Sun Frontier Fudousan Co., Ltd

Financial Results for the First Quarter of
Fiscal Year Ending March 31, 2024
We are aiming to be the most appreciatedvisionary company in the world.

1) Overview of the Results of FY2024/3 1Q

1-92) Business Progress and Initiatives

10-233) Medium-term Management Plan

24-27

4) Philosophy and Sustainability

28-33

5) Business Model

34-40

6) Reference Materials

41-46

August 9, 2023
Securities Code : 8934

Overview of the Results of FY2024/3 1Q
Strong started in Hotel and Tourism Business by the remarkable recovery
of tourism demand. Office Business progressed steadily as planned.
(Unit: million yen)

Results

ProfitmarginYear-on-year

Growthrate

Forecast

Achievement
rate

Net sales

18,452－-4,450-19.4%

83,00022.2%

Operating profit

4,206

22.8%

-2,461-36.9%

16,50025.5%

Ordinary profit

4,184

22.7%

-2,505-37.4%

16,00026.2%

Profit*

3,134

17.0%

-1,555-33.2%

11,00028.5%*The profit attributing to owners of parent.

Performance Highlights• In Hotel and Tourism Business, the completion of the sale of property and the remarkable
recovery of tourism demand for hotel operating contributed significantly to the performance.
• In Real Estate Revitalization Business, though both revenue and profit decreased due to thereaction for previous first quarter, in which the property sales was concentrated, property
sales progressed in line with the initial plan.

• In Real Estate Service Business, as the recovery of the demand, performance of Rental
Conference Room Business grew thanks to the expansion of new sites and floor space. Solidstart in each business.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Sun Frontier Fudousan Co., Ltd

Consolidated Income Statement(Unit: million yen)

Net Sales
Real Estate Revitalization Business
Replanning Business
Rental Buildings Business

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

Other Business
Adjustments

Gross Profit (Loss)
Real Estate Revitalization Business
Replanning Business

Rental Buildings Business

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

Other Business
Adjustments

Selling, General and
Administrative Expenses
Operating Profit (Loss)
Non-operating Income
Non-operating Expenses
Ordinary Profit (Loss)
ProfitFY2023/3
Apr. - Jun.

FY2024/3
Apr. - Jun.

22,903
18,582
18,062
519
2,387
1,917
0
1,917
306
-290
8,519
7,299
7,167
132
1,565
-170
0
-170

18,452
7,693
7,083
609
2,665
8,029
5,270
2,759
368
-303
6,306
2,261
2,125
135
1,557
2,665
2,200
465

48
-224

45
-223

1,850
6,668
167
145
6,690
4,690

YoY increase/
YoY change rate
decrease-4,450-19.4%-10,889-58.6%-10,979-60.8%

+90

17.2%

+278

11.6%

+6,112318.7%+5,270

－

+842

43.9%

+62

20.3%

-13

－

-2,213-26.0%-5,038-69.0%-5,041-70.3%

+3

2.7%

-8

-0.5%

+2,835－+2,200

－

+635

－

-3

-6.1%

+1

－

2,099

+249

13.5%

4,206
125
147
4,184
3,134

-2,461-36.9%-42-25.1%

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

+1

1.4%

-2,505-37.4%-1,555-33.2%

2

Keynotes of Income Statement<Real Estate Revitalization Business>
The number of sales was 5 (-5 YoY). It is the reaction for theprevious first quarter in which there were 10 of the 24 property
sales in the fiscal year concentrated. However, it is in line withthe plan.

<Real Estate Service Business>
Although there was the reaction of the previous first quarter
brokered large-scale projects in the previous first quarter, net
sales increased due to an improvement of operating rate in
Rental Conference Room Business and an increase in number of
entrusted buildings in the PM business, which made a solid startfor Real Estate Service Business.
<Hotel and Tourism Business>
Completed the sale of hotel property contracted in the previous
fiscal year. Due to the remarkable recovery of tourism demand,the occupancy rate and average daily rates were improved. As aresult, net sales and profit increased and made a good start.
<Selling General and Administrative Expenses>
Increased year-on-year due to human capital investment andsystem investment as planned.

Sun Frontier Fudousan Co., Ltd

Consolidated Balance Sheet- Assets -<Cash and deposits> Decreased by 4.4 billion yen due to the payment of dividends and corporate taxes, together with the progress inproperty purchases.
<Inventory assets>

Increased by 3.1 billion yen as purchase amount in Replanning properties was higher than the decreased
amount from the sale of Hotel properties and Replanning properties.

(Unit: million yen)

As of End of
March 2022

As of End of
March 2023

As of End ofJune 2023

Increase/decrease(compared to the End of
March 2023)

Current assets

110,920

125,886

124,615-1,271

Cash and deposits

30,05342,016

37,606-4,409Inventories

77,34080,182

83,351+3,16963,424
13,516400

70,3279,750
105

76,543
6,660
147+6,216-3,090+42

Other current assets

3,527

3,688

3,656

-31

Non-current assets

25,591

26,633

26,440-192

Property, plant and equipment

18,796

20,41020,574

+163

572

815

861

+45

6,222

5,406

5,004

-401

136,512

152,519

151,056-1,463

Breakdown) RP
Hotel
Overseas, etc.

Intangible assets
Investments and other assets
Total assets

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

3

Sun Frontier Fudousan Co., Ltd

Consolidated Balance Sheet- Liabilities/Equity -<Interest-bearing debt> Decreased by 1.1 billion yen as the repayment from property sales were

Changes of Equity Ratio

higher than the borrowings from purchases. Temporary increase in
short-term borrowing due to the loan repaid within one year.
<Net assets>

Increased by 1.9 billion yen due to the profit (3.1 billion yen), etc., despite
the payment of dividends (-1.2 billion yen).

(Unit: million yen)

As of End of
March 2022

As of End of
March 2023

As of End of
March 2022

As of End of
March 2023

As of End ofJune 2023

52.2%

52.9%

54.7%

As of End ofJune 2023(compared to End of March 2023

Increase/decrease

Current liabilities

16,21016,36318,803+2,439

Short-term borrowings, etc.

6,904

5,492

10,298+4,805

Income taxes payable

3,528

1,699

585

-1,113

Other current liabilities

5,777

9,172

7,920

-1,251

Non-current liabilities

45,84952,19046,333-5,856Long-term borrowings and bonds payable

44,16950,17044,261-5,908Other non-current liabilities

1,680

2,019

2,072

+52

Total liabilities

62,06068,553

65,137-3,416

Shareholders' equity

71,26080,43082,348+1,918

Other

3,191

3,535

3,569

+34

Total net assets

74,452

83,96585,918+1,952

Total liabilities and net assets

136,512

152,519

151,056-1,463Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

4

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 5 (-5 YoY), which is in line with the plan. It is (million yen)
the reaction for previous first quarter, in which the property sales (1030,000out of 24) was concentrated.
◼ Average business period was 458 days (-194 days YoY). Compared withthe previous first quarter, which mainly sold medium- to long-term
properties, there were a lot of short-term properties sold in this period.
As a result, the business period becomes short. We continue to achieve
high capital efficiency by focusing on business period.
◼ Maintained a high profit margin, although it is decreased YoY due to the 20,000
sales of medium- to long-term properties in the previous first quarter.
FY2023/3
Apr. – Jun.

FY2024/3
Apr. – Jun.

Increase/decrease

Net sales

18,582

7,693-58.6%

Replanning Business

18,062

7,083-60.8%

Rental Building Business

519

609

+17.2%

Segment profit (Note 1)

7,087

2,047

-71.1%

Replanning Business

6,955

1,911

-72.5%

132

135

+2.7%

38.1%

26.6%

-11.5%pt

Replanning Business

38.5%

27.0%

-11.5%pt

Rental Building Business

25.5%

22.3%

-3.1%pt

Number of properties sold10 cases
47 cases

5 cases
57 cases-5 cases(Unit: million yen)

Rental Building BusinessProfit margin

Number of stocks at the end of FY(Note 2)

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

(Note 2)+10cases

5

Net sales
Segment profit
Profit margin

50%

38.1%

40%

18,582

26.6%

30%

20%
10,000

7,087

7,693

10%
2,047
0

0%

FY2023/3
Apr.-Jun.

FY2024/3
Apr.-Jun.

(Note 1) “Segment profit” is calculated by deducting specific costsof each segment, 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<Replanning Business>
Properties purchased, which is keeping
strengthening, was 22.5 billion yen (including
contracted but unsettled properties), which is+9.65 billion yen YoY.
It is faster than the before of the pandemic of
COVID-19.

FY2023/3
Apr. – Jun.

FY2024/3
Apr. – Jun.

Increase/decrease

Number of properties purchased

10 cases

24 cases+14 cases(of which, contracted and unsettled)

7 case9 cases+2 cases

Purchase amount

12,86022,510+9,6509,560

12,590+3,030(Unit: million yen)(of which, contracted and unsettled)(million yen)

40,00036,82236,281

38,28632,86027,60030,00022,51020,00015,036

10,000

18/3期
FY2018/3

19/3期
FY2020/3
FY2019/3

20/3期
FY2020/3

21/3期
FY2021/3

22/3期
FY2022/3

23/3期
FY2023/3

24/3期1Q
FY2024/31Q

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

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

6

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>◼ Net sales and profit increased in PM Business due to an increase in
number of entrusted buildings.
◼ Net sales in BM Business were flat, profit decreased due to theincreasing costs.

<Brokerage>◼ Sales and profit increased in leasing brokerage by meeting needs forrelocation and expansion.
◼ Net sales and profit of Sales brokerage decreased due to the reactionof the previous first quarter in which brokered large-scale projects. It
is also a reason for the decrease of profit margin in Real Estate Service.
<Rental Conference Room>◼ Both net sales and profit increased due to the recovery of the demand
and the expansion of new sites and floor space.
<Rent Guarantee>◼ Although there was a reactional decrease due to the intra-grouptransactions in the previous first quarter, the number of newcontracts increased, so the result remained steady.

(Unit: million yen)

FY2023/3
Apr. – Jun.

FY2024/3
Apr. – Jun.

Segment profit(million yen)

Profit margin

3,000

80%
2,665
2,387

2,000

65.4%

1,561

58.2%

60%

1,551

1,000

40%

0

20%

Increase/decrease

Net sales

2,387

2,665

+11.6%

Segment profit

1,561

1,551

-0.6%

Profit margin

65.4%

58.2%

-7.2%pt

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

Net sales

7

FY2023/3
Apr. - Jun.

FY2024/3
Apr. - Jun.
Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Hotel and Tourism Business (Hotel Development, Hotel Operation, etc.)<Hotel Development Business>◼ Completed the sale of hotel property contracted in the previous
fiscal year as scheduled. It is contributed to the businessperformance significantly.

Net sales(million yen)

FY2024/3
Apr. – Jun.

Increase/decrease

1,917

8,029

+318.7%

Hotel Development Business

0

5,270

－

Hotel Operation Business, etc.

1,917

2,759

+43.9%

Segment profit

-252

2,638

－

Hotel Development Business

-30

2,173

－

Hotel Operation Business, etc.

-222

465

－

Profit margin

－

32.9%

－

Hotel Development Business

－

41.2%

－

Hotel Operation Business, etc.

－

16.8%

－

(Unit: million yen)

Net sales

Profit margin

10,000<Hotel Operation Business>◼ Net sales and profit increased due to the improvement in occupancy
rates and average daily rates at all hotels under operating according
to the remarkable recovery of tourism demand.
FY2023/3
Apr. – Jun.

Segment profit

50%
8,029

8,000

40%

32.9%
6,000

30%

4,000

20%

2,000

2,638

1,917

10%

0

0%
-252

-2,000-10%
FY2023/3
Apr. - Jun.

FY2024/3
Apr. - Jun.

(Note 1) “Segment profit” is calculated by deducting specific costsof each segment, including interest expenses, sales commission andamortization of goodwill from gross profit.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

8

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Other Business (Construction Business, Overseas Development Business, etc.)(million yen)<Construction Business>◼ Net sales increased due to the completion of orders and thestart of new construction, but profit decreased due to anincrease in costs.

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

Net sales

Segment profit

Profit margin

30%

368

400

20%

306

(Unit: million yen)

FY2023/3
Apr. – Jun.

FY2024/3
Apr. – Jun.

11.8%

Increase/decrease

Net sales

306

368

+20.4%

Segment profit

36

33

-8.1%

11.8%

9.0%

-2.8%pt

Profit margin

9.0%

200

36

10%

33

0

0%
FY2023/3
Apr. - Jun.

FY2024/3
Apr. - Jun.

(Note 1) “Segment profit” is calculated by deducting specific costsof each segment, including interest expenses, sales commission andamortization of goodwill from gross profit.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

9

Sun Frontier Fudousan Co., LtdTrends in Ordinary Profit for recently
5 fiscal years
Against the Forecast for FY2024/3, the results for 1Q was progressedsmoothly as scheduled.
(million yen)

1Q

20,000

2Q

3Q

4Q
Initial forecast

16,127
15,00012,813
Initialforecast
11,80010,000Initialforecast
14,00014,722
2,830

12,215

1,067

2,255

3,002

1,284

7,524

321

232
2,698

Initialforecast
6,500

3,997

5,000

Initialforecast
11,500Initialforecast
12,80016,000

6,366

2,008
1,345

962
1,178

9,758
3,432

7,277

6,690

4,747

4,184

1,952

0
19/3期
FY2019/3

20/3期
FY2020/3

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

21/3期
FY2021/3

10

22/3期
FY2022/3

23/3期
FY2023/3

24/3期
FY2024/3
1Q

Sun Frontier Fudousan Co., Ltd

Progress against Forecast for FY2024/3
Strong started for 1Q due to the completion of the sale of hotel and the remarkable
recovery of demand for hotel operating. Office Business progressed steadily as planned.
(Unit: million yen)

Results for
FY2023/3

Forecast for
FY2024/3

1Q Results for
FY2024/3

Progress Rate

82,77783,00018,45222.2%

50,06655,100

7,693

14.0%

47,9952,070

53,000
2,100

7,083
609

13.4%
29.0%

8,843
22,967

10,00016,900

2,665
8,029

26.7%

13,5009,467

5,400
11,500

5,270
2,759

97.6%
24.0%

1,788

1,860

368

19.8%

-887

-860

-303

－

Gross profit

22,80525,300

6,306

24.9%

(1) Real Estate Revitalization Business

16,122

16,400

2,261

13.8%

15,722399

15,900
500

2,125
135

13.4%
27.0%

4,898
1,907

5,400
3,800

1,557
2,665

28.8%

1,506
400

2,200
1,600

2,200
465

100.0%
29.1%

337

400

45

11.3%

-461

-700

-223

－

Operating profit

7,900
14,7228,800
16,000

2,099
4,184

23.9%

Ordinary profit

11,612

11,000

3,134

28.5%

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

Selling, general and administrative expenses

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

11

47.5%

70.1%

26.2%

Sun Frontier Fudousan Co., LtdTrends in Inventories and Gross Profit of Property Sales
To generate future profit, we improve to invest aggressively and increase inventories.

Sales of properties

FY2024/3(Forecast)561

45.1 billion yen

56.5 billion yen

61.5 billion yen

58.4 billion yen

33.1 billion yen

39.2 billion yen

44.2 billion yen

40.3 billion yen

billion yen

373
billion yen

Keepholding

Affected by COVID-19, both net
sales and purchase decreased,
and causing the decrease of
the balance of inventories .

30.5 billion yen
77.3 billion yen

Keepholding

Although COVID-19 prolonged,
sales were good. Started refocusingon purchases, but the balanceof inventories declined.

RP 15.8 billion yen
Hotel 1.5 billion yen

28.1%
47 billion yen
80.1 billion yen
Sales remained strong.
The results of strengthening
purchase emerged, leading to
the increase of the balanceof inventories .

Keepholding18.1 billion yen
RP 15.9 billion yen
Hotel 2.2 billion yen

30.9%
55.2~60.2 billion yen
95~100 billion yen
Plan to sell the properties more thanthe previous year. Aggressively invest topurchase and aiming to increase thebalance of inventories .

Ending balance for FY2024/3(Forecast)Gross profit margin(Assumed)

Net sales (Assumed)

Unrealized gains on inventories(Assumed)

95~100 billion yen

25~30%

125~140 billion yen

30~40 billion yen

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

12

Carryover86 billion yen

30.6%

17.3 billion yen

Sale in the following fiscal year

billion yen

Keepholding

RP 16.6 billion yen
Hotel 0.7 billion yen

Carryover

92.8

26.3 billion yen

17.3 billion yen

CarryoverEnding balance of theinventory

547
billion yen

26.6%
CarryoverPurchases during the
fiscal year, construction
work, etc.

33.5%

RP 9.2 billion yen
Hotel 2.8 billion yen

Sale in the following fiscal year

Gross profit margin

12 billion yen

Sale in the following fiscal year

billion yen

Sale in the following fiscal year

188

Gross profit

Sale during the year

FY2023/3(Results)

Sale during the year

FY2022/3(Results)

Sale during the year

FY2021/3(Results)

Sale during the year

Cost of property sales

FY2020/3(Results)

Sun Frontier Fudousan Co., Ltd

Business Environment Awareness1. World economy remained uncertain about economic slowdown due to the prolonged war in Ukraine crisis andinterest rate hikes to curb inflation.
The IMF raised its forecast for the world economy's real growth rate to 3.0%, but still keeping in low.
The U.S. Federal Reserve continues to raise interest rates. However, it is expected for a soft landing without meeting
recession.
2. Japanese economy expected to recover due to the easing of supply constraints and the recovery of inboundconsumption.
There is a sign of recovery in personal consumption and facility investment since COVID-19 was shifted to Category 5.
Although the Bank of Japan has revised its policy of manipulating short-term and long-term interest rates, it is stilleasing the monetary policy to achieve a stable 2% of inflation rate.
3. Central Tokyo office building market continues hybrid work styles with both commuting and teleworking.
Average vacancy rate of central Tokyo offices remained flat and average rents continued to decrease moderately, partly
due to an increase in new building completions.
Although institutional investors' appetite for investment is generally strong, attention should be paid to a rise in interest
rates due to monetary tightening.
4. In the hotel and tourism market, tourism demand is recovering. Continuing to expect for the inbound demand.
Domestic travel and inbound demand are both recovering. The number of overnight guests has exceeded of 2019 which
is before the pandemic of COVID-19.
As tourism demand is rapidly recovering, there is a need to cope with labor shortages and over tourism.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

13

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.

14

Sun Frontier Fudousan Co., LtdTrend of Number of Newly Established Corporations
The number of newly established corporations is on an increasing trend. The ratio of newly
established corporations in Tokyo keep in high.
(Companies)

50.0%

160,000

144,62245.0%

142,189

140,000

132,291

128,610

131,39840.0%

131,23835.0%
120,000

32%
31%

31%

30%

30.0%
30%

30%
25.0%

100,000

2017

2018

2019

2020

2021

2022

Source: Compiled by the Company based on "National Trends of Newly Established Corporations" by Tokyo Shoko Research, Ltd.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

15

Sun Frontier Fudousan Co., LtdReplanning Business, Examples of Initiatives (1)Converted a 38-year-old commercial building into an office building and sold it as ahighly profitable building.
BeforeAfter

OfficeOfficeCapsule hotel

OfficeCapsule hotel

OfficeFacilities attached to capsule hotels

Office(Extension)

Rest room
OfficeMassage room
Sauna *3-storey Maisonette

OfficeConvenience store

Convenience store
Road

Restaurants[Building appearance (after replanning)]
Kandamisaki-cho, Chiyoda-ku, Tokyo
Steel-framed reinforced concrete,
7 stories high with 1 basement

Reception space ofthe former hotelRoad

Capsule hotel

Office space

Restaurants

Bathroom

EV hall

Office lounge

Purchase

Although it was difficult for new tenants to move into the building due to the remaining
accommodation facilities and bathrooms of the capsule hotel, the building was turned into
an office building with high-occupancy and high-profitability by value-up. We also entrusted
the property management from the client after the sale.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Lavatory

16

RP

Management

Leasing

Sale

Warranty

Sun Frontier Fudousan Co., LtdReplanning Business, Examples of Initiatives (2)Converted a dormitory into an office, and the wall renovated with large windows createa bright space.
BeforeAfter[Floor structure (image)]

Small windows thatcannot see the outside

Spacious floors with high ceilings and large windows

Dark floor without sunlight

There are no buildings in the front andback, so the view is good

Equipped with separate
toilets for male and female

Purchase[Building appearance (after replanning)]
Iidabashi, Chiyoda-ku, Tokyo
Steel structure, 9 stories

Management

Dark rooms with small windows have been refurbished with large windows on the wall,
renewing the lighting and view. Value up into a building combined design and functionality.
Tenant move-in progressed, and the building was sold as a highly profitable building.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Bright and functional
conference room

17

Sale

RP

Leasing
Warranty

Sun Frontier Fudousan Co., Ltd

Specified Joint Real Estate Ventures

Promote Sales of Small-lot Real Estate Property
Provide small-lot real estate properties with the theme of education and medical in the residential areaat 23 wards of Tokyo.
Compass Nerima

Now on sale

3-15-1 Takanodai, Nerima-ku, Tokyo
8 minutes walk from Nerima-Takanodai station
on Seibu Ikebukuro Line
2 storey wooden building
513.00 square meters for total floor area

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

Taito

Setagaya

A new construction licensed nursery school in
Nerima-Takanodai, Tokyo

5 citiesof centralTokyo(people)Number of Investors in Small-Lot Real Estate
Property

400
Sold out inMarch 2023.
Licensed
nursery school

Ota
Sold out inAugust 2021.
licensed nurseryschool311

329

FY2023/3
23/3期

FY2024/3
24/3期1Q

300

167

200

66

100

29

0

FY2020/3
20/3期
Sold out inNovember 2022
medical andeducational mall

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

FY2021/3
21/3期

FY2022/3
22/3期

1Q

Sales network (tax accountants and financial institutions) is over 180 companies.
We are expanding and aiming to reach over 200 companies.

18

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】(buildings)
600

Trends of the Number of Entrusted Buildings in Property
Management Business

500
400

333

362

372

373

392

397

421

457

464

276

300
200
100

District0
FY2015/3 FY2016/3 FY2017/3 FY2018/3 FY2019/3 FY2020/3 FY2021/3 FY2022/3 FY2023/3 FY2024/3
1Q(cases)Trends of the Number of Rent Guarantee Contracts

4,000
3,000

2,000

1,290

1,642

2,035

2,370

2,658

2,989

3,099

3,261

3,563 3,671

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

OthersExcept for 23
7%
wards 1%

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

Other 23 wards

13%

1,000
0
FY2015/3 FY2016/3 FY2017/3 FY2018/3 FY2019/3 FY2020/3 FY2021/3 FY2022/3 FY2023/3 FY2024/3
1Q

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

P

19

Chuo-ku
19%

Shinjuku-ku
9%Shibuya-ku Minato-ku
14%
12%■ Other Tokyo 14%
Total of 93% in Tokyo* As of March 31, 2023 : 749 new contracts

Sun Frontier Fudousan Co., LtdConference Room Rental Business

Strong Performance at New Sites
Continuing opening New Sites actively
New sites opened and expanded in April is operating well. A new site is scheduled to open in
Nihonbashi in September.
◆Sites of new open and expand◆ Network of Vision◆ Center Sites

Vision Center Tokyo Nihonbashi

Scheduled toopen on Sep. 1

Vision Center Ichigaya

Apr. 3 opened

Vision Center Tokyo Yaesu

Apr. 10 opened

Vision Center
Nihonbashi(Mitsukoshimae)

Apr. 1 opened

Vision Center Tokyo Kyobashi

Apr. 1 expanded

Vision Center Nishishinjyuku

Apr. 24 expaned

2 minutes walk from Nihonbashi Station,
5 minutes walk from Tokyo Station.
1,133.8 square meters for total floor area.

◆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）
2,000

1,842

Pandemic of Covid-19

Operatin area（right axis）

1,279

1,500
1,000
500

720
410

1,200

1,162

1,289

8,000

5,500

6,000

4,400

917

4,000

1,500

3,000

FY2019/3

FY2020/3

3,400

3,400

FY2021/3

FY2022/3

787

2,000

600
0

0
FY2017/3

FY2018/3

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

20

FY2023/3

FY2024/3 1Q

Sun Frontier Fudousan Co., Ltd

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

As the core business in our group, Replanning
Business keeping a high profitability.

（million of yen）

70,00040.0%

60,000

27.8%

30.0%

28.2%

32.4%

31.2%

50,000Net profit

29.2%

31.1%

24.3%

22.1%

35.0%

27.0%

30.0%
25.0%

40,00020.0%
30,000

Segment
profit15.0%

20,00010.0%

10,000

Segment
margin

5.0%

0

0.0%
FY2015/3

FY2016/3

FY2017/3

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

FY2024/3 1Q

Steady start for 1Q. Aiming to consecutive record high profits.

● Steady Growth in Real Estate Service Business（million of yen）

Conference
Room
Rent Gurantee

6,000

Building
Management
Property
Management
Leasing
Brokerage
Sales
Brokerage
Sub-leases,
referaal fee

4,000

Trends in Segment profit

5,000

3,000

2,330

2,491

2,508

FY2015/3

FY2016/3

FY2017/3

2,821

2,829

3,206

4,890
3,490

3,803

1,551

2,000
1,000
0

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

FY2018/3

FY2019/3

21

FY2020/3

FY2021/3

FY2022/3

FY2023/3

FY2024/3 1Q

Sun Frontier Fudousan Co., Ltd

Hotel Development Business

Plan to Invest in Hotel Development actively.
Aiming to contribute to regional revitalization while meeting the needs of（As of August 2023 ）business and tourism.
Luxury Class
Upper Middle Class＜Number of rooms＞
Operating

2,373 rooms

Renewing &planning

631 rooms

Total

3,004 rooms

Sora Niwa Terrace Kyoto
BetteiIshikari （on planning）

Hiyori Ocean Resort
Okinawa
Hakone Condominium Hotel(on planning)

Upper Class

Sakata （on planning）
Sado
Onna-son,
Okinawa
Miyakojima

MatsumotoTakayama

Maihama

Shimonoseki

194
rooms

SADO RESORT HOTEL
AZUMA

52
rooms

Tabino Hotel live Sado
（2023.6.23 OPEN）

8
rooms

SADO NATIONAL PARKHOTEL OOSADO

72
rooms

Tabino Hotel lit Sakata（on planning）

171
rooms

Tabino Hotel lit Kawaguchiko（on planning）

120
rooms

Economy Class
Tabino Hotel Hida Takayama

Tabino Hotel Kurashiki
Mizushima

Tokoname
Osaka
Kurashiki
Mizushima

Kawasaki
Hakone（on planning）

Tabino Hotel Ishikari
DONDEN Highland（on planning）

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

Tabino Hotel Sado
（on planning）

Kawaguchiko

22

4
rooms

Tabino Hotel lit Matsumoto

Spring Sunny Hotel Nagoya
Tokoname Station

Tabino Hotel Kashima

Koiwa

Tabino Hotel Villa
Miyakojima

HIYORI HOTEL OSAKA
NAMBA STATION

102
rooms

Narita（on renewing）

Tabino Hotel lit Miyakojima

80
rooms
224
rooms
176
rooms
111
rooms

HIYORI HOTEL MAIHAMA

Sora Niwa Terrace Kyoto

Kashima

Kyoto

Hakata

32
rooms
203
rooms
60
rooms

80
rooms
194
rooms
155
rooms
111
rooms
180
rooms
11
rooms

Budget ClassSKY HEART Hotel Narita(on renewing)
SKY HEART Hotel Koiwa
SKY HEART Hotel Kawasaki
SKY HEART Hotel Hakata
SKY HEART Hotel
Shimonoseki

100
rooms
105
rooms
200
rooms
157
rooms
102
rooms

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 in occupancy rate and average daily rate(yen)

客室単価 （右軸）
Averagedaily rate (R axis)

Aiming to be certified as SDGs
Partners in all hotel.

稼働率 （左軸）
Occupancy
rate (L axis)【certified hotel】

100.0%

20,00080.0%

16,000

71.2%

68.1%

HIYORI HOTEL MAIHAMA

63.7%

HIYORI HOTEL OSAKA NAMBA STATION

60.0%

12,00043.1%

Tabino Hotel Kurashiki Mizushima

40.0%

8,000

Tabino Hotel lit Matsumoto
Tabino Hotel lit Miyakojima

13,155
11,665

Tabino Hotel Villa Miyakojima

9,440

8,322

Tabino Hotel Sado
Tabino Hotel Hida Takayama

36.8%

20.0%

Hiyori Ocean Resort Okinawa

4,000

6,320

SADO RESORT HOTEL AZUMASADO NATIONAL PARK HOTEL OOSADO
DONDEN Highland

0.0%

0
20/3期
FY2020/3

21/3期
FY2021/3

22/3期
FY2022/3

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

23/3期
FY2023/3

24/3期1Q
FY2024/3
1Q

23

Sun Frontier Fudousan Co., Ltd

Medium-term Management Plan

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

24

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

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

Digital25

Cash flow

Marketing
Sun Frontier Fudousan Co., Ltd

Medium-term Management Plan

(100 millions of yen)

Net sales

1,200

FY2024/3 1Q
Results

FY2024/3
Forecast

FY2025/3
TargetNet sales

18.4 billions yen

83 billions yen

100 billions yen

Ordinary profit

4.1 billions yen

16 billions yen

20 billions yen

Net profit

3.1 billions yen

11 billions yen

14 billions yen

Ordinary profit margin

22.7%

19.4%

20%

Equity ratio

54.7%

Around 50%

Around 50%

-

12.9%

More than 10%

ROE

Ordinary profit

1,000

1,000

Profit
830

827

800
600

732

712
596

533

400
200

128

161
88

107

75

122

44

147
74

116

FY2020/3

FY2021/3

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

FY2022/3

26

200
110

140

41 31

0
FY2019/3

184 160

FY2023/3

FY2024/3 1Q

FY2025/3
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.

Progressing additional investment
in areas with high demand forbusiness and 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.

27

Sun Frontier Fudousan Co., Ltd

Philosophy and Sustainability

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

28

Sun Frontier Fudousan Co., Ltd

Philosophy
Top-level concept
Credo (Company policy)

MissionVisionValue

Management
Philosophy

Future Image

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 Proactiveness29

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.

30（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)

31

•
•
•

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 June 30, 2023

As of June 30, 2023

Actual numberof RP buildings

Carbon Offset
Cumulative total 2,796ｔ

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

398人

400

Total 465 buildings

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

RP construction
25 buildings
555ｔ
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 June 30, 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.

32

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).

FY2024/3 1Q: 14 times (FY2023/3: 61 times)

Property visit

A hotel visit(Hiyori Hotel Maihama) held on July 12, 2023 for sell-side analysts and institutional investors.

RP Property tour

Invited sell-side analysts and institutional investors to the tour for real estate brokerages introduced the Replanning property (4 times).

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.

33

Sun Frontier Fudousan Co., Ltd

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

RP
12NakanoArakawa
Arakawa
14

11

ToshimaBunkyoBunkyoOf the total number of RP buildings,
465buildings, 80% are in the five cities ofcentral Tokyo and adjacent cities.
*As of the end of June 2023

Taito

LM

22

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

77

41

133
Shinjuku
Shinjuku
ChiyodaPM

Of the 464 entrusted properties, over 80% arein the five cities of central Tokyo.
*As of the end of June 2023

Shibuya
11

Chuo
48

BM

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

MinatoRent
Guarantee

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

8

Rental17 of the 18 sites are in the five cities ofConference central Tokyo.
Room*As of the end of June 2023. The rest of one is in Yokohama

ShinagawaShinagawa* 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.

34

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.

35

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.

36

・ 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 the number of rental rooms

Other

29.0%

Company B

Based on rental area

Other

Sun Frontier
Fudousan

27.9%

58.6%

Company A

5.6%

Sun Frontier
Fudousan

51.7%

9.5%

Company A

6.8%

Company B

10.9%

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

37

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

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.

38

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.

39

Sun Frontier Fudousan Co., Ltd

Region Revitalization Business--Shima Yume Business-When region becomes energized, Japan will be as well. As the number of visitors
spurred by fascination (culture, history, nature, food, hot spring, hospitality andothers) that Japan is proud of is rapidly increase, we challenge of region revitalization
business that focuses on the attractiveness and features unique to the regions to
spread the “Wonderfulness of Japan.”

We will energize the islands throughtourism business!

SADO
Sado Island,
Niigata Prefecture
Tabino Hotel Sado

Donden Kogen Lodge
Miyako Shimojishima Airport
Restaurant - Coral Port

Port of Ryotsu

Operation starts on October 1, 2022

Tabino Hotel lit
Miyakojima
Miyako Shimojishima
AirportSADO NATIONAL PARKHOTEL OOSADO

Sado Outdoor BaseMIYAKO
Miyakojima, Okinawa
SADO RESORＴ HOTEL AZUMALE BLUESADO SAWANE

Tabino Hotel live Sado
Start operating in June 2023

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

40

Tabino Hotel Villa Miyakojima
Operation starts on November 3, 2022.

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 ofJune 2023

19,838 yen
Average vacancy rate inJune 2023( 39 yen ↓MoM )

（yen）

6.48%
( 0.32%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.

41

Sun Frontier Fudousan Co., Ltd

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

(yen)
50,00045,000

9.01

Vacancy rate
平均空室率

Averagerent
平均賃料(left axis)

44,193(right axis)

Average vacancy rate inJune 2023

10

6.48％

9

8.08
8.12

40,000

Average rent in June 2023

8

19,838円
35,0006.48

30,0007

6

25,0005

22,18621,99919,83820,0004

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.

42

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.

43

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.

44

Sun Frontier Fudousan Co., Ltd

History(million of yen)

In April 2022, Listed on Prime Sectionof Tokyo Stock Exchange

Net sales
売上高100,000(people)In October 2018, Start Specified Joint Real Estate Ventures

Ordinary profit
経常利益

In April 2016, Start Conference Room Rental Businessthe number of employees
従業員数
80,00083,000 800

In August 2015, Start Hotel Operating Business

In February 2007, Listed on First Section ofTokyo Stock Exchange

73,218641

In July 2005, Start Rent Guarantee Business

82,777
71,251
702
696

600

612

In December 2004, Listed on JASDAQ

59,63260,000In January 2001, Start Replanning BusinessIn 2000, Start Property Management Business

53,291 522

48,15047,463400

40,394 381

40,00035,254329
30,62526,870

5,003

20,000

7,760

3,588
2

1

681
24

1,771

0 140

0

52
377

70

84

16,730134 125152

206

14,469
141

96

142

8,289
6,346
3,474

501 791 1,437

181

27,741
199

16,127276

223

17,772
10,580
7,024
6,923
5,593
4,341
4,289
2,039
799
541
139

12,813
10,755
8,894

16,000200

14,722
12,2157,524

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 '09/3

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

(200)'10/3 '11/3 '12/3

45'13/3 '14/3'15/3 '16/3'17/3 '18/3'19/3 '20/3 '21/3'22/3 '23/3'24/3

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*

739 employees (1,371 including part-timers and temporary workers)
35.9 years old
Real Estate Revitalization

Business Profile

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

Hotel Development and Operation
Others

Accounting Month
Listed Market

March
Tokyo Stock Exchange Prime (Code number: 8934)* As of the end of June 2023
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

46

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