Sun Frontier Fudousan Co., Ltd.

Consolidated Financial Statements for theFirst Quarter of the Fiscal Year ending
March 31, 2018
Our goal is to be the real estate company
that clients love and choose over any other worldwide.
Executive Summary Results for the First Quarter of
FY ending Mar 31, 2018
Future activities

1) Business environment

1-11
12-14

2) Business policy and model

15-243) Growth strategies

25-34

Reference・Company Overview

August 9, 2017

35-38

Stock Code：8934

Summary of the Results for the First Quarter
Summary of the First Quarter for Fiscal Year Ending March 31, 2018
Our performance is developing as planned
Results

Sales andProfit Ratio（¥ million）

Year on Year
ChangeRate of
ChangeForecast of
FY2018/3

Achievement
Rate

Sales

8,909

―

(1,494)(14.4%)

50,00017.8%

Operating income

2,100

23.6%

(1,470)(41.2%)

10,50020.0%

Ordinary income

2,016

22.6%

(1,452)(41.9%)

10,00020.2%

Net income※

1,368

15.4%

(1,157)(45.8%)

7,000

19.6%

（※）Net income attributable to owners of parent

1) Performance of first quarter isdeveloping as planned• As the gain on the sale of a middleterm replanning property, sales of thesame period in FY2017/3 rose largely.
Therefore, both sales and profit of thefirst quarter of FY2018/3 decreased
but the performance is developing asplanned.
• The profit margin of replanningsegment is 30.8%, keeping a very highlevel. (FY2016/3: 27.8%, FY2017/3: 28.3%)
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2) Procurement is progressing well.

3) Operation business is developing well.

• Procurement for properties to sell in
FY2018/3 has been finished.
Procurement for properties tosell in FY2019/3 is in progress.
• Number of buildings in inventory
related to replanning business at theend of this quarter is 43. Balance of
inventory assets increased to 36.4
billion yen.

• “Hiyori Hotel Maihama” , the first hotel
under our original brand began fulloperation in July. On the major online
lodging reservation site, it ranked second
for word-of-mouth reputation in
Maihama/Urayasu/Funabashi/Makuhari
area.
• In space rental business, we newly
opened 2 branches in May and June, and2 other branches will be opened inAugust, which increased the total
number of branches to 10.

(Number of buildings at the end ofJune 2016 is 34, worth 24.8 billion yen)1

Sun Frontier Fudousan Co., Ltd.

Quarterly Transition ofSales and Gross Profit on Sales of Replanning Business
Quarterly Transition of Sales and Gross Profit in Replanning Business（¥ million）

12,00011,724

11,236

Sales
Gross Profit on Sales

10,000

8,920

8,000
6,726

6,224

6,056

6,047

6,000

4,665

4,000

2,000

1,212
391

0

1Q

798

611
111 134

2Q

3Q

1,317
840
316

4Q

1Q

2013/3期
FY
2013/3Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

3,206

2,080
1,700

3Q

2014/3期
FY
2014/33,049 3,131
2,076

1,985

4Q

1Q

2Q

1,506

1,276 1,323

3Q

4Q

2015/3期
FY
2015/3

2

2,662

1,874

1Q

1,565

1,971

2,202

1,048

733

544

2Q

5,106
3,865

3,621

3,579

6,780

6,736 6,742

2Q

3Q

FY
2016/3
2016/3期

4Q

1Q

2Q

3Q

FY
2017/32017/3期

4Q

1Q

FY
2018/3
2018/3期

Sun Frontier Fudousan Co., Ltd.

Revenue/Profit Summary（¥ million）

Apr. to June in
the FY ended
Mar 31, 2017

Apr. to June in
the FY ending
Mar 31, 2018

Sales

10,403

8,909

Real Estate Revitalization Business

9,421

7,308

Replanning Business Part

8,920

6,780

501

527

Real Estate Service Business

714

848

Operation Business

255

657

Other Business

148

225

Adjustment

(136)

(131)

Gross Profit

4,657

3,200

Real Estate Revitalization Business

4,095

2,430

Replanning Business Part

3,865

2,202

230

227

Real Estate Service Business

393

556

Operation Business

57

115

Other Business

132

171

Adjustment

(21)

(73)

1,086

1,099

Rental Building Business Part

Rental Building Business Part

Selling and general administrative
expenses
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Apr. to June in
the FY ended
Mar 31, 2017

Apr. to June in
the FY ending
Mar 31, 2018

3,570

2,100

Non-operating income

53Non-operating expenses

107

88

3,468

2,016

Extraordinary loss/income

00

Corporate income tax, etc.

942

647

2,525

1,368

Operating income

Ordinary income

Net income• Because of the gain on the sale of a middle-term
replanning property, sales of the same period in FY
2017/3 rose largely. Therefore, sales and profit of thefirst quarter of FY2018/3 both decreased。
• Gross profit ratio of the first quarter of replanningbusiness is 32.5%, exceeding the level of 29.9% of thegross profit ratio of last fiscal year.
• Businesses besides replanning business are all
expanding smoothly. Sales and gross profit ratio
increased by 1.5 times compared to the same period oflast fiscal year.

3

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet-Assets（¥ million）

Increase/Decrease(Compared to theend of Mar. 2017)

End of Mar. 2016

End of Mar. 2017

Current assets

51,36555,19561,500+6,304

Cash and deposits

15,413

16,246

12,121(4,124)Inventory assets

32,71436,186

47,139+10,953

Breakdown） RP
Hotel
Overseas, etc.

27,1895,525－

26,0397,254
2,892

36,426
7,804
2,908＋10,386＋550＋16Other current assets

3,237

2,762

2,239

(523)

2,718

8,458

8,644

+185

Property, plant, andequipment

1,919

7,288

7,352

+64

Intangible assets

278

562

541

(21)

Investments and other assets

520

608

750

+142

54,08463,654

70,144+6,490Noncurrent assets

Total assets

End of Jun. 2018

Because of the progress of the procurement of properties for replanning business,inventory assets increased by 10.9 billion yen, cash and deposits decreased by 4.1 billion yen.
As the settlement for replanning business properties which has been confirmed in a purchase
contract progressed, advance payment(deposit for purchase contract) decreased by 800 million yen.
Consumption taxes receivable increased by 300 million yen.
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

4

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet-Liabilities/Equity（¥ million）

End of Mar. 2016

End of Mar. 2017

End of Jun. 2018

Increase/Decrease(Compared to theend of Mar. 2017)

7,641

8,281

8,137

(143)

3,353

3,438

3,376

(61)

973

802

656

(146)

3,314

4,040

4,104

+63

16,298

19,686

26,358+6,672

15,055

18,62625,108+6,481

1,242

1,059

1,250

+190

23,93927,96834,496+6,52830,14435,52835,614

+85

(0)

157

33

(123)

Total net assets

30,14435,68635,648(37)

Total liabilities and capital

54,08463,654

70,144+6,490Current liabilities
Short-term loans payable, etc.

Income taxes payable, etc.
Other current liabilities

Noncurrent liabilities
Long-term loans and bonds payable
Other noncurrent liabilities

Total liabilities
Shareholders’ equity

OthersEnd of Mar. 2016

End of Mar. 2017

End of June 2017

Because of the progress of the procurement of properties for replanningbusiness, loans payable increased by 6.4 billion yen compared the end of previous
fiscal year, balance of interest-bearing debt of the end of June 2017 is 28.4 billion
yen.

55.7%

56.0%

50.8%

Retained earnings (85 million yen) increased as difference of net income (up 1.36
billion yen) and dividend payment (down 1.28 billion yen).

Transition of Equity Ratio

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5

Sun Frontier Fudousan Co., Ltd.

Performance ofReplanning business（Replanning / Hotel Development / Real Estate Securitization）
Apr. to June in
the FY ended
Mar 31, 2017

Apr. to June in
the FY ending
Mar 31, 2018

Sales

8,920

6,780

(24.0%) 10,000

Segment income (Note)

3,684

2,089

(43.3%)

Profit margin

41.3%

30.8%

(10.5%pt)

No. of procured buildings

7

16

+9

No. of sold buildings

5

6

+1

40(Note2)

49(Note2)+9(¥ million)

No. of buildings in stock
as of the end of the term

Increase/
Decrease＜Replanning Business＞
 As the gain on the sale of a middle-term replanning property, sales of the same period
in FY 2017 rose largely. Therefore, sales and profit of the first quarter of FY 2018 bothdecreased.
 As we are keeping on making ingenious efforts towards procurement, commodificationand sales, as well as direct sales to our clients, profit margin maintains at a high level
above 30%.
 The average business period for selling revitalized properties is 378 days
As for some projects in which much higher added value could be created, werearranged the period of selling out strategically (business period is above 500 days).
 Procurement progressed substantially, number of properties in inventory is 49(43are for replanning business and 6 are for hotel business.)
 Balance of inventory assets is 44.2 billion yen (36.4 billion yen is replanning business,
7.8 billion yen of which is hotel business.)※Overseas business excluded.
※Other than above, there are also 9 buildings for replanning business worth 4.7 billion yen which areprocured and contracted at the end of July.

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

6

Sales
（¥ million）

Segment Income
Profit Margin

50%

8,920
41.3%

8,000

40%
6,780
30.8%

6,000

4,000

20%

3,684
2,089

2,000

30%

0

10%

0%
FY2017/3

FY2018/3

April ～June

April ～June(Note1) “Segment income” is calculated by subtracting various expenses ofrespective businesses from gross profit on sales. Various expenses
include interest paid, sales commission and goodwill amortization, etc.
(Note2) Land procurement and development cases are also included in theinventory of revitalization business.

Sun Frontier Fudousan Co., Ltd.

Performance ofRental Building Business（Rental Building / Sub Lease）
Apr. to June in
the FY ended
Mar 31, 2017

Apr. to June in
the FY ending
Mar 31, 2018

Sales

501

527

5.3%

Segment
income230

227(1.1%)

46.0%

43.2%

(2.8%pt)(¥ million)

Profit margin

Increase/
Decrease（¥ million）

600

Sales
Segment Income
Profit Margin

100%
527

501

450

75%

＜Rental Building Business＞
 Compared to the same period of previous fiscal year, number

300

of buildings in inventory which is included in inventory assets

230

increased, but the sales and profit remained flat. The reason isthat some of the buildings which is suitable forcommodification have lots of vacant rooms.

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

7

46.0%

43.2%

50%

227

150

25%

0

0%

FY2017/3

FY2018/3

April ～June

April ～June
Sun Frontier Fudousan Co., Ltd.

Performance ofReal Estate Service Business（Sales Brokerage/ Rental Brokerage / Property Management / Building Maintenance)
Apr. to June in
the FY ended
Mar 31, 2017

Apr. to June in
the FY ending
Mar 31, 2018

Sales

714

848

18.8% 1,000

Segment income

393

556

41.3%

55.1%

65.6%

+10.5%pt(¥ million)

Profit margin

Increase/
Decrease＜Sales Brokerage Business＞
 Recovered from the same period of previous fiscal year, both sales and profit
increased.
＜Rental Brokerage Business＞
 Focusing on the 5 wards of central Tokyo, with the strength provided by rental
brokerage based on community sales, we put our efforts into “problem
resolution from the view of clients”. As a result, the synergistic effect with otherdepartments become higher and both sales and profits increased.
 In the process of commercializing the revitalized property, The planning ability
from the tenant’s perspective become a driving force for improvement inadded value and early high occupancy rate. It also contributed a lot for the
profit of whole company.
＜Property Management Business＞
 In addition to the increase of managing properties, we enforced the plan fromthe perspective of our clients and created the chance of business, both sales
and profit increased stably.
 No. of managing properties : 369 (24 more properties, 7.0%
increase compared to the same period of previous fiscalyear) Occupancy rate: 95.9% (up by 0.6%pt on a year on year basis)＜Building Maintenance Business＞
 Growth of PM’s managing property affected the growth of BM’s managing
property and spot case, both sales and profit increased.

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

8（¥ million）

Sales
Segment Income
Profit Margin

100%
848

800

80%
714

65.6%

600

556

60%

55.1%
400

393

40%

200

20%

0

0%

FY2017/3

FY2018/3

April ～June

April ～June
Sun Frontier Fudousan Co., Ltd.

Performance ofOperation Business（Hotel Management / Space Rental )Apr. to June in
the FY ended
Mar 31, 2017

Apr. to June in
the FY ending
Mar 31, 2018

Sales

255

657

157.2%

Segment income

57

100

75.9%

22.3%

15.3%

(7.1%pt)(¥ million)

Profit margin

Increase/
Decrease＜Hotel Management Business＞
 As for “SPRING SUNNY Hotel Nagoya Tokoname ”, in addition to theincrease of Chinese tour clients, we put our effort in to market
development through the sales of guest rooms via internet. Theseelements led to further increase of occupancy and rise of average dailyrate. Both sales and profit increased.
 “Hiyori Hotel Maihama” , the first hotel under our original brand began fulloperation in July. On the major online lodging reservation site, it ranked
second as popular hotel and ryokan for word-of-mouth reputation in
Maihama/Urayasu/Funabashi/Makuhari area.
 Due to the business commencement expenses of “Hiyori Hotel Maihama”,
profit margin decreased.
＜Space Rental (Rental Conference Room)Business＞
 2 branches newly opened in May and June became monthly profitable ina short span of time. As for existing branches, both sales and profits
increased remarkably due to the stable growth of repeaters and referrals.
 2 branches of rental conference room will be newly opened in August.

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

9（¥ million）

Sales
Segment Income
Profit Margin

800

100%
657

600

75%

400

50%
255

200

22.3%
57

25%
15.3%
100

0

0%
FY2017/3

FY2018/3

April ～June

April ～June

Sun Frontier Fudousan Co., Ltd.

Performance of

Other Business（Rent Guarantee / Construction Solutions / Overseas Business, etc. )(¥ million)

Apr. to June in
the FY ended
Mar 31, 2017

Apr. to Junein the FY
ending Mar
31, 2018

Increase/
Decrease

Sales

148

225

52.0%

Segment
income

132

171

29.5%

89.2%

76.0%

(13.2%pt)

Profit margin（¥ million）

250

89.2%
200

②Jakarta, Capital of Indonesia
・Progressing construction of urban detached house.
・Owning and operating Serviced Apartment “Kyo Serviced
Apartment”.
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

10

100%

225
76.0%

80%

171

150
＜Rent guarantee business＞
 We have been keeping on making efforts in improving theawareness of guarantee system by holding seminars for building
owners and cooperating companies. As a result, cases of new
guarantee and guarantee renewal are increasing steadily, therefore
both sales and profit increased as well.
＜Overseas Business＞
 Accelerate the development in Southeast Asia which is growing
continuously.
①The Biggest City in Central Vietnam.
・Owning and operating our first overseas hotel “The Blossom City”
・Construction for “Hiyori Garden Tower”, the high-rise condominiumof 28 floors and 306 flats has started, and the mockup will be
opened in July, 2017

Sales
Segment Income
Profit Margin

148

60%

132

100

40%

50

20%

0

0%

FY2017/3

FY2018/3

April ～June

April ～June
Sun Frontier Fudousan Co., Ltd.

Transition of Key Performance Indicators◆Transition of ordinary income ratio（¥ million）
50,000（¥ million）

Sales

35,000

70%

25%
22.9%

22.0%

22.6%

20%

20,00015%

Forecast
for FY2018/3

0
2015/3

2016/3Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2017/3

2018/32017/6

60%

56.0%

55.7%

53.7%

30,00010,00056.2%

30,00020.2%

2014/380%

Equity Ratio

Forecast
for FY2018/3

24.4%

Net Assets

40,00030%

Ordinary Income
Ordinary Income Ratio

40,000◆Transition of Equity ratio

50.8%

25,00050%

20,00040%

15,00030%

10,000

20%

5,000

10%

10%

5%

0
2014/311

2015/3

2016/32017/32017/670,1440%

Sun Frontier Fudousan Co., Ltd.

Future Developments
1) Business environment2) Business policy and model3) Growth strategies

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12

Sun Frontier Fudousan Co., Ltd.

Business Environment
As for world
economy,a steady
recovery is
continuing.

As can be seen in the robust share prices and employment improvement of U.S., and cyclical economy recovery in EU,
economy growth of advanced countries is leading growth of world economy. In addition, concern about the economy
recession of emerging countries has receded. Recent world economy is expected to continuing a steady recovery.
For reason of fluctuation risk in financial and capital market, lengthening of uncertainty for the economic policies of theUnited States due to the emerging protectionism, uneasiness about finance for the Brexit, the heightening of
geopolitical risks, etc., there are heightened downside risks for the global economy over the medium term.

Aiming at increasing the country's nominal GDP to 600 trillion in 2020, the government of Japan put together all thegrowth strategies up to now to enhance economy. Through working-style reform, active social participation by womenand relaxation of financing regulation, the government is promoting the Dynamic Engagement of All Citizens andstrengthening the virtuous cycle of growth and allocation.

Supported bypositive businessperformance,
Japan’s economy isexpected to growmoderately.

As BOJ is continuing the monetary easing policy and long-term interest rate is declining, attitudes towards lending to realestate businesses haven’t changed significantly while some financial institutions are showing a strict stance towardcollateral evaluation with a sense of vigilance to the overvalue of real estate market.

Demand-supply
balance in central
office building
market is tight.

Supported by positive business performance, needs for offices in central Tokyo is high and stable, and rent remained
strong. But as there will be a big supply of newly-built buildings in 2018, the average rent is showing only a slightincrease. The average vacancy rate in five wards of central Tokyo remained at a low level, also difference of vacancy rateby area is occurring.

Against the background of the graying of society and a good financing environment, for small and medium-sizedbuildings in central Tokyo which our company is focusing on, the dynamism of purchase demand is still growing as there
are high needs of inheritance countermeasures and asset management.
Working towards the realization of Japan as a tourism nation, the government is working on the amendment of Inns andHotels Act. The number of foreign tourists to Japan reached about 24 million and 30 thousand in 2016, and is expected
to increase 20% in 2017, lack of accommodation became an urgent issue. However, caution is needed in strains due toincrease of construction in plan and lifting of vacation rentals. In addition, Trends of tourists to Japan is shifting from very
inexpensive tour travelers to individual travelers. The consumption demand is also changing from “shopping” to“experiencing”.

Focusing on high quality office buildings in good locations in central Tokyo, the demand for office relocation in theinformation and communication industry as well as the human resource and real estate businesses is growing. Thus
negotiation for raising rent of tenant recruitment and contract renewal is still increasing. However, room for lowering
the cap rate of internal real estate is very small, discretion towards investment decisions is required.

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

13

Sun Frontier Fudousan Co., Ltd.

Changes in office Rent and Vacancy Ratein 5 Wards of Central Tokyo
Average rent [yen/tsubo]

Average vacancy rate [%]Average rent in Jun.

（％）

（yen）

18,864 yen

increased forconsecutive 41 months(+16.4 % fromthe bottom value)
Peak of vacancy rate
Jun. 2012
Vacancy rate: 9.43%

Average rent

Vacancy rate

Peak ofaverage rent
Aug. 2008
22,901 yen

Peak of vacancy rate
Aug. 2003
Vacancy rate: 8.57%

Vacancy rate in Jun.

3.26%

Improved 6.17% by 5 years
Bottom of average
rentOct. 2004
17,526 yen

Bottom average
rentDec. 201316,207 yen

Bottom vacancy rate
Nov. 2007
Vacancy rate: 2.49%※Source：Created based on Miki Shoji’s “Office Report.” Graph reflects office buildings within the 5 wards of Tokyo of which have a standard floor area of
100 tsubo (roughly 331 square meters) or larger.
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14

Sun Frontier Fudousan Co., Ltd.

2) Business Policy and Model
Not for profit, but for trust.
We change, not you. We resolve difficulties
from our clients’ point of view.

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15

Sun Frontier Fudousan Co., Ltd.

Sun Frontier’s Vision and Policies
VisionAs professionals in real estate utilization, our goal is to be
the company that clients love and choose the most in theworld.

Clients

Building owners, asset holders, and the wealthy.

Core
Business

Real estate revitalization and utilization

Policies

Strategies

To focus on people rather than property
Solve any real estate related difficulties from the perspective of
our clients
CentralTokyo

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

OfficeStrength

Tenant Finding
Capability

Real Estate
Revitalization
Capability

Operation Capability
16

Sun Frontier Fudousan Co., Ltd.

Business Introduction
Office Buildings
Real Estate Revitalization Business

Real Estate Services Business
Rental Brokerage Sales Brokerage
Asset Consulting
Building Operation / Management / Maintenance
Rent Guarantee
Construction Planning / Interior Design
Rental Conference Room and Small OfficeRe-planning
Building Rental
Real Estate Securitization

Hotel

Overseas

Hotel Possession and Operation
Development, Revitalization and Sales
M&A for Hotel and Operating Company

Hotel and Housing Developments in Vietnam
Urban Housing and Serviced Apartment inIndonesia
Attract investment from Taiwan to Tokyo

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

17

Sun Frontier Fudousan Co., Ltd.

Real Estate Revitalization and the Cycle of Added Value① In vertical real estate utilization business, we survey and solve difficulties by listening to clients’ concerns.
② In horizontal real estate revitalization business, first, we put together the know-how and client needs
learned from the process above. Then we apply this knowledge to renovate used buildings we purchased and transformthem into high value-added products. After this, we sell the products to clients.

Fund –Raising Consulting

Asset Consulting

Rent Guarantee

Construction Planning

Building Management

Rental Brokerage

Sales Brokerage

Acquisition of
Property②

Real estate
revitalization

Chain Value-added Products① Real Estate Utilization

To research how to solve clients’ troubles at the site,and offer solutions

Clients (Building owners, asset owners, and wealthy people)
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18

Sun Frontier Fudousan Co., Ltd.

Participative Management of All Employees Based on Core Principles
Change and Challenge ～Sun Frontier Management 3 Core Contents～
1. Mental management based on our ethos and philosophy• We have upheld altruism since the establishment of ourcompany.
• By cleaning our office and reading the philosophy booklet
every morning we become a group that shares the value ofmaking others happiness our own happiness.
• Aiming at offering much greater happiness to clients, we
contribute to the actualization of a rich society.
2. Management among all employees’ participation based on theaccounting for each section• By developing and diffusing the accounting system for eachdivision (Amoeba management), we enhance employees'
profit awareness and promote the business operation
involving all employees with the management perspective.
3. Business management from the clients’ viewpoint• We listen to clients’ requests carefully, handle and solve evenminor troubles, without rushing anyone.
• We change ourselves to meet our clients’ needs, making
efforts to challenge new things, create and advance.
• Through internal collaboration of different sections, we createhigh added values that are linked to one another.

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19

Businessmanagement
based on theperspective ofclients

Mentalmanagement
based on our
ethos andphilosophy

Management among
all employees’
participation based on
the accounting foreach section

Employees play major roles.
Resonant business administration.
Sun Frontier Fudousan Co., Ltd.

Keeping High Occupancy Rate while Increasing Area ofManaging Properties and Number of Clients.
Transition of Occupancy Rate and Area under Our Property Management 714,709
100％

About 75% of our managing properties aged 20 years or above.

95.9 ％

97.23％(As of Jun. 2017)(㎡)
700,000
600,000

Occupancy rate of managing properties

500,000

95％

400,000

Entrusted
area

300,000

96.1%

90％

(As of Jun. 2017)

200,000
100,000

Average occupancy rate of middle-sizedbuildings in 23 wards in Tokyo85％

0'08/1 '08/7 '09/1 '09/7 '10/1 '10/7 '11/1 '11/7 '12/1 '12/7 '13/1 '13/7 '14/1 '14/7 '15/1 '15/7 '16/1 '16/7 '17/1※Source: the occupancy rate of middle‐sized buildings in 23 wards in Tokyo was produced by our company based on "Market Data Rent and Vacancy" of Sanko Estate Co., Ltd.

＜Ranking of Managing Properties Area and Client Number＞
Top –ranked Companies in managing area
（Thousand m 2）※

2016

2015

1

Mitsui Fudosan Building Management

8,270

7,854

2

Mitsubishi Jisho Property Management

7,149

6,972

3

Jones Lang LaSalle

4,640

5,160

29 MS Building Support

680

30 SAYCO Building Management

656

2016

2015

1 Vortex

482

360

2 XYMAX266

251

3 Sun Frontier Fudousan

232

207

749

4 RIO CONSULTING

209

191

750

5 Daiwa Information Service

158

158

601

※Resource: It is produced by our company based on“Monthly Magazine Property Management” 2016(No.11).

・・・

31 Sun Frontier Fudousan

650

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Top –ranked Companies
in Number of Clients ※20

Note: Occupancy rate ofbuildings undermanagement of Property
Management Section
In the 4th quarter of fiscal
year 2014, as importanttenants moved to larger
offices, some units become
vacant. Thus occupancy rate
declined temporarily at theend of the term. Later,
tenants have been moving in
steadily, occupancy rate got
recovered.

Sun Frontier Fudousan Co., Ltd.

Revitalization Case ①～”Licensed Day Care Center” building in Ningyocho～

An Office Building Was Converted intoa Societally Important Day Care Center
Appearance After

Interior Before

Interior After

Warm floor for babies less than 1-year old
is made of lots of Hinoki wood.
Good location near 3 stations and 4 lines.
Entrance Before

Interior After

Entrance After【Property Outline】

Location: Tomizawa-cho, Nihonbashi, Chuo-ku, Tokyo
Structure: Steel reinforced concrete, 4 storeys above
ground and 1 basement storey.
Date of completion: 1986
Purposes of use: Office, garage, warehouseparking lot.
Site area: 306.94 m2 (92.84 tsubo)
Floor space: 852.46 m2 (257.86 tsubo)

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

1. Purchased a head office building.
2. From the local features and social
needs, we set the projectsignificance as “Rehabilitation of
Women and Decline in the
Number of Children on the Waiting
List.” Then we invited a tenant,a licensed day care center into thebuilding.
3. Converted the office building intoa day care center.
4. Utilized the governmental subsidy
on the facilities maintenance andoperation.
5. As a property which has a 30-year
fixed-term lease tenant and could
contribute to society, we sold it towealthy people.
Sun Frontier Fudousan Co., Ltd.

～ Capsule Hotel in Nishi-ku, Yokohama ～Revitalization Case ②

An Karaoke Shop Was Converted intoa Capsule Hotel
Appearance After

Interior After

Bright and Clean Cabin
Interior Before

1. Purchased a karaoke shopbuilding.
2. Capture the characteristics of
local area, and lay a plan toconvert the building tocapsule hotel.
3. Entered into a whole building
lease contract with a planningand operation company of
4. Implemented the conversion
from karaoke shop to capsulehotel in Yokohama.
5. Sold it to REIT listed on theTokyo Stock Exchange.

Interior After

Entrance After
Capsule hotel converted from karaoke shop

【Property Outline】

Location: Nishi-ku, Yokohama-shi ,Kanagawa
Structure: Steel construction, 3 storeys above
ground.
Date of completion: 1993
Purpose of use: Recreation facility.
Site area: 516.22 m2 (156.15 tsubo)
Floor space: 1,183.26 m2 (357.93 tsubo)

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Entrance Built of Bricks

22

Relaxation room modelled after cruise ship

Sun Frontier Fudousan Co., Ltd.

～one profitable building in Ebisu～

Revitalization Case ③

Design Planning Ability that tenants like to choose
Appearance After

Entrance Before

Entrance After

Gate with impressive flow lines made bygreen plants decoration and lighting.

Interior AfterIn the center of Ebisu, the best district
where homes and places of work are inclose proximity.

【Property Outline】

Location: Eibisu, Shibuya-ku, Tokyo
Structure: Steel Reinforced-Concrete
Construction, 9 storeys above
ground and 2 basement storeys.
Date of completion: 1993
Purpose of use: OfficeSite area: 387.60 m2 (117.24 tsubo)
Floor space: 1,872.07 m2 (566.30 tsubo)
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Entrance of high designability, where Japanesetraditional paper decoration are used.

23

1. Purchased the headquarters building.
2. As the door way, we made an especiallyattractive entrance. Inside the building, weused the Japanese traditional paper
decoration which is produced by Japanesetraditional paper designer, Ms. Eriko Horiki.
3. As for offices interior, we made the presetup office which venture company and IT
company like to choose. Succeeded in
making contract with tenants by rent higher
than expected.
4. As for existing tenants, we made 40%
upward rent revision through communication
which made them understand the objective
and significance of renovation.
5. Sold to regular clients.

Sun Frontier Fudousan Co., Ltd.

Revitalization Case ④Pre-setup officethat understand and meet the needs of tenants.
For “Pre-setup office”, we make interior decoration before tenant’s moving in by determining
their needs. Relying on the good sense of local features and market, we realize the best use
for property by high-quality design project.
Embodiment 1: Interior

Embodiment 2: Common Element

Reception room designed for IT or
venture company

Stylish elevator hall

Increase the feeling of spaciousness
by raising the ceiling.

Elegant toilets modeled on thosein high class hotel

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

24

Embodiment 3:
A place of recreation and relaxation

Terrace on rooftop
with the warmth of trees

Dedicated balcony where one canfeel the breeze to refresh oneself.

Sun Frontier Fudousan Co., Ltd.

3) Growth Strategies
Establish the base of flow
and increase stocks～Standing on our two feet, “flow” and “stocks”～
・・・New information for “Stock Type Business”

・・・New information for “Flow Type Business”

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

25

Sun Frontier Fudousan Co., Ltd.

With the strength of “Real Estate Revitalization andUtilization”, we enhance the stock type business bycommunicating with clients closely.

■Replanning Business■Hotel Development Business■City-type Condominium
Business(Overseas)

Investment Business

Revitalization & Development of Real Estate
which Creates the Value of People and Society

Heart-warming Operation－To bring smiles to our customers’ faces
and touch their hearts－■Rental Building Business■Hotel Operation Business■Space Rental Business■Sublease Business

Flow-type Business

Stock-type Business

Client Problem Resolution Business

Attentive Building Service Agency■Sales Brokerage Business■Rental Brokerage Business■Construction Solution Business

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Fee Business－Close Advisor－

26－Competitive Building Management－■Property Management Business■Building Maintenance Business■Rent Guarantee Business■Lease Business

Sun Frontier Fudousan Co., Ltd.

Four-pronged Strategy for Future Growth
1) Existing
Business Expansion

Development and Expansion of
Office Business

Inbound
City-tourism Hotel

2) Hotel Business3) M&A

Stock Acquisition,

Capital Participation, Business AllianceIndonesia & Vietnam

4) Overseas
Business Expansion
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

Sun Frontier Fudousan Co., Ltd.

Expansion of existing business

As for Rental Conference Room and Rental Office business,
Total branch number increased to 10.
Rental Office (Vision Office)Rental Conference Room（Vision Center)
1. Vision Center Tokyo

Newly opened
on May 11 1, 2017

2.Vision Office Kanda

3. Vision Office Shinjuku

4. Vision Office Kanda
ANNEX

7. Vision Center Nihonbashi
Newly opened
on June 1, 2017

8. Vision Center Tokyo Annex

Will be opened
In August, 2017

5.Vision Center
Tamachi

6.Vision Center
Yokohama

9.Vision Center
Nagata-choWill be opened
In August, 2017

10.Vision Center
Hamamatsu-cho

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Under the introduction from the leasing brokerage department which
has strong familiarity and good sense for the market of central Tokyo,
subsequent cases in good locations are progressing well.
We opened 2 branches in front of Tokyo station in May and June 2017,
and the two branches become monthly profitable in a short span oftime. In addition, branches in Nagata-cho and Hamamatsu-cho will be
opend in August.
Total branch number increased to 10 just after 2 years of our businessstart.

28

Sun Frontier Fudousan Co., Ltd.

First Hotel under the Original Hotel Brand “HIYORI HOTELS & RESORTS”“Hiyori Hotel Maihama” Has Started Full Operation
On July 1, 2017, “Hiyori Maihama Hotel”, the first hotel under the original hotel brand “HIYORI HOTELS & RESORTS” hasstarted full operation after 3 months of soft opening. This hotel is located 5 minutes away by car from Maihama Theme Park.
Setting our main target customer as “family, girls’ lunch or night out, couple”, we provide guest room where Ryukyu tatami islaid and little children can walk around with bare feet, we also provide a rich variety of amenities and equipment like foot solemassager and shoe dryer. We are aiming at creating a “Heart-warming Hotel” where customers can feel personalized“Omotenashi ( Japanese Hospitality)”.

First Original Brand Hotel

Twin Room“Hiyori Hotel Maihama”
Opening Ceremony

July 1, 2017
Grand Opening

Ryukyu tatami where one
can relax with bare feet.
Family Room with Four Beds

Rental baby necessities such as baby bed.

Pillow Bar

Specially ChosenHigh Quality Amenities

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

Sun Frontier Fudousan Co., Ltd.

Concept and Development of Hotel Business－Inbound City-tourism Hotel－“Heart-warming Hotel”＜List of Domestic Hotel＞

１. Hotel which grows continuously with the staffs’ attention to thecustomer’s viewpoint.
２. Hotel which cherishes the local culture and history, and canreclaim its appeal.
３. Hotel where one can enjoy high quality and exclusive service.

＜Domestic Hotel＞
In operation
1,388
Under construction
81
In plan & preparation 1,019

Sado
Kofu

Total No. of Rooms 2,488

Iwaki

ToyamaTakayama

Maihama

Shijo Kawaramachi
Kyoto
Honmachi Osaka
Nanba Osaka

Narita Airport
NaritaKoiwa
Ginza-higashi

HakataTokoname

Kawasaki（Note）Schedule & scale are still being planned, may change in future.
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Hotel Name
Location
Iwaki

No. ofRooms

StatusOpen（Plan）

Brand

Rented――In operation

Apr. 2016

In operation―

Original

Kawasaki200

In operation―

Original

Koiwa

105

In operation―

Original

Narita100

In operation―

Original

Hakata159

In operation

Apr. 2017

Original

Maihama80

Collaborative Tokoname

150
194

Rented―Rented

Sep.2017

Other
Company Toyama NEW
Other
Company Kofu

Under
Construction

Apr. 2018

Original

Takayama

81

In planJul. 2018

Original

Sado

111

In planJun. 2019

Original

Nanba Osaka NEW 224

In planSep. 2019

Original

Ginza-higashi

135

In planSep. 2019

Original

Honmachi Osaka

193

In plan

Oct. 2019

Original

Shijo Kawaramachi
Kyoto

146

In planUndecided

Undecided Narita Airport

210
190

210

Together with collaborative brand “SPRINGSUNNY”, our own
original brand hotel “HIYORI HOTELS & RESORTS” is also inprogress.

Collaborative
brand

Original
brand

3030

Sun Frontier Fudousan Co., Ltd.

Overseas expansion - Two directions -Aiming at becoming a company
that can play a role in receiving investments from wealthy people in Asia.

© Produced by the Cartographic Research Lab University of Alabama
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Sun Frontier Fudousan Co., Ltd.

Overseas Development

Concept and Development of Outbound Business
Concept "To Realize the Happiness of Everyone in Asia with People who Share the Same Values.”
Developing our outbound business in rapidly-growing cities in South-East Asia and contributing to the happiness and prosperity of
the local people there.

Projects in Vietnam
Interior decoration of first overseas hotel“The Blossom City”

StatusOpen

Location /Use

Scale

In operation

Aug. 2016

Danang Hotel“The Blossom City”

45 rooms

Under
construction

1st half of
2019

DanangCondominium
Residence“Hiyori Garden
Tower”

306 houses

In planUndecided

Danangcommercial complex

Hotel・SA156 rooms+Residence 229
houses+Shop

Opened on
Aug, 2016

Projects in Indonesia
StatusOpen

Location /Use

Scale

All sold

Jakartadetached house

5 housesUnder
construction

Sep. 2017

Jakartadetached house“CASA EMERALDGANDARIA”

9 houses

In operation―

Jakarta Residence+SA“Kyo Serviced
Apartment”

90 rooms

Bath RoomNight View

(Note）”SA”･･･Serviced apartment. Fully furnished apartment available for monthly
stay, providing all the hotel-like service.
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

Sun Frontier Fudousan Co., Ltd.

Danang, Vietnam, Project No.2

~ High-rise urban apartment house project ~Danang was chosen to be the host of 2017 Asia-Pacific Economic Cooperation (APEC) summit and is gaining worldwide
attention. We established “Sun Frontier Vietnam” as an overseas subsidiary in December, 2015. Beside the first overseas hotel“The Blossom City” opened on August, 2016, we are preparing for the high-rise apartment project as our 2nd project. ProjectNo.3 is also in progress.
Bldg. No. 2
High-rise apartment building「HIYORI Garden Tower」
Effect Drawing(Appearance)
High-rise
condominiumof 28 floors

Construction for306 flats
started in June, 2017

Mockup（Bedroom）

Mockup（Living Room）
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Direct flights from Narita Airport toDanang went into service (besides 5
flights per week, now there are 15
temporary flights per month in August) .
76 direct flights per week from China.
77 direct flights per week from Korea.
Danang is an area that many companies
want to help develop, while gathering
worldwide attention as a fascinating
resort area.
It is only a 10-minute drive from Danang
Airport to the city center, and a 15-minutedrive to a beautiful beach where there aremany hotels. Located at an optimal placewith very convenient access.

Sun Frontier Fudousan Co., Ltd.

Jakarta, Indonesia~ Urban Housing & Serviced Apartment ~We established “Sun Frontier Indonesia” as an overseas subsidiary.
We are progressing projects in central Jakarta.
Bldg. No.3 Serviced Apartment“Kyo Serviced Apartment”

Bldg. No.2 City Type Ready-built House“CASA EMERALD GANDARIA”
Sep. 2017 ～9 houses will becompleted successively

Appearance

Internal pool

Operation started
on Dec. 2016

Effect Drawing （Appearance）
Effect Drawing（Interior）＜Logo Mark＞

Serviced Apartment with 90 rooms

完成予想パース
全戸プール完備

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Sun Frontier Fudousan Co., Ltd.

（Reference）Introduction of Corporate Culture

Efforts to Create Corporate Culture of“Working for Workmates”
Sports Training Camp

Basketball
Tug of War between East and West TeamArm Wrestling King
Soccer269 employees took part in this Camp on July 7 and 8 in 2017

Employee Training Trip（Overseas）

Employee Training Trip（Domestic）

Birthday Party in June and July 2017
Visit to projects in progress in Danang, Vietnam
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Enryaku-ji Temple on Mt. Hiei in Kyoto

Sun Frontier Fudousan Co., Ltd.

（Reference）

Transition of Sales / Ordinary Income / Number of Employees

Both sales and profit are showing a steady rise
Number of Employees is also increasing stably（¥ Million）

50,00048,150Sales
Ordinary Income

40,00040,394

Number of Employees

26,87020,000030,62527,741276

16,730

84

96

134

70
7,760
52
5,003
3,474
24 1,771 3,588
1,437
791
2 0 681140 377 501
1

125
8,289

152

141

181

14,469
142

6,346

206

139
4,289

199

799

2,039

4,341

5,593

500

300

223

200

10,580541

329

17,772

6,923（People）

400

35,25430,00010,00050,000

7,024

8,894

10,000100

02000/3 2001/3 2002/3 2003/3 2004/3 2005/3 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3 2018/3(3,776)(10,000)(100)(20,000)(17,794)

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

36

(200)

Sun Frontier Fudousan Co., Ltd.

（Reference）

Realized Return on Equity Ratio of High Level
while Keeping High Equity Ratio
ROE Ranking for Top 25 Companies of Market Capitalization※2■Correlation Diagram of Equity Ratio and Return on Equity Ratio
For Top 25 Companies※1of Market Capitalization in the Real Estate Sector (non-housing)
25.0

Our Company（FY2017/3）

RO

Our Company（FY2017/3）
Converted by effective tax rate

15.0

(
%

)
5.0

0.0
0.0

10.0

20.0

30.0

40.0

50.0

60.0

Equity Ratio（％）

70.0

80.0

37

Ordinary
Income Ratio

Sun Frontier Fudousan

19.6%

56.1%

22.0%

Raysum

17.1%

62.7%

19.9%

3

Tosei

14.4%

33.8%

17.0%

4

AEON DELIGHT

12.0%

66.0%

5.9%

5

11.7%

37.0%

8.5%

10.9%

20.9%

18.1%

7

Kyoritsu Maintenance
Sumitomo Realty &Development
NIPPON KANZAI

10.9%

66.6%

6.4%

8

Hulic

10.7%

30.1%

23.8%

9

Nomura Real Estate HD

10.1%

31.0%

12.1%

10

UNIZO HD

9.7%

11.9%

25.2%

11

Mie Kotsu Group HD

9.5%

25.4%

5.3%

AEONMALLNTT Urban
13
Development
14 Tokyu Fudosan HD

8.3%

35.2%

17.2%

8.0%

25.7%

15.2%

7.3%

21.6%

7.9%

15

Mitsui Fudosan

6.7%

36.9%

12.9%

16

Bitsubishi Estate

6.6%

32.2%

15.1%

17

Tokyo Tatemono

6.4%

24.8%

12.0%

18

Parco

6.3%

48.8%

4.9%

19

Keihanshin Building

5.8%

52.0%

33.0%

20

TOC

5.6%

59.7%

30.1%

21

HEIWA REAL ESTATE

4.7%

33.3%

20.2%

22

DAIBIRU

4.2%

42.9%

24.6%

23

Kabuki Za

3.3%

41.2%

12.7%

24

Showa Aircraft Industry

3.3%

50.9%

7.2%

25

TOKYO RAKUTENCHI

2.9%

68.6%

13.6%

Average

8.2%

40.0%

15.4%

※1 Based on Data from QUICK System of QUICK Corp. The classifications of real estate company(non-housing) are specified in Kaisha Shikiho. Market capitalization is calculated according to the closing price of June 19, 2017.
※2 ROE Ranking for Top 25 Companies of Market Capitalization in the Real Estate Sector (non-housing, 56 companies in total).
Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Equity Ratio

2

12

10.0

ＲＯＥ

1

6

20.0

E

Company Name

（Our Company Excluded）

Sun Frontier Fudousan Co., Ltd.

Company Overview
Name
Head Office
Established

Stock Listing
CapitalRepresentative
Employees
Average Age: Sun Frontier Fudousan Co., Ltd.
Toho Hibiya Building (Hibiya Chanter) 14F:
2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006: April 8, 1999
: First Section of the Tokyo Stock Exchange
on February 26, 2007 (Stock code 8934): ¥8,387 million: President, Tomoaki Horiguchi
Full-time staff 352 Consolidated(666 including temporary and part-time staff): 32.3 (as of Jul 31, 2017)

Main Group
Companies

SF Building Support Inc.
Sun Frontier Real Estate Investment Advisors Inc.
: Yubi Inc.
Sun Frontier Fudousan Taiwan Co., Ltd.
Sun Frontier Hotel Management Inc.
Settlement Month : MarchBusinesses
1. Real Estate Revitalization Business

Replanning Business/ Rental Building Business

2. Real Estate Services Business

Rental Brokerage/ Property Management/ Building Maintenance/ Sales
Brokerage/
Construction Solution / Rent Guarantee

3.Hotel development and operation
Investment, development, operation

Copyright © 2017 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38

Sun Frontier Fudousan Co., Ltd.

Disclaimer

Sun Frontier Fudousan Co., Ltd.

This reference material is intended for providing information, not for soliciting or promoting you topurchase a specific product. When you invest, please do so based on your own judgment andresponsibility. If you want to purchase the shares of our company, please contact securities companies.
The information included in this material may not follow the Financial Instruments and Exchange Act,
the Building Lots and Buildings Transaction Business Act, the regulations for the companies listed inTokyo Stock Exchange, etc.
This reference material mentions our future business performance, but it does not guarantee theperformance.
This reference material was produced carefully, but we do not guarantee the accuracy and certainty of

its contents.
In addition, the contents may be changed or deleted without notice.

We appreciate your understanding.

<Sun Frontier Fudousan IR Desk>
Phone: +81-3-5521-1551
URL: http://www.sunfrt.co.jp/en/
Mail: ir-contact@sunfrt.co.jp