JR Kitahiroshima Station / tonarie Kitahiroshima Hotel /Le JADE Hokkaido Kitashiroshima

Financial Results
for the Year Ended
March 2024

ES-CON JAPAN Ltd. (TSE Prime: 8892)
May 17, 2024

2

Section 1

Overview of Financial Results
for the Year Ended March 2024

* The Company has revised its fiscal period (end of business year) from the end of December to the end of March.
Due to this change, the year ended March 2024 is a one-time 15-month period starting January 1, 2023 and ending
March 31, 2024.

Section 1 Contents

3⚫ Overview of the Year Ended March 2024
P/L

P. 4

Segment Results

P. 5

Real estate sales business

Real estate leasing business
Real estate planning agency and consulting business

B/S

P. 9

Results Forecasts for the Year Ending March 2025

P. 10

⚫ Review of Fourth Medium-Term Management Plan

P. 12

Profit/Loss Statement for the Year Ended March 2024

4

➢ Due to a change in the Company’s fiscal year end date, the year ended March 2024 is a one-time 15-month period starting
January 1, 2023 and ending March 31, 2024.
➢ During this period, which marked the final year of the Fourth Medium-Term Management Plan, the Company achieved
record net sales of ¥118.8 billion and record operating profits of ¥19.0 billion.
➢ Results were generally in line with revised results forecasts announced in August 2023.

(Unit: Million yen)

FY3/24 Full-Term(term under review)

Revised results forecasts
for FY3/24

Vs. revised forecasts

FY12/22 Full-Term(Previous period)

ChangePercent change-1,139

-0.9%

Sales

118,861

Gross profit

34,941

26,607

Selling, general and administrative
expenses

15,867

11,115

Selling expenses

4,976

4,133

General administrative expenses

10,8906,981

Operating profit
Interest expenses
Ordinary income
Extraordinary loss

120,000

19,07418,000

1,074＋ 6.0%

99,431

15,492
1,895

2,650
16,585

15,500

1,085＋ 7.0%

14,012
3,927

1,381

Profit in the quarter attributable toowners of the parent

10,05010,00050＋ 0.5%

7,250

Basic earnings per share in the quarter(yen)

105.44104.95

0.49

-

76.04

Dividend

Planned year-end dividend for FY3/24: ¥48

Payout ratio

45.5％
Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

Segment Overview for the Year Ended March 2024

5

◆ Made Shijo Omiya Building Co., Ltd. a subsidiary, upgraded the tonarie series of commercial facilities and opened new facilities.
These efforts boosted sales and profit in the real estate leasing business. Sales in this business rose 3.5 percentage points
from the previous year, while its share of profits increased by 5.6 percentage points.
We achieved transformation and rapid progress as planned by steadily revising the revenue structure as called for under the
Fourth Medium-Term Management Plan.
■Share of sales by segment ■Sales
Up 3.5 pts.
YoY

■Share of profit by segment ■118,861 million yen

Segment income

28,920 million yen

Real estate planning
agency and consulting
Share

Share

15.4%

0.8%

929 million yen

18,325 million yen

Real estate planning
agency and consulting

Up 5.6 pts.
YoY
Share

Real estateleasing

Share 1.4%
419 million yen

27.1%

7,841 million yen
Real estateleasing

Other sales
Share

Condominium

25.5%

30,315 million yen

Share

Share

44.6%

12,884 million yen

58.3%

69,290 million yen

Condominium

Other sales
Share

26.9%

7,775 million yen

Real estate sales(Condominium/other)
99,606 million yen

Real estate sales(Condominium/other)
20,660 million yen
Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

Segment Overview for the Year Ended March 2024—Real estate sales business

6① Real estate sales business(Unit: Million yen)
Sales

Segment income
YoY

FY3/24Full-Term (A)FY12/22Full-Term (B)Real estate sales business

99,606

86,531

13,075

Condominium sales

69,29058,532

1,216
30,315

Properties delivered (units)
Other businesses

1

Segment profit margin
YoY

FY3/24Full-Term (A)FY12/22Full-Term (B)＋15.1%

20,66017,006

3,654＋21.5%

20.7%

10,758＋18.4%

12,884

9,921

2,963

＋29.9%

18.6%

1,185

31

＋ 2.6%

27,9992,316＋ 8.3%

7,775

7,085

690

＋ 9.7%

25.6%

Change(A-B)

PercentchangeChange(A-B)

PercentchangeFY3/24Full-Term (A)FY12/22Full-Term (B)YoY

Change(A-B)＋1.0 percentage
19.7%
points1.7 percentage＋
16.9% 2points25.3%＋0.3 percentage
points«Condominium sales»➢ The condominium business supplied 1 a record-high 1,216 units.
➢ High margin properties sold out quickly, attesting to our product planning capabilities.
(Le JADE Hokkaido Ballpark, Park Le JADE Shirokane Residence, etc.)
Segment profit ratio increased 2 1.7 percentage points YoY
ES CON FIELD HOKKAIDO (left)
Le JADE Hokkaido Ballpark (right)«Other businesses»➢ We sold logistics facilities (in Hashima City, Gifu Prefecture and Kato City in Hyogo Prefecture),rental residences, and land for a healthcare facility for the elderly (Fujishirodai, Suita)▲Hashima City, Gifu Prefecture (logistics facilities)

We developed TSUNAGU GARDEN Senri
Fujishirodai, a project on the former site of the National
Cerebral and Cardiovascular Center composed of two
Le JADE condominium buildings, detached houses, a
medical mall, a licensed nursery school, commercial
facilities, and a park.
We sold part of this former site to a developer who
intends to develop a healthcare facility for the elderly.
Opened November 7, 2023
Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

Segment Overview for the Year Ended March 2024—Real estate leasing business

7② Real estate leasing business➢ Shijo Omiya Building, made a subsidiary in July 2023, contributed to rental revenue. The segment profit ratio rose 1
2.9 percentage points year on year.
➢ Renovations at tonarie Utsunomiya were completed (February 2023), while tonarie Hoshida opened (March 2023). Leasing activities
proceeded for various commercial facilities, including tonarie Tsukeba Square, and we put emphasis on the project managementbusiness.

(Unit: Million yen)
Real estate leasing
business

YoY
FY3/24 Full-Term (A)FY12/22 Full-Term (B)Change (A-B)

Percent change

Sales

18,325

11,824

6,501

55.0%

Segment income

7,841

4,716

3,125

66.3%

Segment profit margin

42.8%

39.9%

1

＋ 2.9 percentage-

pointsTo implement the goal of changing the revenue structure, a basic policy of the Fourth MediumTerm Management Plan, we made the Picasso Group a subsidiary in 2021. We also madeShijo Omiya Building, which owns revenue-generating real estate primarily in Kyoto, a
subsidiary in July 2023.

Share acquisition price: ¥28.1 billion
Approx. expenses:¥100 million
Total acquisition price: ¥28.2 billion

Current market value

Properties owned

Shijo Omiya Building

Approx. ¥42.0 billion

43

Picasso Group(on being made asubsidiary in 2021)

Approx. ¥59.1 billion

81

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Segment Overview for the Year Ended March 2024—

Real estate planning agency and consulting business8③ Real estate planning agency and consulting business➢ We engage in sales of permanent usage rights for Ryomon Columbarium, the sale of interior options, and contracted
planning and consulting.
➢ Real estate agency and the contracting business, etc. made progress and contributed to profits.

(Unit: Million yen)
Real estate planning
agency andconsulting business

YoY
FY3/24 Full-Term (A)FY12/22 Full-Term (B)Change (A-B)

Percent change

Sales

929

1,074

-145

-13.5%

Segment income

419

228

191

83.8%

45.1%

21.2%

Segment profit margin＋ 23.9 percentage

points-

We attracted a certain number of visits, with those visiting giving high ratings
for the facility. Located three minutes from Hiroo Station, sales efforts
highlighted the location and characteristics of Ryomon, which is composed ofindividual rooms for worship.
Ryomon Columbarium
Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

Balance Sheet for the Year Ended March 2024

9

➢ Investments made exceed those planned. Total assets grew 1 ¥135.9 billion, while the equity ratio fell 6.9 percentage points year on year
to 2 18.1%.
➢ Purchases proceeded smoothly, 3 boosting Real estate for sale in process to ¥88.9 billion.
(Unit: 100 million yen)
■Inventory breakdown and trends (Unit: 100 million yen)
FY3/24(term under review)

Current assets

FY12/22(previous term)

43

Change

2,954

1,913

1,041

Cash and deposits

489

357

132

Real estate for sale

34

48

-14

Real estate for salein process
Non-current assets
Property, plant andequipment
Intangible assets
Investments andother assets
Total assets

3

33

Logistics

2,278

1,389

1,042

723

319

750

521

229

FY12/22143.7
Up 1.6
times

889

161

77

84

129

124

5

660
Condominiums

265

246

Commercial

187

Rentalresidences

Other

Steady progress onpurchasing

Acquisition ofcommercial
facilities (Increase(Increase of 37.4 billion yen)of 14.5 billion yen)

FY3/24

1,034
Condominiums

231.2

HotelsAcquisition ofrental residences(Increase of 19.7 billion yen)

410

443

Commercial

Rental residences

36

88

Logistics

3,996

FY3/24(term under review)

2,637

FY12/22(previous term)

1

1,359

Hotels0■Trends in assets, liabilities, and equity ratio (Unit: 100 million yen)

Change

1,085

556

529

Property, plant and equipment(revenue-generating properties held)

Inventory assets

Short-term loans

515

100

415

Interest-bearing debt

Total assets

Current portion of
long-term loans

426

261

165

Non-current liabilities

2,204

1,438

766

Long-term loans

1,995

1,328

667

Total liabilities

3,289

1,995

1,294

Total net assets

707

641

66

3,996

2,637

1,359

Current liabilities

298
Other

Equity ratio
25.8%

25.0%

24.8%

3,996
18.1%
2,937

2,637

2,527

2,312

Total liabilities and net
assets

1,494
885

1,309

1,630

1,437

1,690

985

744

514

520
141

Equity ratio

18.1%

25.0% 2-6.9 percentage
points

FY12/20

FY12/21

FY12/22(previous term)

FY3/24(term under review)

Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

Results Forecasts for the Year Ending March 2025

10

➢ In the year ending March 2025 sales and profits are expected at around the same level as
the previous year (FY3/24) (effective increase in sales and profits)(Unit: 100 million yen)

Net sales

Operating profit

Profit attributable toowners of parent

Ordinary income

Net profit per share
Yen

Second quarter

30,000

3,500

2,100

1,400

14.67

Full term

118,000

18,00015,00010,000104.76➢ We will maintain our current progressive dividend policy under the Fifth Medium-Term
Management Plan.
(The dividend per share from the previous period is the lower limit for the per-share dividend. Given
the Company’s dividend policy, this means the dividend will remain the same or increase.)
FY3/25Period-end dividend: ¥48 planned
Payout ratio of 45.8%
For more information, see the Fifth
Medium-Term Management Plan in thesecond section starting on p. 26.

11

Review of Fourth Medium-Term
Management Plan
Year ended December 2021 through year ended March 2024

Review of Previous Medium-Term Management Plan ①

12➢ Results proceeded more or less according to plan to achieve transformation, rapid progress, and a steady revenue
Basicstructure.
policy of the previous medium-term plan period.
January 2021 to March 2024

[Results (FY3/24 results)]

Transformation&
Rapid
Progress

Achieving transformation✓ Improved stability indicators via proactive investment[Basic policy]• Proactive investment in long-term revenuegenerating real estate and improving thestructure of the balance sheet• Transform the focus of managementfrom flows to stocks

Three-year cumulative investment

Share of profits from leasing

Long-term revenue generating
real estate

Gross investment
260.0 billion yen(forecast was 230.0 billion yen)

14.2% in FY12/20→ 27.1% (forecast was 28.0%)

FY12/20 9.5%
→ 18.6% (forecast was 21.0%)*1 Share of profits f rom leasing: Leasing segment profits/segment total profits (excluding adjustments)*2 Share of long-term revenue-generating real estate: Real estate generating leasing revenues recorded as noncurrent assets/net assets• Demonstrate synergies in the Chubu
Electric Power Group• Achieve sales of 111.0 billion yen andoperating profit of 16.0 billion yen(Forecast for final year of medium-term
management plan; *based on 12-monthfiscal period)

Achieving rapid progress✓ Achieved steady financial result improvement
Sales

Operating profit

118.8 billion yen(up 53% from FY12/20)

19.0 billion yen(up 55% from FY12/20)

Planned financial results
Unit: 100 million yen
FY12/20
Results

FY12/21
Results

Initial planvs. initial plan

Results

FY12/22

FY3/24

Initial plan

Financial results forecast(15-month period)

Initial plan
(12-month period)

vs. initial plan

Sales

773

790

800

-10

994

980

14

1,188

1,100

Operating profit

122

103

108

-5

154

140

14

190

160

1200

売上高

Sales

1,188

営業利益

Period of the 4th medium-term management plan
994

Operating profit

1000

800

400

790

773

350

vs. FY12/20
Sales up 53%
Operating profit
up 55%
190

600

300

250

200

154
150

122
400

103

Stage involving reforming
the BS structure andrevenue structure

200

Stage involving
setting recordhigh profit

Stage involving
further rapid
progress byrealizingtransformation

0

100

50

0

20/12期
FY12/20

FY12/21
21/12期

FY12/22
22/12期

FY3/24
24/3期
Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

Review of Previous Medium-Term Management Plan ②

13➢ Investment results exceeded expectations; stability indicators rose (share of profits from leasing, long-term revenue-generating real estate);and the revenue structure was successfully transformed.

Investment plan

Unit: 100 million y en

FY 12/21

FY 12/22

Results
Total gross inv estment

FY 3/24

Results

Results

Initial plan (released 2/21)

Three-y ear
cumulativ eThree-y ear(Results) ①

cumulativ e

Rev ised plan (released 8/23)
Three-y ear

vs. initial plan①－②②

v s. rev isedcumulativ e

plan

③

①－③

976

375

1,249

2,600

2,200

400

2,300

300

767

108

609

1,484

1,300

184

1,540

-56

56

36

110

199

300

-101

220

-21

337

56

255

648

600

48

685

-37

373

15

246

634

400

234

635

-1

191

261

577

1,029

900

129

760

269

Ov erseas inv estment

7

4

55

66

-

-

-

-

Other inv estment

9

2

10

21

-

-

-

-

Inv estment in rev enue-generating realestateInv estment in dev elopment of
rev enue-generating real estate
Inv estment in medium-term
rev enue-generating real estate
Inv estment in long-term
rev enue-generating real estate
Inv estment in other dev elopments

Amount recov ered

48

65

104

217

300

-83

280

-63

Net inv estment amount

928

310

1,145

2,383

1,900

483

2,020

363

*Initial plan (released 2/21):
Plan covers from 1/21 to 12/23 (36 months)

Management indicators
FY12/20① Results

Expected to exceed forecasts
ininitial plan (released 2/21) andrevised plan (released 8/23)
Major contribution frominvestment association withsubsidiaries the Picasso Groupand Shijo Omiya Building*Revised plan (released 8/23):
Plan covers from 1/21 to 3/24 (39 months)

FY3/24② Results③ Initial planvs. initial planvs. FY12/20

②－③

②－①

Share of profits from leasing*1

14.2%

27.1%

26.0%

1.1%

＋ 12.9%

Share of long-term revenuegenerating real estate*2

9.5%

18.6%

18.0%

0.6%

＋ 9.1%

ROE

21.2%

14.5%

13.0%

1.5%

-6.7%

ROIC*3

6.6%

3.6%

4.0%

-0.4%

-3.0%

Equity ratio

25.8%

18.1%

23.0%

-4.9%

-7.7%

Net assets

38.6bn yen

70.7bn yen

72.0bn yen-1.3bn yen＋ 32.1bn yen

Improved revenue stability (achieved
transformation)
Maintained high capital efficiency even the vs FY12/20
result declined, based on strengthened capital via
third party allotment to Chubu Electric Power (became
Chubu Electric Power’s subsidiary).
Better-than-expected progress on investment plan, butfinished below plan
Increased compared to FY12/20 due to a capitalinfusion from the above third-party allotment*1 Share of profits from leasing: Leasing segment profits / segment total profits (excluding adjustments)*2 Share of long-term revenue-generating real estate: Real estate generating leasing revenues recorded as noncurrent assets / net assets / total assets*3 ROIC: Operating profit after tax / (shareholders ’ equity + interest bearing debt)

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Review of Previous Medium-Term Management Plan ③

14➢ Steadily diversified business and expanded business area based on management strategy (priority initiatives) during the previous medium-term plan.
① Transformation to a sustained and stablerevenue structure✓ Achieved transformation of revenue structure by making subsidiariesof the Picasso Group and Shijo Omiya Building② Stable growth in existing core businesses✓ [Condominiums]
・ Continued stable supply (supply of around 1,200 units annually)
・ Promoted diversification in product plans, including supply in prime
downtown locations and on sites with rich natural environments✓ [Commercial] Developed a total of 10 facilities in the tonarie series

Made subsidiary in July
2023

Made subsidiary in
October 2021

✓ Obtained ratings of A+ (stable) from JCR and A (stable) from R&I

Park Le JADE Shirokane
Residence

SEVENS VILLA Karuizawa③ Making new business core business④ Challenge of new areas✓ [Logistics] Development of LOGITRES series✓ Participated in multiple projects in the overseas business(Bangkok, Thailand, California and Hawaii, etc. in the U.S.)✓ Conducted initiatives for the next generation by investing in and partnering with
Serendix, which is aiming to use a 3D printer to develop housing, STYLY,
which conducts an XR business, and the SHONAI (formerly Yamagata Design)Group, which develops business on the concept of agriculture✓ [Station Area Development, Urban Development]
Multiporpose development of primarily commercial facilities in front of YamatoTakada Station, Tsukuba Station, and Hokkaido Kitahiroshima Station✓ [Rental residence] Launched and developed the proprietary TOPAZ brand

LOGITRES Sano

TOPAZ Shin-OkachimachiĀlia Project(Reference) Suiden Tearrasse
Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

Review of Previous Medium-Term Management Plan ③

15⑤ Strengthening ES-CON Japan Groupsynergies⑥ Expanding sites centering on five urban
areas✓ Picasso Group, Shijo Omiya Building, FUEL,
ES-CON Sports & Entertainment begin participating in the Group(made subsidiaries or newly established)✓ Building an overall Group system for development business in a multifacetedmanner✓ New supply of condominiums in Hokkaido and Kyushu✓ Diversity of developments in Hokkaido, including senior residences, logistics,
and hotels centering on urban development in the area of ES CON FIELD
HOKKAIDO✓ Steady business expansion in the Chubu area

A new company was established in
December 2023 to promote urban
development based on an approach thatemphasizes entertainment, including sports.

MASTERS VARUS Hokkaido Ballpark⑧ Promoting ESG⑦ Strengthening Chubu Electric PowerGroupsynergies✓ Multiple joint businesses with Chuden Real Estate making progress,
contributing revenue(Shirakabe I & II in Higashi-ku, Nagoya and Fujishirodai 5-chome in Suita , etc.)✓ Developing Techno Farm Fukuroi, a plant-growing facility, jointly with
Chubu Electric Power✓ Participating in urban development project on the former site of the Nagoya
Horse Racing Track

Development at theformer site of the Nagoya
Horse Racing Track

TSUNAGU GARDEN
Senri Fujishirodai

Kitahiroshima Station West Exit development
tonarie Kitahiroshima, hotel, Le JADE Hokkaido
Kitashiroshima✓ Promoted development and continued supply of ZEH condominiums✓ Disclosed information based on the Task Force on Climate-related
Financial Disclosures (TCFD) framework✓ Certified as Health & Productivity Management Outstanding Organization for2024 (large corporation category)Techno Farm Fukuroi
Le JADE Honkawagoe Koedo
Terrace

Le JADE Yao Sakuragaoka
Copyright ©2024 ES-CONJAPAN Ltd., All Rights Reserved

16

Section 2

Long-Term Vision 2030
Fifth Medium-Term Management PlanSection 2 Contents

17⚫ I. Backdrop for the formulation of Long-Term Vision 2030 and the Fifth
Medium-Term Management Plan
Background to the Plan (External/Internal Environments)
Positioning of Long-Term Vision 2030 and
5th Medium-Term Management Plan

P. 19
P. 20

⚫ II. Long-Term Vision 2030
The Direction Targeted (Overview)
The Direction Targeted (Discussion: Business Strategy)
The Direction Targeted (Discussion: Sustainability
Management)

P. 22
P. 23
P. 24

⚫ III. Fifth Medium-Term Management Plan
- Business Plan Financial Results Plan, Investment Plan
About Segment Changes
Results Forecast by Segment
Management Indicators and Management that Accountfor Capital Costs and Stock Prices
Dividend Policy

P. 26
P. 27
P. 28
P. 29
P. 30

⚫ IV. Fifth Medium-Term Management Plan
- Management Strategy Segment Strategy
Promoting Sustainability Management
Urban Development and Area Development

P. 32-35
P. 36-40
P. 41*Key to this document(Group companies)• Picasso Group:
Corporate group made up of PICASSO CO., LTD.
and Yuki Sangyo Inc.
• Shijo Omiya Building: Shijo Omiya Building Co., Ltd.
• FUEL: FUEL Inc.
• ES-CON Sports & Entertainment:
ES-CON Sports & Entertainment Ltd.
(Other proper nouns)• EJR: ESCON JAPAN REIT Investment Corporation• Chubu Electric (or Chuden): Chubu Electric Power
Co., Ltd.
• Chuden Real Estate: Chuden Real Estate Co., Inc.
• Serendix: Serendix Inc.
• STYLY: STYLY, Inc.
(Other abbreviations, etc.)• STO: Security token• CF: Crowdfunding• AUM: Assets under management• PJ: Project

I. Background to the formulation of Long-Term Vision
2030 and the Fifth Medium-Term Management Plan

[I] Background to the Plan (External/Internal Environments)

19➢ We revised our management philosophy system in November 2023 to ensure sustained growth for the long term in any environment.
➢ Further, we created the Long-Term Vision 2030 and 5th Medium-Term Management Plan as a guide and strategy leading up to fiscal 2030.
External environment
Positives

Internal environment
Negatives

Achievements(during the previous medium-term plan)

Challenges✓ Steady economic expansion post-Covid✓ Rising interest rates✓ Achieving basic policies oftransformation & rapid progress✓ Continue building revenue base capableof withstanding uncertain markets.

✓ Increase in disposable income fromcontinuing revisions to wage levels✓ Acceleration in low birthrates and theaging population✓ Made steady progress in acquiring
project sites in FY24 and beyond✓ Diversify business portfolio.

✓ More opportunities for development
due to acceleration in concentration of
population in urban areas✓ Economic stagnation regionally outside
the Tokyo metro area

✓ Built business development system atfive sites in Japan✓ Expand BS related to active businessdevelopment (increase liabilities)✓ Expanded investment from overseas
in safe Japan✓ Stagnation in China’s economy✓ Growth into general developer capableof developing a variety of real estate✓ Strengthening and rigorous
implementation of compliance and risk
management frameworks.

✓ Expansion in business for the wealthy✓ Concerns over increased geopoliticalrisks✓ Movement to TSE Prime market
Strengthened reputation by becoming a
Chuden subsidiary✓ Build stable organizational base andbusiness base for supporting growth.

✓ Increase in new demand for
IT-ization of data centers, etc.

✓ Increased costs, starting withconstruction materials✓ Steadily passing down company
strengths (planning, flexibility)✓ Steadily cultivate and retain humanresources, acquire diverse humanresources.

✓ Greater opportunities for hotel
development with inbound demand
growth✓ Labor shortages everywhere✓ Increased name recognition withparticipation in urban development at
Hokkaido Ballpark F Village✓ Continue to reform the corporate
culture to match the rapidly changing
environment.

⇨ In an opaque environment of rapid change, the Company is on the verge of making reforms
and achieving the growth needed to maintain sustainable, long-term growth.
To achieve sustainable, long-term growth…
November 2023 Revise our system of management philosophy.
PurposeIdeal to Real
Bringing ideals into reality to create a new
futureVisionLifeways developer

Actionprinciples

Provide new value; sustainability management, growth andstability, executive’s view point, compliance, spirit of gratitude.

Permanent
guidelines for all
Group executives andemployees incorporate activities

March 2024 Creating a new management planLong-Term Vision 2030
Fifth Medium-Term
Management Plan
(FY2024 to FY2026)

Guidelines
and strategies forachieving growthleading to
FY2030[I] Positioning of Long-Term Vision 2030 and fifth Medium-Term Management Plan
➢ Since the 1st Medium-Term Management Plan, we have continued to increase revenue in a stable manner.
Under the Long-Term Vision 2030 and 5th Medium-Term Management Plan, we will continue working tosteadily raise corporate value.
4,000

5th and 6th Medium-Term
Management Plans

Real estate
assets to
1 trillion yen

4th Medium-Term Management
Plan

Financial results trends
2, 5003,758

Unit: 100 million yen
3,500

2, 000Sales

Ordinary income
売上高

経常利益

Owned assets

Real estate assets (owned assets + AUM (EJR))

3,064

2,655

2nd Medium-Term Management 当社保有資産
不動産アセット（当社保有資産＋AUM（EJR））

600

500

2,535

Plan

2,500

700

* Real estate assets:
Owned assets +AUM from funds
arranged by EJR
and FUEL, etc.

694

3,000

20

696
697

1, 5002,000

Listed EJR
February 2019 1,556

1st Medium-Term Management
Plan

1,500

AUM(EJR)

422

1,188

659

585

994

419

828

1, 000

522

1,034

972

773

721

Ordinary
income to30.0 billion
300 yen

1,959

1,392

1,000

492

1,837

400

300

790
200

165

500

543

447

500

343

0

104

277

118

140
111

Stable, long-term
growth over
7 years

90

59

188

20

31

35

FY12/14
14/12期

FY12/15
15/12期

FY12/16
16/12期

100

00FY12/17
17/12期

FY12/18
18/12期

FY12/19
19/12期

FY12/20
20/12期

FY12/21
21/12期

FY12/22
22/12期

FY3/24
24/3期* The 3rd Medium-Term Management Plan was withdrawn due to uncertainties in the business environment created by COVID-19 (July 2020).
* Owned assets: Inventories (real estate for sale, real estate for sale in process) + property, plant and equipment. *The AUM of EJR is the total ofbook values (as of the end of each fiscal period).

31/3期
FY3/31(FY2030)（2030年度）

7-year timeline to FY2030
FY3/25 (FY2024)

FY3/26 (FY2025)

FY3/27 (FY2026)

Phase I to realize the Long-Term Vision 2030
5th Medium-Term Management Plan

FY3/28 (FY2027)

FY3/29 (FY2028)

FY3/30 (FY2029)

FY3/31 (FY2030)

Phase II to realize the Long-Term Vision 2030
6th Medium-Term Management Plan (tent.)
What kind of company itwants to be in FY2030

Long-Term Vision 2030

System of management philosophy (permanent) Purpose: Ideal to Real, Vision: Lifeways developer, Action principles

II. Long-Term Vision 2030

[II] The Direction Targeted (Overview)22➢ We understand that the direction targeted for fiscal 2030 is based on deepening and evolution of the following items and promote various initiatives.

Relationship of
two wheels(generating
positive cycle)

Deepening

Priority themes for business strategy
1Profit growth
will create
the latitude
needed toproactively
invest tostrengthen
themanagementbase andcontribute tosociety.

Evolution

3

Further growth ofmain businesses
2

Synergies
with the Chubu
Electric Power Group

4

Furtherstabilizing therevenue structure

1 Diversificiation of

Establishingmanagement that
accounts for capitalcosts and stock price2

4

Challenge of new
business domains

development
projects and types
Expandingdomestic area of
operations

5

New urban
development andmanagement

63Promoting DX

Global expansion

Realizefurther profit
growth bystrengtheningthemanagementbase andcontributing
to society

Priority themes for sustainability management (materiality)
1

Harnessing
diverse humanresources2

Rigorous
compliance

3

Strengthening
governance and risk
management, includingGroup companies

1

Promoting adecarbonizedsociety

2

Achieving asociety characterized
by well-being
Relationship of
two wheels(generating
positive cycle)

estate assets: Owned assets +FY2030 Indicators Ordinary
Real estate
30.0
1 trillion * RealAUM from funds arranged by EJR and
FUEL, etc.
(Outputs)billion yen
incomeassetsyen
We will generate a positive cycle on the two wheels of business strategy and sustainability management
and raise true corporate value not indicated by financial indicators alone.

[II] The Direction Targeted (Discussion: Business Strategy)

23➢ We will promote initiatives based on both themes of deepening and evolution to achieve ordinary income of 30.0 billion yen and real estate assets of
1 trillion yen for fiscal 2030.
Priority themes for business strategy (targeted direction and initiatives)
1

Further growth of main businesses

3

Continue providing quality products andservices; meet the latent customer needs.

Deepening✓ Supply quality condominiums.
✓ Acquire, develop, andoperate commercial facilities.

2✓ Continue station area andurban development.
✓ Diversify exit strategies.

Synergies with the Chubu Electric Power Group

Build management base capable ofwithstanding any economic environment.
✓ Further strengthen stock revenue in order to cover general andadministrative expenses.
✓ Diversify fund-raising methods.

4

Maximize use of group resources, including
technologies, personnel and know-how.

Diversification of development projects and types✓ Achieve ROE, ROIC above shareholder capital costs and WACC.
✓ Achieve profit growth that meets shareholder expectations.

4

Even in a society with a decreasing
population, secure diverse business
options and flexibility.
✓ Expand real estate development business beyond condominiums.
✓ Expand business with an investment cycle.

Evolution

2

Expanding domestic area of operations
Develop business in Japan nationwide.

Global expansion
Communicate ES-CON’s development
capability to the world.

✓ Quickly build our own development systemoverseas.
✓ Grow the overseas business into a pillar of revenue.

Challenge of new business domains
Leverage existing know-how in the realestate business to develop businessgeared to the next generation.

✓ Expand non-asset business.
✓ Develop CF, STO.
✓ Further growth of projects already invested in5✓✓ Build nationwide domestic business development
system by expanding sites.

3

Establishing management that accounts forcapital costs and stock price
Promote capital efficient management
to raise corporate value.

✓ Utilize energy management methods and the latest digitaltechnologies.
✓ Cooperate in multiple domains, including education, medicine,
health, culture, and sports.

1

Further stabilizing the revenue structure

6

New urban development and management
Creating local communities
Next-generation urban development and town
management to realize communities where residents
interact with each other through the keywords:
education, medicine, health, culture, and sports

Promoting DX
Improve quality of products and services
Expand customer segments
Increase administrative efficiency

By deepening business and promoting the evolution of new initiatives,
we will aim to achieve FY2030 indicators

[II] The Direction Targeted (Discussion: Sustainability Management)

24➢ We regard sustainability management as one of two wheels for achieving sustainable growth for the Company and will promote initiatives energetically.
➢ We have recently designated materiality as key issues in sustainability management.

Materiality specification process

1

Step

2

Step

3

Identify key issue elements related to
the Company’s business activities.

Evaluate importance.

Confirm validity.

We identified 74 key issue elements at theCompany based on workshops for department
heads, referring to international frameworks(ISO 26000, GRI standards, etc.) and ourparent company Chubu Electric Power’s list of
materiality issues.

For the key issue elements identified, members
selected from the various departments
evaluated importance based on importance to
the Company and to stakeholders and sorted
and organized key issues.

The validity of the key issues was internallyverified based on discussions with stakeholders(parent company, financial institutions, etc.).
They were also discussed by the Board of
Directors and decisions made based on these
discussions.

Key themes for sustainability management (materiality: targeted direction and initiatives)

1

Deepening
Evolution

Harnessing diverse humanresources2

3

Rigorous compliance✓ Secure and cultivate humanresources to support business growth.
✓ Maintain environment that allows
diverse human resources to thrive.
✓ Promote employee safety and health.

✓ Promote policies in collaboration with
Chubu Electric Power.
✓ Top management declares a noharassment policy.
✓ Continued implementation ofcompliance training.

1

2 Achieving a society

Promoting a decarbonizedsociety✓ Promote ZEH condominium
development.
✓ Make active use of renewable energy.
✓ Take action at the frontlines
throughout the Group (raise andmaintain employee awareness).

characterized by well-being✓ Contribute to the development ofKitahiroshima City by developing the area.
around ES CON FIELD HOKKAIDO.
✓ Promote smart cities utilizing digitaltechnologies.

Strengthen governance andrisk management, includingGroup companies.

✓ Strengthen corporate
governance system.
✓ Rigorous risk management

Specify

Step

III. Fifth Medium-Term Management Plan
- Business Plan -[III] 1. Financial Results Plan, Investment Plan

26

➢ Financial results plan: Plan equivalent net sales and profit next term in FY3/25 as in this term FY3/24 (effective increases in revenue andprofit), followed by planning for achieving stable increase in revenue and profit.
➢ Invesmntent plans: Make three-year cumulative investment of 250.0 billion yen during the 5th Medium-Term Management Plan. This is close
to the level projected under the previous medium-term plan, when investments made more progress than expected.
1,800

Sales

Financial results plan

Operating profit

1,570

1,600

Unit: 100 million yen

1,330

1,400

1,188

1,180

1,200

FY3/24

FY3/25

FY3/26

FY3/27
1,000

220

800

Results(15-month period)

Plan

Plan

Plan
600

200

180

190

400

Sales

1,188

1,180

1,330

1,570

200

0

Operatingprofit

190

180

200

FY3/24(Results)

220

FY3/25(plan)

FY3/26(plan)For FY3/25, plans seek to achieve close to
the same levels of sales and profit in
FY3/24, which is a 15-month period(effective revenue and profit growth).

Investment plan

4th Medium-Term Management Plan

FY12/21

FY12/22

FY3/24

Results

Results

Results

Operating profit basis
Planning growth of around
10% each year
Unit: 100
million yen

5th Medium-Term Management Plan(period of the previous medium-term plan)
Three-year
cumulativeA

FY3/25

FY3/26

FY3/27

Plan

Plan

Plan

Three-year
cumulative
B

A ＋B

976

375

1,249

2,600

610

770

1,120

2,500

5,100

Condominium development

192

176

276

644

200

200

250

650

1,294

Revenue-generating property
development

57

122

408

587

200

300

500

1,000

1,587

Acquisition of revenuegenerating property in operation

711

71

500

1,283

150

200

300

650

1,933

Overseas investment

7

4

55

66

50

60

60

170

236

Other

9

2

10

21

10

10

10

30

51

Recovered amount

48

65

164

277

284

308

417

1,009

1,286

34

42

23

99

121

142

242

505

604

928

310

1,085

2,323

326

462

703

1,491

3,814

Total gross investment

Of which revenue properties
Net investment amountFY3/27(plan)

Investment in Ālia project41.3bn yen
compared to theprevious mediumterm plan; expand
investment cyclebased business.
+10.4bn yen
compared to theprevious mediumterm plan; further
promote global
expansion.

[III] 2. About Segment Changes

27➢ Segments will change from FY3/25 to meet diversified business domains hoping to clarify our business portfolio and achieve stable growth by devisingstrategies for each segment.
Segment change summary
Former segments(to FY3/24)

Real estate sales business

Real estate planning, brokerageand consulting business

Real estate leasing business

Main business
content

Sale ofcondominiums anddetached houses

Sale of revenuegenerating realestateReal estate leasing
business

AM, PM business

New segments(from FY3/25)

Condominium
business

Real estate development business

Real estateleasing business

Asset management business

Main business
content

Sale ofcondominiums anddetached houses

Sale of revenuegenerating realestateReal estateleasing business

AM, PM business

Further
Stable supply
without chasing diversification andexpansion as a
size or unit
general developer
numbers

Overseas, etc
investment
business

Columbarium
business(Ryomon)Brokerage,
consulting business,
etc.

Other business
Overseas, etc.
investment
business

Columbarium
business(Ryomon)Brokerage,
consulting business,
etc.

Start full-fledged development ofoverseas business.

Steady capturing of stock
revenue(aim of around 30%)

Expected profit structure (segment income)
FY3/24
Results[Former segments]
FY3/24
Results[New segments]

Real estate sales business71.4%

Condominium business
46.3%

Real estate leasing business
27.1%

Real estate development business
25.2%

Real estateleasing business
23.2%

Real estate planning,brokerage andconsulting business
1.5%
Asset
managementbusiness
3.0%

Other
business
2.3%

Stock revenue business:around 30%
FY3/27(final year of
medium-term plan)
Projected[New segments]

Around 30%

Around 30%

Condominium business

Real estate development businessAround 10%
Real estateleasing business

Asset
managementbusiness

Otherbusiness

[III] 3. Results Forecast by Segment

28➢ As indicated on the previous page, the segments have changed as of FY3/25 due to the diversification of business domains.

(Unit: 100 million yen)
FY3/24*FormerNet sales

1,188

Real estate sales business996

Condominiums

692

Units sold (units)

1,216

Other businesses

303

Real estate leasing business

183

Real estate planning agency andconsulting business

New Segments

FY3/25

FY3/261,180

FY3/27
1,330

1,570

200

220

9

Condominium business

694

Units sold (units)

1,250Real estate development
business

300

Real estate leasing business

160

Asset management business18

Other business

8

Operating profit

190

180

*15-month period

Fifth Medium-Term Management Plan period

[III] 3. Management Indicators and Management that Account for
Capital Costs and Stock Prices

29➢ Promote management that both maintains and improves safety by building up stock revenue and maintains high capital efficiency.
➢ We will continue to promote management that accounts for capital costs and stock prices and works to raise shareholder value and corporate value.
Management indicators

Stock revenue ratio *2
Stability

Stock revenue / general and administrative
expense coverage ratio (cash basis)*3

Equity ratio
Capital ROE
efficiency
ROIC*4

FY3/24

FY3/25

FY3/26

FY3/27

Results

Plan

Plan

Plan
Continue to secure stock revenue with a targetof 30%.
Continue to cover by 100% or more on a
cash basis.

26.2%

30.4%

28.2%

30.0%

115.5%

119.0%

114.2%

116.8%

18.1%

17.5%

17.6%

17.5%

Proceed with investment plan with a target ofaround 17%.

14.5%

13.4%

13.9%

14.0%

Maintain high levels around 14%; engage inhigh-efficiency management.

4.5%

3.4%

3.5%

3.6%

Promote management that accounts for
efficiency, making around 3.5% the target line.

*1 Stock revenue: Real estate leasing segment profit + Asset management segment profit*2 Stock revenue ratio: Stock revenue / total segment profit*3 Stock revenue / general and administrative expenses coverage ratio: (stock revenue + real estate leasing segment depreciation + real estate leasing segment goodwill amortization) /(general and administrative expenses – general and administrative expense depreciation – overall goodwill amortization)*4 ROIC: (consolidated ordinary income + interest expenses – interest income – income taxes) / (interest bearing debt + net assets averages at end of term)Management that accounts for capital costs and the stock prices
Basic thinking and initiatives

Key indicators
16.0%

14.5%

✓ Achieving profit growth

14.0%

13.9%

13.4%

ROE

Achieve profit growth that meets stakeholder expectations.
12.0%✓ Awareness of capital efficiency
As specific indicators, promote management that accounts for ROE>Shareholder
equity costs, ROIC>WACC.

(around 8.3%)

8.0%✓ Active shareholder returns
Maintain policy of progressive dividends and actively conduct shareholder
returns in the period of the 5th medium-term plan as well.

4.5%
4.0%

Disclose financial and non-financial information in English, etc.

3.6%

3.5%

3.4%

ROIC

* Calculated by theCompany based on beta
※15年間のβ値をもとにvalues for 15 years

当社にて算出WACC(around 2.2%)✓ Constructive dialogue with shareholders and institutional investors
Conduct IR activities with the representative director and director in charge of IR,

Shareholder
equity costs

ROE>shareholder equity costs

ROIC>WACC
0.0%

FY3/24 (results)
ROE

FY3/25 (plan)
Shareholder equity costs 15 yrs.

FY3/26 (plan)
ROIC

FY3/27 (plan)
WACC

[III] 4. Dividend Policy

30➢ We will continue to conduct active shareholder returns.

Maintain progressive dividend policy
Make the previous year’s dividend per share (DPS) the lower limit of the dividend per share (DPS) and in principle we have a dividend
policy of never lowering the dividend; of maintaining or raising it each year.

FY3/25: Planning a dividend of 48 yen
Effective dividend increase

60円

130.0%

Trends in dividends and payout ratio
15-month period

12-month period
110.0%

50円

48 yenYear-end dividend

48 yen48 yen or higher 48 yen or higher

Payout ratio
90.0%

40円

38 yen38 yen38 yen36 yen70.0%

32 yen
56.3%

30円

50.0%

50.0%
33.9%
20円

18 yen

30.2%

45.5%

30.2%

30.0%

Maintain progressive
dividend policy during
the period of the 5th
Medium-Term
Management Plan.

22.0%
10円

10.0%

0円

-10.0%

FY12/17

FY12/18

FY12/19

FY12/20

FY12/21

FY12/22

FY3/24(plan)

FY3/25(plan)

FY3/26(plan)

FY3/27(plan)

IV. Fifth Medium-Term Management Plan
- Management Strategy -[IV] 1. Segment Strategy — ① Condominium Business32
Condominium
business

Main policy✓ Under a vision of “lifeways developer,” we will deliver to customers exclusive, high-quality products that make maximum use of ourplanning ability, a strength of the Company, and not chase after unit numbers (volume).
2,000

Business strategy
1,800✓ Ensure a stable supply of high added-value products.
Ensure a stable supply of quality products based by select purchases of project sites.

1,600[Condominium supply results and plans]

Plan of stable supply of
between 1,000 and 1,200 units

1,400(Unit: units)
1,216
1,185

1,200

1,020

Project sites to achieve plans
have already mostly been
secured

1,000

648

652

539

600

Securing carefully selected
project sites

Focused on product planningand sales so that handover isconducted as planned

800

Period of the 5th MediumTerm Management Plan

476

Period of the 6th Medium-Term
Management Plan (scheduled)400

FY12/17

FY12/18

FY12/19

FY12/20✓ Development in ultra prime locations
Development on urban sites we hadn’t been
involved with before, areas with a richnatural environment, and other rare locations(Tent. name) Kanagawa Pref.
Miura-gun Hayamamachi Project(Location in front of Morito Beach)

FY12/21

FY12/22

FY3/24✓ Larger projects
Increase projects that represent
the core of urban development,
like multipurpose development
projects.

Le JADE City Senri Fujishirodai(Urban development in Suita City’s
Fujishirodai; 244 total units)

Le JADE Hokkaido Kitahiroshima(Hokkaido, 197 total units)

FY3/25

FY3/26

FY3/27

FY3/28✓ Diversification of project areas
Expand share in Chubu, Hokkaido
and Kyushu and turn into core
revenue sources after the Tokyo
metro area and Kansai area.

Le JADE Shin-Omura Station Front(first condominium project in Nagasaki Prefecture;
multipurpose development project in front of the station)

FY3/29FY3/30FY3/31✓ Further raise quality
Strengthen systems tocontinue to provide safety andsecurity to customers.

IDEAL CONPASSOur quality management standard

[IV] 1. Segment Strategy — ② Real Estate Development Business

33
Real estate development business

Main policy✓ As a general developer, we will further promote diverse asset type developments with increased value and raise the profit ratio while
expanding the investment-cycle business, including the fund business.
Business strategy✓ Develop diverse asset types with increased value.
By maximizing diverse development know-how, we will promote the development of revenue-generating properties with high product value that maximize the value
and appeal of the land.
Business types (other than condominiums) slated to contributerevenue under the 5th Medium-Term Management Plan

Rental condominiums, commercial facilities, logistics facilities andfactory land, offices, senior residences, clinic malls, data center sites,
land readjustment business
MASTERS VARUS Hokkaido Ballpark(senior residence with medical mall)✓ Diversify exit strategies

tonarie Kitahiroshima(Commercial + hotel / scheduled to open in March 2025)✓ BS control via selecting appropriate sale or ownershipWork with flexibility to sell the property in a timely, appropriate way.
Strive to achieve sustained growth through the investment cycleand for ESG investment.

Diversifying exit strategies will make it possible to flexibly selectbetween sale and ownership, and we will control the BS by maintaining
or raising asset efficiency.

[Exit strategy diagram]Long-term ownership
Acquire projectsite.
Acquire existing
property.

Newdevelopment
Increasing
value

Make into
product withhigh addedvalue.

Redevelopment
Renovation
Continually increase facility value
via PM/BM, etc.
Urban development and energy
management via partnering with Chubu
Electric Power Group companies

BS
control via
flexibleselection

Sale
Institutional investor,
operating company, etc.

Sell based on strictlegal compliancesystem.

Expand revenue
by accelerating
development
projects.
Realize ESG
investment.

Reacquire
via theCompany.

Property deterioration

Investment cycle-based business
Sale
EJR, FUEL arranged
funds, etc.

* AT FUEL, plan to develop fundbusiness, CF, STO in the future.

Investors
Long-term stable
operation by EJR, FUEL
arranged funds, etc.

Fundraising

Lenders

[IV] 1. Segment Strategy — ③ Real Estate Leasing Business④ Asset Management Business

34

Main policy✓ As the Company’s business segment that posts stock revenue (stable revenue), we will aim to maintain or raise revenue
by continually reshuffling assets (improving).

Real estate leasing
business
Asset managementbusiness

Target indicators
Stock revenue /general and administrative expense
coverage ratio (cash basis)

Stock revenue ratio
160
. 0%

40.0%

38.0%

140
. 0%

36.0%

34.0%

120
. 0%

32.0%

Aim for around 30%

30.4%

119.0%

115.5%

114.2%

116.8%

30.0%
100
. 0%

30.0%

28.0%

28.2%

80.0%

26.0%

Aim for 100%or more

26.2%
24.0%

5th Medium-Term Management Plan

5th Medium-Term Management Plan

60.0%

22.0%

20.0%

40.0%

FY3/24(Result)

FY3/25(Plan)

FY3/26(Plan)

FY3/27(Plan)

FY3/24(Result)

FY3/25(Plan)

FY3/26(Plan)

FY3/27(Plan)*1 Stock revenue: Real estate leasing segment profit + Asset management segment profit*2 Stock revenue ratio: Stock revenue / total segment profit*3 Stock revenue / general and administrative expenses coverage ratio: (stock revenue + real estate leasing segment depreciation + real estate leasing segment goodwill amortization) / (general andadministrative expenses – general and administrative expense depreciation – overall goodwill amortization)

Business strategy✓ Long-term ownership that accounts for BS control
Based on the diverse exit strategies formulated and selected, we will
determine whether to continue owning or to sell based on a comprehensive
consideration of the balance sheet and the above two indicators.

✓ Strengthen development of leasing properties by drawing on
diverse development know-how.
Utilize development capabilities, including development of TOPAZ, ourrental condominium brand.
TOPAZ.

Residences where people can express
themselves and enjoy every moment
TOPAZ Esaka✓ Raise profitability by increasing value of owned properties andreshuffling owned assets
Work to increase the value of owned properties throughout the ES-CON
JAPAN Group.

✓ Stable growth of Group companies
Through commercial facility PM, condominium management, and REIT and
private fund AM, etc. maximize the value provided by the Group overall tocustomers (strengthen profitability) and stably grow asset management businessrevenue.

ES-CON LIVINGSERVICE Ltd.
Group company that
handles condominium
management

ESCON PROPERTY Ltd.
Group company that
handles operation andmanagement ofcommercial facilities

ES-CON ASSETMANAGEMENT Ltd.
Group company that is an
EJR asset managementcompany

FUEL
Group company involvedin online fundmanagement, etc.

[IV] 1. Segment Strategy — ⑤ Other Business

35
Other business

Main policy✓ Take on the challenge of new business domains with a view to the next generation. In particular, accelerate development of the overseas
business into a future core business of the Company.

Overseas development to date

1. Feb. 2019
[Hawaii]
Investment in Hawaii realestate fund

3. Mar. 2020
[California]
Participation in the
520 Project

4. Aug. 2021
[Hawaii]
Waikiki Galleria Tower
Participation in the
project to raise value

5. Sep. 2021
[United States]
Investment in
American realestateinvestment fund

6. Mar. 2022
[United States]
Investment in fund that invests in real estate
related ventures in the field of real estate techglobally, but primarily in North America

Toward a pillar ofCompany revenue

2019

2020

2021

2022

2023 …
7. Dec. 2022
[Thailand]Participation in BRITANIABANGNA KM.39(detached housedevelopment PJ)

2. Aug. 2019
[Thailand]Participation in Knightsbridge
Sukhumvit-Thepharak PJ(condominium development PJ)

Development going forward✓ Expand investment in Hawaii projects.
With participation in the Ālia project, we will actively develop to makeHawaii a priority area in the Company’s overseas business.

✓ Grow the overseas business into a pillar of revenue in 2030
We will further strengthen collaboration with local partners, build know-how
in business overseas, and build a base aimed at local development.

Oct. 2023 [Hawaii]• Seven Signatures International Corporation• BlackSand Capital LLC• Kobayashi Group LLC• The Company These four companies signed
a business partnership agreement.
As the first project, we participated as asales and marketing partner for the Āliacondominium.

2027 … 2030

[IV] 2-①. Promoting Sustainability Management36➢ As mentioned previously, we have specified materiality as priority issues in sustainability management in order to more steadily promotesustainability management.

The Group’s Action Philosophy (created November 2023)
Provide new value.
Make the most of theunlimited potential of realestate through information,planning, and productdevelopment capabilities
and provide new value that
truly satisfies customers.

Sustainability
management
Respond appropriately todiverse social issues andpursue growth that issustainable for both theCompany and society.

Growth and stability

Executive’s
viewpoint

Compliance

Spirit of gratitude

Orient to high quality growth that
accounts for capital and cash
efficiency and does not simply
chase after volume or size, andbuild strong financial andbusiness bases that can handle
all types of business risk.

Have all Group employees
have an executive mindset
and continue being acompany that makes quick
decisions to aim for a
proactive management thatalways makes the first move.

With a high awareness ofcompliance and corporate
governance in accordance withthe laws, regulations, and social
norms domestically andoverseas, as individuals we willtake the correct action andcreate an open organizationfrom the bottom up.

Whether inside or outside theCompany, we will respect
and appreciate our coworkers (other companies)
and will maintain and build
outstanding collaborative
relationships.

Relationship of two wheels

As established in our action philosophy (sustained growth forboth the Company and society), we reaffirm the importance ofstriving on the two wheels of contributing to a sustainable
society and sustained profit growth for the Group.

Contribution toa sustainable
society

Continued profit
growth for the GroupKey issues in sustainability
management specified as materialities

Specifying materialities

Deepening
1

Harnessing
diverse humanresources2

3

Rigorous
compliance

Evolution
Strengthening
governance and risk
management, includingGroup companies

1

Promoting adecarbonizedsociety

Achievement targets set based on each item of materiality

2

Achieving a society
characterized bywell-being

See the next page formore information.

[IV] 2-②. Promoting Sustainability Management37➢ We will carry out various initiatives taking the achievement targets tied to materiality as a guideline.

Materiality (key issue)

Achievement target

Female hiring ratio of 35% of higher

Harnessing diverse humanresources

Deepening

Improve engagement survey.
 Firm improvement once survey starts (FY2024)

Achievement fiscal
year

FY2023 (results)

Each fiscal year

48%

FY2030(Survey not started)

Each fiscal year

Carry out compliance promotion measures incollaboration with Chubu Electric Power.

Each fiscal year

Attendance at compliance training 100%

Each fiscal year

100%

Raise the effectiveness of the Board of Directors andmake continual improvements.

Each fiscal year

100% attendance at board meetings

FY20308,000 tons-CO2[Result in FY2022]

Rigorous compliance

Strengthening governanceand risk management,
including Group companies

Evolution

Promoting a decarbonizedsociety
Achieving a society
characterized by well-being

Certified as Health & Productivity
Management Outstanding
Organization for 2024 (large
corporation category)
Carried out training and seminars incollaboration with Chubu Electric
Power
Compliance declaration made by top
management

Certified as Health & Productivity Management
Outstanding Organization

Reduce GHG emissions by 40%* (vs. FY2022).
*Scopes 1 and 2*FY 2023 results currently being compiled

Contribute to regional revitalization and improved
quality of life by promoting urban development thattakes into account the environment and society.

FY2030[Hokkaido Ballpark F Village]▶ Completed construction on seniorresidence and medical mall[IV] 2-③. [TOPICS] Initiatives for Realizing a Decarbonized Society

38

Main policy

The Group’s decarbonization target

Reduce the Group’s greenhouse gas emissions* by 40% by FY2030 (vs. FY2022).
*Scopes 1 and 2. Scope 3 will be considered in the future.

Specific action plan
✓ Promote ZEH condominiums.
By around 2026, we will make all new condominiums meet the ZEH* standards for environmental performance.

[ZEH development projects to date]
Comfortable and economical
next-generation housing

Le JADE Okurayama

Le JADE Yao Sakuragaoka✓ Active utilization of renewable energy• Active deployment of solar power at logistics andcommercial facilities• Stable securing and procurement of non-fossil fuelcertificates• Promoting initiatives in collaboration with the Chubu
Electric Power Group• Explore the potential of initiatives that combine urban
development and environmental awareness.

Le JADE Honkawagoe Koedo
Terrace* ZEH (net zero energy house):
Housing that aims for net zero primary energy consumption
annually by substantially raising the insulation performance ofthe cladding, deploying high energy-efficiency facility systems torealize major energy savings while improving the quality of theindoor environment and also by deploying renewable energy.

✓ Group actions at the frontline level (raising andmaintaining employee awareness)• Decrease electricity usage by recommending going homeearly and turning off the lights when not needed, etc.
• Promote a paperless office by using the Web for sales
promotion activities.
• Utilize vehicles with high energy efficiency.
• Disclose amounts and results each year in an ESG
Management Report.

ESG Management Report(Published in FY2023)
Period subject to activities: January 1 –December 31, 2022

[IV] 2-④. [TOPICS] Promote and Cultivate Human Resources for Advancement➢ Regarding human resources, an important management base, we will promote various initiatives under a tripartite guideline and build a robust
human resources base.
Human resources strategy diagram

Secure human resources that support growth.

Increase number hired
in line with businessgrowth.

Continue to hire
women.
[Target]
Maintain hiring ratio of
35% of more.

Promote the health and safety of employees.
Promote health andproductivity management.
(Continue to pursue
certification as Health andProductivity Management
Outstanding Organization.)

Create comfortableworkplaceenvironment

Promote employment
of diverse humanresources, including
seniors and people
with disabilities.

Strengthen human resources development.
Development
programs thatconsider the growth ofeach individual
employee

Ensure safety of
employees by
preparing for disasters,for example.

Reform awareness ofadministration bypromoting DX, etc.

Personnel exchangewith Chubu Electric
Power

Human resources base＝Contribution
to society

Recognition as the core of corporate activities
and the Company’s most importantmanagement resource

Business
growthPromote human resources procurement, development and health and safety under a tripartite structure to build anenvironment where each individual flourishes still further.

39

[IV] 2-⑤. [TOPICS] Basic Management Philosophy on ESG

Management Philosophy on ESG

We are supporting Sustainable Development Goals(SDGs).

Our IDEAL to REAL corporate message calls for the creation of a new culture by making ideals reality.
Based on this working slogan, as a lifeways developer committed to creating ideal modes of life that meet today’s changing needs,
we will seek to build a sustainable society and achieve sustainable growth by addressing social issues through our ESG initiatives.

Basic Philosophy on ESG
We strive to grow as a company needed by society by promoting ESG initiatives in strict compliance with laws, regulations,and our pledges related to the environment, society, and self governance.

Environment

SocialGovernance

1. In addition to contributing to community vitality
through urban development, creating new
futures by promoting local community building

1. Enhancing timely, appropriate, and fairdisclosure of management information

2. Promoting real estate development andcorporate activities that give fullconsideration to the environment

2. In addition to developing workplaces where
employees can demonstrate their abilities to thefullest while doing rewarding work, promoting
diversity to enable diverse human resources tothrive2. Promoting governance structures capable ofsecuring management stability, soundness,and transparency

3. Taking on the challenges of new businessdomains based on the key theme of theenvironment, thereby creating both
environmental value and business value

3. Supporting safe and comfortable lives in our
many communities by contributing to solutions
to social challenges posed by health andwelfare, including low birth rates and aging
populations

1. Creating new environmental value throughnext generation urban development andother measures to realize a carbon-neutral
society by 2050

4. Promoting business development to achieve
SDGs on a global basis through international
business development40

3. Enhancing risk management capabilities in
response to growing risks accompanying
business expansion and diversification
4. Pursuing business activities based on the
Corporate Ethics Charter and respect for thehuman rights of all[IV] 3. Urban Development and Area Development

41➢ We will establish the foundations for urban development in Japan and overseas. Based on the Company’s purpose, “IDEAL to REAL,”
we will make real the ideals of customers in all places.
Condition of the Company for conducting urban development

Area development

Toward the practice of urban development that maximizes
our diverse know-how and track record

Real estate development know-how(Company strength)✓ Various development capabilities as a general developer✓ Track record of select, high-quality product plans that don’t
chase volume✓ Collaboration capability (across divisions/companies) basedon project site purchasing, planning, and sales✓ Flexible and speedy for quick decision-making

Urban development track record✓ Track record of involvement in multipurpose development
projects, including in front of stations in major regional cities✓ Recently, a participant in urban development at Hokkaido
Ballpark F Village
To horizontally expand this urban
development know-how nationwide, weestablished ES-CON Sports & Entertainment.
We are establishing a framework for accelerating urban
development centered on sports across the nation,
collaborating with Fighters Sports & Entertainment and DeNA.

ES-CON Japan as a part of the
Chubu Electric Power Group✓ Chubu Electric Power has diverse networks with local publicbodies, etc.
We can use these networks to acquire urban development
projects.
✓ Energy management know-how (approaches to energy
savings and decarbonization)✓ Diverse communication support infrastructure possessed by
the Chubu Electric Power Group

Hokkaido
OfficeBuilding business development
structure at six sites nationwide
Our property development (= value)
regardless of the area will be broadcast
nationwide and to the world.

NagoyaOfficeTokyo
Head OfficeOsaka Head
OfficeKyushuOfficeActive expansion overseas
centering on Hawaii
Okinawa Office(opened in April 2024)

As a lifeways developer that creates ideal living spaces, we will carry out the urban development only we can achieve.

IDEAL to

REAL[Disclaimer]
The information provided in this document is based on judgements made with information available as of the date of document publication.
Please be aware that actual information may change due to various factors.

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