Equity Multiple is based on the business plan of each asset and is the forecast sum of rental income and profits on sale divided by Ichigo Investment.
Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR reflect assets
acquired from FY15/2 onward and exclude Fixed Assets.

© 2018 Ichigo Inc. All rights reserved.

44

Reference: Japan’s Feed-in-Tariff (FIT)
What is a FIT?
‒ A policy mechanism designed to accelerate the deployment of renewableenergy such as solar and wind, guaranteeing a long-term sale price forelectricity (in Japan, 20 years) at a fixed price.
‒ Japan’s FIT is updated every year.
Solar Power FIT

Contract Date

FIT

Guarantee
PeriodContract Date

FIT

Guarantee
PeriodFY2012

JPY 4020 years

FY2015 (7/1～3/31)

JPY 2720 years

FY2013

JPY 3620 years

FY2016

JPY 2420 years

FY2014

JPY 3220 years

FY2017

JPY 21*20 years

FY2015 (4/1～6/30)

JPY 2920 years

Pre-consumption tax FIT for power plants with output of >10kW
Source: METI, Agency for Natural Resources and Energy© 2018 Ichigo Inc. All rights reserved.

* FIT for >2MW non-residential solar power production determined via auction process45

Solar Power Plant Portfolio (1)Ichigo (In-Development)

Ichigo (Operating)Hokkaido

Panel
Output
(MW)
1.32

Kinki

2.94

JPY 24

Feb 2018

Ichigo Kasaoka Iwanoike

Chugoku2.61

JPY 24

Mar 2018

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

JPY 40Aug 2013

Ichigo Memuro Nishishikari

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

JPY 40Mar 2014

Ichigo Tsu

Ichigo Yubetsu Barou

Hokkaido

0.80

JPY 40

Apr 2014

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 40Dec 2017

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.90

JPY 36

Mar 2018

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Toki Tsurusatocho Kakino

Chubu

1.26

JPY 24

Mar 2018

Ichigo Toyokoro Sasadamachi

Hokkaido

0.60

JPY 40

Oct 2014

Ichigo Itoshima Ihara

Kyushu1.29

JPY 36

Jul 2018

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Oct 2019

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015

Ichigo Hitachi Omiya

Kanto

2.96

JPY 24

Nov 2019

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Takashima Kutsuki

Kansai

3.75

JPY 32

Nov 2019

Kyushu2.64

JPY 32

Nov 2021

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016

Ichigo Miyakonojo Takazakicho Tsumagirishima

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Total (In-Development)

10 Plants 33.69MW

Ichigo Kijo Takajo

Kyushu0.89

JPY 40

May 2016

Total (Operating & In-Development)

29 Plants 104.75MW

Ichigo Toki Oroshicho

Chubu

1.39

JPY 36

Jun 2016

Ichigo Toride Shimotakai Kita

Kanto

1.03

JPY 32

Jul 2016

Ichigo Toride Shimotakai Minami

Kanto

0.54

JPY 32

Jul 2016

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

JPY 36

Oct 2016

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Total (Operating)Total
134.18MW

19 Plants 71.01MW

Ichigo Green (9282)

Ichigo Kiryu Okuzawa

Kanto

Panel
Output(MW)
1.33

Ichigo Motomombetsu

Hokkaido

1.40

JPY 40Feb 2014

Ichigo Muroran Hatchodaira

Hokkaido

1.24

JPY 40Mar 2014

Ichigo Engaru Kiyokawa

Hokkaido

1.12

JPY 40Mar 2014

Ichigo Iyo Nakayamacho Izubuchi

Shikoku

1.23

JPY 40

Apr 2014

Ichigo Nakashibetsu Midorigaoka

Hokkaido

1.93

JPY 40

Nov 2014

Ichigo Abira Toasa

Hokkaido

1.16

JPY 40Dec 2014

Ichigo Toyokoro

Hokkaido

1.02

JPY 40Dec 2014

Ichigo Nago Futami

Okinawa

8.44

JPY 40Feb 2015

Ichigo Engaru Higashimachi

Hokkaido

1.24

JPY 40Feb 2015

Ichigo Takamatsu Kokubunjicho Nii

Shikoku

2.43

JPY 36

Jun 2015

Ichigo Miyakonojo Yasuhisacho

Kyushu1.44

JPY 36

Jul 2015

Ichigo Toyokawa Mitocho Sawakihama

Chubu

1.80

JPY 32

Sep 2015

Ichigo Yamaguchi Aionishi

Chugoku

1.24

JPY 40Dec 2015

Ichigo Yamaguchi Sayama

Chugoku

2.35

JPY 36

Apr 2016

Solar Power Plant

Total© 2018 Ichigo Inc. All rights reserved.

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 40

Sep 2013

15 Plants 29.43MW

46

Solar Power Plant Portfolio (2)Serving Local Communities and the Environment

Ichigo Engaru Higashimachi(1.24MW)

Total Operating and In-Development
Ichigo Solar Power Plants

Ichigo Motomombetsu(1.40MW)

Ichigo Engaru Kiyokawa(1.12MW)

44 Plants (134MW)

Ichigo Abira Toasa(1.16MW)

Ichigo Yubetsu Barou(0.80MW)

Currently Operating

Ichigo Muroran Hatchodaira(1.24MW)34 Plants (100MW)

Ichigo Nakashibetsu
Midorigaoka(1.93MW)

Ichigo Hamanaka Bokujo Tsurunokotai(2.31MW)

Ichigo Betsukai Kawakamicho(0.88MW)

Ichigo Hamanaka Bokujo Kajibayashi(2.31MW)
Ichigo Higashi-Hiroshima
Saijocho Taguchi (2.72MW)

Ichigo Kure Yasuuracho Nakahata(2.90MW) Online in 2018/3

Ichigo Sera Tsukuchi(2.54MW)

Ichigo Nago Futami(8.44MW)
Ichigo Yamaguchi Aionishi(1.24MW)
Ichigo Yamaguchi Sayama(2.35MW )Ichigo Itoshima Ihara(1.29MW) Online in 2018/7

Ichigo Akkeshi Shirahama(0.80MW)

Ichigo Sera Aomizu(2.87MW)

Ichigo Memuro Nishishikari(1.32MW) Online in 2018/2

Ichigo Maebashi Naegashima(0.67MW)

Ichigo Toyokoro
Sasadamachi (0.60MW)

Ichigo Fuchu Jogecho Yano
(0.99MW)

Ichigo Toyokoro(1.02MW)

Ichigo Minakami Aramaki(12.02MW) Online in 2019/10

Ichigo Yonago Izumi(2.61MW)

Ichigo Showamura Ogose(43.34MW)

Ichigo Kasaoka Iwanoike(2.61MW) Online in 2018/3

Ichigo Kiryu Okuzawa(1.33MW)

Ichigo Kasaoka Takumicho(1.11MW)

Ichigo Hitachi Omiya(2.96MW) Online in 2019/11
Ichigo Toride Shimotakai Kita
(1.03MW)
Ichigo Toride Shimotakai Minami(0.54MW)

Ichigo Kijo Takajo(0.89MW)

Ichigo Toki Tsurusatocho Kakino(1.26MW) Online in 2018/3

Ichigo Miyakonojo Takazakicho
Tsumagirishima (2.64MW)
Online in 2021/11
Ichigo Miyakonojo Yasuhisacho(1.44MW)© 2018 Ichigo Inc. All rights reserved.

Ichigo Toki Oroshicho(1.39MW)
Ichigo Tokushima
Higashi-Okinosu (2.52MW)

Ichigo Toyokawa Mitocho Sawakihama(1.80MW)

Ichigo Takamatsu Kokubunjicho
Nii (2.43MW)

Ichigo Takashima Kutsuki(3.75MW) Online in 2019/11

Ichigo Iyo Nakayamacho Izubuchi(1.23MW)

Ichigo Tsu(2.94MW) Online in 2018/3

IchigoIchigo Green (9282)
47

Ichigo-Owned Solar Power Plant Details
Total Operating and In-Development
Ichigo-Owned Solar Power Plants: 29 Plants (104.75MW) By Customer(Electric Power Utility Co)
Hokkaido4%

Kansai4%

 By Feed-In-Tariff

Shikoku
2%

Tohoku4%
Kyushu
5%
Chubu
5%

TEPCO
58%

JPY 24
JPY 40
9%
14%
JPY 32
14%

JPY 3663%

 By Solar Intensity

 By Output>10MW <2MW
(In-Development) 10%
12%
2-10MW(In-Development)
17%

2-10MW
18%

>10MW
41％

© 2018 Ichigo Inc. All rights reserved.

Starting
operation after+6 months
20%>1 yearin operation
22%

0.5-1 year inoperation
3%

Starting operation
wihtin 6 months 10%

Chugoku18%<2MW(In-Development)2%

 By Operating Timeline

B(In-Development)
12%

A(In-Development)
14%<6 months inoperation
45%

C(In-Development)
5%

A
46%

Rank
A
B
C
D

Solar Intensity≧4.00≧3.75, <4.00≧3.50, <3.75<3.50

Unit: kWh/m² per day

C 7%
B
16%

48

Consolidated Balance Sheet: Assets(JPY million)
FY14/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Power plants for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets© 2018 Ichigo Inc. All rights reserved.

FY15/2

FY16/2

FY17/2

FY18/2 H1

FY18/2 Q3

vs. FY18/2 H1

24,991
451
1,100
3,583
54,084
–
576
1,384
-410
85,761

19,383
519
2,330
1,965
109,769
–
1,200
2,657
-484
137,342

28,779
691
1,324
1,784
172,833
–
1,766
3,966
-458
210,687

47,678
913
1,324
1,433
167,805
–
516
3,125
-453
222,344

55,491790
1,324
30
170,243
－
491
1,365
-30
229,70752,210
1,396
1,324
72
184,351
－
491
2,405
-30
242,223-3,281+606－+42+14,108－－+1,040－+12,516

4,901
2,044
12,433
1,922
21,3004,021
9,168
12,142989
26,321

3,830
12,256
12,192
3,264
31,546

7,375
7,246
18,627
12,40245,6549,614
6,753
22,80812,90952,087

9,637
17,67722,482
2,946
52,746+23+10,924-326-9,963
+659

2,221
392
71
2,686

2,082
392
27
2,502

1,942
392
38
2,373

1,864
62
29
1,956

1,276
135
98
1,509

1,652
135
97
1,884

+376
－
-1
+375

4,278
13
222
780
-97
5,196
29,183
114,944

5,266
12
2
1,392
-95
6,578
35,402
172,744

5,486
12
39
1,736
-124
7,149
41,069251,757

1,426
10
339
1,820
-92
3,504
51,115
273,459

1,407
10
355
1,747
-91
3,428
57,024
286,732

1,769
10
278
1,882
-91
3,848
58,479300,703

+362
－
-77
+135
－
+420
+1,455+13,97149

Consolidated Balance Sheet: Liabilities & Net Assets(JPY million)
FY14/2
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Negative goodwill
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate hedges
Foreign currency translation adjustment
Total Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© 2018 Ichigo Inc. All rights reserved.

FY15/2

FY16/2

FY17/2

FY18/2 H1

FY18/2 Q3

vs. FY18/2 H1

132
950
–
–
3,123
428
96
24
14
2,817
7,588

124
1,416
48
–
3,488
786
284
30
16
3,677
9,872

80
2,188
79
–
8,161
2,975
631
53
13
3,979
18,161

110
805
611
112
5,209
6,825
1,655
62
36
4,119
19,548

－
2,436
－
112
4,726
7,160
3,082
107
150
3,799
21,575

－
2,843
－
112
4,514
8,845
2,536
474
293
4,690
24,309

－
+407
－
－
-212
+1,685
-546
+367
+143
+891
+2,734––
26,12624,178
1,213
4,770
180
44
56,51364,102–100
53,40943,004
1,402
6,391
90
96
104,494
114,367–100
94,40956,193
1,543
8,707
–
475
161,430
179,591

632
100
91,60468,319
1,147
8,038
–
624
170,467
190,015576
100
110,865
54,548
1,752
8,182
－
849
176,874
198,450576－
112,962
62,968
1,753
8,199
－
779
187,240
211,549－-100+2,097+8,420+1+17－-70+10,366+13,099

26,443
10,808
10,891-92
48,05026,49910,873
17,201-78
54,496

26,575
10,96829,454-41
66,956

26,65011,05642,840-15
80,532

26,655
11,05849,189-1,511
85,392

26,686
11,08051,260-2,99986,027

400
–
9
409
121
2,261
50,842
114,944

1,208
-36
6
1,177
198
2,505
58,377
172,744

761
-251
23
533
319
4,357
72,166
251,757

117
-365
55
-192
491
2,612
83,443
273,459

81
-382
－
-300
598
2,591
88,281
286,732

262
-387
－
-125
638
2,612
89,153
300,703+31+22+2,071-1,488
+635
－
+181
-5
－
+175
+40
+21
+872
+13,97150

Consolidated P&L(JPY million)
FY14/2(12M)
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Negative goodwill amortization
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Stock issuance cost
Mark-to-market loss on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of fixed assets
Gain on sale of securities investments
Gain on sale of shares in affiliates
Receipt of share trading proceeds
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on sale/disposal of fixed assets
Valuation loss on securities investments
Office move expenses
Impairment loss
Earthquake-related damages
Other
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© 2018 Ichigo Inc. All rights reserved.

FY15/2(12M)

FY16/2(12M)

FY18/2 Q3Cumulative(9M)

FY17/2(12M)

FY17/2 Q3Cumulative(9M)

Change(YOY)

FY18/2Full-Year
Forecast

vs.
Forecast

35,101
27,666
7,435
3,522
3,912

42,70530,53912,166
3,977
8,189

49,69929,835
19,863
4,446
15,417109,253
82,44626,806
5,025
21,78144,75525,422
19,332
3,617
15,71593,83573,045
20,7903,748
17,042-49,080-47,623-1,458-131-1,32775,500－25,994－20,600

59.3%
－
74.4%
－
76.3%

4
112
90
31
238

5
78
90
39
213

2
79
90
43
215

–
85
–
32
118

3
52
－
104
159

–
80
－
35
115

+3
-28
－
+69
+44

－
－
－
－
－

－
－
－
－
－

370
89

943
–

1,277
–

1,303
–

925
－

1,034
－

-109
－

－
－

－
－

–

–

–

38

233

－

+233

－

－

–
93
553
3,597

–
202
1,146
7,255

86
379
1,743
13,889

585
216
2,144
19,755

158
95
1,413
14,461

580
167
1,782
15,375

-422
-72
-369
-914

－
－
－
18,300

－
－
－
79.0%

7
204
–
434
33
680

–
–
–
–
57
57

–
223
–
–
–
223

–
2,466
–
–
–
2,466

－
－
1,221
－
41
1,263

–
2,427
–
–
–
2,427

–
-2,427+1,221–+41-1,164

–
–
–
–
–
–

–
–
–
–
–
–

1
–
21
307
–
13
344
3,933
-573
4,506
-19
4,526

–
–
1
–
–
91
93
7,220
343
6,876
115
6,761

–
49
9
–
–
31
89
14,022960
13,062
136
12,925

–
–
31
1,090
244
224
1,590
20,6305,436
15,194299
14,894

11
－
－
327
－
－
338
15,385
4,381
11,00357
10,945

–
–
–
–
269
–
269
17,533
4,398
13,135297
12,837

+11
–
–
+327
-269
–
+69
-2,148-17-2,132-240-1,892

–
–
–
–
–
–
–
–
–
–
–
13,500

–
–
–
–
–
–
–
–
–
–
–
81.1%

51

Consolidated Cash Flows from Operations(JPY million)
FY14/2 (12M)

FY15/2 (12M)

FY16/2 (12M)

FY17/2 (12M)

FY18/2 Q3 (9M)

Cash Flows from Operations
Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Loss (gain) on sale of securities investments
Loss (gain) on sale/disposal of fixed assets
Impairment loss
Valuation loss on securities investments
Loss (gain) on sale of shares in affiliates
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational loans receivable
Decrease (increase) in operational securities investments
Valuation loss on operational securities investments
Decrease (increase) in real estate for sale
Decrease (increase) in solar power plants for sale
Valuation loss on SPC capital contributions
Decrease (increase) in advances paid
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in security deposits received
Other
Sub-totalInterest and dividend income received
Interest expense paid
Income taxes paid and refunded

3,933
304
69
139
-90
-11
33
-116
370
-204
-6
307
–
–
97
218
1,635
114
-6,729
–
12
–
-255
-139
137
38
1,230
522
1,611
116
-378
-94

7,220
565
112
139
-90
1
65
-83
943
–
–
–
–
–
-68
-1,2301,110–-42,991–
91–-1,079
388
16
211
1,391
-407
-33,693
83
-843
161

14,022
792
174
139
-90
-3
3
-81
1,277
-223
–
–
49
–
-172
1,006
1,239
19
-63,070–11-990-1,140
535
42
317
2,380
435
-43,324
81-1,226-186

20,630
778
223
141
–
23
-3
-85
1,303
-2,466
–
1,090
–
–
-367
–
2,727
–
-6,303
7,251
16
-190
-193
204
92
-49
-667
1,304
25,46085-1,146-2,852

15,385
668
168
76
－
290
-353
-55
925
－
－
327
－
-1,221
-768
－
1,598
－
-6,834
996
－
831
18
-385
-226
－
-167
1,052
12,32755-800-3,567

Net Cash from (Used for) Operations

1,254-34,292-44,654

21,5478,015© 2018 Ichigo Inc. All rights reserved.

52

Consolidated Cash Flows from Investments & Financing(JPY million)
FY14/2 (12M)
Cash Flows from Investments
Payments into time deposits
Redemptions of time deposits
Payments for securities investments
Proceeds from sale of securities investments
Proceeds from redemptions of investments
Acquisition of property, plant, and equipment
Proceeds from sale of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Redemption of SPC capital contributions
Payments of security deposits
Acquisition of subsidiary shares resulting in change ofconsolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Payments for acquisitions of newly consolidated subsidiaries
Other
Net Cash from (Used for) Investments
Cash Flows from Financing
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Repayment of maturing bond principal to bondholders
Repayment of maturing non-recourse bond principal to bondholders
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from issuance of common shares
Proceeds from employee exercise of stock options
Payments received from minority interests
Payments to minority interests
Share buyback
Dividends paid
Dividends paid to minority interests
Net Cash from (Used for) Financing© 2018 Ichigo Inc. All rights reserved.

FY15/2 (12M)

FY16/2 (12M)

FY17/2 (12M)

FY18/2 Q3 (9M)

–
–
–
282
2
-7,150
72
-389
-5
7
-5

-325
325
-210
–
–
-10,769
–
-23
-10
–
-127

–
–
-671
296
3
-6,628
–
-21
-9
6
-37

-6,100
201
-300
6,136
–
-11,719
–
-1
-63
–
-5

-3
－
-139
－
－
-2,503
－
-75
-28
－
-36

-1,389––-93-2,635

–

–

–

–

2,096

–
-35
-8,610-1,3494-12,485–
9-7,052–
11-11,933－-16-3,342465–––－
26,777-5,388
5,675-19,030
16,387
242
–
–
–
-445
–
24,682

466
48
–
–
－
47,203-19,557
19,900-5,958
–
99
–
–
–
-543
–
41,658

771
31
–
–
－
64,866-19,192
18,150-2,772
–
153
2,000
–
–
-646
-43
63,318-1,383
532
785
-56
－
55,674-61,22130,850-15,400–
137–-2,000–-1,501
-39
6,377

1,494
-611
－
-56
-100
31,418-11,499
2,200
16,744－54－－-2,999-2,508－647

53

Appendix: Power Up 2019 Mid-Term Business Plan

© 2018 Ichigo Inc. All rights reserved.

54

Power Up 2019 Key Goals & KPIs
Key Goals
1. Drive Further Sustainable Growth in Ichigo’s Core Businesses
2. Develop New Ichigo Businesses
3. Deepen Ichigo’s Core Capabilities and Corporate Strength
Power Up 2019 KPIs (Key Performance Indicators)(JPY million)

FY16/2 (Actual)

FY17/2 (Actual)

FY18/2 (Forecast)

Operating Profit

15,417

21,781

20,60025,000+62.2%

Recurring Profit

13,88919,75518,30021,400+54.1%

6.9%

26.4%

30.0%

30.0%

–

12,925

14,894

13,50014,800+14.5%EPS

JPY 25.86

JPY 29.66

JPY 26.98

JPY 29.00+12.1%DPS

JPY 3.00

JPY 5.00

JPY 6.00

JPY 7.00+133.0%

ROE

21.0%

20.2%

15.9%

15.6%

–

Tax Rate
Net Income© 2018 Ichigo Inc. All rights reserved.

FY19/2 (Plan)

vs. FY16/2

55

Target: Top 200 Ranking within the JPX-Nikkei 400 Index
Ichigo Targeting Ranking Within the Index’s Top 200
Companies by August 2019 (the Final Year of Power Up 2019)
Note: While the JPX-Nikkei Index 400 does not provide an official ranking of its 400 constituents, it can becalculated based upon the JPY-Nikkei 400’s publically-available quantitative ranking formula, whichrank orders the top 1,000 companies from the joint set of the 1,200 highest market capitalizationand 1,200 highest value-traded Japanese companies by:(a) 3-year average ROE (40% weighting)(b) 3-year cumulative operating profit (40% weighting)(c) Market capitalization (20% weighting)© 2018 Ichigo Inc. All rights reserved.

56

Power Up 2019 Key Initiatives
Profitability• List Ichigo’s solar assets on the TSE’s new
Infrastructure Market• Support the ongoing growth of Ichigo Office
REIT (8975) and Ichigo Hotel REIT (3463)(1) Core Business
Growth• Expand the architecture and structural
engineering team to deliver real estate that is
high-function, safe, secure, andenvironmentally friendly• Spin out a dedicated leasing team to drive
tenant acquisition and rental income• Extend Ichigo’s REIT-focused asset
management business into the much larger
physical real estate market(2) New Business
Creation

Sustainability• Grow both financial stability and earnings(3) Finance as aStrategic Measure(4) High Capital
Efficiency andOrganic Growth(5) Best Place toWork• De-collateralize loans, lengthen loan
maturities, lower debt costs, get credit
ratings, and issue bonds to diversify funding
profile• ROE >15%

• Support employee health and wellness• Goal: Japan’s number one company inproviding opportunities for employees• Grow Ichigo’s hotel business synergisticallywith Ichigo Hotel REIT
• Launch one or more REtech businesses,
fusing Ichigo’s Real Estate and IT
capabilities© 2018 Ichigo Inc. All rights reserved.

(6) Global Best Practice Governance and Compliance57Adoption of Progressive Dividend & DOE Policy
 Progressive Dividend: The previous year’s dividend is the floor for the current
year’s dividend. Dividend will be raised (or kept flat) but not cut, providing
shareholders with downside dividend protection
 Newly set a minimum DOE (dividend on equity) payout ratio of >3 %‒ Dividend payout ratio policy: Dividends based on annual earnings
 More Volatile‒ DOE policy: Dividends based on shareholder equity
 More Stable The combination of a Progressive Dividend and DOE policy will significantly
increase the stability, certainty, and visibility of Ichigo’s dividend to the benefitof Ichigo’s shareholders
 Adoption of this policy also underscores Ichigo’s commitment to driving
continued organic earnings growth and dividend growth for its shareholders© 2018 Ichigo Inc. All rights reserved.

58

These materials were prepared to explain Ichigo’s businesses and are not for the purpose of soliciting investment inmarketable securities issued by Ichigo. Ichigo does not guarantee the accuracy of the figures, information, estimates, orother statements included herein, and accepts no responsibility for damages or losses arising through the use of the
figures, information, estimates, or other statements contained herein.
These materials are based upon information available as of the publication date, and may contain forward-looking
statements pertaining to Ichigo’s expectations, targets, plans, and strategies. Such forward-looking statements are notfacts, but are the result of management’s judgment based on information currently available. Actual operating results ordevelopments concerning Ichigo may differ substantially from those indicated by forward-looking statements. The
information enclosed is subject to revision without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation,
the Japanese version shall prevail.

Contact:
Ichigo (TSE First 2337)
Investor Relations
TEL: +81-3-3502-4818
E-mail： ir@ichigo.gr.jp
www.ichigo.gr.jp/en
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© 2018 Ichigo Inc. All rights reserved.

59