Becoming a
Next-generation
Developer
Long-term Vision,
Medium-term Business Plan (2020-2024)

Contents
I. Review of Previous Medium-term
Business Plan
1. Review of Quantitative Plan
2. Review of Qualitative Plan

II. Long-term Vision
1. Context for our Long-term Vision
2. Strengths of the Tokyo Tatemono Group
3. Long-term Vision for 2030
4. Fundamental Long-term Vision Policy

III. Medium-term Business Plan
1. Positioning of the Medium-term Business Plan
2. Roadmap 2030
3. Business Portfolio Concepts
4. (1) Promotion of Large-scale Redevelopment
5. (2) Further Strengthening of Condominium
Business
6. (3) Expansion of Property Sales for Investors
7. (4) Expansion of Brokerage, Fund, and Parking Lot
Businesses
8. (5) Growth in Overseas Business9. Evolution of ESG Management
10. Profit / Financial Plan
11. Management with Awareness of Capital Efficiency
12. Investment Plan
13. Shareholder Return Policy
14. Quantitative Plan Summary- 2-

I. Review of Previous
Medium-term Business Plan

1-1

Review of Quantitative Plan (1)■ Achieved operating income quantitative target (from previous medium-term plan), as well as debtequity ratio and multiple of interest-bearing debt divided by EBITDA (targets for financial indicators).
■ Profit growth led to ROE increasing from 5.6% in 2015 to 8.2% in 2019.
Results: Fiscal Year Ended 2019/12

ProfitOperating income: ¥52.4 billion

Financial
Indicators

Debt-equity ratio: 2.5X
Interest-bearing debt / EBITDA
multiple: 12.6X(Medium-term target: ¥50.0 billion)

Evaluation (Positive Results, Issues to Address)• Operating income up 72% from ¥30.5 billion in 2014, marking
the highest profit in two consecutive years since 2018
• Achieved profit growth exceeding initial targets• Management maintained awareness of financial discipline, raised
funds utilizing favorable financial environment(Medium-term targets: 3X and 13X, respectively)
CapitalEfficiency

ROE: 8.2%• Profit growth led to year-by-year increase, from 5.6% in 2015
• Must continuously improve profitability and turnover rate tomaintain and improve current levels in stable fashion

Shareholder
ReturnAnnual dividend per share: ¥41.0
Consolidated payout ratio: 29.0%• Profit growth led to six consecutive years of increased dividends• Repurchase of ¥10 billion in shares in 2019 (canceled on January
31, 2020)

Investment

Cumulative net investment: ¥350 billion(Medium-term plan: ¥300 billion)• Focus on return on investment and promote highly-selective
investment• Secured projects that will contribute to profits in the next
medium-term plan onward while realizing profit growth
-4-

1.

Review of Quantitative Plan (2)Consolidated ROE（％）

Operating Income / Net Income (millions of yen)
Operating Income

Net income attributable to owners of parent

60,00044,75750,00040,00046,765

8.0

52,4106.0

36,36334,43930,00019,742

16,35920,00010.0

22,59927,277

29,796

8.2

18/12

19/12

6.8

4.0
2.0

10,000

0.0

0
15/12

16/12

17/12

18/12

19/12

15/12

16/12

17/12

Interest-bearing debt / EBITDA ratio (multiplier)Debt-equity Ratio (multiplier)
4.0
3.0

5.6

6.4

7.9

15.0

2.3

2.3

2.4

2.5

14.0

2.5

13.4

13.0
12.5

13.0

12.7

12.6

18/12

19/12

2.0
12.0
1.0

11.0

0.0

10.0
15/12

16/12

17/12

18/12

19/12

15/12
- 5-

16/12

17/12

1-1

Review of Quantitative Plan (3)■ Realized profit growth across each business, primarily in the commercial properties and residence
businesses.
■ Cumulative net investment of ¥350 billion yen, primarily in real estate for sale such as hotels andlogistics facilities.
Operating Income per Segment(hundreds of millions of yen)
Commercial properties

Residence

Real estate service

Other

300

447

0
-100

38

344

363

44

53
62

167

272

310

319

-13
-62

-1
-62

-5
-72

104

200
100

Plan

467
1
63

141

333

-73

17
58

158

Net
Invested

Invested Recovered

Net
Invested

Buildings

1,500

－

1,500

1,700

500

1,200

Parking Lots

300

－

300

50

－

50

Leisure / Senior

500

－

500

200

－

200

Other

500

－

500

650

250

400

Total

2,800

－

2,800

2,600

750

1,850

Plan

370

Real Estatefor Sale

-82

-200
15/12

16/12

17/12

18/12

ActualInvested Recovered

524

600

400

Elim/Corp
Fixed Assets

700

500

Investment, Cumulative Total over Five Years(hundreds of millions of yen)

Invested Recovered

ActualNet
Invested

Invested Recovered

Condominiums

3,600

3,500

100

3,350

2,950

400

Other

800

700

100

2,350

1,100

1,250

Total

4,400

4,200

200

5,700

4,050

1,650

Cumulative Net Investment:(Plan) 300 billion yen vs. (Actual) 350 billion yen

19/12
-6-

Net
Invested

1-2

Review of Qualitative Plan

■ Careful, selective investments in superior projects despite a severe investment environment led to
expanded investment in new asset types.
■ Bolstered value chain improves customer service and brand value, and partnerships with local
communities promotes community development.
■ Cross-departmental and cross-company collaboration within the Group leads to acquisition of business
opportunities leveraging a diverse set of business options.
Key Strategies and their Major Results

Investments backed byuniqueness and strengths

Strengthen services to be thecontinued leading choice

Exert group synergies todeliver amazing value

Acquiring high-quality projects using akeen, selective eye for investment

Improved customer service and brand value
from a bolstered value chain

Acquiring business opportunities bystrengthening intra-Group cooperation

Expanding investment in new asset types
capturing changes in investor andcustomer needs

Promotion of partnering with and creating
new communities and other community
development activities

Promoting information-sharing andimproving productivity with Group-wide
IT systems

T-LOGI Kuki

the b osaka midosuji

Entry into logistics facility development
business with attention to logistics needs
arising from evolution of e-commerce

Promoting urban hotel
development in response to
growing inbound tourism
demandBrillia Tower Yokohama
Higashi Kanagawa
Redevelopment/rebuilding
initiative plus development ofresidence business withintegrated production, sales,and management-7-

xBridge-Tokyo
Opened a startup support
facility helping generateinnovation

Kita-Aoyama 3-Chome development
project
Partnering with the residence, senior,and child care businesses to acquirebusiness opportunities

II. Long-term Vision2-1

Context for our Long-term Vision
Key External Environmental Factors

Intensifying international competition between cities

Changing financial environment

Declining population (total and working-age) in Japan

Diversification of work and life styles

Intensifying competition in acquiring talent

Advances in digital technology andaccelerating globalization

Increasing awareness of ESG

Growing geopolitical and natural disaster risks

As changes in our business environment continues to quicken their pace,
it is becoming more and more important every year to managementwith awareness of Environmental, Social, and Governance (ESG).
In such an environment, in order for our unified Group to realize sustainable growthin 2020 and beyond, we have drafted a ten-year long-term vision targeting 2030,
which is both when currently ongoing large-scale redevelopment projects are to conclude,
and the target year for the Sustainable Development Goals (SDGs).

-9-

2-2

Strengths of the Tokyo Tatemono Group■ Having inherited its founding mission of solving social issues, the Group has developed strengths in its
achievements and know-how from taking on pioneering initiatives and cultivating trust over more than
120 years.

Founded in 1896
Mission to provide high quality housing andcontribute to the development of Tokyo

Founded for the development of a sound realestate business

Strengths, yesterday and today
Ingenuity and problemsolving supporting
customer/social needs

Nakano Central Park
New working styles amongst a green
environment

A corporate culture
capturing change over time
and taking on new
challenges

Otemachi Tower
Bringing life to both nature and city

-10-

Hareza IkebukuroPartnering with government todevelop/beautify the city

120 years of trust,track record, know-how

Brillia Tower Ueno Ikenohata
Acquiring business opportunities
thanks to deep customer relations

2-3

Long-term Vision for 2030
Long-term Vision

Becoming a Next-Generation Developer
In an era full of uncertainty and rapid change in terms of demographics, diverse values,
accelerating technological progress, and more, various issues have emergedon the path to creating a sustainable society.
The Tokyo Tatemono Group recognizes that the role developers play must also change significantly.
The group’s aim is to be a good company for stakeholders by leveraging its businesses

to solve social issues and achieve higher levels of growth as a company.

-11-

2-4

Fundamental Long-term Vision Policy■ Aim to achieve the dual goals of solving social issues and sustainable company growth.
■ Target a well-balanced profit structure while steadily expanding stable leasing profit and being
mindful of capital efficiency.
In order to reflect the growth of overseas businesses, we have set our target profit indicator as
business income, which is the sum of operating income and equity gains (or losses) in earnings ofaffiliated companies.

Helping Solve a Variety of Social Issues

Steady Profit GrowthTarget for 2030:
Consolidated business income* of¥120.0 billion

Contributing
to the SDGs

*Consolidated business income = consolidated operating income + equity
gains (losses) of affiliated companies

Basic Profit Growth Policy◼ Steadily expand stable leasing profit, making it the core of our profit composition◼ Target a well-balanced profit structure, mindful of capital efficiency-12-

III. Medium-term Business Plan

3-1

Positioning of the Medium-term Business Plan

■ In the first step toward achieving our 2030 long-term vision, we have established a five-year period
from 2020 to 2024 for our Medium-term Business Plan, targeting a milestone of ¥75 billion inconsolidated business income.

2015-2019
Medium-term Business Plan

Long-term Vision to 2030
2020-2024
Medium-term Business Plan

Consolidated
business income*¥120.0 billion

Consolidated
business income*¥75.0 billion

352

382

2015

2016

464

471

2017

2018

516

2019

2024

*Consolidated business income = consolidated operating income + equity gains (losses) of affiliated companies-14-

Around2030

3-2

Roadmap 2030

■ Target achievement of Medium-term Business Plan goals and realization of the long-term vision throughinitiatives that contribute to the evolution of ESG management and the promotion of our five key
strategies.

Realizing the Long-term Vision

Achieving Medium-term Business Plan Goals

Key
Strategies(1) Promotion of Large-scale
Redevelopment(2) Further Strengthening ofCondominium Business(4) Strengthening ofBrokerage, Fund, andParking Lot Businesses(5) Growth in Overseas
Business

Evolution of ESG Management-15-(3) Expansion of Property
Sales for Investors

3-3Business Portfolio Concepts (1)■ Our business portfolio can be classified into three categories based on their profit characteristics:
leasing, condominiums/sales, and services. We manage each segment with a focus on the value chain.
■ We promote five key strategies with a focus on the balance between profitability, efficiency, and stability.

Business classification and management by profit
characteristics, with awareness of the balance
between profitability, efficiency, and stability

Leasing

Property sales

Services

Profit Type

Characterized By

Profit from leasing
offices, condominiums,
etc.

Highly-stable profit
Requires significant
investment

Development profit,
acquired from sale ofproperties held

Highly-volatile profit
High capital efficiency

Fee revenue fromfacility
management/operation, provision of services

Highly-stable profit
Does not requiresignificant investment

Key Strategies and their Profit Sources

Key Strategy-16-

Profit Source(1) Promotion of Large-scale
Redevelopment

Leasing(2) Further Strengthening ofCondominium Business

Property sales(3) Expansion of Property Sales for
Investors

Property sales(4) Strengthening of Brokerage,
Fund, and Parking Lot
Businesses

Services(5) Growth in Overseas Business

Property sales

3-3

Business Portfolio Concepts (2)■ Working under our five key strategies, we are steadily growing our Services area, with profit growth
driven especially by the Property sales area through 2024 and expansion of Leasing in 2025 andbeyond, achieving a well-balanced profit structure mindful of capital efficiency.
Projected Shift in Per-Area Profit over Time¥120 billion
20%

Services

30%

Property sales

50%

Leasing¥75 billion¥51.6 billion
10%

20%
40%

30%

Leasing
Property sales

Services

60%

40%

2019

2024

Promotion of large-scale
redevelopment*Chart percentages
are approximations

Around 2030

Project completions in 2025 drive
major expansion

Growth of leasing revenue from active properties
Expansion through primarily recovery
on held properties

Ongoing profit generation

Steady growth-17-

Well-balanced
profit structure,
focused onleasing profit andmindful of capitalefficiency

3-4(1) Promotion of Large-scale Redevelopment- Community-building in Contribution to Solving Social Issues■ Centered on a core of new developments and active properties, we will contribute to solving social
issues and community development in order to improve local appeal, aiming to make our cities andregions more competitive and to increase the value of our company's entire office building portfolio.
Initiatives in the Yaesu, Nihonbashi, and Kyobashi Areas
Community-building in Contribution to Solving Social Issues
Urban Redevelopment Projectfor Yaesu 1-Chome North Area

Contributing to solving issues in larger areas and for future
generations while respecting local history and culture

Urban Redevelopment Projectfor Yaesu 1-Chome East Area
in front of Tokyo Station

Contributing to a sustainable society through reduction inenvironmental footprint, stronger measures against natural
disasters, and more

12

Creating bustling hubs to foster rich, diverse, active
communities

Creating new value by collaborating with diverse partners andleveraging advanced technologies

3

4

Boosting area appeal through solving social issues,in an aim to grow the office building portfolio
-18-

5

6

Redevelopment involving
Redevelopment planned
New projects
Tokyo Tatemono
by Tokyo Tatemono
Redevelopment by other companies
Tokyo Tatemono-owned buildings

3-4(1) Promotion of Large-scale Redevelopment- Initiatives in the Yaesu, Nihonbashi, and Kyobashi Areas■ We are progressing with large-scale redevelopment projects looking ahead to 2030. These projects arefocused around Tokyo Station, a key hub of transportation and business center and where ourheadquarters building is located. We are also rolling out new initiatives to enhance the appeal of thearea.
Urban Redevelopment Project for Yaesu 1-Chome
East Area in front of Tokyo Station(Yaesu Project)•••

Urban redevelopment adjacent to Tokyo Station, including theCompany's HQ building
Development of underground bus terminal, connecting
international airports and regional cities
Generating bustling environments through holding events,
developing pedestrian spaces, and more

[Total Area][Main Uses][Floors][Construction Begins][Construction
Completed]

Area A: Appr. 12,000 m2, Area B: Appr. 229,800 m2
Area A: Offices, stores, etc. Area B: Offices,
medical facilities, bus terminal, conference spaces, etc.
Area A: 11 floors (+ 3 basement floors),
Area B: 50 floors (+ 4 basement floors)
Scheduled for FY2021
Scheduled for FY2025

Urban Redevelopment Project for
Yaesu 1-Chome North Area
(Gofukubashi Project)•••

Improving waterfront spaces and generating a bustlingenvironment around the Nihonbashi River
Developing walking paths at the points where Otemachi and
Nihonbashi connect
Improving financial facilities, contributing to greaterinternational competitiveness[Total Area][Main Uses][Floors][Construction Begins][Construction
Completed]

South Area: Appr. 180,500 m2, North Area: Appr.
1,000 m2
Offices, stores, accommodations, parking lots, etc.
South Area: 45 floors (+ 5 basement floors),
North Area: 2 floors (+ 1 basement floor)
Scheduled for FY2025
South Area: FY2030, North Area: FY2035

New Initiatives in Yaesu,
Nihonbashi, and Kyobashi
Yaesu
1 +OURS
Providing a shared officespace in support of
new work styles
xBridge-Tokyo2 A startup support facility
helping generate innovation
SUIBA

3 A kitchen studio using
cuisine as catalyst forliveliness
City Lab Tokyo

4 An open innovation hub
centered on sustainability
TOKYO FOOD LAB

5 A community hub offering
food education and handson experience in a cuttingedge plant factory
TOKYO IDEA

6 EXCHANGE

A forum for creating
innovation businessand encouraging ideas
to take shape

-19-

3-4

(1) Promotion of Large-scale Redevelopment- Ongoing Projects■ In addition to the Yaesu and Gofukubashi Projects, we are moving forward with multiple projects inTokyo’s Chuo, Minato, and Shibuya Wards.
■ Several redevelopment projects covering an estimated total of 320,000 m2 of leased area (*Companyowned) are scheduled to complete by around 2030.
Realize expansion of stable rental income by increasing leased area.
Ongoing Redevelopment Projects
Current
Status

Project Name

Area

Association
EstablishedYaesu Project

Chuo
Ward

Prep Assoc.
EstablishedCity Planning
Finalized

Gofukubashi Project

Chuo
Ward

Prep Assoc.
Established

Redevelopment 1

MinatoWard

Prep Assoc.
Established

Redevelopment 2

Chuo
Ward

Prep Assoc.
Established

Redevelopment 3

Shibuya
Ward

Under
Discussion

Redevelopment 4

MinatoWard

Under
Discussion

Redevelopment 5

2020

-

2024

2025

■ Project period (construction start to completion)

-

2030

Estimated
Leasable Area*(held bycompany)Appr.
120,000m2

Appr.
150,000m2

Appr.
50,000m2

MinatoWard

Estimated investment:¥230.0 billion*Estimated leased area includes non-office leased area such as conference and commercial facilities-20-

Estimated investment:¥330.0 billion

Leasable
Area
Grand Total
Appr.
320,000m2

Intentionally Blank

-21-

3-5

(2) Further Strengthening of Condominium Business- Focus on Redevelopment/Rebuilding, Providing High-Quality Housing■ We will leverage our strong track record and know-how in a constant cycle of acquiring highlycompetitive properties, further enhancing our condominium business and providing high-quality housing
in response to social changes.
Acquiring Development Opportunities Leveraging
Redevelopment/Rebuilding Techniques

Providing High-quality Housing

Acquisition of business opportunities in highly-convenient
locationsHomes that accommodate diverse
values and lifestyles

Development of high value-added housing (complexes,
etc.)

Safe, secure homes that are environmentally-friendly andnatural disaster-resistantRedevelopment of real estate stock, developing favorable
living environments

Homes leveraging advanced technology fromdiverse partner base

Brillia Towers Meguro
Complex redevelopment project at
Meguro Station

Brillia Tsurumaki

Brillia Tower Ikebukuro

Acquired Tokyo's first High-rise ZEHM certification

Tower condo development, will house
Toshima City Hall

Brillia Shonan Tsujido Seaside Park
Rooftop tsunami evac space open to local
residents

Leverage deep experience and know-how to provide contemporary housing
and further strengthen the condominium business
-22-

3-5

(2) Further Strengthening of Condominium Business- Major Projects■ We will continue efforts in our large-scale redevelopment and reconstruction projects, securing
stable profits.
■ The medium-term plan’s management period includes booking of a planned 6,500 units’ worth ofprojects. Approx. 80% of expected total sales have already been secured.

Brillia Tower Takasaki
ALPHA RESIDENCIA(Total Units: 222)

Brillia Tower Nishijin(Total Units: 307)

2020年
Brillia Tower Ariake MID CROSS(Total Units: 300)

Brillia Tower Seiseki Sakuragaoka
Blooming Residence(Total Units: 520)

2021年

2022年

SHIROKANE The SKY(Total Units: 1,247)

2023年
Minato Ward Kaigan 1-chome
Rebuilding Project (Total units: 420)

SHINTO CITY
(Total Units: Appr. 1,400)

Dojima Project (name TBD)
(Total units: TBD)

2024年
HARUMI FLAG
(Total Units: 4,145)

Land bank units to be booked in the medium-term plan period: Appr. 6,500 secured(Around 80% of projected cumulative sales in the medium-term period)
-23-

3-6

(3) Expansion of Property Sales for Investors- Developing Assets Capturing Real Estate Investment Needs■ We will develop a diverse set of asset types in response to real estate investment needs andproactively acquire development opportunities.
■ We aim to achieve high capital efficiency through strategic investments and sales.

Development of Assets for the Real Estate
Investment Market

Developing diverse assets in line with changing real estate
investment needs
Commercial facility
FUNDES Ginza

Realizing high profitability through not only the Company's
track record and know-how in real estate operation, but also
through cooperation with a wide range of external operators

Urban hotel
Candeo Hotels
Tokyo Roppongi

Contributing to healthy development of the real estate
investment market by supplying high-quality assets
Mid-sized officeSendai Hankyoin Terrace

Continuous acquisition of development opportunities
in response to real estate investment needs
Contribution to stable profit by development of highquality assets

Rental apartments
Brillia ist Sendagaya

Logistics facility
T-LOGI Kuki

BeforeSocial apartments
NEIGHBORS Musashi Nakahara

-24-

After

Office spaces converted into a hotel

Hotel Noum OSAKA

3-6(3) Expansion of Property Sales for Investors– Dynamic Property Sales■ The Company's policy is to increase the stock of real estate for sale through building a portfolio of diverse
asset types, as well as to expand the Group's AUM by selling these to REITs sponsored by the company.
This will achieve a continuous growth in profits and improvement in capital efficiency.
■ We will also adjust our fixed asset portfolio as appropriate with a focus on profitability and future potential.
Generating Profit from Real Estate for Sale

Revision of Fixed Asset Portfolio

Carefully-selected investments drive steady expansion
in real estate assets for sale

Swapping fixed assets in consideration of individual property
profitability, future potential, portfolio balancing, etc.

Dynamic sale to REITs, etc. based on market conditions
and performance status
Per-Segment Balances
Other ¥16.4 Bn
8%Real Estate
Service

Commercial¥51.7 Bn 25%

Properties¥107.9 Bn

Residence¥29.1 Bn 14%

53%

As of end of 2019
Tangible + Intangible Fixed Assets Balance: ¥902.7 Billion
Unrealized gain on leasing and other real estate: ¥463.5 Billion

Properties for Sale to Investors
as of end of 2019
Balance*1：Appr. ¥205.3 Bn
Total Investment（Decided)*2：Appr. ¥305.0 Bn
Expected Profit on Sale*3：Appr. ¥60.0 Bn

Expansion of Group AUM,
continuous profit growth,and contribution to improved capitalefficiency through better turnover rate

Cumulative Gross Profit inMedium-term Plan Period
Appr. ¥85.0 Billion*1 Of real estate for sale, the total book value of owned/developing non-condominium properties for sale to investors*2 Total of the book value of above properties for sale to investors, plus total expected investment amount including future expected
construction expense, plus total investment amount for properties decided for acquisition in or after January 2020
*3 Expected profit on sale of above properties for sale to investors, as of current date

-25-

3-7

(4) Strengthening of Brokerage, Fund, and Parking Lot Businesses- Contributing to a Stock-based Society with Real Estate Services■ We will enhance the brokerage business, which focuses on increasing real estate stock, and the parking
lot business, which captures the needs for effective use of real estate, and we will expand Group-related
assets.
■ We will target growth of the fund business by selling developed/owned properties to REITs or funds
sponsored by the Company and others.
Contributing to a Stock-based Society
with Real Estate Services

Expanding Group profit opportunities
by strengthening the fund businessDistributing real estate stock through the brokeragebusiness, corporate growth and improved asset efficiency
through corporate real estate (CRE)

Property sales
Tokyo Tatemono
Group
Development

Providing investment products utilizing Company
developed/held assets

Value Add

Effectively leveraging real estate through the parking lot
business and more

Funding
recoveryServices

Asset Management
Property/Building
Management

Expansion of brokerage, fund, and parking
lot businesses capturing real estate effective
use and investment needs

Effective Useof Parking
Lots

Japan Prime Realty
Investment Corporation
Tokyo Tatemono
Private REIT, Inc.

New fund formations

Brokerage/
CRE

External acquisition ofreal estate
-26-

Fee
Revenue

Expected 2024 AUM:
1.5 trillion yen

Financing frominvestors

3-8(5) Growth in Overseas Business■ We will continue promoting business in China, where we have a 15-year track record, and continue
promoting development in other Asian countries entered during the previous medium-term plan.
■ We will collaborate with leading local partners to acquire new business opportunities, primarily
condominium projects with quick turnover, in aiming to increase business income to around 10% by 2030.
Overseas Business Policy•

Target Areas

Investment
PolicyRisk
Management•••

China: Primarily develop second & third-tier cities with strong tiers ofconsumers with actual demand
Other Asian countries: Primarily develop countries where we have an
existing footprint
Invest in condominium businesses with quick turnover in interest of risk
management
Deepen collaborative relationships with leading local partners, leading
to new business opportunities• Further strengthen management systems to aid new andexpanded business initiatives in light of diverse risks in doing
business overseas

Xuzhou Qiaohu Project(Xuzhou City, China)

Sathorn Project(Bangkok, Thailand)-27-■ Project city

■Local subsidiary3-9

Evolution of ESG Management- Development of a Sustainability Promotion System■ In order to promote sustainability initiatives across the entire Group, we have established a
Sustainability Committee, working with business divisions to set goals, monitor progress, evaluate
performance levels, and continue to implement sustainability measures on an ongoing basis.

■ Our goal is to be leverage the positive evaluations we have received from ESG rating agencies asbenchmarks for our inclusion in ESG indices.
Promotion System for Sustainability Measures
Management by the Sustainability Committee(chaired by the President)

Board of Directors

Goal-setting

Implementation /
promotion

Evaluate

PDCA cycle
Reviseactivities

MonitorMonitoring/ evaluation

Promotion of sustainability measures withineach business division

Activity
promotion& information
disclosure

Improved evaluations from ESG rating agencies, inclusion in ESG indices-28-

Stakeholder engagement

Report3-9Evolution of ESG Management- Concrete Sustainability-related Initiatives■ In order to achieve greater corporate and social value at a higher level, the Group as a whole willproactively work to carry out sustainability measures and promote advanced ESG management.
Major Themes in Promoting Sustainability

E: Environmental

S: Social

G: Governance◼ Use businesses to further
strengthen environmental
measures◼ Securing and cultivating talent
supporting sustainable growth-Productivity boosts from work-style reforms◼ Improved profitability andmanagement transparency
through stronger governance-Reducing greenhouse gas emissions-Promoting diversity-Stronger risk management systems

Building an environment bringing out the capabilities of
a diverse set of employees

Further evolution in comprehensive risk management bystrengthening both business monitoring and internal
control systems-Strengthening response to climate change-Promoting development of environmental
real estate
Realizing reduction of environmental load and creationof rich and comfortable spaces through improvement ofenvironmental performance and development of realestate in harmony with nature

Hareza Ikebukuro
Obtained first ZEB Readycertification for high-rise
multipurpose buildings

Brillia Tower Seiseki
Sakuragaoka
Blooming Residence
Acquired Tokyo's first superhigh-rise ZEH-M certification-Proactive investment in and cultivation oftalent for business expansion
Strengthening professional, global, and digital humanresources in keeping with the modern era◼ Maintaining and strengthening
relationships with stakeholders-Stronger action on human rights-Providing products and services that meetwith a changing society-Strengthening supply chain management
Formulating basic policies and engaging with partners-Further strengthening in Group synergies
Improve Group-wide profitability further throughcontinuous structural reforms and proactively leveraging
ICT-Revisions in strategic shareholdings
Review significance of and reduce strategic holdings-Further improvement of managementtransparency and effectiveness
Brillia Oyama Park Front
Integrated development:
condominiums + childcare
facilities-29-

Promote stronger governance structures and enhanced
information disclosure3-10 Profit / Financial Plan
■ In the Medium-term Business Plan, we have set a profit target of ¥75 billion in business income forfiscal 2024.
■ In addition, we have set targets for ROE, the debt-equity ratio, and the interest-bearing debt to
EBITDA multiple in order to optimize the business portfolio in consideration of capital efficiency andfiscal discipline.
FY2024 Figures

ProfitTargetConsolidated business income:*1 ¥75.0 billion

CapitalEfficiency

ROE: 8-10%

Financial
Indicators

Debt-equity ratio*2: Appr. 2.4X
Interest-bearing debt / EBITDA multiple*3: Appr. 12X*1 Consolidated business income = consolidated operating income + equity gains (losses) of affiliated companies*2 Debt-equity ratio = consolidated interest-bearing debt / consolidated owners’ equity*3 Interest-bearing debt / EBITDA multiple = interest-bearing debt / (operating income + interest & dividend income + equity gains (losses) of affiliatedcompanies + depreciation expense + goodwill amortization expense)-30-

3-11 Management with Awareness of Capital Efficiency■ We will target the following: enhancing ROA by improving margin and turnover, appropriately controllingthe debt-equity ratio through earnings growth and asset sales, realizing an ROE of 8% to 10%, andoptimizing our business portfolio and asset composition.
Realize appropriate
ROE
Net income ÷ owners’ equity

2024：8-10%
2024:
4%

Decrease debtequity ratio

Improve ROA
Business profit ÷
total assets

Interestbearing
debt

Improve Margin/Turnover1) Enhance asset profitability by investing
while mindful of capital cost2) Improve turnover rate through greater
profit on property sales
3) Make adjustments to businesses withlow profitability/poor growth outlook

AssetsOwners’equityInterest-bearing debt ÷owners’ equity

Secure Fiscal Stability1) Increase equity through accumulating
greater profit
2) Recover funding by sales, not only of forsale real estate but also fixed and nonbusiness assets (e.g. strategic shares)

Guide optimization of business portfolio andasset composition

-31-

2024:
2.4X

3-12 Investment Plan
■ Estimated net investment of ¥500.0 billion yen total over five years.
■ In addition to enhancing owned capital through stable profit growth, we aim to optimize our asset
composition by selling fixed assets in consideration of profitability and reducing cross-shareholdings inorder to either maintain or reduce the debt-equity ratio and simultaneously control the balance sheet in
an appropriate fashion.
Medium-term Investment Plan
(Cumulative)

Balance Sheet Changes
Unit:
100m yen

Gross investment total

14,000Investment in large-scale redevelopment

2,300

Investment in condominium projects

4,300

Investment in properties for sale to investors
Investment in the overseas business

Other¥200 billion

Other¥264.2 billion

5,500
700

Other

1,200

Recovered

9,000

Net investment

5,000

Assets¥1,564.0
billionInterestbearing
debt¥924.8billionOwners’equity¥375.0billion2019-32-

Assets¥1,900billionDebtequity
ratio
2.5X

Interestbearing
debt¥1,200billionOwners’equity¥500
billion2024 (Expected)

Debtequity
ratio
Appr.
2.4X

3-13 Shareholder Return Policy■During the medium-term plan period, we will establish a baseline consolidated dividend payout ratio of
30% or more and aim to continuously increase shareholder returns through sustainable growth.
■We will also consider whether or not to repurchase company shares based on the business environmentand our financial situation.
Shareholder Return Projection

Treasury stock acquisition:¥10.0 billion yen(Cancelled on January 31, 2020)

¥41.0

¥45.0

¥35.0
¥26.0

¥30.0

Profit growth drives
further increase

¥20.0

2024
（Expected）

2015

2016

2017

2018

2019

2020
(Forecasted)

Consolidated
payout ratio

26.3％

28.6％

28.8％

27.8％

29.0％

30.3％

Net income attributableto owners of the parent¥16.3
billion¥19.7
billion¥22.5
billion¥27.2
billion¥29.7
billion¥31.0
billion

30％ ormore¥45.0
billion

EPS

¥76

¥91

¥104

¥126

¥142

¥148

¥215

-33-

3-14 Quantitative Plan Summary

Medium-term Business Plan: Business Income Trend
Commercial properties

Residence

1000

Real estate service

Other

Expected 2024 Figures

Elim/Corp

Business income¥75.0 billion
Profit Target

800

600

400

200

0

Business income¥51.4 billion

5
58

80
90
180
（Reference）

158

375

-82

2024
Expected

Consolidated businessincome¥51.6 billion¥75.0 billion

Consolidated operating
income¥52.4 billion¥70.0 billion

Net income attributable toowners of parent¥29.7 billion¥45.0 billion

EPS

¥142

¥215

ROE

8.2%

8-10%

Debt-equity ratio

2.5X

Appr. 2.4X

Interest-bearing debt /EBITDA Multiple

12.6X

Appr. 12X

490
CapitalEfficiency-90
Financial
Indicators-200
2019 Actual

2019
Actual2024 Projection-34-

Notes■ Although every effort has been made to provide the information provided in thisdocument, we do not guarantee the accuracy or completeness of the information
contained herein. In addition, please note that its contents may be revised or removed
without notice.
■ This material contains the Tokyo Tatemono Group's current plans, beliefs, and outlook
regarding its future business performance. These forecasts are not necessarily allinclusive, and risks and uncertainties may affect future performance. Actual
performance may differ from these forecasts due to various factors.

-35-