Otemachi Building, 6-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8133, Japan
http://www.mec.co.jp/

ANNUAL REPORT 2011

ANNUAL REPORT 2010
Ye a r e n d e d M a r c h 3 1 , 2 0 1 0

A N N U A L R E P O RT

2 0 1 1

Ye a r e n d e d M a r c h 3 1 , 2 0 1 1

Printed in JapanA Love for People
A Love for the City
—Forever Taking on New Challenges—The Mitsubishi Estate GroupOur wish is to provide people who live in, work in and visit the citywith enriching and fulfilling lives,
full of stimulating opportunities to meet.
The Mitsubishi Estate Group
has always pursued the genuine value sought by people
in the environments and services it provides.
With an eye to the future,
we carefully listen to each and every customer,
and create the true value they seek.
We wish to share with our customers
the inspiration and passion we derive from our work.
We will constantly take on new challenges to achieve this vision,and through it, we will continuously evolve.
This aspiration will always drive our growth.

Contents

2 |2 A Message from Management
4 To Our Shareholders
8 Special Feature : The Mitsubishi Estate Group—Orchestrating Ideal
Urban Environments Worldwide
22 Business Information
36 Financial Review
39 Financial Statements
62 Corporate Data
66 Corporate Social Responsibility
ANNUAL REPORT 2011

ANNUAL
ANNUALREPORTREPORT2011
2010 |1

A Message from Management

Orchestrating Comfortable Cities for the Future—We Create Ideal Urban Environments Worldwide
The Mitsubishi Estate Group adheres to its mission of contributing to society through urban development.
Since its involvement in the construction and 1894 completion of the Mitsubishi Ichigokan—the first officebuilding in Marunouchi, Tokyo—Mitsubishi Estate has orchestrated numerous urban development projects
in Marunouchi and many other locations in Japan and overseas. Now, as then, the sense of having a mission
to fulfill remains; Mitsubishi Estate continues to work with due diligence to create ideal urban environments
in which people can live, work and relax with contentment.
The Great East Japan Earthquake that occurred on March 11, 2011, has placed Japan in an extremely
difficult situation economically. However, we strongly believe that Japan will recover and achieve renewed
growth. As the entire nation makes all-out efforts toward this end, the Mitsubishi Estate Group will
accelerate the development of safe and secure urban districts, thereby providing more people with the space
and time that allow them to enjoy comfort to the full. Our responsibility is to promote and succeed in these
activities to assist Japan’s resurgence.
Located both within and outside of Japan, the settings for our urban development projects are currently
extending far and wide. To enable us to share our passion for ideal urban development with all stakeholders
and to facilitate our dialogue with them on upcoming issues, we have formulated and launched two initiatives, and a newin the fiscal year ending March 31, 2012: a new long-term vision, dubbed
medium-term management plan. Through these initiatives, we aim to ensure that the Mitsubishi EstateGroup remains a corporate entity as ideal as the urban environments it creates. More specifically, backed byour powerful value chains, we have in our sights on becoming the leader in the investment and development
business. To accomplish this goal over the next 10 years, we will strengthen our competitive superiority infour of our business sectors: “Marunouchi redevelopment,” “urban development,” “residential business” and“international business.” At the same time, we will generate greater synergies by more closely dovetailing
our operations in these sectors with those in the sophisticated management and services business, which
encompasses property management (PM) and leasing as well as investment management. Through these
activities, we will tackle the establishment of stronger value chains on a Groupwide scale.
To support the accurate implementation of these business strategies, we will focus on four Group themes,
namely: (1) Groupwide promotion of globalization; (2) environmental initiatives; (3) management
infrastructure enhancements; and (4) human resource (HR) development and workplace invigoration.
This raft of initiatives, strategies and themes is underpinned by the Mitsubishi Estate Group’scommitment to value creation and unwavering determination to self-innovate; a commitment anddetermination encapsulated in our corporate slogan, “A Love for People, A Love for the City.”
As we endeavor to remain true to our mission, I would like to take this opportunity, on behalf of the entire
Mitsubishi Estate Group, to thank you, our stakeholders and seek your ongoing support and understanding.
July 2011

Keiji Kimura, Chairman

2 |ANNUAL REPORT 2011

Hirotaka Sugiyama, President & CEO

ANNUAL REPORT 2011 |3

To Our Shareholders

Operating Environment

Financial Results

During the fiscal year ended March 31, 2011, in the office building leasing
market in Japan, the vacancy rate in central Tokyo persistently trended in ahigh range. Nevertheless, the vacancy rate showed signs of improvement
for high-grade office buildings.
The condominium market continued to show a steady growth trend,
including a healthy increase in the number of successful condominium sales
contract signings, supported by low interest rates and related government
policies. Conditions in the real estate investment market in Japan are gradually recovering. For example, from January 2011, the Japanese real estate
investment trust (J-REIT) market has witnessed an acceleration of public
offerings, which accompanied property acquisitions by J-REITs.
Still, uncertainties in the economic outlook continue to increase due tothe aftermath of the Great East Japan Earthquake. Thus, the promotion ofrecovery and restoration efforts is expected to determine future market conditions. For instance, there exists the risk of economic stagnation attributable
to constraints in manufacturers’ supply chains caused by the physical damageof the disaster, possible rolling blackouts and other factors. Also, accidents at
the Fukushima Daiichi Nuclear Power Station have not only threatened thesafety of Japanese people, but have also impacted the trust of the global
community vis-á-vis Japan as a whole. Therefore, the situation at nuclear
facilities in Japan does not provide much room for optimism.
Under these circumstances, the Mitsubishi Estate Group will endeavor to
respond appropriately to changes in its operating and market environments
as it strives to enhance management efficiency, earnings power and corporate value.

For the fiscal year ended March 31, 2011, revenue from operations
decreased 2.5% year on year to ¥988,447 million, while operating income
rose 6.2% to ¥158,258 million. Despite a significant decline in operating
income in its Urban Development & Investment Management Business segment, Mitsubishi Estate achieved increased earnings, buoyed by a recovery in
the performance of its Residential Business segment from an operating loss
posted in the previous fiscal year and contributions from the full-year operation of the Marunouchi Park Building, which was completed in April 2009.
Ordinary income grew 11.5% year on year to ¥130,830 million. Afteraccounting for such extraordinary loss items as loss related to retirement of
fixed assets, loss on valuation of investment securities, impairment loss, loss
on valuation of equity investments and loss on disaster, net income morethan quadrupled. Specifically, it increased 439.6% year on year to ¥64,219
million. (For more details, please see the Financial Review section starting on
page 36 of this report.)

Revenue from operations¥

844,2172007¥

947,641

Dividend Policy
Mitsubishi Estate adheres to the basic policy of consistently returning profits
to its shareholders through such means as cash dividends. In doing so, theCompany gives due consideration to reserving the funds necessary for futurebusiness developments, including the Marunouchi Redevelopment Project.
For the fiscal year under review, Mitsubishi Estate paid an interim dividend of¥6 per share, and decided to pay a year-end dividend of ¥6 per share, for anannual per-share dividend of ¥12.
Mitsubishi Estate will determine future dividend levels by taking into
account, on a comprehensive basis, performance levels for each period andwill aim to keep its consolidated payout ratio at a 25% to 30% level. In linewith such a stance, the Company plans to pay an annual per-share dividendof ¥12 for the fiscal year ending March 31, 2012, which comprises an interim
and a year-end per-share dividend of ¥6, respectively.

2008

¥

787,652

2009¥

942,626

2010¥

1,013,415¥

Millions of yen

Thousands of
U.S. dollars

2011

2011

988,447$ 11,887,516

55,82597,662

86,96345,423

11,90064,219772,327

6.6%

10.3%

11.0%

4.8%

1.2%

6.5%

—

5.4%

8.3%

7.1%

3.8%

1.0%

5.4%

—

Total assets

3,280,209

3,447,272

4,327,137

4,429,070

4,355,065

4,245,209

51,054,828

Total equity

1,133,623

1,225,644

1,238,889

1,148,494

1,183,156

1,202,270

14,459,049

Common stock

129,736

136,534

136,534

136,534

141,373

141,373

1,700,216

Yen

U.S. dollars

Net income
As a percentage ofrevenue from operations
As a percentage of
total equity

Per share amounts:
Net income¥

Cash dividends
applicable to the year

42.60

¥

10.00

70.95
14.00

¥

(April 1, 2011 to March 31, 2021)

BREAKTHROUGH 2020
Mitsubishi Estate has formulated its new long-term management plan that extends over the next 10 years with the aim of more strategically
responding to changes in external environments from a long-term perspective. This new plan encompasses a ten-year vision with basic
strategies and three-year medium-term management plans.

I. Long-Term Vision of the Mitsubishi Estate Group

Financial Highlights Years ended March 31
2006

The Mitsubishi Estate Group’s New Long-Term Management Plan

62.99
16.00

¥

32.90
16.00

¥

8.58
12.00

¥

46.27
12.00

$

0.55

BREAKTHROUGH 2020
Orchestrating Comfortable Cities for the Future—We Create Ideal Urban Environments Worldwide
Mitsubishi Estate has defined the five “Values” that it must adhere to and five “Actions” that it must take toward the realization of its
long-term vision.
Five “Values”

Five “Actions”“Innovation”

Continue to take on challenges as an innovative urban developer“Eco-conscious”

Aim for sustainable growth through advanced environmental initiatives“Customer-oriented”

Always think about customer value from a customer perspective“Global”

Develop HR, structure and businesses suitable for global operations“As One Team”

Unite as one team and strive to realize BREAKTHROUGH 2020

•The Mitsubishi Estate Group will continue to adhere to its mission, “Contribute to society through urban development,” and its corporate
slogan, “A Love for People, A Love for the City.” Through such adherence, the Group aims to maximize its corporate value by skillfully balancing sustainable growth and coexistence with stakeholders.
•Mitsubishi Estate will further refine its role in creating and offering new lifestyle and work-style values centered on safety, security
and comfort.

0.14

Notes: 1. Yen amounts shown are translated into U.S. dollars, solely for convenience, at the prevailing exchange rate on March 31, 2011, of ¥83.15 to US$1.00.
2. Total equity is calculated by deducting minority interests and stock acquisition rights from total net assets.

•Mitsubishi Estate will promote global operations and take on new challenges. The word “BREAKTHROUGH” is intended to convey theCompany’s determination to overcome difficulties and make rapid progress through innovative ideas and new ways of business.

Caution regarding forward-looking statements
Plans, estimates and strategies included in this annual report are forward-looking statements concerning the future performance of the Mitsubishi Estate Group. These statements are based on management’s assumptions,which have been made in accordance with information available to the Company as of the date of this report’s preparation. Accordingly, the content of this report should not be relied upon unduly. Mitsubishi Estate cautions that a number of factors could cause future results to differ from its forecasts.

4 |ANNUAL REPORT 2011

ANNUAL REPORT 2011 |5

II. Basic Long-Term Strategies (April 1, 2011 to March 31, 2021)

III. Medium-Term Management Plan (April 1, 2011 to March 31, 2014)

The Mitsubishi Estate Group aims to achieve Groupwide growth by “reinforcing value chains” and “becoming the leader in the investment
and development business.”

III.-1 Quantitative Targets

Under its new long-term management plan, Mitsubishi Estate has categorized its ten business sectors into two larger business groups:“Investment & Development Business” and “Management & Services Business.” The Investment & Development Business is underpinned byfour business sectors—namely, Marunouchi Redevelopment, Commercial Property Development & Investment Business, Residential Businessand International Business—and through this business group, Mitsubishi Estate will invest in development projects, manage its balance sheets
strategically and establish its earnings base. Through the Management & Services Business, the Company will offer added value through professional services. By reinforcing value chains between the two business groups, the Group will work to become the leader in the investment
and development business, where it traditionally boasts competitive advantages, and thereby achieve additional growth.

Mitsubishi Estate has set management indicator targets for growth potential, efficiency and soundness.
Indicator

Target*3

Growth Potential

EBITDA*1¥265.0 billion

Efficiency

EBITDA/Total assets

5.3% or moreSoundness

Net interest-bearing debt*2/EBITDA

7.5 times max.

*1 EBITDA = Operating income + Interest and dividend income + Equity in earnings (losses) of unconsolidated subsidiaries and affiliates + Depreciation and amortization*2 Net interest-bearing debt = Interest-bearing debt – Cash and cash equivalents*3 These targets are based on figures after the inclusion of special-purpose companies within the scope of consolidation.

Investment & Development
Business

Management & Services
Business• Marunouchi Redevelopment• PM & Leasing• Commercial Property Development &Investment Business

Synergies• Investment Management• Residential Business• Architectural Design & Engineering• International Business• Hotels(1) Reinforce Value Chains•Operations in the Investment & Development Business and the Management & Services Business will be closely linked.
•W ith “development” as its mainstay, Mitsubishi Estate will accelerate operations in “leasing and sales” and “property management,”
creating added value for customers through this tripolar structure.
(2) Become the Leader in the Investment & Development Business•The Mitsubishi Estate Group has traditionally nurtured its development capabilities. The Group will further bolster these capabilities throughthe reinforcement of its value chains and the generation of synergies among business sectors.

Sector-Specific Strategies to Become the Leader in theInvestment & Development Businessa. Marunouchi Redevelopment

Continue to promote Marunouchi Redevelopment and maximize the value of the Marunouchi areab. Commercial Property Development& Investment Business

Lead market expansion through selective investments

c. Residential Business

Establish Japan’s top condominium brand for quality and quantity and pursue lifelong customer value throughmanagement, renovation and brokerage operations

d. International Business

Leverage accomplishments, experience and network nurtured through U.K. and U.S. operations to expand business portfolio while aggressively penetrating growing markets in Asia and developing businesses(3) Vision for Growth toward March 31, 2021
The Mitsubishi Estate Group aims to double operating income by the end of the new long-term management plan.

ANNUAL REPORT 2011(1) Investment & Development Businessa. Marunouchi Redevelopment

Maximize the value of the Marunouchi area
•Promote world-leading business concentration•Boost area attraction by taking advantage of various city planning systems and policies, introducing a variety of urban
functions and undertaking area management through public-private partnerships (PPP) aimed
at developing disaster-resistant urban districtsb. Commercial Property Development& Investment Business

Promote projects and lead the market•Reinforce the Company’s asset portfolio management•Continue to supply prime properties in the real estate investment market by actively participating in redevelopment andmultipurpose complex development projects and promoting the development of various types of properties

c. Residential Business

Strengthen operations centered on the condominium development and sales business•Leverage the synergy of consolidating Mitsubishi Jisho Residence Co., Ltd.
•Bolster servicing and other peripheral operations, including property management, renovation and brokeraged. International Business

Expand portfolios in Europe and the United States and reinforce Asian operations•Continue to promote development projects in Europe and the United States, where the Company has businessaccomplishments and a network•Expand Asian operations through collaboration with local partners• Shopping Centers• Brokerage and Other Services

6 |III.-2 Business Themes and Groupwide Themes(2) Management & Services Business: Provision of solutions and services based on the Group’s strengths•Improve professional capabilities to offer added value to customers in PM & Leasing, Shopping Centers, Investment Management,
Architectural Design & Engineering, Hotels, Brokerage and Other Services•Leverage the collective strengths of the Mitsubishi Estate Group to strategically reinforce and coordinate value chains(3) Groupwide Themes
In step with the initiatives to be implemented in individual business fields, Mitsubishi Estate will promote the following fourGroupwide initiatives.
1. Groupwide promotion of globalization
	Promote globalization in each business field by enhancing global business capabilities of domestic operations (“out-in” approach)and accelerating overseas expansion (“in-out” approach)2. Environmental initiatives
	Implement advanced initiatives in each business field under the Long-Term Environmental Vision, including the use of renewableenergy and the promotion of R&D for eco-technologies, to help realize harmony between the global community and the environmentand reduce the environmental impact of society
3. Management infrastructure enhancements
Strengthen the Company’s functions for Group management, risk management and asset management as well as for research and analysis
4. HR development and workplace invigoration	
Nurture employees with global business capabilities and create workplaces and a corporate culture characterized by diversity andvitality to underpin the Group’s corporate value maximization

ANNUAL REPORT 2011 |7

Special Feature

The Mitsubishi Estate Group—
Orchestrating Ideal Urban
Environments Worldwide
The Mitsubishi Estate Group has undertaken a number of urban development projects in the Marunouchi area of Tokyo forover 120 years. Today, the Group owns and manages office buildings and other types of commercial properties in Marunouchi
as well as in major cities throughout Japan. At the same time, we are working to create and produce comfortable living andworking environments in the United States, the United Kingdom and Asian countries, leveraging the experience and expertisethat we have nurtured over those 120 years.

8 |1

Marunouchi Redevelopment

2

Commercial Property Development & Investment Business3

Residential Business

4

International Business
ANNUAL REPORT 2011

1

Marunouchi Redevelopment

Marunouchi is an international business center that lies between Tokyo Station and the Tokyo Imperial Palace. The area’s
120 hectares accommodate approximately 100 buildings, and Mitsubishi Estate owns and manages about 35 of these buildings.
With approximately 4,000 companies located in an area employing some 230,000 office workers, Marunouchi is home to nearly
10% of the companies listed on the First Section of the Tokyo Stock Exchange.

Marunouchi

Creation of New Value in Urban Districts over 120 Years
Mitsubishi Company—the predecessor of Mitsubishi Estate—purchased a stretch of moor in Marunouchi, Tokyo from the Japanese government in 1890. This is how it all began. In 1894, the Mitsubishi Ichigokan was completed as Marunouchi’s first office building. Since
then, Mitsubishi Estate has continued to develop the Marunouchi area into a world-leading business center in line with the growth of
the Japanese economy.

Marunouchi site purchased in 1890

Mitsubishi Ichigokan, Marunouchi’s first
office building completed in 1894

Marunouchi Naka Dori Avenue in 1967

Marunouchi today, currently undergoingredevelopment

ANNUAL REPORT 2011 |9

Special Feature: The Mitsubishi Estate Group—Orchestrating Ideal Urban Environments Worldwide

Marunouchi Redevelopment

Green Buildings

Steady Growth as an International Business Center
Mitsubishi Estate launched the Marunouchi Redevelopment
Project in 1998. In the first stage of this project, which covered
the period from 1998 to 2007, Mitsubishi Estate worked totransform Marunouchi from a mere business district into an
open city center providing a diversity of urban functions. To
achieve this goal, the Company focused on upgrading thefunctions in the area peripheral to Tokyo Station andreconstructing six office buildings in this area.
Mitsubishi Estate is currently promoting the second stageof the Marunouchi Redevelopment Project, which extends
from 2008 to 2017. In the second stage, the Company aims tofurther expand and deepen the scope of the project based on
the successful rejuvenation of Marunouchi through the firststage. In April 2009, the Company completed the Marunouchi
Park Building & Mitsubishi Ichigokan and opened the
Mitsubishi Ichigokan Museum in April 2010. More recently, theCompany is undertaking the Marunouchi 1-4 Project (tentativename), which will create a large office space with each floor
boasting approximately 3,306m2. Simultaneously, we areadvancing the Otemachi 1-chome Second Area 1st Class Urban
Redevelopment Project aimed at rejuvenating the Otemachi
district—an international financial center. This project is scheduled for completion in the fiscal year ending March 31, 2013.
During the second stage, the Company plans to undertake thedevelopment of two or three more buildings, in addition to
the projects mentioned above, to maximize the value of the
Marunouchi area.

Tokyo Metropolitan Government Certifies
Mitsubishi Estate-Owned Eco-Friendly Buildings

First Stage
Building Name

Number of Floors

Total Floor Area
Site Area

1

Marunouchi Building

4 floors below ground, 37
floors above ground with
2-story-high roof structure

159,907 m2
10,027 m2

2

The Industry Club of Japan and
Mitsubishi UFJ Trust and Banking
Building

4 floors below ground, 30
floors above ground with
2-story-high roof structure

109,808 m2
8,100 m2

3

Marunouchi Kitaguchi Building(Marunouchi OAZO)

4 floors below ground, 29
floors above ground with
1-story-high roof structure

83,291 m2
6,280 m2

4

Tokyo Building

4 floors below ground, 33
floors above ground with
1-story-high roof structure

149,339 m2
8,068 m2

5

Shin-Marunouchi Building

4 floors below ground, 38
floors above ground with
1-story-high roof structure

193,685 m2
9,983 m2

The Peninsula Tokyo

4 floors below ground, 24
floors above ground

58,571 m2
4,287 m2

6

In May 2011, the Tokyo Metropolitan Government certified seven of the buildings owned by Mitsubishi Estate as eco-friendly buildings, inaccordance with the Tokyo Metropolitan Ordinance on Environmental Preservation. More specifically, three of these buildings received the
AAA-ranking, and four received the AA-ranking.
This certification scheme is based on the “system regarding emissions trading and the obligation to reduce total emissions of greenhousegases” defined under the ordinance. In this scheme, buildings promoting outstanding global warming countermeasures are classified into thetwo ranks of “AAA” and “AA” according to the degree of their environmental countermeasure promotion effectiveness. Buildings completed
in or after 2007 were exempt from the scheme. Buildings certified are eligible for the easing of their obligation to reduce greenhousegas emissions.
•AAA-Ranked Buildings (Outstanding Countermeasure Promotion): Eligible for the halving of reduction obligation•AA-Ranked Buildings (Steady Countermeasure Promotion): Eligible for a 25% decrease of reduction obligation

AAA-Ranked Buildings

Second Stage
Building Name

Number of Floors

Total Floor Area
Site Area

1

Marunouchi Park Building &Mitsubishi Ichigokan

4 floors below ground, 34
floors above ground with
3-story-high roof structure

204,729 m2
11,662 m2

2

Marunouchi 1-4 Project(tentative name)

4 floors below ground, 27
floors above ground with
2-story-high roof structure

Approx. 139,600 m2
Approx. 8,034 m2

3

Otemachi 1-chome Second Area
1st Class Urban
Redevelopment Project

4 floors below ground, 35
floors above ground with
2-story-high roof structure

242,000 m2
14,100 m2 (project area)

低解像度

Marunouchi Building

Shin-Otemachi Building

AA-Ranked Buildings

Tokyo Building

Sanno Park Tower

Marunouchi India Economic Zone, a forum
for India-based companies operating inJapan and Japanese companies planning topenetrate markets in India

10 |ANNUAL REPORT 2011

Hibiya Kokusai Building

Shin-Aoyama Building

A branch hospital, which includes thePrimary Care Clinic for International
Patients of Saint Luke’s International
Hospital, scheduled for opening in autumn
2012 in Building B of the Otemachi
1-chome Second Area 1st Class Urban
Redevelopment Project (sample photo)

Akasaka Park Building

General disaster drill, which the Company hasorganized every September since 1926 (three
years after the Great Kanto Earthquake)

ANNUAL REPORT 2011 |11

Special Feature: The Mitsubishi Estate Group—Orchestrating Ideal Urban Environments Worldwide

Mitsubishi Ichigokan Museum

Green Cities

Creation of a City Block Full of Cultural Activities and Arts

Eco-Friendly Office Buildings of the Mitsubishi Estate Group

Since the 1894 completion of the Mitsubishi Ichigokan, Mitsubishi Estate has consistently pursued its passion of making Marunouchi a city center filled with cultural activities and arts. Adhering to this passion over the years, the Company
realized its long-sought goal, opening the Mitsubishi Ichigokan Museum in April
2010. To celebrate its opening, the museum presented “Manet and Modern Paris”
as its opening exhibition. Approximately 300,000 people visited the exhibition during the event period. Looking ahead, Mitsubishi Estate will take advantage of theprime location of Marunouchi to establish the museum as a cultural exchange hub
and win greater support of office workers in the district and visitors.

The Mitsubishi Estate Group positions refining eco-technology and tackling the creation of new value in all businesses as one of its growthstrategies. This section introduces examples of the environmental initiatives that the Company has incorporated in the development of the
Marunouchi Park Building.

Environmental Initiatives for the Marunouchi Park Building

Marunouchi Naka Dori Avenue

Avenue of Vitality and Excitement
Boasting a distance of 1.2 kilometers, a road width of 21 meters and a sidewalk
width of 7 meters, the Marunouchi Naka Dori Avenue stretches from north tosouth, connecting the Otemachi, Marunouchi and Yurakucho (OMY) districts. The
vitality and excitement, enhanced by the first stage of Marunouchi
Redevelopment, has spread across the OMY districts through this avenue. Also,
sculptures and hanging flowers on sidewalks add a cultural and artistic atmosphere to the avenue. Mitsubishi Estate plans to extend the avenue to the
Nihonbashi River, aiming to further invigorate the OMY districts.

Utilizing “Green” Solar Power
Solar cell panels boasting a maximum
output of approximately 60kW havebeen installed on the roof. These panels
generate sufficient electricity for nighttime lighting in the entire city block
where the Marunouchi Park Building
is located.

Use of Reusable Items
Clocks previously used in the
Marunouchi Yaesu Building, which has
been demolished, are now reused in
the Retail Zone.

Solar-Tracker Window
Shade System
The solar-tracker system installed on
the roof automatically controls window
shades for office floors.

Ground, Rooftop and ExteriorWall Greenery
A variety of flowers as well as lowgrowing and tall trees have been planted in the Ichigokan Square. Together
with rooftop and exterior-wall greenery,such greenery suppresses urban “heatisland” effects.

Simultaneous holding of “Genki! For Japan,”* an event aimed at supporting the victims of the Great East Japan Earthquake, and La Folle Journée au
Japon “Days of Enthusiasm” Music Festival 2011
* Genki is a Japanese word for “energy” or “vitality.”

12 |ANNUAL REPORT 2011

Airflow Window System
Room air circulates through spaceinside the window unit, enhancing thewindow’s thermal insulation and reducing the thermal load of sunlight andexternal air.

Dry Mist“Dry mist” generators spray mist,
which extracts heat from its surroundings as vaporization heat, and reduce
the ambient temperature.

At the “Chef’s Lunch” event, chefs from restaurants allover Marunouchi provided their artistic menus on suchthemes as seasonal ingredients, local production andlocal consumption, and food self-sufficiency.

Ultrahigh-Efficiency
Lighting System
Improved reflector shape and coating
reduce the power consumption oflighting systems. Compared with conventional systems, this new lighting system achieves a 36% energy savings.

Water-Retention Pavement with
Self-Water-Supply System
Reused rain water is fed to the pavement via a water pipe embedded in thelower layer of the pavement. The water
evaporating from the water-retention
pavement cools the pavement
surface.

“Aozora-Ichiba & Marunouchi Marché,”a forum for producers, consumers andrestaurant chefs

ANNUAL REPORT 2011 |13

Special Feature: The Mitsubishi Estate Group—Orchestrating Ideal Urban Environments Worldwide

Marunouchi Map
Kokyo Gaien National GardenHarumi Dori

Palace Hotel Reconstruction Project(tentative name)(scheduled for completion in January 2012)

Tokyo
Kaijo
NichidoBldg.
(Annex)Marunouchi 2-chomeBldg.

Shin-Nisseki
Bldg.

Mitsubishi Bldg.

Marunouchi
Bldg.

Shin-Marunouchi
Bldg.

The Bank ofTokyo-Mitsubishi UFJ,
Ltd. Head Office

The Marunouchi
1-4 Project

Marunouchi
South Exit

Marunouchi
Central Exit

Otemachi 1-chome
Second Area 1st Class
Urban Redevelopment Project

Tokyo Sankei
Bldg.

Otemachi 1-6 Project(tentative name)(tentative name)e, Marunouchi Lin

Marunouchi Center Bldg.

Shin-Marunouchi
Marunouchi OAZO Center Bldg.

Marunouchi
North Exit

Tokyo Bldg.

Marunouchi Marunouchi
Hotel Kitaguchi Bldg.
(Marunouchi OAZO)NTT Communications
Otemachi Bldg.

Otemachi Nomura
Bldg.

Mitsubishi
Soken Bldg.

TeishinBldg.
NTT Communications
Otemachi Bldg. (Annex)
Urbannet Otemachi
Bldg.

Shin-Otemachi
Bldg.
NTT
Marunouchi
Bldg.

NTT Data
Otemachi
Bldg.

ou

te

Toyota Tsusho Corp.
Tokyo Head Office

Shin-Koko
Bldg.

Otemachi Station

Nihon Seimei
Marunouchi Bldg.

Tokyo Central Post Office“JP Tower”
Reconstruction Project(tentative name)(scheduled for completion in 2012)

Koko Bldg.

rRTokyo Station

irc
ula

Infos
Yurakucho

OtemachiFinancial Center

Yomiuri Shimbun
Bldg.

Pacific Century Place
Marunouchi Bldg.

Buildings Owned by Mitsubishi Estate

Marunouchi
CentralBldg.

GranTokyo
South Tower

Eitai Dori

Sapia
Tower

Asahi
Life Insurance
Otemachi Bldg.
(owned by aspecial-purpose
company undermanagementof Mitsubishi Estate)

JFE Shoji Bldg.
Nippon Bldg.
oky
To

The First StageThe Second Stage

Marunouchi
Trust Tower
Main

GranTokyo
North Tower

xp
res
sw
ay
Inn
er
C

Tokyo Kotsu
Kaikan Bldg.

Otemachi
Bldg.

Tokyo Station, Marunouchi Line

Daimyo Koji Ave.

Yurakucho ITOCiA

Otemachi First Square

Mizuho Corporate Bank Ltd.
Head Office Bldg.

The Industry Clubof Japan and
Mitsubishi UFJ Trustand Banking Bldg.

Development Bankof JapanKDDI
Otemachi Bldg.
Line

Tokyo
Kaijo
Nichido
Bldg.

Ginko
KaikanBldg.

Shin-Sumitomo
Bldg.

n, Hanzomon

Yusen
Bldg.

Marunouchi 1st St.

Marunouchi-Nakadori
Bldg.

Mitsubishi
Corp.
Head Office

Tokyo
Ginko
KyokaiBldg.

(owned through a special-purpose company
capitalized by Mitsubishi Estate)

Marunouchi Park Bldg. &Mitsubishi Ichigokan

Shin-Tokyo Bldg.

Yomiuri Kaikan
BIC Camera(owned by a Mitsubishi Estate
consolidated subsidiary)
Tokyo
Metro
politanExpressway Inner Circular Route

Kishimoto Marunouchi
MitsuiBldg.
Bldg.

Marunouchi Naka Dori Ave.

Shin-Kokusai
Bldg.

Keidanren
KaikanMitsuiLife Insurance Bldg.

oda Line

Gyoko Dori

Meiji Yasuda Life Insurance
Bldg.

Marunouchi 3rd St.

Babasaki DoriMarunouchi 4th St.

Fuji Bldg.

Tokyo International Forum(owned by a Mitsubishi Estate
consolidated subsidiary)

Meiji Seimei Kan
Bldg.

Otemachi
Pal Bldg.

JA Bldg.

tro
po
lita
nE

ShinYurakucho
Bldg.

Kokusai Bldg.

Tokyo
KaikanMitsui Bussan Bldg.
(Annex)(owned by aspecial-purpose
company undermanagementof Mitsubishi Estate)

Ote Center
Bldg.

Otemachi Station, Tozai Line

Yu
rak
uc
ho
Sta
tio
n

Marunouchi 6th St.

Yurakucho
Bldg.

Imperial
Theater

The Bankof Tokyo
Mitsubishi UFJ
Otemachi Bldg.

NIKKEI Bldg.

Otemachi Station, Chiy

Nijubashimae Station, Chiyoda LineTokyo
Chamber ofCommerce &Industry

Tokyo Station, JR Keiyo Line

Yurakucho
Center Bldg.
Yurakucho
HankyuDepartment
Store
Yurakucho
Seibu
Department
Store

Marunouchi 7th St.

Yurakucho
Denki Bldg.

Marunouchi 5th St.

iya

The Peninsula Sanshi Kaikan
Tokyo
Bldg.

Yurakucho Station, Yurakucho Line

St a

tion

, Hib

Marunouchi
Police Sta.
HibiyaSankei Bldg.
Togyo Kaikan-Nippon
DN
Broadcasting System Tower 21
Bldg.

Hib

Toho
Twin Tower
Bldg.

iya

Hibiya Marine
Bldg.

Sumitomo
Mitsui Banking
Corporation
Head OfficeBldg.

Mitsui Bussan Bldg.

Otemachi Station, Toei Mita Line

Hibiya DoriLine

Hibiya Station, Toei Mita LineAIG Bldg.

Wadakura-bori
Moat

Marunouchi 2nd St.

Hib
Ch iya St
iyod atioa Lin n,eBabasaki-bori MoatN

(owned by aspecial-purpose
company under managementof Mitsubishi Estate)

Otemachi Statio

Hibiya-bori Moat

ResonaMaruha Bldg.

e
M

Marunouchi
Trust Tower
North

JX Bldg.
Daini Tekko Bldg.

The First StageThe Second Stage

Daiichi Tekko Bldg.

Daiwa
Gofukubashi Bldg.
Bank of Japan

Mitsubishi
Jushi
Bldg.

Marunouchi Building
Completed inAugust 2002

14 |The Industry Club of Japan and
Mitsubishi UFJ Trust and Banking
Building
Completed in March 2003

ANNUAL REPORT 2011

Marunouchi Kitaguchi
Building (Marunouchi OAZO)
Completed in August 2004

Tokyo Building
Completed in
October 2005

Shin-Marunouchi Building
Completed in
April 2007

The Peninsula Tokyo
Completed in May 2007
Opened in
September 2007

Marunouchi Park Bldg.
& Mitsubishi Ichigokan
Completed in April 2009

The Marunouchi 1-4
Project (tentative name)(scheduled for completionin January 2012)

Otemachi 1-chome Second
Area 1st Class Urban
Redevelopment Project (scheduled for completion in 2012)(owned by aspecial-purpose
company undermanagementof Mitsubishi Estate)

ANNUAL REPORT 2011 |15

Special Feature: The Mitsubishi Estate Group—Orchestrating Ideal Urban Environments Worldwide

2

Commercial Property Development & Investment Business

Office buildings owned and managed by Mitsubishi Estate are located not only in Marunouchi, but also in central Tokyo in places
such as Akasaka and Aoyama as well as in Yokohama, Osaka, Nagoya and other major cities in Japan. Meanwhile, Mitsubishi Estate
operates various types of commercial properties in the Tokyo Metropolitan area, including Marunouchi, Odaiba and Yokohama.
Designed to suit the characteristics of individual locations, these properties include CHELSEA PREMIUM OUTLETS shopping centers.
Chelsea Japan Co., Ltd.—a consolidated subsidiary of Mitsubishi Estate—manages eight of these shopping centers throughout Japan.

Office Building Development

Strengthening Our Asset Portfolio
In March 2011, Mitsubishi Estate acquired the Kokusai Shin-Akasaka Building East and West Towers through a special-purpose company,
with the aim of bolstering its asset portfolio. Pursuing that same goal, current projects include the Shinjuku Eastside Square, which is alarge-scale development project on an approximately 2.6-hectare site in Shinjuku Ward, Tokyo, and the Grand Front Osaka, which is apilot development project on a 7-hectare site in the “Umekita” area, north of Osaka Station.

Kokusai Shin-Akasaka Building East and West Towers(Minato Ward, Tokyo)

Shinjuku Eastside Square (Shinjuku Ward, Tokyo)

Shopping Center Development

Other

Promoting Development Congruent toLocations

Participating inDistribution Facility
Development

In shopping center (SC) development, Mitsubishi Estate launched in May 2011 theMinatomirai Block 34 Project (tentative name), which is now the largest project conducted within the Minato Mirai 21 district in Yokohama. When completed, the shopping center, dubbed “Life Entertainment Mall,” will boast a total floor area of approximately
116,000m 2 and attract customers from a broad region encompassing Yokohama City andthe Shonan area of Kanagawa Prefecture. Also, we plan to open the ninth CHELSEAPREMIUM OUTLETS shopping center in Japan near Narita International Airport in 2013.

Minatomirai Block 34 Project (tentative name; Yokohama
City, Kanagawa Prefecture)

16 |ANNUAL REPORT 2011

Grand Front Osaka (Osaka City, Osaka)

Consolidated subsidiary Chelsea Japan Co., Ltd. operates
eight shopping centers under the PREMIUM OUTLETS
brand in Japan, including Gotemba Premium Outlets in
Shizuoka Prefecture, Rinku Premium Outlets in Osaka
Prefecture and Sano Premium Outlets in Tochigi Prefecture.

To diversify its asset portfolio, in April
2011, Mitsubishi Estate launched the
Tatsumi 3-chome Development Project(tentative name) involving the development of distribution facilities, for which
many investors have shown great interestin recent years.

Tatsumi 3-Chome Development Project (tentative name)

ANNUAL REPORT 2011 |17

Special Feature: The Mitsubishi Estate Group—Orchestrating Ideal Urban Environments Worldwide

3

Residential Business

In January 2011, Mitsubishi Jisho Residence Co., Ltd. was established through the integration of residential development and sales
operations previously promoted separately by Mitsubishi Estate, Mitsubishi Real Estate Services Co., Ltd. and Towa Real Estate
Development Co., Ltd. Mitsubishi Jisho Residence boasts the largest volume of condominium supply in Japan.* Due to this significant business scale, the company shoulders an important mission. It must continue to supply high-quality condominiums in a steadymanner. Furthermore, it must continue to seek new ways of living, listen closely to customers and provide residences that offer
new value, with an eye to the development of future society.
At the same time, Mitsubishi Estate will leverage the collective strengths of the entire Group to expand the horizons of its
Residential Business. We will reinforce the structure required to offer our customers lifelong, high added value not only throughresidential development and sales, but also through such operations as residential resales, leasing, management and renovation.
*Mitsubishi Estate and Towa Real Estate Development together supplied the largest volume of condominium units in Japan in 2010. (Source: Real Estate Economic Institute Co., Ltd.)

Pursuing Lifelong Customer Value
To provide lifelong, high added value to its customers, Mitsubishi Estate and Group companies within the Residential Business will continue to strengthen their business structure to offer meticulous support for various residential needs, including through purchase,leasing, management, brokerage and renovation.
Condominium
Management
Condominium Sales

Rental Condominiums

Custom-Built Housing/
Renovation

Customers

Sales/Leasing Brokerage

Toward Establishing Japan’s Top Condominium Brand
Established in January 2011, Mitsubishi Jisho Residence has formulated its corporate vision, “Always, new joy in daily life.” Adhering to thisvision, Mitsubishi Jisho Residence will steadily supply high-quality condominiums and listen carefully to its customer’s aspirations, thereby
establishing the top condominium brand in Japan in terms of both quantity and quality.

“The Parkhouse” is the major condominium brand offered by Mitsubishi Jisho Residence. The five lines in the brand logo forma smooth andorderly curve, expressing our passion for bringing together the five elements of “people,” “city,” “future,” “the environment” and “tradition”
through our condominium development and sales business. Condominiums that strengthen ties among residents and neighbors, that blend inwell with city streets, and that enable lifestyles filled with joy and comfort—this is the concept behind our new brand.

Creating Residences That Provide New Lifestyle Value

Parkhouse Kichijoji OIKOS
Offering nine residential units, this is an eco-friendly condominium
building that has been designated as a Model Project for Promoting
CO 2 Reduction in Housing and Buildings, organized by the Ministryof Land, Infrastructure, Transport and Tourism. Incorporating various technologies to reduce CO 2 emissions, such as outside insulation and an underfloor chamber air-conditioning system, Parkhouse
Kichijoji OIKOS realizes reductions in CO2 emissions and energy
consumption while achieving a new class of comfort.

18 |ANNUAL REPORT 2011

The Parkhouse Rokuban-cho
Only a five-minute walk from JR Yotsuya Station, this46-unit condominium building provides excellent transportation access to major train and subway stations incentral Tokyo. In addition, the location, in the quiet residential area in Rokuban-cho, Bunkyo Ward, Tokyo, offers
a comfortable living environment. The Parkhouse
Rokuban-cho has been developed through the use of
fixed-term leasehold interests.

PARK HABIO Shibuya Honmachi ResidenceThis is a 261-unit luxury leased condominium building
under the PARK HABIO brand. The first floor houses a
supermarket, while a variety of common facilities areavailable to residents, including a guestroom, studio andfitness room. In addition, concierge services are provided
in this building.

ANNUAL REPORT 2011 |19

Special Feature: The Mitsubishi Estate Group—Orchestrating Ideal Urban Environments Worldwide

4

International Business

The Mitsubishi Estate Group has leveraged the accomplishments and network that it has nurtured since the establishment of
Mitsubishi Estate New York Inc. in 1972 to build a portfolio of prime assets focusing on New York and London. Taking advantage
of such experience, the Group will work to further expand its asset portfolio in the United States and Europe, while accelerating
operations in booming Asia.

The United States

Promote Development and Investment Management Operations throughRockefeller Group, Inc.

Time-Life Building (New York)1101 K STREET (Washington D.C.)

Distribution facilities (South Carolina)

The United Kingdom

Promote Development Projects Based on Accomplishments and Network
Nurtured over More than 20 Years

Paternoster Square (London)

Central St. Giles (London)

Asia

Promote Development Projects Jointly with CapitaLand Residential
Singapore Pte Ltd and Other Powerful Local Partners

Hanoi Residential Development Project (Vietnam)

20 |ANNUAL REPORT 2011

ANNUAL REPORT 2011 |21

Business Information
Business Structure of the Mitsubishi Estate Group
Building Business

Mitsubishi EstateCo., Ltd.

Funds
procurement

Real estate
investment

C O N S U L T I N G

Commercial Property Development &Investment BusinessResidential Business

International BusinessMaximize asset
Risk
efficiency
management

Determinecurrent
statusCustomers

Investment Management BusinessConduct
research
and analysis

Real estate-relatedplanning,
proposals and services

Considerinitiatives
and proposals

Hotel BusinessArchitectural Design & Engineering

Proposal determination
Real Estate Services

Implementation

Business Segment
Building Business
B u i l d i n g B u s i nes s

Residential BusinessGroup Framework

Business Activities• Property Management and Office LeasingGroup• Commercial Asset Management and Development Group• Retail Property Group

Building Business segment revenues are derived mainly
from building development and leasing in Japan. This
segment is also engaged in building management,
parking facilities, district heating and cooling, andother operations.

• Residential Development GroupR e s i d e n t i a l B us i nes s

Urban Development & Investment Management• Commercial Property Development andInvestment Group

Commercial Property Development& Investment Business

The Mitsubishi Estate GroupInternational BusinessResidential Business segment revenues are derived
from the construction and sale of condominiums,
single-unit homes, and residential and commercial
lots. This segment is also engaged in the managementof condominiums and homes, along with leisurerelated businesses.
Commercial Property Development & Investment Business segment revenues are derived from the development of real estate for investment purposes.

Consolidated
Sales Breakdown¥463.9Billion

36.6%

¥47.9

4.8%

¥45.0

4.5%

Billion• International Business GroupI n t e r n a t i o n a l B us i nes sInternational Business segment revenues are derived
from the development and leasing of buildings conducted through U.S.-based Rockefeller Group, Inc.

BillionArchitectural Design & Engineering
I n v e s t m e n t M a n ag ement
Business• Investment Management Group

Custom-Built Housing• Architectural Design & Engineering Group¥5.2
BillionA rc h i t e c t u ra l Des i g n& E n g i n e e r i ng

Hotel Business

Investment Management Business segment revenues
are derived from the management of real estate forinvestment purposes and other types of assets.

• Hotel Business Group

Architectural Design & Engineering segment revenues
are derived from the design and supervision of
construction and civil engineering projects and related
activities, mainly through Mitsubishi Jisho Sekkei Inc.

1.8%

¥27.6

2.7%

¥27.7

2.8%

¥3.4

0.3%

Hotel Business segment revenues are derived from theoperation of Royal Park Hotels.

H o t e l B u s i n es s

Billion

Real Estate Services• Real Estate Services GroupR e a l E s t a t e S erv i ces

Real Estate Services segment revenues are derived
from real estate brokerage and related services
through Mitsubishi Real Estate Services Co., Ltd.

Billion

Other

Real estate development

Real estate investment

Real estate liquidity• Development method
proposals• Business plan support• Project management• Effective utilization/joint
ventures (equivalentexchanges/term leaseholdinterest method)• Provisional use• Reconstruction• Real estate investment
strategy formulation support• Market research and analysis• Due diligence• Acquisition support• Asset management• Real estate-backed
financing support• Securitization• Specified real estate
joint ventures• Sales and leaseback• Real estate brokerage

Business
Development,
Consulting &Solutions
Departments

Building operation andmanagement

Comprehensive building
analysis• Operation and management plan
analysis and proposals• Long-term maintenance plan consulting• Commissioned operation andmanagement of buildings,
retail facilities and hotels• Subleasing• Tenant marketing• Operation and management ofresidential complex and corporate
housing• Property management• Earthquake resistanceanalysis• Facility management• Energy saving andIT utilization in buildings
and facilities• Interior and exteriorrenovation• Barrier-free facility
construction• Anti-aging measures forbuildings and facilities• Conversion

Construction

Design and supervision

CRE strategy support• Single-unit homes
and rental andcorporate housing• Residential andoffice renovation• Environmental assessment
and research• Consulting for urban
development and private
finance initiatives (PFIs)• Consulting, design andsupervision for environmental
and civil-engineering solutions• Construction management• Design and supervision forbuildings and structures• Design and supervision forinterior and exterior• Organization of CRE
information• CRE valuation• Support for strategy
formulation andimplementation

Leveraging the Resources of the Entire Group to Expand Business
Opportunities in Proposal-Based MarketingStanding at the heart of Mitsubishi Estate’s strategic marketing structure, the Business Development,
Consulting & Solutions Departments work to foster deeper ties with clients through proposal-based marketing,which is conducted across the Company as a whole. Making full use of the company’s accumulated real estatedevelopment, planning and management expertise, the department is active in efforts to realize maximum
value for its clients.
A Wide Range of Solutions Covering Everythingfrom Individual Real Estate Needs to Corporate Real
Estate Strategic Support
These departments are independent from Mitsubishi
Estate’s eight principal business segments (comprising the
Building Business, Residential Business, Commercial
Property Development & Investment Business,
International Business, Investment Management Business,
Architectural Design & Engineering, Hotel Business andReal Estate Services).
In an effort to consistently provide optimal consultation and solutions services that address clients’ real estateneeds, such as effective methods for property utilization
and acquisition, we create business proposals that draw
on the resources of the entire Group.
The departments offer consultation for individual
properties and multiple properties held and leased by corporate clients. We analyze the situation, taking into consideration the comprehensive features of the real estate
under review, and provide solutions that match the financial and management strategies of individual client companies. In this manner, Mitsubishi Estate endeavors torealize the maximum value of corporate real estate (CRE).

Other segment revenues are derived from related
operations other than the aforementioned.

Other

22 |

0.5%

¥18.5
BillionS O L U T I ON

46.0%

¥369.1
BillionAnalysis and review

Billion

ANNUAL REPORT 2011

ANNUAL REPORT 2011 |23

BuildingBusiness

2(Millions of yen)

463,939

160,000

141,823300,000

200,000

489,696

400,000

120,000

200,000

80,000100,000

40,00005(Millions of yen)

149,836

500,000

4

2010/3

2011/30

Revenue from operations (left scale)Operating income (right scale)3

1

1 Mitsubishi Ichigokan
Mitsubishi Ichigokan has been completely
restored to what it was in 1894—the first officebuilding in Marunouchi. Today, this building isfunctioning as a key culture and arts complex for
expanding the area’s cultural horizons.

2 Marunouchi 1-4 Plan (tentative name)Through this project, three existing office buildings are being reconstructed into one large-scalebuilding to facilitate more effective land use. The
new building will serve as an advanced businesscenter that accommodates the wide-ranging
needs encountered in today’s business globalization and informatization. Leveraging the extensive portfolio of its business functions, Mitsubishi
Estate will promote this project to create a highquality urban environment and enhance urban
infrastructure, while giving due consideration to
the environment-friendliness of the project.

3 Otemachi 1-chome Second Area 1st

Class Urban Redevelopment Project

Positioned as the second phase of a linked urban
redevelopment project in Otemachi, this project
aims to upgrade the urban functions of the district, establishing sophisticated, high-quality business functions and business support facilities
appropriate to this international financial center.
Mitsubishi Estate is participating in the project as
the owner of the land on which the Mitsubishi
Soken Building is sited while also executing an
independent project relating to the portion designated as Building B jointly with the Urban
Renaissance Agency.

24 |Enhancing Urban Functions from an Area Management Perspective
The Building Business primarily undertakes the development, leasing and property management of office buildings in Japan’s major cities. It also handles the management of large-scale shopping centers, the operation of
parking lots and district operation of heating and cooling services throughout Japan, thereby enhancing urban
functions from an area management perspective.

Promoting the Second Stage ofMarunouchi Redevelopment
Mitsubishi Estate is going beyond the role of developer tothat of producer, as it maximizes the full potential of the
Marunouchi area and delivers new functions that meet
the business needs of today and tomorrow. In 1998, we
commenced the first stage of Marunouchi
Redevelopment, a 10-year program encompassing the
upgrade, reconstruction and renovation of much of the
Marunouchi district. Beginning with the Marunouchi
Building in August 2002, six new buildings have been
completed, highlighted by the grand opening of the ShinMarunouchi Building in April 2007. With the opening of
the Peninsula Tokyo in September 2007, the first stage ofMarunouchi Redevelopment came to a close.
From 2008, we have been pushing ahead with thesecond stage. The first project of the second stage consisted of the Marunouchi Park Building & Mitsubishi
Ichigokan. In September 2009, we launched the second

ANNUAL REPORT 2011

project, the Marunouchi 1-4 Project (tentative name),encompassing the simultaneous reconstruction of the
Togin Building, the Sumitomo Trust and Banking Co., Ltd.
Tokyo Building and the Mitsubishi UFJ Trust and Banking
Corporation Tokyo Building.
Going forward, Mitsubishi Estate has begun a third
project—rebuilding the Mitsubishi Soken Building—through participation in the second phase of the
Otemachi 1-chome Second Area 1st Class Urban
Redevelopment Project using a linked urban redevelopment process.
Based on the achievements of Marunouchi
Redevelopment to date, the second stage will encompass
broader and more comprehensive plans to further rejuvenate the Otemachi, Marunouchi and Yurakucho districts,
an area of approximately 120 hectares.

W Retail Property Group
Active Expansion of the Retail Property Businessthroughout Japan
In its retail property business, Mitsubishi Estate is pushingahead with the development of various types of retailproperties that match the unique features of each location and area. The Mitsubishi Estate Group continuously
engages in facility planning, development, tenant leasing
and management operations through its comprehensive
business structure.
Offering New Value by Creating Ideal
Urban Environments—for People and City
Creating new value through our retail property business,
synchronizing people’s lifestyles with “urban heartbeats,”
Mitsubishi Estate orchestrates ideal urban environmentsthat maximize cities’ value and the quality of living, foreverybody who lives, works and visits there. Since the1989 opening of the Tenjin MM Building (IMS) in Fukuoka
Prefecture, retail property operations have become a fullblown business with numerous projects completed,including the Yokohama Landmark Tower and the
Marunouchi Buildings.
In its efforts to create a more appealing city,
Mitsubishi Estate has continued to raise the value of retailfacilities in the Marunouchi area, including the ShinMarunouchi Building, in 2007, followed by the6

Marunouchi Brick Square (commercial zone in the
Marunouchi Park Building) in September 2009. Alongwith such infrastructure development, the Company isaggressively carrying out promotional activities. From anarea management perspective, Mitsubishi Estate is focusing on operations that realize intangible benefits.
In a project outside the Marunouchi area, we opened
the Higashikurume Shopping Center “Qurune” inHigashikurume City, Tokyo in November 2009. Also, theCompany implemented the second stage of shop floor
expansion at the Kobe-Sanda Premium Outlets in Kobe
City, Hyogo Prefecture in December 2009 and the third
stage of shop floor expansion at the Toki Premium Outlets
in Toki City, Gifu Prefecture in July 2010.
Mitsubishi Estate will continue to focus on three
types of retail properties: those in Marunouchi, centeredon the Marunouchi Building; those situated in urban centers and suburban areas, such as Aqua City Odaiba in
Minato Ward, Tokyo and the Minamisunamachi Shopping
Center “SUNAMO” in Koto Ward, Tokyo; and outlet
shopping centers operated by Chelsea Japan Co., Ltd.,
which became a Mitsubishi Estate consolidated subsidiaryin March 2009. Maintaining this focus, the Company will
promote retail property projects across Japan.

7

4 Marunouchi Brick Square
Opened in September 2009 as a commercial
area in the Marunouchi Park Building, theMarunouchi Brick Square offers retail functions
suitable for a hub that joins the Marunouchi
and Yurakucho areas. The synergistic locationsof the Mitsubishi Ichigokan and the Ichigokan
Square significantly expanded people’s “strolling options” in Marunouchi.

5 Higashikurume Shopping
Center “Qurune”

This shopping center opened in November 2009
in Higashikurume City, Tokyo, as the fourth lifestyle-oriented retail facilities in the area. The
center houses approximately 25 retail shops
offering diverse merchandise that helps people
realize a comfortable, enjoyable lifestyle.

6 Toki Premium Outlets
Operated by Chelsea Japan Co., Ltd., this is thefifth CHELSEA PREMIUM OUTLETS shopping
center in Japan. Located in Toki City, Gifu
Prefecture, this shopping center opened in
March 2005 and underwent a second and third
shop floor expansion in October 2006 and July
2010, respectively. Total shop floor area
increased from 17,521m2 to 28,099m2, and thenumber of retail shops increased from about 90
to 140.

7 Kobe-Sanda Premium Outlets
This is the sixth CHELSEA PREMIUM OUTLETS
shopping center in Japan. Located in the Kita
Ward of Kobe City, this outlet shopping centerstarted operations in July 2007. In December
2009, the shopping center opened expandedshop floors. The total shop floor area almost
doubled from 19,174m2 to 35,041m2, and thenumber of retail shops doubled from 90 to 180.

ANNUAL REPORT 2011 |25

Residential
Business(Millions of yen)

(Millions of yen)

400,000

369,145

350,008

320,000

40,00030,000160,000

20,00012,234(35,730)

240,000

80,0001

50,000

5

6

7

8

10,000002010/3

2011/3

Revenue from operations (left scale)Operating income (loss) (right scale)*In line with changes in segmentation, CustomBuild Housing operations were integrated into
the Residential Business in April 2011.

2

1 The Parkhouse Osaki
This 84-unit condominium building is located in
Osaki 2-chome, Shinagawa Ward, Tokyo, on aquiet hill connecting to a redevelopment areaaround the west gate of Osaki Station. The outer
limits of the site are embellished with rich greenery, creating a restful atmosphere.

2 The Parkhouse Minami-Senri
Located in Satakedai 1-chome, Suita City, Osaka
Prefecture, this 82-unit condominium building is
one of the first groups of The Parkhouse properties in western Japan. With the building situatedon a hill slanting to the southeast, all units face
the same direction, providing a view of grandeur
and openness.

3 The Parkhouse Shinjuku Tower
Located in Kita-Shinjuku 2-chome, Shinjuku Ward,
Tokyo, this seismically isolated condominium
building boasts 298 residential units. The
Parkhouse Shinjuku Tower sits within the
Shinjuku Front Square, a large-scale multipurpose
complex development project. The building provides favorable conditions for the relaxation,living and working of its residents while providing easy access to the urban functions that
Shinjuku offers.

4 The Parkhouse UrbanceBunkyo-Koishikawa

Situated in Koishikawa 4-chome, Bunkyo Ward,
Tokyo, this condominium building offers 37 residential units. It is the first building under the“Urbance” compact condominium brand. Most
residential units face southwest, and all condominiums are corner units. In addition, the building provides indoor hallways, enabling urban
lifestyles emphasizing privacy.

3“Always, New Joy in Daily Life.”—The Birth of Mitsubishi Jisho Residence
Through the Residential Business segment, we aim to provide ideal living environments in concert with healthy
and fulfilling lifestyles by developing, marketing and leasing condominiums, single-unit homes and residential
land, as well as engaging in businesses such as condominium management and consulting services for the optimal use of real estate. At the same time, Mitsubishi Estate operates and manages golf courses. More recently, in
April 2011, the Company integrated custom-built housing operations outside of Mitsubishi Estate Home Co.,
Ltd. (MEH) into its Residential Business.
Mitsubishi Jisho Residence Co., Ltd. Debuts
In January 2011, we established Mitsubishi Jisho
Residence through the integration of residential development and sales operations previously promoted separately
by Mitsubishi Estate, Mitsubishi Real Estate Services Co.,
Ltd. and Towa Real Estate Development Co., Ltd. This
integration was aimed at strengthening the residential
development and sales operations within the entire
Mitsubishi Estate Group. Through business integration,
the Group is now the industry leader in terms of the volume of residential unit supply. Furthermore, these new
integrated operations have enabled the Company to build
a more comprehensive development and sales structure.
Through such a structure, we will continue to offer superior services to accommodate ever-diversifying customer
needs by listening carefully to our customers and maintaining lifelong relationships with each of them. In thisway, we aim to become the industry leader in the truest
sense for product quality and service excellence.
New Condominium Brand “The Parkhouse” Launched
In line with the launch of Mitsubishi Jisho Residence, we

26 |ANNUAL REPORT 2011

announced a new condominium brand, “The Parkhouse,”which provides condominiums in a wide range prices.
Also, condominium complexes under this brand areequipped with a special feature called “Five Eyes” toensure the safety, security and quality of condominiums
and living environments. The Five Eyes includes “Check
Eye’s”—the unique condominium quality control and performance indication system of Mitsubishi Jisho
Residence—and eco-friendly and security systems, while
also offering an extensive lineup of residential options.
Through consistent quality control, we provide state-ofthe-art condominiums.
Environmental Initiatives
Mitsubishi Jisho Residence is working closely with MEC
Eco LIFE Co., Ltd., which was established in 2008, in thedevelopment of eco-friendly condominium complexes.
Among their joint efforts, particularly noteworthy is thedevelopment of the “soleco” system, which combines asolar power generation system and a central high-voltage
power transmission system. The soleco system has been
approved as a new environmental business model to4

reduce greenhouse gasses by the Ministry of Land,
Infrastructure, Transport and Tourism and, accordingly, iscontributing to the reduction of CO2 emissions in thehousehold sector.
Residential Leasing under the PARK HABIO Brand
Mitsubishi Estate is accelerating its residential leasing business through the PARK HABIO brand, focusing on theTokyo Metropolitan area. To date, the Company has completed 23 condominium complexes. We will continue topromote our residential leasing business by consistently
providing high-quality condominiums.

W Custom-Built Housing Business
Creating Home Lovers from Generation to Generation
In the custom-built housing business, MEH develops
custom-built housing for individuals while undertaking
the development of housing complexes through effective
land use and the construction of houses for sale. In
addition, MEH boasts an extensive record in the renovation of homes and condominium complexes.
We Build Ideal Residences Together with Our Customers
In the custom-built housing business, MEH supplies“residences with true value” by offering flexible,
custom-design services and developing technologies torealize long-life homes. In so doing, MEH has fostered its
unique technological capabilities and established its own
stringent quality standards. MEH builds homes that are

comfortable to live in and are capable of flexibly satisfying
customers’ custom-design needs by combining its proprietary Super Two-by-Four construction method, which demonstrates maximum earthquake protection, fire resistanceand durability, and the Aerotech central air-conditioning
method. Also, MEH makes proposals regarding effective
use of land and other assets when constructing housing
complexes. Meanwhile, the company provides fully ordermade buildings for use as medical clinics and other uses.
In the renovation business, we conduct order-made renovations. We also listen closely to each customer’s “lifeplans” and preferences to create their “dream home.”
Proposing Homes That Create Ties between Peopleof Different Generations
In January 2011, MEH opened a model home in the
Komazawa Park Housing Gallery in Tokyo. Through thismodel home, which provides excellent interior arrangement versatility, we are disseminating the concept of “aresidence that creates ties between people of different
generations” with particular focus on “family ties” and“community involvement.” Also, rooms inside the model
home can be freely arranged thanks to the use of the
Aerotech method. This feature enables flexibility inaccommodating the various needs of our customers.
Looking ahead, we will continue to build homes bytaking a customer perspective, strive to understand eachcustomer’s ideas about their dream home and propose
affluent lifestyles. To this end, we will further strengthen
the development of advanced, unique technologies.

5 PARK HABIO Shinjuku
Eastside Tower

Located in Shinjuku 6-chome, Shinjuku Ward,
Tokyo, this 761-unit large-scale lease condominium building is scheduled for completionin December 2011. With a towering view ofShinjuku and the Tokyo skyline, the top floor
offers residents a swimming pool, Jacuzzi,
sports gym, hot bath and bar lounge.
Providing such premium communal facilities
and hospitality that go beyond those expected in ordinary leasing condominium buildings, this building realizes unparalleledtenant satisfaction.

6 Studio-Type Housing Complex
To help our customers utilize their land more
effectively, we leverage the extensive experienceand know-how that we have nurtured throughour operations in providing consultation for
optimal land use from various perspectives.

7 Komazawa Stage 3 Home Gallery
Its exterior facade fosters the owner’s love forthe home. Its simple gable roof never tires
residents’ eyes, and genuine stones and othernatural materials gently welcome families
and visitors.

8 Komazawa Stage 3 Home
Gallery (Hall)

Creating openness on the second floor, thehall allows families to spend their free time inreading, exercising and various other activities. It offers movable partitions and ample
storage space.

ANNUAL REPORT 2011 |27

Commercial
Property
Development &Investment
Business(Millions of yen)

(Millions of yen)

60,00030,00050,00047,90750,69140,00040,25950,00060,00040,00030,00010,0002011/30

10,0000

3

20,0005,674

20,0002010/3

Revenue from operations (left scale)Operating income (right scale)*I n line with changes in segmentation, the former Urban
Development & Investment Management Business was divided into the Commercial Property Development & Investment
Business and the Investment Management Business in April
2011. The data for the fiscal year ended March 31, 2010
above is for the segment before the division.

1 Toyosu Front
Directly connected to Toyosu Station on theTokyo Metro Yurakucho Line, Toyosu Front is amultipurpose complex housing offices and retailspaces. This eco-friendly property reduces CO 2
emissions by 26% compared with ordinary buildings thanks to greenery occupying 36% of the site
and the effective utilization of natural air flow
and sunlight. It was completed in August 2010.

1

2

Developing Market Needs-Oriented Real Estate for Investment Purposes
Through the Commercial Property Development & Investment Business, Mitsubishi Estate is promoting development operations. Our basic strategy in this segment entails the development of prime real estate for investment
purposes that effectively accommodates the needs of both tenants in the leased real estate market and investors in the real estate investment market.

2 Shinjuku Eastside SquareThis project involves real estate development on avast site, measuring approximately 26,000m 2,
directly connected to Higashi-Shinjuku Station on
the Tokyo Metro Fukutoshin Line and the Toei
Oedo Line. The building will house offices andretail spaces, and the office floors will boast thelargest-scale floor plate among buildings withincentral Tokyo. Also, a variety of eco-friendly features are incorporated into the building, such as
the adoption of double-skin, low-emissive, double-glazed glass, which reduces CO 2 emissions
associated with the building by approximately
25% compared with ordinary buildings. It isscheduled for completion in April 2012.

3 Shinjuku Front Tower
Completed in May 2011, this multipurpose complex provides several floor types, with each floor
concentrating on either offices, retail spaces orclinics, or on serviced offices, which support new
startups and young entrepreneurs. In addition togreenery on the rooftop and external walls, anumber of tall trees are planted within the site,
for a total greenery area of approximately
2,400m 2. Also, a water-retentive coating wasapplied to the building exterior, contributing to
the suppression of urban “heat island” effects.

28 |Actively Promoting Development Operations byStrengthening Asset Solutions Capabilities
Mitsubishi Estate’s Commercial Property Development &Investment Business employs a unique business model.
Under this model, the business cycle starts with the development of office buildings and other types of real estatefor investment. Then, the Mitsubishi Estate Group leverages its wide-ranging business functions to maximize thevalue of the properties developed. These properties are
sold at the highest possible prices in the real estate investment market, and the proceeds collected through property sales are used for new development projects.
Recent examples of development projects regarding
real estate for investment include Toyosu Front in Koto
Ward, Tokyo, which was completed in August 2010.
Then, in May 2011, the Shinjuku Front Tower was completed in Shinjuku Ward, Tokyo. Projects under development include the Harumi 2-chome 2-4 City Block Building
Projects in Chuo Ward, Tokyo, and the Shinjuku Eastside
Square, also in Shinjuku Ward, Tokyo.

ANNUAL REPORT 2011

Mitsubishi Estate does not limit its activities solely tooffice buildings: it also engages in the development of abroad range of real estate in an effort to address thediverse needs of the investment market.
For example, we are promoting the serviced apartment business jointly with The Ascott Group Limited, aSingapore-based global serviced apartment operator.
Through this business, we have launched operations of
the Citadines Shinjuku in Shinjuku Ward, Tokyo, and the
Citadines Kyoto Karasuma-Gojo in Kyoto City, Kyoto
Prefecture. Meanwhile, in April 2011, through the distribution center business, we began constructing distribution facilities in Tatsumi 3-chome, Koto Ward, Tokyo—our
first development project involving such facilities—incooperation with Mitsui & Co., Ltd. Looking ahead,
Mitsubishi Estate will build a solid record in the tenantneeds-oriented development of various types of realestate for investment, adhering to a “Build-to-Suit” business model.

4

4 Harumi 2-chome 2-4 City Block

Building Project (tentative name)

Maintaining Income Gains and Securing Capital
Gains through Timely Sales of Assets
In general, real estate for investment generates stable
income gains (rental revenues) after completion. For thisreason, such real estate does not have to be sold immediately after completion. Instead, it can be sold when market conditions are favorable. In other words, the seller ofa property can decide on the timing of securing capitalgains (the difference between the selling price and all
associated costs and expenses, including land acquisition
costs and building construction costs). This is the trueadvantage of Mitsubishi Estate in this segment. The
Company will continue to bolster the asset solutions
capabilities required to maximize the value of real estate.
In this way, we will strive to capture new business opportunities, thereby strategically meeting the socioeconomic
needs forurban development.

The Harumi area in Chuo Ward, Tokyo, is seeing the acceleration of development projects
aimed at supporting lifestyles that balance
work and private life. Through this project,
Mitsubishi Estate is constructing a leased
office building. This eco-friendly project willfeature greenery occupying approximately
35% of the site, while using low-emission,
double-glazed window glass and solar-tracker,
electric-powered window shades to reduce
CO2 emissions associated with the building. It
is scheduled for completion in March 2012.

5 Tatsumi 3-Chome Development
Project (tentative name)5

Through this project, scheduled for completion in February 2012, Mitsubishi Estate isdeveloping distribution facilities boastingeasy access to central Tokyo, harbor facilities
and airports—it is only a four-minute walkfrom Tatsumi Station on the Tokyo Metro
Yurakucho Line and approximately 2km awayfrom the Shinkiba Interchange on the
Bayshore Route of the Shuto Expressway.
While providing general versatility in the creation of certain sections, the building is being
constructed in a “Build-to-Suit” manner tomeet tenants’ exact needs, which are determined prior to the beginning of construction.

ANNUAL REPORT 2011 |29

International
Business(Millions of yen)

45,091

20,00040,18740,00016,00020,00010,01512,00010,49630,00010,00003(Millions of yen)

50,000

8,000

4,000

2010/3

2011/30

Revenue from operations (left scale)Operating income (right scale)

1

1 The McGraw-Hill Building in
New York

With 51 floors above ground and five floors
below ground, the McGraw-Hill Building boasts
total floor space of 237,126m 2 . Located in
Manhattan, New York, this office building wascompleted in March 1972. Mitsubishi Estate firstacquired an interest in the building in April 1990.

2 1101 K Street in Washington D.C.
Mitsubishi Estate acquired this office building inMarch 2011. Situated in a prime location of
Washington D.C.’s East End, the 10-story building
was completed in 2006 and boasts leasable floor
space of 27,078m2.

2

4

Expanding Real Estate Leasing and Development Business Globally
In its International Business, Mitsubishi Estate is promoting the real estate leasing and development businessmainly across the United States and in London, while participating in condominium complex development
projects in Vietnam and Singapore. Also, in April 2011, the Company opened the Shanghai Representative
Office in China.
In October 2010, Mitsubishi Estate became a strategic investor in the Europa Capital Group LLC (Europa
Capital), an independent real estate fund management group mainly operating in Europe. With this, Mitsubishi
Estate has established a solid network for its real estate investment management business in Japan, the UnitedStates and Europe.

Accelerating Leasing and Development Operationsin the United States, the United Kingdom and Asia
In the United States, Mitsubishi Estate owns large-scale
office buildings—the McGraw-Hill Building and the TimeLife Building—in Manhattan, New York City, and the One
North Central office building in central Phoenix, Arizona.
In March 2011, the Company acquired the 1101 K Street
office building in a prime location on K Street in
Washington D.C.’s East End. In addition, the Company iscurrently undertaking approximately 30 development
projects in 10 states, ranging from office condominiums
and distribution facilities to homes andmultipurpose complexes.
Mitsubishi Estate is also aggressively expanding its
U.K. development business in London, England. Throughthe Paternoster Square Redevelopment Project completed

in 2003, the Company has developed a multipurpose
complex centered on an office building in the financial
district of the City of London. Also, we completed the
Bow Bells House Redevelopment Project—a joint venturewith Mitsubishi Corporation—in 2007 in the City of
London, and Bow Bells House was sold in 2010. In
London’s West End, the Company completed the Central
St. Giles Redevelopment Project in April 2010, involving
the construction of a multipurpose complex that houses
offices, shops and residences. Furthermore, the Company
owns River Plate House in the City of London and, in2011 we acquired the 150 Leadenhall Street office building and the 6-8 Bishopsgate office building, both ofwhich are located close to Lloyd’s of London and theGovernor and Company of the Bank of England.
Turning to Asia, Mitsubishi Estate has promoted the

3 Paternoster Square in London
Hanoi Residential Development Project in Vietnam jointlywith CapitaLand Residential Singapore Pte Ltd(CapitaLand)—a leading real estate company in Asia—and
other entities since November 2010. Also, the Company
has undertaken the development of two high-rise condominium buildings in central Singapore through cooperation with CapitaLand since March 2011.
In April 2011, Mitsubishi Estate established theShanghai Representative Office in China, a country
expected to sustain economic growth over the long term.

Development of this multipurpose office complex located in the City of London was completed in May 2003. The Company owns twobuildings: Warwick Court, with floor space of
29,480m2; and 10-Paternoster Square, withfloor space of 34,866m2.

Meanwhile, the Company has built a global investment management business platform that enables concerted activities in investor marketing and research,decision making and fund establishment by becoming
a strategic investor in Europa Capital in October 2010.
Mitsubishi Estate will continue to develop its real estatebusiness on a global scale, leveraging its extensive
accomplishments in overseas operations.

4 Central St. Giles in London
A joint redevelopment project with Legal &General, a major U.K. life insurance company,
this complex comprises 66,000m2 of offices,
retail shops and residences. Construction wascompleted in April 2010.

5 Hanoi Residential Development
Project in Vietnam

This is a project promoted jointly by
Mitsubishi Estate, CapitaLand and other entities. When completed, the residential building
will offer 960 residential units on a site measuring approximately 14,000m2.

530 |

ANNUAL REPORT 2011

ANNUAL REPORT 2011 |31Investment
Management
Business

Architectural
Design &Engineering
1(Millions of yen)

5,000

3,000

3,000

0

2011/31,500

10,000

1,000

2,000
5,000

0

0

Revenue from operations (left scale)ment management operations were spun off from theformer Urban Development & Investment Management
Business segment to form the Investment Management
Business segment in April 2011.

1 Osaki Front Tower

2011/30Operating income (right scale)*In line with changes in segmentation, domestic invest-

The Osaki area has rapidly grown as a new prime
office location adjoining the Shinagawa area, theland value of which has skyrocketed as an officelocation thanks to the acceleration of redevelopment in the area and the opening of the Tokaido
Shinkansen (bullet train) platform at JR
Shinagawa Station. Completed in June 2005, therelatively new, first-class Osaki Front Tower islocated in the booming Osaki area. Mitsubishi
Estate developed the building through its
Commercial Property Development & Investment
Business, and Japan Real Estate Investment
Corporation acquired it in January 2011.

2010/3500

Revenue from operations (left scale)Operating income (right scale)1

2

Providing a Variety of Specialized Services for Real Estate Investment Management
In its Investment Management Business, Mitsubishi Estate is offering wide-ranging services for both individual
and institutional investors. Specifically, by managing real estate investment trusts (REITs), the Company accommodates the needs of investors who desire to manage their assets securely through real estate investment overthe long term. Meanwhile, the Company manages investment funds that work to satisfy the specific needs ofinstitutional investors.

ANNUAL REPORT 2011

buildings. Japan Real Estate Asset Management has thelongest history among listed J-REITs, and it has maintained steady performance over the past 10 years. Thus,
the Mitsubishi Estate Group is providing industry-leading
investment management services. Looking to the future,
we aim to contribute to the further development of thereal estate investment market by consistently offering
prime investment opportunities to investors in Japan andoverseas.

2

1 JR Hakata City

Leveraging Superior Design and Engineering Capabilities in Urban Development

MJS undertook a project to reconstruct the JR
Hakata Station building in line with the launch of
the complete Kyushu Shinkansen line. Throughthis project aimed at enhancing the station building’s functions as a transportation hub and a
shopping center, a multipurpose station complex
has been established, appropriate to its place as
the “face” of the Kyushu region and the “gateway” to Japan from Asia.

At the core of Mitsubishi Estate’s Architectural Design and Engineering Business are Mitsubishi Jisho Sekkei Inc.
(MJS) and MEC Design International Corporation. MJS engages in the design and administration of construction
and civil engineering projects, building renovation work and projects related to urban and regional development,
as well as comprehensive consulting. MEC Design International directs interior design and construction projects.

2 Gakushuin Girl’s Junior & Senior
Offering Industry-Leading Investment Management
Services to Meet Diversified Investor Needs
To meet the specific needs of institutional investors,
Mitsubishi Jisho Investment Advisors, Inc. (MJIA) has
formed fixed-term private funds that invest in shopping
centers, office buildings and leased residential properties.
Also, MJIA has launched various new investment products. For example, in 2011, Mitsubishi Jisho Investment
Advisors formed an open-ended, non-listed private REIT
to satisfy the needs of investors who prioritize stability
and long-term investments.
Meanwhile, Japan Real Estate Asset Management
Co., Ltd. handles a listed REIT that accommodates individual investors. This investment management company
manages the investments of Japan Real Estate Investment
Corporation, a Japanese REIT (J-REIT) specializing in office

32 |

2,000

15,000

1,000

1,000

(Millions of yen)

1,392

4,000

2,528

4,000

2,000

20,000

590

5,220

5,000

(Millions of yen)

6,000

18,5846,000

19,466(Millions of yen)High School Main BuildingThis project involved the reconstruction of a classroom building for Gakushuin Girl’s Junior &Senior High School, which has a 125-year history.
The new classroom building has been rebuilt
using a feminine, elegant design. Through thisproject, classroom functions, which had been previously divided into four different buildings, havebeen gathered into one building. Also, MJS has
incorporated eco-friendly features into this highly
functional school building to satisfy recent societal needs.

Mitsubishi Jisho Sekkei, Marking the10th Anniversary of Its Founding
In June 2011, MJS marked the 10th anniversary of its
inception. In fact, it has been more than one hundredyears since Mitsubishi Estate established an architecturaldesign and engineering division. Leveraging its long-nurtured knowledge and expertise and further refining its
design and engineering capabilities, MJS will continue its
involvement with the development of urban districts andbuildings that achieve safety and security and remain
attractive for generations to come.
Expanding Steadily in Japan and
Accelerating Overseas Operations
Major projects completed by MJS during the fiscal year
ended March 31, 2011 included the JR Hakata City
(Fukuoka City, Fukuoka Prefecture), new office buildings for
Lower House Diet Members (Chiyoda Ward, Tokyo), theAzabudai Park House (Minato Ward, Tokyo), the Gakushuin
Girl’s Junior & Senior High School Main Building (Shinjuku
Ward, Tokyo) and the Marui-Nakano Project (Nakano Ward,
Tokyo). In the fiscal year ending March 31, 2012, MJS plans
to complete such projects as the Tokyo Central Post Office“JP Tower” Reconstruction Project (tentative name;
Chiyoda Ward, Tokyo), the Palace Hotel Reconstruction
Project (Chiyoda Ward, Tokyo) and the Toyo Bunko
Reconstruction Project (Bunkyo Ward, Tokyo). MJS will
aggressively pursue increased architectural design and engineering orders for new construction and renovation projects. Simultaneously, it will work to realize truly effective
eco-friendly buildings while further strengthening alreadyestablished operations in such fields as construction management and district heating and cooling facilities.
Overseas, taking advantage of the business networkthat it has expanded through the Shanghai Representative
Office, which opened in 2007, MJS aims to secure agreater number of orders in China by leveraging its trackrecord in urban and architectural design. To this end, MJSplans to launch a local subsidiary in Shanghai in 2011.
Also, with Mitsubishi Estate’s Overseas Project Office—established in the previous fiscal year—as the core driver,
MJS and MEC Design International will work together toexpand their operations in East Asia by widely disseminating their capabilities in architectural and urban design aswell as their eco-friendly, energy-saving technologies.

ANNUAL REPORT 2011 |33

Hotel Business(Millions of yen)

(Millions of yen)

20,0001

15,000

(340)

(112)

500

10,000

0

0

200
100

5,000
-10,000

2010/3

2011/3-500

02010/3

2011/3

Revenue from operations (left scale)

Revenue from operations (left scale)Operating income (right scale)Operating income (right scale)2

1 Yokohama Royal Park Hotel
Yokohama Royal Park Hotel was accorded“Four Red Pavilions”—the highest evaluation
among hotels in the Yokohama area—in the
Hotels category of Michelin Guide 2011 Tokyo
Yokohama Kamakura.

2

Royal Park Hotel The Fukuoka (artist’s rendition/guestroom)
Royal Park Hotel The Fukuoka opened in
Hakata Ekimae 2-chome, Hakata Ward,
Fukuoka City, Fukuoka Prefecture on July 30,
2011 as the first hotel under the new brand.
Only a five-minute walk from JR Hakata
Station, this hotel provides a total of 174
guestrooms, centered on twin rooms. Royal
Park Hotel The Fukuoka enables guests toenjoy architecture and services that are tailormade for this location.

3

Royal Park Hotel The Kyoto (artist’s rendition)
Scheduled for opening on October 8, 2011,
this hotel is only a three-minute walk from
Kyoto Shiyakusho-mae Station on the Tozai
Line of the Kyoto Municipal Subway. It is
located at Sanjo-dori Higashi-Iru, Kawaramachi,
Nakagyo Ward, Kyoto City. Offering 172
guestrooms, this hotel has been designed
using motifs appropriate to historic Kyoto.

34 |In the Hotel Business, Royal Park Hotels and Resorts Co., Ltd. coordinates the administration and managementof each hotel to ensure consistency throughout the hotel chain. At the same time, Royal Park Hotels and Resorts
is working to enhance management efficiency and improve the level of management, pursuing the benefits ofoperating the hotel chain. With hotels in Tokyo, Yokohama and other locations in Japan, the Royal Park Hotelchain comprises a network of five hotels.

New Brand “Royal Park Hotel The [City Name]”
Debuts and Expands
In the fiscal year ending March 31, 2012, the Royal Park
Hotel The Fukuoka and the Royal Park Hotel The Kyoto
will make their debut. Royal Park Hotels under this new
brand will be of a relatively compact scale but will pursue
the ultimate in comfort and reasonableness. They aim togrow into hotels that deliver features specific to theirrespective locations under the key phrase of “We and thecity at your service.” In addition to these two locations,
we have decided to open a new Royal Park Hotel The
Nagoya, in 2013. Looking ahead, we plan to open hotels
under the new brand in Tokyo and other governmentdesignated cities in Japan, thereby expanding our hotel
chain and enhancing our brand power.

*Japan Hotel Guest Satisfaction Index StudySM conducted by J.D. Power Asia Pacific, Inc.
 oyal Park Hotels ranked in the segment of ¥15,000 to ¥35,000 per night hotels with the most common guestroom space of 20m2 or larger. The study wasRbased on 9,663 valid responses received from people who used applicable hotels within the previous year. For more details, please see the press release of the
J.D. Power and Associates Web site at:
http://www.jdpower.co.jp/press/pdf2010/2010JapanHotelGSI.pdf (Japanese language only)

ANNUAL REPORT 2011

03

Improving Our Brand Value and Expanding Our Hotel Chain

Increasing the Brand Value of Royal Park Hotels
through a Management Focus on Customer Delight
Based on the “Best for the Guest” philosophy of Royal
Park Hotels, we go one step beyond customer satisfaction
by aiming to delight our guests. This approach has been
well acknowledged, enabling us to win the leading rank
in the 2010 Japan Hotel Guest Satisfaction Index Study SM
conducted by J.D. Power Asia Pacific, Inc.,* an organization specializing in research and consulting relating to customer satisfaction. This marks the fourth consecutive year
for Royal Park Hotels to win the top position in the¥15,000 to ¥35,000 per night segment. We will further
promote customer-delight-focused hotel management
and operations.

400
300

210

10,000

500

430

1,000

600

27,71927,64325,00020,000(Millions of yen)

30,0001,500

28,56430,00025,816(Millions of yen)

Real Estate
Services

1

1 PARK HABIO Higashi-Nakano
In December 2010, Mitsubishi Estate completed this leased condominium complex in
Nakano Ward, Tokyo. Mitsubishi Real Estate
Services conducts lease management operations on behalf of Mitsubishi Estate.

2

CRE Strategy Support System“CRE@M”
CRE@M is an application service provider(ASP) service that provides various functions,
including the centralized management of realestate information, the improvement of realestate management efficiency and the strategic management of CRE. Through the operation of the CRE@M system, we support ourcustomers in strategic CRE management.

3

Parking Ecology Network “PEN”
To contribute to global environmental efforts
through parking operations, Mitsubishi Real
Estate Services donates a portion of theproceeds from parking charges to tree-planting programs.

Meticulously Responding to the Various Real Estate Needs of Customers
Mitsubishi Real Estate Services Co., Ltd. and Mitsubishi Jisho House Net Co., Ltd. closely collaborate with eachother to promote Mitsubishi Estate’s Real Estate Services Business and enable highly customized responses tocustomer needs relating to real estate. Leveraging its collective strengths and information capabilities, theMitsubishi Estate Group provides a wide array of optimal solutions for individual and corporate real estate utilization, brokerage and leasing.

Real Estate Brokerage Services
Mitsubishi Real Estate Services and Mitsubishi Jisho HouseNet engage in wide-ranging operations relating to realestate owned by individuals and corporations. These operations include purchasing, sales, brokerage for leasing services and consulting services for real estate utilization.
Through brokerage services for individuals, the two companies provide comprehensive support in real estate purchasing and sales as well as in finding new housing. They
meet the diversified requirements of customers through anationwide network.
In addition to providing various need-oriented investment proposals to individual customers, they work to satisfy the wide-ranging needs of corporate customers inJapan and overseas through services ranging from realestate assessment, sales and purchase brokerage to consulting for effective utilization. Furthermore, they haveestablished the CRE@M system to offer integrated assistance to corporations in promoting their corporate realestate (CRE) strategies.

Accelerating Leased Condominium/Office Building
Management Support Business and Coin-Operated
Parking Lot Operations
Mitsubishi Real Estate Services and Mitsubishi Jisho House
Net offer a variety of lease management support services
relating to leased condominiums and office buildings, andtheir customer base ranges from individuals and corporateclients to asset managers of securitized real estate. We
have a structure that enables comprehensive services covering everything from business plan formulation andproduct planning to lease management after construction
completion. Moreover, we provide our customers withinformation on leased properties according to their preferences, including those owned by Mitsubishi Estate. In
addition, we are promoting “PEN” automated, coin-operated parking services, applying our extensive expertise inlease management services.

ANNUAL REPORT 2011 |35

Financial Review
Revenue from Operations/Operating Income

In the International Business segment, properties located in major U.S.

in profitability through cost reduction efforts, despite a decline in revenues

In the fiscal year ended March 31, 2011, consolidated revenue from opera-

cities and the City of London in the United Kingdom showed stable perfor-

from restaurants, bars and banquet management attributable to stagnant

tions decreased ¥24,967 million, or 2.5%, from the previous fiscal year tomance. In addition, Mitsubishi Estate sold certain properties in the United

economic conditions. With the occurrence of the Great East Japan

¥988,477 million. Consolidated operating income increased ¥9,285 million,

States and the United Kingdom while achieving increased revenue in the

Earthquake in March 2011, however, Mitsubishi Estate’s performance in thisor 6.2%, year on year to ¥158,258 million. Results for each business seg-

investment management business. Reflecting these positive factors, revenue

segment worsened significantly. Also, the Company discontinued the opera-

ment are as follows.

from operations expanded ¥4,904 million to ¥45,091 million. Operatingtion of Royal Park Inn Nagoya in February 2011. As a result, revenue fromincome dipped ¥481 million to ¥10,015 million, owing to deterioration in

operations slid ¥920 million year on year to ¥27,643 million. Operating loss

the profitability of property sales.

worsened ¥227 million to ¥340 million.

In the Building Business segment, Mitsubishi Estate enjoyed a year-onyear increase in rental revenue due to factors that included full-year contributions from the Marunouchi Park Building, which was completed in April

In the Architectural Design & Engineering Business segment, Mitsubishi

In the Real Estate Services segment, home agency sales declined year

Estate recorded revenue in connection with such projects as the Azabudai

on year, reflecting the Companywide integration of residential developmentwith 3.40% as of March 31, 2010. Reflecting these factors, revenue fromPark House (Minato Ward, Tokyo) and the MID OASIS TOWERS (Sagamihara

and sales operations in January 2011, which included the spinoff of applica-

operations dropped ¥25,756 million year on year to ¥463,939 million.

City, Kanagawa Prefecture). During the fiscal year under review, the number

ble operations from Mitsubishi Real Estate Services Co., Ltd. On the other

Operating income fell ¥8,013 million to ¥141,823 million.

of projects in both the architectural design and engineering business andhand, revenue from real estate brokerage services rose year on year due toIn the Residential Business segment, Mitsubishi Estate’s revenue in thethe interior design and construction business declined. Accordingly, reve-an increase in the number of cases handled. As a result, revenue from oper-

condominium business slipped year on year, due to a year-on-year decline innues in these operations decreased year on year. As a result, revenue fromations climbed ¥1,903 million to ¥27,719 million. Operating income

the number of condominiums sold. As a result, revenue from operations

operations edged down ¥882 million to ¥18,584 million. Operating income

increased ¥220 million to ¥430 million.

decreased ¥13,413 million to ¥336,595 million. However, the Company

similarly edged down ¥802 million to ¥590 million.

Revenue from operations in the Other segment edged up ¥161 million to

Driven by Mitsubishi Estate Home Co., Ltd., the Custom-Built Housing

2011/3

2010/3

YoY Change

988,447

1,013,415(24,967)

Building Business

463,939

489,696(25,756)

Residential Business
Urban Development &Investment Management
Business
International BusinessArchitectural Design &Engineering
Custom-Built Housing

336,595

350,008(13,413)52,98750,691

2,296

45,09140,187

4,904

18,584

19,466(882)

33,29026,427

6,863

Hotel Business

27,64328,564(920)

Real Estate Services

27,71925,816

1,903

Revenue from operations

2009. As of March 31, 2011, the vacancy rate stood at 3.58%, comparedposted operating income in this segment totaling ¥11,783 million, a turn-

Millions of yen (rounded down)¥3,443 million. Operating income increased ¥221 million to ¥411 million.

around of ¥47,513 million from an operating loss in the previous fiscal year.

Business segment continued to focus on increasing orders for “Mitsubishi

In the Urban Development & Investment Management Business seg-Home” brand homes. Thanks to such efforts, both the number of orders

Other Income (Expenses)

ment, overall capital gains rose year on year, reflecting the sale of a portion

received and actual sales increased year on year for these homes and con-

Other income declined ¥838 million year on year to ¥8,503 million, owingof ownership interest that Mitsubishi Estate held in a property. As a result,tract work. As a result, revenue from operations expanded ¥6,863 million toto decreases in amortization of negative goodwill and equity in earnings ofrevenue from operations grew ¥2,296 million to ¥52,987 million. However,¥33,290 million. Operating income amounted to ¥478 million, a ¥848 mil-unconsolidated subsidiaries and affiliates, despite an increase in interest andduring the previous fiscal year, the Company sold a portion of ownershiplion turnaround from an operating loss posted in the previous fiscal year.

dividend income. Other expenses decreased ¥5,002 million to ¥35,930 mil-interest in a property held by a special-purpose company in which it has

Royal Park Hotels and Resorts Co., Ltd. serves as the core driver ininvested. The absence of the prior-year capital gains from this transaction,

strengthening Mitsubishi Estate’s operations in the Hotel Business segment.

among other factors, resulted in a ¥32,071 million decrease in segment

This consolidated subsidiary operates Royal Park Hotels in Japan. For mostnary loss totaling ¥14,874 million, which consisted of ¥3,052 million in loss

operating income to ¥8,187 million.

of the period under review, Royal Park Hotels and Resorts achieved recovery

related to retirement of fixed assets, ¥3,286 million in loss on valuation oflion, due to a decrease in interest expenses, among other factors.
Turning to extraordinary items, Mitsubishi Estate posted an extraordi-

investment securities, ¥2,788 million in impairment loss, ¥3,587 million inloss on valuation of equity investments, and ¥2,159 million in loss on disaster.

3,443

3,281

161

(20,849)(20,724)(124)

Operating Income

158,258

148,972

9,285

Building Business

141,823

149,836(8,013)

Residential Business
Urban Development &Investment Management
Business
International BusinessArchitectural Design &Engineering
Custom-Built Housing

11,783(35,730)

47,513

8,187

40,259(32,071)

10,015

10,496

(481)

Other
Adjustments (see Note)

590

1,392

(802)

478

(370)

848

Hotel Business

(340)

(112)

(227)

Real Estate Services

430

210

220

Other

411

189

221

(15,121)(17,198)

2,076

Adjustments (see Note)

Note: From the fiscal year under review, the line item “Eliminations or Corporate” ispresented as “Adjustments.”

Net Income
Income before income taxes and minority interests surged ¥85,083 million,
or 275.6%, year on year to ¥115,955 million. Net income skyrocketed¥52,318 million, or 439.6%, to ¥64,219 million. Net income per sharestood at ¥46.27.

Revenue from Operations

Operating Income(Billions of yen)

947.6

942.6

1,013.4 988.4

Ordinary Income(Billions of yen)

166.1

177.9

138.5

787.6

148.9

158.2

Net Income

Total Assets(Billions of yen)

151.6

162.0

(Billions of yen)

Total Equity(Billions of yen)

4,327.1 4,429.0 4,355.0 4,245.2

97.6
86.9
130.8
108.6

Interest-Bearing Debt
(Billions of yen)

1,225.6 1,238.8

1,148.4 1,183.1

1,202.2

EBITDA(Billions of yen)

1,834.1
1,762.1
1,645.4
1,639.0(Billions of yen)

233.4

245.9

230.7 237.1
209.5

3,447.2

117.3
64.2

1,012.5
45.4

11.9
2007/3 2008/3 2009/3 2010/3 2011/3

36 |2007/3 2008/3 2009/3 2010/3 2011/3

ANNUAL REPORT 20112007/3 2008/3 2009/3 2010/3 2011/3

2007/3 2008/3 2009/3 2010/3 2011/3

2007/3 2008/3 2009/3 2010/3 2011/3

2007/3 2008/3 2009/3 2010/3 2011/3

2007/3 2008/3 2009/3 2010/3 2011/3

2007/3 2008/3 2009/3 2010/3 2011/3

ANNUAL REPORT 2011 |37

Financial Statements
Analysis of Financial Position

Disclosure of Fair Value of Investment and Rental Properties
Mitsubishi Estate and some of its consolidated subsidiaries own certain
office buildings and retail facilities in Tokyo and other major cities in Japan
as well as in the United States and the United Kingdom, with the aim ofobtaining rental revenue from these buildings and facilities. Because certain
leased office buildings among these are used by the Company or some ofits consolidated subsidiaries, the Company has classified such buildings asreal estate that includes portions used as investment and rental properties.
The following table shows the year-end amounts, changes in theseamounts during the period under review and the fair values of investment
and rental properties and other real estate that includes portions used as
investment and rental properties.

(1) Consolidated Cash Flow
On a consolidated basis, cash and cash equivalents at the end of the fiscal
year under review increased ¥51,237 million year on year to ¥229,062 million. Major cash inflows included income before income taxes and minority
interests and an increase in long-term borrowings. Major cash outflows
included the repayment of long-term borrowings and a decrease in leaseand guarantee deposits received.
Cash Flows from Operating Activities
Net cash provided by operating activities stood at ¥259,263 million, up¥46,595 million from the previous fiscal year. For the fiscal year underreview, income before income taxes and minority interests amounted to¥115,955 million, and depreciation and amortization—a non-cash item—
totaled ¥70,628 million. These and other cash inflows were adjusted toreflect movements in inventories and notes and accounts receivable aswell as other items.

Amount Included in Consolidated Balance Sheets(Millions of Yen)

Investment andRental Properties

Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥67,223 million, down ¥45,415 million year on year. This was largely due to purchases of property and equipment.
Cash Flows from Financing Activities
Net cash used in financing activities amounted to ¥140,269 million, up¥33,416 million year on year. This increase reflected the repayment of long-termborrowings, the repayment of corporate bonds and other financing activities.

Real Estate That
Includes Portions
Used as Investment
and Rental Properties

Balance as ofMarch 31,2010

ChangeBalance as ofMarch 31,2011

2,615,827(148,649)

2,467,177

234,910(1,221)

Fair Value as ofMarch 31, 2011
(Millions of Yen)

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2010

4,316,530

233,688323,700

Notes:1. T he amount included in the consolidated balance sheets presented in the table
above is equal to the total acquisition price for applicable properties or real estate lessthe aggregate amounts of depreciation and impairment loss for these properties orreal estate.
2. T he fair values of domestic properties and real estate have been calculated by Mitsubishi
Estate, based mainly on the Japanese Real Estate Appraisal Standards. The fair values ofoverseas properties and real estate have been calculated mostly by local appraisers.

Also, the following table shows the performance of the investment andment and rental properties for the fiscal year ended March 31, 2011.

2011
Revenue from operations¥

ROE

Rental Costs(Millions of Yen)

Difference(Millions of Yen)

Other Income (Loss)(Millions of Yen)

Investment andRental Properties

341,761

217,064

124,697(10,486)

Real Estate That
Includes Portions
Used as Investment
and Rental Properties

20,26815,476

4,792

(373)

Notes:1. R eal estate that includes portions used as investment and rental properties
has portions that are used by Mitsubishi Estate and some of its consolidated
subsidiaries for the purpose of providing related services and conducting
operation management. Accordingly, rental revenue associated with these
portions has been excluded. Costs associated with applicable properties and realestate, such as depreciation costs, building management costs and taxes, havebeen included in rental costs.
2. Other income (loss) includes loss on disposal of fixed assets.

Interest Coverage Ratio

Net Income Per Share
70.95

9.5
8.3

5.3

(Yen)

(Times)

62.99

46.27
5.4

(78,235)(79,653)(940,898)

148,972

1,903,288

3,700

3,172

44,509(24,777)(29,235)(297,988)

661

763

7,957

(21,887)(92,800)(263,229)(42,302)(118,100)(508,750)

115,955

30,872

1,394,538

Current(26,953)(16,319)(324,159)

Deferred(21,687)

4,966(260,823)(48,641)(11,353)(584,982)(3,095)(7,618)(37,225)

Other income (expenses):
Interest and dividend income
Interest expenses
Other, net (Note 13)
Income before income taxes and minority interests
Income taxes (Note 8):

Minority interests
Net income

¥

3.5

4.7

5.2
8.58

1.0
2007/3 2008/3 2009/3 2010/3 2011/3

ANNUAL REPORT 2011

64,219¥11,900$772,330

Consolidated Statements of Comprehensive Income
Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2010

Thousands of
U.S. dollars (Note 3)

Millions of yen

2011
Income before minority interests

¥

2011

2010
67,314¥

19,518$809,555

Other comprehensive income:(11,717)

28,988(140,924)

113

212

1,370

Land revaluation reserve

0

(189)

11

Translation adjustments(16,613)

3,306(199,804)

18

2

217

(28,198)

32,319(339,130)¥

39,115¥51,838$

470,424

Shareholders of Mitsubishi Estate Co., Ltd.

¥36,717¥44,164$

441,584

Minority interests

¥

2,398

¥

7,673

$

28,840Comprehensive income
Total comprehensive income attributable to:

3.8

38 |

(9,043,334)

32.90

3.8

2007/3 2008/3 2009/3 2010/3 2011/3

11,887,520

158,258

accounted for by the equity method

4.9

3.3

$

(784,789)

Operating income

Total other comprehensive income

6.6

1,013,415

Share of other comprehensive income of companies

8.5

7.1

¥

See accompanying notes to consolidated financial statements.

Rental Revenue(Millions of Yen)(%)

988,447

Selling, general and administrative expenses

Unrealized gain (loss) from hedging instruments
(%)

2011

2010

(751,953)

Cost of revenue from operations

Unrealized holding gain (loss) on securities

ROA

Thousands of
U.S. dollars (Note 3)

Millions of yen

Equity in earnings of unconsolidated subsidiaries and affiliates

rental properties and other real estate that includes portions used as invest-(2) Consolidated Balance Sheets
Compared with March 31, 2010, total assets as of March 31, 2011
decreased ¥109,856 million to ¥4,245,209 million.
Total liabilities declined ¥118,681 million to ¥2,930,161 million. Thebalance of interest-bearing debt as of March 31, 2011 shrank ¥123,061
million from March 31, 2010 to ¥1,639,050 million. Deducting cash andcash equivalents, the net balance of interest-bearing debt as of March 31,
2011 fell ¥174,298 million year on year to ¥1,409,987 million.
Net assets increased ¥8,825 million year on year to ¥1,315,047 million.
Decreases in unrealized holding gain on securities, foreign currency translation adjustments, minority interests and other items were more than offset
by increases in retained earnings and other items.

Consolidated Statements of Income

See accompanying notes to consolidated financial statements.
2007/3 2008/3 2009/3 2010/3 2011/3

2007/3 2008/3 2009/3 2010/3 2011/3

ANNUAL REPORT 2011 |39Consolidated Balance Sheets
Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
March 31, 2011 and 2010

Thousands of
U.S. dollars (Note 3)

Millions of yen

2011

2011

2010

2011

AssetsLiabilities and net assets

Current assets:

Current liabilities:¥

Cash (Notes 6 and 16)

224,688¥

175,159$

2,702,204

Short-term borrowings and current portion of long-term debt (Note 6)¥

313,723

40,13031,889482,631

Notes and accounts payable – trade76,113Marketable securities (Note 15)

5,094

3,567

61,263

Accrued income taxes (Note 8)

Allowance for doubtful receivables

(502)

(506)

(6,048)Advances and deposits

Inventories (Notes 4 and 6)

559,405

493,775

6,727,662

Accrued expenses and other current liabilities

Equity investments (Note 15)

209,900

226,201

2,524,354

Total current liabilities

Deferred income taxes (Note 8)

18,84941,850226,687

Long-term liabilities:

Other current assets

42,361

57,146509,459

1,099,926

1,029,082

13,228,214

Investments:¥

431,672$

3,772,988

78,800915,372

15,857

8,472

190,707

80,58485,369969,140

46,62846,708560,769

532,906

651,023

6,408,978Long-term debt (Note 6)

1,318,097

1,322,149

15,852,049

Lease deposits received

374,719

382,413

4,506,544

Accrued employees’ retirement benefits (Note 7)

15,322

15,570184,273

Deferred income taxes (Note 8)

546,241555,951

6,569,355

Goodwill

79,074

83,705

950,989

Other non-current liabilities

63,79838,029767,271

Total long-term liabilities

2,397,254

2,397,819

28,830,484

2,031,097

Total liabilities

2,930,161

3,048,842

35,239,463

149,287

1,724,958

Net assets:

350,610

3,929,635

			 Issued – 1,390,397,097 shares in 2011 and 2010

141,373

141,373

1,700,219

Investments in and advances to unconsolidated
subsidiaries and affiliates

14,433

16,579173,579

Investment securities (Notes 6 and 15)

168,885

184,743

Other investments (Note 5)

143,430
326,749

Total investments

2011

2010

Notes and accounts receivable – trade

Total current assets

Thousands of
U.S. dollars (Note 3)

Millions of yen

Shareholders’ equity (Note 9):
		 Common stock, without par value:
			 Authorized – 1,980,000,000 shares;

Property and equipment (Note 6):Land
Land in trust

1,613,702

1,652,937

19,407,130

		 Capital surplus

170,485

170,485

2,050,338

245,091

277,425

2,947,578

		 Retained earnings

449,889402,792

5,410,579

1,882,691

1,972,256

22,642,115

		 Less treasury stock, at cost

(4,390)(3,926)(52,800)

Machinery and equipment and other117,822

118,483

1,416,986

Total shareholders’ equity

757,358

710,724

9,108,336

Construction in progress

35,516

26,723427,133

3,894,824

4,047,825

46,840,945

Unrealized holding gain on securities

48,021

59,729577,529(1,177,519)(1,175,804)(14,161,385)

Deferred gains or losses on hedging instruments

(254)

(376)

(3,059)2,717,305

2,872,021

32,679,559

Land revaluation reserve458,297458,3035,511,689

Foreign currency translation adjustments(61,151)(45,223)(735,435)

Total accumulated other comprehensive income

444,912472,432

5,350,724

381

305

4,585

112,395

122,760

1,351,722

1,315,047

1,306,222

15,815,368

Buildings and structures

Less accumulated depreciation
Property and equipment, net

101,228

Intangible and other assets (Note 6)

1,217,422

103,350

Accumulated other comprehensive income:Stock acquisition rights
Minority interests
Contingent liabilities (Note 12)
Total net assets¥

Total assets

4,245,209¥

4,355,065$

51,054,832

Total liabilities and net assets¥

4,245,209¥

4,355,065$

51,054,832

See accompanying notes to consolidated financial statements.

40 |ANNUAL REPORT 2011

ANNUAL REPORT 2011 |41Consolidated Statements of Changes in Net Assets

Consolidated Statements of Changes in Net Assets (continued)

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2010

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2010
Millions of yen

Thousands of U.S. dollars (Note 3)

Shareholders’ equity

Balance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2010
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in the scope of consolidation
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2011

Commonstock

CapitalsurplusRetainedearnings¥136,534¥165,216¥408,775

4,839

5,269

Shareholders’ equity
Treasurystock¥(3,715)(19,372)
11,900
(27)
1,516
4,839
141,373

5,269
170,485(5,983)402,792(432)
221¥141,373¥170,485

47,097¥449,889¥706,810
10,108(19,372)
11,900
(432)
194
1,516

(210)
(3,926)

3,914
710,724(749)
285(16,657)
64,219
(749)
214
18
(411)

(463)
¥(4,390)

46,633¥757,358(16,657)
64,219
(71)
18
(411)

Total shareholders’equityBalance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2010
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in the scope of consolidation
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2011

Commonstock

CapitalsurplusRetainedearnings$1,642,022$1,986,966$4,916,120

58,196

63,372

Balance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than thosein shareholders’ equity
Total of changes in the year
Balance at March 31, 2010
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in the scope of consolidation
Net change in items other than thosein shareholders’ equity
Total of changes in the year
Balance at March 31, 2011
See accompanying notes to consolidated financial statements.

42 |ANNUAL REPORT 2011

Deferred
gains or losses
on hedging
instruments

Land
revaluation
reserve

Foreigncurrencytranslation
adjustments¥ 30,730¥(591)¥460,009¥(48,462)(327)
18,23258,1961,700,219

215
215
(376)

(1,705)(1,705)458,303

3,238
3,238
(45,223)122
122¥(254)(6)(6)¥458,297(15,927)(15,927)¥(61,151)(71,959)
4,844,161$1,700,219$2,050,338

566,418$5,410,579

121,568(232,986)
143,121(5,201)
2,339
18,232(2,535)(47,223)

47,074
8,547,495(9,013)3,436(200,331)
772,330(9,013)
2,577
221(4,943)(5,577)$(52,800)

560,841$9,108,336

Minority
interests

Total
net assets(200,331)
772,330(859)
221(4,943)$8,500,421

Thousands of U.S. dollars (Note 3)

Total
Accumulated
other
Stock
comprehensive acquisition
incomerights¥441,684¥218

Minority
interests

Total
net assets¥125,999¥1,274,713

30,74730,747472,432

87
87
305(3,239)(3,239)122,760

27,59531,5091,306,222(16,657)
64,219
(749)
214
18
(411)
(11,708)(11,708)¥ 48,021

63,3722,050,338(5,201)
2,666

Total shareholders’equityAccumulated other comprehensive income

10,108(19,372)
11,900
(432)
194
1,516
28,99928,99959,729$(44,688)(232,986)
143,121

Millions of yen
Accumulated other comprehensive income

Unrealized
gain onsecurities

Treasurystock(27,519)(27,519)¥444,912

75
75
¥381

(10,364)(10,364)¥112,395(37,808)
8,825¥1,315,047

Balance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than thosein shareholders’ equity
Total of changes in the year
Balance at March 31, 2010
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in the scope of consolidation
Net change in items other than thosein shareholders’ equity
Total of changes in the year
Balance at March 31, 2011

Unrealized
gain onsecurities

Deferred
gains or losses
on hedging
instruments$ 369,576$(7,116)Land
revaluation
reserve

Foreigncurrencytranslation
adjustments

Total
Accumulated
other
Stock
comprehensive acquisition
incomerights$5,532,280 $(582,834) $5,311,905$2,623 $1,515,333$15,330,284
121,568(232,986)
143,121(5,201)
2,339
18,232

348,762
348,762
718,338

2,588
2,588
(4,528)(20,517)(20,517)
5,511,763

38,952
38,952(543,881)

369,786
369,786
5,681,692

1,049
1,049
3,673

(38,964)(38,964)
1,476,369

331,871378,945
15,709,230(200,331)
772,330(9,013)
2,577
221(4,943)(140,808)
1,468(140,808)
1,468$ 577,529 $(3,059)(73) (191,553)(330,967)
911(124,646)(454,702)(73) (191,553)(330,967)
911(124,646)
106,138$5,511,689 $(735,435) $5,350,724 $4,585 $1,351,722 $15,815,368

See accompanying notes to consolidated financial statements.

ANNUAL REPORT 2011 |43Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2010

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2010

Thousands of
U.S. dollars (Note 3)

Millions of yen

2011
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Loss on sales or disposal of property and equipment
Gain on sales of securities
Valuation loss on securities
Valuation loss on equity investments
Impairment loss
Gain on grant of transferable development air rights
Equity in net income of affiliates
Increase (decrease) in allowancesInterest and dividend income
Interest expense(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories(Increase) decrease in equity investments
Increase (decrease) in notes and accounts payable
Increase (decrease) in lease deposits received
Other
		 Subtotal
Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from sales of marketable securities
Purchases of marketable securities
Proceeds from sales of property and equipment
Purchases of property and equipment
Proceeds from sales of investment securities
Purchases of investment securities
Purchase of investments in subsidiaries resulting in change in scopeof consolidation
Other (Note 16)
Net cash used in investing activities
Cash flows from financing activities
Net increase and decrease in short-term borrowings
Net increase and decrease in commercial paper
Increase in long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of corporate bonds
Repayment of corporate bonds
Cash dividends paid
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase and decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents arising from mergers and acquisitions
Cash and cash equivalents of subsidiaries excluded from consideration
Cash and cash equivalents at end of year (Note 16)
See accompanying notes to consolidated financial statements.

44 |ANNUAL REPORT 2011¥¥

115,955
70,628
4,388
(337)
3,286
3,587
2,788
–
(661)
(12)
(3,700)24,777(13,640)
71,6769,183(530)(7,929)12,979292,440
3,943(25,047)(12,073)259,263

2011

2010
¥

30,87273,926
4,442(1,058)976
54,52334,309(1,263)(763)
23(3,172)
29,235(2,091)
106,227(20,284)(24,352)
11,272(16,518)
276,3023,422(29,219)(37,837)
212,668$

1,394,538
849,40952,781(4,053)39,527
43,14633,532–(7,957)(146)(44,509)297,988(164,044)
862,009110,449(6,385)(95,359)
156,092
3,517,018
47,431(301,231)(145,195)
3,118,022

1,220(1,000)157(76,239)
3,683(8,838)

312
–
4,468
(112,214)1,911(4,112)

14,682(12,026)
1,897(916,893)
44,301(106,300)(9,147)22,939(67,223)–(3,004)(112,639)(110,013)
275,885(808,465)(22,786)–
260,170(323,857)
17,074(38,861)(16,657)(15,351)(140,269)(2,096)49,674
177,825
1,563–
229,062(30,678)(10,000)
236,677(261,603)
45,784(61,190)(19,372)(6,467)(106,852)
612(6,210)184,552–(516)
177,825(274,039)–
3,128,929(3,894,857)
205,351(467,368)(200,330)(184,627)(1,686,941)(25,212)597,4022,138,606
18,798–2,754,807¥$

1

Significant Accounting Policies

a. Basis of preparation
The accompanying consolidated financial statements of Mitsubishi Estate Co.,
Ltd. (the “Company”) and consolidated subsidiaries are prepared on the basisof accounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company as required by
the Financial Instruments and Exchange Law of Japan.
The notes to the consolidated financial statements include information
which may not be required under accounting principles generally accepted inJapan but is presented herein as additional information.
As permitted by the Securities and Exchange Law of Japan, amounts ofless than one million yen have been rounded off. As a result, the totals shownin the accompanying consolidated financial statements (both in yen and U.S.
dollars) do not necessarily agree with the sums of the individual amounts.
Certain amounts in the prior year’s financial statements have been
reclassified to conform to the current year’s presentation.
b. Principles of consolidation
The accompanying consolidated financial statements include the accounts of
the Company and its consolidated subsidiaries that it controls directly or
indirectly. Companies over which the Company exercises significant influencein terms of their operating and financial policies have been included in the
consolidated financial statements on an equity basis.
All significant intercompany balances and transactions have been
eliminated in consolidation.
c. Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates andassumptions that affect the amounts reported in the financial statements andaccompanying notes. The actual results could differ from those estimates.
d. Foreign currency translation
Current and non-current monetary accounts denominated in foreign
currencies are translated into yen at the current rates.
The revenue and expense accounts of the foreign consolidated
subsidiaries are translated using the average rate during the year. Except forshareholders’ equity, the balance sheet accounts are also translated into yen
at the rates of exchange in effect at the balance sheet date. The components
of shareholders’ equity are translated at their historical exchange rates.
e. Cash equivalents
The Company and its consolidated subsidiaries consider all highly liquid
investments that are readily convertible into cash and have an original
maturity of three months or less to be cash equivalents. Reconciliation
between cash in the balance sheet and cash equivalents at March 31, 2011
and 2010 is presented in Note 16.
f. Marketable securities and investment securities
Securities other than those of subsidiaries and affiliates are classified into
three categories: trading, held-to-maturity or other securities. Trading
securities are carried at fair value and held-to-maturity securities are carried atamortized cost. Marketable securities classified as other securities are carriedat fair value with any changes in unrealized holding gain or loss, net of theapplicable income taxes, included directly in shareholders’ equity. Nonmarketable securities classified as other securities are carried at cost. Cost of
securities sold is determined by the moving average method.
g. Inventories
Inventories are mainly stated at cost, determined by the identified cost
method. Net book value of inventories in the consolidated balance sheet iswritten down when their net realizable values decline.

h. Property and equipment, depreciation and impairment
Property and equipment, except for land as discussed below, is stated at costless accumulated depreciation. Depreciation is calculated principally by the
declining-balance method, except for buildings acquired in Japan subsequent
to March 31, 1998 and property and equipment of foreign subsidiaries on
which depreciation is calculated by the straight-line method at rates
determined based on the estimated useful lives of the respective assets. The
Company and its consolidated subsidiaries have capitalized the costs incurred
for significant renewals and additions; however, costs for maintenance andrepairs are charged to income.
As of March 31, 2002, the Company revalued its land at fair value,
pursuant to Article 2 of the “Enforcement Ordinance for the Law Concerning
Revaluation Reserve for Land” and its amendments. The related unrealized
gain, net of applicable income taxes, has been recorded as “Land revaluation
reserve” in net assets.
The Company and its consolidated subsidiaries review their property andequipment (including land) for impairment whenever events or changes in its
business circumstances indicate that the carrying amount of the assets may
not be fully recoverable. They perform cash flow analyses to determine if
impairment exits. If impairment is determined to exist, any related loss on
impairment is calculated based on the cash flow analyses.
The useful lives of property and equipment are summarized as follows:
Buildings and structures
2 to 75 years
Machinery and equipment and other2 to 22 years
i. Intangible and other assets
Intangible and other assets primarily consist of goodwill and land use rights.
Goodwill is stated on the basis of cost and is being amortized over a period of
5 years or an estimated economical period on a straight-line basis. A loss isrecognized if the fair value falls below the carrying amount. Land use rights
are stated on a cost basis.
j. Retirement benefits
The Company and most consolidated subsidiaries have noncontributory
funded and unfunded defined benefit plans covering most of their employees.
Employees of the Company and its consolidated subsidiaries are entitledunder most employment termination circumstances to annuity payments or
lump-sum payments, the amounts of which are determined principally byreference to their basic rates of pay, length of service, and the conditions
under which the termination occurs.
Accrued employees’ retirement benefits are provided mainly at an
amount calculated based on the retirement benefit obligation and the fairvalue of the pension plan assets as of the balance sheet date, as adjusted for
unrecognized actuarial gain or loss and unrecognized prior service cost. The
retirement benefit obligation is attributed to each period by the straight-line
method over the estimated years of service of the employees.
Actuarial gain and loss are amortized in the year following the year inwhich the gain or loss is recognized by the straight-line method over theperiod of the range from 1 year to 15 years which are shorter than the
average remaining years of service of the employees.
Prior service cost is being amortized as incurred by the straight-line
method over the period of 1 years or 10 years which are shorter than the
average remaining years of service of the employees.
k. Income taxes
Deferred tax assets and liabilities are determined based on the financial
statements and the tax bases of assets and liabilities, using the enacted tax
rates in effect for the year in which the temporary differences are expected toreverse. Deferred tax assets are also recognized for the estimated future tax
effects attributable to operating loss carry forwards. Valuation allowances are
established to reduce deferred tax assets if it is more likely than not that thesome portion or all of the deferred tax assets will not be realized.

ANNUAL REPORT 2011 |45

l. Derivative financial instruments
The Company and certain of its consolidated subsidiaries utilize derivative
financial instruments for the purpose of hedging their exposure to adverse
fluctuations and changes in interest rates (interest rate swaps) and foreignexchange rates (currency swaps), but do not enter into such transactions for
speculative or trading purposes.
Derivative financial instruments are carried at fair value with any changes
in unrealized gain or loss charged or credited to operations, except for thosewhich meet the criteria for deferral hedge accounting under which unrealized
gain or loss is deferred as an asset or liability.
m. Revenue recognition
The consolidated statements of income reflect revenue from operations in thefollowing manner:(a) Revenue from the leasing of office space is recognized as rent accrued overthe leasing period.
(b) Revenue from sales of condominiums, residential houses and land isrecognized when the units are delivered and accepted by the customers.
Revenue from consignment commissions for residential sales earned by thereal estate service business segment is recognized at the time of contract

2

Changes in Accounting Policy(“Accounting Standard for Equity Method of Accounting forInvestments” and “Practical Solution on Unification of Accounting
Policies Applied to Associates Accounted for Using the Equity Method”)
Effective April 1, 2010, the Company has adopted “Accounting Standard for
Equity Method of Accounting for Investments” (Financial AccountingStandard No. 16 announced by the Accounting Standards Board of Japan on
March 10, 2008) and “Practical Solution on Unification of Accounting Policies
Applied to Associates Accounted for Using the Equity Method” (Practical
Issues Task Force No. 24 issued by the Accounting Standards Board of Japanon March 10, 2008).
This adoption had no impact on net income before income taxes andminority interests.
(“Accounting Standard for Asset Retirement Obligations”)
Effective April 1, 2010, the Company has adopted “Accounting Standard for3

conclusion for services provided up to the conclusion and at the time ofownership transfer for services provided up to the transfer.
(c) Revenue from real estate brokerage is recognized when an underlying
lease agreement goes into force or the underlying units are delivered.
(d) Revenue of construction contracts, of which the percentage of completioncan be reliably estimated, is recognized by the percentage-of-completion
method. The percentage-of-completion method is calculated at the cost
incurred by the end of the consolidated fiscal year as a percentage of
estimated total cost. The completed-contract method continues to be
applied for other contracts for which the percentage of completion cannot
be reliably estimated.
(e) Other operating revenue is recognized on an accrual basis.
n. Appropriation of retained earnings
Under Corporation Law of Japan, the appropriation of retained earnings withrespect to a given financial year is made by resolution of the shareholders at
a general meeting held subsequent to the close of such financial year. The
accounts for that year do not, therefore, reflect such appropriations. See Note
9 for more information.

Asset Retirement Obligations” (Financial Accounting Standard No. 18 issued
by the Accounting Standards Board of Japan on March 31, 2008) and“Implementation Guidelines on Accounting Standard for Asset Retirement
Obligations” (Financial Accounting Standard Implementation Guidelines No.
21 issued by the Accounting Standards Board of Japan on March 31, 2008).
The effect of this adoption on operating income and net income before
income taxes and minority interests was immaterial.
(“Accounting Standard for Presentation of Comprehensive Income”)
Effective from the year ended March 31, 2011, the Company has adopted“Accounting Standard for Presentation of Comprehensive Income (Financial
Accounting Standard No. 25 issued by the Accounting Standards Board ofJapan on June 30, 2010). Accordingly, the Company presents “Valuation andTranslation Adjustments” as of March 31, 2010 as “Accumulated Other
Comprehensive Income” in the accompanying financial statements.

U.S. Dollar Amounts

Translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation only, at the rate of ¥83.15 =U.S.$1.00, the approximate rate of exchange prevailing on March 31, 2011. The inclusion of such amounts is not intended to imply that yen amounts havebeen or could be readily converted, realized or settled in U.S. dollars at the above or any other rate.

4

Inventories

Inventories at March 31, 2011 and 2010 are summarized as follows:
Millions of yen

Real estate for saleLand and housing projects in progress
Land held for development
Other
Total

5

2011
¥217,420
324,7138,801
8,469¥559,405

Thousands of U.S. dollars

2010¥150,245
323,9438,844
10,741¥493,775

2011$2,614,797
3,905,158
105,846
101,859$6,727,662

Other Investments

Other investments at March 31, 2011 and 2010 were as follows:
Millions of yen

Lease deposits
Long-term prepaid expenses and other
Total

46 |

ANNUAL REPORT 20112011
¥ 97,238
46,192¥143,430

Thousands of U.S. dollars

2010¥ 96,017
53,270¥149,2872011$1,169,429
555,529$1,724,958

6

Short-Term Borrowings and Long-Term Debt

At March 31, 2011 and 2010, short-term borrowings and the current portion of long-term debt consisted of the following:
Millions of yen

Loans, principally from banks
Current portion of long-term debt
Total

2011
¥ 75,507
238,216¥313,723

Thousands of U.S. dollars

2010¥105,586
326,085¥431,672

2011$ 908,084
2,864,903$3,772,988

The weighted-average interest rates per annum on short-term borrowings outstanding at March 31, 2011 and 2010 were 0.60% and 0.72%, respectively.
Short-term borrowings are principally unsecured.
At March 31, 2011 and 2010, long-term debt consisted of the following:
Millions of yen

2011
1.9% unsecured bonds due 2010
2.29% unsecured bonds due 2010
1.55% unsecured bonds due 2011
1.44% unsecured bonds due 2011
1.16% unsecured bonds due 2011
1.47% unsecured bonds due 2012
1.58% unsecured bonds due 2012
3.275% unsecured bonds due 2012
2.77% unsecured bonds due 2012
1.395% unsecured bonds due 2012
1.2% unsecured bonds due 2012
1% unsecured bonds due 2013
0.785% unsecured bonds due 2013
1.675% unsecured bonds due 2014
1.349% unsecured bonds due 2014
1.65% unsecured bonds due 2014
1.75% unsecured bonds due 2014
1.655% unsecured bonds due 2014
1.409% unsecured bonds due 2015
1.295% unsecured bonds due 2015
1.572% unsecured bonds due 2015
1.443% unsecured bonds due 2016
1.985% unsecured bonds due 2016
1.88% unsecured bonds due 2016
1.79% unsecured bonds due 20172.045% unsecured bonds due 20171.825% unsecured bonds due 20173.125% unsecured bonds due 20171.77% unsecured bonds due 20171.65% unsecured bonds due 2018
2.005% unsecured bonds due 2018
3% unsecured bonds due 2018
1.84% unsecured bonds due 2018
1.72% unsecured bonds due 2018
1.87% unsecured bonds due 2019
1.62% unsecured bonds due 2019
1.53% unsecured bonds due 2019
1.975% unsecured bonds due 2019
1.805% unsecured bonds due 20192.5% unsecured bonds due 2020
1.165% unsecured bonds due 2020
2.42% unsecured bonds due 2022
1.50% unsecured bonds due 2022
2.075% unsecured bonds due 2023
2.28% unsecured bonds due 2024
2.305% unsecured bonds due 2027
2.385% unsecured bonds due 2027
2.52% unsecured bonds due 2027
2.425% unsecured bonds due 2027
2.555% unsecured bonds due 2028
2.9% unsecured bonds due 2032
2.615% unsecured bonds due 2032
2.04% unsecured bonds due 2032
1.72% unsecured bonds due 2033
Floating rate bonds due 2010 (payable in U.S. dollars)
Floating rate bonds due 2011 (payable in U.S. dollars)
Loans from banks and insurance companies:
SecuredUnsecuredLess current portion

Thousands of U.S. dollars–––
10,00010,00010,00020,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00010,00010,00020,00010,00010,00010,00015,00010,00015,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00020,00010,000
–
6,330

2010
¥ 10,000
10,00010,00010,00010,00010,00020,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00010,00010,00020,00010,00010,00010,00015,00010,00015,00010,00010,00010,00010,00010,000–10,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00020,00010,0009,916–

258,665
731,318
1,556,314(238,216)¥1,318,097

316,498
741,820
1,648,235(326,085)¥1,322,150

¥

2011

$

–
–
–
120,264
120,264
120,264
240,529
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
180,396
120,264
120,264
120,264
120,264
120,264
120,264
240,529
120,264
120,264
120,264
180,396
120,264
180,396
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
120,264
180,396
120,264
120,264
120,264
120,264
240,529
120,264–
76,1393,110,828
8,795,168
18,716,952(2,864,903)$15,852,049
ANNUAL REPORT 2011 |47

The aggregate annual maturities of long-term debt subsequent to March 31, 2011 are summarized as follows:Year ending March 31,

8Millions of yen

2012
2013
2014
2015
2016
2017 and thereafter
Total

Thousands of U.S. dollars¥ 238,185
255,042
189,356
305,81765,539502,342¥1,556,283$ 2,864,531
3,067,252
2,277,289
3,677,900
788,210
6,041,395$18,716,580

The assets pledged as collateral for short-term borrowings of ¥100 million ($1,202 thousand) and long-term debt of ¥258,665 million ($3,110,828 thousand) at
March 31, 2011 were as follows:
Cash
Real estate for sale
Buildings and structures
Machinery and equipment
Land
Land in trust
Other property and equipment
Investment securities
Total

Millions of yen

Thousands of U.S. dollars

¥

$

4,803
45,862
155,117
4,275
196,978
243,942068¥651,048

57,765551,563
1,865,509
51,414
2,368,954
2,933,764
5
827$7,829,804

Income Taxes

Income taxes in Japan applicable to the Company and its domestic
consolidated subsidiaries consist of corporation tax, inhabitants’ taxes andenterprise tax which, in the aggregate, resulted in statutory tax rates of

40.69% for the years ended March 31, 2011 and 2010. Income taxes of theforeign consolidated subsidiaries are based generally on the tax rates
applicable in their countries of incorporation.

The effective tax rates reflected in the consolidated statements of income for the two years ended March 31, 2011 differ from the statutory tax rate for thefollowing reasons:Statutory tax rate
Increase (decrease) in income taxes resulting from:
Change in valuation allowance
Different tax rates applied
Revenues deductible for income tax purposes
Expenses not deductible for income tax purposes
Undistributed earnings of affiliates
Equity income
Expiration of net operating loss carry forwards
Other
Effective tax rates

201140.69%

2010
40.69%

1.18(0.44)(0.26)
0.48(0.15)(0.21)–
0.66
41.95%

3.03(0.19)(24.50)1.65
0.28(0.88)
9.37
7.33
36.78%The significant components of deferred tax assets and liabilities as of March 31, 2011 and 2010 were as follows:
Millions of yen

As is customary in Japan, collateral must be given if requested by lending
institutions under certain circumstances, and banks, in general, have the rightto offset cash deposited with them against any debt or obligations payable to7

a bank which become due in cases of default or certain other specified
events. The Company has never received any such requests nor does it expectthat any such requests will be made.

Pension and Severance Plans

The following table sets forth the funded status of the plans, and the amounts recognized in the consolidated balance sheets at March 31, 2011 and 2010 for
the Company’s and its consolidated subsidiaries’ defined benefit pension plans:Millions of yen

Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
The net retirement benefit obligation at transition of the accounting standards
Unrecognized actuarial loss
Unrecognized prior service cost
Net amounts recognized in the consolidated balance sheet
Prepaid pension expenses
Accrued employees’ retirement benefits

2011¥(97,352)
73,880(23,472)
17
16,097976(6,381)
9,229¥(15,610)

Thousands of U.S. dollars

2011$(1,170,810)
888,522(282,288)
206
193,598
11,738(76,744)
110,998$ (187,742)

2010¥(97,035)
74,687(22,348)30
15,154946(6,215)
9,691¥(15,907)* The accrued employees’ retirement benefits recognized by Rockefeller Group, Inc., a consolidated subsidiary, in the amount ¥288 million ($3,469 thousand) was presented in other current liabilities.

The components of expenses related to the pension and severance plans for the years ended March 31, 2011 and 2010 were as follows:
Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of net retirement benefit obligation at transition
Amortization of actuarial loss
Other
Total

2011
¥ 4,425
2,231(1,515)
12
2,083
388
¥ 7,626

Thousands of U.S. dollars

2010¥ 4,493
2,267(1,342)9
3,080
518¥ 9,0272011$ 53,217
26,841(18,223)148
25,056
4,676$ 91,717

The assumptions used in accounting for the pension and severance plans for the years ended March 31, 2011 and 2010 were as follows:
Discount rate
Expected rate of return on plan assets

48 |ANNUAL REPORT 20112011
1.5 ~ 5.9%
0.5 ~ 7.5%

2011

Thousands of U.S. dollars

2010

2011

Deferred tax assets:
Net operating loss carry forwards
Accrued retirement allowances and pension costs
Valuation loss on inventories
Unrealized loss on property and equipment
Unrealized loss on property and equipment by consolidation
Land revaluation reserve
Loss on valuation of equity investments
Other
Total gross deferred tax assets
Valuation allowance
Total deferred tax assets¥ 14,612
14,546
18,54967,617
17,34654,305
2,175
32,197221,351(69,747)
151,603¥ 24,669
14,501
17,16363,75917,66854,306
21,64228,936242,648(69,545)
173,103$

Deferred tax liabilities:
Reserves under Special Taxation Measures Law
Land revaluation reserve
Unrealized gain on property and equipment by consolidation
Unrealized gain on securities
Other
Total deferred tax liabilities
Net deferred tax liabilities(64,748)(375,791)(177,806)(34,564)(20,239)(673,149)¥(521,546)(65,373)(375,804)(178,755)(39,476)(20,035)(679,446)¥(506,343)(778,695)(4,519,437)(2,138,381)(415,684)(243,409)(8,095,608)$(6,272,358)

9

175,742
174,947
223,086
813,196
208,614653,103
26,159387,220
2,662,069(838,819)
1,823,250

Shareholders’ Equity

The Corporation Law of Japan (the “Law”) provides that an amount equal to
10% of the amount to be disbursed as distributions of capital surplus (otherthan the capital reserve) and retained earnings (other than the legal reserve)
be transferred to the capital reserve and the legal reserve, respectively, until
the sum of the capital reserve and the legal reserve equals 25% of the capitalstock account. The capital reserve amounted to ¥170,485 million ($2,050,338

thousand), and the legal reserve amounted to ¥21,663 million ($260,538
thousand) at March 31, 2011. Such distributions can be made at any timeby resolution of the shareholders or by the Board of Directors if certain
conditions are met, but neither the capital reserve nor the legal reserve isavailable for distributions.

2010
1.5 ~ 5.75%
0.5 ~ 7.5%

ANNUAL REPORT 2011 |49

10 Amounts per Share

12 Contingent Liabilities
Yen

Year ended March 31,
Net income:
Basic
DilutedCash dividends applicable to the year

2011

March 31,
Net assets

2011¥866.31

U.S. dollars

2011

2010
¥46.2746.26
12.00

Basic net income per share was computed based on the net income available
for distribution to shareholders of common stock and the weighted average
number of shares of common stock outstanding during the year, and diluted
net income per share was computed based on the net income available for
distribution to the shareholders and the weighted average number of sharesof common stock outstanding during each year after giving effect to thedilutive potential of shares of common stock to be issued upon the exerciseof warrants and stock subscription rights.

Millions of yen

$0.55
0.55
0.14

¥ 8.58
8.58
12.00
Yen

2011
$10.41

Amounts per share of net assets are computed based on net assets
available for distribution to the shareholders and the number of shares ofcommon stock outstanding at the year end.
Cash dividends per share represent the cash dividends proposed by the
Board of Directors as applicable to the respective years together with theinterim cash dividends paid.

reflected in the consolidated balance sheets if finance lease accounting had
been applied to the finance leases currently accounted for as operating leases:

Millions of yen

Buildings and structures
Others
Total

Accumulated
depreciation

Accumulated
impairment loss

¥11,3292,226¥13,556¥7,795
1,676¥9,472

¥231
0
¥232

Net bookvalue¥3,301549¥3,851

Acquisition
costs

Accumulated
depreciation

Accumulated
impairment loss

$136,255
26,782$163,037$ 93,756
20,159$113,916$2,7888$2,797

Net book
value$39,7096,614$46,323

2010
Buildings and structures
Others
Total

Accumulated
depreciation

Accumulated
impairment loss

¥16,546
3,987¥20,533¥ 9,870
2,654¥12,524

¥278
1
¥280

Net book
value¥6,3971,331¥7,729Lease payments relating to finance leases accounted for as operating leases in the accompanying consolidated financial statements amounted to ¥1,838 million($22,112 thousand) and ¥2,498 million for the years ended March 31, 2011 and 2010, respectively.
Future minimum lease payments subsequent to March 31, 2011 on noncancelable operating leases and finance leases accounted for as operating leases are
summarized as follows:
Millions of yen

Thousands of U.S. dollars

Year ending March 31,

FinanceleasesOperatingleasesFinanceleasesOperatingleases

20122013 and thereafter
Total¥2,723
1,361¥4,084¥ 3,320
56,320¥59,641$32,752
16,368$49,121$ 39,936
677,341$717,277

The Company and its consolidated subsidiaries lease office buildings and commercial properties and earn income on these leases. Future minimum lease income
subsequent to March 31, 2011 from noncancelable operating leases is summarized as follows:Year ending March 31,

Millions of yen

2012
2013 and thereafter
Total

50 |

¥188,805
600,304¥789,109ANNUAL REPORT 2011

$ 20,685
535,4882,233$558,407

The components of “Other, net” in “Other income (expenses)” for each of the years ended March 31, 2011 and 2010 were as follows:
Millions of yen

2011
¥

943
–
337
(6,136)(3,052)(2,788)(3,587)(3,286)(2,159)(2,156)¥(21,887)

Amortization of negative goodwill
Gain on grant of transferable development air rights
Gain on sales of investment securities
Loss on disposal of fixed assets
Loss related to retirement of fixed assets
Impairment loss (*1)
Loss on valuation of equity investments
Loss on valuation of investment securities
Loss on disaster
Other, net(*1) Impairment loss
The Company recorded consolidated impairment losses for the following asset
groups for the fiscal year ended March 31, 2011:
Major Application
Leased assets, etc.
(total 10 groups)

Category
Buildings, land, etc.

Location
Chiyoda-ku, Tokyo, etc.

Millions of yen
Acquisition
costs

Thousands of U.S. dollars

13 Other Income (Expenses)

Thousands of U.S. dollars

2011
Acquisitioncosts¥ 1,720
44,525
185¥46,431

Guarantees of affiliates’ loans from banks
Guarantees of house purchasers’ loans from banks and others
Other
Total

U.S. dollars

2010¥852.36

11 Leases
The following pro forma amounts represent the acquisition costs,
accumulated depreciation, accumulated impairment loss and net book valueof the leased assets as of March 31, 2011 and 2010, which would have been

At March 31, 2011, the Company and its consolidated subsidiaries had the following contingent liabilities:

Thousands of U.S. dollars$2,270,661
7,219,536$9,490,198

Asset grouping for the Group was made based on a minimum unit thatgenerates cash flows, which is substantially independent from cash flows ofother assets or asset groups. Company condominiums are regarded as sharedassets. As a result, for the fiscal year ended March 31, 2011, the book values of
10 asset groups, consisting of those for which the market prices fell considerablycompared with the book values due to the decline of land prices and those forwhich profitability decreased considerably due to fallen rent levels or deteriorated
market conditions, etc., were reduced to the respective collectible amounts andsuch reduced amounts were recorded as an impairment loss in the amount of¥2,788 million ($33,532 thousand).
The breakdown of such impairment loss was ¥2,165 million ($26,042
thousand) in land, ¥622 million ($7,489 thousand) in buildings and structures,
respectively.
The collectible amounts of asset groups are measured with net sale value or
use value, and the net sale value is principally expressed as an appraised value by
a real estate appraiser. Future cash flows mainly discounted at a rate of 5% areused to compute the use value.
The Company recorded consolidated impairment losses for the following asset
groups for the fiscal year ended March 31, 2010:

Major Application

Thousands of U.S. dollars

2010¥ 1,060
1,263
1,059(6,676)–(34,309)(54,523)––(675)¥(92,800)
Category

2011$ 11,347–
4,053(73,802)(36,714)(33,532)(43,146)(39,527)(25,971)(25,935)$(263,229)
Location

Leased assets, etc.
(total 9 groups)

Construction inprogress, etc.

Shinjuku-ku, Tokyo,
etc.

International businesses(total 6 group)

Construction inprogress, etc.

California, USA, etc.

Asset grouping for the Group was made based on a minimum unit thatgenerates cash flows, which is substantially independent from cash flows ofother assets or asset groups. Company condominiums are regarded as sharedassets. As a result, for the fiscal year ended March 31, 2010, the book values of
15 asset groups, consisting of those for which the market prices fell considerablycompared with the book values due to the decline of land prices and those forwhich profitability decreased considerably due to fallen rent levels or deteriorated
market conditions, etc., were reduced to the respective collectible amounts andsuch reduced amounts were recorded as an impairment loss in the amount of¥34,309 million.
The breakdown of such impairment loss was ¥815 million in land, ¥427 million
in buildings and structures and ¥33,066 million in construction in progress,
respectively.
The collectible amounts of asset groups are measured with net sale value or
use value, and the net sale value is principally expressed as an appraised value by
a real estate appraiser. Future cash flows mainly discounted at a rate of 5% areused to compute the use value.
As for the impairment loss in the International Business, the impairment loss iscalculated for consolidated foreign subsidiaries in accordance with the U.S
accounting standards.

14 Financial Instruments
Overview(1) Policy for financial instruments
In consideration of plans for capital investment, the Company and its
consolidated subsidiaries (collectively, the “Group”) raise funds mainly
through bank borrowings and bond issues. In terms of fund management, theGroup makes every effort to avoid market risks by emphasizing liquidity andshortening the fund management period. The Group uses derivatives for the
purpose of hedging exposures to interest rates and reducing interest expenses
and do not enter into derivatives for speculative purpose.

ANNUAL REPORT 2011 |51

(3) Risk management for financial instruments(a) Monitoring of credit risk (the risk that customers or counterparties may
default)
In accordance with the internal policies for managing credit risk of theGroup arising from receivables and lease and guarantee deposits, eachrelated division in each business segment monitors credit worthiness of
their main customers periodically, and monitors due dates and outstandingbalances by individual customer. In addition, the Group is making efforts to
identify and mitigate risks of bad debts from customers who are having
financial difficulties.

(2) Types of financial instruments and related risk
Trade receivables – notes and accounts receivable- are exposed to credit risk inrelation to customers. Trade receivables denominated in foreign currencies,
which arise from overseas operation, are exposed to foreign currency
exchange risk.
Marketable securities and investment securities are exposed to market
risk. Those securities are composed of mainly held-to-maturity debt securities
and the shares of common stock of other companies with which the Grouphas business relationships.
Equity investments are composed of mainly preferred equity investmentsin special purpose companies under the Law concerning Liquidation of Assets,
investments in investment unit of trust held in real estates and investments insilent partnership for special purpose companies. They are exposed to credit
risks of issuers, risks of fluctuations in interest rates and market prices,
respectively.
Lease and guarantee deposit for leased assets are exposed to credit risks
of customers.
Substantially all trade payables - accounts and notes payable - havepayment due dates within one year. Some of them denominated in foreign
currencies are exposed to foreign currency exchange risk.
Borrowings and bonds are taken out principally for the purpose of
making capital investments and the repayment dates of the long-term debt
extend up to 23 years from the balance sheet date. Certain long-term debt
with variable interest rates is exposed to interest rate fluctuation risk.
However, to reduce such risk for long-term debt bearing interest at variable
rates, the Group utilizes derivative transactions (interest rate swap) as ahedging instrument.
Derivative transactions include interest rate swap and currency swap
transactions. The Group also enters into interest rate swap transactions to fix
interest expense for long-term debt bearing interest at variable rates and to
reduce interest rate fluctuation risk. Some of the consolidated subsidiaries
enter into interest swap and currency swap transactions in accordance withthe same policies and purposes adopted by the Company.

(b) Monitoring of market risks (the risks arising from fluctuations in foreignexchange rates, interest rates and others)
In order to mitigate the interest rate risk for loans payable and bonds
bearing interest at variable rates, the Group may also enter into interest
rate swap and currency swap transactions.
For marketable securities and investment securities, the Group
periodically reviews the fair values of such financial instruments and thefinancial position of the issuers (business partners). In addition, the Group
continuously evaluates whether securities other than those classified as
held-to-maturity should be maintained taking into account their fair values
and relationships with the issuers (business partners).
(c) Monitoring of liquidity risk (the risk that the Group may not be able tomeet its obligations on scheduled due dates)
Based on the report from each division, the Group prepares and updates
its cash flow plans on a timely basis and stabilizes liquidity to manage
liquidity risk.
(4) Supplementary explanation of the estimated fair value of financial
instruments
The fair value of financial instruments is based on their quoted market price, if
available. When there is no quoted market price available, fair value isreasonably estimated. Since various assumptions and factors are reflected inestimating the fair value, different assumptions and factors could result indifferent fair value.

Estimated Fair Value of Financial Instruments
Carrying value of financial instruments on the consolidated balance sheet as of March 31, 2011 and unrealized gains (losses) are shown in the following table.
The following table does not include financial instruments for which it is extremely difficult to determine the fair value. (Please refer to Note 2 below).
Millions of yen

Thousands of U.S. dollars

20111) Cash and due from banks2) Notes and accounts receivable – trade   Allowance for doubtful receivables (*1)3) Securities and Investment securities   (i) Held-to-maturity debt securities   (ii) Other securities
4) Equity investments
Total assets
1) Notes and accounts payable – trade2) Short-term borrowings
3) Current portion of long-term borrowings
4) Current portion of long-term bonds5) Long-term bonds6) Long-term borrowings
Total liabilities

52 |ANNUAL REPORT 2011

Carrying
Value

Estimated
Fair Value¥ 224,688
40,130(502)
39,627¥ 224,688

3,460
159,500
7,996¥ 435,273

3,483
159,6107,996¥ 435,406¥¥

76,11375,507
201,885
36,330530,000
788,097¥1,707,935–

39,627

76,11375,507
201,885
36,330547,683
795,698¥1,733,219

Carrying
Value

Difference

–
¥

¥

23
109
–
132

–
–
–
–
¥17,683
7,600¥25,284

Estimated
Fair Value

Difference$ 2,702,204 $ 2,702,204
482,631(6,048)476,583
476,583
41,614
1,918,230
96,172$ 5,234,804

41,897
1,919,545
96,172$ 5,236,403$$

915,372
908,084
2,427,971
436,932
6,374,022
9,478,026$20,540,410

915,372
908,084
2,427,971
436,932
6,586,692
9,569,436$20,844,489–

Millions of yen

20101) Cash and due from banks2) Notes and accounts receivable – trade   Allowance for doubtful receivables (*1)3) Securities and Investment securities   (i) Held-to-maturity debt securities   (ii) Other securities
4) Equity investments
Total assets
1) Notes and accounts payable – trade2) Short-term borrowings
3) Current portion of long-term borrowings
4) Current portion of long-term bonds5) Long-term bonds6) Long-term borrowings
Total liabilities

$

$

283
1,315
–
1,598

–
–
–
–
$212,669
91,409$304,079

Estimated
Fair Value¥ 175,159
31,889(506)
31,382¥ 175,159–

31,382–

3,927
174,5238,248¥ 393,241

3,947
174,5238,248¥ 393,261¥¥

78,800105,586
286,169
39,916550,000
772,149¥1,832,622

Difference

78,800105,586
286,169
39,916560,818
776,558¥1,847,849

¥

¥

19
–
–
19

–
–
–
–
¥10,818
4,408¥15,227(*1) The value of notes and account receivable-trade is shown at net value, after deducting allowance for doubtful accounts.
rate in a short period of time, their carrying value approximates fair value. The fair value of long-termborrowings with fixed interest rate is based on the present value of the total of principal and interest
discounted by the interest rate to be applied if similar new borrowings were entered into.
Derivatives Transactions   Please refer to Note 17. “Derivatives and hedging activities”.

Note 1: M ethods to determine the estimated fair value of financial instruments and other matters related tosecurities and derivative transactions
AssetsCash on hand and in banks   Since these items are settled in a short period of time, their carrying value approximates fair value.
Notes and accounts receivable – trade   Since these items are settled in a short period of time, their carrying value approximates fair value.
Marketable securities and investment securities  The fair value of stocks is based on quoted market prices. The fair value of debt securities is mainly
based on prices provided by the financial institutions making markets in these securities. For information
on securities classified by holding purpose, please refer to Note 15. “Marketable Securities andInvestment Securities.”
Equity investments   The fair value of equity investments is based on quoted market prices.

Note 2: F inancial instruments for which it is extremely difficult to determine the fair value

2011

2010

2011

(i) Unlisted stocks *1¥ 25,451¥ 26,418$ 306,095(ii) Equity investments *2

201,903

217,952

2,428,182(iii) Lease and guarantee deposit receivables *3

97,23896,017

1,169,429(iv) Lease and guarantee deposit payables *4

374,719

382,413

4,506,544*1. Because no quoted market price is available and it is extremely difficult to determine the fair value,
unlisted stocks are not included in the above table.
*2. Because it is extremely difficult to determine the fair value for equity investments which are not listed
and have no quoted market price, they are not included in the above table.
*3. Because no quoted market price for lease and guarantee deposit receivables for rental properties isavailable and calculation of the actual period of duration from lease initiation to evacuation is difficult,it is extremely difficult to estimate a reasonable amount of cash flow and therefore they are notincluded in the above table.
*4. Because no quoted market price for lease and guarantee deposit payables for rental properties isavailable and calculation of the actual period of duration from lease initiation to evacuation is difficult,it is extremely difficult to estimate a reasonable amount of cash flow, and therefore they are notincluded in the above table

Note 3: Redemption schedule for receivables and marketable securities with maturities at March 31, 2011
Millions of yen

Cash on hand and in banks
Notes and accounts receivable – tradeMarketable securities and investment securities:
Held-to-maturity debt securities
National and local government bonds
Corporate bonds
Other
Other marketable securities with maturities:
Corporate bonds
Other
Total

Due in One Year Due after One Yearor Less
through Five Years

Thousands of
U.S. dollars

Millions of yen

Liabilities
Notes and accounts payable - trade   Since these items are settled in a short period of time, their carrying value approximates fair value.
Short-term borrowings   Since these items are settled in a short period of time, their carrying value approximates fair value.
Current portion of long-term borrowings   Since these items are settled in a short period of time, their carrying value approximates fair value.
Current portion of bonds   Since these items are settled in a short period of time, their carrying value approximates fair value.
Bonds   The fair value of bonds is based on the quoted market price.
Long-term borrowings  Since variable interest rates of certain long-term borrowings are determined based on current interest

As of March 31, 2011–

Carrying
Value

Thousands of U.S. dollars

Due after Five Years
through Ten Years

Due after
Ten Years

Due in One Year Due after One Yearor Less
through Five Years

Due after Five Years
through Ten Years

Due after
Ten Years¥224,546
40,130

–
–

–
–

–
–

$2,700,493
482,631

–
–

–
–

–
–

15
162
1,450

¥ 145
383
2,582

¥ 210
–
–

–
–
–

180
1,960
17,438$ 1,743
4,606
31,063$2,525
–

–
–
–

–
2,443
¥268,748––¥3,110

–
–
¥ 210

–
–
–

–
29,386$3,232,090

–

–

–

$37,413$2,525–Due after Five Years
through Ten Years

Due after
Ten Years

Millions of yen
As of March 31, 2010
Cash on hand and in banks
Notes and accounts receivable – tradeMarketable securities and investment securities:
Held-to-maturity debt securities
National and local government bonds
Corporate bonds
Other
Other marketable securities with maturities:
Corporate bonds
Other
Total

Due in One Yearor Less

Due after One Yearthrough Five Years¥175,009
31,889

–
–

15
220
–

¥ 150
1,951
25

–
2,279
¥209,414––¥2,126

–
–

–
–

¥

30
1,556
–

–
–
–

–
–
¥1,586–––

ANNUAL REPORT 2011 |53

Note 4: The redemption schedule for bonds and long-term borrowings
Millions of yen
Due inOne Yearor Less¥ 36,300
201,885¥238,185

Due after
One Yearthrough
Two Years¥ 70,000
185,042¥255,042

Due after
Two Years
throughThree Years¥ 30,000
159,356¥189,356

As of March 31, 2010

Due inOne Yearor Less

Due after
One Yearthrough
Two Years

Due after
Two Years
throughThree Years

Corporate bonds
Long-term borrowings
Total¥ 40,000
286,169¥326,169¥ 30,000
204,099¥234,099¥ 70,000
201,957¥271,957

As of March 31, 2011
Corporate bonds
Long-term borrowings
Total

Millions of yen

Thousands of U.S. dollars
Due after
Four Years
throughFive Years¥20,000
45,539¥65,539

Due after
Five Years¥370,000
132,342¥502,342

Due afterThree Years
through
Four Years

Due after
Four Years
throughFive Years

Due after
Five Years¥ 30,000
84,262¥114,262¥ 40,000
137,656¥177,656¥380,000
144,173¥524,173

Due afterThree Years
through
Four Years¥ 40,000
265,817¥305,817

Due inOne Yearor Less$ 436,560
2,427,971$2,864,531

Due after
One Yearthrough
Two Years$ 841,852
2,225,400$3,067,252

Due after
Due afterThree Years
Two Years
throughthroughThree Years Four Years$ 360,793 $ 481,058
1,916,496
3,196,842$2,277,289 $3,677,900

Due after
Four Years
throughFive Years$240,529
547,681$788,2102010
Due after
Five Years$4,449,789
1,591,605$6,041,395

Millions of yen

15 Marketable Securities and Investment Securities

Amortized
cost

Fair
value

Unrealized
gain (loss)

Debt securities whose fair value exceeds their cost:
Government bonds
Corporate bonds  Subtotal

¥ 162
863
1,025

¥ 164
880
1,045

¥ 2
17
20

Debt securities whose cost exceeds their fair value:
Government bonds
Corporate bonds  Subtotal
Total

29
2,872
2,902
¥3,927

28
2,872
2,901
¥3,947

(0)
–
(0)
¥19

16 Supplemental Cash Flow Information

Marketable and investment securities classified as other securities at March 31, 2011 and 2010 are summarized as follows:
Millions of yen

The following table represents a reconciliation of cash and cash equivalents as of March 31, 2011 and 2010:

Thousands of U.S. dollars

Millions of yen

2011
Cost

Fair
value

Unrealized
gain (loss)

Cost

Fair
value

Unrealized
gain (loss)

Securities whose fair value exceeds their cost:
Equity securities
Other  Subtotal¥42,409
5,331
47,740¥124,735
7,997
132,733¥ 82,326
2,666
84,992$ 510,032
64,116574,148$1,500,128
96,182
1,596,310$ 990,095
32,066
1,022,161

Securities whose cost exceeds their fair value:
Equity securities
Other  Subtotal
Total

38,639142
38,782¥86,522

34,68518
34,703¥167,436(3,954)(124)(4,078)¥ 80,913

464,696
1,717
466,414$1,040,562

417,139219
417,359$2,013,669(47,557)(1,498)(49,055)$ 973,106

Millions of yen

2010
Cost

Fair
value

Unrealized
gain (loss)

Securities whose fair value exceeds their cost:
Equity securities
Other  Subtotal¥67,335
5,481
72,817¥164,626
8,249
172,875¥ 97,290
2,767
100,058

Securities whose cost exceeds their fair value:
Equity securities  Subtotal
Total

11,204
11,204¥84,021

9,896
9,896
¥182,772(1,308)(1,308)¥ 98,750

Thousands of U.S. dollars

2011
Fair
value

Unrealized
gain (loss)

¥ 318
560
878

¥ 322
580
903

¥ 4
19
24

$ 3,825
6,744
10,570$ 3,881
6,980
10,862

$ 56
236
292

Debt securities whose cost exceeds their fair value:
Government bonds
Corporate bonds  Subtotal
Total

50
2,530
2,581
¥3,460

49
2,530
2,580
¥3,483

(0)
–
(0)
¥23

607
30,43531,043$41,614599
30,43531,035$41,897

(8)
–
(8)
$283

ANNUAL REPORT 2011

Thousands of U.S. dollars

87
2,688
7,614
(989)
(672)
418
9,147
¥(9,147)

Current assets
Fixed assets
Goodwill
Fixed liabilities
Minority interests
Foreign currency translation adjustments
Acquisition cost
Payments for acquisition2011$ 1,049
32,33091,580(11,897)(8,082)
5,033
110,013$(110,013)

2010
–
–
–
–
–
–
–
–

Millions of yen

Thousands of U.S. dollars

Class of Transactions

Subject to hedged accounting

Notional
AmountCurrency swap contracts

Corporate bonds¥6,300Due after
One Year

Fair
value

Notional
AmountDue after
One Year

Fair
value

–

¥569

$75,766–$6,852Millions of yen

2010
Class of Transactions

Subject to hedged accounting

Notional
AmountCurrency swap contracts

Corporate bonds¥10,000

Due after
One Year

Fair
value

–

¥339

Calculation method of fair value is based on the data obtained from financial institutions
Amortized
cost

Debt securities whose fair value exceeds their cost:
Government bonds
Corporate bonds  Subtotal

54 |Millions of yen

2011
¥

2011

Millions of yen
Unrealized
gain (loss)

2011$2,702,204(8,480)61,083$2,754,807

The following are major components of assets and liabilities of a consolidated subsidiary, which was acquired by the Company through additional purchase of its
stocks, as well as a reconciliation of the difference between the acquisition price of these assets and liabilities and the payments from the acquisition.

1. Currency-related transactions

Marketable debt securities classified as held-to-maturity securities at March 31, 2011 and 2010 are summarized as follows:

Fair
value

Cash
Time deposits with maturities of more than three months
Marketable securities with maturities of three months or less
Cash and cash equivalents

2010¥175,159
(665)
3,331
¥177,825

17 Derivatives and Hedging Activities

Proceeds from sales of securities classified as other securities totaled ¥549 million ($6,612 thousand) in 2011 and ¥1,472 million in 2010, respectively. Grossrealized gain was ¥337 million ($4,053 thousand) in 2011 and ¥1,059 million in 2010, respectively. Gross realized loss was ¥13 million ($162 thousand) in 2011and ¥0 million in 2010, respectively.

Amortized
cost

Thousands of U.S. dollars

2011¥224,688
(705)
5,079
¥229,062

2. Interest-related transactions

Millions of yen

Thousands of U.S. dollars

2011Class of Transactions

Subject to hedged accounting

Interest swap contracts Pay/fix
and Receive/floating
Interest swap contracts
Receive/fix and Pay/floating
Interest swap contracts by short-cut
Method Pay/fix and Receive/floating
Total

Short-term borrowings andLong-term borrowings
Corporate bonds
Long-term borrowings andCorporate bonds

Notional
AmountDue after
One Year

Fair
value

Notional
AmountDue after
One Year

Fair
value

¥ 94,132¥ 87,287¥(215)$1,132,082$1,049,759$(2,592)

6,300

–

569

75,766–

6,852

138,776

113,498(*)

1,668,983

1,364,978(*)¥239,208¥200,785¥ 354$2,876,833$2,414,738$ 4,260

ANNUAL REPORT 2011 |55Millions of yen

Millions of yen

2010

2010
Notional
AmountClass of Transactions

Subject to hedged accounting

Interest swap contracts Pay/fix
and Receive/floating
Interest swap contracts
Receive/fix and Pay/floating
Interest swap contracts by short-cut
Method Pay/fix and Receive/floating
Total

Short-term borrowings andLong-term borrowings¥ 20,630

Due after
One Year

Fair
value

¥

7,736

¥634

Corporate bonds

10,000–339

Long-term borrowings andCorporate bonds

282,810150,364(*)¥313,441¥158,101¥973

Calculation method of fair value is based on the data obtained from financial institutions(*) The estimated fair value of interest rate swap contracts is included in the estimated fair value of long-term borrowings and corporate bonds since amounts in such derivative contracts accounted for short-cut method
are handled together with long-term borrowings and corporate bonds that are subject to hedged accounting.

18 Segment Information
Effective April 1, 2010, the Company has adopted “Accounting Standards forDisclosures about Segment of an Enterprise and Related Information”(Accounting Standards Board of Japan Statement No. 17, issued on March 27,2009) and the “Guidance on the Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information” (Accounting Standards
Board of Japan Guidance No. 20, issued on March 21, 2008).
The reportable segments of the Group are components for which discrete
financial information is available and whose operating results are regularly
reviewed by the board of directors and other committees to make decisions
about resource allocation and to assess performance. Business performances
are aggregated according to business areas that consist of multiple businessgroups and defined as organizational units having common businessobjectives and management responsibilities within the Group, and suchaggregated business areas are disclosed as reportable segments.
The Company and its consolidated subsidiaries are primarily engaged in
the real estate business. Their business segments are classified in terms of thenature of each operation or service and consist of eight segments: (1) Building
Business; (2) Residential Business; (3) Urban Development & Investment
Management; (4) International Business; (5) Architectural Design andEngineering; (6) Custom-Built Housing; (7) Hotels Business; (8) Real Estate
Services; and (9) Other businesses.

Revenue and operating income
Revenue from:
External customers
Intersegment or transfers
Total revenue
Operating expense
Operating income (loss)
Assets, depreciation,
impairment loss andcapital expenditures
AssetsDepreciation
Impairment loss
Capital expenditures¥348,720
1,288
350,008
385,739¥ (35,730)¥ 50,551
139
50,691
10,432¥  40,259¥  40,187–
40,187
29,690¥  10,496¥12,636
6,829
19,466
18,073¥  1,392¥26,374 ¥28,017 ¥22,122
52
546
3,694
26,427 28,564 25,816
26,797 28,676 25,606¥    (370) ¥    (112) ¥     210¥   983 ¥1,013,415
2,298
20,724
3,281 1,034,140
3,092
867,968¥     189 ¥   166,171¥           – ¥1,013,415¥ (20,724)–(20,724) 1,013,415(3,526)864,442¥ (17,198) ¥   148,972¥2,846,909
61,74339¥   79,748¥688,298
1,962
43¥   6,502¥250,005
1,780
31,501¥ 21,964¥318,075
6,302
2,630
¥   8,222¥25,01669–¥     151

¥14,250144–¥     321

¥27,188 ¥4,250,851
79
73,89590
34,309¥       34 ¥   117,578¥104,21331–¥    4,197

Consolidated¥4,355,065
73,92634,309¥   121,775

to be disclosed in accordance with “Accounting Standard for Disclosuresabout Segments of an Enterprise and Related Information” (Financial
Accounting Standard No. 17 issued by the Accounting Standards Board ofJapan on March 27, 2009).

Millions of yen

2011
Reportable Segments

Impairment loss

¥35

Urban
Architectural CustomDevelop­ment
Built
Residential and Investment International Design andEngineering Housing
Management
Business
Business¥130¥2,207––

Hotel
Business

Real Estate
Services¥414–¥2,788–¥2,788–¥2,788–$33,532–$33,532–$33,532–

SubotalOther

Eliminations
or corporate Consolidated

Total

$427

$1,573$26,549–––$4,981

The following table presents the amortization and balance of goodwill as of and for the years ended March 31, 2011 by reportable segment:
HotelBusiness

Real Estate
Services

Subotal

Other

Total

Millions of yen

Eliminations
or corporate Consolidated

2011
Reportable Segments¥334,948
1,647
336,595¥ 11,783¥671,769¥ 52,840
147
52,987¥ 8,187¥192,667¥ 45,091 ¥12,904 ¥32,560 ¥27,017 ¥24,174 ¥ 987,320 ¥ 1,126 ¥ 988,447
–
5,680
730
626
3,545
18,532
2,316
20,84945,091 18,584 33,290 27,643 27,719 1,005,853
3,443 1,009,296¥ 10,015 ¥ 590 ¥ 478 ¥ (340) ¥ 430 ¥ 172,968 ¥ 411 ¥ 173,379¥292,808 ¥24,333 ¥14,845 ¥23,151 ¥25,265 ¥4,130,943 ¥27,609 ¥4,158,553– ¥ 988,447¥(20,849)–(20,849)
988,447¥(15,121) ¥ 158,258¥ 86,655 ¥4,245,209¥ 1,850¥ 8,375¥ 1,434¥ 6,658¥ 5,689 ¥¥ 7,594 ¥

¥
¥

79 ¥
60 ¥

200 ¥ 1,153 ¥308 ¥ 530 ¥

537 ¥
461 ¥

70,446 ¥79,843 ¥

72 ¥
28 ¥

70,51979,871

109 ¥(520) ¥

Building
Business

Amortization of goodwill
Balance of goodwill
Amortization of negative goodwill
Balance of negative goodwill

¥ 498
¥ 283
¥ 909
¥107,801

Hotel
Business

Subotal

Other

Total

Eliminations
or corporate Consolidated

Revenue, operating income andassets by reportable segments
Revenue from:$ 5,505,523 $4,028,243 $ 635,484 $ 542,296 $155,189 $391,581 $324,921 $290,727 $11,873,969 $ 13,551 $11,887,520– $11,887,520
External customers
Intersegment or transfers
74,02919,808
1,772– 68,313
8,782
7,531 42,642
222,880 27,860
250,741 $ (250,741)–
Total revenue
5,579,552 4,048,052
637,257
542,296 223,502 400,364 332,453 333,370 12,096,850 41,412 12,138,262 (250,741) 11,887,520
Segment income (loss)$ 1,705,629 $ 141,713 $ 98,469 $ 120,447 $ 7,099 $ 5,752 $ (4,092) $ 5,182 $ 2,080,201 $ 4,944 $ 2,085,145 $ (181,857) $ 1,903,288
Segment assets$34,709,582 $8,079,006 $2,317,107 $3,521,453 $292,646 $178,537 $278,432 $303,858 $49,680,624 $332,043 $50,012,668 $1,042,163 $51,054,832
Other items
Depreciation and amortization$ 715,595 $ 22,250 $ 17,254 $ 68,424 $ 959 $ 2,406 $ 13,877 $ 6,459 $ 847,227 $ 869 $ 848,096 $ 1,312 $ 849,409
Capital expenditures$ 671,713 $ 100,730 $ 80,084 $ 91,336 $ 728 $ 3,704 $ 6,385 $ 5,547 $ 960,231 $ 341 $ 960,572 $ (6,264) $ 954,308

ANNUAL REPORT 2011

¥ 70
¥211
–
–

¥ 164
¥7,381
–
–

–
–
–
–

Real Estate
Services

–
–
–
–

–
–
–
–

–
–
–
–

Eliminations
or corporate Consolidated

Subotal

Other

Total

¥ 3,857¥ 28,726¥ 909¥107,801

–
¥ 0
¥33
–

¥ 3,857¥ 28,726¥ 943¥107,801

Subotal

Other

Total

–
$ 0
$406
–

$ 46,392$ 345,474$ 11,347$1,296,464

–
–
–
–

¥ 3,857¥ 28,726¥ 943¥107,801

2011
Reportable Segments
Building
Business

Real Estate
Services¥ 3,124¥20,849––

Hotel
Business

Thousands of U.S. dollars

Reportable Segments
Urban
Architectural CustomDevelop­ment
Built
Residential and Investment International Design andEngineering Housing
Management
Business
Business

Urban
Architectural CustomDevelop­ment
Built
Residential and Investment International Design andEngineering Housing
Management
Business
Business

70,62879,3502011

56 |¥55,691537–¥     301

Total

Impairment loss of the Company and its consolidated subsidiaries on fixed assets by reportable segments for the years ended March 31, 2011 is summarized asfollows:

Thousands of U.S. dollars

Building
Business¥25,4161,275
3¥   330

Other

Thousands of U.S. dollars

2011

Revenue, operating income andassets by reportable segments
Revenue from:
External customers¥ 457,784
Intersegment or transfers
6,155
Total revenue
463,939
Segment income (loss)¥ 141,823
Segment assets¥2,886,101
Other items
Depreciation and amortization¥ 59,501
Capital expenditures¥ 55,853

Eliminations
or corporate¥   483,821
5,875
489,696
339,859¥   149,836

Segment information on revenue, operating income, assets and other items
by reporting segments is omitted for the year ended March 31, 2010 since
relevant segment information is disclosed based on the previous segment
information disclosure rules and such information is equivalent to information

Impairment loss

Reportable Segments
Building
Business

Real Estate
Services

Residential
Business

Millions of yen

Urban
Architectural CustomDevelop­ment
Built
Residential and Investment International Design andEngineering Housing
Management
Business
Business

Hotel
Business

Building
Business

Building
Business

The reportable segments information of the Company and its consolidated subsidiaries for the years ended March 31, 2011 and 2010 are summarized asfollows:

Urban
Architectural
Develop­ment
and Investment International Design and Custom-Built
Engineering Housing
Management
Business

Amortization of goodwill
Balance of goodwill
Amortization of negative goodwill
Balance of negative goodwill$ 5,991$ 3,409$ 10,941$1,296,464

Urban
Architectural CustomDevelop­ment
Built
Residential and Investment International Design andEngineering Housing
Management
Business
Business$ 37,580$250,749––$ 846$2,538––$ 1,974$88,776
–
–

–
–
–
–

–
–
–
–

Hotel
Business––––

Real Estate
Services– $ 46,392– $ 345,474– $ 10,941– $1,296,464

Eliminations
or corporate Consolidated

–
–
–
–

$ 46,392$ 345,474$ 11,347$1,296,464

Geographical segments
The Company and its consolidated subsidiaries operate primarily in Japan, the United States and certain other areas. In the fiscal year ended March 31, 2010,
Japan area accounted for more than 90% of the consolidated revenue of all segments and the total amount of segment assets. Consequently, disclosure ofsegment information by geographic area has been omitted.
Overseas revenue
For the fiscal year ended March 31, 2010, overseas sales accounted for less than 10% of the consolidated revenue. Consequently, disclosure of overseas sales
information has been omitted.

ANNUAL REPORT 2011 |57

Amounts of preferred investment as of March 31, 201119 Business Combination(Integration of Residential Development and Sales Business)At meetings of their respective boards of directors on October 29, 2010, theCompany, Mitsubishi Real Estate Services Co., Ltd. (“MRES”) and Towa haveresolved to conclude an absorption-type company split agreement pertaining
to integration of the residential development and sales business, and haveconcluded the agreement on the same day. In this agreement, the Company’s
residential development and sales business and MERS’s consignment
residential sales business are split (simple split from the Company) andsucceeded to Towa, a wholly-owned subsidiary of the Company. In
accordance with the agreement, the absorption-type company split was
executed on January 2, 2011, the effective date of the agreement.
(1) Outline of the company split
1) Name and business description of the transferred business
The Company: Residential development and sales business
MRES:
Consignment residential sales business
Towa: 	Real Sales and intermediate service of real estate andother businesses
2) Date of the company split
January 2, 2011
3) Legal form of the company split
Absorption-type company split (kyuushu bunkatsu), with the Company
and MRES as the splitting companies (bunkatsu kaisya) and Towa as the
successor company (shoukei kaisya).
4) Name of the company subsequent to the company split
Mitsubishi Jisho Residence Co., Ltd.
5) Additional information relating to the company split
Subsequent to a capital alliance agreement with Towa in December
2004, the Company subscribed the new shares through a third-party
allocation issued by Towa to make it a consolidated subsidiary inJanuary 2008. Furthermore, to reconstruct their business organization
by improving their strategic integration and agility, the Company and
Towa implemented exchange of their shares to make Towa become awholly-owned subsidiary by the Company in April 2009.
The market of residential development and sales in Japan has
shown signs of improvement since the credit crunch triggered by theso-called Lehman Shock in 2008 and the balance of supply and demandin the market has recovered since then. However, the market
environment has changed as a decreasing population in Japan andpopulation’s concentration to the Tokyo Metropolitan area as well aschanging lifestyle and family composition and diversification of
consumer demand. It is therefore anticipated that a higher quality
business offering and service will be required to meet a demand of alimited volume of the market in the future.

In order to survive the more competitive market with this businessenvironment projection, the Company has recognized that it isnecessary to bolster its competitiveness and maximize its earnings
power in the residential development and sales business by operating
the business more strategically and seeking efficiency througheconomies of scale. Therefore, the Company executed this split
agreement to generate a comprehensive structure capable ofperforming both residential development and sales operations by
integrating the residential development and sales functions of thesethree companies in the Group.
(2) Outline of Accounting Treatment
The company split was treated as transactions under common control inaccordance with “Accounting Standard for Business Combinations”(Financial Accounting Standard No. 21 issued by the Accounting Standards
Board of Japan on December 26, 2008) and “Implementation Guidelines
on Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (Financial Accounting Standard
Implementation Guidelines No. 10 issued by the Accounting Standards
Board of Japan on December 26, 2008).

1) Assets and liabilities transferred from the Company to Towa
Millions of yen

Thousands of
U.S. dollars

Assets:Current assets
Non-current assets
Total¥277,848
13,304¥291,152$3,341,535
160,001$3,501,536

Liabilities:
Current liabilities
Non-current liabilities
Total¥ 31,369
1,460¥ 32,829$ 377,264
17,558$ 394,822

2) Assets and liabilities transferred from MRES to Towa
Assets:Current assets
Non-current assets
Total
Liabilities:
Current liabilities
Non-current liabilities
Total

Millions of yen

Thousands of
U.S. dollars¥9,21972¥9,292$110,882
871$111,754

Millions of yen

Preferred investment securities

(*1)

2011
¥105,532$1,269,177¥9,219–¥9,219$110,882–$110,882

ANNUAL REPORT 20112010
¥108,829(*1)

Major revenue (cost) from transactions with special purpose companies
Millions of yen

Millions of yen

2011
Preferred investment securities: revenue (*2)
Other income(*3)
Management business: revenue(*4)
Intermediate business: revenue(*5)
Real estate rent: cost(*6)
Design management business: revenue (*7)

¥8,707
46
3,584
180
5,096
687

$104,717
561
43,111
2,166
61,293
8,265

2010
¥ 908
48
1,658
202
8,198
854

Preferred investment securities: revenue (*2)
Other income(*3)
Management business: revenue(*4)
Intermediate business: revenue(*5)
Real estate rent: cost(*6)
Design management business: revenue (*7)(*1) Preferred investment securities are indicated as amount of investment andspecific bonds as at March 31, 2011. The Company considers that its exposure
to loss that may arise in the future is limited to the amount of its preferredinvestments.
(*2) The Company records dividends from such investments as revenue fromoperations and related expense as cost of revenue from operations.
(*3) The Company records interest incomes from such specific bonds as other income.
(*4) The Company, Mitsubishi Estate Building Management Co., Ltd. and Mitsubishi
Jisho Property Management Co., Ltd. provide asset management business to
special purpose companies and record such service income as revenue fromoperations.
(*5) The Company and Mitsubishi Real Estate Services Co., Ltd. provide real estateintermediate business to special purpose companies and record such service
income as revenue from operations.
(*6) The Company enters into real estate rental agreements with special purpose
companies and records such rent expenses as cost of revenue from operations.
(*7) Mitsubishi Jisho Sekkei Inc. and MEC Design International Corporation provide
design management services and remodeling services to special purpose
companies and record such service incomes as revenue from operations.
The Company does not own investments with voting rights for any special
purpose companies and does not send directors and employees to any special
purpose companies. The following table sets forth major assets and liabilities ofthe special purpose companies as of their recent financial closing dates.
Excluded are special purpose companies whose financial closing dates are yet tocome because their initial fiscal years have just started.

(*1) Preferred investment securities are indicated as amount of investment andspecific bonds as at March 31, 2010. The Company considers that its exposure
to loss that may arise in the future is limited to the amount of its preferredinvestments.
(*2) The Company records dividends from such investments as revenue fromoperations and related expense as cost of revenue from operations.
(*3) The Company records interest incomes from such specific bonds as other income.
(*4) The Company, Mitsubishi Estate Building Management Co., Ltd. and Mitsubishi
Jisho Property Management Co., Ltd. provide asset management business to
special purpose companies and record such service income as revenue fromoperations.
(*5) The Company and Mitsubishi Real Estate Services Co., Ltd. provide real estateintermediate business to special purpose companies and record such service
income as revenue from operations.
(*6) The Company enters into real estate rental agreements with special purpose
companies and records such rent expenses as cost of revenue from operations.
(*7) Mitsubishi Jisho Sekkei Inc. and MEC Design International Corporation provide
design management services and remodeling services to special purpose
companies and record such service incomes as revenue from operations.
The Company does not own investments with voting rights for any special
purpose companies and does not send directors and employees to any special
purpose companies. The following table sets forth major assets and liabilities ofthe special purpose companies as of their recent financial closing dates.
Excluded are special purpose companies whose financial closing dates are yet tocome because their initial fiscal years have just started

Major assets

Major assets
Thousands of
U.S. dollars

2011¥544,191$6,544,691
47,092566,354¥591,283$7,111,046

Real estate
Other
Total

2010
¥515,818
78,466¥594,284

Real estate
Other
Total
Major liabilities and net assets

Millions of yen

Debt and otherPreferred investments
Total

Millions of yen

(*8)
(*9)

Thousands of
U.S. dollars

2011¥371,575$4,468,737
219,708
2,642,309¥591,283$7,111,046(*8) Debt and other include specific bonds.
(*9) Preferred investments include contributions made by the Company.

58 |Preferred investment securities

Thousands of
U.S. dollars

Major liabilities and net assets

has been obtained by the special purpose companies from their customers or
sale of such real estate after construction of buildings on it. The following
tables represent the Company’s transactions with major special purpose
companies for the fiscal year ended March 31, 2011.

Millions of yen

Major revenue (cost) from transactions with special purpose companies

Millions of yen

20 Transactions with Special Purpose Companies
As part of its real estate business, the Company makes preferred investments
in 14 special purpose companies that are established under the Asset
Liquidation Law of Japan. The Company intends to recover such preferredinvestments through rental revenue and subsequent sale of real estate thatAmounts of preferred investment as of March 31, 2010
Thousands of
U.S. dollars

Millions of yen

Debt and otherPreferred investments
Total

2010
¥385,966
208,318¥594,284

(*8)
(*9)

(*8) Debt and other include specific bonds.
(*9) Preferred investments include contributions made by the Company.

ANNUAL REPORT 2011 |59

Report of Independent Auditors

21 Rental Properties
The Company and some of its consolidated subsidiaries own office buildings
for lease, commercial facilities for lease and others in Tokyo and other areas
including overseas countries (the United States and the United Kingdom) forthe purpose of obtaining revenue from leases.

Some office buildings for lease in Japan are regarded as real estateincluding space used as rental properties since they are used by the Company
and some of its consolidated subsidiaries.

The followings are the carrying value on the consolidated balance sheet as of March 31, 2011 and the fair values of these rental properties and real estateincluding space used as rental properties as of March 31, 2011;
Millions of yen

Thousands of U.S. dollars

2011
Rental properties
Real estate including spaces used as rental properties

2011

2010

Carrying
value (*1)

Fairvalue (*2)

Carrying
value (*1)

Fairvalue (*2)

Carrying
value (*1)

Fairvalue (*2)¥2,467,177
233,688¥4,316,530
323,700¥2,615,827
234,910¥4,549,292
357,303$29,671,412
2,810,450$51,912,571
3,892,964(*1) The carrying value represents the acquisition cost less accumulated depreciation and accumulated impairment loss.
(*2) The fair value is based on the following:(1) The fair value of real estate in Japan is calculated by the Company based mainly on the Real Estate Appraisal Standards.
(2) The fair value of real estate in overseas countries is appraised principally by local real estate appraisers.

Report of Independent Auditors

The income or loss from rental properties and real estate including space used as rental properties for the year ended March 31, 2011 and 2010 were as follows:
Millions of yen

2011
Lease
income (*1)

Thousands of U.S. dollars

2011

2010
Lease
income, net

Other, net
(*2)

Lease
income (*1)

Rental properties¥341,761 ¥217,064 ¥124,697 ¥(10,486) ¥339,750 ¥215,040 ¥124,709
Real estate including space
20,26815,476
4,792(373) 21,474
17,352
4,121
used as rental properties¥(38,328)$4,110,182 $2,610,511 $1,499,671 $(126,109)

Lease cost

Lease
income, net

Other, net
(*2)

Lease
income (*1)

Lease cost

(632)

243,760

Lease cost

186,125

Lease
income, net

57,635

Other, net(*2)(4,490)(*1) Lease income excludes the one from real estate including space used as rental properties that was used by the Company and some of its consolidated subsidiaries for leasing
service and operating management.
(*2) Other, net includes loss on disposal of fixed assets and impairment loss ¥34,243 million for the year ended March 31, 2011 and 2010, respectively.

22 Asset Retirement Obligations(1) Asset retirement obligations presented in the consolidated balancesheet
1. Outline of asset retirement obligations
Asset retirement obligations include obligations of restoration related toleasehold and rental contracts.
2. Calculation method for asset retirement obligations
Asset retirement obligations are calculated based on the remaining
contract years as an expected use period with a discount rate between
0.4% and 2.4%.
3. Change in asset retirement obligations for the fiscal year is as follows:
Millions of yen

Thousands of
U.S. dollars

Asset Retirement Obligations

Balance at April 1, 2010 (*)
Increase due to the acquisition ofproperty and equipment
Adjustments due to the elapse of time
Decrease due to the fulfillment of asset
retirement obligations
Balance at March 31, 2011

¥405

$4,878

2
5

32
66

(40)
¥373

(482)
$4,495(*1) The beginning balance is presented in accordance with “Accounting Standard for
Asset Retirement Obligations” (Financial Accounting Standard No. 18 issued by
the Accounting Standards Board of Japan on March 31, 2008) and“Implementation Guidelines on Accounting Standard for Asset Retirement
Obligations” (Financial Accounting Standard Implementation Guidelines No. 21
issued by the Accounting Standards Board of Japan on March 31, 2008).

(2) Asset retirement obligations not recognized in the consolidatedbalance sheet
As below stated, certain obligations are excluded from recognition of asset
retirement obligations.
1) Obligation to remove asbestos that is used for some properties and60 |ANNUAL REPORT 2011

The Board of Directors
Mitsubishi Estate Co., Ltd.

equipments in a particular way required by the Ordinance on Preventing
Asbestos Hazards
For such properties, the Company has an obligation to remove asbestos atdemolition of buildings. However, no demolition has taken place in thepast other than those related to redevelopment or other projects involving
many other business associates. It is therefore difficult to reasonably
estimate the timing to fulfill such obligation based on the physical usefullife of the assets caused by aging and it is impossible to estimate the timing
without specific business plans. Although the Company has been
voluntarily conducting asbestos removal work when that is feasible due tosuch as termination of tenancy, it is impractical to make a reasonableestimation of progress of such voluntary removal work based on the actual
record of the tenancy termination and of the remaining amount of asbestos
at demolition. Moreover, it is difficult to distinguish costs of asbestos
removal from total costs of demolition. Although the Company made thebest estimation taking into account all the evidence available as of March
31, 2011, these obligations are excluded from recognition of asset
retirement obligations since the probability of obligations in terms of scope
and amount was not reasonably estimated.
2) Obligation of restoration based on some real estate rental agreements
For some commercial facilities, the Company has an obligation ofrestoration at the termination of leasehold rental agreements. However,
the timing to fulfill the obligation is uncertain since it is practically possible
to continue to use those facilities by re-signing contracts and some
contracts set forth a special provision to reduce the possibility to fulfill theobligation. Furthermore, given its business strategies and the current
business environment, the Company intends to continue its operation andnot to fulfill the obligation. Although the Company made the best
estimation taking into account all the evidence available as of March 31,
2011, these obligations are excluded from recognition of asset retirement
obligations since the probability of obligations in terms of scope andamount was not reasonably estimated.

We have audited the accompanying consolidated balance sheets of Mitsubishi Estate Co., Ltd. andconsolidated subsidiaries as of March 31, 2011 and 2010, and the related consolidated statements ofincome, comprehensive income, changes in net assets, and cash flows for the years then ended, allexpressed in yen. These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, theconsolidated financial position of Mitsubishi Estate Co., Ltd. and consolidated subsidiaries at March
31, 2011 and 2010, and the consolidated results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2011 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 3.

Tokyo, Japan
June 29, 2011

ANNUAL REPORT 2011 |61Mitsubishi Estate Corporate Data

Mitsubishi Estate Group

Corporate Information

Building BusinessDirectors, Statutory Auditors and Executive Officers (As of June 29, 2011)
Directors and Statutory Auditors(as of March 31, 2011, except where indicated)

Keiji Kimura

Chief Executive Officer

Hirotaka Sugiyama

President & Representative Director

Hirotaka Sugiyama

Deputy President

Nobuyuki Iizuka

Representative Director

Nobuyuki Iizuka

Executive Vice President

Hiroshi Danno

Representative Director

Hiroshi Danno

Executive Vice President

Masaaki Kono

Representative Director

Masaaki Kono

Executive Vice President

Takao Yagihashi

Representative Director

Hiroyoshi Ito

Executive Vice President

Hiroyoshi Ito

O.A.P. D.H.C. Supply Co., Ltd.

Representative Director

Yutaka Yanagisawa

Executive Vice President

Yutaka Yanagisawa

Minato Mirai 21 D.H.C. Co., Ltd.

Director

Takao Yagihashi

Executive Vice President

Masao Ouchi

Director

Jo KatoSenior Executive Officer

Toshihiko Kazama

Director

Shiro Fujisawa

Senior Executive Officer

Masamichi Ono

Director (see Note 1)

Isao Matsuhashi

Senior Executive Officer

Jo KatoDirector (see Note 1)

Fumikatsu Tokiwa

Senior Executive Officer

Naoto Aiba

Director (see Note 1)

Yasumasa Gomi

Senior Executive Officer

Soichiro Hayashi

Director (see Note 1)

Shu Tomioka

Senior Executive Officer

Shiro Fujisawa

Building Leasing Business•

Sunshine BS Corporation•

Sunshine Enterprise Corporation

Head Office•Sunshine City Corporation

Otemachi Building, 6-1, Otemachi 1-chome, Chiyoda Ward
Tokyo 100-8133, JapanWeb site: http://www.mec.co.jp/index_e.html
Phone: +81-3-3287-5100•

Yokohama Sky Building Co., Ltd.

•Tokyo Kotsu Kaikan Co., Ltd.

•Grand Parking Center Co., Ltd.

•

Chelsea Japan Co., Ltd.

•Tokyo Garage Co., Ltd.

Date of Establishment•

Mitsubishi Estate Building
Management Co., Ltd.

•

Mitsubishi Jisho Retail Property
Management Co., Ltd.

¥141,373 million•

Mitsubishi Jisho Property Management
Co., Ltd.

Number of Shares of Common Stock Issued•

Hokuryo City Service Co., Ltd.

1,390,397,097 shares•

IMS Co., Ltd.

•

Yuden Building Kanri Co., Ltd.

Parking Business

Building Management Business

May 7, 1937

Paid-in Capital

District Heating and Cooling Business•

Marunouchi Heat Supply Co., Ltd.

•

Ikebukuro District Heating and CoolingCo., Ltd.

Others•Marunouchi Direct Access Limited
Marunouchi Hotel Co., Ltd.

Number of Shareholders
72,061 (excluding shareholders with less than 7,472 shares)

Major Shareholders

Residential Business% of total

The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
Meiji Yasuda Life Insurance Company
Tokio Marine & Nichido Fire Insurance Co., Ltd.
State Street Bank and Trust Company
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
SSBT OD05 OMNIBUS ACCOUNT – TREATY CLIENTS
Asahi Glass Co., Ltd.
Mellon Bank, N.A. as Agent for its Client Mellon Omnibus US Pension
CBLDN STICHTING PGGM DEPOSITORY

7.03
3.95
3.60
2.67
2.32
1.86
1.71
1.63
1.56
1.41

•

Real Estate Sales•

MEC Urban Resort Tohoku Co., Ltd.

Mitsubishi Jisho Residence Co., Ltd.

•

Towa Nasu Resort Co.

Custom-Built Housing

Sakura Golf Development Co., Ltd.
OthersStanding Statutory Auditor

Eiji Tan

Executive Officer

Ichiro Watarai

Residence Management Business•

MEC Eco LIFE Co., Ltd.

•

Izumi Park Town Service Co., Ltd.

•

Ryoei Life Service Co., Ltd.

Standing Statutory Auditor (see Note 2)

Kazuhiko Hasegawa

Executive Officer

Takao Tojo•

Mitsubishi Jisho Community Co., Ltd.

Mitsubishi Estate Housing Components
Co., Ltd.

Kenjiro Hata

Executive Officer

Koji Kiyosawa

MT Community Staff Co., Ltd.

•

Statutory Auditor (see Note 2)•

Statutory Auditor (see Note 2)

Akio Utsumi

Executive Officer

Masao Toyoizumi

Executive Officer

Kazuyuki Yabu

Executive Officer

Kenichi Iwata

Executive Officer

Atsuo Kyono

Executive Officer

Hirokazu Kano

Executive Officer

Kazuhiko Arahata

Executive Officer

Toru Okusa

Investment Management Business

Executive Officer

Yutaka Tajima•

Mitsubishi Jisho Investment Advisors, Inc.

Executive Officer•

Tetsuji ArimoriJapan Real Estate Asset Management Co., Ltd.

Architectural Design & Engineering

Executive Officer

Masami Amano•

Mitsubishi Jisho Sekkei Inc.

Executive Officer•

Hidemi Waki

MEC Design International Corporation

Executive Officer

Junichi Tanizawa••

Mitsubishi Estate Home Co., Ltd.

Recreational Facilities

Tsunagu Network Communications, Inc.

Higashinihon Kaihatsu Co., Ltd.

Prime Truss Co., Ltd.

Stock Exchange Listings
Tokyo Stock Exchange and other major Japanese stock exchanges

Commercial Property Development & Investment
Ascott International Management Japan Co., Ltd.

Transfer Agent and Registrar
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda Ward, Tokyo 100-8212, Japan

International Business•

Rockefeller Group, Inc. (RGI)•

Mitsubishi Estate New York Inc.

Transfer Account Management Institution for Special Account•

MEC UK Limited

Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda Ward, Tokyo 100-8212, Japan•

Mitsubishi Estate Asia Pte. Ltd.

Transfer Account Management Institution for Special Account establishedfor shareholders of the former Towa Real Estate Development Co., Ltd.
The Chuo Mitsui Trust and Banking Company, Limited
33-1, Shiba 3-chome, Minato Ward, Tokyo 105-0014, Japan

Executive Officers

Chairman & Representative Director

AuditorHotel Business

Ernst & Young ShinNihon LLC•

Royal Park Hotels and Resorts Co., Ltd.

•

Tohoku Royal Park Hotel Co., Ltd.

•Royal Park Shiodome Tower Co., Ltd.

•

Yokohama Royal Park Hotel Co., Ltd.

•Royal Park Hotel Co., Ltd.

•Royal Park Hotel Management Co., Ltd.

Notes: 1.	Among directors, Isao Matsuhashi, Fumikatsu Tokiwa, Yasumasa Gomi and Shu Tomioka
are outside directors who fulfill the qualifications set forth under Article 2-15 of the
Corporation Law of Japan.
2.	Among statutory auditors, Kazuhiko Hasegawa, Kenjiro Hata and Akio Utsumi are outside auditors who fulfill the qualifications set forth under Article 2-16 of the Corporation
Law of Japan.

Real Estate Services•

Mitsubishi Real Estate Services Co., Ltd.

•

Mitsubishi Jisho House Net Co., Ltd.

Others•MEC Information Development Co., Ltd.

•MEC Human Resources, Inc.

•

Keiyo Tochi Kaihatsu Co., Ltd.

• Consolidated subsidiary
Equity-method affiliate

62 |ANNUAL REPORT 2011

ANNUAL REPORT 2011 |63Organization (As of April 1, 2011)

Corporate History• Business Development, Consulting & Solutions Group1890

March The Marunouchi site (over 353,000m2)—a former military training ground
known as Kanda Misaki-cho—purchased by Mitsubishi Company from theJapanese government
September Marunouchi Architectural Office established1893

December Mitsubishi Goshi Kaisha (limited partnership) established

Business Development, Consulting & Solutions Dept. 1
Business Development, Consulting & Solutions Dept. 2• Property Management and Office Leasing Group
Property Management Dept.

Building Safety Management Office

1894

Yokohama Renewal OfficeCommercial Property Advisory Dept.
Office Leasing and Tenant Relations Dept.

Mitsubishi Ichigokan

Master Lease Planning and Management Office

1906

Tenant Improvements Management Office

1923

February Marunouchi Building completed

Chairman of the Board

President &Chief Executive Officer

Internal Audit Office

Marunouchi Building
1937

May Mitsubishi Estate Company, Limited established with paid-in capital
totaling ¥15 million, with the ownership of the Marunouchi Building and its
site, as well as business rights for buildings and land within the Marunouchi
area, transferred from Mitsubishi Goshi Kaisha
November Construction-related businesses of Mitsubishi Goshi Kaisha transferred to
Mitsubishi Estate

1945

April Ownership of Yaesu Building (completed in March 1928 and renamed
Marunouchi Yaesu Building in 1962) and its site transferred from
Mitsubishisha Co., Ltd. to Mitsubishi Estate

Commercial Asset Development Dept.

Board of Directors

Area Planning Office

Strategic Planning
Committee
CSR
Committee
Compliance
Subcommittee• Retail Property Group

Retail Property Planning Dept.
Retail Property Development Dept.
Retail Property Leasing Dept.

•

Retail Property Tenant Improvements Management OfficeCommercial Property Development and Investment Dept.

Risk Management
Subcommittee

Toyosu Development Project Office

Executive Committee
Strategic Investment
Committee

1950

Commercial Property Development and Investment Group
Commercial Property Development and Investment Planning Dept.

Environmental
Subcommittee

1952

Development Planning Dept.

• Residential Development Group

1953

Residential Business Dept.

Recreational Facilities Office

Apartment Development Dept.

Development Solutions Office• International Business GroupInternational Business Dept.

Shanghai Representative Office

1959• Corporate Group

Affiliated Group Dept.

Human Resources Dept.

Human Resources Compliance Office
Investor Relations Office

1973

November Branches established in Sapporo, Sendai, Nagoya and Osaka

General Affairs Dept.

Secretary Office

1975

May Semiannual settlement of accounts changed to annual

Legal Office

1978

Environmental Sustainability Office

1980

Sapporo Branch

1981

Tohoku Branch

1983

Yokohama Branch
Nagoya Branch
Osaka Branch

1984
1986

Chugoku Branch
Kyushu Branch

1987
1988
1989

ANNUAL REPORT 2011

April Mitsubishi Estate New York Inc. established
June The first phase of the Izumi Park Town
Project launched

Corporate Communications Dept.

CSR Dept.

April Sendai Royal Park Hotel opened
November Reconstruction of Marunouchi Building announced

1996

January Osaka Amenity Park (OAP) completed
November Head Office relocated to Tokyo Building

1999

April Aqua City Odaiba commercial complex opened under the management of
Mitsubishi Estate subsidiary Aqua City Co., Ltd. (renamed Mitsubishi Jisho
Retail Property Management Co., Ltd. in July 2007)
November Royal Park Hotels and Resorts Co., Ltd. established

2001

April Mr. Shigeru Takagi and Mr. Takeshi Fukuzawa appointed president andchairman, respectively
June Mitsubishi Jisho Sekkei Inc. established through a spin-off of thearchitectural design and engineering business
September Mitsubishi Jisho Investment Advisors, Inc. established

2002

March Properties and equipment revaluated in accordance with
the Law Concerning Revaluation of Land and otherrelevant laws and regulations
September Marunouchi Building opened (completed in August)Marunouchi Building
2003

September Marunouchi OAZO opened (completed in August)December Capital investment in Towa Real Estate Development Co., Ltd. initiated2005

March Construction of Shin-Marunouchi Building commenced
June Mr. Keiji Kimura appointed president
November Tokyo Building opened (completed in October)

2007

April Shin-Marunouchi Building opened
September The Peninsula Tokyo opened (completed in May)

Shin-Marunouchi Building
2008

2009

October Hibiya Kokusai Building completedApril Nagoya Dai-Ichi Hotel opened (Hotel Business launched)
November MEC USA, Inc. established
July Mitsubishi Estate Home Co., Ltd. establishedMarch MEC UK Limited established
July The first consolidated financial statements announced
October Yokohama Office established (reorganized as Yokohama Branch in April 2000)

April
June
July
July

Tenjin MM Building (IMS) opened in Fukuoka City
Royal Park Hotel in Hakozaki, Tokyo opened
Hiroshima Park Building completed
Hiroshima Branch (renamed Chugoku Branch in April 2000) andKyushu Branch established

January Towa Real Estate Development turned into a Mitsubishi Estate consolidated subsidiary
March Sunshine City Corporation turned into a Mitsubishi Estate consolidated subsidiary
October Mitsubishi Estate Asia Pte. Ltd. commenced operations
March Chelsea Japan Co., Ltd. turned into a Mitsubishi Estate
consolidated subsidiary
April Towa Real Estate Development turned into a
Mitsubishi Estate wholly owned subsidiary
April Marunouchi Park Building & Mitsubishi Ichigokancompleted
September Marunouchi Brick Square opened
Marunouchi Park Building & Mitsubishi Ichigokan

2010

March Construction under the Osaka Station North District Phase 1 Development
Project commenced
April Mitsubishi Ichigokan Museum opened

2011

January Mitsubishi Jisho Residence Co., Ltd. established through company spin-offs
and the subsequent integration of residential development and sales businesses of Mitsubishi Estate, Mitsubishi Real Estate Services Co., Ltd. and
Towa Real Estate Development Co., Ltd.
April Messrs. Keiji Kimura and Hirotaka Sugiyama appointed chairman and president, respectively
April Shanghai Representative Office established

June Mr. Jotaro Takagi appointed president
January Yokohama Minato Mirai 21 Block-25 Development Plan announced

February Mitsubishi Trust and Banking Building completed (renamed Mitsubishi UFJ
Trust and Banking Building in October 2005)
March Head Office relocated to Otemachi Building
April Introduction of an executive officer system
May Paternoster Square completed in the City of London
July Royal Park Shiodome Tower opened

2004

October Shin Aoyama Building completed
June Mr. Tatsuji Ito and Mr. Otokazu Nakata appointed president andchairman, respectively

April Reconstruction of Marunouchi Building commenced

2000

Izumi Park Town
December Mitsubishi Real Estate Services Co., Ltd. establishedFinance & Accounting Dept.

64 |May Mr. Otokazu Nakata and Mr. Takejiro Watanabe appointed president andchairman, respectively
Akasaka Park House offered for sale in lots, marking the launch of theCondominium Business

June Mr. Takeshi Fukuzawa and Mr. Jotaro Takagi appointed as president andchairman, respectively

1995

July Marunouchi Remodeling Plan formulated

December Hokkaido Building completed

1972

Corporate Planning Dept.

April Yowa Fudosan and Kaito Fudosan merged with Mitsubishi Estate
May Mitsubishi Estate’s shares listed on the Tokyo Stock Exchange and the Osaka
Securities Exchange

1962
1969

1994

May Mr. Takejiro Watanabe appointed president
November Shin-Marunouchi Building completed

February Marunouchi Parking Area completed

Investment Management Office

Office of Statutory Auditors

January Business rights for the Marunouchi site and other land and buildings,
excluding those for Marunouchi Building and Yaesu Building, were returned
to Mitsubishihonsha Co., Ltd. , Mitsubishihonsha was dissolved and its
operations transferred to two newly established secondary corporations,
Yowa Fudosan Ltd. and Kaito Fudosan Ltd.

1960

• Investment Management Group

Board of Statutory Auditors
Statutory Auditor

July Akasaka Park Building completed
Yokohama Landmark Tower completed
September Yokohama Royal Park Hotel opened

July Real Estate Division established within Mitsubishi Goshi Kaisha

Group Companies Management Office

Museum Management Office

1993

Yokohama Landmark Tower

Relocation Management Office

Area Brand Management Dept.

Meeting of Shareholders

February Participation in the City of London’s Paternoster Square Project announced
April Capital investment in the Rockefeller Group, Inc. initiatedSeptember Construction of Ryokuendai New Town commenced

June Mitsubishi Ichigokan,
the first office building in
Marunouchi, completed• Commercial Asset Management and Development Group
Commercial Asset Management Dept.

1990

ANNUAL REPORT 2011 |65

Corporate Social Responsibility
CSR Case Studies
The Mitsubishi Estate Group has adopted as its fundamental mission the goalof creating a truly meaningful society by building attractive, environmentallysound communities where people can live, work and relax with contentment.
Putting this mission into practice itself underpins Mitsubishi Estate’s CSR activities, all of which are aimed at helping realize the sustainable growth of theCompany and society as a whole. At the same time, Mitsubishi Estate believes
that the promotion of CSR activities will directly lead to the improvement of its

corporate brand. All Group employees share the Mitsubishi Estate Group Codeof Corporate Conduct as ethical guidelines to achieve the mission. Meanwhile,with the aim of promoting Groupwide CSR activities, the Company has established a CSR Committee, chaired by the president. With the CSR Committee
serving as the central driver, we are proactively implementing a wide variety of
CSR activities that draw on the Group’s distinctive features.

Compliance

Social Contribution

Mitsubishi Estate considers compliance as not simply the adherence to legal
standards, but as meeting the expectations of people in society at large, not tomention the adherence to internal company rules and ethical corporate standards. Furthermore, because we recognize how essential compliance is tothe profit base of the Company, we view the maintenance of a compliancesystem as a priority task of management. Moreover, all Group employees are
deepening their awareness of compliance issues while proactively promoting
compliance-focused activities.

As a good corporate citizen, the Mitsubishi Estate Group engages in a wide
range of social contribution activities centered on promoting its harmonious
coexistence with communities, its environmental preservation and social welfare activities, and its support for culture and the arts. For example, during the
fiscal year under review, Mitsubishi Estate participated as a supporter in the La
Folle Journée au Japon “Days of Enthusiasm” Music Festival 2011, held small
concert events in the Marunouchi and other areas, implemented “Experience
Nature” projects nationwide to promote communication between urban andrural people, and hosted the annual Dazzling Art Competition—a drawing contest for disabled children throughout Japan.

Environmental Management

The Mission of the Mitsubishi
Estate GroupWe contribute to society through urban development
By building attractive, environmentally sound communities where people can live, workand relax with contentment, we contribute to the creation of a truly meaningful society.

The Mitsubishi Estate Group
Code of Corporate Conduct
In order to carry out the Group Mission, we pledge
to observe the following Code of Conduct:

1. We will act with integrity

The Mitsubishi Estate Group has clarified its commitment to proactively contribute to societal efforts aiming to reduce its environmental impact. Under its
Environmental Slogan, “For Sustainable Cities, For the Sustainable Earth,”
Mitsubishi Estate is leading sustainable urban development that gives due consideration to such environmental aspects as biodiversity by aggressively implementing initiatives toward realizing a low-carbon, recycling-oriented society inpartnership with its customers. Specifically, we are implementing various initiatives to reduce the environmental impact in general in the Otemachi,
Marunouchi and Yurakucho areas through public-private collaboration. Actual
initiatives are categorized into those with direct or indirect results. Initiatives
with direct results include the introduction of high-efficiency air-conditioning
systems and “dry mist” generators as well as the arrangement of roof-top andexternal-wall greenery on our properties. In fact, the Shin-Marunouchi Building
has started the use of 100% renewable, “fresh green electricity.” Also, in the
Residential Business, we are actively promoting the development of the ecofriendly “soleco” system, which combines a solar power generation system anda central high-voltage power transmission system. On the other hand, initiatives
with indirect results involve the staging of environment-related events and seminars, which are aimed at promoting environmental awareness and the dissemination of environmental information.

Small concert event held as part of the La Folle Journée au Japon “Days of Enthusiasm” Music
Festival 2011 (a number of concerts were held at the MARUCUBE atrium on the first floor of
the Marunouchi Building as well as at many other places in the Marunouchi and other areas
between April 28, 2011 and May 5, 2011).

We will base our conduct on laws and ethics and always reflect with humility upon
our behavior, valuing our communication with society and placing priority in our
corporate activities on earning trust through fairness and transparency.

2. We will strive to earn the trust of our clients
We will approach all objectives from our clients’ point of view, providing safe andreliable products and services, and make information available as appropriate.

3. We will strive to create a vibrant workplace
While aiming at personal growth, we will respect the human rights and diversity ofopinions of others and increase our creativity and professionalism, while displaying
our collective strengths as a team.
“Experience Nature” project to revitalize abandoned farmland in Yamanashi
Prefecture (May 2010)

For details of the Mitsubishi Estate Group Guidelines for Conduct,
please visit our Web site at:
http://www.mec.co.jp/e/company/charter/index.html(Formulated December 1, 1997)(Revised August 1, 2002)(Revised January 1, 2006)

Mitsubishi Ichigokan Museum and Ichigokan Square

66 |ANNUAL REPORT 2011

ANNUAL REPORT 2011 |67