Sun Frontier Fudousan Co., Ltd

Financial Results for the Fiscal year
ended March 31, 2023
We are aiming to be the most appreciatedvisionary company in the world.

1) Overview of the Results for FY2023/3

1-112) Forecast for FY2024/3 and Growth Strategies

12-173) Medium-term Management Plan, Business Initiatives

18-324) Philosophy, Sustainability and Business Model

33-465) Reference Materials

47-54

May 12, 2023
Securities Code : 8934

Overview of Results for FY2023/3
Net sales and profits increased for 2 consecutive years and profit hit record highs.
Office Business posted solid growth and Hotel Operation Business recovered rapidly.
(Unit: million yen)

Results

ProfitmarginYear-on-year

Growthrate

Forecast(Released on Feb. 10, 2023)

Achievement
rate

Net sales

82,777-+11,526+16.2%

82,000100.9%

Operating profit

14,90518.0%+2,778+22.9%

14,800100.7%

Ordinary profit

14,72217.8%+2,506+20.5%

14,500101.5%

Profit*11,61214.0%+4,197+56.6%

10,400111.7%

Performance Highlights• Real Estate Revitalization Business was in line with the initial plan. Profit margin continued tobe higher than the previous year (segment profit margin was 31.1%).
• All business in Real Estate Service Business posted solid growth. Rental Conference RoomBusiness appeared the effects of sites expanding along with the recovery in demand,
Brokerage Business also remained strong.
• In Hotel and Tourism Business, the sale of hotel properties contributed significantly toearnings. Due to the increasing tourism demand by lifting of restrictions and the resumptionof inbound tourism, Hotel Operation Business recovered remarkable.
*Profit, which is attributing to owners of parent, increased significantly as a result of reduced taxable income stemming from loss
carryforwards, recording of deferred tax assets, etc. in Hotel and Tourism Business.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Sun Frontier Fudousan Co., LtdTrends in Consolidated Results
Net sales and Profit hit record highs and dividend increased for 2 consecutive
years (increased 4 yen YoY).
(Unit: million yen)
FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

Net sales

53,291

73,21859,632

71,251

82,777

Operating profit

13,305

16,571

7,912

12,127

14,905

Ordinary profit

12,813

16,127

7,524

12,215

14,722(Ordinary profit margin)(24.0%)(22.0%)(12.6%)(17.1%)(17.8%)

Profit8,783

10,666

4,274

7,415

11,612

Profit per share180.35 yen

219.03 yen

87.77 yen

152.26 yen

238.98 yen

Dividends per share

38.50 yen

42.00 yen

42.00 yen

44.00 yen

48.00 yen
(Forecast)

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2

Sun Frontier Fudousan Co., LtdTrends in Achievement Rate of Forecast
Continued to achieve initial forecast by flexibly responding to rapid changes inbusiness environment.
Disclosure budget (left axis)

Upward reversion (left axis)

Results (left axis)

Achievement rate of initial forecast (right axis)(million yen)
30,00025,000115.8%

115.2%
107.6%

108.6%

115.0%
106.2%

120.0%

110.0%

20,000100.0%

16,127
15,00012,813
10,755

14,722

15,50012,21514,00012,80011,80010,00010,00014,50090.0%

11,50010,700

7,524
6,500

5,000

80.0%

7,100

0

70.0%

FY2018/3

FY2019/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

FY2020/3

FY2021/3

3

FY2022/3

FY2023/3
Sun Frontier Fudousan Co., Ltd

Consolidated Income Statement(Unit: million yen)
FY2022/3

FY2023/3

71,251
55,95882,77750,066

53,8342,124

47,995
2,070

7,154
6,911

8,843
22,967

Hotel Operation, etc

2,548
4,363

13,5009,467

Other Business

1,695

1,788

Adjustments

▲467

▲887

Gross Profit (Loss)

19,344
17,05322,805
16,122

16,517535

15,722399

3,822▲1,503

4,898
1,907

484
▲1,988

1,506
400

YoY increase/
YoY change rate
decrease

Other Business

171

337

Adjustments

▲199

▲461

+11,526▲5,892▲5,839▲54+1,689+16,056+10,952+5,104+93▲420+3,461
▲931
▲795
▲136
+1,076+3,410+1,022+2,388
+166
▲262

7,216

7,900

+684

9.5%

12,127

14,905

614
526

406
589

12,215
7,415

14,722
11,612+2,778▲208+63+2,507+4,19722.9%▲33.9%
12.0%
20.5%
56.6%

Net Sales
Real Estate Revitalization Business
Replanning Business
Rental Buildings Business

Real Estate Service Business
Hotel and Tourism Business
Hotel Development Business

Real Estate Revitalization Business
Replanning Business
Rental Buildings Business

Real Estate Service Business
Hotel and Tourism Business
Hotel Development Business
Hotel Operation, etc

Selling, General and
Administrative Expenses
Operating Profit (Loss)
Non-operating Income
Non-operating Expenses
Ordinary Profit (Loss)
ProfitCopyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

16.2%▲10.5%▲10.8%▲2.5%
23.6%
232.3%
429.8%
117.0%
5.5%
―
17.9%
▲5.5%
▲4.8%
▲25.4%
28.2%―
484.5%
―
97.1%
―

4

Keynotes of Income Statement<Real Estate Revitalization Business>
As selling 24 properties at a high profit margin(gross profit margin 32.2%), we achieved resultsin line with the initial plan.
The sales of 2 cases in the formation of small-lot
real estate properties were also progressed andwere included in 24 cases.
<Real Estate Service Business>
Sales and profits increased in all Businesses.
In addition to Rental Conference RoomBusiness, appeared the effects of sites
expanding along with the recovery in demand,
Brokerage Business was also strong. The
number of managing buildings in PM Businessand BM Business are increased.
<Hotel and Tourism Business>
Sales of hotel properties contributed to earnings
growth significantly. Occupancy rate andaverage daily rate improved thanks to recovery
in tourism demand. Hotel Operation Businessturned a profit.
Sun Frontier Fudousan Co., Ltd

Consolidated Balance Sheet- Assets -<Cash and deposits> Increased 11.9 billion yen from the end of the previous fiscal year, due to the sale of Replanning and hotel properties.
<Inventory assets>

Despite Inventory in Hotel properties decreased due to the sales of 2 hotels, inventory in Replanning properties
increased due to purchases progress.

<Investments and other assets>

Although paid long-term guarantee deposited due to the opening of sites of rental conference rooms,
return due to hotel sales was more than them. As a results, long-term guarantee deposits decreased.

FY2021/3

FY2022/3

FY2023/3(Unit: million yen)

Increase/decrease(compared to FY2022/3)

Current assets

110,785

110,920

125,886+14,965

Cash and deposits

21,50830,05342,016+11,962

Inventories

86,087

77,34080,182+2,841

71,34913,917821

63,424
13,516399

70,3279,750
105+6,903▲3,766▲294

Other current assets

3,189

3,527

3,688

+160

Non-current assets

16,70025,591

26,633+1,041

Property, plant and equipment

10,52818,796

20,410+1,614

701

572

815

+243

5,470

6,222

5,406

▲816

127,485

136,512

152,519+16,007

Breakdown) RP
Hotel
Overseas, etc.

Intangible assets
Investments and other assets
Total assets

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5

Sun Frontier Fudousan Co., Ltd

Consolidated Balance Sheet- Liabilities/Equity -<Interest-bearing debt> Interest-bearing debt balance is 55.6 billion yen. Increased 4.6 billion yen
due to borrowings associated with purchases and progress in construction.
<Net assets>

Despite we increased the dividend, Net assets increased 9.5 billion yen
mainly due to profit increasing (11.6 billion yen) and other reason(Unit: million yen)

FY2021/3

FY2022/3

Changes of Equity Ratio
FY2021/3

FY2022/3

FY2023/3

52.3%

52.2%

52.9%

FY2023/3

Increase/decrease(compared to FY2022/3)

Current liabilities

13,358

16,21016,363+153

Short-term borrowings, etc.

5,530

6,904

5,492

▲1,411

Income taxes payable

901

3,528

1,699

▲1,829Other current liabilities

6,926

5,777

9,172

+3,394Non-current liabilities

44,35445,84952,190+6,340Long-term borrowings and bonds payable

41,991

44,16950,170+6,000

Other non-current liabilities

2,363

1,680

2,019

+339

Total liabilities

57,71262,06068,553+6,493

Shareholders' equity

66,916

71,26080,430+9,169

Other

2,856

3,191

3,535

+343

Total net assets

69,77374,452

83,965+9,513

Total liabilities and net assets

127,485

136,512

152,519+16,007

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6

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Real Estate Revitalization Business (Replanning and Rental Buildings)<Replanning Business>◼ The number of sales was 24 including 2 in New York and 2 ofthe formation of small-lot real estate property. Profit margin
was kept in high level. s also progressed steadily and 2 weresold.

(million yen)

60,000Net sales
Segment profit
Profit margin◼ Average business period was 652 days (down 55 days YoY).
Although middle- to long-term properties were sold, thebusiness period was shorter than the previous fiscal year
which was 707 days.

50,066FY2022/3

FY2023/3

Increase/decrease

Net sales

55,95850,066-10.5%

Replanning Business

53,83447,995-10.8%

Rental Building Business

2,124

2,070

-2.5%

Segment profit (Note 1)

16,262

15,343-5.7%

Replanning Business

15,727

14,943

-5.0%

535

399

-25.3%

29.1%

30.7%

+1.6%pt

Replanning Business

29.2%

31.1%

+1.9%pt

Rental Building Business

25.2%

19.3%

-5.9% pt

22 cases
21 cases
54 cases

23 cases
24 cases
52 cases+1 case(Note 2)

(Note 2)

(Unit: million yen)

Rental Building BusinessProfit margin

Number of properties purchased
Number of properties soldNumber of stocks at the end of FY

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

60%

55,958+3 cases-2 cases

7

40,00040%
29.1%

20,000

50%

30.7%
30%

16,262
15,343

20%
10%

0

0%
FY ended March2022

FY ended March
2023(Note 1) “Segment profit” is calculated by deducting specific costs of eachsegment, including interest expenses, sales commission and amortization of
goodwill from gross profit.
(Note 2) Land purchase and development projects are included.

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Real Estate Revitalization Business<Purchase in Replanning properties>
Properties purchased and settled during FY2023/3
totaled 32.86 billion yen, up 5.26 billion yen fromthe previous fiscal year.
For FY2024/3, we have contracted 10 buildings for
8.59 billion yen so far (including unsettled
properties).

FY2023/3

22 cases

23 cases+1件

27,60032,860+5,260(Unit: million yen)

Number of properties
purchased
Purchase amount

Increase/decrease

FY2022/3(million yen)

40,00036,82236,281

38,28632,86027,60030,00020,00015,036
8,590

10,000FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

FY2024/3

Note : Includes properties in non-current assets, small-lot real estate properties and New York properties.

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8

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Real Estate Services Business(Property Management, Building Maintenance,
Sales Brokerage, Leasing Brokerage,
Rental Conference Room, Rent Guarantee, etc.)<Property Management and Building Maintenance>◼ Sales and profits both in PM Business and BM Businesses increased
due to an increase in the number of entrusted buildings.
<Brokerage>◼ Sales and profits increased in Sales Brokerage due to the steadyconclusion of transactions introduced from other divisions.
◼ Sales and profits increased in Leasing Brokerage due to the market
recovery.

(million yen)

10,000

FY2022/3

FY2023/3(Unit: million yen)

Increase/decrease

Net sales

7,154

8,843

+23.6%

Segment profit

3,803

4,890

+28.6%

Profit margin

53.2%

55.3%

+2.1%pt

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9

80%
8,843

8,000

<Rental Conference Room>◼ Firm recovery in demand. Sales and profits increased due toimprovement in occupancy rate, large-scale projects, and performance
contributions from opening new sites and floor expansion.
<Rent Guarantee>◼ Sales and profits increased due to an increase in the number of newcontracts from the previous fiscal year.

Net sales
Segment profit
Profit margin

6,000

7,154

55.3%

53.2%
4,890

4,000

60%

40%

3,803
20%

2,000

0

0%

FY ended March2022

FY ended March2023
Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Hotel and Tourism Business (Hotel Development, Hotel Operation, etc.)
Net sales<Hotel Development Business>◼ Sales of two hotel properties contributed to earnings significantly.

Segment profit(million yen)

25,000

Profit margin

22,967<Hotel Operation Business>◼ Both OCC (occupancy rate) and ADR (average daily rate) improved
due to the recovery in domestic tourism demand and inbound.
Segment profit turned a profit and contributed to earnings.

FY2023/3

Increase/decrease

6,911

22,967+232.3%

Hotel Development Business

2,548

13,500+429.8%

Hotel Operation Business, etc.

4,363

9,467

+117.0%▲1,9501,720―

Hotel Development Business

238

1,392

+484.5%

Hotel Operation Business, etc.

▲2,188328―

Profit margin

－

7.5%

―

Hotel Development Business

9.3%

10.3%

+1.0%pt

Hotel Operation Business, etc.

―

3.5%

―

FY2022/3(Unit: million yen)

Net sales

Segment profit

25%

20,00020%

15,00015%

10,000
6,911

7.5%

5,000

10%
5%

1,720
0
-5,0000%-1,950FY ended March
2022

-5%
FY ended March
2023(Note 1) “Segment profit” is calculated by deducting specific costs of eachsegment, including interest expenses, sales commission and amortization of
goodwill from gross profit.

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10

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Other Business (Construction Business, Overseas Development Business, etc.)<Construction Business>◼ Sales and profits increased. The construction completed
earlier than the plan at the group company, so we could
accrue the sales ahead of schedule.

(million yen)

2,000

Net sales
Segment profit
Profit margin

1,695

40%

1,788

<Overseas Development Business>◼ Continuing to focus on arranging new project.

FY2022/3

FY2023/3(Unit: million yen)

Net sales
Segment profit
Profit margin

1,500

30%

1,000

20%

15.8%

Increase/decrease

1,695

1,788

+5.5%

101

283

+177.8%

6.0%

15.8%

+9.8%pt

500

6.0%

283

101
0

0%

FY ended March2022
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10%

11

FY ended March2023
Sun Frontier Fudousan Co., Ltd

Forecast for the fiscal year
ending March 31, 2024
and Growth Strategies

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12

Sun Frontier Fudousan Co., Ltd

Business Environment Awareness1. The outlook for the global economy is uncertain again due to the continuing of interest rate hikes tocurb inflation and the prolonged war in Ukraine.
◆ The IMF lowered the global economic growth rate in both 2023 and 2024, raising caution about the future.
◆ FRB continued to raise interest rates at the FOMC. Difficult maneuvering continues in order to control
inflation and avoid financial instability.

2. Japanese economy is expected to recover as constraints are eased. Developments in financial
instability should be monitored closely.
◆ With the transition of COVID-19 to Category V, it is expected that social and economic activities will further
normalize.
◆ The Bank of Japan will continue to ease its monetary policy, taking into account economic and pricetrends, as well as the impact of financial instability in the United States and Europe.

3. In the central Tokyo office building market, people are returning to work in offices while hybrid
working style is being ingrained.
◆ Due to an increase in the completion of new buildings, the average vacancy rate of central Tokyo officebuildings were flat and the average rent continued to decline moderately.
◆ Although European and American funds are cautious about investing, Japanese real estate market isrelatively strong compared to other countries.

4. In the hotel and tourism market, travel demand has recovered, and inbound demand is expected.
◆ In the tourism market, travel demand is recovering. Recovering of full-fledged inbound is expected.
◆ Despite the rapid recovery in tourism demand, labor shortages have become apparent, and it is necessary
to strengthen the system to accept tourists.
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13

Sun Frontier Fudousan Co., Ltd

Forecast for FY Ending March 2024
(Unit: million yen)

FY2023/3

FY2024/3 forecast

Rate ofchangeKeynotes of Forecast

82,77783,000+0.3%

50,06655,100+10.1%<Real Estate Revitalization Business>

47,9952,070

53,0002,100+10.4%+1.4%

8,843
22,967

10,00016,900+13.1%▲26.4%• Maintain profit margin as 30%. Forecast
for profits are planned at the same level
as the previous fiscal year.

13,5009,467

5,400
11,500▲60.0%+21.5%

1,788

1,860

+4.0%

▲887

▲860

－

Gross profit

22,80525,300+10.9%(1) Real Estate Revitalization Business

16,122

16,400+1.7%

15,722399

15,900500+1.1%+25.3%

4,898
1,907

5,400
3,800

+10.2%<Hotel and Tourism Business>+99.3%

1,506
400

2,200
1,600

+46.1%+300.0%337

400+18.7%

▲461

▲700

－

Selling, general and administrative
expenses

7,900

8,800

+11.4%• Settlement of hotel properties contracted
in the previous fiscal year will contributeto performance significantly.
• Hotel Operation Business is also planned
to grow significantly year on year due tothe recovery of tourism demand.

Operating profit

14,905

16,500+10.7%

Ordinary profit

14,722

16,000+8.7%<SG&A Expenses>

Profit11,612

11,000▲5.3%

EPS (Profit per share)

238.98226.37▲5.3%• Plan to increase expenses by investing inhuman capital, DX and marketing.

Net sales(1) Real Estate Revitalization Business
Replanning
Rental building(2) Real Estate Service Business(3) Hotel and Tourism Business
Hotel Development Business
Hotel Operation Business, etc.

(4) Other
Adjustments

Replanning
Rental building(2) Real Estate Service Business(3) Hotel and Tourism Business
Hotel Development Business
Hotel Operation Business, etc.

(4) Other
Adjustments

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14<Real Estate Service Business>• Steady growth continues in all businesses
led by demand recovery in Rental
Conference Room Business.

Sun Frontier Fudousan Co., Ltd

Dividend Forecast for FY2024/3
52 yen for FY2024/3 in forecast. (Increase dividend for 3 consecutive years. Increase 4 yen YoY)
With the exception of keeping dividend in FY2021/3, we have continued to increase dividend for 11 years

Basic Policy for Shareholder Return1) Strive to provide long-term and stable shareholder return2) Secure investment funds for future growth3) Maintain the stability of financial baseTrends in Dividends per Share

(yen)

60

Interim dividend

50
40

38.5

Initial forecast

42.0

Increased dividend

44.0

42.0

48.0

52.0

2.0

2.0

2.5

26.0

2.0
2.0

23.0
21.0

30
20

Commemorative dividend

34.5

39.5

42.0

Interim dividend

10Interim dividend

21.0

23.0

FY2022/3

FY2023/3

Interim dividend

26.0

0
FY2019/3

FY2020/3

FY2021/3

FY2024/3 （Forecast)※ Interim dividend started from FY2022/3

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15

Sun Frontier Fudousan Co., LtdTrends of Key Performance Index (ROE)
Improve profitability and capital efficiency through sustained business growth, andalso improve ROE while maintaining financial soundness, to aim for PBR of 1 or higher.
■ Trends in ROE and PBR
25.0%

20.0%

3.00

Profitability

ROE =

19.6%
17.6%

16.8%

17.7%

X
(1) Net profit
margin2.50

Capitalefficiency(2) Total asset
turnoverX

Financialsoundness(3) Financial
leverage

15.3%
15.0%

10.8%

2.00

◆ Initiative policies to improve ROE

1.50(1) Net profit
marginImprove profitability by enhancing added
value in Hotel Business and evolving a highly
profitable Office Building Business.

(2) Total asset
turnoverWe will strengthen the cooperation withdivisions, focus on the business period, andenhance the feasibility of plans to increase
efficiency.

(3) Financial
leverage

We will maintain financial soundness andstrive to maintain an appropriate equity ratio
while pursuing business growth.

10.0%

5.0%

1.16

1.17

6.5%
1.03
1.00

0.0%

0.62

0.72

0.71

0.77

0.50

-5.0%

-10.0%

0.00
FY2017/3

FY2018/3

FY2019/3

ROE (left axis)

FY2020/3

FY2021/3

FY2022/3

FY2023/3

PBR (right axis)(As of end of each FY)

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16

Sun Frontier Fudousan Co., LtdTrends of Key Performance Index■Trends of Ordinary Profit Margin（million of yen）

（Improve high value management）

100,000■Trends of Equity Ratio（million of yen）

（construct stability of financial base）

100,000

30.0%

60.0%

24.0%
80,00080,000

22.0%

55.0%

17.1%

60,000

17.8%

20.0%

52.3%

52.2%

52.9%

60,00050.3% 49.6%
50.0%
40,00040,000

12.6%
10.0%

45.0%
20,00020,00000

0.0%
FY2019/3

FY2020/3

FY2021/3

Net sales（left axis）

FY2022/3

40.0%
FY2019/3

FY2023/3

Ordinary profit（left axis）

FY2020/3

FY2021/3

Equity（left axis）

FY2022/3

FY2023/3

Equity Ratio（right axis）

Ordinary profit margin（right axis）
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17

Sun Frontier Fudousan Co., Ltd

Medium-term Management Plan

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18

Sun Frontier Fudousan Co., Ltd

Medium-term Management Plan

Basic Policy and Growth Strategies
Basic Policy
Providing “a place where people gather and communicate with each other,and create social development and happiness for people"

Growth strategies
OfficeDeepen and expand the Office Business

Hotel

Provide satisfaction and excitement going beyond
customers’ expectation with a sharp concept

Overseas

Expand residential-related business in Vietnam

M&A

Invest in start-ups and peripheral businesses
to expand our current business

Key Points

ESG

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Digital19

Cash flow

Marketing
Sun Frontier Fudousan Co., Ltd

Medium-term Management Plan

Net sales(100 millions of yen)

1,200

Ordinary profit

FY2023/3
Results

FY2024/3
Forecast

FY2025/3
TargetNet sales

82.7 billions yen

82.2 billions yen

100 billions yen

Ordinary profit

14.7 billions yen

16.0 billions yen

20 billions yen

Net profit

11.6 billions yen

11.0 billions yen

14 billions yen

Ordinary profit margin

17.8%

19.4%

20%

Equity ratio

52.9%

Around 50%

Around 50%

ROE

15.3%

12.9%

More than 10%

1,000

Profit

1,000

827

800
600

732

830

712
596

533

400
200
0

128

88

FY2019/3

161
107

FY2020/3

122

75 44
FY2021/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

74

FY2022/3

20147116FY2023/3

160
110

FY2024/3(forecast)

200
140

FY2025/3(Target)Sun Frontier Fudousan Co., LtdInvestment Plan of Medium-termManagement Plan（FY2022/3-FY2025/3）
Overseas Business

Office Business

Hotel BusinessInitial plan

Initial plan

Balance at March 31, 2021

¥72.8 billion

Balance at
March 31, 2021

¥21.8 billion

Balance at
March 31, 2021

¥0.6 billion

Investment amount¥200.0 billion

Investment amount¥7.0 billion

Investment amount¥8.0 billion

Amount collected¥182.8 billion

Amount collected¥5.8 billion

Amount collected¥2.5 billion

Balance at March 31, 2025

¥90.0 billion

Balance at
March 31, 2025

¥23.0 billion

Balance at
March 31, 2025

¥6.1 billion

Initial plan

Maintain a high turnover rate by carrying out purchaseand development in a planned manner and aim forbusiness growth while recouping investment.

Realized recovery by selling hotel properties asplanned. Opening new hotels and hotel
operation is recovering rapidly.

Residential development in Vietnam.
Invest continuously and systematically.

Property sales are proceeding asplanned. Strengthening purchase for
future business growth.

Additional investment in areas
with high demand for businessand tourism.

Making purchases for next
development project.

Digital¥3.0 billion

Build data infrastructure and move on to the phase of data utilization.

M&A¥5.0 billion

Expansion of Office, Hotel, Environment Businesses

Improve free cash flow
Pay close attention to free cash flow and make investments in a planned manner according to recouping status.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Sun Frontier Fudousan Co., Ltd

Business Initiatives

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

22

Sun Frontier Fudousan Co., LtdReplanning Business, Examples of Initiatives
Reviewed the usage of space, improved earning power of buildings by conversion.
BeforeWhole earning power building
Shibaura, Minato-ku, Tokyo
Reinforced concrete structure, flat roof, 7 stories,
Completed in 1987, 36 years oldFirst floor was a dark parking area.

After

Parking area was converted into an office space.

Office became bright and open due to the windows in theback of the building.

Purchase

RP

Management

Leasing

Sale

Guarantee

Leasing after replanning andentrusted management after sale.

Office with free address, teleconference booths, etc. forhybrid work style.

Lounge space improves communication.

Meeting rooms are
partitioned but bright.

As a high profitable property with all floors in operation, it was purchased by a foreign investor, who has bought otherproperties from us. We also entrusted the property management from the client.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

23

Sun Frontier Fudousan Co., Ltd

Value-Up with “Leasing Capabilities”
Increase occupancy rate and improve profitability of Replanning properties through leasing capabilities.
◆ Trends in average occupancy rate of Replanning properties◆ Community-based branch network

sold in FY2023/3

94.8%

100%

77.2%

80%

82.0%

84.6%

Shinjuku
branchShinjuku

67.7%

40%

20%

Shibuya

50.6%
39.6%
29.7% 29.3%

33.2%

Kanda branch
Kodemmacho
branchChiyoda

56.8%

60%

Kojimachi
branchNihonbashi
branch

42.9%

Value up the low-occupancy buildings into
high-occupancy with around a year
through the “creativity” of replanning and“leasing capabilities” closely tied withlocal communities.

0%

ShibuyabranchGotandabranchMinatoChuo

Ginza branch
Hamamatsucho
branch● Yokohama

branch◆ Major Replanning properties sold in FY 2023/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

24

Sun Frontier Fudousan Co., Ltd

Specified Joint Real Estate Ventures

Promote Sales of Small-lot Real Estate Property
Sell nursery schools, medical and educational malls, which contribute to the lives of local communities,
as small-lot products.
(people)400

Number of Investors in Small-Lot Real Estate Property

Sales network(tax accountants and financial institutions)

311
300

100

Over 180 companies

167

200

29

66

0

FY2020/3
FY2021/3
FY2022/3
FY2023/3
FY2024/3
An increasing number of clients are investing in small-lot products to meetreal estate investment needs

Sold out on November 1！

Expanding, aiming to reach over 200
companies

Compass Magome

Compass Ueno

A new construction medical and educationalmall in Ota Ward

A new construction licensed nursery school in
Ueno

2-28-4 Kitamagome, Ota-ku, Tokyo
2m walk from Magome Station on Toei Asakusa Line
3-stories
1,274.89 square meters for total floor area

3-45 Taito, Taito-ku, Tokyo
2m walk from Naka-okachimachi Station on Hibiya Line
6m walk from Okachimachi Station on JR Yamanote
Line and Keihin-Tohoku Line
4-stories
546.77 square meters for total floor area

With the theme of “medical and education”, inwhich daycare, English conversation school, etc.
Enter as tenants, centered on large medical
corporations that has strengths in hemodialysis,
and drugstores with a dispensing pharmacy.

In line with SDGs and ESG investments, including
eliminating the problems of children waiting foradmission and promoting women’s activities.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Sold out on March 23！

25

Sun Frontier Fudousan Co., Ltd

Real Estate Service Business Continues to Expand
Its Customer Base
Increase the clients of Real Estate Service Business, which specializes in the central Tokyo area,and strengthens the business base.
【Property Management entrusted property distribution】

Trends of the Number of Entrusted Buildings in Property
Management Business（棟）(buildings)
600
500
400

333

362

372

373

392

397

421

457

276

300
200

District100
0FY2015/3(cases)

FY2016/3

FY2017/3

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

FY2024/3

Trends of the Number of Rent Guarantee Contracts

4,000
3,000

2,035
2,000

1,290

2,370

2,658

2,989

3,099

3,261

P

Entrusted properties of the Company【Percentage of new contracts of Rent Guarantee by area】

3,563

OthersExcept for 23
7%
wards 1%

Chiyoda-ku
25%■ 5 cities of central
Tokyo 79%

Other 23 wards

13%

1,642

Chuo-ku
19%

Shinjuku-ku
9%Shibuya-ku Minato-ku
14%
12%

1,000

■ Other Tokyo 14%
Total of 93% in Tokyo

0
FY2015/3

FY2016/3

FY2017/3

FY2018/3

FY2019/3

FY2020/3

FY2021/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

FY2022/3

FY2023/3

26

FY2024/3* As of March 31, 2023 : 749 new contracts

Sun Frontier Fudousan Co., LtdConference Room Rental Business

Expand Sites to Meet Diverse Needs
Operating area of Vision Center increases 25% by opening new sites and expand.
◆Sites of new open and expand◆ Network of Vision◆ Center Sites

Vision Center Ichigaya

4/3

Open

Vision Center Tokyo Yaesu

4/10

Open

Vision Center Nihonbashi

4/1

ExpandVision Center Tokyo Kyobashi

4/1

ExpandVision Center Nishishinjyuku

4/24

Expand※In March 2023, there are 4,400 tsubo for operating. In April, there will
increase into 5,500 tsubo.

◆Trends of Net sales for Conference Room Business and Operating area of Vision Center(million of yen)(tsubo)

2,500

10,000Net sales（left axis）

Operatin area（right axis）

1,279

1,500
1,000
500

1,842

Pandemic of Covid-19

2,000

720
410

1,200

1,162

1,289

917

8,000

5,500

6,000

4,400
4,000

1,500

3,000

FY2019/3

FY2020/3

3,400

3,400

FY2021/3

FY2022/3

2,000

600
0
FY2017/3

FY2018/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

FY2023/3

0
FY2024/3 （forecast）

Sun Frontier Fudousan Co., Ltd

Office Building Business Keep in High Profitability● Replanning Business maintains high profit margin

Replanning Business contributed as high profit business withthe highest level of the profit margin in the past.

(million of yen)

70,000

40.0%

32.4%

60,000
27.8%

28.2%

31.2%

30.0%

31.1%

29.2%

50,00047,995

24.3%

22.1%

20.0%
30,000

15.0%

Segment profit
Segment margin

30.0%
25.0%

40,000Net profit

35.0%

14,94320,00010,000

5.0%

0

0.0%
FY2015/3

FY2016/3

FY2017/3

FY2018/3

Leasing Brokerage
Bales Brokerage
Sub-leases referral fee

FY2020/3

FY2021/3

FY2022/3

FY2023/3

4,890

Conference Room (million of yen)
5,000
Rent Guarantee
4,000
Building Maintenace
3,000

FY2019/3

Sales Brokerage, Leasing Brokerage and Property Management are also strong.
Rental conference room operations are also improving. The growth rate of Real
Estate Service Business is increasing.

● Steady Growth in Real Estate Service Business

Property Management

10.0%

3,206
2,330

2,491

2,508

FY2015/3

FY2016/3

FY2017/3

2,821

3,490

3,803

2,829

2,000
1,000
0

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

FY2018/3

28

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

Sun Frontier Fudousan Co., Ltd

Hotel Development Business

Develop Hotel Planned and Aggressively
Collected development funds through the sale of two hotels in FY2023/3,
and the other one in FY2024/3. Going forward, we will develop and operate
mainly “Tabino Hotels” brand and condominium hotel, and also keep using
M&A to expand our business.

NumberAcquisition and openingof rooms

Hotel name and location

StatusSpring Sunny H Nagoya Tokoname Station

194

2016.4

AcquiredOwn

4 Sky Heart Hotels (excluding Shimonoseki)564

2016.12AcquiredLending and leasing

HIYORI Hotel Maihama

80

2017.4

Newly constructed

Sold leaseback

SADO RESORT HOTEL AZUMA

57

2018.4

Acquired

Own

Tabino Hotel Hida-Takayama

80

2018.5

Newly constructed

Own (leased)

SKY HEART Hotel Shimonoseki

105

2018.6

Acquired

Own

Tabino Hotel Sado111

2018.7

Newly constructed

Lending and leasing

HIYORI Hotel Osaka Namba Ekimae224

2019.5

Newly constructed

Lending and leasing

Tabino Hotel Kurashiki Mizushima

155

2020.2

Newly constructed

Lending and leasing【Tabino Hotel lit Matsumoto】 Rooms with kitchen and washing machines are suitable for long-term stays.
A large public bath is handled for both tourism and business demand.

DONDEN Highland Lodge

112020.4

Entrusted

Lending and leasing

Tabino Hotel Kashima

194

2020.4

Newly constructed

Own (leased)● Condominium Hotel Case Study

Hiyori Ocean Resort Okinawa

203

2021.2

Newly constructed

Sold leaseback

SADO NATIONAL PARK HOTEL OOSADO

74

2021.4

Acquired

Own

Tabino Hotel lit Miyakojima

111

2021.6

Newly constructed

Own

Tabino Hotel lit Matsumoto

176

2021.7

Newly constructed

Lending and leasing

Sora Niwa Terrace Kyoto

1022022.6

Newly constructed

Own

Sora Niwa Terrace Kyoto Bettei

342022.6

Newly constructed

Own

Tabino Hotel Villa Miyakojima

42022.11

Entrusted

Lending and leasing● "Tabino Hotel" Brand Case Study【Hiyori Ocean Resort Okinawa】 Luxury hotel which all are suite rooms with ocean flat terrace.

21 hotels 2,477 rooms as of May 12, 2023
<Hotel Business Model Case>
Land

Land

Operation
Sell
Owner

Purchase

Development

Operation

Constructionus
Sun Frontier
Hotel Management

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

us
Sun Frontier
Hotel Management

29

Sell
us
Sun Frontier
Hotel Management

Purchase
Owner

Lease
Contractus
Sun Frontier
Hotel Management

Sun Frontier Fudousan Co., Ltd

Hotel Operation Business

Improvement in Occupancy Rate and Average Daily Rate
Strengthening initiatives for the realization of a heartwarming and fun hotel anda sustainable society.
Trends and outlook for occupancy rate and average daily rate(yen)

100.0%

20,000
Average daily rate (R axis)

Occupancy rate (L axis)
80.0%

75.0%

71.2%

Both「Tabino Hotel Sado」and「Hiyori Ocean Resort Okinawa」
certified as SDGs Partners.

16,000

63.7%
60.0%

12,000

43.1%
36.8%
40.0%

8,000

13,50011,665
20.0%

9,440

8,322

4,000

Together with local governments, we
keep making efforts to contribute to therealization of a sustainable society .

6,320

0.0%

0

FY2020/3

FY2021/3

FY2022/3

FY2023/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

FY2024/3 (Forecast)

30

Sun Frontier Fudousan Co., Ltd

Shima Yume Business

Two Hotel Buildings Reopened After Renovation
In anticipation of inscribing ”Sado Gold Mine” on the World Heritage List, we leverage themeasures of the Japan Tourism Agency to renovate the hotels. Improve the revitalization of
tourism industry.
A long-established hotel that has been opened for more than half a century.
A hot spring resort with an open-air bath nestled in a superb view.

Water terrace leading to theopen ocean of the Sea of Japan.

Open-air bath where you canenjoy the Sea of Japan fromseason to season.

Variety of specialty of Sado fromthe mountain and sea.

Premium suite with hot spring open-air bath on the top floor.

An extraordinary and casual resort to have more fun and consolation in Sado.

An unbroken view of Sea of Japan
at then open-air bathan

Room with an open-air bath on
the view terrace

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Ocean terrace with an open-air
bath

31

Kaiseki cuisine made withseasonal ingredients carefully
selected mainly from Sado.

One of the 100 selections of Japanesesunsets scenery

Sun Frontier Fudousan Co., Ltd

Environment Energy Business

Addressing Social Issues of Decarbonization
Environment Business based on the Philosophy.

Solar
power
generation

Electric
Construction

Organizing operators of EPC (Engineering / Procurement /Construction) for solar power equipment and delivering
the equipment.

Electricity
Sales

Became a PPA (Power Purchase Agreement) operator
and sell electricity to power consumers.

Agrivoltaics

Promotion of utilization of
power storage system

Installing solar power equipment on farmland to sellelectricity, which could solve the issues on power
plant sites.
Capital alliance with Notus Solar Japan.

Agrivoltaics “Notus Solar System”

Expanding sales of industrial medium-sizedindustrial power storage systems.
Capital and business alliance with CONNEXX
SYSTEMS.
Power storage system BLP® of CONNEXX SYSTEMS

Environment value

Contributed to carbon offset of office buildings
with forest-related J-Credit (Mori no Denki, RE100)

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

Sun Frontier Fudousan Co., Ltd

Philosophy and Sustainability

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Sun Frontier Fudousan Co., Ltd

Philosophy
Top-level concept
Credo (Company policy)

MissionVisionValue

What for?
How youwant to be

Course of
ActionCopyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

COMPASSION
We believe in helping others, as many as we can,throughout our lives.
Our mission is to co-create a rich and sustainable
society as we look after every employee and pursue
the happiness of both mind and matter.
Our vision is to become the most appreciatedvisionary company that fully utilizes limited resources
and continues the challenges to create new values.
1. Work For Your colleagues

5. Be GENBA-Centric

2. Stay Humble, Thankful, And
Respectful

6. Always Work Creatively

3. Do The Right Thing

7. Be Open-Minded Cheerful and
Wonderful

4. Absolute Proactiveness34

Sun Frontier Fudousan Co., Ltd

Business area
Solving social issues through our core business, Real Estate Utilization.

Realization of Sustainable Society
Environmental
Protection
Office Business

Real Estate Revitalization
・Replanning
・Small-lot Property
・Rental Building

Human Resource
Development
Hotel and Tourism

Others・Construction

Overseas

Hotel
Hotel
Operating Development

USA・Operating

・Replanning

Real Estate Service
・Sales Brokerage
・Leasing Brokerage
・Peoperty Management
・Building Maintenace
・Aseet Consulting
・Rent Guarantee
・Conference Room Rental

Region
Revitalization

・Development
・Revitalization
・DalesShima Yume

Region Revitalization・Hotel Operating and Development
・Tourism
Taxi, Restaurant
Rental car, Rental bicycle

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35（New York）

Taiwan・Sales Brokerage

Environment
・Solar Power
EPC, PPA・Agrivoltaics

・Sales of power
storageVietnam・Residential
Development

・Environment value

・Residential
Management

Sun Frontier Fudousan Co., Ltd

Sustainability Issues and Targets
Sustainability Vision

Sustainability HP → https://www.sunfrt.co.jp/sustainability/

We will contribute to the realization of a sustainable society through business activities
while respecting the heart of altruism, the Company policy.
IImportant Issues

Environmental
protection

Social issues to be solved

PolicySmall and medium-sized buildingsthat can still be used withincreased value are being
demolished.
= Waste of resources■ Extend the life and health ofreal estate■ Energy conservation andreduction of environmental
impact by the Real Estate
Revitalization Business

•
•
•

•
•

Revitalizationof regional economies

Regional
revitalization
Response to massive natural
disasters

Humanresource
development

Elimination of the decline in theworking-age population due to lowbirthrate and aging population (realdecrease in labor force) and thegender gap■ Create buildings, offices, andspaces with “job satisfaction”
and “creativity” that
contribute to economic growth■ Prevent and mitigate disasterthrough regional cooperation■ Respect and utilize diversity■ Create workplaces with job
satisfaction, creativity andgrowth opportunities

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

SDGs
icon

Goal (KPI)

36

•
•
•

Extend economic estimated useful lives by at least 30%
Occupancy rate of buildings over 30 years old to be 90% or
moreRetention of management after sale of replanning property
to be 90% or more
Reduce carbon dioxide emissions by an average of at least
12% compared to a building reconstruction project
100% carbon offset
Establish internal standards by the end of FY2022
Percentage of new supply of replanning properties thatexceed the established internal standards to be 30% ormore in FY2023
Implement tenant satisfaction surveys (for Companyowned properties)••

At least five lots by FY2023
Post disaster prevention information on the dedicatedwebsite 100% in FY2023 (for Company-owned properties)•

Ratio of female management to be 12% or more by April
2025 (Sun Frontier Fudousan Co., Ltd.)
Training hours as a percentage of prescribed working hours
to be 10% or more
Increase hourly recurring profit in FY ending March 2023
year-on-year (per regular employee of Sun Frontier
Fudousan Co., Ltd.)••Sun Frontier Fudousan Co., Ltd

ESG Data
Environment

SocialGovernance
As of March 31, 2023

As of March 31, 2023

Actual numberof RP buildings

Carbon Offset
Cumulative total 2,757ｔ

Ratio of male and female employees
in managerial positions■Male ■Female（people）

398人

400

Total 460 buildings

RE100/Mori no Denki
Total 19 buildings 2,241ｔ

RP construction
22 buildings
516ｔ
Capital and business alliance
Promoting the use ofelectricity storage systems

Establishment of SF
Ocean Power Generation
Co., Ltd.

Target ratio of female（people）

100

managers at least 12%
79人

254
People
63.8%

300
200

144
people
36.2%

100

0

50

0

72
People91.2％
7people8.8％

Employee

Management
管理職

Childcare leave

Human resource
development

Utilization rate 100%

As of March 31, 2023

Transition to acompany with
Audit & Supervisory
Committee
As of June 30, 2022

Board of Directors
Audit &
Supervisory
Committee

Female Directors
1 out of 11

Training at least 10%External
36.4%

Full-time
63.6%

Nomination andCompensation
Committee (optional)
2 out of 4 outside officersof working hours
10.3%

Return to work
ratio 92.6%

Ratio of Outside
Officers 1/3 or more

Full-time Full-time

Capital and business alliance
Promoting agrivoltaics

Acquired BELS for
6 properties

Outside Outside

From childcare leave,
92.6% return to work

■ Male ■ Female

Ensuring transparency
and soundness

・ RE100 ・ ・ ・ ・ Carbon offset using J-credit derived from renewable energy. Initiatives to become the first in Japan to introduce this system on each floor. Achieve zero Co2 emissions per tenant company.
・ "Mori no Denki" ・ ・ ・ Carbon offset using J-credit derived from forests. We can feel that we are supporting forests side-by-side and moving into the building will contribute to the environment.

For more information, please refer to our sustainability website →https://www.sunfrt.co.jp/en/sustainability/
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

37

Sun Frontier Fudousan Co., Ltd

Shareholder ・ Investor Relations
In order to contribute to sustainable growth and the improvement of corporate value over the medium to long term, we
disclose information fairly and in a timely manner to all stakeholders. We place importance on direct communication by the
Representative Director, and report and share information with the Board of Directors to make improvements.

Disclosed materials
Financial Results

Disclose Japanese and English version simultaneously.
Disclose Chinese version within a week after Japanese.

IR Presentation

Disclose Japanese and English version simultaneously.
Disclose Chinese version within a week after Japanese.

Annual Securities Report

Disclose Japanese and English version.

Japanese: https://www.sunfrt.co.jp/ir_info/
English: https://www.sunfrt.co.jp/en/ir_info/ir_doc/annual_securities_report/

Notice of General
Meeting of Shareholders

Disclose Japanese and English version.

Japanese: https://www.sunfrt.co.jp/ir_info/annual_general_meeting/English: https://www.sunfrt.co.jp/en/ir_info/annual_general_meeting/Presentation of financial
results

Held every quarter by President Representative
Director, Seiichi Saito.

Website for on-demand broadcast (including Q&A)
https://www.sunfrt.co.jp/ir_info/ir_doc/on-demand.html

Individual IR meetings

Conducted individually as needed.
(mainly handled by IR staff).

FY2023/3: 61 times in total

Property tour

A Replanning properties tour held on September 22, 2022 for sell-side analysts and institutional investors.

Seminar for Individual
investors

President Representative Director, Seiichi Saito, joined an IR seminar for individual investors held by Securities Analysts
Association of Japan on March 22, 2023.

Website (IR Library)
Japanese: https://www.sunfrt.co.jp/ir_info/ir_doc/statement-of-accounts/
English: https://www.sunfrt.co.jp/en/ir_info/ir_doc/statement-of-accounts/

IR activities

Shareholder benefit program
Eligible shareholders

Shareholders stated or recorded in the shareholder list as of the end of March of each year who hold one unit (100 shares) ormore for our company share.

OutlineDiscount coupons for hotels operated by our group companies based on the number and period of shares held.

Details and facilities
available for use

Shareholder benefit program website
https://www.sunfrt.co.jp/ir_info/stockholder_benefit_plan/

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38

Sun Frontier Fudousan Co., Ltd

Business Model

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

Sun Frontier Fudousan Co., Ltd

Strategy in Office Business
Solving client’s various problems, mainly in the five cities of central Tokyo.

RP
12

14

11

*As of the end of March 2023

LM
21
73

Of the total number of RP buildings,
460buildings, 80% are in the five cities ofcentral Tokyo and adjacent cities.

133

PM

41

Community-based 10 branches
Ginza, Kanda, Nihonbashi, Kodemmacho, Kojimachi,
Shinjuku, Shibuya,Gotanda,Hamamatsucho, Yokohama

Of the 457 entrusted properties, over 80% arein the five cities of central Tokyo.
*As of the end of March 2023

48

BM

11

Of the 222 buildings under comprehensive
management, 85% are in the five cities ofcentral Tokyo.
*As of the end of March 2023

Rent
Guarantee

Of the 749 new contracts signed, 90% are in thefive cities of central Tokyo.
*As of the end of March 2023

8

Rental19 of the 18 sites are in the five cities ofConference central Tokyo.
Room*As of the end of March 2023. The rest of one is in Yokohama* The numbers on the columns in the map are
the cumulative number of RP buildings.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

40

Sun Frontier Fudousan Co., Ltd

Strengths in Office BusinessWith in-house manufacturing from purchase, development, leasing to sales and consulting,
we solve various problems by getting client’s needs correctly.

① Real Estate Utilization
To be a partner for solving various problems from clients’ point of view

Fundraising Consulting

Asset consulting

Rent guarantee

Construction planning

Property management

Leasing brokerage

Sales brokerage

Property
purchasing② Real Estate
Revitalization
Building
development ofvalue chain

Property
sales

Clients
1. Real estate utilization: Get close to our clients and solve various problems. Capture the source of added value
from clients’ voices.
2. Real estate revitalization: Utilize the needs we earned and the know-how for improving the valuation to conduct
sales activities.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

41

Sun Frontier Fudousan Co., Ltd

Business Model for Replanning Business
Renovating the office buildings with low occupancy and in need of large-scale repairs
into high-value-added properties demanded by society using “clients’ point of view.”

Low-occupancy
low-profit buildings
・ Aging degradation
・ Earthquake
resistance anxiety
・ Violation of legal
compliance, etc.

Creativity

Leasing

Design offices in clients'
point of view and carryout renovation and repair
work in pursuit of safety
and security.

A community-based sites
network keep the building inhigh occupancy and becomesthe closest contact point for
any kind of consultation.

High-occupancy
high-profit buildingssought by owners

Value-up

Purchasing

Rent Guarantee

Purchase of lowoccupancy and nonoccupancy buildings
using various routes andmethods.

Encourage tenants tomove into the building andguarantee stable income
for the owner in the eventof rent arrears.

Clients =Building owners

Sales

Management

Stay close to clients of asset
holders and meet needs
with high levels of difficulty
beyond expectation.

Provide high-quality
services, maintain highoccupancy rate, andstabilize building
revenues.

・ Asset management, inheritancemeasures, etc.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

42

・ Full occupancy
・ Improve
income andexpenditure
・ Stable income

Sun Frontier Fudousan Co., LtdReplanning Business

Set-up Office Share"Set-up Office" is an office set up in an office building replanned by the Company. Unlike regular office interiors, the officehas reception and reception room, etc. set up, highly designed interior work in the office area, which is rented out withsome equipment and fixtures pre-installed.

◆Four benefits for tenant companies
Merit 1) Reduced burden on management
No need for unfamiliar tasks such as designing office interiors andselecting interior decorators, significantly reducing management’s
effort.

Merit 2) Immediately available after moving
Increase the net estimated internal useful life due to no work other than wirerelated work and moving, a significant reduction in the relocation period and ashorter construction period for interior finishing and restoration.

Merit 3) Reduced financial burden
Significant cost reduction for office interiors, etc., and no interior assets
recorded by tenants.

Merit 4) Employment, motivation and productivity improvement
Improve employment of human resources, employee motivation, and officeproductivity by the office interior that pursues a high level of design, focusing
on design, functionality, and various usage scenes.

The share of Set-up Office in 23 wards of Tokyo
Based on rental area

Based on the number of rental rooms

Company C
2.5%

Other
20.6%

Company B
5.5%
Company A
6.4%

Company C
2.6%

Sun Frontier
Fudousan

Other
20.9%

Company A
9.2%

65.0%

Company B
9.8%

Sun Frontier
Fudousan

57.5%
Survey conducted in September 2022
Survey planning: Sun Frontier Fudousan Co., Ltd.
Survey conducted: H. M. Marketing Research

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

43

Sun Frontier Fudousan Co., LtdReplanning Business

Create both Customer Value and Social Value
Solving social issues through supporting our clients' business.
Supporting the business growth forbuilding owners and tenants throughour Replanning Business.

Comparison of resource input over 50 years(kg / ㎡)

3,991

(t-CO₂)

40.9% ↓

4,000

Comparison of CO₂ emissions over 50 years

7,000

=
Reducing non-reproducible resources
to prosper humankind, plants andanimals on the earth.

3,000

6,399

19.1% ↓

2,357
6,000

2,000

5,179
1,000

5,000

0
Rebuilding
建替
New bldg
新築

Clients’value

Renovation
改修

Rebuilding
建替

Renovation 4,000
改修

Repair
修繕

Comparison of waste generation over 50 years(kg / ㎡)

3,000

801

49.3% ↓

800

2,000
600

406

400

Economic
value

Social
value

1,000

200
0
Rebuilding

Renovation

建替

New bldg

新築

Rebuilding

建替

改修

RepairRenovation

修繕

改修

Demolition

解体

0Standard
標準
New新築
bldg
Maintenance

維持管理

Renovation
改修

Repair
修繕 Renovation改修
Disposal
Energy

廃棄エネルギー<Assumptions and rationale> Assuming a 30-year-old office building of approximately 3,000 square meters, the environmental contribution over a 50-year period (the service life of SRC office buildings) was
estimated based on the Architectural Institute of Japan's LCA Tool (*).
・ Rebuilding: “In the case of rebuilding every 35 years” ・ Renovation: "Regeneration without destroying old buildings (long-life buildings)" ・ Standard: "Assuming a 30-year-old unrenovated building"*Architectural I "LCA Tool for Buildings Ver5.0 - Evaluation Tool for Global Warming, Resource Consumption and Waste Management”, estimated with the cooperation of Engineering Research Institute of Japan.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

44

Sun Frontier Fudousan Co., Ltd

Hotel and Tourism Business

Focus on Creating Enthusiastic Fans
With the theme of “a heartwarming and fun hotel”, we are aiming to be the mostappreciated hotel in the world.
Our Hotel Brand

Renewal Open on March 31, 2023

Sado
Luxury Class

Upper Middle Class

Sora Niwa Terrace Kyoto Bettei

HIYORI Hotel Maihama

Hiyori Ocean Resort Okinawa

HIYORI Hotel Osaka Namba Station
Tabino Hotel lit Matsumoto

MatsumotoOnna-son,
Okinawa
Kyoto Shijo

Takayama

Upper Class

Tabino Hotel lit Miyakojima

Sora Niwa Terrace Kyoto

Tabino Hotel Villa Miyakojima

SADO RESORT HOTEL AZUMA

Spring Sunny Hotel Nagoya
Tokoname Station

KashimaMiyakojima

Maihama SADO NATIONAL PARK HOTEL OOSADO
NaritaKoiwa

Shimonoseki
Tokoname
HakataKurashiki
Mizushima

Osaka Namba

Kawasaki

Economy Class

Budget ClassDONDEN Highland

SKY HEART Hotel Narita ※Tabino Hotel Sado

SKY HEART Hotel Koiwa

Tabino Hotel Hida Takayama

SKY HEART Hotel Kawasaki

Tabino Hotel Kashima

SKY HEART Hotel Hakata

Tabino Hotel Kurashiki Mizushima

SKY HEART Hotel Shimonoseki(As of May 2023) ※Will be temporarily closed on May 31, 2023

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

45

Sun Frontier Fudousan Co., Ltd

Business Model of Overseas Business
Developing local communities through creating clients' joy and happiness.
Our business includes land acquisition, development, construction, Handover after completion,
property management and brokerage.

Landacquisition

Completion
HandoverDevelopment
Construction

Management

Urban
Development

Contribute to future performance through systematic andcontinuous development efforts

China
Hanoi
Laos

Land
acquisition

Development
Land
acquisition

Hue

Completion
HandoverDevelopment

Land
acquisition

Hai PhongThailandCompletion
HandoverDevelopment

Cambodia

Da Nang City
Hoi AnVietnamHo Chi Minh

Completion
Handover

Rooted in the local community in Vietnam, we work together with local partners to ensure highconstruction quality, a safe, organized, and beautiful construction site.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

46

Sun Frontier Fudousan Co., LtdReference Materials

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

47

Sun Frontier Fudousan Co., Ltd

Office Vacancy Rates and Rents in Five Cities ofCentral Tokyo（％）

Peak of vacancy rate
August 2003
Vacancy rate: 8.57

Peak of average rent
August 2008
22,901 yen

Average rent as ofMarch 2023

19,991 yen
Average vacancy rate in
March 2023

( 23 yen ↓MoM )

（yen）

6.41%
( 0.26%pt ↑ MoM )Peak of vacancy rate
June 2012
Vacancy rate:
Peak average rent
July 2020
23,014 yen

Bottom of average rent
October 2004
17,526 yen

Bottom of average rent
December 201316,207 yen

Bottom of vacancy rate
November 2007
Vacancy rate: 2.49%

Bottom of vacancy rate
February 2020
Vacancy rate: 1.49%* Source: Compiled by the Company based on Miki Shoji's "Office Report”. Office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

48

Sun Frontier Fudousan Co., Ltd

Long-term Trends in Office Vacancy Rate and Rent
(％)

(yen)
50,00045,00044,193

Average rent
平均租金

Vacancy rate
空屋率

(left axis)(right axis)

9.01

Average vacancy rate in
March 2023

10

6.41％

9

8.08
8.12

40,000

Average rent in March 2023

8

19,991円
35,0006.33
30,000

6.47

7

6.41
6

25,0005

22,18621,99919,991
20,0004

17,577

16,2073.77
15,000

3

3.17
2.65

10,000

2

1.79
1.55

5,000

1

0.39
0

0

Source: Compiled by the Company based on Miki Shoji's "Office Report"
Target office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered. Figures for 2021 and earlier are taken as of December of each year.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

49

Sun Frontier Fudousan Co., Ltd

Age Distribution of Office Buildings in Tokyo’s 23 Cities
Solving social issues through revitalizing and utilizing Aging Small-to-Medium-Sized Buildings
Tokyo 23 cities with 9,400 buildings

Small-to-Medium-Sized Buildings(Total floor area: 300 to 5,000 tsubo)

8,642 buildings

75

Large-sized Buildings

70(Total floor area: Over 5,000 tsubo)

65758 buildings

60

Old Seismic Building Codes:
2,072 buildings (24%)

55

Old Seismic Building Codes:
109 buildings (14%)

50
45

20 years old or more:

40

7,523 buildings(87%)

35

Age of buildings

30
25

Buildings built for more than 20 years :20

460 buildings(61%)

15

Buildings built for less than 20 years :101,108 buildings (13%)

Buildings built for less than 20 years :5298 buildings (39%)

0
800

600

400

200

0

200

400

600

800

Number of buildings
Source : Created by us based on "Tokyo 23 cities Office Pyramid 2023 (based on the number of buildings)" (Xymax Real Estate Institute)

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

50

Sun Frontier Fudousan Co., Ltd

Market Size and Number of Corporations in Tokyo
Provide happiness and improve society development in Tokyo which people and corporations
gathering.
Ratio of Tokyo population to Japanese population (estimate)(Thousand people)

Population in
東京都人口
Tokyo

160,000

Population
日本人口of Japan

Population of Tokyo as a percentage of the
東京人口が日本人口に占める割合
population of Japan

25.0%

140,000
20.0%

120,000
100,000

15.0%

80,00060,00040,000

10.6%

10.3%

11.1%

11.4%

11.7%

11.9%

12.6%

9.5%

9.8%

12,064

12,577

13,15913,515

13,85013,97913,93813,754

13,458

2000

2005

2010

2015

2020

2025

2030

2035

2040

10.0%
5.0%

20,0000

0.0%

Source: Compiled by the Company based on Tokyo Metropolitan Government statistics - "Population of Tokyo (Estimate).”Top 10 Prefectures in Number of Corporations
Tokyo 京東575,234

Osaka 阪大223,407

Kanagawa神奈 川

184,363

Aichi 知愛

153,694

Saitama埼
玉130,108

Hokkaido
北海 道
Chiba 葉千兵Hyogo庫119,564
107,704

94,013

福岡Fukuoka

83,562静岡Shizuoka

76,981
Source: Compiled by the Company based on the National Tax Agency‘s “Number of Corporations by Prefecture”.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

51

Sun Frontier Fudousan Co., Ltd

Population Movements in the Three Major
Metropolitan Areas and Local Areas
In 2022, the number of people moving into the Tokyo area started to increase again,
and the trend of population concentration remains unchanged.
First peak of
population inflow(1961)（Ten thousand people）

40
30
20

Excess transfer

10

Second peak of
population inflow(1987)

Tokyo Area

Third peak of
population inflow(2007)

Fourth peak of
population inflow(2019)

Osaka area
Nagoya area

0
(10)
(20)
(30)

Local area

Collapse of
bubble economy

Oil crisis(40)

Global financial
crisisCOVID-19
crisis

(50)
(60)
(70)

Source: Prepared by the Company based on Statistics Bureau, Ministry of Internal Affairs and Communications, "Number of New Residents by Address Before and After"

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

52

Sun Frontier Fudousan Co., Ltd

History(million of yen)

In April 2022, Listed on Prime Sectionof Tokyo Stock Exchange

売上高
Net sales

100,000

経常利益
Ordinary profit

In October 2018, Start Specified Joint Real Estate Ventures

the number of employees
従業員数

In April 2016, Start Conference Room Rental Business

82,777

In August 2015, Start Hotel Operating Business

In February 2007, Listed on First Section ofTokyo Stock Exchange

80,00073,218641

In July 2005, Start Rent Guarantee Business

71,251696

600
59,63253,291 522

In January 2001, Start Replanning Business

48,15047,463

In 2000, Start Property Management Business

400

40,394 381

40,000

800

702

612

In December 2004, Listed on JASDAQ

60,000(people)35,254329

30,62526,870
5,003

20,000

3,588
2

1

681
24

1,771

0 140

0

52
377

70
501

84

7,760

16,730
134

125

152

14,469
141

96
8,289
3,474

142

27,741

206

199

181
139

10,580

6,346

4,289
541

791 1,437

799

223

17,772

6,923
2,039

7,024
4,341

16,127276

200

12,813

14,722

10,755
8,894

12,215

5,593

7,524

0

▲3,776▲20,000▲17,794
'00/3

'01/3

'02/3

'03/3

'04/3

'05/3

'06/3

'07/3

'08/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

'09/3

'10/3

(200)
'11/3

53

'12/3

'13/3

'14/3

'15/3

'16/3

'17/3

'18/3

'19/3

'20/3

'21/3

'22/3

'23/3

Sun Frontier Fudousan Co., Ltd

Company Profile
Company Name

Sun Frontier Fudosan Co., Ltd.

Location of Head Quarters 1-2-2, Yurakucho, Chiyoda-ku, Tokyo
Date of Foundation

April 8, 1999

Date of Listing

February 26, 2007 (First Section of Tokyo Stock Exchange)

Capital Stock *11,965 millions yen

Representative

Tomoaki Horiguchi, Chairman Representative Director
Seiichi Saito, President Representative Director

Number of Consolidated
Employees *Average Age of
Employees*

702 employees (1,303 including part-timers and temporary workers)
36.4 years old
Real Estate Revitalization

Business Profile

Real Estate Service

Properties Management, Brokerage, Construction Planning,
Rent Guarantee, Building Operations, Asset Consultation

Hotel Development and Operation
Accounting Month

March

Listed Market

Tokyo Stock Exchange Prime (Code number: 8934)

Company Name

Sun Frontier Fudosan Co., Ltd.

* As of the end of March 2023
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

54

Sun Frontier Fudousan Co., Ltd

Sun Frontier Fudousan Co., Ltd

Thank you for your continued support.
◆ The purpose of this document is to provide information that can be used as a reference, not for soliciting or promoting you

to purchase a specific product. Please make your decision by your own discretion and responsibility when you make an
investment. If you want to purchase shares of our Company, please contact securities companies.
◆ The information provided in this document is not necessarily in compliance with the Financial Instruments and ExchangeAct, the Building Lots and Buildings Transaction Business Act, the Listing Rules for the Tokyo Stock Exchange and otherrelated laws and regulations.
◆ Forward-looking statements included in this document do not guarantee future performance.
◆ Although we have made every effort to ensure the contents of this document, we can not guarantee their accuracy or
certainty. Please note that they are subject to change or removal without notice.

<Inquiries about this document>
Sun Frontier Fudousan Co., Ltd. IR Desk
Phone : +81-3-5521-1551
URL : https://www.sunfrt.co.jp/
Mail : ir-contact@sunfrt.co.jp