Financial Results for
Term Ended
December 2019
ES-CON JAPAN Ltd.
February 6th, 2020

Table ofContents• Financial Results for Term Ended December 2019
Main Activities in Term Ended December 2019
P/L in Term Ended December 2019
Segment Results for Term Ended December 2019
B/S in Term Ended December 2019

• Second Medium-Term Management Plan: Results Report• Most Recent Main Initiatives
Progress of capital and business partnership with Chubu Electric Power Co., Ltd.
ESCON JAPAN REIT Investment Corporation
Saitama Detached Housing Company Shares Acquired; Made Subsidiaries
Overseas Business Development• Third Medium-Term Management Plan “IDEAL to REAL 2022”
Basic Policy
Performance Plan: Management Targets
Management Strategy
Real Estate Sales BusinessCondominium Sales Business
Commercial Development Business
Hotel Development Business
Logistics Business and Other Business
Real Estate Leasing Business
Strategic Business Expansion of ES-CON JAPAN Group• ESG Initiatives and Dividend Policy
Addressing Social Problems by Promoting ESG
Dividend Policy
Information
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

P.4
P.5
P.6, 7
P.8
P.9-12
P.13
P.14
P.15, 16
P.17
P.18
P.19
P.20
P.21
P.22
P.23
P.24, 25
P.26, 27
P.28
P.29
P.30, 31
P.32
P.33
P.34-36
P.37
P.38

2

Financial Results for Term Ended December 20193
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Main Activities in Term Ended December
2019
Final year revisions to Medium-Term Management Plan “IDEAL to REAL 2019”

January

Acquisition of new business sites (Aoyamadai, Suita-shi) (Yayoicho, Nakanoku) (Kudankita, Chiyoda-ku)
Acquisition of commercial facility (Kotoni, Nishi-ku, Sapporo-shi)
All units sold in Le JADE Bio Funabashi Kitanarashino and Le JADE Takatsuki
KosobeInvested in ESCON JAPAN REIT Investment Corporation.

July

Acquisition of new business sites (Hikone-shi, Shiga-ken) (Minamisumiyoshi,
Sumiyoshi-ku) (Katsuyama, Tennoji-ku)

AugustBegan participating in condominium development
project in the Bangkok metropolitan area, Thailand

Sales commence for Le JADE Tsujido Higashi Kaigan.

Acquisition of Treasury Shares
Acquisition of new business site (Shirakabe 4-chome II, Higashi-ku, Nagoya-shi)

February

ESCON JAPAN REIT Investment
Corporation listed on J-REIT market

September

All units sold in Le JADE Higashisumiyoshi Imagawa Ryokudo

Work commences on overseas business developmentwith investment in Hawaii real estate investment fund.
All units sold in Le JADE Kuzuha and Le JADE
Sumakaihin Koen
Acquisition of new business site (Nishi-Akashi Ekimae,
Akashi-shi)
Sales commence for Grand Le JADE Todoroki.

Support contract concluded between Chuden Real Estate Co., Inc., ESCON JAPANREIT Investment Corporation, and ES-CON ASSET MANAGEMENT Ltd.
Le JADE Okurayama adopted in the Ministry of the Environment’s Fiscal 2019
High-Rise ZEH-M Support Projects

Nagoya Office opens
March

All units sold in Grand Le JADE Ochanomizu
Sales commence for Le JADE Higashisumiyoshi Imagawa Ryokudo, Le JADE Nishinomiya Kitaguchi Hinokuchicho, Le JADE Toyoda Master
Hills, Le JADE Ikeda Masumicho, Le JADE Takatsuki Miyanocho, and Le JADE Kotoen.
Acquisition of commercial facility (Tsukuba CREO)
Acquisition of new business sites (Nakamichi, Higashinari-ku, Osaka-shi)(Matsukazecho, Hiratsuka-shi)

Acquisition of commercial facility (Oh! Me Otsu Terrace)

Le JADE Nakano and tonarie Yamato-Takada awarded 2019 Good Design Awards
October

Donated research expenses for WT1 cancer vaccine, a cancer immunotherapy
All units sold in Le JADE Nakano
Sales commence for Grand Le JADE Shukugawa Residence
Acquisition of new business site (Hyogo Tojo II – (A)(B))
All units sold in Le JADE Otsu LUXE and Le JADE Kotoen

LOGITRES logistics facility brand launched
November
All units sold in Grand Le JADE Takatsuki Tenjin

April

Acquired rating from GRESB, an outside agency, for ESG management promotion

ESCON JAPAN REIT Investment Corporation acquires rating from Rating andInvestment Information, Inc. (R&I)
Transferred real estate for sale to Chuden Real Estate Co., Inc.
Sales commence for Le JADE Nishiakashi

Grand opening of tonarie Toga-Mikita community shopping center held on April 26, 2019 (Friday)
December

Revisions made to FY2019 year-end dividend forecast and full-term
consolidated results forecasts
Formulated 3rd Medium-Term Management Plan “IDEAL to REAL 2022”
Acquisition of new business site (Kandacho, Higashiosaka-shi)May

Acquisition of new business sites (Shirakabe 4-chome/Chikaramachi 4-chome,
Higashi-ku, Nagoya-shi) (Higashichujocho, Ibaraki-shi)

June

Joint project with Chuden Real Estate Co., Inc. (provisionally named Nagoyashi Higashi-ku Shirakabe 4-chome Project)

Acquisition of new business site (Furuedai, Suita-shi)One's Own House Co., Ltd. and Rise Home Co., Ltd. made subsidiaries* Shares transferred July 1
All housing sites sold in Nakano, Nakano-ku (housing landdevelopment) project

January/
February
2020

ESCON JAPAN REIT Investment Corporation conducts first public offering
Naming rights acquired for the Hokkaido Nippon-Ham Fighters’ new stadium;new stadium named ES CON FIELD HOKKAIDO
Opening of tonarie Utsunomiya, the Tokyo metropolitan area’s first community
shopping center

Number of new business sites acquired in second quarter of term ending December 2019
Metropolitan
area

Kinki region

Chubu region

Condominium

3

9

3

Commercial (includingcommercial facilities)

1

4

Total

4

13

All units sold in Le JADE Shinkanaoka Park Fields
Sales commence for Le JADE Utsukushigaoka.

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

3

Other

Total

15
1

6

1

21

4

P/L in Term Ended December 2019
• Both sales and profits increased from the previous term, driven by sales of commercial facilities to ESCON
JAPAN REIT Investment Corporation and sales of hotels.
• Earnings per share (EPS) in the current term were up 119.17 yen from the previous term to 13.19 yen.
(Unit: Million yen)
Full year ended December Full year ended December
2019 (term under review)2018 (previous term)

Amount ofincrease/decrease

Compared toprevious term

Full year ended December
2019 (initial plan)

Difference
from plan

Percentage vs.
initial plan

74,800-2,694-3.6%

12,500

412

＋

3.3%

Sales

72,10654,325

17,781 ＋ 32.7%

Gross profit

19,767

16,9272,840 ＋ 16.8%

6,854

5,366

1,488 ＋ 27.7%

Selling expenses

2,627

2,088

539 ＋ 25.8%

General administrativ e
expenses

4,226

3,277

949 ＋ 29.0%

12,912

11,561

1,351 ＋ 11.7%

Interest expenses

1,143

1,020

123 ＋ 12.1%

Ordinary income

11,81010,4981,312 ＋ 12.5%

11,200

610

＋

5.4%

Net income in current
term

8,155

7,226

929 ＋ 12.9%

7,800

355

＋

4.6%

119.17105.9813.19 ＋ 12.4%

Selling, general andadministrative expenses

Operating profit

Earnings per share incurrent term5
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Segment Results for Term Ended December 2019
• In the real estate sales business, sales grew by 32% and income by 11.8% YoY. Other sales contributed substantially to both sales and income. (Table １ )• Condominium income was down YoY due to sales being somewhat prolonged at certain properties. Other sales boosted both sales and profit by large margins thanks to sales of properties to REIT
and sales of hotels. (Tables １ , ４ , and ５ )• The project profit margin for condominium sales fell 5.3 points due to high land and construction costs. (Table ２ )• We sold 648 condominiums as of the end of term, out of the 759 units in initial sales plans, due to the delivery of Le JADE Tsujido Higashi Kaigan being pushed back to the next term and other factors,
resulting in an achievement rate of 85.4%, just short of the target. (Table ３ )• The real estate leasing business is making steady progress, with both sales and profits up YoY thanks to the acquisition of commercial facilities (Aeon Minamisenri, Tsukuba) and the completion ofcommercial facilities (Yamato Takada, Toga-Mikita) (Table １ ).
(Unit: Million yen)

Sales

１

Full year ended
December 2019
(term under review)

Real estate sales
business
Condominium sales

Full year ended
December 2018(previous term)＋ 32.0%13,802

12,341

28,52925,089＋ 13.7%

2,593

3,617

-28.3%

11,2098,723＋ 28.5%38,18025,429

5,022

3,400

＋ 47.7%

3,001

2,128

＋ 41.0%

372

405

-8.1%

286

369

-22.5%

72,10654,325

32.7%

17,091

14,839Price per unit
(10,000 yen)＋

４
Project profit margin

Full year ended December 2018(previous term)

539

25,089

4,654

14.4%

Full year ended December 2019
(term under review)

648

28,529

4,402

9.1%

No. of units
Planned units solddelivered as of termthis termend (units)

Full year ended December
2019 (term under review)759＋ 11.8%50,519Real estate leasing
businessAmount(million yen)

Units soldCompared toprevious term

66,710

Sales

Condominium sold/
sales

Full year ended
December 2018(previous term)＋ 50.1%Total

３Full year ended
December 2019
(term under review)

Compared toprevious term

Other sales

Real estate planning agency
and consulting business２

Segment income

648

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Closing inventory

Achievement rate

103

85.4%

＋

15.2%

Non-condominium
project profit margin

Full year ended December 2018(previous term)
Full year ended December 2019
(term under review)

Contracted units(including delivered
units) as of February 3(units)Inventory as ofFebruary 3 (units)

Achievement rate

660

91

87.0%

５

Results
Sales (million yen)

Project profit(million yen)

Project profit
margin25,429

8,723

34.3%

38,180

11,209

29.4%

Sales
Hotels sold/sales

Full year ended December 2018(previous term)
Full year ended December 2019
(term under review)

Number of projects
soldAmount(million yen)

Project profit
margin7

21,68037.7%

312,68046.1%

6

Segment Results for Term Ended December 2019
• Completed condominium inventory stood at 103 units at the end of December.
• Other sales included 13.7 billion yen in sales to REIT and 12.6 billion yen in sales of hotels.
Condominium sales

Location

Total no.
of units

Initial inventory for term
ended December 2018

No. of units delivered
Closing inventory for termin term ended
ended December 2019
December 2019

(Unit: Units)

Contract and delivery progress asof February 3

Grand Le JADE Ochanomizu

Bunkyo-ku, Tokyo

53

2

2

0

Grand Le JADE Jiyugaoka

Meguro-ku, Tokyo

23

16

8

8

Sold out
7

Le JADE Nakano

Nakano-ku, Tokyo

25

16

16

0

Sold out

Le JADE Bio Funabashi Kitanarashino

Funabashi-shi, Chiba

Mirakita City Himeji

Himeji-shi, Hyogo

Grand Le JADE Shonan Enoshima R134

50

14

14

0

Sold out

143 (67 units)*1

ー

35

32

29

Fujisawa-shi, Kanagawa

24*2

ー

19

5

5

Le JADE Minami-Ibaraki MUSE

Ibaraki-shi, Osaka

40

ー

37

3

2

Grand Le JADE Takatsuki Tenjin

Takatsuki-shi, Osaka

28

ー

28

0

Sold out

Le JADE Takatsuki Kosobe

Takatsuki-shi, Osaka

181

ー

181

0

Sold out

Le JADE Sumakaihin Koen

Kobe-shi, Hyogo

30

ー

30

0

Sold out

Le JADE Shinkanaoka Park Fields

Sakai-shi, Osaka

204

ー

204

0

Sold out

Le JADE Otsu LUXE

Otsu-shi, Shiga

35 (32 units)*3

ー

35

0

Sold out

Le JADE Hama-Otsu

Otsu-shi, Shiga

51

ー

24

27

25

Grand Le JADE Todoroki

Setagaya-ku, Tokyo

43

ー

15

28

23

48

648

103

91

Total

Other sales

Type

Minamisenba I, Chuo-ku

HotelNagahoribashi Ekimae
Awajicho III, Chuo-ku

Business scheme
Sale

Hotel

Sale

Hotel

Sale

Revenue-generating real estate

Sale

Land

Sale

Genboen, Koga-shi, Fukuoka

Land planning

Sale

Shimotakaido, Suginami-ku

Revenue-generating real estate

Sale

Detached housing

Detached housing

Sale

Kitanagoya Pare Marche Nishiharu

Commercial facility

Sale

Asumigaoka Brand-New Mall

Commercial facility

Sale

K’s Denki Oyumino shop

Commercial leasehold

Sale

Mitani, Nishi-ku, Kobe-shi

Commercial leasehold

Sale

Daisen-nishi Commercial II, Sakai-shi

Commercial leasehold

Sale

Nishishirai Ekimae

Commercial facility

Sale

Kasuga, Fukuoka

Commercial leasehold

SaleSanbancho, Chiyoda-ku
Nakano, Nakano-ku

Leasing business (major owned properties)

Sales(million yen)
6,580
2,100
4,000
2,034
346
4,273
3,800
1,298
4,610
3,200
2,710
1,430
946
451
401

Hotel total
12.6 billion yen

Ones Own House, Rise
Home, etc.

Transferred to
ESCON JAPANREIT Investment
Corporation (attime of listing)total 13.7 billion yen*1 Includes 143 residential units and nine
unsold units. Based on our 50% share,
this means a total of 67 units.
*2 Includes 24 residential units and two
unsold units.
*3 Includes 35 residential units, three officeunits, and one management office (units
for sale: 32 units).
Location

Possession status

Kansai Medical University Kuzuha Hospital

Hirakata-shi, Osaka

Fixed asset●Aeon Minamisenri

Suita-shi, Osaka

Fixed asset●Otsu Terrace

Otsu-shi, Shiga

Fixed asset

LOGITRES Tojo

Kato-shi, Hyogo

Current asset (for sale)

Ikaruga, Ikoma-gun

Ikoma-gun, Nara

Current asset (for sale)

Omihachiman

Omihachiman-shi, Shiga

Current asset (for sale)

Daisen-nishi I, Sakai-shi, Osaka-fu

Sakai-shi, Osaka

Current asset (for sale)Kamiueno, Muko-shi

Muko-shi, Kyoto

Current asset (for sale)●tonarie Yamatotakada

Yamatotakada-shi, Nara

Current asset (for sale)●tonarie Toga-Mikita

Sakai-shi, Osaka

Current asset (for sale)●Tsukuba CREO

Tsukuba-shi, Ibaraki

Current asset (for sale in process)●Tsukuba Q’t, MOG

Tsukuba-shi, Ibaraki

Current asset (for sale in process)●KoLuTeNa I

Nishi-ku, Sapporo-shi

Current asset (for sale in process)soyoca Fujimino

Fujimino-shi, Saitama

Current asset (for sale in process)Yamada Denki Sapporo Shiroishi store

Shiroishi-ku, Sapporo-shi

Current asset (for sale in process)Mukomotomachi, Amagasaki-shi

Amagasaki-shi, Hyogo

Current asset (for sale in process)

Ikegami, Nishi-ku, Kobe-shi

Nishi-ku, Kobe-shi

Current asset (for sale in process) Main properties contributing to income year-on-year from the term ended December 2019
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Transfer to ESCON
JAPAN REIT
Investment
Corporation and
Chuden Real EstateCo., Inc. (FY2020)

7

B/S in Term Ended December 2019
(Unit: Million yen)
Full year ended December
Full year ended December
20192018 (previous term)(term under review)

Current assets
Cash and deposits

Increase/decrease

114,137

104,642

9,495

22,511

16,598

5,913

Real estate for sale

24,23415,308

8,926

Real estate for sale inprocess

59,61965,890-6,271

18,558Fixed assets

5,104

Others13,433

1,658

11,775Intangible fixed assets

492

30

462

Investments and otherassets

4,632

3,415

1,217

132,696

109,747

22,94942%

Others

4%

2%
Hotel

13,454

Tangible fixed assets

Total assets• Fixed assets increased by 13.4 billion yen due to the transfer of a revenue-generating property (Aeon
Minamisenri) from inventories to fixed assets and acquisition of the Otsu commercial facility• The interest rate paid on funds raised fell 0.2 points YoY to 0.9% thanks to the effects of the business partnershipwith the Chubu Electric Power Group.
1%(Unit: Million yen)Hotel2019 end7%

Condo2019 term-end minium
inventory
83.8 billion yen

52%

Condo2018 end
minium46%
inventory
81.1 billion yen 46%

Commercial,etc.

2018 end

Condominium

43,58837,198Commercial, etc.

35,15537,280

Hotel

1,734

5,564

Others

3,377

1,156

Total

83,854

81,199Commercial,
etc.

(Unit: （単位︓百万円）
Million yen)
Full year ended December
Full year ended December
20192018 (previous term)(term under review)

132,696

Increase/decrease

Current liabilities

50,19937,21012,989

Short-term loans

4,580

1,720

2,860

Current portion of
longterm loans

32,41523,993

8,422

40

40

0

48,95045,176

3,774

Corporate bonds

230

270

-40

Long-term loans

47,72044,5683,152

Total liabilities

99,14982,387

16,762

Total net assets

33,54627,3596,187

Total liabilities and net
assets132,696

109,747

22,949Fixed ass et s (owned as sets)
Invent ory
Interest -bearing debt

Current portion of bonds

Fixed liabilities

Equity ratio

24.8%

24.9%

Total as sets

25.3%
109,747

Equity ratio

25.3%
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

24.9% +0.4 points

86,43573,70364,21981,19984,98583,85470,661

23.6%
51,17745,423

10,142
Term ended December
2016

56,544

12,655
1,565

1,534

Term ended December
2017

Term ended December
2018

Term ended December
20198Second Medium-Term Management Plan: Results Report9
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Second Medium-Term Management Plan: Results: Performance-Plan
Performance greatly exceeded plans in all categories. Net sales rose 2.1 times and ordinary income 3.3 times comparedto the term ended December 2016.
Second Medium-Term Management Plan IDEAL to REAL 2019

First Medium-Term Management Plan

Term ended December
2016 (22nd term)

Term ended December 2017
(23rd term)

Term ended December 2018
(24th term)

Make The One for 2016

ActualActualTerm ended December 2019
(25th term)

Performance plan

Sales

Real estate sales businessYoY change

YoY change

Initial full-year plan

ActualYoY change

Am ount of increase(com pared w ith
FY2016)34,34744,72430.2%

54,32521.5%

60,000to 62,000

72,10632.7%+

37,75930,687

41,16834.2%

50,51922.7%

57,800to 59,700

66,71032.0%+

36,023Comparedwith FY2016

2.1x

20,865

19,500-6.5%

25,08928.7%

28,529

13.7%

+

7,664

Other businesses

9,822

21,668120.6%

25,42917.4%

38,18050.1%+

28,358

Real estate leasing business

3,594

3,459

-3.8%

3,400

-1.7%

2,000
to 2,100

5,022

47.7%

+

1,428

65

96

47.7%

405

321.9%

200

372

-8.1%

+

307

Operating income

4,680

7,042

50.5%

11,561

64.2%

8,200
to 9,500

12,912

11.7%

+

8,232

2.8x

Ordinary income

3,575

5,988

67.5%

10,498

75.3%

7,200
to 8,500

11,810

12.5%

+

8,235

3.3x

Condominium sales business

Real estate planning, brokerage, andconsulting businesses

10
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Second Medium-Term Management Plan: Results:
Management Targets, and Dividend Policy
Management targets: Four out of five targets achieved
The equity ratio fell short of the plan due to the active purchasing of properties that resulted from the capital and business partnership with Chubu ElectricPower Co., Ltd.
First Medium-Term
Management Plan

Management index

Second Medium-Term Management Plan IDEAL to REAL 2019

FY2016 Actual
Make The One for 2016

Term ended December
2017 (23rd term)

Term ended December
2018 (24th term)

ActualActualTerm ended December 2019 (25th term)
ActualInitial full-year plan

Equity ratio

23.6%

24.8%

24.9%

33.0% to 35.0%

×

25.3%

ROE
(return on equity)

25.1%

28.1%

29.6%

18.0% to 21.0%

〇

26.8%

ROA
(return on assets)

6.0%

6.8%

7.4%

6.0% to 7.0%

〇

6.7%

ROIC
(return on invested capital)

6.5%

8.4%

10.2%

7.0% to 9.0%

〇

7.5%

58.76 yen

81.77 yen105.98 yen

75 yen to 85 yen〇

119.17

EPS(earnings per share)* ROIC (return on invested capital): Net operating profit after
tax / (Shareholders' equity + Interest-bearing liabilities)

Dividend policy:
Adopting a progressive
dividend policy, thedividend will be
increased for the fourthconsecutive year.

Dividend trend
Dividend (yen)Dividend payout ratio
Acquisition of treasury stock(million yen)
Total payout ratio

Copyright ©2020 ES-CONJAPAN Ltd., All Rights ReservedFirst Medium-Term
Management Plan
FY2016 Actual
Make The One for 2016

Second Medium-Term Management Plan IDEAL to REAL 2019
Term ended December 2017
(23rd term)

Term ended December 2018
(24th term)

Term ended December 2019
(25th term)

ActualActualActual

15

18

32

36

25.5%

22.0%

30.2%

30.2%

429

449

-

40

36.8%

30.9%

30.2%

31.0%

11

Second Medium-Term Dividend Policy: Results: Main Initiatives
Second Medium-term Management Plan −Growth Action Plan
1. Further strengthening of core business

2. Improving company value through diversification ofmultiple core businesses
3. Securing stable long-term stock revenue through active
development of real estate leasing business

4. Expansion of real estate sales business through stablesupply of high-quality real estate as a main sponsor of
the listed REIT formation
5. Expanding the breadth and depth of real estatedevelopment capabilities through enhancement of realestate operation business6. Improving corporate brand power
7. ESG initiatives to create new value and achievesustainable growth

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Main Initiatives
1. For the core condominium sales business, our core business, we supplied 476 units in fiscal 2017
(sales: 19.5 billion yen) and 539 units in fiscal 2018 (sales: 25 billion yen) and 648 units in fiscal
2019 (sales: 28.5 billion yen). We have secured sites sufficient for approximately 760 units forfiscal 2020 (sales: approximately 36 billion yen), approximately 1,200 units for fiscal 2021 (sales:
approximately 55 billion yen) and approximately 480 units for fiscal 2022 (sales: approximately 25
billion yen). We’re making steady progress in expanding our sales force, which currently numbers
32.
2. We expanded our business domain in the commercial development business and hotel
development business as well as in the condominium sales business. We also launched as new
business domains a logistics development business, land readjustment business and overseas
business.
3. In the commercial development business, we’re strengthening NSC development efforts throughstrong ties to local communities. tonarie Yamato-Takada had a grand opening in November 2018
and tonarie Toga-Mikita in April 2019. We acquired Tsukuba Q’t Mog in December 2018, Tsukuba
CREO in March 2019 and Oh! Me Otsu Terrace in October 2019. We’re enhancing the value ofcommercial facilities in operation and proactively developing our redevelopment business.
4. ESCON JAPAN REIT Investment Corporation (EJR) was listed on the J-REIT market on February
13, 2019. We concluded a support agreement with Chubu Electric Power and Chuden Real Estate.
In November 2019, EJR received a rating of “A-” (stable) from Rating and Information, Inc. (R&I).
5. We also launched a renovation business in addition to businesses for AM, PM of commercial
facilities, operation of food and beverage establishments such as cafés, and apartment building
management.
6. We’re airing new TV commercials for the Grand Le JADE brand, and continue to act as a sponsor
of a popular TV program. We remain focused on strengthening our corporate brand.
7. Le JADE Okurayama became ES-CON JAPAN’s first business adopted in the Ministry of theEnvironment’s Fiscal 2019 High-Rise ZEH-M Support Projects. ES-CON became the firstJapanese business company to receive the ratings of Green Star and 2 Star in the GRESB Real
Estate Developer Assessment conducted in 2019.
12

Most Recent Main Initiatives

13
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Progress of capital and business partnership with Chubu Electric Power Co., Ltd.
In August 2018, we concluded a capital and business partnership agreement with Chubu Electric Power, becoming an equity method affiliate of Chubu Electric Power (which holds 33.3% of voting rights of our company).

Demonstrating synergies through the capital and business partnership with Chubu Electric Group
Promoting joint projects

Nagoya Shirakabe Project conducted jointly with Chuden Real
EstateDetails of business partnership

Support contract concluded between Chuden Real EstateCo., Inc., ESCON JAPAN REIT Investment Corporation,
and ES-CON ASSET MANAGEMENT Ltd. (Sept. 27, 2019)

Mutually complementary business areas

Making effective use of real estate owned by
the Chubu Electric Power Group

Joint research and implementation of
nextgeneration smart houses, connected
homes, etc.

Prospective buyers for our real estatedevelopment projects

Exchange of human resources

Respect for autonomy

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Nagoya Office opened in March 2019.
Business developed in both regions (Chubu and Kansai)

 Large-scale urban
development backed by theoverwhelming credibility andcustomer base of the Chubu
Electric Group Promotion of next-generation
condominium research anddevelopment utilizing the living
environment, energy, AI, andother technologies

Expertise in energy and other businesses
Sales infrastructure in the Chubu region

Chubu
Electric
Power
Group

ES CONJAPAN Real estate business expertise
 Sales infrastructure in themetropolitan area and Kansai
regionSale of properties owned by the Company to Chuden Real Estatethrough warehousing method
Two of the Company’s employees were seconded to Chuden Real
Estate from April 2019, and one person from Chubu Electric wasnamed director in March 2019.
Chuden Real Estate employees seconded to the Group for training
Continued business development utilizing the Company’s
characteristic speed

Broad support content starting with warehousing services
Drawing on Chuden Real Estate’s credibility and real estate knowhow, growth is expected in our investment corporation, along withsynergies with the Chubu Electric Group in the real estate businessof ES-CON JAPAN, the sponsor.
Based on the warehousing method, commercial facilities andcommercial leaseholds owned by the Company are being sold toChuden Real Estate (Feb. 2020)
Omihachiman-shi,
tonarie YamatoShiga
Takadatonarie Toga-Mikita Muko-shi, Kyoto
Ikoma-gun, Nara
Chuden Real

Total of approx.
9.5 billion yen

中電不動産
EstateChubu
Electric
中部電力

ES-CON JAPAN日本エスコン

Provide information
情報提供

●

●

●

Grant preferred acquisition
優先買取権及びrights and preferred
negotiating rights
優先交渉権付与――●

Warehousing
ｳｪｱﾊｳｼﾞﾝｸﾞ

●

―

●

Redevelopment support
再開発サポート――●

Environmental
環境配慮技術
technologies

●

●

―

PM BMＢＭ業務
processes
ＰＭ

●

●

●

Leasing support
リーシングサポート●―●

Personnel support
人的サポート●―●Same-boat investment
ｾｲﾑﾎﾞｰﾄ出資●―●

ｼﾝﾎﾞﾙﾏｰｸのPermission to use
logos/symbols
使用許諾

●

●

●

14

ESCON JAPAN REIT Investment Corporation

Three distinguishing features

J-REIT listed in February 2019, first post-listing PO in February 2020; toward early achievement of 100.0 billion in assets
Building a portfolio centered oncommercial facilities that people depend
on in their daily lives
Areas targeted for investment: Four majorurban areas (Tokyo metropolitan area,
Kansai area, Chukyo area, Fukuoka area)

Facilities with roots in local communities in these four major urban areas where population concentrations
are projected to continuein the future as wellPursuing highly stable earnings and growth potential through investment focusing on commercial facilities
that people depend on in their daily lives

Investing in highly stable leasehold (landcomponents of fixed-term leaseholds forbusiness use)
Investment targets: approx. 50%
leasehold, approx. 50% land and buildings

Investing proactively in leasehold of commercial facility sites, with a focus on the benefits andadvantages of leasehold
Building highly stable portfolios

External growth: Targeting steady external growth by leveraging the various real estate development
capabilities of ES-CON JAPAN as "Life Developers" active in developing the places where people live
and real estate information contributed by the Chubu Electric Power GroupInternal growth: Targeting steady internal growth leveraging the various real estate development
capabilities of the ES-CON JAPAN Group and the Chubu Electric Power Group's expertise with ecofriendly technologies and lowering energy costs

External and internal growth leveraging
the advantages of the real estatedevelopment capabilities and strength inmanagement provided by comprehensive
developer ES-CON JAPAN, with support
from Chubu Electric Power Rating Overview
Rating acquired from Rating
and Investment Information(R&I) (November 2019)

Ratinginstitute

Ratingscope

RatingR&I

IssuerratingA-

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Ratingdirection
StableFirst public offering(Feb. 2020)* See next page for
portfolio details.

Portfolio

Acquisition price

When listed

25 properties (commercial facilities
and commercial leaseholds)

41,607 million yen

Publicoffering

3 properties
tonarie Yamato-Takada
tonarie Toga-Mikita
LIFE Daisen

10,373 million yen

Total

28 properties

51,980 million yen

15

ESCON JAPAN REIT Investment Corporation Portfolio Summary Map
Number of properties

Total acquisition priceTotal appraised value

Utilization rate

Appraised NOI yield

Amortized appraised NOI
yield

Years remaining on
lease

28 properties

51.9 billion yen

56.7 billion yen

99.6%

5.1%

4.6%

11.29 years

Commercial leasehold included

25.5 billion yen

Leasehold ratio

49.2%

Lamu Kitatsumori shop
(leasehold)

LIFE Daisen(leasehold)*1) Amounts are truncated and fractions rounded off.
*2) Including properties acquired as of February 4, 2020
*3) Utilization rates and years remaining on lease are as of endOctober 2019.
*4) Appraisals are the most recently acquired.

Nitori Imaichi shop
(leasehold)Pare Marche
Nishiharu

Sanyo-Marunaka Mitani
shop (leasehold)
K’s Denki Nishi-Kobe
shop (leasehold)Nitori Tsuchiura shop
(leasehold)tonarie Minamisenri

K's Denki Kurashiki shop
(leasehold)Nishishirai Ekimae Plaza

K's Denki Oyumino shop
(leasehold)

Asumigaoka Brand-New
Mall
Fukuoka Kasuga Project (leasehold)tonarie Seiwadai

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

tonarie Toga-Mikita (50% stake)tonarie Yamato-Takada (50%stake)TSUTAYA Sakai-Minami
shop (leasehold)Max Valu Kikyogaoka Higashi
shop (leasehold)16

Saitama Detached Housing Company Shares Acquired; Made Subsidiaries
In July 2019, we acquired stock in two companies based in Saitama Prefecture, making them wholly owned subsidiaries: One's Own
House Co., Ltd., which is active in sales of detached homes, and Rise Home Co., Ltd., which is active in building detached homes.
The company names are slated to be changed in March 2020 (One’s Own House to ES-CON HOME Ltd.; Rise Home to ES-CON
CRAFT Ltd.)
1,154
1,200

3,000
2,500

One's Own House Co., Ltd.
Sales

Ordinary income

Rise Home Co., Ltd.

2,949

Net income

2,139

973

1,000

(Unit: Million yen)

(Unit: Million yen)

807

2,114

800

2,000
600
1,500

500

133

152

86

191

104

400

Strengthen Tokyo
metro area

1,000

200

62

125

0

80

46

102

52

67

0

Term ended June
2017

Term ended June
2018

Term ended June
2019

Term ended February
2017

Term ended February
2018

Term ended February
2019

Projected to experience stable development as a bedroom community for those working in central Tokyo, the Saitama area isamong the most attractive in the metropolitan area. We plan to strengthen our real estate development business, with afocus on sales of condominiums and detached homes in Saitama Prefecture.
Supply of condominium units by district in the metropolitan

23 wards of Tokyo
Other areas of Tokyo
Kanagawa
Saitama
Chiba
Metropoli tan area
total

2017

2018

16,017
4,016
8,540
3,956
3,369
35,89815,957
3,666
8,212
4,294
5,003
37,132

YoY change

-0.4%
-8.7%
-3.8%
8.5%
48.5%
3.4%

2019
forecast
16,000
4,000
8,500
4,500
4,000
37,000Source: Real Estate Economic Institute Co., Ltd., Metropolitan Area Condominium Market(Units)Change

0.3%
9.1%
3.5%
4.8%
-20.0%-0.4%

Ranking of most desirable communities in which to live
(metropolitan area as a whole/up to three answers)

Population change by prefecture

Rank Prefecture
Nationwide

1
2
3
4
5
6

Tokyo
Saitama
Okinawa
Aichi
Chiba
Kanagawa

Population change (%)
2017
-0.18
0.73
0.28
0.26
0.24
0.16
0.15

2018
-0.13
0.80
0.32
0.40
0.32
0.21
0.20

2019

Ranking

Population (million)

Source: Statistics Bureau, Ministry of Internal Affairs and Communications, Population
Estimates (as of October 1,2017)

126.7
13.7
7.3
1.4
7.5
6.2
9.2

2019
1
→
2
→
3
→
4
↗
5
↗
6
↘
7
↗
↗
8
↘
9
10
↗

Score

Station
2018
1
2
3
9
7
4
8
10
6
14

(example of main rail lines)
Yokohama (JR Tokaido Main Line)
Ebisu (JR Yamanote Line)
Kichi joj i (JR Chuo Line)

2019
1,211
871
774
567
551
517
498

Change
22%
6%
0%
11%
5%
-6%
-4%

2,018
995
822
774

Uraw a (JR Keihin-Tohoku Line)

465

8%

511
527
552
520
430

Musashi-Kosugi (Tokyu Toyoko Line)

453
448

-16%
26%

542
356

Omiya (JR Keihin-Tohoku Line)
Shinjuku (JR Yamanote Line)
Shinagawa (JR Yamanote Line)
Meguro (JR Yamanote Line)

Kamakura (Enoshima Electric Railway)

Source: Recruit Sumai Company Ltd.

17
Copyright ©2020 ES-CONJAPAN Ltd., All Rights ReservedOverseas Business Development
Following investment in a Hawaii real estate investment fund, started first overseas condominium
development project in Bangkok, Thailand toward further global development
 We launched our overseas business development efforts by investing in a Hawaii realestate investment fund in February 2019.
 In August 2019, we began participating in a condominium development project undertakenby the Thai real estate developer Origin Property in Samut Prakan Province, adjacent tothe capital city of Bangkok.
This marked our first condominium development project overseas.
Slated to encompass a total of 474 residential units and one shop, this condominium
development project is located one minute's walk from Thipphawan Station on the MRT
elevated railway line, which is scheduled to enter service in 2021.
With numerous facilities nearby, including commercial facilities and an international school,
the development is located in an area expected to experience growing development, withservice anticipated from an extension of the MRT from central Bangkok.

Knightsbridge Sukhumvit-Thepharak Project
Bang Mueang Mai, Mueang Samut Prakan, Samut Prakan
Location
10270, Thailand
Transportation
1.7 km from Samrog Station on the BTS Line
Site land area
3,016 m2
Total floor area
25,891.52 m2
Exclusive floor area
13,799.00 m2
Scale (planned)
36 aboveground floors, one underground floor
Total units (planned)
474 residential units, one shop
Construction
April 2021
completion slated:

As we also focus on efforts targeting new business areas with an eye to the future,
we plan to deploy a multifaceted real estate business capable of contributing globally
to society.

18
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Third Medium-Term Management Plan IDEAL to REAL 2022

19
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Third Medium-Term Management Plan: Basic Policy

Basic Policy

Basic Policy

Aim to maximize corporate value by setting on track“management stability and sustainable growth” andalso accurately addressing the diversifying social
issues through promotion of ESG initiatives.

20
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Third Medium-Term Management Plan: Performance Plan: Management Targets（単位：百万円）(Unit: Million
yen)

2nd Medium-Term
Management Plan
第2次中期経営計画

業績計画 plan
Performance

Term2019年12⽉期
ended December
2019(25th term)（第25期）IDEAL to REAL 2019

3rd Medium-Term
Management
Plan
REAL 2022
第3次中期経営計画
IDEAL
toIDEAL
REALto2022
Term2020年12⽉期
ending December（第26期）
2020(26th term)
Plan
計画

72,10686,00066,71080,00028,529Term2022年12⽉期
ending December（第28期）
2022(28th term)
Plan
計画

Term2021年12⽉期
ending December（第27期）
2021(27th term)
Plan
計画

100,000

110,000

36,00054,70059,000

648

765

1,200

1,200

38,18044,000

5,022

5,750

372

250

Operating
営業利益 income

12,912

13,300

経常利益 income
Ordinary

11,81012,300Sales
売上⾼
Real estate sales business
不動産販売事業
Condominium sales business
分譲事業
Condominium units sold
分譲マンション販売⼾数(⼾)
Other businesses
分譲事業以外Real estate leasing business
不動産賃貸事業
Real estate planning, brokerage,
不動産企画仲介コンサル事業
and consulting businesses

経営⽬標 index
Management
ROE(return on equity)

8,000

14,00015,200

2nd Medium-Term Management
第2次中期経営計画
Plan

3rd Medium-Term
Management Plan
第3次中期経営計画

2019年12⽉期
FY2019IDEAL toto REALREAL 2019
2019
IDEAL

2022年12⽉期
FY2022
IDEAL toto REALIDEAL
REAL 2022
2022

26.8%

20.0%

7.5%

5.5%

Equity ratio
⾃⼰資本⽐率

25.3%

25.0%

配当性向
Dividend payout ratio

30.2%

30％以上
30% ormore

ＲＯＥ（⾃⼰資本利益率）

ROIC(return on invested capital)

ＲＯＩＣ（投下資本利益率）* ROIC (return on invested capital): Net operating profit after tax / (Shareholders' equity + Interest-bearing liabilities)※ＲＯＩＣ（投下資本利益率）︓税引き後営業利益／（株主資本＋有利⼦負債）

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved21

Third Medium-Term Management Plan: Management Strategy
Corporate Strategy

Management Strategy

1. Management stability and sustainable growth(1) Diversify businesses① Diversify development businesses and make them core businesses② Diversify business areas(2) Stabilize revenue structure by securing stock revenue bases① Strengthen real estate leasing business by developing and holding revenuegenerating properties② Strengthen real estate operation business revenue(3) Exert synergistic effects with the Chubu Electric Power GroupEngage in large development and other joint projects, and researchdevelopment of next-generation condominiums(4) External growth of ESCON JAPAN REIT Investment Corporation (EJR)① Steady mutual growth as sponsor of EJR② Mutual growth through collaboration with the Chubu Electric Power Group(supporter of EJR)

2. Address social issues through promotion of ESG initiatives
3. Return to shareholders
22
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Real Estate Sales Business
120,000

100,000

Plan to begin condominium supply in the Chubu area in 2021,
along with stable supply in Kanto and Kansai
7.2%
Sales Share by Area
Acquisitions for FY2021 completed;
6.5% Other
Planning share of 50%
Chubu
57.9%
or more in Kansai area
FY2022 also progressing steadily
Kansai28.3%

in 2020, just as in 2019

Other

(Units sold)

5.7%

1,400

61.0%
33.2%
Kanto

Kansai2020
2020年
units (Plan)

2019年
2019

80,00066,710（実績）(Results)(Results)
50,519（実績）60,000

units

units

44,000units
40,00025,429Condominium sales
分譲事業
business

分譲事業以外Other

20,000Condominium units
分譲販売戸数sold

0(Unit: Million yen)
Condominium
sales business

25,089Minamisenba III Project (hotel)
Kitakyuhoji Project (hotel)
Awajicho I Project (hotel)
Awajicho II Project (hotel)
Kita-ku Tsurunocho Project (hotel)
Chiyoda-ku Hayabusa-cho Project(hotel)Kanazawa-shi Horikawashinmachi
Project (hotel)
Sendagaya Project (revenuegenerating real estate)
Wakamatsucho 31 Project (revenuegenerating real estate)
Fukuoka Kasuga Project (landplanning)

Term ended December 20182018年12⽉期(Results)
Feel Garden Minamisenri
Le JADE Minamimorimachi
Le JADE Nagaokakyo
Grand Le JADE Okamoto

Kansai

Kanto
Le JADE Southern Gate Toyota
Le JADE Kawasaki
Grand Le JADE Shibuya Tomigaya
Grand Le JADE Ochanomizu
Le JADE Nakano
Grand Le JADE Jiyugaoka
Le JADE Bio Funabashi
Kitanarashino
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

38,18028,529

Other
Minamisenba I Project (hotel)
Nagahoribashi Ekimae Project (hotel)
Awajicho III Project (hotel)
Shimotakaido A Project (revenue-generating
real estate)
Nakano-ku Nakano Project (land)
Fukuoka Kasuga Project (land planning)Grand Le JADE Sanbancho Project(revenue-generating real estate)

Nakasu 5-chome (hotel)
Hyogo Tojo (logistics)
Fukuoka Koga (land planning)
Kita-ku Honjonishi (revenuegenerating real estate)
Shinjuku Daikyocho (revenuegenerating real estate)
Toshima-ku Minamiotsuka (building(dorm))
Higashi-ku Chikaramachi (land)
Sale to REIT, Chuden Real Estate(6 commercial projects)
Total approx. 20.0 billion yen

800

Acquired
approx. 50%

Acquired
100%

1,000

600

400

59,000 (plan)

54,700 (plan)

36,000200

Sale to REIT(7 commercial projects)
Total approx. 13.7 billion yen

Term ended December 20192019年12⽉期(Results)
Mirakita City Himeji
Le JADE Otsu LUXE
Le JADE Hama-Otsu
Le JADE Takatsuki Kosobe
Le JADE Sumakaihin Koen
Le JADE Shinkanaoka Park Fields
Le JADE Minami-Ibaraki MUSE

Grand Le JADE Todoroki
Grand Le JADE Shonan
Enoshima R134

units

(of which, Chubu
200 units)(of which, Chubu
67 units)(Full-year forecast)
80,000（通期予想）

Kanto

1,200

(Plan)

Kansai

Kanto

0
FY20202020年12⽉期(projection)
Le JADE Kuzuha
KansaiLe JADE Kotoen
Le JADE Higashisumiyoshi
Imagawa Ryokudo
Le JADE Takatsuki Miyanocho
Le JADE Ikeda Masumicho
Le JADE Morinomiya
Le JADE Nishinomiya Kitaguchi
HinokuchichoGrand Le JADE Shukugawa
Residence

Kanto
Le JADE Toyoda Master Hills
Le JADE Tsujido Higashi Kaigan
Le JADE Utsukushigaoka
Le JADE Okurayama

FY2021(plan) （計画）2021年12⽉期
KansaiLe JADE Nishiakashi
Le JADE Senri Aoyamadai
Le JADE Suma Myohoji Ekimae
Le JADE Yamato-Takada Ekimae
Mukonosohonmachi, Amagasaki-shi
Besshonakanocho, Takatsuki-shi
Higashichujocho, Ibaraki-shi
Furuedai 5-chome, Suita-shi
Minamisumiyoshi 2-chome,
Sumiyoshi-ku
Katsuyama, Tennoji-ku
Zaimokuza, Kamakura-shi
Shirakabe I, II, Higashi-ku,
Nagoya-shi

2022年12⽉期（計画）FY2022 (plan)

Higashikozucho,
KansaiTennoji-ku
Hiranonishi, Hirano-ku
Senriyamanishi 6-chome, Suita-shi
Neyagawakoen
Shirokane, Minato-ku
Tsukuba

Kanto

Kanto
Chubu

23

Le JADE Kuzuha Condominium (Osaka)

Le JADE Higashisumiyoshi Imagawa Ryokudo (Osaka)

Le JADE Kotoen (Hyogo)

Redevelopment Project (Kinki region)
Sold out
Location: Hirakata-shi, Osaka
Access: 16-minute walk from Kuzuha Station on Keihan
Main Line
No. of residences: 78 (including 31 units not for sale)
Occupancy date: Slated to start late February 2020

Location: Osaka-shi, Osaka
Access: 4-minute walk from Tobushijomae
Sold out
Station on JR Kansai Main Line
No. of residences: 41 (plus one management office)Occupancy date: Slated to start late February 2020

Location: Nishinomiya-shi, Hyogo
Access: 5-minute walk from Kotoen Station on Hankyu Imazu Line;
6-minute walk from Kotoen bus stop on Hankyu bus route
No. of residences: 49
Occupancy date: Slated to start late February 2020

Sold out

Grand Le JADE Shukugawa Residence (Hyogo)

Le JADE Ikeda Masumicho (Osaka)

Location: Nishinomiya-shi, Hyogo
Access: 4-minute walk from Sakura-Shukugawa Station on JR Kobe Line
No. of residences: 13
Occupancy date: Slated to start late June 2020

Location: Ikeda-shi, Osaka
Access: 2-minute walk from Ikeda Station on Hankyu Takarazuka Line
No. of residences: 35
Occupancy date: Slated to start late May 2020

Kanto (Tokyo Metro) Area

Kansai (Kinki) Area

Condominium Sales Business FY2020

Le JADE Takatsuki Miyanocho (Osaka)

Le JADE Morinomiya (Osaka)

Le JADE Nishinomiya Kitaguchi Hinokuchicho (Hyogo)

Le JADE Toyoda Master Hills (Tokyo)

Le JADE Okurayama (Kanagawa)

Location: Takatsuki-shi, Osaka
Access: 18-minute walk from Takatsuki-shi Station on Hankyu Kyoto Line
No. of residences: 99
Occupancy date: Slated to start late April 2020

Location: Higashinari-ku, Osaka
Access: 4-minute walk from Morinomiya Station on JR Osaka Loop Line
5-minute walk from Morinomiya Station on Osaka Metro Chuo Line andNagahori Tsurumi-ryokuchi Line
No. of residences: 45
Occupancy date: Slated to start late December 2020

Location: Nishinomiya-shi, Hyogo
Access: 14-minute walk from Mondoyakuzin Station on Hankyu Imazu Line
No. of residences: 94
Occupancy date: Slated to start late May 2020

Location: Hino-shi, Tokyo
Access: 2-minute walk from Toyoda Station on JR Chuo Line
No. of residences: 63
Occupancy date: Slated to start late April 2020

Location: Kohoku-ku, Yokohama-shi, Kanagawa
Access: 12-minute walk from Okurayama Station on Tokyu Toyokosen
No. of residences: 25
Occupancy date: Slated to start late November 2020

Le JADE Tsujido Higashi Kaigan (Kanagawa)
Location: Fujisawa-shi, Kanagawa
Access: 17-minute walk (SEA-SIDE VILLA)/18-minute walk (GARDEN-SIDE VILLA) from
Kugenuma-kaigan Station on Odakyu Enoshima Line; 9-minute bus ride from Tsujido Station on
JR Tokaido Line and 3-minute walk (SEA-SIDE VILLA)/4-minute walk (GARDEN-SIDE VILLA)
from Shoyo Chugakko-mae bus stop
No. of residences: 51 (25 in SEA-SIDE VILLA, 26 in GARDEN-SIDE VILLA)
Occupancy date: Slated to start late March 2020

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Le JADE Utsukushigaoka (Kanagawa)
Location: Yokohama-shi, Kanagawa
Access: 6-minute walk from Azamino Station on Tokyu Denentoshi
Line and Yokohama Municipal Subway Blue Line
No. of residences: 90
Occupancy date: Slated to start late August 202024

Condominium Sales Business FY2021, FY2022

Le JADE Nishiakashi (Hyogo)

Le JADE Suma Myohoji Ekimae (Hyogo)

Le JADE Senri Aoyamadai (Osaka)

Le JADE Yamato-Takada Ekimae (Nara)

Location: Akashi-shi, Hyogo
Access: 2-minute walk from Nishiakashi Station on JR Sanyo Main Line
No. of residences: 77
Occupancy date: Slated to start late February 2021

Location: Kobe-shi, Hyogo
Access: 1-minute walk from Myohoji Station on Kobe Municipal Subway SeishinYamate Line
No. of residences: 40
Occupancy date: Slated to start late March 2021

Location: Suita-shi, Osaka
Access: 17-minute walk from Kita-Senri Station on Hankyu Senri Line
No. of residences: 152
Occupancy date: Slated to start late March 2021

Location: Yamato Takada-shi ,Nara
Access: 3-minute walk from Yamato-Takada Station on Kintetsu Osaka Line
3-minute walk from Takada Station on JR Sakurai-Wakayama Line
No. of residences: 205
Occupancy date: Slated to start late May 2021

 Nagoya-shi Higashi-ku Shirakabe I, II Project(Aichi)(Shirakabe I Project conducted jointed with
Chuden Real Estate)

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved●Suita-shi Furuedai 5-chome Project (Osaka)

 Amagasaki-shi Mukonosohonmachi Project (Hyogo)●Sumiyoshi-ku Minami-Sumiyoshi 2-chome Project (Osaka) Takatsuki-shi Besshonakanocho Project (Osaka)●Tennoji-ku Katsuyama Project (Osaka) Ibaraki-shi Higashichujocho Project (Osaka)

Kanto (Tokyo Metro) Area

Chubu Area

Kansai (Kinki) Area

FY2021

FY2022[Provisional name] Kamakura Zaimokuza Project(Kanagawa)
Location: Kamakura-shi, Kanagawa
Access: 16-minute walk from Kamakura Station on JR
Yokosuka Shonan-Shinjuku Line
10-minute walk from Wadazuka Station on Enoden Line
No. of residences: 31
Occupancy date: Slated to start July 2021

 Tennoji-ku Higashikozucho Project(Osaka) Suita-shi Senriyamanishi 6-chome
Project (Osaka) Hirano-ku Hiranonishi Project(Osaka) Neyagawa-shi Uchiagetakatsukacho(Condominium) Project (Osaka) Minato-ku Shirokane Project (Tokyo)
 Tsukuba (Condominium) Project (Ibaraki)

25

Commercial Development BusinessWe will develop tonarie brand neighborhood shopping centers (NSC) and redevelop and revitalize commercial facilities in operation in order tocontribute to the development of local communities that are closely connected with people’s daily lives and to help promote compact cities,
local community creation, and regional revitalization.
We develop and operate neighborhood shopping centers(NSC) as a part of our commercial development
business. We launched the tonarie brand of commercial
facilities, and five such facilities are currently in operation.
They are operated by ES-CON PROPERTY.

Brand Concept
Close to the community inorder to develop together withthe community
Always a good neighbortonarie Seiwadai (Kawanishi-shi, Hyogo)

tonarie Minamisenri (Suita-shi, Osaka)

tonarie Toga-Mikita (Sakai-shi, Osaka)

tonarie Yamato-Takada (Yamato Takada, Nara) Project
After acquisition, dismantling and construction took place
while the approximately 30 tenants (including a supermarket
and other stores essential to the community) continued tooperate.

Will promote the Le JADE Yamato-Takada Ekimae
condominium and create a large-scale development
project by enticing large specialty stores, among others.

We acquired a general merchandise
store (GMS) from the high growth
period that was over 40 years old froma major textile manufacturer in 2015.
Even though it is directly connected tothe train station in a relatively busy
commercial area, the store sizes andaging facilities were a mismatch forcurrent needs. (Photo of Oak Town
Yamato Takada)
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

tonarie Utsunomiya(Utsunomiya-shi, Tochigi)

The tonarie Yamato-Takada
neighborhood shopping centerhas opened. It has
transformed into a facility thatis sized to meet community
needs and rooted inexperience-based lifestyles,
with 68 tenants opening on
November 23, 2018. The
center won a 2019 Good
Design Award.

26

Commercial Development Business
Tsukuba (Tsukuba-shi, Seibu Tsukuba, a large-scale commercial facility in front of the station, closed in February 2017, and Aeon Tsukuba Ekimae closed in January 2018, so the area around the station is in need of urban
development and revitalization. We acquired three facilities, CREO, Q’t and MOG, and are currently promoting the integrated development of these facilities in the area around Tsukuba Station.
Ibaraki) Project

Tsukuba CREO (Tsukuba-shi, Ibaraki)

Tsukuba Q’t (Tsukuba-shi, Ibaraki)

Tsukuba MOG (Tsukuba-shi, Ibaraki)soyoca Fujimino (Fujimino-shi, Saitama)
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KoLuTeNa I (Sapporo-shi, Hokkaido)

Daisen-nishi I, Sakai-ku, Sakai-shi (Sakai-shi, Osaka)

Oh! Me Otsu Terrace (Otsu, Shiga)

27

Hotel Development Business

Kayabacho, Nihonbashi
Opened in December
2016
102 rooms

Awajicho I, Chuoku, Osaka-shi
Opened in May
2018
168 rooms

Sold

Sold

Bakurocho, Nihonbashi
Opened in April 201763 rooms

Awajicho II, Chuo-ku,
Osaka-shi
Opened in June 2018
168 rooms

Sold

Sold

Hiranomachi,
Chuo-ku, Osaka-shi
Opened in April 2017
96 rooms

Kitakyuhojimachi, Chuo-ku,
Osaka-shi
Opened in June2018
182 rooms

Sold

17 Development Projects (15 sold); Policy of Continued Development
on Project Basis

Sapporo-shi, Hokkaido
Opened in July 2017
144 rooms

Tsurunocho, Kita-ku,
Osaka-shi
Opened inNovember 2018
134 rooms

Sold

Sold

Oyamamachi, Kanazawa-shi
Opened in December 201747 rooms

Nagahoribashi Ekimae
Opened in December
2018
96 rooms

Sold

Minamisenba III,
Chuo-ku, Osaka-shi
Opened in January 2018
100 rooms

Sold

Awajicho III, Chuo-ku,
Osaka-shi
Opened in February
2019
184 rooms

Sold

Minamisenba I,
Chuo-ku, Osaka-shi
Opened in April 2019
256 rooms

Sold

Sold

Hayabusacho,
Chiyoda-ku
Opened in April 2018
102 rooms

Sold

Nakasu, Hakata-ku, Fukuoka-shi
Slated for April 2020
103 rooms

Horikawa Shinmachi,
Kanazawa-shi
Opened in April 2018
121 rooms

Nishi-Shinsaibashi,
Chuo-ku, Osaka-shi
Slated for December
2020
53 rooms

 Numbers of hotel projects

Sold

Tokyo metropolitan
area

Kinki region

Other

Total

3

9

3

15

1

1

2

10

4

17

0

Sales contract signed
Other
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Total

3

28

Sold

Logistics Business and Other BusinessWe launched the new LOGITRES brand of logistics facilities and developed its first project, LOGITRES Tojo. Land for the second project was acquired in October
2019 in the same area as the first project. We are also working to develop sites for logistics through our land readjustment business in Koga, Fukuoka Prefecture.
As this is a candidate for our next core business, our current policy is to further strengthen these initiatives. We are also engaged in revitalization projects for leasecondominiums, office buildings (project site acquired in Kudankita, Chiyoda-ku), and other properties and plan to actively carry out various development projects inorder to establish our next core business as a general developer.
Land readjustment business

Logistics
development
business

LOGITRES Tojo
(Kato-shi, Hyogo)

Large-scale urban
development
business
Koga Genboen Land Readjustment Project (Koga-shi, Fukuoka)
: Aerial photo : Current lot map, neighboring area, Genboen location map

Fukuoka Kasuga
Project (Kasuga-shi,
Fukuoka)
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

29Real Estate Leasing BusinessWe are strengthening the real estate leasing business through development and ownership of revenue-generating properties.
A stock revenue structure is being established that can cover total general administrative expenses with rental income.
There are prospects for covering general administrative expenses with segment profit from the real estate leasing business, and thecoverage ratio for FY2022 has been set at 81%.
8,000
8,000

 Strengthening real estate leasing business (stock revenue)

Rental Target ratio of segment profit from the real estate leasing
business to overall segment profit set at 23%

income plan
7,000

Rentalincome6,000

Real estate sales business
Generaladministrative
expenses

5,750

5,900

Term ended

5,220
5,022

5,000

Real estate leasing business

4,800

December 2018

83%

Real estate planning agency

14%

and consulting business

4,226

Term ended
4,000

Segment

3,400
3,000

3,277

December 2019

81%

17%

3,001
2,670

2,128

2,000

Term ending
December 2022

75%

23%

1,000

0

Term ended December
2018 (Results)

Term ended December
2019 (Results)

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Term ending December Term ending December Term ending December
2020 (Forecast)
2021 (Plan)
2022 (Plan)

30

Real Estate Leasing Business
Strengthening revenue from operation business
Strengthen the entire ES-CON JAPAN Group’s stock revenue-generating capacity by expanding the operation business at groupcompanies.

 Strengthen asset management (AM)revenue Strengthen property management (PM)revenue Strengthen management revenue andoperation capabilities

 Expand ESCON JAPAN REIT’s asset size
Increase in revenue with property acquisition Increase inrevenue earned according to size of AUM

 Enhance consulting capabilities for commercial facilities
Greater tenant mix and MD proposing capabilities Stable increase in number of units under management from
entrustment with management of condominiums developedby ES-CON JAPAN Promote switch of existing properties managed jointly withother companies to sole management
 Strengthen services and reduce costs by insourcing manager
operations
 Strengthen inflow of orders by enhancing scheduled repair
and maintenance proposing capabilities
 Strengthen services for customers after they move in(renovation consulting, interior product sales, etc.)
 Establish restaurant business Foray into hotel operation business Entrustment with AM from Chuden Real Estate
In addition to properties held by warehousing function,
potentially also properties acquired by Chuden Real Estate Promote other businesses
Investment advisory and agency, real estate trust beneficial
interest sales intermediary, etc.

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 Enhance leasing capabilities
Expand potential tenants from community-based companies
to national companies
 Expand business scope
Insource building management (BM) Promote entrustment with outsourced operations
 Foray into peripheral operations
Rental storage, store renovation consulting and advertising31

Strategic Business Expansion of ES-CON JAPAN Group
ES-CON JAPAN
Property
management(PM) ofcommercial
facilities

International
business

Logistics
development

Group companies

Commercial
development

Collaboration■ＲＥＩＴ

Real estate asset
managemen

REIT

 Condominium units: approx. 10,834 units (approx. 8,656 units in
Kansai; approx. 2,178 units in Kanto) Detached houses/housing land development: approx. 700 sections
 Commercial development etc.: Acquiring and developing properties
throughout the country Hotel development: acquisition of land for over approx. 2,118 rooms
Developing in Tokyo, Osaka, Hokkaido, Kanazawa, and Fukuoka
 Overseas business development: Investment in Hawaii real estate fund,participation in condominium development project in Thailand Current state ofdevelopment by area

HokkaidoLand
readjustment

Hotel: 1 project
Commercial facility (including leasehold):
2 projects
Condominium
management

Condominiums
Hoteldevelopment

Officedevelopment

Hokuriku
Hotel: 2 projects

Collaboration

Detached
housingbusiness in
SaitamaRentalresidential
development

 Detached housingbusiness in Saitama

One's Own House Co., Ltd.
Rise Home Co., Ltd.

Kansai
Condominiums: 47 buildings
Hotel: 10 projects
Commercial facilities (including leasehold):
14 projects
Logistics facilities:
3 projects

Kanto
Condominiums: 47 buildings

The ES-CON JAPAN Group(including 1 renovation project)

Chubu

Comprehensive developer operating a multifaceted real estate businessWe will maintain our focus on the Kansai region, which promises market vitalization thanks to the planned
exposition, IR, etc.
We will focus on further growth in the enormous Kanto market.
Proactive deployment in the Chubu region through capital and business partnership with Chubu ElectricPower Full-scale deployment in the Fukuoka region
Launching overseas business development to advance globally
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Commercial facilities:
1 project

Hotel: 3 projects
Commercial facilities(including leasehold): 6 projects

KyushuHotel: 1 projectLand readjustment: 1 project
Large complex development: 1 project32

ESG Initiatives and Dividend Policy

33
Copyright ©2020 ES-CONJAPAN Ltd., All Rights ReservedAddressing Social Problems by Promoting ESG
Contribution to the realization of a sustainable society“Addressing social problems by promoting ESG” is positioned in the Third Medium-Term Management Plan (2020-2022) as one of our key management strategies.
In fiscal 2019, our environmental and sustainability initiatives were rated as exceptional in terms of “management and policy” and “execution and measurement,” and we wereawarded the Green Star rating.* In addition, we achieved the 2 Star rating in the GRESB rating system, which consists of five levels based on a relative assessment of the overall
score. In the GRESB Real Estate Developer Assessment, we became the first operating company in Japan to acquire the Green Star and 2 Star ratings.

ESG Initiatives
 Promotion of ZEH-M (for condominiums)

Board of Directors
Le JADE Okurayama (Yokohama-shi, Kanagawa) Promoting the improvement of operational efficiency with IT and increasing the percentage of
people of taking maternity leave, childcare leave and paid holidays

SocialS

 Contribution to regional revitalization and community creation through development of tonarie neighborhood
shopping centers Support for WT1 cancer vaccine research, a cancer immunotherapy
 Promoting proactive recruitment and success of female employees, the elderly and people withdisabilities Naming rights acquired for the Hokkaido Nippon-Ham Fighters’ new stadium; participation in urban
development activities for the overall area
*See next page for details.

G

Governance Conducting timely disclosure of business activities and management status
 Holding regular and emergency meetings of the risk management committee, and thoroughly
reporting to the risk management committee in case of an emergency or when an emergency islikely to occur

President and Representative Director
Nomination
andRemuneration
Committee

President’s Office
ESG Promotion GroupE TeamS Team

G TeamCoordinate

 Conducting environmentally and socially friendly real estate research anddevelopment through industry-academia collaboration and collaboration
with other industries

Coordinate

E

Strengthening the ESG
Management Promotion System

Environment

Related departments
Led by the ESG Promotion Group, specificinitiative policies are formulated and actively
carried out while coordinating with related
departments. The ESG Promotion Groupcurrently has a total of 16 members.

 Establishment of Nomination and Remuneration Committee Succession plan (successor candidate system) initiatives

Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved* Absolute ratings are given to companies in two categories: “management and policy” and “execution and measurement.” The Green
Start rating is then awarded to companies that have scored 50 or more in both categories.

34

Addressing Social Problems by Promoting ESG
Naming rights acquired for the Hokkaido Nippon-Ham Fighters’ new stadium; new stadium named ES CON FIELD HOKKAIDO
We plan to be involved in various real estate development projects and contribute to urban development in the area, including a hotel, on an approximately 9,400
square-meter site adjacent to the stadium. We will also use this as an opportunity to take part in sports and cultural promotion initiatives and will contribute to the
Hokkaido region’s vitality and development.
Contract period

Long-term contract of 10 years or more starting January 2020

Business partners

Hokkaido Nippon-Ham Fighters Baseball Club Co., Ltd.
Fighters Sports & Entertainment Co., Ltd.

Main rights(1) New stadium naming rights and promotion rights
 Right to use logo, right to create video introducing the new stadium for publicity purposes and other design
rights, right to put up outdoor advertising (including overseas), etc.
(2) Development rights in the ballpark area as a business partner, etc.
 Right to acquire land in the ballpark area and conduct hotel business

New stadium logo

Rendering of new
stadium whencompleted
Copyright ©2020 ES-CONJAPAN Ltd., All Rights Reserved

Simple, universal design
with a silhouette of theretractable roof (thesymbol of the newstadium) accented by
the seven-pointed star,a symbol of Hokkaido

35

Addressing Social Problems by Promoting ESG
Planned site forhotel and other realestate development

We plan to be involved in various realestate development projects including
a hotel and contribute to urban
development on an approximately
9,400 square-meter site that is adjacentto the stadium (FVILLAGE).
 We will take part in sports andcultural promotion initiatives andcontribute to the Hokkaido region’svitality and development.

36

Dividend Policy
We will continue to provide a stable dividend, raise the transparency of future dividend levels, further strengthen returns to shareholders,
and thereby work to raise sustainable corporate value.

Dividend payout ratio

30% or higher

Dividend per share

Continue progressive dividend
policyAcquisition of treasury shockFlexible action with reference tothe total payout ratio

Third Medium-Term Management
Plan

Second Medium-Term Management Plan IDEAL to REAL 2019
Dividend trend

About the progressive
dividend policy

Term ended December 2017
(23rd term)

Term ended December 2018
(24th term)

Term ended December 2019
(25th term)

Term ending December 2020 (26th term)

ActualActualActual

Plan

18

32

36

38

Dividend payout ratio

22.0%

30.2%

30.2%

30.6%

Acquisition of treasury
stock (million yen)

449

-

40

30.9%

30.2%

31.0%

Dividend (yen)Total payout ratio

In principle, our dividend policy is tomaintain or increase the dividend andnot reduce it; the dividend per share(DPS) must be equal to or greater thanthe DPS for the previous term. The
Company adopted this policy inconjunction with its announcement of theprevious Medium-Term Management
Plan (IDEAL to REAL 2019) in
November 2016.

37
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Information
ESCON JAPAN Ltd.
Email: ir@escon.jp
Tokyo
20F The Okura Prestige Tower, 2-10-4 Toranomon, Minato-ku,
Tokyo, 105-0001☎03-6230-9308

Osaka
13th Floor, Meiji Yasuda Seimei Building, 4-1-1 Fushimimachi,
Chuo-ku, Osaka 541-0044☎06-6223-8055
ESCON JAPAN Official
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Memo

39
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