HEART INTO THE CITY.

Financial Results For the Fiscal Year Ended November 30, 2016
Tosei Corporation

Ϩ. Overview of Results for the Fiscal YearTokyo Stock Exchange, First Section Code䠖8923
Singapore Exchange, Mainboard Code䠖S2D

Ended November 30, 2016

ὼ P. 2

ϩ. Business Development in FY2017

ὼP.18

Ϫ. Growth vision for Mid-to-long term

ὼP.23

ϫ. Reference Materials for the first time visitors to Tosei ὼP.38

ᾋSeparate volumeᾍ Real Estate Market Conditions

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

ḩᵌᴾᵭᶔᶃᶐᶔᶇᶃᶕᴾᶍᶄᴾᵰᶃᶑᶓᶊᶒᶑᴾᶄᶍᶐᴾᶒᶆᶃᴾᵤᶇᶑᶁᵿᶊᴾᵷᶃᵿᶐᴾᵣᶌᶂᶃᶂᴾᵬᶍᶔᶃᶋᶀᶃᶐ ᵑᵎᵊᴾᵐᵎᵏᵔ

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

2ᵭᶎᶃᶐᵿᶒᶇᶌᶅᴾᵮᶃᶐᶄᶍᶐᶋᵿᶌᶁᶃᴾᶍᶄᴾᵤᵷᴾᵣᶌᶂᶃᶂᴾᵬᶍᶔᶃᶋᶀᶃᶐᴾᵑᵎᵊᴾᵐᵎᵏᵔᴾᵋ ᵦᶇᶅᶆᶊᶇᶅᶆᶒᶑ
ṸRevenue ¥49.8 billion (up 15.8% yr/yr).
ṸOperating profit ¥9.2 billion (up 34.6% yr/yr) and profit for the period ¥5.5 billion (up 34.1% yr/yr) increased greatly.

ẔOperating profitẕ

Ẕ Revenue ẕ
1Q(¥ million)

2Q

3Q

4Q
49,81849,98150,00043,00640,0009,000(¥ million)
10,000

9,279

8,000

8,000

456
1,148

7,000

10,67915,380

8,484
6,000

30,000

6,633

5,284

9,118

10,817

17,12820,000

1,570

1,986

771

4,000

2,185

3,000

11,33911,525

13,527FY2014FY2015FY2016

873

2,365

1,000

ᾋ Segment Revenueᾍͤ(¥ million)

FY2015FY201649,818
Revitalization

ᾋ Segment Operating Profitᾍ
9,279

Rental

25,986

9,000

6,891

7,000

Property Management

20,00013,138

2,329

2,444
3,574

1,078

2,190
FY2015

4,005
694

341

-582

-559

-1,131FY2014FY2015FY2016FY2016

ẔProfit for the periodẕ
14.4%

8,000
ROE
7,000

14%
12.0%

9.2%
5,000

4,135
4,000
4,174

5,000

3,330

3,000

432

3,674
534

Internal Transactions

5,324

4,262
958

3,459

Other

6,605

4,210

4,001

5,560

Fund and Consulting

10,0001,427

12%Development

25,80934,743

6,112

3,914

672

6,000

43,00630,0001,980

11,00050,00040,000

3,326

1,683

FY2014ͤ (¥ million)(¥ million)
49,981

1,298
572

0

FY2014

ͤ We have abolished the Alternative Investment Business segment from the fiscal year ended November 30, 2016. For comparison, segment
information for the previous fiscal year (FY2015) are recalculated in accordance with the new reportable segment classifications.

1

2,000

4,127

1,600

4,663

879

0

0

0

5,000

3,548

4,000

2,000

10,000

6,000

5,560

1,101

8,450
247
963

6,040

6,891

22,889ẔProfit before Taxẕ(¥ million)

1,797
2,414

1,000
࣬

-1,000174

1,464

213 227

178 146-1,233-1,404FY2014FY2015

3,000

2,000
2,389

1,000
951

141ࣩ࣬

-1,860FY2016

2,874
1,041
544
415
872

1,087
395

5,547
168
636

8%

2,132
6%
4%

1,263
2,611

2%

1,390

0

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

FY201410%FY2015FY20160%

3ᵭᶔᶃᶐᶔᶇᶃᶕᴾᶍᶄᴾᵡᶍᶌᶑᶍᶊᶇᶂᵿᶒᶃᶂᴾᵤᶇᶌᵿᶌᶁᶇᵿᶊᴾᵰᶃᶑᶓᶊᶒᶑᴾᶄᶍᶐᴾᵤᵷᴾᶃᶌᶂᶃᶂᴾᵬᶍᶔᶃᶋᶀᶃᶐᴾᵑᵎᵊᴾᵐᵎᵏᵔ(¥ million)

FY2015
Revenue
Cost of revenue
Gross profit
Selling, general and administrative expenses, etc.
Operating profit
Finance income/costs (net)Profit before tax
Income tax expense

FY201643,006

㻑
100.0

31,091yr/yr change

49,818

㻑
100.0

6,811

15.8

72.3

33,468

67.2

2,376

7.6

11,91527.7

16,349

32.8

4,434

37.2

5,023

11.7

7,070

14.2

2,046

40.7

6,891

16.0

9,279

18.6

2,387

34.6

21

-2.6

2,409

39.9

998

52.4

-851
6,040

14.0

1,904

-829
8,450

-

㻑

17.0

2,902

-

Profit for the period

4,135

9.6

5,547

11.1

1,411

34.1

Comprehensive income for the period

4,081

9.5

5,509

11.1

1,427

35.0

EPS (䢠)85.66

114.89

29.23

34.1

ROE (%)

12.0

14.4

2.4P

ROA (%)

6.9

7.9

0.9P

ͤ ROE=Profit for the year 㾂䠄䠄Total equity at preceding year end + Total equity at current year end䠅㾂2䠅
ͤ ROA=Profit before tax 㾂䠄䠄Total assets at preceding year end + Total assets at current year end䠅㾂2䠅

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

4ᵰᶃᶔᶇᶒᵿᶊᶇᶘᵿᶒᶇᶍᶌᴾᵠᶓᶑᶇᶌᶃᶑᶑ
ṸWhole buildings ᾉ Sold 32 buildings including income-generating offices such as “ Kinshi-cho Tosei building ” and“ Nakano-ku income-generating building ” and condominiums ί6 buildings sold in 4Q aloneὸṸRestylingᾉSold 57 units in 6 properties including “Hilltop Yokohama Negishi” , “Hilltop Yokohama Higashiterao” etc.
ί9 units sold in 4Q aloneὸ

Revenue / Gross Profit Margin(¥ million䠅

34,74335,000Major Properties Sold

Revenue (Restyling)
Revenue (Whole buildings to general customers)
Revenue (Whole buildings to REIT)
Gross profit margin

2,037

20.0%

20.2%

ᵏᾠ

ᵐᾠ

20.0%

30,00025,00020,00015,25925,98625,809

2,161

1,725

15.0%

12.2%

ᵐᾠ

13,32910,00010.0%

17,25415,000

Yokohama-shi Aoba-ku Incomegenerating commercial facility

17,446

Kinshi-cho Tosei building(Hotel Conversion Plan)

5.0%
10,494

5,000

6,829
0

ᵑᾠ

0.0%
FY2014(䢠million)

Revenue
Gross profit
Operating profit
No.of sales 䠄Restyling)
No.of sales (whole buildings, others)

FY2015FY2014
Full year
34,743
4,226
3,330
58
35

FY2016FY2015Full year
25,986
5,192
4,174
68
24

FY2016
Full year
25,809
5,214
4,001
57
32

*The gross profit is net of Cost of Revenues including the following write-down amounts
under LCM: FY2014: -260millions FY2015: -27millions FY2016: -25millions

Nakano-ku income-generating buildingᵒᾠ

Kamagaya-shi incomegenerating apt building

Kokubunji-shi incomegenerating apt building

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

5

ᵢᶃᶔᶃᶊᶍᶎᶋᶃᶌᶒᴾᵠᶓᶑᶇᶌᶃᶑᶑ
ṸIncome-generating commercial facilities T’S BRIGHTIA Minami Aoyama and T’S BRIGHTIA Tsunashima led the revenue and profit of
the Development Business.
Ṹ Sold 119 detached houses in 21 projects (“THE Palms Court Kashiwa Hatsuishi” , “THE Palms Court Mitakaoosawa”(sold out) and “THE
Palms Court Hashimoto”(sold out) etc. ), and land lots. (45 detached houses sold in 4Q alone)

Revenue / Gross Profit Margin

Major Properties Sold / Being Sold

Income-generating Condominiums(¥ million䠅

Condominiums

40.4%

Offices

15,00045.0%ᵏᾠDetached house / Land lots/ Housing construction

13,138Gross profit margin

30.0%
THE Palms Court Koshigaya Lake Town

10,000

5,000

19.5%

20.7%

6,112

6,605
591

7,488
T’S BRIGHTIA Minami Aoyama

15.0%

1,629

4,483

6,014

5,649

0

THE Palms Court Mitakaosawa(sold out)

0.0%
FY2014(䢠million)

Revenue
Gross profit
Operating profit
No.of sales (sale in lots)
No.of sales (whole buildings)

FY2015FY2014
Full year
6,112
1,192
432
111

FY2016FY2015Full year
6,605
1,364
534
105
1

FY2016
Full year
13,138
5,302
3,674
119
2

*The gross profit is net of Cost of Revenues including the following write-down amounts
under LCM: FY2014: -24.8millions FY2015: -43.8millions FY2016: -66.5millions

THE Palms Court Kashiwa Hatsuishi

THE Palms Court Hashimoto(sold out)

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

6ᵟᶁᶏᶓᶇᶑᶇᶒᶇᶍᶌᶑᴾᶇᶌᴾᵰᶃᶔᶇᶒᵿᶊᶇᶘᵿᶒᶇᶍᶌᴾᵿᶌᶂᴾᵢᶃᶔᶃᶊᶍᶎᶋᶃᶌᶒᴾᵠᶓᶑᶇᶌᶃᶑᶑᶃᶑᴾᵋᵟᶁᶏᶓᶇᶑᶇᶒᶇᶍᶌᴾᵟᶋᶍᶓᶌᶒᴾᵿᶌᶂᴾᵧᶌᶔᶃᶌᶒᶍᶐᶇᶃᶑᵋ
*including 1 non-current assetṸTotal acquisition amount was ¥66.8 billion * on a delivery basis (expected disposition values)
Revitalization Businessᾉ63 Properties - 23 office properties, 32 income-generating apt buildings *, 8 land lots Development Businessᾉ9 Properties - 3 office/commercial projects, 1 newly-built condominium, 5 detached house projects Ṹ As of the end of November 2016, total acquisition amount progressed to about ¥75.3 billion * on a contract basis.

Trends in Annual Acquisition Amounts
ίdelivery basis and expected revenuesὸ
(¥ million)
80,000(75,386)

70,000D

㛤Ⓨ
Development

Rὶື໬
Revitalization(8,544)

66,842
D2,808D

Acquisition progress(delivery basis, expected
disposition values) was
about ¥66.8 billion.

60,0006,956

Commercial
facilities
Offices

Breakdown of Inventories
ίTrends in Expected Disposition Valuesὸ
Contract basis
progressabout¥75.3billion.
(End of Nov.
2016)

9 Expanded the acquisition of properties for investment centeredon income-generating offices
9 Expanded the area and increased the size of properties
9 Actively acquire buildings with a low occupancy rate,
leveraging our expertise in value adding and leasing
9 Promoted real estate acquisitions through M&As

Detached

housesD
6,631

49,05450,000

D 3,723
D

40,000

4,424

D
R
R

31,96930,000

D 2,410D
9,851

20,000R
253
R 1,300
R
9,576

10,000R
8,578

Commercial
facilities
Offices

R

Detached
housesOthers

D

6,966

R

R 1,765
R

Commercial
facilities
45,168 Commercial
Officesfacilities
4,970 Offices
Detached
housesDetached
2,033 houses
2,202
OthersOtherscondos

9,576

9,093

(¥ million)

R

R

Urayasu-shi incomegenerating apt building

Sumida-kui incomegenerating building

21,321

Income-generating
Apt buildings

Income-generating
Aptbuildings

R

Income-generating
Apt buildings

As of the end of
FY2014As of the end of
FY2015

As of the end of
FY201627,18534,99837,820

-

2,336

4,151

Condo/Apt buildings

13,881

23,497

39,573

Detached houses

15,247

11,184

13,673

Others

4,243

2,348

4,208

60,55774,36599,428

Office, Commercial buildings

Apartments

Hotel

OthersIncome-generating
Apt
24,848buildings
Incomegenerating
offices
Incomegenerating
officesNov.
20132013.11Nov.
2014
2014.11

26,387

Incomegenerating
officesNov.
2015
2015.1127,360

Incomegenerating
officesNov.
20162016.11

Total

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

7

ᵰᶃᶌᶒᵿᶊᴾᵠᶓᶑᶇᶌᶃᶑᶑ
ṸActively acquiring income-generating offices and condominiums. Tosei holds 83 income-generating offices in total (31 properties increased
from FY 2015) .
ṸRental revenue from non-current assets increased 40%

Revenues / Gross Profit Margin

Breakdown of Properties Held by Tosei(¥ million䠅

Revenue (Current assets)
Revenue (Non-current assets)

6,000

Revenue (Restyling)
Gross profit margin
5,324

5,000

Office and commercial buildings : 35
Apartments : 45
Other : 3

90.0%
80.0%

4,262

4,210

70.0%

4,000

3,056
2,663

3,000

100.0%

60䠂

60.0%
2,760

60.0%
50.0%

72䠂

6
67䠂

46.8%

50.2%

40.0%

145

2,000

30.0%
199

278

2,122

1,000
1,171

28䠂

33䠂

1,399

40䠂

20.0%
10.0%
0.0%

0
FY2014(䢠million)

Revenue
Gross profit
Operating profit

FY2015FY2014
Full year
4,210
2,526
2,414

FY2015Full year
4,262
1,995
1,797

*The revenue includes internal transactions.

FY2016FY2016
Full year
5,324
2,670
2,389

(No. ofbuildings)

90
80
70
60
50
40
30
20
10
0

Current assets*

Restyling

Non-current assets

83
60
43

33

18

51

52

25

26

55

11

12

10

8

7

14

15

16

18

21

Nov. 2012

Nov. 2013

Nov. 2014

Nov. 2015

Nov. 2016*Includes income-generating properties only

䠘 Increase and decrease since the end of the previous year 䠚
New acquisition+51
Decrease by sale-16
Increase due to converted empty building to rental condominium +1
Total
+31
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

8

ᵤᶓᶌᶂᴾᵿᶌᶂᴾᵡᶍᶌᶑᶓᶊᶒᶇᶌᶅᴾᵠᶓᶑᶇᶌᶃᶑᶑ
Ṹ The balance of AUM increased to ¥448.1 billion. Including ¥36.1billiom held by Tosei Reit.
ẔNet increaseᾉ¥26.3 billion
ίBreakdown of a net increase Ὁincrease :¥100.8 billion, Ὁdecrease :¥74.4 billionὸẕṸIntermediary fee from CRE consigner companies and others contributed .

Revenues / Gross Profit Margin
AM feeAcquisition fee

Disposition fee

Brokerage fee / Other

Dividends

Gross profit margin(¥ million)

2,500

Balance of Assets Under Management

96.3%
92.8%

94.2%

Private Funds AM

2,329
46

448,186

400,000

80%

91,789311,335

426
289

246

300,000

264,135
23,130199
116

85,771

69,108

ͤ2

40%

170

170,114300,643
241,005

983

828

20%

192,525

36,177

98,67916,618150,000
100,000

29,358248,028

209,143
200,000

323
500

300,607285,904

250,000

239
1,000

124,084

350,000

60%

958
53

CRE ͤ1
421,792

814
1,500

REIT AM100%
450,000

2,444

729

2,000

(¥ million)

500,000

216,796

17,434

225,564

287,924
ͤ2

149,349

50,000113,057266
00%FY2014(䢠million)

Revenue
Gross profit
Operating profit

FY2015FY2014
Full year
958
889
174

FY2016FY2015Full year
2,444
2,353
1,464

FY2016
Full year
2,329
2,193
951

0
Nov. 2009 Nov. 2010 Nov. 2011 Nov. 2012 Nov. 2013 Nov. 2014 Nov. 2015 Nov. 2016

ͤ1 The purple portion indicates the assets under consulting agreements of CRE.
CRE is methods of investing in and managing corporate real estate efficiently to maximize
long-term enterprise value. By undertaking CRE, Tosei conducts comprehensive consulting
services from the views of real estate professional.
ͤ2 ¥45 billion was transferred from private funds AM to CRE at the end of November,2016 after reviewing the management details㻚

*The revenue includes internal transactions.
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

9ᵮᶐᶍᶎᶃᶐᶒᶗᴾᵫᵿᶌᵿᶅᶃᶋᶃᶌᶒᴾᵠᶓᶑᶇᶌᶃᶑᶑ
ṸThe total number of properties under management was about 594 as of November 30, 2016.
ṸIn addition to service expansion, new property management contracts and maintenance of existing contracts

contributed to the stable income of business.

Revenue / Gross Profit Margin

The Number of Properties Under

Repair works, commissions and fees(¥ million)
5,000

PM࣭BM fees

50%

Gross profit margin

45%

3,459

40%

3,574
1,098

3,000

889
27.0%

907

35%
30%

27.4%

27.2%

2,906

2,667

500
400

180

511

522

511

544

547

203

193

196

343

351

351

594

219
199

203

216

15%

312

308

306

300
200

291

10%

1,000

471

546

25%
20%

2,000
2,570

Office building management 䠄Office ,Commercial facility, School ,Hotel, Nursery, etc.䠅

600

4,005
4,000

Condo/Apt management(No. ofbuildings)

375

100

5%
0

0%

FY2014FY2015FY20160Nov. 2009 Nov. 2010 Nov. 2011 Nov. 2012 Nov. 2013 Nov. 2014 Nov. 2015 Nov. 2016

䛆Example of Properties Under Management 䛇(䢠million)

Revenue
Gross profit
Operating profit

FY2014
Full year
3,459
934
227

FY2015Full year
3,574
980
146

FY2016
Full year
4,005
1,090
141

Condominium

OfficeCommercial facility*The revenue includes internal transactions.

SchoolCopyright
CORPORATION,
Hotel© 2017 TOSEINurseryschool All Rights Reserved.

10ᵱᶓᶋᶋᵿᶐᶗᴾᶍᶄᴾᵠᵿᶊᵿᶌᶁᶃᴾᵱᶆᶃᶃᶒᴾᵆᵡᶍᶌᶑᶍᶊᶇᶂᵿᶒᶃᶂᵇḩᵌ 㘞ᵟᶑᶑᶃᶒᶑᵋ
(¥ million)

End ofNov. 2015

Total Assets

Decrease

Increase

End of
May 2016

Decrease

Increase

Full year

End ofNov. 2016

Decrease

93,196+18,834

112,030+9,245

121,276

18,791+3,836

22,627-986

21,640

Increase+28,080A
Cash and cash equivalents
Inventories(properties)
Investment
properties/PPE
Other assets

46,156-16,248+29,987

59,895-15,918+23,322

67,298

22,101-145+1,962

23,918-2,571+3,97825,324

6,147

-557

A䠖Change in cash and cash
equivalents
䞉Cash and cash equivalents increased by ¥2.8 billion
from the previous year-end.

5,589+1,422

7,012

䞉Investment properties and PPE increased by ¥3.2
billion from the previous year-end, mainly reflecting
the new acquisition and transfer from inventory to
non-current assets ( increase : 4 properties,
decrease : 1 property)

BC-32,167+53,309-2,717+5,940+865

B䠖Change in inventory
䞉Inventory increased by ¥21.9 billion from the previous year-end as someinventories were transferred to non-current assets, although the sum ofacquisitions䠄 including real estate acquisitions through M&As 䠅 andconstructions, etc. exceeded dispositions by ¥21.1 billion.
䠄⁎ million)

C䠖Investment properties/PPE+2,849Acquisitions
Increase Construction/value up
Factor Acquired Urban Home Corporation
OthersDecrease Dispositions
Factor Tansfer,others
Total

FY2016+44,354+5,804+727+2,423-28,179-3,987-32,167+53,309

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11ᵱᶓᶋᶋᵿᶐᶗᴾᶍᶄᴾᵠᵿᶊᵿᶌᶁᶃᴾᵱᶆᶃᶃᶒᴾᵆᵡᶍᶌᶑᶍᶊᶇᶂᵿᶒᶃᶂᵇḪᵌ ᵋᵪᶇᵿᶀᶇᶊᶇᶒᶇᶃᶑᵍᵣᶏᶓᶇᶒᶗᵋ
(¥ million)

End ofNov. 2015

Total Liabilities /Equity
Total Liabilities

Decrease

Increase

End of
May 2016

Decrease

Increase

Full year

End ofNov. 2016

93,196+18,834

112,030+9,245

121,276

56,967+14,856

71,823+8,44280,266

Decrease

Increase+28,080+23,298

A
48,668-19,843+32,344

61,169-14,596+23,586

70,159-34,440+55,930

Current borrowings

9,492-7,046+4,744

7,191-4,175+6,371

9,387-11,221+11,115

Non-current borrowings

39,175-12,797+27,599

53,978-10,421+17,21460,772-23,218+44,814

Borrowings

Other Liabilities

8,299+2,355

10,654-547

10,106Equity36,228+3,97840,206+803

41,010+4,781

38.9
0.82

-3.0
+0.13

35.9
0.96

-2.1
+0.22

33.8
1.18

-5.1
+0.36

+1,807B

Equity Ratio (%)
Net D/E Ratio

A䠖Change in borrowings• ¥42.4 billion of new borrowings incurred
to finance acquisition of 72 properties(book value ¥45.9 billion*).
*including 1 non-current asset(book value ¥1.6 billion)• The repayment of borrowings by sales was¥20.4 billion.
• They resulted in increase of debt balanceby ¥21.4 billion from the previous yearend.

䠄ᵺᴾmillion)

Current

Non䇲
Current

New Borrowings
Increase Non䇲Current 䊻㻌Current
䊻 Current Portion
Factor Acquired Urban Home Corporation
Others䠄refinace,etc.)
Decrease Repayments upon Disposition
FactorOthers repyments䠄refin/maturity)
New Borrowings
Increase
Acquired Urban Home Corporation
FactorOthers䠄refinace,etc.)
Repayments upon Disposition
Decrease
Others repyments䠄refin/maturity)
FactorNon䇲Current䊻Current Portion
Total

B䠖Change in Equity

FY2016+2,388+8,233+487+6-6,757-4,464+40,090+229+4,495-13,689-1,296-8,233-34,440

䞉 Total equity increased by ¥5.5
billion from the previous yearend, in consequence of theincrease in retained earnings( up ¥4.7 billion) and dividend
payments (down ¥0.7 billion).

+55,930

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

12ᵧᶌᶔᶃᶌᶒᶍᶐᶇᶃᶑᴾᴾᵆᵠᶐᶃᵿᶉᶂᶍᶕᶌᵇ
Balance of Inventories
As of Nov. 30, 2016

67,298(102properties)

Total Expected
Disposition Value

99,428

Breakdown of Inventories(¥ million)

Inventories㼀 㼛㼠㼍㼘
䛆䠝䛇㻗䛆䠞䛇

Property type

Expected disposition values

Total
expected
disposition
value

Revitalization

No. ofproperties

Development

No. ofproperties

Office, Commercial buildings

26,319

26

1,678

3

27,99734,8972,923

37,820

Hotel

1,281

1

900

1

2,181

1,800

2,351

4,151

Condo/Apt buildings

21,453

45

5,153

2

26,607

26,641

12,932

39,573

-

-

7,668

14

7,668

-

13,673

13,673

Other

2,842

10

-

-

2,842

4,208

-

4,208

TOTAL

51,89682

15,401

20

67,29867,54731,88099,428

Detached houses

Revitalization Development

䞉The expected disposition values above are based on Tosei’s estimate of revenue corresponding to the properties currently in the inventories. These are calculated using information available
as of Nov. 30, 2016. Actual amounts may be vary significantly from the estimates, due to various factors.
䞉The inventories above represent carrying amount as of Nov. 30, 2016 and may increase due to such factors as value-up investments and construction costs
䞉The condominium buildings and detached houses are counted as each project being one property 㻚

Property type(Expected Disposition Value)

Area(Expected Disposition Value)

Property Size(Expected Disposition Value)
Note: Detached houses and condominiums are classified by one unit’s price.

Detached
houses
14%

Other
4%

Office, Commercial
buildings
38%
Condo/Apt buildings
Hotel
40%
4%

Saitama
Chiba 7%
10%
The 23wards ofKanagawa
Tokyo
14%
49%
Tokyo(except theTokyo's 23 wards)
20%

More than¥2 billion
30%

Less than ¥100
million31%
Between ¥100 and
Between ¥1¥500 millionand ¥2 䠾illion Between ¥0.5
10%
and ¥1 䠾illion
18%
11%

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

13ᵧᶌᶔᶃᶌᶒᶍᶐᶇᶃᶑᴾᴾᵆᵣᶖᶎᶃᶁᶒᶃᶂᴾᵢᶇᶑᶎᶍᶑᶇᶒᶇᶍᶌᴾᵴᵿᶊᶓᶃᶑᵇṸInventories (expected disposition values) totaled ¥99.4 billion as of November 30, 2016.
ṸBy property type, Condo/Apt buildings greatly increased to ¥16 billion. (Revitalization : ¥9.1
billion increase, Development : ¥6.9 billion increase)(¥ million)

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY201660,48731,264

22,251

15,206

18,595

18,497

27,18534,99837,820

―

―

―

―

―

―

―

2,336

4,151

Condo/Aptbuildings

14,327

12,84430,58926,62723,47622,70913,881

23,497

39,573

Detached
houses

―

―

558

3,727

7,701

13,225

15,247

11,184

13,673

Other

1,672

479

220

1,021

354

393

4,243

2,348

4,208

TOTAL

76,48744,58853,62046,581

50,12754,82560,55774,36599,428

Office,Commercial
buildings
Hotel

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

14

ᵱᶓᶋᶋᵿᶐᶗᴾᶍᶄᴾᵡᵿᶑᶆᴾᵤᶊᶍᶕᴾᵱᶒᵿᶒᶃᶋᶃᶌᶒᶑᴾᵆᵡᶍᶌᶑᶍᶊᶇᶂᵿᶒᶃᶂᵇ
Cash Flows from Operating Activities*1(¥ million)
FY 2015[A]

Cash flows from/used in operating activities
Profit before tax
Depreciation expense
Increase/Decrease in inventories
Other, net
Cash flows from/used in investing activities
Increase/Decrease in PPE
Increase/Decrease in investment properties
Other, net
Cash flows from/used in financing activities
Increase/Decrease in borrowings
Cash dividends paid
Interest expenses paid
Other, net
Increase/Decrease in cash and cash equivalents
Cash and cash equivalent at beginning of period
Effect of exchange rate change on cash and cash equivalents
Cash and cash equivalent at end of period

FY 2016[B]-4,443 ͤ1 -7,472
6,040
8,450
222
333
-8,845-15,971-1,860-284
481 ͤ2 -8,193
-71
-54
-750
-1,743
1,302-6,396
6,661 ͤ3 18,522
8,258
20,228-578-771-1,015
-926
-3
-7
2,699
2,856
16,10018,791-9-6
18,791
21,640yr/yr change[B]-[A]-3,0292,409
110-7,125
1,575-8,67517-993-7,69911,861
11,969
-193
89
-4
156
2,690
2
2,849

Cash flow from operating
activities was ¥7.4 billion decrease,due mainly to ¥8.4 billion increasein profit before tax, ¥15.9 billion
decrease due to increase in inventories
Cash Flows used in Investing
Activities*2
Cash flow from Investing Activitieswas ¥8.1 billion decrease, due mainlyto ¥1.7 billion decrease in purchase ofinvestment properties and ¥3.2 billion
decrease in purchase of investments in
subsidiaries through MβAs.
Cash Flows used in Financing
Activities*3
Cash flow from financing activitieswas ¥18.5 billion increase, due
primarily to ¥20.2 billion net increasein borrowings, ¥0.7 billion decrease of
cash dividends paid, and ¥0.9 billion
decrease of interest expenses paid.

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

15

ᵭᶔᶃᶐᶔᶇᶃᶕ ᶍᶄᴾᵱᶃᶅᶋᶃᶌᶒᴾᵰᶃᶑᶓᶊᶒᶑᴾᵆᵡᶍᶌᶑᶍᶊᶇᶂᵿᶒᶃᶂᵇᴾᵧᵌᴾᴾᴾᵰᶃᶔᶃᶌᶓᶃᴾᵿᶌᶂᴾᵡᶍᶑᶒᴾᶍᶄᴾᵰᶃᶔᶃᶌᶓᶃ
(¥ million,%䠅

Revenue
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions

Cost of revenue
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions

FY 2015yr/yr change

FY 2016%%

43,006 100.0
25,986 60.4
6,605 15.4
4,262
9.9
2,444
5.7
3,574
8.3
694
1.6
-559
-

49,818 100.0
25,809 51.8
13,138 26.4
5,324 10.7
2,329
4.7
4,005
8.0
341
0.7
-1,131-

FY 2015

FY 2016%

31,091
20,793
5,241
2,266
90
2,593
576
-470

72.3
80.0
79.3
53.2
3.7
72.6
83.1
-

%

6,811
-176
6,532
1,062
-114
431
-352
-572

yr/yr change%

33,46820,595
7,836
2,653
136
2,915
327
-995

67.2
79.8
59.6
49.8
5.8
72.8
95.7
-

15.8
-0.7
98.9
24.9
-4.7
12.1
-50.8
-

%

2,376
-198
2,595
386
45
321
-249
-524

7.6
-1.0
49.5
17.1
50.4
12.4
-43.3
-

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

16ᵭᶔᶃᶐᶔᶇᶃᶕᴾᶍᶄᴾᵱᶃᶅᶋᶃᶌᶒᴾᵰᶃᶑᶓᶊᶒᶑᴾᵆᵡᶍᶌᶑᶍᶊᶇᶂᵿᶒᶃᶂᵇᴾᵧᵧᵌᴾᴾᴾᵥᶐᶍᶑᶑᴾᵮᶐᶍᶄᶇᶒᴾᵿᶌᶂᴾᵭᶎᶃᶐᵿᶒᶇᶌᶅᴾᵮᶐᶍᶄᶇᶒ
(¥ million,%䠅

Gross profit
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions

Operating profit
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Corporate expenses, etc.

FY 2015

FY 2016%

11,915
5,192
1,364
1,995
2,353
980
117
-88

27.7
20.0
20.7
46.8
96.3
27.4
16.9
-

FY 2015%

16,349
5,214
5,302
2,670
2,193
1,090
14
-136

FY 2016

%

6,891
4,174
534
1,797
1,464
146
178
-1,404

16.0
16.1
8.1
42.2
59.9
4.1
25.7
-

32.8
20.2
40.4
50.2
94.2
27.2
4.3
-

%

9,279
4,001
3,674
2,389
951
141
-17
-1,860

18.6
15.5
28.0
44.9
40.8
3.5
-5.2
-

yr/yr change%

4,434 37.2
22
0.4
3,937 288.6
675 33.8-159-6.8
109 11.2-102 -87.6-47-

yr/yr change%

2,387 34.6
-172
-4.1
3,139 586.8
592 33.0-513 -35.0-5-3.8-196 -110.0-456-

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

17

Ḫᵌᴾᵠᶓᶑᶇᶌᶃᶑᶑᴾᵢᶃᶔᶃᶊᶍᶎᶋᶃᶌᶒᴾᶇᶌᴾᵤᵷᵐᵎᵏᵕ

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

18

ᵤᶍᶐᶃᶁᵿᶑᶒᴾᶄᶍᶐᴾᵤᵷᵐᵎᵏᵕᴾᵋ ᵰᶃᶔᶃᶌᶓᶃᵍᵮᶐᶍᶄᶇᶒᴾᵱᶓᶋᶋᵿᶐᶗᴾᵋ
Revenue

Operating Profit(¥ million)(¥ million)

80,000(¥ million)
10,00012,000୙ື⏘ὶື໬஦ᴗ
Revitalization

70,00060,000

Profit before Tax

69,268 10,000

Development
୙ື⏘㛤Ⓨ஦ᴗ
Rental୙ື⏘㈤㈚஦ᴗ
୙ື⏘䢈䡣䢙䢀䢚䞉䡶䢙䡷䢕䡿䡤䢙䡴䢚஦ᴗ
Fundand Consulting୙ື⏘⟶⌮஦ᴗ
Property
Management
Other
䛭䛾௚

8,000

ෆ㒊ྲྀᘬTransactions
Internal

4,000

6,000

8,000

9,279

6,891

6,040

6,000
4,663

5,560

4,000

49,81849,981

9,001
8,450

10,008

2,000

2,000

50,0000043,00640,000

Profit for the year

25,80934,743

6,000
ROE

4,000

13,138

4,210
958
3,459
-582

1,078

4,262

5,324

6,083

2,444

2,329

2,438

3,574
694

-559

4,005

4,316
341

14.4%

13.7%

15%

12%

4,135

Earnings per share
Annual Dividends
Per Share

2,874-1,1312,000
3%02014ᖺ11᭶ᮇ
FY2014-971

2014.11᭶ᮇ2015.11᭶ᮇ FY2016
2016.11᭶ᮇ 2017.11᭶ᮇ
FY2014FY2015FY2017䠄ண᝿䠅(Forecast)-10,000

5,926

Dividends(¥ )6%

10,000

0

9.2%

12.0%

5,547

FY20172017ᖺ11᭶ᮇ(Forecast䠄ண᝿䠅 )

9%

6,987
6,605

6,112

FY20162016ᖺ11᭶ᮇ

EPS
(¥ )

(¥ million)

20,000FY20152015ᖺ11᭶ᮇ

Dividends

25,98630,000FY20142014ᖺ11᭶ᮇ

FY2014FY2015FY2016FY20172014ᖺ11᭶ᮇ2015ᖺ11᭶ᮇ2016ᖺ11᭶ᮇ2017ᖺ11᭶ᮇ(Forecast䠄ண᝿䠅 )

50,4142015ᖺ11᭶ᮇ
FY20152016ᖺ11᭶ᮇ
FY20160%2017ᖺ11᭶ᮇ
FY2017䠄ண᝿䠅(Forecast )FY2014FY2015FY2016FY2017(Forecast )Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

19

ᵣᵿᶐᶌᶇᶌᶅᶑᴾᵤᶍᶐᶃᶁᵿᶑᶒᶑᴾᶄᶍᶐᴾᵤᶇᶑᶁᵿᶊᴾᵷᶃᵿᶐᴾᵣᶌᶂᶇᶌᶅᴾᵬᶍᶔᶃᶋᶀᶃᶐᴾᵑᵎᵊᴾᵐᵎᵏᵕᴾᵋ ᵱᶃᶅᶋᶃᶌᶒᴾᵭᶔᶃᶐᶔᶇᶃᶕᴾᵋ
(¥ million, %)FY2015

Revenue
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions
Gross profit
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions
Selling, general and administrative expenses,etc
Expenses related to property marketing activities (A)Selling, general and administrative expenses (䠞䠞)(net of expenses related to property marketing activities)

Operating profit
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Corporate expenses, etc.
Finace income/costs(net)Profit before tax
Income tax expenses
Profit for the year

yr/yr change [B]㸫
㸫 [A]

䕺FY2017䕺

FY2016䚷䚷 [A]FY2017 [B]

㸣

㸣

ࠉ

㸣

39.0
95.3
-46.8
14.3
4.7
7.7
-100.0
12.0
104.2
-76.6
13.7
8.9
9.8
-865.617.5
27.5[Revitalization Business]

䞉The construction of wholebuilding properties such as
condominiums and hotels underdevelopment will be completed in
the following fiscal year (ending
November 2018)㸣

43,00625,986
6,605
4,262
2,444
3,574
694
-559
11,915
5,192
1,364
1,995
2,353
980
117
-88
5,023
1,063

100.0
60.4
15.4
9.9
5.7
8.3
1.6
27.7
20.0
20.7
46.8
96.3
27.4
16.9
11.7
2.5

49,81825,80913,138
5,324
2,329
4,005
341
-1,131
16,349
5,214
5,302
2,670
2,193
1,090
14
-136
7,070
1,806

100.0
51.8
26.4
10.7
4.7
8.0
0.7
32.8
20.2
40.4
50.2
94.2
27.2
4.3
14.2
3.6

69,26850,414
6,987
6,083
2,438
4,316
0
-971
18,314
10,646
1,242
3,036
2,389
1,197
-111 -86
8,306
2,303

100.0
72.8
10.1
8.8
3.5
6.2
0.0
26.4
21.1
17.8
49.9
98.0
27.7
12.0
3.3

19,45024,604-6,151
759
108
310
-341
160
1,964
5,431
-4,059
365
195
106
-126
50
1,236
496

3,960

9.2

5,263

10.6

6,002

8.7

739

14.0

6,891
4,174
534
1,797
1,464
146
178
-1,404
-851
6,040
1,904
4,135

16.0
16.1
8.1
42.2
59.9
4.1
25.7
14.0
9.6

9,279
4,001
3,674
2,389
951
141
-17
-1,860
-829
8,450
2,902
5,547

18.6
15.5
28.0
44.9
40.8
3.5
-5.2
17.0
11.1

10,008
8,414
-40
2,714
1,008
191
-116 -2,163-1,006
9,001
3,074
5,926

14.4
16.7
-0.6
44.6
41.3
4.4

728
4,412
-3,714
324
56
50
-98
-302
-176
551
172
379

7.8
110.3
-101.1
13.6
6.0
35.4
550.4
6.5
6.8

13.0
8.6

䞉Planning to double revenue year
on year䞉Focusing on small-scale
properties with a value of less than
one billion yen.
䞉The gross margin will be 21.1%[Development Business]
䞉Revenue will decrease, reflecting
no sales of properties on a wholebuilding basis. (Sales of detachedhouses only)

䞉The gross margin will be 17.8%.

ͤThe orange portion shows gross profit margin and operating profit margin
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

20

ᵠᶓᶑᶇᶌᶃᶑᶑᴾᵱᶒᶐᵿᶒᶃᶅᶇᶃᶑᵍᵫᶃᵿᶑᶓᶐᶃᶑᴾᶇᶌᴾᵤᶇᶑᶁᵿᶊᴾᵷᶃᵿᶐᴾᵣᶌᶂᶇᶌᶅᴾᵬᶍᶔᶃᶋᶀᶃᶐᴾᵑᵎᵊᴾᵐᵎᵏᵕ䕺 Double the revenue of the revitalization business (FY2016: 25.8 billion yen э FY2017: 50.4 billion yen). Expand sales of buildings, with a focus on
small-scale properties (FY2016: 32 buildings э FY2017: 60 buildings).
䕺 Focus on sales of detached houses in the development business.
The development of commercial facilities and condominiums are underway for sales in the following term.
Gross Profit Gross Profit Margin
Revitalizationn Revenue
Business¥50.4bn ¥10.6bn 21.1䠂
¥Component ratio of

Gross Profit

58䠂

Strengthen the capacity to supply small-scale properties with a value ofless than one billion yen, which offer a high level of liquidity anddemonstrate the Company’s strengths (25 building э49 buildings)

Gross Profit Gross Profit Margin
Development Revenue
Business¥6.9bn ¥1.2bn 17.8䠂

Component ratio of

Gross Profit

7䠂

Focus efforts on the sales of detached houses and development of wholebuildings in the 68th terms.
䞉Sales plan: Approx. 160 units(up 40 units from the previous year)
䞉Work on improving profitability through in-house
construction.
䞉Developmentof condominiums, hotels andDevelopment ofwhole buildings commercial facilities is underway.
Detached
housesContinue to supply medium- to large-scale properties (exceeding one
billion yen) for investors in both Japan and abroad.

Drive a business model that does not rely on the increase in property prices
by creating added value through the revitalization of used properties.
(improvements in security, design and environmental performance)Examine construction sites broadly to make the most of diverse productlines and search for opportunities to develop highly profitable hotels andcommercial facilities.

䕺 Acquisition goals 䕺¾ Aim for a step-by-step expansion keeping cash positions and equity ratios in mind.
¾ Implement efficient acquisitions using a range of methods such as M&A.
¾ Acquire excellent properties aggressively with a high revitalization potential such as low

operation, vacant buildings or age-related deterioration, leveraging our revitalization
capacity.

Purchase target(delivery basis, expected disposition values)

FY2016¥66.8 billion
FY2015¥45.1 billion

FY2017¥80 billion(Forecast)

Condominium (under development)
Yutenji Setagaya-ku
Sales scheduled to start in March 2017

The Company’s first hotel (under development)
TOSEI HOTEL COCONE
Kanda, Chiyoda-ku
Scheduled to open around winter 2017

Copyright ©images2017 TOSEIRights Reserved.
*The photos are conceptual
andCORPORATION,
may subject toAllchange.

21

ᵠᶓᶑᶇᶌᶃᶑᶑᴾᵱᶒᶐᵿᶒᶃᶅᶇᶃᶑᵍᵫᶃᵿᶑᶓᶐᶃᶑᴾᶇᶌᴾᵤᶇᶑᶁᵿᶊᴾᵷᶃᵿᶐᴾᵣᶌᶂᶇᶌᶅᴾᵬᶍᶔᶃᶋᶀᶃᶐᴾᵑᵎᵊᴾᵐᵎᵏᵕᴾ
䕺 Facilitate the reinforcement of a management base to stay unaffected even if the market changes. Secure SG&A expenses on aGroup-wide basis by expanding the revenue of the “rental / management / fund businesses” which we position as stable businesses.
Rentalbusiness

Revenue

Gross Profit Gross Profit Margin¥6.0bn ¥3.0bn

Component ratio of

Gross Profit

49.9䠂

17䠂

Increase owned properties (inventory assets, fixed assets).
Improve profitability quickly through conversions and leasing.

Gross Profit Gross Profit Margin
Management Revenue
business¥4.3bn ¥1.2bn 27.7䠂(¥䠄ⓒ୓෇䠅million)
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

revenue኎ୖ㧗

83 properties
60
51

43

4,210

2,510

6,083

5,324

52

80
70
60
50

4,262

40

2,703

30
20
10
0

FY2012
2012

FFund
d&
Consulting
businessᮇᮎᲷᩘ
the number of properties

FY2013
2013

Revenue

FY20142014

FY20152015

FY20162016

FY2017 (Forecast )2017䠄ண᝿䠅

Gross Profit Gross Profit Margin¥2.4bn ¥2.3bn

98.0䠂

Take steps to expand assets under management and consulting

Enhance customer satisfaction and service quality. Improve
management efficiency.

FY20122012኎ୖ㧗revenue

544

600
580

547

560
540

3,541

3,459

3,574

4,005

4,316

520
500
480
460
440

420

FY20132013

FY20142014

FY20152015

FY20162016

400

FY2017 (Forecast )2017䠄ண᝿䠅

AUM balances of Tosei Group(¥ 䠄ⓒ୓෇䠅million)䠄ⓒ୓෇䠅Ṳ⚾ເ䝣䜯䞁䝗㻭㻹
Private Funds⚾ເ䝣䜯䞁䝗䠝䠩
㻾㻱㻵㼀 㻭㻹
Ṳ Tosei Reit䝖䞊䝉䜲䞉䝸䞊䝖䠝䠩
㻯㻾㻱
䠟䠮䠡
Ṳ CRE

㻠㻤㻡㻘㻝㻝㻟㻌
㻠㻞㻝㻘㻣㻥㻞㻌

㻠㻠㻤㻘㻝㻤㻢㻌

㻥㻝㻘㻣㻤㻥㻌 㻝㻞㻠㻘㻜㻤㻠㻌*Tosei Reit Investment Corporation (Securities code: 3451)
㻤㻡㻘㻣㻣㻝

9 Making investments aggressively in existing building stocks
constructed years ago.

594 properties

ᮇᮎᲷᩘ
the
number of properties546㻟㻝㻝㻘㻟㻟㻡

9 Listed in 2014. A comprehensive Reit that make investments inoffices, commercial facilities, residential houses and hotels
with a focus on the greater Tokyo area.

7䠂

(Entrusted assets: hotels, logistics facilities, school facilities, public facilities,
medical facilities, etc.)(Services: property management, building maintenance, rent guarantee, etc.)

Component ratio of

13䠂

Gross Profit

Expand assets under management. Win new property management
contracts through the enhancement of services.

䠄ⓒ୓෇䠅
(¥
million)
8,000
7,000
6,000
522
5,000
3,500
4,000
3,000
2,000
1,000
0

Gross Profit

Component ratio of

䛆Investment properties䛇㻟㻜㻜㻘㻢㻜㻣㻌
㻞㻠㻤㻘㻜㻞㻤㻌
㻥㻤㻘㻢㻣㻥㻌

㻝㻠㻥㻘㻟㻠㻥㻌

㻟㻢㻘㻝㻣㻣㻌

㻝㻣㻜㻘㻝㻝㻠㻌
㻝㻣㻘㻠㻟㻠㻌

㻞㻞㻡㻘㻡㻢㻠

㻞㻥㻘㻟㻡㻤㻌

㻝㻝㻟㻘㻜㻡㻣㻌

㻟㻜㻜㻘㻢㻠㻟 㻞㻤㻣㻘㻥㻞㻠

TTosei Reit *AM䞉Supporting external and internal growth(supply of properties,
improvement of profitability)
Private fund AM
䞉Formation of new funds
䞉Attraction of overseas money

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

㻞㻜㻝㻞㻛㻝㻝 㻞㻜㻝㻟㻛㻝㻝 㻞㻜㻝㻠㻛㻝㻝 㻞㻜㻝㻡㻛㻝㻝 㻞㻜㻝㻢㻛㻝㻝 㻞㻜㻝㻣㻛㻝㻝 (Forecast )22

ḫᵌ ᵥᶐᶍᶕᶒᶆᴾᶔᶇᶑᶇᶍᶌᴾᶄᶍᶐᴾᵫᶇᶂᵋᶒᶍᵋᶊᶍᶌᶅᴾᶒᶃᶐᶋ

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

23

ᵲᶆᶃᴾᵲᶍᶑᶃᶇ ᵥᶐᶍᶓᶎᵅᶑᴾᵫᶇᶑᶑᶇᶍᶌ

The Tosei Group's Mission
Create new value andinspiration*4 in all aspects of real estate*3
as a global-minded*1 group of
seasoned professionals*2.

*1 Global-minded

99*2 Professional

999*3 All aspects of real estate

999*4 New value and inspiration

99
9

Dually listed on the Singapore Stock Exchange. Efforts are being to attract inbound investments for Japan and promote outboundinvestments.
Adopted the International Financial Reporting Standards (IFRS). Disclosure documents are disclosed in both Japanese and English.
Have comprehensive knowledge of transactions conducted in the greater Tokyo area with our business focused on the area. Have agood grasp of area characteristics, rental needs, investor needs, investors’ trading trends, and expected yields, among other matters.
Offer optimal plans for revitalization and development for clients by leveraging skills and expertise that we have cultivated over years.
Have an internal organization that functions as a first-class architect office.
Broad product range (office buildings, commercial facilities, hotels, condominiums, detached houses)
Broad customer base (real estate funds, REITs, general business corporations, wealthy individuals, end users)‫ك‬
Diverse means of acquisitions (trust beneficiary rights, real estate M&A, real-estate collateralized loans)
Improve profitability through the revitalization of aged properties from both tangible and intangible perspectives. Create added-value
in existing real estate.
Provide residential and office environments that are eco-friendly, secure, safe, and sophisticated.
Contribute to the creation of a sustainable society through business (reginal vitalization, community development, measures to deal
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.
with an aging and diversifying society)24ᵥᶐᶍᶕᶒᶆᴾᶔᶇᶑᶇᶍᶌᴾᶄᶍᶐᴾᵫᶇᶂᵋᶒᶍᵋᶊᶍᶌᶅᴾᶒᶃᶐᶋᴾ
䕺 We aim for further increase in corporate value throughan expansion of existing businesses and high-quality
management that enables us to maintain a long-termcompetitive advantage.

For further growth

Vision for 2020

Revenue䠄¥ billion䠅

Profit before Tax
䠄¥ billion䠅

Revenue ¥100 billion
Profit before Tax ¥12 billion

100
1,000

15

80
800
10
60
600

Tosei Reit Investment
Corporation listied on TSE

40400

Listed on SGX

5

Listed on TSEFirst Section

20
200

0

00

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

䞉䞉䞉

20XX

Midterm Management Plan

Charge Up 2011

Next Stage 2014

Advancing
Together 2017

Next Plan

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

25ᵟᶑᶑᶃᶑᶑᶋᶃᶌᶒᴾᶍᶄᴾᶃᶖᶒᶃᶐᶌᵿᶊᴾᶀᶓᶑᶇᶌᶃᶑᶑᴾᶃᶌᶔᶇᶐᶍᶌᶋᶃᶌᶒᶑ
䕺 Capital continues to flow in for real estate investments against the backdrop of the negative interest rate, which preventsa further deterioration of the real estate market.
䕺 The business environment surrounding real estate may have a bearish tendency on a medium- to long-term basis due tosuch factors as price increases and low birth rates.

<Macro environments><Investment market>

Low growth will continue although GDP shows signs of recovery.

Investors have a high motivation to invest on the back of the yield gap effectagainst the backdrop of the negative interest rate and large-scale monetary easing.

Society in which the population is aging with low/declining birth rates.
Bank loans for the real estate industry stand at a record high of approximately 70
trillion yen.

Utilization of used real estate is a societal demand.

<End-user market>
Consumption tax hike postponed я No last-minute surge in demand.
Detached housing prices are not likely to increase. However, demand willremain solid.
Initiatives are being taken to promote the distribution of used houses.
(obligation to confirm an intention of home inspection, government subsidies
on measures for abandoned houses)
Construction costs have shown no signs of a decline since they began toincrease sharply.
Contracts for new condominiums have declined, inventory has increased andthe number of supplied units has declined, reflecting soaring prices.

Assessment of challenges

Financial Services Agency and BOJ are strengthening their control out of concern
about oversupplying as loans are increasing sharply for the rental housing businessconducted by individuals (apartment loans).
The supply of large-scale offices will exceed the previously recorded average,
going forward. Even so, the market will absorb such supply thanks to an increasein demand.
The CAP rate has declined to a point lower than the 2007 level. Prices of largescale properties remain high and their trading volume is on the decline.
The market has started to become cautious of overheating situations.
J-REIT remains firm as the fundamentals continue to be strong due to the ongoing
low interest rate environment and the recovery of office rents, among other factors.

- In the real estate market, demand fluctuates depending on economic conditions and the trends of financial economy -Under the current situation, it is hard to imagine
that the market will be entirely disrupted as isseen in a financial crisis. That said, the current
real estate business environment may go throughan adjustment stage as prices remain high.

Preparation foradjustment stages
Growthopportunities

Establish a “sound and stable management base” and a “business structure that
does not rely on real estate price increases.”

Aim to achieve sustainable growth by leveraging value recreation and development
capabilities, which are our strengths.
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

26

ᵠᵿᶑᶇᶁᴾᶑᶒᶐᵿᶒᶃᶅᶗ
Basic strategy
Aim to achieve sustainable growth with a business structure that can flexibly
address changes, while maintaining a business base that remains unaffectedby fluctuations in the real estate market.

Priority measures(i) Flexible and agile portfolio management to respond to changes in demand in the market.
(ii) Proactively expand the supply of small-scale properties* for which demand is stable andwe can leverage our strengths.
(iii) Focus efforts on the acquisition of medium- and large-scale properties* as well for which
demand is strong among funds and investors in both Japan and abroad.
(iv) Raise the stable earnings ratio (from 40% to 50%) of the Group in preparation for market
downturns.
*We classify the size of properties based on the following factors.
Small-scale properties: 0.1 billion yen or higher and lower than one billion yen
Medium-scale properties: one billion yen or higher and lower than three billion yen
Large-scale properties: three billion yen or higher
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

27ᵮᶐᶇᶍᶐᶇᶒᶗᴾᶋᶃᵿᶑᶓᶐᶃᶑᴾᵆᶇᵇᴾᵤᶊᶃᶖᶇᶀᶊᶃᴾᵿᶌᶂᴾᵿᶅᶇᶊᶃᴾᶎᶍᶐᶒᶄᶍᶊᶇᶍᴾᶋᵿᶌᵿᶅᶃᶋᶃᶌᶒ
Flexible
portfolio¾ Flexible portfolio management to respond to changes in demand in the market (for investment market я for end users)¾ Win a broad range of business opportunities for growth with a diverse product lineup.

Trends in Tosei’s revenue by product category (Revitalization Business /Development Business)<2005‫ع‬2008ٜ
Boom period for investment market<2009‫ع‬2012>
Sluggish period for investment market<2013‫> ع‬
Period of recovery to booming for investment market

The investment market remained active.
Expanded the business scale by handling commercial
facilities, income-generating offices mainly forbusiness.

Shift from for investors-oriented to end users-oriented
䞉Restarted the acquisition of condominiums for which
demand recovered ahead of other properties. Commenced
the Restyling business.
䞉Offered a full lineup of properties by enhancing productlines for end users.

Expanded the handling of investment properties andoffices for industrial corporations in sync with the recovery
in the investment market.
Continued to offer product lines for end users without
decreasing the volume.

THE PALMS

Office building(Developed)

Revenue䠄¥ million䠅
60,000Commercial
facility(Developed)

T’S BRIGHTIA

THE PALMS COURT

Income-generating
apartment (Developed)

Condominium(Developed)

Condominium(Revitalized)

Detached house(Developed)

Commercial facility Office building
Hotel(Under development)(Developed)

Commercial
facility(Revitalized)

Properties forthe end-user(detachedhouses andsuch)

50,00040,000

Income-generating
apartment

30,000Condominium

20,000

Income-generating
apartment

10,0000

For theend-user

Detached house
Income-generating
apartment

OfficeRestyling Condominium

Condominium
Restyling
Detached house

OfficeFor theInvestment
marketOfficeRestyling

2005

2006

Office/Commercial Building䐟䜸䝣䜱䝇䞉ၟᴗ䝡䝹

2007

2008

Income-generating䐠཰┈䝬䞁䝅䝵䞁

apartment

2009
Land
䐡ᅵᆅ䞉䛭䛾௚

2010

2011

2012

2013

2014

2015

2016

Properties for
Investment
market(office/commercial
Building,

incomegenerating
apartment
and such)2017(Forecast)2017(ィ⏬)

Revitalized Condominium
Detached
house andCondominium䐢䝸䝇䝍䜲䝸䞁䜾䠄୰ྂMSศㆡ䠅䐣ศㆡ䠄ᅵᆅ䞉ᡞᘓ䠅䐤ศㆡ䠄䝬䞁䝅䝵䞁䠅
Copyright© 2017TOSEI“Restyling”
land forsale inlots CORPORATION, All Rights Reserved.

28

ᵮᶐᶇᶍᶐᶇᶒᶗᴾᶋᶃᵿᶑᶓᶐᶃᶑᵆøᵇᴾᵧᶌᶁᶐᶃᵿᶑᶃᴾᶒᶆᶃᴾᶑᶓᶎᶎᶊᶗᴾᶍᶄᴾᶑᶋᵿᶊᶊᵋᶑᶁᵿᶊᶃᴾᶎᶐᶍᶎᶃᶐᶒᶇᶃᶑᵋ ᵰᶃᶄᶃᶐᶃᶌᶁᶃᴾᶋᵿᶒᶃᶐᶇᵿᶊᶑᴾᵆᵏᵇᴾᵟᶁᶒᶓᵿᶊᴾᶐᶃᶑᶓᶊᶒᶑᴾᶍᶄᴾᵲᶍᶑᶃᶇᵅᶑᴾᶑᶓᶎᶎᶊᶗᴾᶍᶄᴾᶎᶐᶍᶎᶃᶐᶒᶇᶃᶑᴾᶀᶗᴾᶑᶁᵿᶊᶃᴾᵋ
¾ Supply of a wide range of properties from properties for end users below one hundred million yen to properties for funds

over three billion yen

Changes in gross profit by scale of Tosei properties *(Revitalization Business /Development Business )Gross profit margin for small-scale properties (not less than one hundred million yen and less than one billion yen)
Gross profit margin for medium and large-scale properties (not less than one billion yen)
⣔ิ1
⣔ิ2

37%

18%

16%

22%

22%

15%

23%

Gross profit䠄¥ million䠅

12%

10%

12%

Small-scale properties

43% Medium andlarge-scale
properties

21%

Small-scale
properties

24%

22%

11%

7%

Medium to large-scale properties(over one billion yen)

12,000- During the market downturn, liquidity andprofitability declines with high volatility.
- On the other hand, when the investment
market is brisk, considerable profits can be
made.

10,0008,000

16%Gross Profit ratio of properties lessthan one billion yen

6,000

Gross Profit ratio of properties
over one billion yen

4,000
2,000

(hundred million to one billion yen)

- Even when the investment market issluggish, profits are relatively stable.

36%
64%

28%
54%

10%
29%

22%

2010

2011

2012

0
2009

68%

32%
23%

34%

23%

9%

2013

2014

3%

33%
2015

2016

For small-scale properties
and medium to largescale properties,
respectively, flexible
actions will be taken
toward growth.
㻞㻜㻝㻣㻔㻲㼛㼞㼑㼏㼍㼟㼠㻕-2,000Mediumto large-scale䐟୰䞉኱ᆺ≀௳
䐟10൨෇㉸
properties(over one billion䠄10൨෇௨ୖ䡚䠅
yen)

Small-scale䐠ᑠᆺ≀௳properties
䐠1൨෇㉸(hundredmillion to one
䠄1൨෇௨ୖ䡚10൨෇ᮍ‶䠅billion yen)

Properties less than ¥100M
䐡䠍൨෇ᮍ‶(detachedhouses,condominiums and such)

REIT,
etc
䐢REIT䜋䛛

*This graph shows the breakdown of gross profit by scale of properties to be sold, not including loss on valuation by the Lower of Cost or Market Method.

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

29ᵮᶐᶇᶍᶐᶇᶒᶗᴾᶋᶃᵿᶑᶓᶐᶃᶑᵆøᵇᴾᵧᶌᶁᶐᶃᵿᶑᶃᴾᶒᶆᶃᴾᶑᶓᶎᶎᶊᶗᴾᶍᶄᴾᶑᶋᵿᶊᶊᵋᶑᶁᵿᶊᶃᴾᶎᶐᶍᶎᶃᶐᶒᶇᶃᶑᵋ ᵰᶃᶄᶃᶐᶃᶌᶁᶃᴾᶋᵿᶒᶃᶐᶇᵿᶊᶑᴾᵆᵐᵇᴾᵫᵿᶐᶉᶃᶒᴾᶃᶌᶔᶇᶐᶍᶌᶋᶃᶌᶒᴾᶄᶍᶐᴾᶑᶋᵿᶊᶊᵋᶑᶁᵿᶊᶃᴾᶎᶐᶍᶎᶃᶐᶒᶇᶃᶑᴾᵋ
[Material(1) Tokyo’s
23 wards
officeofficestockstockby agebuilding*] *][Material(1) Tokyo’s
23 wards
byofageof building
overtotal
300floor
tsubo
build
after
* Office buildings for use*Buildings
as offices whosearea
is 3001946
as a office
objects
tsubo or tsubo
more which werecompletedin andpurpose
after 1946areare theincluded.
Tokyo’s 23 wards 11.95 million

7,803 buildings average age of the buildings 27.8 years

Large scale( flor space over 5,000 tsubo)
total 6,440 thousand tsubo

Small-to-mid scale( flor space 300-5,000 tsubo)
total 5,510 thousand tsubo

732 buildings average 22.0 years old

7,071 buildings average 28.4 years old
Old earthquake proofing standard :1,310 thousand tsubo (20%)

Old earthquake
proofing standard :1,490 thousand tsubo (27%)
Over 20 years old:

2,950
thousand295
୓ᆤ䠄54䠂䠅
tsubo (54%)
䝪䝸䝳䞊䝮䝌䞊䞁

Volume zone

Less than 20 years old:
1,070 thousand tsubo(19%)

Over 20 years old:

Age of properties

4,440 thousand tsubo(81%)

3,190 thousand tsubo (50%)

New earthquake proofing᪂⪏㟈ᇶ‽䛾୰ᑠつᶍ䝇䝖䝑䜽standard proof
402୓ᆤ䠄73䠂䠅䛜
small-to-mid
size building stock䝖䞊䝉䜲䛾䝍䞊䝀䝑䝖
4,020
thousand tsubo (73%)
is Tosei’s target

Less than 20 years old:

3,250 thousand tsubo (50%)

Lending area (thousand tsubo)

Source: XYMAX REAL ESTATE INSTITUTE Corporationฟ඾䠄䛂䜸䝣䜱䝇䝢䝷䝭䝑䝗2016䛃䠄䝄䜲䝬䝑䜽䝇୙ື⏘⥲ྜ◊✲ᡤ䠅“office pyramid 2016”[Material (2) Central Tokyo Office market *]Office Rent (Yen/Tsubo)
A grade buildings
B grade buildings㻠㻜㻘㻜㻜㻜
㻟㻜㻘㻜㻜㻜

¾ Office stock
According to the graph shown at the left (Material (1)),- Office stock of medium to small-scale properties andthat of large-scale properties are almost half-and-halfaccording to the total floor area. However, according to
the number of buildings, medium to small-scale
properties standing for twenty years or more account for
about 80% of the total.
- Of the medium to small-scale properties, the volume
zone includes properties standing for twenty years ormore and less than thirty five years after the newearthquake resistance standards (2,950,000 tsubo).
In addition, the Company's targets include properties
whose area is equivalent to 4,020,000 tsubo upon the
addition of stocks standing for less than twenty years(1,070,000 tsubo).
=> For small properties whose total area is not more than
300 tsubo which are not included in the data, additional
huge inventory is estimated.
¾ Office rental market
According to the graph below (Material (2)),- Less volatility of both rent and operation for B gradebuildings than for A grade buildings

Vacancy rate㻝㻞䠂A grade buildings
B grade buildings㻥䠂㻢䠂㻞㻜㻘㻜㻜㻜

㻟䠂㻝㻜㻘㻜㻜㻜

㻜䠂㻜㻞㻜㻜㻜 㻞㻜㻜㻝㻌㻌㻞㻜㻜㻞㻌㻞㻜㻜㻟㻌㻌㻞㻜㻜㻠㻌㻌㻞㻜㻜㻡㻌㻞㻜㻜㻢㻌㻌㻞㻜㻜㻣㻌㻌㻞㻜㻜㻤 㻞㻜㻜㻥㻌㻞㻜㻝㻜㻌㻌㻞㻜㻝㻝㻌㻌㻞㻜㻝㻞㻌㻌㻞㻜㻝㻟㻌㻌㻞㻜㻝㻠㻌㻌㻞㻜㻝㻡㻽㻟㻞㻜㻜㻜 㻞㻜㻜㻝㻌㻌㻞㻜㻜㻞㻌㻞㻜㻜㻟㻌㻌㻞㻜㻜㻠㻌㻌㻞㻜㻜㻡㻌㻞㻜㻜㻢㻌㻌㻞㻜㻜㻣㻌㻌㻞㻜㻜㻤㻌㻞㻜㻜㻥㻌㻞㻜㻝㻜㻌㻌㻞㻜㻝㻝㻌㻌㻞㻜㻝㻞㻌㻞㻜㻝㻟㻌㻌㻞㻜㻝㻠㻌㻞㻜㻝㻡㻽㻟*A grade buildings: total floor area of 10,000 tsubo or more, one floor area of 300 tsubo or more, building age not more than 15 years
B grade buildings: no limits of total floor area, one floor area of 200 tsubo or more, no limits on building age

Copyright© 2017TOSEICORPORATION,
All Rights
Reserved.
Source:"Office
Trend
Data 2016" Sanko
EstateCo., Ltd.

30

ᵧᶋᶎᶍᶐᶒᵿᶌᶒᴾᶋᶃᵿᶑᶓᶐᶃᶑᴾᵆøᵇᵧᶌᶁᶐᶃᵿᶑᶃᴾᶒᶆᶃᴾᶑᶓᶎᶎᶊᶗᴾᶍᶄᴾᶑᶋᵿᶊᶊᵋᶑᶁᵿᶊᶃᴾᶎᶐᶍᶎᶃᶐᶒᶇᶃᶑᴾᵋ ᵩᶃᶗᴾᶋᶃᵿᶑᶓᶐᶃᶑ ᵋ
Small-scale properties below one billion yen
Market scaleCompetition- Existing real estate in 23 wards of Tokyo: about 124,000 buildings- Office stock after the new earthquake resistance standards: 4,020,000 tsubo- Based on the trial calculation by the Company, the distribution scale in themetropolitan area: about 10 trillion yen annually- Small size and much trouble results in difficulty in entry by major companies- At the time of acquisition, competitors are end users (rich individuals, etc.)
The Company has strengths in know-how on recreation of value of properties andfunds for renovation=> Small-scale properties: large market scale and high liquidity

Characteristics of products- Relatively stable rent revenues and property prices- Price range affordable as investment by individual rich customers- Small-scale properties include many properties standing for many
years. The judgment ability and know-how on revitalization are thestrengths of the Company and other advantages can be utilized easily=> There are stable demands for purchase. The strengths of the=> Fewer competitors than in the case of medium to large-scale propertiesL
Large
market scale and fewer competitors
leads to the expectation of future high growth.
I the amount of information obtained and examined can be increased by
If
sstrengthening the Company's own acquisition system, sales can be easily
eexpanded.

Company can be utilized

Measures for increasing the supply[Steps for acquisitionby the Company](1) Acquisition of not less than 1,000 cases of information per month through cooperation with agents and trust banks(2) Sorting of information, detailed investigations and consideration of acquisition => about 100 to 150 cases per month(3) Acquisition of properties upon negotiation and conclusion => about 5 to 10 cases (strictly selected investments)

Promotion of initiatives to increase the supply
Strengthening¾¾

Increase in sales personnel (from 112 persons at the end of FY2016 to 167 persons by the end of 2020)
Improvement of skills of sales personnel (knowledge of laws and regulations, sales, development, property restoration, sales
skills for M&A, etc.)¾¾

Concept of expansion of sales offices (establishment of branches)
Introduction of area professional systems and development of judges in investments (setting of investment
authorization, construction of database on market by area)¾

Utilization of M&A for the purpose of real estate, which is an efficient method of acquisition

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

31ᵧᶋᶎᶍᶐᶒᵿᶌᶒᴾᶋᶃᵿᶑᶓᶐᶃᶑᴾᵆùᵇᴾᵧᶌᶁᶐᶃᵿᶑᶃᴾᶒᶆᶃᴾᵿᶁᶏᶓᶇᶑᶇᶒᶇᶍᶌᴾᶍᶄᴾᶋᶃᶂᶇᶓᶋᴾᶒᶍᴾᶊᵿᶐᶅᶃᵋᶑᶁᵿᶊᶃᴾᶎᶐᶍᶎᶃᶐᶒᶇᶃᶑᴾ ᵋ ᵩᶃᶗᴾᶋᶃᵿᶑᶓᶐᶃᶑ ᵋ
Increase the acquisition of medium to large-scale properties¾ Upon judgment of the market environment and liquidity, continual investment in medium to large-scale properties over one billion yen¾ Utilizing business opportunities obtained by becoming involved in all areas of real estate and aiming for the acquisition of properties¾ Eliminating unreasonable acquisition and considering the acquisition flexibly by taking advantage of the wide variety of product lines dealt with by the Company

Policy for
acquisition

and its capability for restoration

Initiatives to increase the supply

Strengthening¾

Maximum utilization of financial method including M&A for the purpose of real estate, real estate collateralized loans andtrust beneficiary rights¾

Use of various solutions utilizing the know-how of the Company including change of the purpose of use (from office to hotel),change of floor plans, meeting the needs for vacant buildings and large-scale renovations[Supplied properties]

Development¥5䡚10bn

2016

> > >

2015

> > >

Revitalization ¥3䡚5bn

Revitalization ¥1䡚3bn

Revitalization ¥1䡚3bn

Revitalization ¥1䡚3bn

Revitalization ¥1䡚3bn

Nakano-ku building

Toyo-cho Tosei building

Sinjuku 6-chome building

Sinjuku building[Commercial facility] T‘S BRIGHTIA Minami Aoyama Kinshi-cho Tosei building

2013
Revitalization¥3䡚5bnDevelopment¥5䡚10bn

2014

2012

2011

2010

2009

2008

2007

Development

Development

Development

Development

Revitalization

Development¥1䡚3bn¥1䡚3bnMeguro-ku building Kamata Tosei building Nihonbashi
Sinjuku Tosei
Hongoku-cho Tosei buildingbuilding¥3䡚5bnTHE PALMS Nihonbashi
Yokoyama-cho apartment¥5䡚10bn

Over ¥20bn

2006

Over ¥10bn

Revitalization¥1䡚3bnGinza commercial
building
Heiwajima Tosei building CopyrightEbisu building
Ueno Tosei building© 2017 TOSEICORPORATION,
All Rights Reserved.

32ᵱᶒᶐᵿᶒᶃᶅᶗᴾᶍᶄᴾᶐᶃᶑᶒᶍᶐᶇᶌᶅᴾᶎᶐᶍᶎᶃᶐᶒᶗᴾᶔᵿᶊᶓᶃ
Restorationof value¾ Acquisition of real estate stocks which have lost competitiveness due to deterioration over time and the restorationof value with Tosei's unique know-how¾ Supply of restored competitive products to the market(i) Business scheme to create added value through revitalization

Revitalized building

Aging building
Regenerating value,
using Tosei’s expertiseCompetitiveness is lost,
and the occupancy rate
and rents have fallen.

Improving the functionsof facilities, safety
performance, energy
saving performance, andimproving profitability
through leasing activities

Profitability has improved.
The value of the realestate has increased.

(ii)“Value Up 32”: Key points in Tosei’s value regeneration(1) the functions of facilities, safety and energy saving performance

 To create the best value for customers, Tosei provides safety& security, sophistication & comfort, and sustainability &eco-friendliness.
5CHGV[CPFUGEWTKV[

9Create value using the items in our original Value UP 32 survey

9Constantly place emphasis on the balance between cost effectivenessand design (excessive investment is not necessary for revitalization.)

9

Implement flexible leasing activities while carefully monitoring theconditions of the surrounding market and tenant needs which leads torapid profitability improvement.

Upon judgment of locations, characteristics of properties and needs from users,
increase value with awareness of usability for the persons working and living there(2) Operation /measures for profitability, correction of compliance with laws, etc.

 Renovation of floors in accordance with needs of tenants(change of the purpose of use and floor plans)<Renovation of commercial facilities/offices>- Office=> HotelEx. - Cram school => Office- Store=> SOHO specifications<Renovation of apartments for rent>- Company house => Apartment with soundproof equipment capableof supporting musical instruments- Company house => Common area capable of differentiation of partof a room for rent
- Owned house => House for rent upon split

Grovesnor Square
Commercial Property Build in 1990

The open space in the center has a wood deck, where visitors canmake themselves comfortable, to draw in customers.

Value improvement for security, disaster prevention, community revitalization,and conservation

4GHKPGOGPVCPFEQOHQTV
Value improvement for scenic views, nice exterior appearance, amenities,
and enhanced convenience

5WUVCKPCDKNKV[CPFGPXKTQPOGPVCNHTKGPFNKPGUU
Value improvement for sustainable energy conservation, cost cuts,and resource saving

Toyo-cho Tosei building(Build in 1993 as a office)Introduction of wall greening system, LED
light and EV disaster prevention cabinet andwooden deck construction, etc..

House Kitakashiwa
Study RoomThe living room is designed
Kids Room
Income-generating apartment as the common
Copyright
2017 TOSEI CORPORATION, All Rights Reserved.
area©with
Build in 1992
family residents in mind33

ᵧᶋᶎᶍᶐᶒᵿᶌᶒᴾᶋᶃᵿᶑᶓᶐᶃᶑᴾᵆúᵇᴾᵧᶌᶁᶐᶃᵿᶑᶃᴾᶑᶒᵿᶀᶊᶃᴾᶇᶌᶁᶍᶋᶃ
Increasestable income¾ Portfolio management with awareness of stability and growth with five segments¾ In preparation for the reversal of market conditions, promotion of establishment of the business foundation for theincrease in stable income¾ Increase of the ratio of stable businesses and cover administrative expenses and interest with income from the stablebusinesses
5LVN KLJKBusiness involving real estate transaction (revitalization / development)
Advantages: possibility of sharp increase of revenue and profit

Real estatetransaction
6WDELOLW\

Disadvantages: no expectation of profit when market condition worsen,QFUHDVHLQ
LQFRPHŶƗƒƆƎŃ
ƅƘƖƌƑƈƖƖ

=> Profit growth with increase in investment when market conditions
are active

Business with stable income (rental / funds / management)
Advantages: continual stable income
Disadvantages: time required for business expansion

5LVN ORZ=> Profits secured to a certain extent when market conditions arestagnant.

Gross profit by segment (including internal transactions)
Gross profit䠄¥ million䠅

10,000Business involving realestate transaction

8,000

Revitalization andὶື໬+㛤Ⓨ
Development

6,000

Business with stable
incomeRental, Funds and㈤㈚+䝣䜯䞁䝗+⟶⌮Management

Expansion of both businessinvolving real estate transaction
and business with stable income

Sales, general and㈍⟶㈝
administrative expenses

Maintaining a surplus
with stable income

4,000
2,000
0
-2,000-4,000-6,000-8,000

2009

2010

2011

2012

2013
IFRS

2014
2015
2016
2017 TOSEI CORPORATION,IFRS Copyright ©IFRS
IFRS All Rights Reserved.

34ᵱᶇᶋᶓᶊᵿᶒᶇᶍᶌᴾᶍᶄᴾᵥᶐᶍᶕᶒᶆᴾᶔᶇᶑᶇᶍᶌᴾᶄᶍᶐᴾᵐᵎᵐᵎ 㘞ᵠᵿᶊᵿᶌᶁᶃᴾᵱᶆᶃᶃᶒᴾᵣᶖᶎᵿᶌᶑᶇᶍᶌᵋ
Balance Sheet Simulation¾ Expand the asset size to achieve revenueof ¥100 billion൨in 2020.
൨¾ Maintain the equity ratio at the 30% level, keeping financial
soundness in mind
ͤ In this simulation, the figures are calculated based on the corporate tax rate of 31.9% from FY2017
The simulation is based on the information available as of the financial year-end.
The actual amount may vary significantly due to various factors.

As of 30 November, 2020
Revenue ¥100 billion൨൨
1,737൨෇
¥173.7billion

Cash and cash
equivalents

10.6

Other
Liabilities

99.4

Borrowings

24.1

As of Nov.30, 2016
¥121.1billion
As of Nov.30, 2015
¥93.1billion
931൨
൨

18.7

10.1

21.6

൨

8.2

46.1

*Expected based on the averagefor the most recent three years(1.5 times book value)(disposition value)

67.2¥99.4billion(disposition value)

Investment
properties/PPE¥74.3billion(disposition value)

22.1

84.6

¥126.9billion*

൨

70.1
48.6

Inventories(properties)

36.2

6.1
38.9%
0.82

25.3
7.0
33.8%
1.18

58.7

63.7

Equity41.0䠄¥billion䠅
Equity Ratio
Net D/E Ratio

Other assets

6.4
Equity Ratio
36.7%
1.18
Net D/E Ratio
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

35ᵲᶍᶑᶃᶇᵅᶑᴾᶋᶃᶂᶇᶓᶋᴾᵿᶌᶂᴾᶊᶍᶌᶅᵋᶒᶃᶐᶋᴾᶅᶐᶍᶕᶒᶆᴾᶔᶇᶑᶇᶍᶌ
 We aim for further increase in corporate value through an expansion of existing businesses and highquality management that enables us to maintain a long-term competitive advantage.
Business involving real estate transaction- Increase in supply of small-scale properties (increase in personnel, plan for Yokohama branch)- Constant supply of medium and large-scale properties (utilization of M&A and other financial methods)- System to supply of 300 detached houses per year (in-house construction, 600 houses held in stock)- Acquisition of opportunities for large-scale development, continuation of the development business to maintainand improve development
dev
technologies and skills for restoration of value
Stable business
Related businesses- Accumulation of good real estate for rent
- Advance into the hotehotel industry- Increase in balance of funds in trust- Research on cloud funding- Increase in balance of properties managed- Research on shared houses

Vision for 2020

Revenue䠄¥ billion䠅

Revenue ¥100 billion
Profit before Tax ¥12 billion

100
1,000

Profit before Tax
䠄¥ billion䠅

15<*Breakdown of gross pr
profit>(Note) Gross profit exclusive of sales expenses
for sale and purchase of properties
prope

2016
Business involving
real estate transaction Stable business80800

㻢㻜㻑 㻠㻜㻑

10
60
600

Tosei Reit Investment
Corporation listied on TSE

Target for 2020
40
400

Listed on SGX

5

Listed on TSEFirst Section

Business involving
real estate transaction Stable business㻡㻜㻑 㻡㻜㻑

20
200

To achieve the above target,
the ratio of stable income is to increase.

0002009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Midterm Management Plan
Charge Up 2011
Next Stage 2014

Advancing
Together 2017

Next Plan

䞉䞉䞉

20XX

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

36ᵲᶐᶃᶌᶂᶑᴾᶇᶌᴾᵢᶇᶔᶇᶂᶃᶌᶂᶑ

Trends in Dividends

FY2011FY2012FY2013

FY2014FY2016(Forecast)

FY2015FY2017(Forecast)

Annual Dividends
Per Share(¥)* 5.00* 6.00

8.00

12.00

16.00

22.00

25.00

Payout ratio(%)

30.4

18.7

18.6

20.2

18.7

19.1

20.4

*The Company split its shares by 100 for 1, effective July 1, 2013. The dividends per share are restatements in line with the stock splits from the FY2011.

Current Share Price
[1]

[2]

[1]㾂[2]

RealMarket Capitalization

Net Book Value

PBR

PBR ͤ

(As of Jan. 4, 2017)(As of Nov 30, 2016)¥42.7billion¥41.0billion

Stock PriceBook Value Per Share(Same as above)(Same as above)¥886.00¥849.35(As of Jan 4, 2017)

PER(Forecast)䈜In the case of taking ¥15.23
billion unrealized gains on
investment propertyes (as of
Nov.30,2016) into account

1.04

0.76

7.22

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

37Ḭᵌ ᵰᶃᶄᶃᶐᶃᶌᶁᶃᴾᵫᵿᶒᶃᶐᶇᵿᶊᶑ ᶄᶍᶐ ᶒᶆᶃ ᶄᶇᶐᶑᶒ ᶒᶇᶋᶃ ᶔᶇᶑᶇᶒᶍᶐᶑ ᶒᶍ ᵲᶍᶑᶃᶇ

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

38

ᵥᶐᶍᶓᶎᴾᵭᶔᶃᶐᶔᶇᶃᶕᴾᵟᶑᴾᶍᶄᴾᴾᵬᶍᶔᵌ ᵑᵎᵊᴾᵐᵎᵏᵔCompany name
AddressTOSEI CORPORATION Board of Directors

4-2-3 Toranomon, Minato-ku, Tokyo Audit & Supervisory Board

constituted by 5 directors
䠄including 2 Independent directors䠅

Corporate
governancesystemconstituted by 5 members(2 full time, 3 part time auditors.
All from outside the Company
and independent audit &supervisory )Date establishedFebruary 2, 1950

Paid-in capital¥6,421,392 thousand Organizational form

Representative

Seiichiro Yamaguchi, President and CEO

 Nominating and

Fiscal year-end

November 30

Tosei Community Co., Ltd.
Tosei Asset Advisors, Inc.
Tosei Revival Investment Co., Ltd.
Tosei Singapore Pte. Ltd.
Urban Home Corporation
Tosei Hotel Management Co., Ltd.

Company with Audit &Supervisory Board Members

Employees

152 (Non-consolidated) 368 (Consolidated)

Stock listing

Tokyo Stock Exchange, First Section (8923)
Singapore Exchange, Mainboard (S2D)

Compensation Advisory
Committee

Mainaffiliatedcompanies

Total outstanding shares

48,284,000 shares
Number of shareholders

Share status

6,339
Shareholder composition
䞉Individuals/Other䞉Foreign companies
䞉Other companies
䞉Financial institutions
䞉Securities companies

42.10%
29.83%
14,41%
12.36%
1.30%

䠄20,326,953䠅
䠅
䠄14,405,385䠅
䠄6,956,900䠅䠅
䠄5,968,000䠅䠅
䠄626,762䠅䠅

Investment
Trust
Management
Company

Tosei Reit Investment Corporation(3451) ͤͤ The investment corporation, whose assets aremanaged by Tosei Asset Advisors, Inc. , a whollyowned subsidiary of Tosei Corporation

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

39

ᵦᶇᶑᶒᶍᶐᶗᴾᶍᶄᴾᵲᶍᶑᶃᶇᴾᵡᶍᶐᶎᶍᶐᵿᶒᶇᶍᶌ
1950: Established Yukari Kogyo Co., Ltd, the predecessor of Tosei Corporation
1983: Tosei Building Co., Ltd.
1994: Mr. Seiichiro Yamaguchi assumed the role of President and CEO.
Revenues(¥ billion)

70
65
60
55
50
45
40
35
30
25
20
15
10
5
0

Changed its name to current“Tosei Corporation”

Registered for
Financial Instruments Business Registration; Type II
Investment Management Business; Investment
Advisor and Agency Business
Introduced commercial building
Brand T’s BRIGHTIA

EstablishingTosei HotelManagementͤ5
Acquired 100%
ownership ofUrban Home.*6

Tosei Reit Investment
Corporation Listing

Relocated its head office
to Toranomon

Listed on Singapore
Exchange

Listed on Tokyo Stock
Exchange Second
SectionLaunched
Established TRI.*1
Acquired 100% ownership of TC.*2

Launched
Revitalization businessConducted
real estate M&A
through LBO

Established
Tosei
Singapore*4

Established TAA*3

Began developing office andcommercial buildings

Listed on
Tokyo Stock
Exchange,
First Section

Registered for Real Estate
Investment Consulting

Changed its name to

Listed on
JASDAQ“Tosei Fudosan”

Begandeveloping
condominiums

Restylingbusiness

Began developing
detached houses

Set up private
placement fund1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
䠄Forecast䠅Notes:
1. TRI: Tosei Revival Investment Co., Ltd.
2. TC: Tosei Community Co., Ltd.
3. TAA: Tosei Asset Advisors, Inc. (Name changed from Tosei REIT Advisors, Inc. in April 2008)
4. Tosei Singapore: Tosei Singapore Pte. Ltd.
5䠊Tosei Hotel Management Co., Ltd.
6. Urban Home Corporation

Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

40

ᵠᶓᶑᶇᶌᶃᶑᶑᴾᵭᶔᶃᶐᶔᶇᶃᶕ
 Tosei operates its business mainly in grater Tokyo area as a comprehensive real estate company.
 The mutually complementary relations through the five businesses enables flexible portfolio management tocope with market condition changes.

5Businesses

Strong driver of growth in revenues䖃ᵰᶃᶔᶇᶒᵿᶊᶇᶘᵿᶒᶇᶍᶌ ᵠᶓᶑᶇᶌᶃᶑᶑ

In our Revitalization Business, Tosei acquires existing office buildings
and condominiums, and resells them as revitalized real estate after
improving their equipment and designs, installing eco-friendly
facilities and undertaking other renovation work.
䞉Project period: a half year to a year
䞉Considering the balance of the portfolio in terms of size, type, and area
䞉Developing the best sales plans to maximize earnings, considering thetiming of the sale of each property and how to enhance their value䖃 ᵢᶃᶔᶃᶊᶍᶎᶋᶃᶌᶒᴾᵠᶓᶑᶇᶌᶃᶑᶑ
In our Development Business, Tosei acquires land for development,
and develops and sells new office buildings, condominiums,
residential houses, commercial buildings, hotels and otherbuildings, taking into account the needs and characteristics of thearea.
Tosei also has an in-house, first-class architect office obsessed withquality planning and design skills and fully utilizes these in"manufacturing."
䞉Project period: one to two years
䞉Seeking to respond to market conditions by developing diversified
properties (for end users, for the investment market)
䞉Aiming to create competitive properties, emphasizing usability

Stable earnings base䖃ᵰᶃᶌᶒᵿᶊ ᵠᶓᶑᶇᶌᶃᶑᶑ
In our Rental Business, Tosei generates steady income by leasing
office buildings, condominiums, and other properties owned by
the Group, mainly in Tokyo. As of November 30, 2016, Tosei hold83 income-generating properties.

䖃ᵤᶓᶌᶂᴾᵿᶌᶂᴾᵡᶍᶌᶑᶓᶊᶒᶇᶌᶅᴾᵠᶓᶑᶇᶌᶃᶑᶑ
In our Fund Business, Tosei is engaged in the asset managementof properties owned by real estate funds and Tosei Reit, as well as
acquiring and selling properties to meet the needs of a wide
variety of investors, and offering advisory services to companies.
As of November 30, 2016, the balance of assets undermanagement totaled more than ¥440 billion.

䖃ᵮᶐᶍᶎᶃᶐᶒᶗ ᵫᵿᶌᵿᶅᶃᶋᶃᶌᶒ ᵠᶓᶑᶇᶌᶃᶑᶑ
In our Property Management Business, Tosei undertakes generalproperty management operations, such as management, cleaning
and renovation work including fire protection inspection on
condominiums and office buildings through Tosei Community Co.,
Ltd. As of November 30, 2016, the number of properties managed
by the Company was 594. (Office ,Hotel, School and Others: 375,
Residential : 219.)
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

41

ᵱᶓᶋᶋᵿᶐᶗᴾᶍᶄᴾᵮᶐᶍᶎᶃᶐᶒᶇᶃᶑᴾᵱᶍᶊᶂᴾ㘞 ᵮᶐᶍᶎᶃᶐᶒᶗᴾᵱᶇᶘᶃᴾᵍᴾᵰᶃᶔᶃᶌᶓᶃᴾᵋ
㻸㼑㼟㼟㻌㼠㼔㼍㼚㻌㼈㻝㻜㻜㻌㼙㼕㼘㼘㼕㼛㼚䠄¥ million䠅㻮㼑㼠㼣㼑㼑㼚㻌㼈㻝㻜㻜㻌㼍㼚㼐㻌㼈㻝㻘㻜㻜㻜㻌㼙㼕㼘㼘㼕㼛㼚㻮㼑㼠㼣㼑㼑㼚㻌㼈㻝㻌㼍㼚㼐㻌㼈㻌㻟㻌㼎㼕㼘㼘㼕㼛㼚㻻㼢㼑㼞㻌㼠㼔㼍㼚㻌㼈㻟㻌㼎㼕㼘㼘㼕㼛㼚

50,00043,80840,85440,00033,091

32,591
24,61427,44526,517

10,102

16,8628,401
19,49320,00010,998
8,525

14,867

12,9106,294

11,805

7,264

2,571

FY2005

FY2006

FY2007

17,348

8,877

9,510

7,949

7,388

7,128

FY2014FY2015FY2016

1,076
4,969

3,543

12,086

12,66912,997

9,456

8,213

1,221

10,850

2,418

8,407

0

5,422
6,218

6,251

7,351

17,297

1,718
2,119

12,237

19,831
3,530

4,388

8,513

11,016

4,088

30,00010,00038,505

3,373

1,895

1,594

2,818

FY2008FY2009FY2010FY2011FY2012FY2013

No. of projects
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Over than㻌㼈3 billion
0
0
1
2
2
1
0
0
2
1
1
2
Between 㼈1 and㻌㼈3 billion
5
6
6
4
2
4
4
1
1
10
7
6
Between㻌㼈100 and㻌㼈1,000 million
16
22
16
31
23
15
9
8
9
23
19
24
Less than㻌㼈100 million
2
3
3
6
4
7
18
24
31
26
25
42
Total
23
31
26
43
31
27
31
33
43
60
52
74
* The condominiums, detached houses and Restyling are counted as each project being one property* The condominiums and detached houses are classified by one unit’s price.
* Past performance includes properties sold through the Alternative Investment Business segment .
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

42ᵱᶓᶋᶋᵿᶐᶗᴾᶍᶄᴾᵮᶐᶍᶎᶃᶐᶒᶇᶃᶑᴾᵱᶍᶊᶂᴾᴾ㘞 ᵮᶐᶍᶎᶃᶐᶒᶗᴾᵲᶗᶎᶃᵍᵱᵿᶊᶃᶑᴾᶀᵿᶑᶃᴾ㘞
¾

Breakdown by Property Type

(Properties)

Office/Commercial

In FY2016, sales for income-generating offices were decreased, but sales
for condominiums were strong,

Condominium

Detached house

Other

80
74
70
19

60

Others (lands etc.)
19 properties, 26ή

60
7
50
43
4

40

30

20

23
1

31
2
3
4

8

26

15
22

19

FY2007

FY2008

13

19

17

15

FY2015FY20162018

9FY2006

28

18
14

9

8

FY2010FY20110
FY2005

10

7
14

14

4

Residential Properties(Condominium &detached house)
40 properties, 54ή

14

33

7

3

3

22

10

27

6

31
1
3

8
21

7
31

17

11

43

52

FY20094

6FY2012FY2013

FY2014

Office / Commercial
15 properties, 20ή

* The condominiums, detached houses and Restyling are counted as each project being one property.
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

43ᵧᶌᶔᶃᶌᶒᶍᶐᶗᴾᵠᶐᶃᵿᶉᶂᶍᶕᶌᴾ㘞ᵮᶐᶍᶎᶃᶐᶒᶇᶃᶑᴾᶇᶌᴾᵧᶌᶔᶃᶌᶒᶍᶐᶇᶃᶑᴾᵿᶑᴾᶍᶄᴾᵬᶍᶔᵌ ᵑᵎᵊᴾᵐᵎᵏᵔᵋ
Location Area of Inventory Properties

Tokyo 23 wards(Properties)¾

Total number of 102 inventories at the end of Nov. 2016. Inventories arelocated mainly in the 23 wards of central Tokyo, with an increase in thepercentage of inventories in the outskirts of Tokyo, Kanagawa, and othersuburban areas in and around Tokyo.

Outskirts of Tokyo

Kanagawa

Chiba, Saitama & Others

120
102
100

91
22
8

5

80

60

72

61
3
2

55
3
2
1

40

65

8

6
1
3

6
4

41
78

56

5
1
2

43
2
4
4

55

49

38
2
5
2

54
2
5
2

33

33

FY2009FY2010

68

5

7

9

12

6

17

19

9

54

48

45

20

68

40

44

29

In Tokyo23wards,
44 properties
43%

0
FY2005

FY2006

FY2007

FY2008FY2011FY2012FY2013

FY2014FY2015FY2016* The condominiums, detached houses and Restyling are counted as each project being one property.
Copyright © 2017 TOSEI CORPORATION, All Rights Reserved.

44ᵡᵱᵰ ᵟᶁᶒᶇᶔᶇᶒᶇᶃᶑ
Based on its corporate philosophy, Tosei strives to respond to the expectations of society by strengthening its business foundations tomaintain a sound growth, taking initiatives to reduce the environmental burdens, and carrying out all other necessary corporate
activities. By continually taking these actions, Tosei will fulfill its corporate social responsibility, aspiring to become a company thatis even more trusted by society.
Main activities for reinforcement of the
management base to maintain sound business¾Corporate Governance System
Our company by responding promptly and accurately to changes
in the operating environment to maintain sound business activities
for all other stakeholders to achieve sound growth.
Three Important Items in Corporate Governance.
Compliance

We place compliance at the top of our agenda andraise awareness of it from top management to all
employees of the Group companies

Risk
Management

Assuming every possible risk, we prepare andpractice responses for daily risk and emergency
conditions.

Information
Disclosure

We practice disclosure appropriately and on a timely
basis to all stakeholders including shareholders.

Contribution to the local communities¾Initiatives Through Business Activities
Changes in the social environment have created issues such as adeclining birthrate and aging population, diversifying lifestyles, andnatural disasters. The Tosei Group addresses those issues through
Revitalization business and Real estate development business.
䞉 Creation of Comfortable Residences䞉 Development of Secure Towns
䞉 Creation of Comfortable Work Environment¾Support for Disaster-Stricken Areas
Continuing voluntary activities to support areas
affected by the Great East Japan Earthquake .

Eco-Friendly Activities by Employees¾Environmental awareness-raising activities
The project team, which consists of members selected from eachdepartment, plays the leading role in internal eco-friendly activities.

Compliance training

Expand the IR information available
on our website (disclosure)

Rooftop gardening

room- temperatureParticipation in cleaning

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Rights Reserved.

45ᵡᵱᵰ ᵟᶁᶒᶇᶔᶇᶒᶇᶃᶑ
Since 2009, the Tosei Group has been striving to reduce the burden on the global environment bypromoting human and eco friendly corporate activities under the Tosei Eco Declaration.
Eco-friendly building Revitalization and Development

Tosei Group Eco Declaration
In order to achieve our slogan "Heart into the City", the Tosei
Group declares its intention to promote corporate activities that arefriendly to people and the environment and to work to reduceburdens on the environment, while keeping true to our philosophy"To create new value and inspiration in all aspects of real estate."

Promoting Greening
Since 2006, Tosei Group has been proactive in promoting greeningof the properties it owns. A cumulative total of 74 buildings with anarea of approx. 3,670m2 have been greened to date (as of November
30, 2016). We not only green newly built buildings but also actively
green pre-owned offices and condominiums as well.

When planning new properties (new development and value-up), in
accordance with the characteristics of the properties, the Tosei Groupexamines which products from more than 40 items of its uniqueenvironmental product list (LED, energy-saving glasses) are to be
adopted, and selects environmental products from the perspective ofenergy and resources saving, and many other viewpoints.
¾greening rooftops, rooftop gardening, garden terrace¾Energy saving glasses, sashes¾Energy-saving gas-fired water heater¾use recycled materials¾renting bicycles, car sharing¾Water-saving toilets¾ CASBEE certified buildings䞉 Heiwajima Tosei Building䞉 Kamata Tosei Building䞉 Toranomon Tosei Building
Heiwajima Tosei Building
A Rank Certification of CASBEE

Wall greening

Rooftop greening

Eco-friendly condominium
THE Palms Tukishima
Introducing solar power generating
system and rooftop gardening

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46

Please visit our website.

For Contact:
Accounting
Department⤒Ⴀ௻⏬㒊㼀㻱㻸䠖㻜㻟㻙㻟㻠㻟㻡㻙㻞㻤㻢㻠Tel䠖+813-3435-2865
㻲㻭㼄䠖㻜㻟㻙㻟㻠㻟㻡㻙㻞㻤㻢㻢㼁㻾㻸㻌㻦㻌㼔㼠㼠㼜㻦㻛㻛㼣㼣㼣㻚㼠㼛㼟㼑㼕㼏㼛㼞㼜㻚㼏㼛㻚㼖㼜
Fax䠖+81 3-3435-2866
URL : http://www.toseicorp.co.jp/english

DISCLAIMER
Except for historical facts, all plans, forecasts, strategies and other information contained herein are forward-looking statements. Forward-looking statements
include but are not limited to descriptions of future events and performance containing words such as or similar to “believe,” “expect,” “plan,” “strategy,”“anticipate,” “forecast,” and “estimate,” and are based on judgments derived from the information available to the Company at the time of publication. Various
factors could cause results to differ materially from any projections presented herein. The Company reserves the right to maintain or change its projections
regardless of any new information, conditions or changes in performance. These materials are for informational purposes only, and should not be construed as arecommendation to invest in the Company.

47

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