Takara Leben Co., Ltd.
FY2018 Financial Results Briefing:Results for the Year Ended
March 31, 2018
May 18, 2018

Contents

Summary of Business Results
for the Year Ended March 2018
Key Topics
for the Year Ended March 2018
Projected Results
for the Year Ending March 2019
Dividend/Capital Policy

Appendix

P. 2
P. 9
P. 17
P. 23

P. 25

1

Summary of Business Results
for the Year Ended March 2018

LEBEN ASAKA REGENES

2

Highlights

Achieved record profits again with an upward revision to final profits ofabout 1 billion yen
The gross profit margin for condominiums improved.
Power generation facilities were also sold.
Sales, general and administrative (SG&A) costs were reduced.

Achieved the delivery plan in the new built-for-sale condominium businessNet sales decreased slightly from the plan; however, the gross profit margin rate
improved significantly due to efforts to reduce the cost of sales.

Expansion of the investment area
Revenue-generating real estate and power generation facilities were actively acquired.
(Infrastructure funds, REIT, private placement funds, funds for long-term holding, etc.)3Highlights by Segment
Real estate sales businessImprovement of the gross profit margin rate
New condominiums: 20.6%  22.1%

Real estate rental business
Purchases of hotels, offices and residences
Increase in rent revenues

New condominiums
1,619 units recovered against the planned 1,600 units
Detached houses
116 units recovered against the planned 160 units
Change in lifestyle => Increase in needs for compact and usedproperties
Establishment of a position for supply in the Tohoku area
(ranked first in supply for three consecutive years)
Replacement of revenue-generating real estate

Real estate management business
Steady increase in the number of units undermanagement (49,650 units)
Almost achieved the target under the previous Mid-Term
Management Plan, 50,000 units, one year ahead of the plan(an increase of 4,944 units from the previous fiscal year;
including replacement of other companies, 3,436 units)
Replaced other companies in large-scale managementbusiness (1,100 units)
Outlook for securing an order for management of a high-rise
condominium

Active investment toward formation of a REIT
Increase in hotel business

Power generation business
Additional sales
First PO by the infrastructure fund
Additional sales of three facilities
The gross profit margin rate decreased slightly due to mixing of
the business in the secondary market
Revenue from sale of electricity increased due to the increase in
the scale of power generation

4

Consolidated Income Statement (Highlights)(Units: million yen)

FY2017/3(45th)FY2018/3(46th)

PercentagechangeNet sales

103,599

110,851

7.0%

Operating profits

10,34912,597

21.7%

Ordinary profits

9,496

11,79224.2%

Net income

6,107

7,367

20.6%

Initial planned

FY2018/3(46th)

PercentagechangeNet sales

110,000

110,851

0.8%

Operating profits

10,55012,597

19.4%

Ordinary profits

9,500

11,79224.1%

Net income

6,300

7,367

17.0%

Achieved record profits again.
Upward revision and dividend increase were made.
The respective items of profits rose due to the improved profitability and the effect of reduced sales,general and administrative (SG&A) costs.

5

Consolidated Segment Information (Net Sales)(Units: million yen)
（単位：百万円）

FY2017/3(45th)FY2018/3(46th)

PercentagechangeReal estate sales business

79,63879,341-0.4%

Real estate rental business

5,056

5,472

8.2%

Real estate management business

3,665

4,0009.1%

Power generation business

11,10818,23964.2%

Other businesses

4,130

3,797

-8.1%

103,599

110,851

7.0%

Total net sales

Real estate sales business:

Real estate rental business:
Real estate management business:
Power generation business:
Other businesses:a slight decrease, mainly due to the failure to achieve the targets in the
detached houses business
an increase in fixed assets
a significant increase in the number of units under management
an increase in the scale of sales of power generation facilitiesa decrease in sales from contract works for construction

6

Consolidated Balance SheetYear ended
March 31,2017
(Million yen)

Year ended
March 31,2018

YoY change

Current assets

86,585

103,498

19.5%

Cash anddeposits/cash
equivalents

29,78029,223-1.9%

Inventory assets

49,93368,43837.1%

Real estate held
for sale

9,658

20,279110.0%

Power generation
facilities for sale

7,885Real estate forsale underconstruction

4,090-48.1%

32,39044,06836.1%

Fixed assets

53,23774,437

39.8%

Total assets

139,874

177,975

27.2%

Real estate held for sale: strategic carrying-over ofcompleted inventories
Real estate for sale under construction:
・順調な用地取得で増加
steady progress in purchases
固定資産
Fixed assets:
expansion of the investment area仕掛販売用不動産

Year ended
March 31,2017(Million yen)

Year ended
March 31,2018

YoY change

50,48256,876

12.7%

12,173

15,786

29.7%

29,58831,227

5.5%

Fixed liabilities

52,59978,191

48.7%

Long-term
borrowings

48,43975,015

54.9%

Total liabilities

103,081

135,067

31.0%

Net assets

36,792

42,907

16.6%

Capital

4,819

4,819-

139,874

177,97527.2%

Current liabilities
Notes and accounts
payable-trade
Loans payable(short-term borrowingsand current portion of
long-term borrowings)

Total liabilities andnet assets

Increase in borrowings:借入金(短期・長期)
Equityratio:
ROE:

active acquisition of revenuegenerating real estate
24.0%
18.6%

・仕入および固定資産借入の増加

・収益不動産の積極的な購入
7Consolidated Balance Sheet (Details)
Breakdown of property, plant and equipment
Residence
レジデンス(Million yen)

17,522

Office, retail
オフィス･店舗

11,441

4,769

Power
generation
発電施設
facilities

Hotel
ホテル

9,747

Other
その他

Total

3,665

Year ended
2017年3月期
March 31, 201747,146
million yen

Year ended
March 31, 2018

66,340
million yen

2018年3月期

17,07420,922

14,727

11,067

2,549

Breakdown of borrowings
New condominiums
新築分譲マンション
for sale(Million yen)

31,318New/used detached
新築分譲戸建･中古
houses for sale

6,150

24,903

Revenuegenerating
収益不動産
real estate

14,167Power

generation
発電施設

facilities

Other

その他
business

Total

3,189

2017年3月期

Year ended
March 31, 2017

79,727
million yen

Year ended
March 31, 2018

106,443
million yen

2018年3月期

38,787

12,781

36,203

17,2971,372
8

Key Topicsfor the Year Ended March 2018

LEBEN MORIYA-HIGASHINO THE PRESIUS

9

Key Topics- New business locations

Acceleration of nationwide operations by opening new bases
Opening
Takara Leben
Sapporo Office

Takara Leben West Japan
Fukuoka Main Office

Takara Leben
Osaka Branch

Opening
Opening

Takara Leben Tohoku

Takara Leben

Takara Leben West Japan
Matsuyama Head Office

Takara Leben
Hokuriku Office10Key Topics- Compact Properties

Urban-style compact properties for single-person households anddouble-income households without children

Birth of the "NEBEL" series

Properties already sold: "Warabi Chuo," "Sugamo," "Togoshi-Koen"
Properties to be sold: "Takinogawa," "Kachidoki," Hiroo 1-chome,""Hatchobori"
NEBEL Togoshi-Koen
NEBEL Sugamo

A salon established on a permanent
basis was opened in Ginza.

SALON DE NEBEL
Yoei Ginza Building 4F,
8-8-5, Ginza, Chuo-ku, Tokyo
Salon of SALON DE NEBEL
11

Key Topics- Hotel Business

HotelsGuest Houses

December 8, 2017:
Dormy Inn Matsuyama opened

December 26, 2017:
HOTEL REJOICE STAY Kyoto Karasuma Oike
openedChanged from apartments for rent toguest houses"Dormy Inn" series
To be opened in Mito, Morioka,etc.

Dormy Inn Matsuyama

Actively acquired and developed the land forhotels.
In addition, projects of 10 hotels in total areunderway in Nagoya, Kyoto, Osaka andFukuoka.

HOTEL REJOICE STAY Kyoto Karasuma Oike

In addition, projects for 8 guest house-style
hotels are underway in Kyoto, Osaka andTokyo.

12

Key Topics- Real Estate Management Business Leben Community

Significant increase in the number of units under management

Number of units of condominiums under management
Takara

タカラレーベンLeben Group(Unit)

60,000Propertiesof other
他社物件

companies

Ratio of other他社比率
companies
50%

49,65050,00040,00035,86038,70041,13144,65630,00045%

40%

20,00035%
10,000030%
FY2014/3
FY2015/3
FY2016/3 2017年3月期
FY2017/3 2018年3月期
FY2018/3
2014年3月期
2015年3月期
2016年3月期

Market conditions for
management of condominiums

Increased awareness ofmanagement
Increase in replacement
Intensifying costcompetition

Property management contract
retention rate

99.9%
(as of the end of March 2018)

Steady acquisition ofreplacement of other companies
Increase of 4,994 units
including
1,558 units of Takara Leben Group and3,436 units of other companiesIncrease in the number of units undermanagement
Opportunities for revenues derived
from management
Large-scale repairs
Insurance agent business
Management company
consulting, etc.

13

Key Topics- Renewal Resale Business Leben Zestock
New entry into renewal resale businessLively used market due to sharp rise in new homes

Change in lifestyle

Less negative feeling regarding used condominiums

Growth of the market for used condominiums

Business model

Purchase of rental
properties

Rental properties can be purchased at a lower
price than vacant units.
Rent revenues can be obtained until tenantsmove out.
Owning as rental
properties until
tenants move out

Sales

Establishment of the model to cover
the fixed costs with rent revenues fromthe inventories owned

Renovation after
tenants move out

Owning about 60 units as of the end of March 2018

Aim to own 500 units by the end of March 2021
14

Key Topics- Actions for REIT Takara PAG Real Estate Advisory Ltd.
OfficeResidence

Hotel

Commercial/others

Records of a wide range of developments and stable supply as the general developer of real estate

Takara Leben Co., Ltd.

A lot of records of value increase/enhancement including renovation

Expertise in stable management of properties by taking advantage of the value chain of the Takara Leben Group
Records of investment in real estate amounting to as much as 1.7 trillion yen in aggregate, mainly offices

PAG Investment
Management Limited

A lot of records of value increase/enhancement
Records of management of real estate funds in Japan over 20 years

Kyoritsu MaintenanceCo., Ltd.

Records of management of a wide variety of dormitories andhotels throughout Japan
Records of operation of dormitories and hotels for as long as 40 years

Information network utilizing thestore networks consisting of
12,029 stores all over Japan

Yamada Denki Co., Ltd.

Know-how on management ofcommercial facilities available to thelargest distributor of consumer
electronics

Comprehensive REIT established and managed jointly
by the four companies by taking advantage of theunique business models and real estate networks ofthose companies
Aim for formation and listing of REIT during FY201815

Key Topics- Overseas Business
Development of the overseas business
1

The representative office in Hanoi, thecapital of Vietnam, opened.

3Hanoi
82459【Socialist Republic of Viet Nam】

1067

Name: REPRESENTATIVE OFFICE OF
TAKARA LEBEN CO., LTD. IN HANOI CITY

1.
China
2.
Hainan, China
3.
Fansipan Mountain
Haiphong
4.
Vinh
5.
Hue
Da Nang
Hoi An6.
Nha Trang
Da LatTay Ninh
Ho Chi Minh
Phan Thiet
My ThoVinh Long
Can Tho7.
Phu Quoc
8.
Laos
9.
Thailand10.
Cambodia

Collect project information
Discover partner companies
Analyze the market
Perform construction schedule management, etc.

Business expansion withextension of the investmentarea beyond the real estate
sales businessSpecific projects already commenced

16Projected Resultsfor the Year Ending March 2019

LEBEN MAKUHARI HONGO THE RESIDENCE

17Outlook (Consolidated)

FY2018/3(46th)
ActualUnits sold (units)(new condominiums for sale and detachedhouses for sale)

FY2019/3(47th)
Forecast

YoY change

1,619

1,700

81

(excluding JV: 1,612units)(excluding JV: 1,500units)(excluding JV: -112units)

116

190

74

Net sales(million yen)

110,851

130,000

17.3%

Operating profits(million yen)

12,597

10,700-15.1%

Ordinary profits(million yen)

11,7929,600-18.6%Net income(million yen)

7,367

6,300

-14.5%Net sales:

an increase in net sales is expected given growth in the liquidation business

Operating profits: a decrease in profits from the sale of power generation facilities
a decrease in operating profits due to an increase in sales, general and administrative (SG&A)
costs (including personnel expenses and expansion of the group companies)

Aim to construct a new strategic base for long-term growth in the"time for reconstruction of portfolios"
18Outlook (by Business Segment)(Units: million yen)

Breakdowns by segment(Net sales/gross profits)
Real estate sales business

FY2018/3(46th) Actual
Net sales

FY2019/3(47th) Forecast

Gross profits

Net sales

Gross profits

79,341

17,086

105,700

20,660Condominiums

60,36813,31360,00013,000Detached houses

6,335

830

12,0001,600

Renewal resale

588

78

1,700

220

Liquidation

9,707

2,322

30,000

5,500

Other

2,340

541

2,000340

Real estate rental business

5,472

1,346

5,500

1,400

Real estate management business

4,000

504

4,300

590

Power generation business

18,2395,273

10,800

1,630

Sale of facilities

14,6875,068

7,0001,430

Revenue from sale of electricity

3,552

204

3,800

200

3,797

1,568

3,700

2,120

110,851

25,779130,000

26,400

Other businesses
Total

19

Plan for the Year Ending March 2019
Real estate sales business
Plan to recover 1,700 units of new
condominiums (excluding JV: 1,500 units)
Sell revenue-generating real estate
Promote purchases at new bases
Promote purchases in the renewal resale business
Establish a short detached houses recovery cycle

Real estate management business
Achievement of 50,000 units undermanagement/additional increase in thenumber of units under management
Acquire new properties of other companies and replace othercompanies in the management of properties
Strengthen the system for the management of high-rise
condominiums
Implement cost reduction measures
Expand fees derived from property management

Real estate rental business
Acquire and develop revenue-generating realestate with an awareness of exits
Operate the hotel business stably
Promote purchases at new bases
Accelerate the replacement of assets
Diversify exits

Power generation business
Decrease in the profitability of sales of power
generation facilities
Accelerate the acquisition and developmentof power generation facilities
Promote purchases using the commitment line
Promote acquisitions from the secondary market
Secure stable pipelines
Look for other types of renewable energy

20Schedule for Completion of Condominiums

Schedule for completion of condominiums(Unit)
1,600
1,400

FY2019/3
2019年3月期

FY2018/3
2018年3月期

1,200
1,000
800
600
400
200
0
1Q

2Q

3Q

4Q

Improvement of extreme concentration on the fourth quarter21

Investment/Power Generation BusinessToward the supply of properties to infrastructure funds and REIT
Development track record

Diversifying exit points

Carried out investments ofapprox. 50 billion yen(April 2015 to March 2018)

RentalLong-term
Ownership

Increasevalue

Reconstruction

Infrastructure
fundREIT

PrivatePlacement

OwnedAssets

Sale

External(tentative name) LUXENA Heiwadai

Plan for investment and recovery
Income Real Estate

Aim to establish a pay back cycle

FY2019/3

FY2020/3

FY2021/3

Investment Amount

30,00030,00030,000

Sale Amount

30,00026,00024,000(Million yen)

Secure pipelines as a sponsor
Balance sheet optimization
Clarify investment criteria
Capture fees arising after sales

Infrastructure assets

FY2019/3

FY2020/3

FY2021/3

Investment Amount

20,00020,000

20,000

Sale Amount

7,000

17,00017,00022

Dividend/Capital Policy

LEBEN SENDAI YAMATOMACHI EMBRACE

23

Shareholder Return

Dividend and payout ratio
Interim dividend

中間配当金（左軸）(left axis)(yen)Year-end dividend

期末配当金（左軸）(left axis)

Payout ratio (right axis)
配当性向（右軸）

20.0

35Dividend
increase of 1 yen

30

15.0

25

10.0

10.0

11.0

11.0

20
15

9.0

10

5.0

4.0

3.50.0

(%)

1.5

2.0

2014年3月期
FY2014/3

2015年3月期
FY2015/3

4.0

5.0

5.0

5.0

50

2016年3月期
FY2016/3

2017年3月期
FY2017/3

2018年3月期
FY2018/3

2019年3月期（予定）FY2019/3 (Plan)

Continue to actively return profits to shareholders

24Appendix

LP ITABASHI SKY RESIDENCE

25

Appendix

State of acquisition of land forcondominiums

Hokkaido
128 units

Total in Japan

6,180units

As of the end of March 2018

Hokuriku
468 units

Koshinetsu
259 units

Tohoku
884 units

Kinki
415 units

Kitakanto
898 units

Chugoku
292 units

Capital Area
2,133 units

Kyushu/Okinawa
118 units

Shikoku
176 unitsTokai
409 units

26

Appendix
Target for year ending
March 2020

Power-generating capacity of mega solar power generation facilities
Sold
売却済み

Capacity

56Not sold
未売却

Being developed 今後の仕入
To be purchased
開発中

47

44200 MW53(MW)

147 MW(already developed + pipelines)

FIT rate per KW

10% 8%

Obtain a high FIT license early
Obtain a commitment line of ¥10 billion
Look for other types of renewable energy

40
yen
40円
33yen
36円
32yen
32円

82%
27

Appendix

Major projects owned anddeveloped

28
OfficeHotel

Residence

Residence

Development

Developmentbuildings

including affiliated companies

TypeHotel

Property name (tentative name)(tentative name) LUXENA Heiwadai

Dormy Inn Matsuyama

Address

Property type

Yamagata Tokamachi Building

Yamagata, Yamagata

Existing(tentative name) LUXENA
Nagareyama Otakanomori

Nagareyama, Chiba

Development

Nakano Dai-ichi OS Building

Nakano-ku, Tokyo

Existing(tentative name) LUXENA Heiwadai

Nerima-ku, Tokyo

Development(tentative name) L.Biz Suidobashi

Chiyoda-ku, Tokyo

Development

Fullness Sayama

Adachi-ku, Tokyo

Existing

Shibuya Udagawacho PJ

Shibuya-ku, Tokyo

Development(tentative name) LUXENA Yoga

Setagaya-ku, Tokyo

Development

MB Odakyu Building

Sendai, Miyagi

ExistingYokohama, Kanagawa

Development

Mito Minamimachi Hotel PJ

Mito, Ibaraki

Development

Koto-ku, Tokyo

Development

Maison De Klein

Nerima-ku, Tokyo

Existing

Sanvario Saikon

Koriyama, Fukushima

Existing

Sophia Court Minami Ogikubo

Suginami-ku, Tokyo

Existing

RUSSE ISHIKAWDAI

Ota-ku, Tokyo

Existing

Dormy Ukima-Funado

Itabashi-ku, Tokyo

Existing

Gokiso PJ

Nagoya, Aichi

Oasaka City Chuo-ku Minamisenba PJ Osaka, Osaka

Development

Morioka Hotel PJ

Morioka, Iwate

Development

Hakata Hotel PJ

Fukuoka, Fukuoka

Development

Kyoto Gojo Horikawa Hotel PJ

Kyoto, Kyoto

Development

Nagoya Higashisakura Hotel PJ

Nagoya, Aichi

Development

Kyoto Horikawadori Marutamachi PJ

Kyoto, Kyoto

Development

Onomichi PJ

Onomichi, Hiroshima

Development

Dormy Inn Matsuyama

Matsuyama, Ehime

ExistingType(tentative name) LUXENA Nagareyama
Otakanomori

Property name (tentative name)(tentative name) LUXENA Higashi
Kanagawa
Residence (tentative name) LUXENA MonzennakachoCommercial/
Coop Sapporo Shunko store
othersTA Shonan Kugenuma Kaigan

Address

Property type

Development

Asahikawa, Hokkaido

Existing

Fujisawa, Kanagawa

Existing

28

Notes and Inquiries Relating to these Materials

These materials were prepared based on data current as of March 31, 2018.
These materials, as well as answers, plans, projections and so on provided during the subsequent Q&A session are based on Takara
Leben’s best judgment at the time the materials were prepared, and do not constitute a guarantee or promise that anything contained
herein will be realized or achieved, nor do they provide any guarantees or promises as to the accuracy or completeness of the information
contained herein. The contents of these materials are subject to change without notice.

Contact for Inquiries
IR Office, General Planning DivisionTel

03-6551-2130

Fax03-6551-2139

E-mailirinfo@leben.co.jp

29