The Second Quarter Financial Statements of
the FY ending March 31, 2016
Our goal is to be a real estate company most loved
and chosen by customers in the world.

Executive Summary

Results of the 2nd Quarter Financial Statements of
the FY ending Mar 31, 2016
Future activities
1) Business environment

2-14
15-17

2) Managerial policy and business model

18-283) Growth strategies

30-36

Nov. 10, 2015

Securities code: 8934

Corporate profile
Corporate name

Sun Frontier Fudousan Co., Ltd.

Location of theheadquarters

1-2-2 Yuraku-cho, Chiyoda-ku, Tokyo

Date of establishment
CapitalApr. 8, 1999
8,387 million yen

Representative

President,Representative Director: Tomoaki Horiguchi

No. of employees

259 consolidated base (average age: 31.7 years old)

Business contents

Revitalization of real estate
Realty services

Fiscal year end
Listed inReal estate management, brokerage, construction
planning, rent guarantee, property management
asset management

MarchFirst Section of the Tokyo Stock Exchange (securities code: 8934)(as of the end of Sep. 2015)

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Executive Summary
Summary of the 2nd Quarter Financial Statementsof the FY ending Mar 31, 2016

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2

Summary of the results for the 2nd quarter[unit: million yen]

Profitmargin to
sales

Increasefrom thesame periodof theprevious year

Initial forecast for
the FY ending Mar
31, 2016

Progress
rate withrespect tothe initial
forecast

Apr. to Sep. in
the FY ended
Mar 31, 2015

Apr. to Sep. in
the FY ending
Mar 31, 2016

Sales

11,87012,857―＋8.3％

33,00039.0％

Operatingincome

3,012

3,559

27.7％ ＋18.2％

6,300

56.5％

Ordinary
income

2,879

3,337

26.0％ ＋15.9％

6,000

55.6％

Net
income

2,660

2,717

21.1％

5,300

51.3％

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3

＋2.2％

Consolidated profit-and-loss statement[unit: million yen]
Apr. to Sep. in the FY
ended Mar 31, 2015

Apr. to Sep. in the FY
ending Mar 31, 2016

11,87012,857

Real estate revitalization

9,253

9,771

Real estate securitization

403

145

Rental building business

869

1,020

Brokerage

498

919

Property management

634

729

Other businesses

211

270

Gross profit on sales

4,521

5,199

Real estate revitalization

2,809

3,198

Real estate securitization

403

145

Rental building business

468

551

Brokerage

411

817

Property management

285

342

Other businesses

142

144

1,509

1,639

Sales

Selling and generaladministrative expenses
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Apr. to Sep. in the FY
ended Mar 31, 2015

Apr. to Sep. in the FY
ending Mar 31, 2016

3,012

3,559

Non-operating income

710

Non-operating expenses

139

232

2,879

3,337

Extraordinary loss/income

13

▲11

Corporate income tax, etc.

233

609

2,660

2,717

Operating income

Ordinary income

Net income

The profit margin of the Revitalization business increased,
improving ordinary income margin
・The gross profit margin of the Revitalization business for the 2nd
quarter is 32.7%, which is higher than the profit margin for the
2nd quarter of the previous year (30.3%).

Stable income structure covering SG&A
・The income from rental building and realty service businesses(1,856 million yen) exceeds the SG&A(1,475 million yen),excluding Revitalization sales commissions.

4Consolidated balance sheet-Assets[unit: million yen]

End of Mar. 2014

End of Mar. 2015

End of Sep. 2015

Increase/decrease(from the end of
Mar. 2015)

31,44637,452

38,052+599

Cash and deposits

11,18012,686

11,130▲1,556Inventory assets

18,72923,47924,737+1,257

Other current assets

1,536

1,285

2,184

+898

Noncurrent assets

2,464

2,971

9,182

+6,210Property plant andequipment

2,164

2,483

8,436

+5,952Intangible assets

11

76

199

+123

Investments and otherassets

287

412

546

+134

33,91040,42447,234+6,810Current assets

Total assets

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

5

Consolidated balance sheet-Liabilities and net assets[unit: million yen]

End of Mar. 2014

End of Mar. 2015

End of Sep. 2015

Increase/decrease(from the end of
Mar. 2015)

3,023

3,550

4,106

+556

Short-term loans payable, etc.

1,006

1,004

1,312

+307

Income taxes payable, etc.

266

221

643

+421

Other current liabilities

1,750

2,324

2,151

▲173

12,417

14,172

18,411+4,238Long-term loans and bonds
payable11,35912,98817,128+4,139Other noncurrent liabilities

1,057

1,183

1,282

+99

15,44017,72322,518+4,794

18,217

22,69324,704+2,011

252

8

11

+3

Total net assets

18,46922,701

24,716+2,015

Total capital and liabilities

33,91040,42447,234+6,810Current liabilities

Noncurrent liabilities

Total liabilities
Shareholders’ equity
OthersVariation in capital-to-asset ratio

As the purchasing of revitalized property progressed, the interest-bearing liabilities
increased from 13.9 billion yen as of the end of the previous year to 18.4 billion yen.

End of Mar. 2014

End of Mar. 2015

End of Sep. 2015

53.7%

56.2%

52.3%

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Retained earnings increased doe to the difference between quarterly net income(+ 2.7 billion yen) and term-end dividend payment (-700 million yen).

6Performance of

Revitalization business[unit: million yen]

Apr. to Sep. in
the FY ended
Mar 31, 2015

Apr. to Sep. in
the FY ending
Mar 31, 2016

Increase/decrease(million yen)

Sales

9,253

9,771

+5.6%

Segment income (Note 1)

2,459

2,937

+19.4%

26.6%

30.1%

+3.5%pNo. of procuredbuildings

17

10

▲7

No. of sold buildings

11

12

+1

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

27

25

▲2

Profit margin

12,000

Sales
Segment income
Profit margin

10,000
8,000

60%
50%

9,771
9,253
38.6%

40%

6,000

30.1%
4,938

26.6%

4,000

■ Both sales and profit grew, and profit margin increased considerably.

20%
2,459

■ The average business day for selling a property is 270.

2,000

■ The stocks of revitalization property as of the end of the second quarter are

30%

2,937

1,908

10%

25 buildings, worth 24.7 billion yen

0※As of the end of October, the real estate in the process of procurement contract was
13 buildings for revitalization. In addition 1 building and 2 pieces of land for hotels.

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Sep.
Apr. to Sep.
Apr. to Sep.

The total amount is 11.7 billion yen.
(Note 1) “Segment income” is calculated by subtracting the expenses for respective businesses, such as interest paid, sales commission, and goodwill amortization, from gross profit on sales.

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

70%Extended the processing period to create
higher-margin
70%●2012.4 - 2015.3●2015.4 - 2015.9

Taking more months to reachcommercialization, we generatehigh values.

60%

Gross Profit（％）

50%

40%

30%

20%

10%

0%
0

100

180 200

300

Day for selling a property
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8

400

500

Performance ofRental building business
Apr. to Sep. in
the FY ended
Mar 31, 2015

Apr. to Sep. in
the FY ending
Mar 31, 2016

Sales

869

1,020

+17.4%

Segment income

460

540

+17.3%

Profit margin

53.0%

53.0%

+0.0%p[unit: million yen]

Increase/decrease(million yen)

1,200

Sales
Segment income
Profit margin

100%
1,020

1,000

80%
869

800
600

53.0%

53.0%
540

460

 The increase in income from rents of mid to longterm revitalized properties contributed.

400
200
0

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60%

54.1%

 Increasing stable income, as a result of steady
growth of sales and profit.

9

400

216

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Sep.
Apr. to Sep.
Apr. to Sep.

40%

20%

0%

Performance ofReal estate securitization business[unit: million yen]

Apr. to Sep. in
the FY ended
Mar 31, 2015

Apr. to Sep. in
the FY ending
Mar 31, 2016

Increase/decrease(million yen)

500

Sales

403

145 ▲63.9％

450Segment income

403

145 ▲63.9％

400

Profit margin

100.0%

100.0%

Sales
Segment income
Profit margin－

100.0%

100.0%

100%
100.0%

403 403

80%

350
300

There was the income from investment allocation in
conformity with the sale of collaborative investment
projects, but both sales and profits dropped.

60%

250

40%

200
145 145

150
100

20%

50
0

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10

8

8

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Sep.
Apr. to Sep.
Apr. to Sep.

0%

Performance ofBrokerage business[unit: million yen]

Sales

Apr. to Sep. in
the FY ended
Mar 31, 2015

Apr. to Sep. in
the FY ending
Mar 31, 2016

498

919

Increase/decrease(million yen)

+84.6%

1,000
900

Segment income

408

815

+99.7%

Profit margin

82.0%

88.7%

+6.7%p

85.6%

100%
919

82.0%

800
700

< Sales brokerage> As the property market has been vibrant, thenumber of successful transactions increased, andthe scale of projects got larger. Consequently, bothsales and profits grew considerably.

600< Rental brokerage> Both sales and profits were on a plateau, but weconcentrated on solving the worries and difficulties
of owners and finding tenants for revitalizedbuildings, which is generating to the creation of the
future profits for the entire company.

200

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Sales
Segment income
Profit margin

500
400

88.7%
815

80%

688

60%

589
498
408

40%

300

20%

100
0

11

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Sep.
Apr. to Sep.
Apr. to Sep.

0%

Performance ofProperty management business[unit: million yen]

Sales

Apr. to Sep. in
the FY ended
Mar 31, 2015

Apr. to Sep. in
the FY ending
Mar 31, 2016

634

729

Increase/decrease(million yen)800

+14.9%

Segment income

285

342

+20.1%

Profit margin

44.9%

46.9%

+2.0%p

700
634

600

We made efforts to increase projects in cooperation with otherbusiness divisions. As a result, both sales and profits increased.

12

60%
540

500

43.4%

44.9%

46.9%

400

40%
342

300

285
234

20%

200
100
0

<Building maintenance business>

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

80%
729

<Property management business>Sales increased 14% more, and profits increased over 20%.

No. of entrusted buildings: 306 (up 63 compared to the same
period of the previous year)Occupancy rate: 96.6% (down by 0.2%)【Variations in the number of entrusted buildings and occupancy rate】
No. of entrusted buildings Occupancy rate
End of Sep. 2013
190
95.7%
End of Sep. 2014
243
96.8%
End of Sep. 2015
306
96.6%



Sales
Segment income
Profit margin

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Sep.
Apr. to Sep.
Apr. to Sep.

0%

Performance of

Other Business (delinquent rent guarantee,
construction solution, space rental)
Apr. to Sep. in
the FY ended
Mar 31, 2015

Apr. to Sep. in
the FY ending
Mar 31, 2016

Sales

211

270

+27.8%

Segment income

142

144

+1.7%

Profit margin

67.3%

53.6%

▲13.7%p[unit: million yen]

Increase/decrease(million yen)

< Delinquent rent guarantee business>
We concentrated on in-house introduction and cooperation
with influential companies. As a result, the ratio of successfultransactions exceeded by 40%, compared to the previous FY,
which increased both sales and profits.
<Construction solution business>
The contract amount per construction was raised, increasing
both sales and profits.

800

80%

67.3%

700
600
500
400

60%
53.6%

509

40%

35.1%

300
200

270
179

211
142

144

20%

100

<Space rental business>
The number of users of “Vision Office Tokyo,” which wasstarted as a new business in April this year, is increasing. We
recognized a trend toward improvement in the profits.

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Sales
Segment income
Profit margin

0

13

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Sep.
Apr. to Sep.
Apr. to Sep.

0%

Variations in target managerial indexes■ Variation in ordinary income margin■ Variation in capital adequacy ratio( million yen）

( million yen）

35,000Full-year forecast

売上⾼
Sales
Ordinary
経常利益 income
Profitmargin to sales
経常利益率30,00080.0%

純資産
Net asset
自己資本比率Capital adequacy ratio

68.5%

30,000

30.0%

70.0%

26.0%

24.4%

25,00035,00035.0%

25,000 57.5%

25.0%

56.2%

20.2%

53.7%

19.3%

60.0%

52.3%

20.0%

20,000

50.0%

15.0%

15,000

40.0%

10.0%

10,000

30.0%

5,000

5.0%

5,000

20.0%

0

0.0%

0

10.0%

20,00015,000Full-year forecast

11.5%
10,00003/201203/201303/201403/2015

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09/2015

03/201214

03/201303/201403/2015

09/2015

Future activities
1) Business environment2) Managerial policies and business models3) Growth strategies

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

15

Business environment
The global
economymoderates to asustainablegrowth.

The global economy is expected to grow moderately, because of low oil prices and the healthy U.S.
economy, but we need to pay attention to the sluggish growth of the Chinese economy, the downturn ofEurope, the hike in interest rates in the U.S., etc.

Financial andhuman inflow
from inside andoutside JapanAs population is aging and the fund procurement environment is favorable because of low interest rates,
there is a growing demand for the purchase of real estate, for coping with inheritance tax, managing assets,
and bracing for inflation. The inflow of funds from overseas investors will become remarkable, because ofJapan’s growth strategies, the yen depreciation, and the economic growth in Asia, and then the needs for theacquisition of real estate will grow.

The urban
office building
market is
improving.

Based on healthy corporate performance, the transaction of relocating to a larger office, enlarging the officespaces etc. becomes more achieve than before. In the five wards of Tokyo, the demand-supply balance will
be tightened due to the decline in supply, and this leads the rent upward and vacancy rate downward.

The Japanese economy will keep recovering sustainably for getting out of deflation, as corporate
performances, employment situations, and incomes are being improved, thanks to the monetary easing
policy, the yen depreciation, etc.
Under the vision with Tokyo Olympics 2020 being a springboard, urban infrastructure will be upgraded,and “the world’s best city Tokyo” in the aspects of the environment, safety, convenience, etc. is about to be
actualized.

Foreign tourists to Japan reached 14 million people in the end of September, the government had set atarget "20 million people in 2020" are likely to be achieved this year. Along with this, along with theincreasingly active inbound consumption, the supply of accommodation in hotels and in metropolitan areas
has become a socially urgent.

Mainly for urban office buildings in good locations, the advertised rents will be raised, or rent increasenegotiation at the renewal of contract is necessary. This enhances the advantage of lessors.

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16

Changes in office rent and vacancy rate
in 5 wards in Tokyo
Average rent [yen/tsubo]

Average vacancy rate [%]

（％）

（yen）

Peak of vacancy rate
Jun. 2012
Vacancy rate: 9.43%

Average rent in Oct.

17,612 yen

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

Increase for
22 months in a row(+8.7% fromthe bottom value)

Vacancy rate in Oct.

4.46%

Improved 4.97% during
the last 40 months

Bottom average rent
Oct. 2004
17,526 yen

Bottom average rent
Dec. 201316,207 yen

Bottom vacancy rate
Nov. 2007
Vacancy rate: 2.49%

year* Source: Produced by our company based on the “office report” of Miki Shoji. This researched the office buildings whose reference floor’s area is over 100 tsubo in 5 wards in Tokyo.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

17

Average rent

Vacancy rate

Peak of average rent
Aug. 2008
22,901 yen

2) Managerial policies and business models

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18

Sun Frontier’s Vision and Policies
VisionWe aim to become the real estate company loved and chosen themost by clients in the world as “professionals in real estateutilization”

Clients

Building owners, asset holders, and wealthy individualsCorebusiness

Real estate revitalization (utilization)

Policies

To focus on people, rather than property
To keep the viewpoint of customers, and solve any real estaterelated difficulties

Strategies

Urban
centerCopyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

OfficeStrength19

Tenant finding
capability

Real estate
Revitalization
capability

Building operation
capability

Real Estate Revitalization and the Cycle of
Added ValueIn the vertical service business, we survey and solve complaints, inconveniences, and discomforts, while
listening to clients’ voices. We combine the know-how and grasped needs, and apply them to used buildings
we acquired, and then② Revitalize the real estate with added values in the horizontal real estate revitalization business, and sell them.
①

Asset consultancy

Rent guarantee

Construction
planning

Building Management

Brokerage in Rental

Brokerage in Sale

Acquisition ofproperty

Real estate
revitalization

Added value-linked products

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

Clients (Building owners, asset owners, and wealthy people)
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20

Earning Opportunities even after sale
“Revitalized buildings with one price for one buildings” located at good places in the urban center
We increase market values with excellent quality and attractive features, and sell real estate
to asset holders and wealthy people at the right price. Even after the sale, we have important earning
opportunities.

Menu of after-sale services
Sale of revitalized
property

Building
management/
maintenanceRentalbrokerage

Rent
guarantee

Interior
finishing・Accountmanagement
・To listen toopinions
・Accounting report
・Negotiation withtenants
・Buildingmaintenance・Emergency
measures・Equipment
management

・To findoccupants
・brokage for
furnished office・Nonpayment is

・Interiorplanning
・Design・Interiorfinishing・Restoration tothe original state・Undertaking of
tenant’s
construction

・Marketing
・Consultancy

immediately
guaranteed
・To guarantee
rent, etc. forup to 18 months

RenewalAssetconsultancy

Sales
brokerage

・Renewal of theentrance, airconditioner,
outer walls,
etc.
・Repair
・Buildinginspection

・Specialist
consultation
・Measures forinheritance tax
・Assetmanagement
・Business
succession
・Consultancy

・Purchase of new
real estate
・Sale of assets
・Replacement bypurchase of new
real estate forbusiness
・Replacement ofassetsBusinesses of both revitalizing real estate and operating rental buildings
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Basic Principles for our business
1. Mental management based on our ethos
and philosophy• We have upheld “altruism” since the establishmentof our company.
• We together clean our office, etc. and read thephilosophy booklet every morning, to share thevalue “the pleasure of others pleases us.”
• We aim to offer greater happiness to customers, andcontribute to the actualization of a rich society.

Businessmanagement
based on the
viewpoint ofcustomers

2. Management among all employees based on theaccounting for each division• By developing and diffusing the accounting systemfor each division (Amoeba management), we
enhance employees’ profit awareness and promote
the business operation among all employees withmanagement perspective.

Management among
all employees based on
the account for eachdivision

3. Business management based on the
viewpoint of customers• We listen to customers’ requests carefully, deal withand solve even minor troubles, without stint.
• We change ourselves from the viewpoint ofcustomers, and challenge, create, and advance.
• Based on the collaboration among different sections,
we create high added values that are linked to one
another.
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Mentalmanagement
based on our
ethos andphilosophy

Employees play major roles.
Resonant business administration.

22

Comprehensive services provided through ourbranch network specialized in Tokyo CBD
1. Specializing in the center of Tokyo

Ueno
Akihabara

Head Quarter and 8 branches are all locatedin Tokyo Central Business District
Strong leasing capabilities in finding tenants
for Office and Commercial buildings.

Ikebukuro

Koujimachi

2. Various Solutions to Property Owner
Not only leasing brokerage related services, Shinjuku
we provide the property owners with various
solutions to their problems and produce
various revenue opportunities.
ShibuyaNihonbashi

Imperial
PalaceAoyama

HQ in
Hibiya3. Procure buildings for Revitalization

23

Ginza
Shinbashi

Ebisu

Close relationship with and consultation for theproperty owners, we may purchase buildings forrevitalization business purpose.

Tokyo

Toranomon
Akasaka

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Kanda

Kudan

Hamamatsu-choShinagawa

Yokohama(

indicate the main target areasof our branches.)Property Management operations withhigh-quality and quick response
Over 70% of buildings under PM operations are located in
5 wards in Tokyo, Central Business District.

Distribution of entrusted buildings under
our PM department(as of the end of Sep. 2015)

5 wards inTokyo

218 buildings

71.2%

The other wards 70 buildings

22.9%

Others18 buildings

5.9%

Total

306 buildings

100%

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24

Maintain Higher Occupancy Rate andEnhance PM operations
Variation in the occupancy rate and entrustment area of entrusted real estate
100％

Entrusted area
Occupancy rate of entrusted real estate
Occupancy rate of middle-sized buildings in 23 wards in Tokyo(㎡)

604,992

60000096.4％(As of the end of Oct. 2015)97.41％

500000Occupancy rate of PM entrustment buildings

95％

40000030000090％20000093.9％(As of Oct. 2015)

100000Occupancy rate of middle-sized buildings in 23
wards in Tokyo85％

01/2008

07/2008

01/2009

07/2009

01/201007/201001/201107/2011Top-ranked companies in the number of owners※
2015

2014

1

Vortex

360

283

2

XYMAX

251

243

3

Sun Frontier Fudousan

207

159

4

RIO CONSULTING

191

－

5

Itochu Urban Community

180

180

01/201201/201307/201301/201407/201401/2015

07/20150Note: Occupancy rate of entrusted buildings under our company for management
In the 4th quarter of fiscal year 2014, important tenants relocated to larger offices, vacating someunits. Consequently, occupancy rate declined temporarily at the end of the term.
Later, tenants have been moving in steadily, recovering occupancy rate.

※Source: Produced by our company based on the Nov. 2015 issue of “Monthly Property Management”
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

07/201225

Revitalization Business Project Example [1]Profit-earning building in Shibaafter- Improved earthquake
resistance and refurbish
common area
- 20% increase in rent

Before

after

after

【Property outline】
Location: Minato-ward in Tokyo
Date of completion: 1981
Purposes of use: store, officeLand area: 182.21 ㎡
Gross floor area: 1,191.09 ㎡

This building was bought by Hong Konger
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Revitalization Business Project Example [2]Profit-earning building in Hirakawa-cho
Renovation from theviewpoint of applicants
Lease contracts havebeen signed with rent
being about 30%“Setup office” whose interior finish
work is conducted before occupation

higher than themarket value.

Appearance Before【Property outline】

Appearance

After■Location: Hirakawa-cho, Chiyoda-ku, Tokyo■Structure: a steel reinforced concrete and light-gauge steel flatroofed 9-story building with one basement■Date of completion: 1984 (31 years old)
■Purposes of use: store, office, apartment, garage, residence■Land area: 186.17 ㎡ (56.31 tsubo)■Gross floor area: 1,222.53 ㎡ (369.81 tsubo)
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

By developing a refreshing space in the rooftop, which has not been utilized,
we create comfortable time for tenants.

27

Introduction of corporate culture

To clean every morning

Sporting camp involving all club members on July 3 and 4, 2015

New employee training

To read the philosophy booklet every morning
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In-house birthday party in Jan. 201528

Baseball club

Tennis club3）growth strategy
activities of “three growth directions”
１）Strengthen our existing business→ hotel business, high demand of inbound２）M&A→ capital alliance, business alliance３）Overseas expansion→ Indonesia, Vietnam
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

Rental Assets for Hotels
Sanco Inn Numazu-ekimae

Hotel Frontier Iwaki

View

Guest room

Guest room

Guest room

Communal bathroom■Location: Daikumachi, Taira, Iwaki-shi, Fukushima Prefecture(6 min. on foot from Iwaki Station of JR Joban Line)■No. of guest rooms: 150 (equipped with a communal bathroom,a bedrock bath, a loess bath, etc.)■Year built: Mar. 2007 (8 years old)
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

■Location: Ohte-machi, Numazu-shi, Shizuoka Prefecture(2 min. on foot from Numazu Station of JR Tokaido Main Line)■No. of guest rooms: 152 (1st and 2nd floors are occupied by stores)■Year built: Nov. 2007 (8 years old)30

Hotel development, revitalization,and operation businesses
As for hotel operation, we have surveyed the market, and discussed business plans and commercialization. As
the number of foreign visitors who stay in Japan has been increasing rapidly, our company decided to develop
and revitalize hotels by utilizing our accumulated know-how. Furthermore, we will develop a system for
operating hotels, and establish a hotel planning/operation company inside our corporate group, in order tooffer investment products to wealthy people in Asia, including Japan.

Ratio of foreign hotel guests【Outline of the company to be established】[million guests]

9.5%

500

■Corporate name: Sun Frontier Hotel Management Inc.

474

466

10%
9%

■Representative: Tomoaki Horiguchi

450■Location: Chuo-ku, Tokyo

400■Date of establishment: Aug. 2015 (scheduled)350■Capital: 80 million yen

300■Investment ratio: 90% from our company, 10% form Mizuho Shoji

250■Business contents: Planning, operation, etc. of accommodation

200

4%

facilities, such as hotels

150

3%

100

Regarding Mizuho Shoji Co., Ltd.
■Representative: Hisao Ishii■Location: Ochi-gun, Shimane Prefecture■Capital: 76.75 million yen■Business contents: operation of hotels, inns, and ski resorts

50
0

439
417

8%

7.2%

7%

6.0%

6%

4.4%

5%

Ratio ofbusiness
hotels
38％

39％

2011
2011年

2012
2012年

Business hotel
Resort hotel
Others

41％

40％

2%
1%

2013
2013年

2014
2014年

0%

Urban hotel
Inn
Ratio of foreign hotel guests* Produced by our company based on the reference materials released by Japan Tourism Agency.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Strategic Alliance with The Spring Group- Hotel BusinessOur company has agreed to make an business alliance with andShanghai Spring Investment Management Co., Ltd. for the hotelbusiness in Japan.
Through this partnership, we aims to accelerate the expansion of“urban hotels for enjoying the Japanese style” targeted at foreign
visitors to Japan, by combining our ability to revitalize real estate,
our “altruistic” spirit, and the Spring Group’s capability ofescorting Chinese tourists to Japan.

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

About The Spring GroupIn China, Shanghai Spring International Travel Services, Ltd.
(Spring Travel) has 51 branches in Beijing, Xian, Guangzhou,
etc. and outside China, it has 7 offices in the U.S., Thailand, etc.
Spring Airlines Co., Ltd (Spring Airlines), which is a
subsidiary of Spring Travel, is a private airline company
headquartered in Shanghai, and the only low-cost carrier(LCC) in China. These companies collaboratively offer group
tours, etc. by utilizing their original business models fordesigning packaged services, individual and group tour
services. Since 1994, it has been ranked 1st in the domestic
sightseeing section of the China National Tourism
Administration every year, as its products and services arehighly evaluated.
Spring Travel and Spring Airlines recognize the Japanesemarket as the most important market in their global strategies.
Since they opened the air route from Shanghai to Ibaraki in
2010, they have introduced a total of 26 routes connecting 18
cities in China and 8 cities in Japan, occupying about 20% of
the total number of flights between China and Japan. In
addition, the Spring Group established Spring Airlines Japan
Co., Ltd. in 2012, and started operating domestic flights from
Narita on August 1, 2014.
The total number of tourists to Japan in fiscal 2015 is estimatedto exceed 1.2 million. Especially, the demand for regular flightsfrom 18 cities in China to Osaka and Nagoya is extremely
strong. Other leading Chinese airline companies, too, increased
flights to Osaka and Nagoya, energizing the sightseeing
industry.

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Changes in Visitor Arrivals
Total
China
Korea
TaiwanHong Kong
USA
ThailandAustralia
UK
Malaysia
Philippines
Singapore
CanadaFranceIndonesia
VietnamGermany
Italy
India
Spain
Russia
Other

2014

2015

Jan.〜Oct.

Jan.〜Oct.

11,008,967 16,316,856
2,011,723
4,283,742
2,245,381
3,226,607
2,381,315
3,114,767
734,488
1,236,069
744,886
854,652
513,282
627,122242,892
297,220
184,678
217,481
182,534
215,707
146,461
211,211
153,432
203,556
148,989
188,618
152,313
183,749
123,588
161,666
105,953
160,499
118,374
137,60267,42087,62373,59586,87553,04367,31653,96844,813570,652
709,961

Increaserate
48.21%
112.94%43.70%
30.80%
68.29%
14.74%
22.18%
22.37%
17.76%
18.17%
44.21%
32.67%
26.60%
20.64%
30.81%
51.48%
16.24%
29.97%
18.04%
26.91%-16.96%24.41%

Population Total visitors
ratio to（million） population
7,105.15
0.23%
1,367.82
0.31%
50.42
6.40%
23.43
13.29%
7.26
17.03%
319.05
0.27%
68.66
0.91%
23.59
1.26%
64.51
0.34%
30.26
0.71%
99.43
0.21%
5.47
3.72%
35.49
0.53%
63.92
0.29%
251.49
0.06%
90.63
0.18%
81.10
0.17%
59.96
0.15%
1,259.70
0.01%
46.46
0.14%
143.700.03%
3,012.80
0.02%

Source: Compiled from statistics of Japan National Tourism Organization and IMF ”World
Economic Outlook Databases”（Apr.2015）.

33

M&A－Capital and business tie-ups

Reorganization of an asset consulting/housing managementcompany into an affiliate【Outline of the invested company】■Corporate name: Power Consulting Networks Co., Ltd.
■Location of the headquarters: 6-12-20 Jingu-mae, Shibuya-ku, Tokyo■Business contents: consulting about real estate, rental management,
seminar business, etc.
■Capital: 75 million yen (capital reserve: 35 million yen)■No. of employees: 50 for the non-consolidated (105 for the corporate group)■No. of shares acquired: 20% of outstanding shares
Headquarter building

Mainly office buildings

Mainly rental housing

Capability of
proposing utilization

Consulting capability
Capability of managing
rental housing

34

Synergetic effect

PCN

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

When the two companies, having
different business fields and client
bases, cooperate with each other, it
is possible to exert the strengths ofboth and provide more customers
with high added values. It will
improve our corporate value.

SF
Capability of revitalizing real estate

Capability of operation
Capability of finding office tenantsOverseas expansion - Two directions

We will develop new investment products,
hone our operation ability to operate
hotels, and play an role of receiving
investments from wealthy people in Asia.

Produced by the Cartographic Research Lab University of Alabama
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Overseas expansion － Two directions －(2) Start of local businesses in Indonesia and Vietnam
Jakarta, Indonesia

Da Nang, Vietnam--Sale of urban housing--Urban hotel business《Images of houses under construction》《Images of a business hotel under construction》

We are constructing urban houses to be sold, inthe center of Jakarta. We are preparing for theestablishment of a local affiliate in order tooperate the business in Indonesia on a full scale.

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

In the riverside of the largest ward Da Nang incentral Vietnam, we will commercialize a smallscale hotel as a development project.We arepreparing for the establishment of a local affiliate.

36Thank you for visiting us today.
We would appreciate yourcontinued support.
 This reference material is intended for providing information, not for soliciting or promoting you to purchase a specificproduct. When you invest, please do so based on your own judgment and responsibility. If you want to purchase the shares ofour company, please contact securities companies.
 The information included in this material may not follow the Financial Instruments and Exchange Act, the Building Lots andBuildings Transaction Business Act, the regulations for the companies listed in Tokyo Stock Exchange, or the like.
 This reference material mentions our future business performance, but it does not guarantee the performance.
 This reference material was produced carefully, but we do not guarantee the accuracy and certainty of its contents.
In addition, the contents may be changed or deleted without notice. We would appreciate your understanding.

<For inquiries about this material>
Sun Frontier Fudousan Co., Ltd.
Management Planning Dept.
Phone: 03-5521-1551
URL: http://www.sunfrt.co.jp/
Mail: ir-contact@sunfrt.co.jp