Integrated
ReportOtemachi Park Building, 1-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8133, Japan
http://www.mec.co.jp/index_e.html

MITSUBISHI ESTATE CO., LTD.

2023
Working Steadily to

Integrated Report 2 019

Achieve Ongoing Growth

Advancing

Innovation,
UnlockingPotential
Integrated Report 2019

Otemachi Park Building, 1-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8133, Japan
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CONTENTS
INTRODUCTION“ A Love for People“Shoki Hoko”“Shoji Komei”“Ritsugyo Boeki”

Corporate Responsibility to Society
Strive to enrich society, both materiallyand spiritually, while contributing
toward the preservation of
the global environment.

Integrity and Fairness
Maintain principles of transparency
and openness,
conducting business withintegrity and fairness.

Global Understanding through Business
Expand business,based on an all-encompassing
global perspective.

10

Promoting Marunouchi NEXT Stage58

1 Environment

12

Mitsubishi Estate’s Value Creation Model

61

TCFD

14

Mitsubishi Estate’s Strengths

62

2 Diversity & Inclusion

16

Expanding into Various Domains

68

3 Innovation

69

4 Resilience70

Topic: Realizing Sustainable Actions in the
Otemachi, Marunouchi, and Yurakucho
Areas

72

SASB

CEO Message

P

8

Mitsubishi Estate’s Value Creation Story



The Mitsubishi Estate Group’s Strategies

18

Long-Term Management Plan 2030

20

Overview of Sustainability (ESG) Initiatives

22	Progress of Long-Term Management Plan 2030
30

CFO Message

34

Special Feature 1 	Domestic Asset Business:
Opening of FUKAYAHANAZONO PREMIUM
OUTLETS®

36

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

Sustainability (ESG) Section

8	Marunouchi: Continuously Evolving with the Times

2

P 18

The Spirit of Mitsubishi: Three Principles

P 56

56	Sustainability-Related Policies and KPIs /Sustainability Frameworks / Monitoring
Frameworks / History of Sustainability
Committee Meetings / External Evaluations of
ESG PerformanceP

A Love for the City ”

Forever Taking On New Challenges—The Mitsubishi Estate Group38

Special Feature 2 	International AssetBusiness:
Creation of Value in theAustralian Market
Special Feature 3 	Non-Asset Business:
Opening of the Royal Park
Canvas Ginza Corridor

P 73

Corporate Governance73

Message from the Chairperson of the Board

74

Corporate Governance System

80	Evaluation of the Effectiveness of the Board of
Directors
82

Remuneration

84	Dialogues with Shareholders and Investors(ESG Meetings)
85

Shares Held for Strategic Purposes

86	Directors / Corporate Executive Officers,
Executive Officers, and Group Executive Officers
88

Message from an Outside Director

The Mitsubishi Estate Group Code of Corporate Conduct

P 40

In order to carry out the Group’s Mission,
we pledge to observe the following Code of Conduct:

41

Overview of Business Segments

90	Roundtable Discussion among Members of theNominating Committee

42

Commercial Property Business Group

92

2

3

We will act with integrity.

We will strive to earn
the trust of our clients.

We will strive to createa vibrant workplace.

We will approach all objectives fromour clients’ point of view, providing
safe and reliable products andservices, and make information
available as appropriate.

While aiming at personal growth, wewill respect the human rights anddiversity of opinions of others andincrease our creativity and professionalism,
while displaying ourcollective strengths as a team.

We will base our conduct on laws
and ethics and always reflect withhumility upon our behavior, valuing
our communication with society andplacing priority in our corporate
activities on earning trust throughfairness and transparency.

For details on the Mitsubishi Estate Group Guidelines for Conduct:
https://www.mec.co.jp/en/company/charter/(Formulated December 1, 1997; revised on August 1, 2002, January 1, 2006, and April 1, 2018)

Office Building Business

Risk Management

		

42

		

44	Retail Facility Business / Outlet Mall
Business

95

		

45

Logistics Facility Business		

46

Hotel Business96	Eleven-Year Summary of Selected Financial
Data (Consolidated)		

47

Airport Operation Business48

Residential Business

50

International Business

52

Investment Management Business

53	Architectural Design & Engineering Businessand Real Estate Services Business
54

Innovation and Business Transformation GroupP 95

Financial Section
Status of Shareholdings

98	Targets and Results of the Key Themes andMajor Initiatives Laid Out in Mitsubishi EstateGroup 2030 Goals for the SDGs

P100

CONTENTS

1

Business Review

Corporate Data

100

Principal Mitsubishi Estate Group Companies

102

Organization

103

Corporate Information

55	Business Development, Client Relations &Solutions GroupA Word about Integrated Report 2023
We adopted this integrated report format starting from FY2018, having published annual reports through to FY2017. With this integrated report, we have expanded coverage of nonfinancial information, centering on environmental, social, and governance (ESG) topics, compared with prior annual reports. In doing so, we aim to increase readers’ awareness of ourefforts to raise the corporate value of the Mitsubishi Estate Group from a medium- to long-term perspective. We hope that this report promotes a deeper understanding of the Groupamong all of our stakeholders, including shareholders and investors.
Definition of Term Covered“FY2022” refers to the Group’s fiscal year ended March 31, 2023, and other fiscal years are referred to in a corresponding manner.
Caution Concerning Forward-Looking Statements
This integrated report contains forward-looking statements concerning Mitsubishi Estate Co., Ltd., and its future strategies and earnings outlook, including forecasts, plans, anddecisions based on information available at the time of publication. As with any forecast, plan, or decision, forward-looking statements are inherently susceptible to potential risks,
uncertainties, and assumptions. The Company’s actual results may therefore vary materially from those expressed or implied in its forward-looking statements.

1

CEO Message
CEO MESSAGE

Strong Commitment toward Our 2030 Targets
I am Atsushi Nakajima, and I became president & chief executive officer of Mitsubishi Estate in
April 2023. Three years have passed since we unveiled Long-Term Management Plan 2030 inJanuary 2020. I am determined to fulfill my duties in my position leading the management of theCompany going forward.
There is a saying: “the journey of a thousand miles begins with a single step.” This is my motto.
No matter how ambitious the goal is, taking the first step is crucial to achieving it. After resolving
to achieve a goal, there is no other option but to advance steadily, one step at a time. My current
hobby is marathon running, which I started at the age of 50 while stationed in New York. Although
the road seems long when running a marathon, advancing step by step eventually leads to the finishing line.
I believe the same can be said about managing a company. Once I set a goal, I advance step bystep with a resolute determination to achieve it. That is my creed. I have gained wide-ranging experience since joining the Company in 1986, including experience in the Corporate Planning
Department, overseas studies at the University of California, Berkeley, and in development andasset management. However, I consider the two years I served from 2014 to 2016 as the president
and CEO of Rockefeller Group International, Inc. (RGII), in the United States to be particularly invaluMitsubishi Estate’s Value Creation Storyable. In addition to facing a language barrier, I was the first Japanese person to lead RGII.
Navigating various difficulties in my own way made me keenly aware of the importance of communication. In an environment where people have disparate standpoints and approaches, doggedly
maintaining careful communication is imperative for understanding the views of others and ensuring that others understand your views.
In my position leading the management of the Company going forward, I recognize that communication with shareholders and investors is of the utmost importance. I regard it as my duty tocommunicate our steady progress toward achieving the targets established in Long-Term
Management Plan 2030 to shareholders and investors. The three years since the unveiling of theplan have witnessed various changes in the external environment, including the COVID-19 pandemic,

Atsushi Nakajima

uncertain in real estate markets around the world. Amid such unpredictable conditions, in the event

President & Chief Executive Officer
Mitsubishi Estate Co., Ltd.

achieve our targets, I will strive to bridge it through communication or, if necessary, examine theof a gap opening between our approach and that of our shareholders and investors to how best to
possibility of revising our policies. I am committed to communicating our steady progress while
maintaining a resolute determination to achieve Long-Term Management Plan 2030.

INTRODUCTIONINTRODUCTION

the crisis in Ukraine, and upheaval in financial markets, primarily overseas. The outlook is also

Confronting Changes Fearlessly as a “Change Maker”

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Mitsubishi Estate’s history began in 1890 when Yanosuke Iwasaki, the first president of Mitsubishi

2

Create Value with a Long-Term Perspective (Tradition) and
Forward-Looking DNA (Pioneering Spirit) as a “Change Maker”

Company, purchased Marunouchi land at the request of the Meiji government of Japan. Based on
our strong commitment to modernizing Japan, we spent over 130 years developing the
Marunouchi area into a world-leading business center while navigating various events, including
Japan’s period of rapid economic growth and the collapse of the country’s bubble economy.
Moreover, we were also at the forefront of globalization, entering the real estate market in the
United States (1972) and the United Kingdom (1986) ahead of other real estate companies in3CEO Message

social environment. Enhancing the value of the area by boosting its appeal in terms of both area

ing company, including our entry into the REIT market and expansion of U.S.-style outlet malls. This

management and infrastructure is key. I am convinced that greatly enhancing the appeal of thehistory is the result of efforts to embody our universal basic mission of contributing to society

Marunouchi area will help raise Tokyo’s and—by extension—Japan’s international competitiveness.

through urban development.

Meanwhile, domestic capital-recycling assets* have accumulated to a level exceeding ¥1 trillion,

Looking again at the footprints left by the Mitsubishi Estate Group, I feel the makeup of our

CEO MESSAGE

Japan. Domestically, we have continuously made efforts to create new value as the industry’s lead-based on their book value. Its extensive record of selective investments has enabled the domestic

DNA—urban development with a long-term perspective (tradition) and foresight to stay ahead ofasset business to put in place a system to continuously post highly efficient, high-level capitalthe times (a pioneering spirit), both of which are at the root of our activities—has indeed been

gains. We will continuously make even more selective investments while carefully monitoring thepassed down over our history. I believe the virtuous cycle whereby our pioneering spirit became

latest market conditions to achieve the targets of Long-Term Management Plan 2030.

part of our tradition, which then became the foundation underpinning a renewed pioneering spirit,* Rental properties, excluding those in Marunouchi, outlet malls, and the assets of certain consolidated subsidiaries

is one of the Group’s strengths. Constantly remaining highly sensitive to all changes in society andcreating new value without fear of change (being a Change Maker) are vital to maintaining our DNA

The international asset business has expanded while managing risks by diversifying its portfo-

into the future. Today, the Group’s operational domains have expanded into every conceivable busi-

lio across a wide range of regions and assets. However, in light of recent changes in certain

ness related to real estate. I believe the Mitsubishi Estate Group’s purpose is to contribute to soci-regions and assets, we intend to maintain selective investments in focus regions while revising

ety by continuously identifying and offering value it can provide.

capital allocation as necessary. Despite an uncertain outlook in real estate markets, including a
sharp rise in interest rates in the United Kingdom. and the United States and concerns regarding adecrease in office demand stemming from the spread of working from home and other factors, theMitsubishi Estate’s Value Creation Story

international market remains promising in the long run. Given that the working population will

Continuously Growing Based on the Group’s Strengths,
Even in an Uncertain External Environment

decline in Japan, I believe developing earnings power overseas is indispensable to the Group’s
continuous growth. Meanwhile, the governance systems of local subsidiaries are extremely important for achieving growth overseas. Real estate is basically a local business. For this reason, I
believe it is advisable to establish an environment that allows those with a thorough understanding

Long-Term Management Plan 2030 sets forth growth strategies for the domestic asset, interna-of the market to spearhead management, regardless of whether they are Mitsubishi Estatetional asset, and non-asset businesses. In the domestic asset business, we will further enhance

employees or employees of local subsidiaries. Accumulating a record of various achievements inthe value of our portfolio centered on the Marunouchi area while taking into account changes in thelocal markets helps build trust in those markets, which can then lead to our involvement in major
projects. We are advancing a wide range of projects in North America, Europe, and Asia. I am keen
for us to build further trust to achieve continuous growth by strengthening communication withvarious parties in local markets.
Turning to the non-asset business, the Investment Management Business is achieving steadyprofit growth. Having achieved the initial target for assets under management announced at thelaunch of Long-Term Management Plan 2030 ahead of schedule, we have set out fresh targets forthe end of FY2030 of ¥10.0 trillion for assets under management and ¥30.0 billion for operating
entailing major investments. Although the new targets may be challenging, they are an extremely
important element for achieving the main targets of Long-Term Management Plan 2030. Drawing
on the global platform it has developed over the years to accelerate communication between different regions, Mitsubishi Estate will seek to expand by addressing the needs of investors aroundthe world. The hotel management business aims to maximize profits by steadily tapping into the

INTRODUCTIONINTRODUCTION

profit. The non-asset business generates revenues at a high level of capital efficiency without

post-COVID-19 recovery. Moreover, we acquired Regus Japan Holdings Co., Ltd., as a subsidiary in
February 2023. With this acquisition, we will develop flexible workspaces and aim to make a variety of value propositions in terms of places to work, in addition to our mainstay core offices.
I believe that identifying earnings power is vital to achieving solid growth in each of these three

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

businesses. Given Mitsubishi Estate is engaged in the real estate business, its assets earn a sub-4

stantial portion of its revenues. However, it also has businesses that earn revenues without owning
major assets, in the manner of the non-asset business. I believe identifying the elements that are
central to earning revenues in each of our businesses will enable us to better leverage and customize know-how across businesses, which will in turn contribute to the further growth of theCompany as a whole.

5CEO Message

CEO MESSAGE

We will steadily advance concerted efforts toembody urban development with a long-term per-Growing with Society to Create a Sustainable Future

spective (tradition) and foresight to stay ahead of
the times (a pioneering spirit) to achieve

As set forth in Long-Term Management Plan 2030, we will not be able to realize growth as acompany unless our business activities help improve social value. To do otherwise would damage
shareholder value. Mindful of this, we have established Mitsubishi Estate Group Sustainability

Long-Term Management Plan 2030 and realize
ongoing corporate growth.

Vision 2050. To realize this vision, we are advancing specific themes and actions under the
Mitsubishi Estate Group Sustainable Development Goals 2030, adopted in Long-Term Management
Plan 2030.
While I am proud that we have promoted a host of initiatives ahead of other companies within
our industry in Japan, steadily maintaining these efforts going forward will be crucial. I wonderthat Japanese companies and Japanese society have been less sensitive to sustainability thanother countries. Amid these circumstances, I believe that Mitsubishi Estate must establish itself as
a leader of Japanese companies as well as the real estate industry. To this end, it is imperative that
we steadily promote initiatives and communicate key performance indicators, which serve as targets, and the outcomes of our initiatives to shareholders and investors in an easily understoodmanner. In real estate-related businesses, including urban development, there are many goals thatcannot be realized and issues that cannot be solved solely through the efforts of individuals or
grows with society as the industry’s leading company.

Three years have passed since the launch of Long-Term Management Plan 2030. While various
events occurred that could not have been anticipated, results to date—including in terms of theCreating Further Innovation Spurred by Our Diverse
Human Resources

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

progress of key performance indicators, profit growth, and headway made with investments—haveproceeded as expected. Since the launch of the plan, we have consistently implemented shareholder returns at a high level. For example, the share buybacks of ¥100.0 billion that weannounced in November 2022 brought the total amount of such buybacks to ¥230.0 billion since

Ultimately, I believe business is about people. Human resources, our most valuable asset, play the

FY2019. We will continue

leading role in offering value to society. We require human resources to be Change Makers andpromoting shareholder returns as one of our priorities. Ensuring the continuous growth of ourProfessionals. Leveraging the Company’s long-term perspective on urban development and for-businesses and profits is also a priority. To achieve this goal, we will endeavor to maintain a strong

ward-looking DNA and acting with the spirit to take on challenges without fearing change or being

awareness of returns from both long- and short-term perspectives.

bound by convention, Change Makers are capable of building businesses while drawing in others

Despite uncertainties in the current operating environment, including inflation, financial condi-

and gaining the cooperation of external parties. As the term implies, Professionals have specialist

tions, and geopolitical risks such as the crisis in Ukraine, the Mitsubishi Estate Group has seen its

expertise. Through efforts such as promoting the strengthening of the International Business andbusiness activities expand globally and its number of employees grow to more than 10,000 overall. If

expanding the non-asset business, I believe the presence of human resources with specialist

every one of them can embody urban development with a long-term perspective (tradition) and fore-

expertise in their respective domains will accelerate the development of businesses, thereby spur-sight to stay ahead of the times (a pioneering spirit), I am convinced that we can achieve Long-Termring further innovation. With these two elements—Change Makers and Professionals—interacting

Management Plan 2030 and contribute to the creation of a truly meaningful society. I hope to proceedwith each other, I believe we can offer new value that goes beyond conventional frameworks.

steadily into the future with all our stakeholders to respond to the diverse types of value that will be

Another important point is the diversity of human resources. Organizations devoid of diversity are

required by society. My aim is to advance management with a strong focus on what is important tolikely to fall into decline. In addition to establishing systems and rules, fundamentally understand-shareholders, investors, community members, customers, employees, and business partners.

ing the viewpoints of others is a prerequisite for enhancing the diversity of our organization and6

To Our Stakeholders

INTRODUCTIONINTRODUCTION

Mitsubishi Estate’s Value Creation Story

individual companies. Together with our stakeholders, we aim to become a corporate group that

Drawing fully on our diversity, we will continue making concerted efforts to achieve Long-Termhuman resources. Long-Term Management Plan 2030 has adopted the improvement of both

Management Plan 2030 and realize ongoing corporate growth. Taking inspiration from the tradition

shareholder and social value as the two prongs of its strategy. Accordingly, we will steadily pro-and pioneering spirit that make up our DNA, we pledge to grow together with stakeholders with anmote initiatives for enhancing social value and properly demonstrate the outcomes they yield.

awareness of our position as the industry’s leading company. We ask for yourcontinued support for our endeavors.

President & Chief Executive Officer
Mitsubishi Estate Co., Ltd.

7

Marunouchi: Continuously Evolving with the Times

Mitsubishi Estate’s Value Creation Story

The Mitsubishi Estate Group has overseen the development of the Marunouchi area for more than 130 years, evolving
it into Japan’s preeminent business center, which is now home to the offices of approximately 4,300 companies comprising some 280,000 office workers. The knowledge and expertise that we have accumulated through our urban
development and area management efforts represent a part of our identity as well as a strength. Today, we are actively

Growth of the Office Building BusinessContracted Office Area in Marunouchi (Non-Consolidated) Otherspromoting Marunouchi NEXT Stage with the aim of establishing Marunouchi as a “co-creation platform for innovation

14.2%
ProfessionalFirms

through companies, employees, and visitors” we have cultivated over more than 130 years.

4.4%
Information

Manufacturing

6.3%
Trading

10.4%

Marunouchi Today*

1

Visitor Numbers for Major Events 

Approx.

4,300

7,400,000
Marunouchi Market (Gyoko-dori Ave.): 166,300
Marunouchi Market (Marunouchi Building): Approx. 10,200

*2

118

*3

Approx.

24
Buildings Using Renewable Energy: 35

280,000

DBJ Green Building-Certified Buildings:*2

Railway Lines Servicing the Area 

13 stations, 28 lines
Mitsubishi Estate’s Value Creation Story

1,526

Approx.
thousand m2

22.2%

Number of Stores 

357 service providers
68 medical service providers

125,405 million

FY2001¥

Approx. 200% Expansion
FY2022

¥

2020

1890

s



Starting from Scratch
Purchase of Marunouchi
land
In 1890, Yanosuke Iwasaki, the firstpresident of Mitsubishi Company, purchased Marunouchi land at the requestof the Meiji government of Japan. The
area, which was an expanse of flat,
grassy fields, became known as
Mitsubishigahara, or Mitsubishi Fields.

The construction of the area’s firstmodern office building, Mitsubishi
Ichigokan, was completed in 1894.
Thereafter, three-story redbrick officebuildings began springing up, resulting
in a townscape reminiscent of London’sbusiness center, which led to the area
becoming known as the “London Block.”

As Japan entered an era of high economic growth, demand for office spacerose sharply. To address this demand,
Mitsubishi Estate began rebuilding thearea with large-scale office buildings toprovide an abundant supply of largecapacity office space under the
Marunouchi remodeling plan of 1959.

—



Following the announcement of the reconstruction of the former
Marunouchi Building in 1995, the Company transformed the
Marunouchi area—which had up until then been purely a business district—into a space with a vibrant and bustling atmosphere, based on the concept of creating the world’s mostinteraction-inspiring neighborhood.
Aiming to make that concept broader and more comprehensive, we expanded our urban development efforts to Otemachi
and Yurakucho from 2008, in order to strengthen the international competitiveness of Marunouchi by establishing a financial
business center and a greater infrastructure. Furthermore, we
worked to give the area a fresh appeal based on a new sense ofvalues by adding new functionality, such as the development of
cultural and artistic functions, including a museum, and the promotion of environment-friendly initiatives.

Positioning urban development from 2020 onward as partof Marunouchi NEXT Stage, we will promote urban development that generates improvements in people’s quality oflife and which spurs the discovery of and solutions to social
issues through the emergence of innovation and strengthening of our digital foundations. Through the promotion ofsuch urban development and area management, we aim totransform Marunouchi into a “co-creation platform for innovation through companies, employees, and visitors.”
Under Marunouchi NEXT Stage, we will redevelop the
Marunouchi area by investing between approximately¥600.0 billion and ¥700.0 billion (our share of the total
investment) by 2030 in reconstruction projects and area
management centered on Tokiwabashi and Yurakucho.

INTRODUCTION

1890

First Phase of Development
Evolution into a full-scalebusiness center

252,486 million

Marunouchi NEXT Stage
Creating new value

Third Phase of Development
Strengthening of the international
competitiveness of Marunouchi

Second Phase ofDevelopment
Rising demand for officespace due to rapid economic growth

24.3%
9.2%

—

s

Finance

10.9%

Rental Revenue from Buildings in Marunouchi (Non-Consolidated) 

1995 20191960

Information

Trading*1 As of July 2023; Source: Mitsubishi Estate Co., Ltd.
*2 Calculated by The Council for Area Development and Management of Otemachi,
Marunouchi, and Yurakucho based on the 2014 Economic Census for Business Activity*3 Basic Information on Listed Companies, February 2022 edition, vol. 2*4 Stations with the same name on different lines are counted in the number of lines.

*4

INTRODUCTION

835

Approx.
thousand m2

Number of Environment-Friendly Buildings 

Number of Office Workers 

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

March 2023

16.5%

FinanceMarunouchi Illumination: Approx.

Number of Companies Listed on the First Section of
the Tokyo Stock Exchange 

8

23.0%

Approx. 180% Growth

Number of Companies 

562 restaurants
321 shops

Manufacturing

16.1%
Professional
Firms

42.5%

March 2000

OthersPhoto by Kawasumi and Kenji Kobayashi Photo Studio

Marunouchi Bldg.

Marunouchi Park Building and
Mitsubishi Ichigokan

Marunouchi Nijubashi Bldg

Tokiwabashi Tower

Uchikanda 1-chome Project

Torch Tower

9Marunouchi

Otemachi

900 m

Yurakucho

N

Kokyo (Imperial Palace) Gaien National Garden
Palace HotelTokyo

Otemon Tower •ENEOS Bldg.

PalaceBldg.

NIKKEI Bldg.

MITSUI & CO. Building

OtemachiPark Bldg.

Yurakucho
Center Building(Yurakucho Marion)(Annex)Marunouchi
2-chome Bldg.

Mitsubishi Ichigokan
MuseumShin-Nisseki
Bldg.

St
at

Otemachi
Bldg.

Otemachi Naka-dori Ave.

Marunouchi Naka-dori Ave.

Mitsubishi Bldg.

Marunouchi
Eiraku Bldg.

Otemachi Tower

HOSHINOYA Tokyo
Otemachi Nak

a-dori Ave.

OTEMACHI FINANCIAL CITY
North Tower
South Tower

Tokyo
SankeiBldg.

, Marunouchi Lin

Tokyo Station, Marunouchi Line

Daimyo-koji Ave.

Otemachi Station

ad e

3

Uchikanda
1-chome Project(Planned completion in 2025)e

NTT Communications
Otemachi Bldg.
Marunouchi Center Bldg.
MUFG Bank
Head Office

Tokyo International Forumion

Nihon Seimei
Marunouchi Bldg.
JP TOWER

Tokyo Kotsu
Kaikan Bldg.
(Owned by a
Mitsubishi Estate
consolidated
subsidiary)

Marunouchi
South Exit

Marunouchi
Central Exit

Tokyo Bldg.

Shin-Marunouchi
Center Bldg.

Marunouchi Oazo

Marunouchi
North Exit

Marunouchi Marunouchi
Hotel
Kitaguchi Bldg.

Otemachi Nomura Bldg.

Chiyoda Ward
Sports Center
Otemachi PLACE
WEST TOWER
NTT Communications
Otemachi Bldg. (Annex)
Urbannet
Otemachi Bldg.

Shin-Otemachi
Bldg.
Otemachi PLACE
EAST TOWER

NTT Data
Otemachi Bldg.

NTT
Marunouchi
Bldg.

Yurakucho Infos
Marunouchi Police Sta.

Tokyo Station
TOKYO TORCH (Tokyo Tokiwabashi Project)

Sapia Tower

Pacific Century Place
Marunouchi Bldg.

Mitsubishi Estate’s Value Creation Story

Marunouchi
Central Bldg.

GranTokyo
South Tower

Promoting Marunouchi NEXT Stage

Eitai-dori Ave.

4

Positioning urban development from 2020 onward as part of Marunouchi NEXT Stage, we will continue to promote

Zenigamecho
Bldg.

Asahi Life
Insurance
OtemachiBldg.

TOKIWA BRIDGE

Nippon Bldg.

(Owned by aspecial-purpose
company undermanagement of
Mitsubishi Estate)■ Completion before 2002
■ Redevelopment completed

Marunouchi
Trust Tower Main

GranTokyo
North Tower

Marunouchi
Trust Tower North

new, forward-looking urban development and area management, with an eye on the post-COVID-19 era by embarking
Tekko Bldg.

on the redevelopment of the Tokiwabashi and Yurakucho areas, in order to further evolve Marunouchi into an appeal-■ Redevelopment scheduled
Tokiwabashi Tower

INTRODUCTIONINTRODUCTION

Mizuho Marunouchi
Marunouchi Terrace
Tower

Shin-Marunouchi
Bldg.

Marunouchi Bldg.

Shin-Tokyo Bldg.

Yomiuri
Shimbun
Office Bldg.

Otemachi First Square

The Industry Clubof Japan and
Mitsubishi UFJ
Trust andBanking Bldg.

OTEMACHIFINANCIAL CITY
GRAND CUBE

KDDI
Otemachi Bldg.

Ginkokaikan

O te mac hi Rive rsid e Pro me n

Yusen Bldg.

Marunouchi 1st St.

Mitsubishi
Corp.
Head Office

Marunouchi Naka-dori Ave.

Marunouchi Park Bldg.

Chiyoda Line

SMBC East Tower
Tokyo
Kaijo
NichidoBldg.

Gyoko-dori Ave.

Marunouchi
Naka-dori Bldg.

Marunouchi 2nd St.

Marunouchi
Mitsui Bldg.

Yomiuri Kaikan
BIC CamerahoYurakucho Ekimae Bldg.
(ITOCiA)(Owned by a
Mitsubishi Estate
consolidated subsidiary)

Mitsubishi Estate’s Value Creation Story

Shin-Kokusai
Bldg.

Meiji Yasuda Seimei Bldg.

Kishimoto
Bldg.

Otemachi Station, Tozai Lineuc

ShinYurakucho
Bldg.

Marunouchi
Nijubashi Bldg.

Tokyo Station, JR Keiyo Lineak

Yurakucho
Bldg.

Marunouchi 6th St.

Marunouchi 7th St.

Yu
r

1

Meiji Seimei Kan
Bldg.

Marunouchi 3rd St.

Kokusai Bldg.

SanshiKaikan Bldg.

Hib

Yurakucho
Denki Bldg.

Imperial
Theater

Babasaki-dori Ave.

Dai-ichi Life
Hibiya First

Togyo KaikanNippon Broadcasting
System Bldg.

Otemachi Station,

Nijubashimae Station, Chiyoda Line

Marunouchi 4th St.

The
Peninsula
Tokyo

iya

Sta
t

ion
, Hib

iya

Lin

Toho Hibiya
Promenade
Building

Keidanren
KaikanOtemachi Station, Toei Mita Line

Hibiya-dori Ave.

2

Yurakucho Station, Yurakucho LineeMarunouchi
Police Sta.
HibiyaSankei Bldg.

Marunouchi 5th St.

HibiyaMarine Bldg.

Otemachi One Tower

Ote Center Bldg.

Line

Hibiya Station, Toei Mita Line

SMBC
Head OfficeBldg.

Nippon Life
Marunouchi
Garden Towerntion, HanzomoHi
C h bi y a S
i yo t ad a t io
Lin n,
eTokyo Midtown
HibiyaWadakura-bori
Moat

Babasaki-bori Moat

Otemachi Sta

Hibiya-bori Moat

JA Bldg.

ing and vibrant area.
1,900 mMarunouchi NEXT
Stage

1

2

3

4 

TOKYO TORCH

Making Japan a Place That Excites the World

Main Redevelopment Areas

Under a project vision of “bringing light and energy to Japan,” Mitsubishi Estate is
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Tokiwabashi and Yurakucho

10

Floor Area of
Total Redevelopment Projects

1,100–1,300 thousand m2
Note: Total floor area under construction
confirmation application

Company’s Total Investment
by 2030¥600–¥700 billion

aiming to create a symbol of Japan that will serve as a beacon of hope for the world,

Yurakucho Building andShin-Yurakucho Building
Redevelopment Project
Mitsubishi Estate has decided to redevelop the Yurakucho Building and ShinYurakucho Building in front of JR
Yurakucho Station, a prime location, as
the first phase of the redevelopment of
the Yurakucho area.
Note: Details of the project are currently underconsideration.

Kokusai Building and
Teigeki Building
Redevelopment Project
Mitsubishi Estate, Toho Co., LTD., and theIdemitsu Museum of Arts have decided
to jointly undertake the integrated redevelopment of the Kokusai Building, which
is owned by Mitsubishi Estate, and the
Teigeki Building, which is owned by Tohoand the Idemitsu Museum of Arts.
Note: D etails of the project are currently underconsideration.

Uchikanda 1-chome
Project (Tentative Name)
This project will establish business andindustrial support facilities for the agrifood (a portmanteau of “agriculture” and“food”) sector to accelerate innovation
through cooperation among companies.
Site Area
Total Floor Area
Building Size
Completion

5,100 m2
85,200 m2
26 aboveground floors /3 belowground floors
November 2025

combining inspiration and excitement that can only be experienced in a real setting.
Tokiwabashi Tower

Torch Tower

Site Area
Total Floor Area
Size (Aboveground /Belowground)
HeightCompletion

Tower C

Zenigame-cho Building

31,400 m

2146,000 m2

544,000 m2

20,000 m2

30,000 m2

38 floors / 5 floors

62 floors / 4 floors

4 belowgroundfloors

9 floors / 3 floors

212 m

390 m

—

53 m

June 2021

FY2027

FY2027

March 202211

Mitsubishi Estate’s Value Creation Story

Mitsubishi Estate’s Value Creation Model

Input (Strengths)
Our Long-Term Perspective andForward-Looking DNA
Human Capital and Intellectual Capital
Innovation DNA Underpinned by Our Personnel System  ong-term perspective on urban development
Lreflected in the development of Marunouchi
Foresight to constantly stay ahead of the times andthe spirit to take on challenges
Examples • Evolution of Marunouchi into a major business center• Large-scale redevelopments such as Minatomirai• Expansion of U.S.-style outlet malls across Japan• Early entrance into the REIT market

 he ability to improve the value of urban areas by leverTaging our extensive business relationships
Examples • Improvement of Marunouchi Naka-dori Avenue• Promotion of TOKYO TORCH project

Mitsubishi Estate’s Value Creation Story uman Resource Strategy and Personnel System
H
to Maximize Value Creation
Examples • 10% Rule System (setting targets outside of regular duties)• Creation of an information platform shared by all
Group companies

Extensive Portfolio andRelationships
Natural Capital and Manufactured Capital
Carefully Selected and Abundant Real Estate
Asset Touchpoints 

Investment
Management Business
2%
International
Business
19%
Residential Business
12%

Other businesses*
1%

Total Assets
Approx.
¥6.8719 trillion

Commercial
Property Business66%(As of March 31, 2023)

Establishmentof a Business
Portfolio Resilientto Changes
in Market
Conditions

Growth Strategies
Emphasizing
Efficiency

Flexible Capital
Policies

Commercial Property BusinessFeatures 
Stable income gains centered on
redevelopment projects in the
Marunouchi area

Capital gains through capitalrecycling business

Redevelopment Projects in
Marunouchi
19 buildings (ownership ofapprox. 30 buildings)

Capital Gains Track Record(Commercial Real Estate)
Average for last three years of¥38.6 billion

Rental Profits¥177.5 billion(consolidated)

Residential Business

Domestic
Asset BusinessCondominium business that
carefully selects areas topursue high profitability

Number of Units Sold
/ Gross Profit Ratio
2,706 / 22.9%(Average for last three years)

Rental housing business that
addresses robust demand topost stable capital gains

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

 elationships of trust built up with customers and solidR
relationships with business partners and subcontractors
Number of Tenants (Nationwide, All Purposes) 

3,360 companies

Number of Office Workers in Marunouchi 

280,000

For information on our strengths, please refer to pages 14 and 15.

Environment  eduction of GHG emissions, use of electricity from renewable energyRsources, etc.

Number ofOverseas
Offices
19

2

Diversity & Inclusion 

Urban development that responds to lifestyle and human resource trends
and facilitates active participation for all

Examples of Initiatives

Asia: Capital-recycling business through investments spread across a variety of areas

Non-Asset
Business

Other Businesses

Assets under Management
More than ¥5.4 trillion

3

Innovation 
KPI umber of incubation facilities, their floor space, and number of tenantN
companies
Examples of Initiatives

Features  peration of incubation facilities
ODigital transformation of real estate through use of the latest technology
Spurring of innovation through cooperation and collaboration

Architectural Design & Engineering Business
Provision inside and outside the Group of a range of knowledge and expertise accumulated as an in-house design company



For information on sustainability, please refer to pages 56 to 72.

Corporate Foundations Under pinning Our Businesses
Corporate Governance  eparation of management supervision and business execution as a Company withS
Nominating Committee, etc.
Diversification of the membership of the Board of Directors
Monitoring of daily activities through the evaluation of the effectiveness of the Board of Directors

Financial Foundations: Financial Capital  ong-term, low-interest rate financing taking advantage of Mitsubishi Estate’s credibility
LLeveraging of Company’s high credit rating to secure financing through optimal methods,
even under uncertain financial conditions
Control of financial discipline

Increasing shareholder value
 ealization of a highly efficient portfolio resilient to changes
Rin market conditions
Pursuit of efficiency expected by equity markets

5%
ROE of 10 %ROA of

200

EPS of ¥Increasing social value

Innovative urban development that continuously reinvigorates society

Non-Asset
Business

For details on each business, please refer to pages 40 to 55.

value sustainably through urban development.

 upply chain management initiatives pertaining to human rights, laborSissues, etc.
Diversity-related initiatives within the Group

Europe: Large-scale development backed by more than 40 years of business experience

Establishment of a global platform to operate the business globally

Mitsubishi Estate will continuously offer value to its shareholders,Long-Term Management Plan 2030 KPI Targets  ercentages of female managers, employees with disabilities, employees inPgood health, etc.

United States: Stable income from our flagship buildings in Manhattan andcapital gains from logistics facilities

Feature 

we contribute to the creation of a truly meaningful society.

Introduction of renewable energy to achieve decarbonization
Biodiversity initiatives

Non-Asset
Business

International
Asset Business

Investment Management Businesswhere people can live, work, and relax with contentment,

Examples of Initiatives

Feature 
Promotion of real estatedevelopment in the
United States, Europe,Asia, and Oceania

We contribute to society
through urban development.

society, and all other stakeholders by improving its corporate

KPI

International Business

The Mission of the Mitsubishi Estate Group

Provision of
innovative services
and experiences

KPI

Operating Profit¥19.2 billion

Capital Gains¥12.0 billion(Average for last three years)

Quality of Life

Sustainable urban development that proactively addresses climate change
and other environmental issues

Features 

Relationships and Partnerships Founded on Trust 

121

Leading outlet mall businessin JapanOutlet Malls
10

Provision ofsolutions to current
and emerging
social issues

By building attractive, environmentally sound communities

Non-Asset
Business

Asset types: Office buildings, retail properties and outlet malls, logistics facilities, hotels, and airports

Social Capital

Approx.

Domestic
Asset Business

Synergy

Sustainability

Increasing
SocialValue

Real Estate Services Business
Provision of one-stop solutions leveraging an extensive service menu and Mitsubishi Estate’s comprehensive strengths* Architectural Design & Engineering Business, Real Estate Services
Business, and other businesses

Approx.

Increasing
Shareholder
Value

Outcome4

Resilience 

Dynamic, flexible urban development that builds disaster-resilient communities and prioritizes safety and security

Offering of a wide range of value by addressing social issues
and providing services and experiences ahead of the times
1

Environment  ities that conduct management of climate change, waste, andCenergy issues
Efficient and ecological cities where stock is effectively utilized
2

Diversity & Inclusion  orderless cities respecting the diverse backgrounds of allBpeoplesCities conducive to realizing an inclusive society
Affluent and pleasant cities that respond to demographic andlifestyle changes
3

INTRODUCTIONINTRODUCTION utstanding asset portfolio centered on the
O
Marunouchi area
Creation of a portfolio resilient to market conditions
by diversifying asset types and possessing assets indifferent areas

Business Model / Output

Innovation  ities that provide interactive added value through knowledgeC
accumulation and networks
Innovative cities acting as wellsprings for open innovation
4

Resilience Safe and peaceful cities of a sustainable and resilient nature

KPI ercentages of buildings designated as shelters for stranded commuters,P
employees with first aid provider qualifications, etc.
Examples of Initiatives

Disaster dashboard

Rain gardens

Sustainable Corporate Growth (Improving Corporate Value)
13

Mitsubishi Estate’s Value Creation Story

Mitsubishi Estate’s Strengths

Human Capital and Intellectual Capital

Natural Capital and Manufactured Capital

Innovation DNA Underpinned by Our Personnel System

Carefully Selected and Abundant Real Estate Asset Touchpoints

Deployment of the Long-Term Perspective Cultivated through the Development of
Marunouchi in Other Areas

The Mitsubishi Estate Group possesses a market-resilient asset portfolio

Development of the Izumi Park Town Project in Sendai 

Our Long-Term Perspective and Forward-Looking DNA

INTRODUCTION
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Commercial Property Business 
Number of Office Buildings underManagement 

Development of Minato Mirai 21, a Large-Scale Redevelopment Project 

214

Mitsubishi Estate took part in Minato Mirai 21 as the largest private-sector landowner. Yokohama Landmark Tower, which was completed in 1993, was the tallest
building in Japan (296 m) at the time of its completion.

Number of Hotels under Operation 

20Retail Facilities 

23 (Including 10 Outlet Malls)
Number of Rooms in Hotels under
Operation 

Logistics Facilities (Total Number ofDeveloped Facilities) 

21

Number of Airports Operated by
Airport Operation Business 

10

4,620

Foresight and the Spirit to Take On Challenges
Residential Business Expansion of U.S.-Style Outlet Malls in Japan 
Mitsubishi Estate introduced the culture of outlet malls, which originated in the
United States, to Japan, beginning with the opening of GOTEMBA PREMIUM
OUTLETS® in 2000. Today, the Company operates 10 outlet malls across Japan.

Number of Condominiums Solda Year 

International Business 
Number of Overseas Offices 

19 offices

1,596Land Bank of For-Sale
Condominiums in Asia 

9,400 units

Contracted Area 

Early Entrance into the REIT Market 
In 2001, Japan Real Estate Investment Corporation, of which Mitsubishi Estate is the main sponsor, became thefirst J-REIT to go public (Nippon Building Fund Inc. went public at the same time.).

The Ability to Enhance the Value of Urban Areas by Leveraging Outstanding Relationships

Rental Apartment Buildings(Owned or under Development) 

89
Number of Condominiums underManagement 461,530 m
Europe: 59,254 m
Asia: 8,436 m
U.S.:

2

Investment Management
Business 22

Assets under Management 

5.4 trillion

Approx. ¥344,867

Improvement of Marunouchi Naka-dori Avenue Note: Figures as of FY2022

In 2002, we made improvements to Marunouchi Naka-dori Avenue, the main street in the Marunouchi area, tocoincide with the completion of the Marunouchi Building.
We made the avenue more pedestrian-friendly by widening the sidewalks from 6 m to 7 m and reducing thewidth of the road from 9 m to 7 m.

Social Capital

Proceeding with TOKYO TORCH (Tokyo Tokiwabashi Project),a New Landmark for Japan 

Relationships and Partnerships Founded on Trust OKYO TORCH is a large-scale mixed-use development project that aims toTredevelop a site of approximately 3.1 hectares in front of Tokyo Station. At 390 min height, Torch Tower, which is slated for completion in FY2027, will become
the tallest construction in Japan.
The Dorchester Collection, an ultra-luxury hotel, will open its first location in Asia on the upper floors ofTorch Tower.

The relationships of trust built up over the years with customers and the long-lasting relationships
formed with business partners and subcontractors are among the Mitsubishi Estate Group’s key
strengths. We also proactively support and collaborate with start-up companies.
Number of Tenants(Nationwide, All Purposes) Approx.

Human Resource Strategy and Personnel System to Maximize Value Creation
Clarifying That We Require Change Makers and Professionals as Human Resources and Enhancing
Our Personnel System to Create a Vibrant Workplace Along with a long-term perspective on urban development and forward-looking DNA, we have clarified thehuman resources we require going forward by defining those for whom taking on challenges and spurringinnovation is part of their DNA as Change Makers and Professionals. At the same time, we aim to maximize ourvalue creation as an organization by enhancing various personnel programs and making Companywide efforts
to both develop our existing businesses and promote business model innovation.


Please see pages 62 to 65 for details.

Number of Passengers at
Group-Operated Airports 

3,360 companies

Number of Office Workers in
Marunouchi 

Approx.

24.32 million per year

Number of Support Hubs forStart-Ups (Marunouchi) 

280,000

Number of Members Eligible to Jointhe Residence Club 

Approx.

Approx.

5
Number of Start-Ups in
Support Hubs (Marunouchi) 660,000 house-

202

holds

Number of Overnight Guests at
Group Hotels 

Approx.

INTRODUCTION

14in Marunouchi.

Extensive Portfolio and Relationships

Mitsubishi Estate’s Value Creation Story

Opened in 1974 and among the largest private-sector residential land development projects in Japan, Izumi Park Town has a population of over 25,000 andmore than 10,000 households.

diversified across a variety of different areas and assets, most notably

1.71 million per year

Amount of Investment inStart-Ups (Commitment Basis) 

29.0 billion

Approx. ¥15

Expanding into Various Domains

Mitsubishi Estate’s Value Creation Story

The Mitsubishi Estate Group has expanded its business activities into various domains by utilizing its unique expertiseand know-how accumulated through its development of Marunouchi. The Group has continuously taken on chal-

Operating Revenue¥1.37 trillion

lenges in anticipation of changes in its operating environment and the coming era, such as expanding into overseas
markets and participating in new asset types, while further refining its strengths, centered on office buildings.

Operating revenue (left scale)Operating Revenue / Operating Profit

Operating Profit¥296.7 billion

Operating profit (right scale)(Millions of yen)

(Millions of yen)

2,000,000

1894

1,500,000

OfficeBuilding
Business

Mitsubishi Estate’s
core business, whichis involved in thedevelopment andmanagement of officebuildings in Japan’smajor cities, particularly Tokyo

RetailFacility
Business

Operates various
types of retailfacilities

Logistics
Facility
Business

Promotes the development of logistics
facilities through the
Logicross brand

HotelBusiness

Operates hotel development and management businesses

AirportBusiness

Contributes toregional development
through the operationof 10 airports inJapan

Residential
Business

Offers development,
sales, brokerage,
management, andother services

Marunouchi

2002

Completion of Mitsubishi
Ichigokan, Japan’s first modern
office building
1978

1993

Opening of Sunshine City

Other than
Marunouchi

2007

Completion of Tokiwabashi
Tower

2013

2000

Scheduled completion of Torch Tower,a high-rise building approximately 390 min height
2027

2015

Completion of GRAND FRONTOSAKACompletion of Yokohama
Landmark Tower

Completion of Dai Nagoya
Building

Scheduled completion of GRAND GREEN OSAKA(Umekita Phase II), a large-scale redevelopment locatedin front of Osaka Station

2013

2022

Opening of MARK IS Minatomirai

Opening of GOTEMBA PREMIUM OUTLETS®,
the first outlet mall in the PREMIUM OUTLETS®
seriesOpening of FUKAYA HANAZONO PREMIUM OUTLETS®,
the 10th in the series of PREMIUM OUTLETS® in Japan

2012

2023

Completion of Tatsumi 3-chome
Development Project, Mitsubishi Estate’s
first logistics facility development

Scheduled completion of Tokyo Ryutsu Center
Distribution New A Building

Mitsubishi Estate’s Value Creation Story

1989

2023

Opening of Royal Park Hotel in Hakozaki

2018

1969

2011

Sale in lots of Akasaka Park House,
the first property in Mitsubishi Estate’s
condominium business
1972

1,000,000

International
Business

Operates diverse realestate businesses in
the United States,
Europe, Asia, andOceania

Completion of Hilton Okinawa Miyakojima Resort,
Mitsubishi Estate’s first resort hotel development
2019

Commencement of the operationof Takamatsu Airport

UnitedStates

2018

Establishment of Mitsubishi
Estate Residence Co., Ltd.

Entry into businesses developing commercial
nursing homes and residences for students
2021

Capital investment in the Rockefeller
Group International, Inc.

Participation in a data center
development business

1986

2023

Establishment of MEC UK Limited

Completion of 8 Bishopsgate,a large-scale office building in London
2021
Establishment of branch officein Australia
2015

Offers asset management services forinvestors in Japan, theUnited States, Europe,and Asia2022

Acquisition of TA Realty LLC, one of the leading realestate investment management companies
in the United States

200,000

Assets under management
exceeds the ¥5-trillion markINTRODUCTIONINTRODUCTION

2008
Establishment of Mitsubishi
Estate Asia Pte. Ltd.

Asia and
Oceania

Investment
Management
Business

400,000

Opening of Miyako Shimojishima
Airport Terminal

1990

Establishment of Mitsubishi Estate
New York Inc.

Europe600,000

2028

2021

Completion of Shin-Marunouchi
Building

Completion of the Marunouchi
Building

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

500,000

16

0

0

FY1995

FY1996

FY1997

FY1998FY1999FY2000FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

17

The Mitsubishi Estate Group’s Strategies

Long-Term Management Plan 2030

Growth Strategies and Targets
Leveraging our long-term perspective on urban development and forward-looking DNA, in addition to our extensive user reach andabundant real estate asset touchpoints, strengths of the Group, we will seek to realize growth in the three domains of our domestic
asset business, international asset business, and non-asset business.

Overview of Strategies
In light of the rapidly changing market environment, the Mitsubishi Estate Group has formulated a 10-year plan, Long-Term
Management Plan 2030, as it aims to continuously provide value sustainably to its stakeholders over the longer term.
To promote urban development, which forms the core of its business, the Company will raise the value of facilities andareas and boldly take on the challenge of achieving growth in new domains, which will involve initiatives to be carried out
over the long term, by formulating management plans with more suitable periods.

The Mitsubishi Estate Group’s Mission

Domestic Asset Business

Leverage Existing Strengths Creation of a Truly Meaningful Society through Urban Development

Four key themes* to realize asustainable society* Environment, Diversity & Inclusion,
Innovation, and Resilience

Increasing
SocialValue

Fundamental Approach

5%
ROE
10%
EPS¥200
ROA

Synergy

Increasing
Shareholder
Value

Create value for every
stakeholder, including
visitors and employees

Fundamental Approach

Transformational
improvements to the Group’sbusiness portfolio’s
efficiency and market
resilienceby Increasing Both Social Value and Shareholder Value

Build a More Efficient and Market-Resilient Business Portfolio
Improve ROA and ROE by expanding revenues via mainly market-resilient, non-asset and other businesses in combination withflexible capital policies(Value Creation through Balance Sheet Management)

 ustainable urban development that proactively addresses climate change and other environmental issues
SUrban development that responds to lifestyle and human resource trends and facilitates active participation for all
Innovative urban development that continuously reinvigorates society
Dynamic, flexible urban development that builds disaster-resilient communities and prioritizes safety and security

Quality of Life Provision of innovative services and experiences

 rban development that provides inspiration and happiness to customers, allowing them to experience convenience, fun, wellU
being, and community involvement

Profit Contributions from
Redevelopment Projects

CapitalRecyclingOptimize the balance of new investments and capital returns in response to market conditions

Residential

 ecure and commercialize redevelopment
S
projects

2030 Goal chieve sizable profit contributions fromA
large-scale projects, including Torch Tower

Approx. +¥50.0 billion(vs. FY2019)Increase the number of units sold andrealize profits from redevelopment projects

	Asia: Enhance development business	Europe: Advance development business and enhance revenue base

	U.S.: Enhance and diversify capital-recycling business

Early to Mid StageMid to Late Stage

Profit Scale with Asset Accumulation

Stabilize Profitability via Capital
RecyclingAsia ecure development opportunities and accumulate assets
SRealize profits (from residential and ongoing projects)

Optimize investments and capital returns

Europe nact approach to investments and returns: Stabilize revenues and enhance capital efficiency
EAdvance large-scale development projects (8 Bishopsgate, 60–72 Upper Ground, etc.)

2030 Goal

Approx. +¥50.0 billion(vs. FY2019) trengthen capital-recycling business with local resourcesS
Carry out joint project development with local partners

U.S.

	Grow fee business	Utilize new technologies, e.g., AI and robotics

	Create new B2C and B2B2C businesses

Early to Mid StageMid to Late Stage

Promote Commercialization in New
Domains

Boost Profitability in New Domains

Investment Management Business: Grow assets under management(aim for ¥5.0 trillion by the mid-2020s)
Hotel management business: Expand number of hotel rooms (open 3–4 hotels per year)

Existing

 elect new domains
SIdentify business partners
Implement field trials

 onduct business trials
CAchieve early profits

2030 Goal

Approx. +¥50.0 billion(vs. FY2019) cale up businessesSAchieve sizable profit
contributions

Plan to Achieve 2030 Targets (ROA, ROE, and EPS) 
At Time of Formulating
Long-Term Management
Plan 2030(FY2019 Forecast)Business Profit¥230.5 billion(EPS: ¥100.2)

2030 Targets¥350.0 billion–¥400.0 billion(EPS: ¥200.0)

Target: Increase of¥120.0 billion–¥170.0 billion
Approx. ¥50.0 billion growth for each of our domestic
asset, international asset, and non-asset business

Expected Change in Total Assets

Total Assets

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

18

Sustainability Provision of solutions to current and emerging social issues

Advance Redevelopment Projects
 dvance and commercialize redevelopment
Aprojects, including in MarunouchiOptimize mix of investments, asset sales, shareholder returns, and financing in response to market growth projections

Aspects for Value Provision in Light of Changes in the Social Environment

Mid to Late Stage

RentalNew

Flexible Capital Policies
Enact Flexible Capital Policies in Response to Market Conditions

Early to Mid Stage

Adapt to a Changing Future Realize Our Mission and Sustainable Growth

Goal	Optimize capital-recycling business in line with market conditions* Net operating income = Rental income — Rental costs (excluding depreciation)

Grow International Business 

Non-Asset Business

The Mitsubishi Estate Group’s Strategies

2030 Targets

A Pair of Turning Gears

International Asset Business

2030 Target	Advance Marunouchi NEXT Stage project	Increase NOI* with long-term development projects

Business Profit
Total Assets¥5.9 trillion

Approx. ¥7.0 trillion–¥8.0 trillion

Flexible capital policies
Optimize investments, asset sales, shareholder returns, and financing according toreal estate market conditions
Expected net increase in total assets:¥1.0 trillion–¥2.0 trillion=

ROA: 3.9%

ROA: 5%Current leverageWith current leverage

ROE: 7.8%

ROE: 10%

Increase

Net investment (cumulative):
Approx. ¥2.0 trillion to ¥3.0 trillion

Decrease

Depreciation (cumulative):
Approx. ¥1.0 trillion

19

The Mitsubishi Estate Group’s Strategies

Mitsubishi Estate Group

Overview of Sustainability(ESG) Initiatives
In Long-Term Management Plan 2030, the Mitsubishi Estate Group declared its aim to address current and emerging social
issues through its business activities under management targets focused on strategies for increasing both social andshareholder value to realize a sustainable society.
Efforts toward this goal began in 2018 with the formation of a Groupwide working group, which anticipated changes in theGroup’s operating environment to identify seven material issues. Based on these issues, we established the Mitsubishi EstateGroup 2030 Goals for the SDGs, which set out four key themes as the social issues that the Group must focus on in particular.
At the same time, we established Mitsubishi Estate Group Sustainability Vision 2050 (Be the Ecosystem Engineers) witha title expressing the Group’s vision for realizing a sustainable society based on a long-term outlook essential for urban
development. We have positioned the Mitsubishi Estate Group 2030 Goals for the SDGs as a milestone establishing specificthemes and actions for realizing our 2050 vision.
The Mitsubishi Estate Group will aim to achieve ongoing growth and create a truly meaningful society through sincere

The Mitsubishi Estate Group’s Strategies

efforts to address social issues.

2030 Goals for the SDGs
Environment 
Sustainable urban development that proactively addresses climate change
and other environmental issues
GHG emissions, such as CO2: Reduce the total of Scope 1 and Scope 2 emissions by at least
70% and Scope 3 emissions by at least 50% by FY2030, compared with FY2019, and achieve
net-zero emissions for Scope 1, Scope 2, and Scope 3 by 2050
Renewable energy ratio: 100% by FY2025
Promote waste recycling and reduction of emissions focusing on food and plastic items
Waste recycling rate: 90% by 2030
Waste disposal: 20% reduction by 2030 (compared with FY2019, per m2)
Promote sustainable timber use
Opportunities 

Risks Increasing need for acquiring and leasing real estate with low environmental impact
Reduction of waste accompanying longer demolition and rebuilding
time spans due to effective use of existing properties ise in vacancy rates and decline in sales closing rates and salesR
prices in the event of a late response amid an increase in the need toacquire and lease real estate with low environmental impact
Increasing costs for new real estate development due to stronger
environmental regulations and for countermeasures due to tighteningof standards for repair work

Diversity & Inclusion 
Urban development that responds to lifestyle and human resource trends andfacilitates active participation for all trengthen hospitality and realize stress-free cities
SRespect different lifestyles, local customs, religions, and individuals’ sexual orientation
Establish traceability of timber to be used in business activities by using wood equivalent
to that in the Sustainable Sourcing Code

Increasing
Shareholder
Value

A Pair ofTurning Gears

Synergy

Increasing
SocialValue

Opportunities 

Risks Increasing demand for facilities and services to meet the needs ofglobal customers
Alleviation of labor shortages through acceptance of non-Japanese
workers into Japan
Rise in demand for facilities and services that respond to diverse lifestyles, workstyles, and consumption styles, such as the accelerationof teleworking and freelance working
Growth in demand for facilities and services tailored to new needs
due to demographic changes
Increasing demand for facilities and services tailored to the concept ofuniversal design, such as barrier-free layouts

Increasing country-specific risks and compliance risks, including
supply chain management
Declining demand for facilities and services with inadequate provision
for diversified needs
Decreasing demand for facilities and services accompanying demographic changes (decline in working population, etc.)
Decreasing user numbers and rise in vacancy rates in the event of alate response amid an increase in demand for facilities and services
tailored to the concept of universal design, such as barrier-free layouts

Innovation 
Innovative urban development that continuously reinvigorates society
Innovate business models and maximize performance upport the creation of new ideas and businesses from the perspective of urban development
Sand contribute to the growth of cities and industries

Mitsubishi Estate Group Sustainability Vision 2050

Be the Ecosystem Engineers
We aspire to be a corporate group (engineers) that provides spaces and infrastructure (ecosystems) where all actors (individuals, corporations, and otherplayers) are able to coexist sustainably and thrive together—economically,
environmentally, and socially.

Backcasting

Opportunities 

Risks  ecreasing cost of environmental countermeasures and investmentsDwith the advancement of technological innovation
Rise in the efficiency and convenience of operating facilities throughutilization of IT and robots
Increasing development opportunities and needs in smart communities, residences, and offices

 eclining demand for brick-and-mortar stores and services accompanyD
ing the advancement of online buying and selling, such as e-commerceDecreasing demand for facilities and services due to late response to
IT and digital innovation
Loss of opportunities because of a late response amid an expansion indevelopment opportunities and demand for smart communities, residences, and offices

Resilience 
Dynamic, flexible urban development that builds disaster-resilient communities andprioritizes safety and security

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Material Issues (Primarily Social Issues It Addresses)20

 nhance disaster preparedness to minimize functional stagnation during disastersEEnhance business continuity plan function through hardware measures and strengthen neighborhood communication
Environment

Globality

Community

Declining Birth Rateand Aging Population

Leveraging Existing
Properties

Digital Innovation

Diversity

Formulation of key
themes and KPIs based on
our material issues

Opportunities 

Risks Increasing need to acquire and lease real estate highly resilient todisasters, including urban floods, accompanying climate changeGrowing need to acquire and lease real estate highly resilient todisasters such as earthquakes

 ecreasing asset value and increasing expenses for maintenance andD
countermeasures due to intensifying and increasing disasters, suchas urban floods, accompanying climate change
Fall in asset value and rise in expenses for maintenance and countermeasures due to disasters such as earthquakes
Increasing renovation expenses and disaster countermeasure costs
accompanying aging buildings	For information on the Mitsubishi Estate Group 2030 Goals for the SDGs, please refer to the following website.
https://mec.disclosure.site/e/sustainability/goals/

21

The Mitsubishi Estate Group’s Strategies

Progress of Long-Term Management Plan 2030
Capital Gains (Capital-Recycling Business) In total, the Commercial Property andCapital-Recycling Assets Owned
Capital-Recycling Assets of
業 Property Businessノン アセット事
by Commercial
the 業
Residential BusinessResidential businesses own capital- ノン アセット事
Hotelsrecycling assets of ¥1.25 trillion.
OfficesNursing homes6%

Businesses 

Logistics
facilities
2%

39.0 billion¥

The Mitsubishi Estate Group’s Strategies

 reation of urban areas that are truly attractive to office workC
ers and offices where they want to work by leveraging oururban development experience and know-how accumulated
over more than 130 years as a comprehensive developer
Provision of flexible workspaces catering to a variety ofworkstyles
Promotion of condominium and rental apartment businesses
focused on areas in central Tokyo where the population willcontinue to increase (or where the rate of decline is minimal)
Advancement of decarbonization initiatives in partnershipwith construction companies and subcontractors, such asincreasing energy efficiency and accelerating the introduction of renewable energy, to balance control of costs withenvironmental consideration

200

201.5

201.6

33.0
14.7

39.0
16.7

47.0
25.3

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

47.0 billion¥+¥50.0 billion
Marunouchi

Property Name
(Including Tentative Name)*1

Total Floor
Area*2

Tokiwabashi Tower (Building A)

146,000 m

Uchikanda 1-chome Project

85,200 m2

FY2021
2

Yurakucho Building and Shin-Yurakucho
Building Reconstruction Project*3 10,700 m2

Torch Tower (Building B)

544,000 m2

Kokusai Building and Teigeki
Building Redevelopment Project*3 9,400 m2

FY2022

FY2023136,000 m2

Tenjin 1-7 Project (Fukuoka)

74,000 m2

GRAND GREEN OSAKA (Umekita
Phase II) (Osaka)
Nishiki 3-Chome 25th City Block
Project (Nagoya)
Dogenzaka 2-chome South
Redevelopment Project
Iidabashi Station East
Redevelopment Project
Sannomiya Kumoi Dori 5-chome
Redevelopment Project (Kobe)
Former Hotel Grand Palace Site
Redevelopment Project
Akasaka 2 · 6-chome Development
Project
FUKAYA-HANAZONO PREMIUM
OUTLETS®

378,450 m2

KYOTO JOYO PREMIUM OUTLETS®

*3 245,000 m2

Tokyo Ryutsu Center Distribution
New A Building

205,000 m2

Logicross Zama

178,700 m2

Start construction

Completion

Logicross Sagamihara

170,900 m2

Start construction

Completion

Osaka City Suminoe Ward Shibatani Frozen
Refrigerated Distribution Project (Osaka)

43,500 m2

Japan

Income Gains  he first year of Long-Term Management Plan 2030 coincided with the outbreak of the COVID-19 pandemic. Although the impact ofT
the pandemic was significant—particularly on the hotel business (non-asset business) and outlet mall and retail facility businesses—results gradually recovered in FY2021 and FY2022 and the outlet mall business posted operating profit of ¥19.2 billion in
FY2022, exceeding the pre-pandemic level. With demand from Chinese visitors to Japan expected to recover, we expect revenues
in the domestic asset business to improve to beyond the pre-pandemic level in FY2023.
 ffice rental profits increased with the opening of Tokiwabashi Tower. On the other hand, there was a decrease in profits resultingO
from the announcement of the closure for reconstruction of the Yurakucho, Shin-Yurakucho, Teigeki, and Kokusai buildings. Moving
forward, the opening of large-scale redevelopment properties centered on Marunouchi is expected to facilitate rental profit growthin the second half of the 2020s.

Outlet malls

Large-scale
logistics
facilities(100,000m2+)—

Completion
Gradual completion and opening

Start construction

Completion
Completion

Start construction

Completion

98,600 m2

Start construction

Completion*3 6,600 m2

Under consideration

210,000 m2

277,000 m2

Approx.
¥1.2–¥1.3
trillion

Completion
Start construction

46,500 m2

Kyoto Joyo Next-Generation Core
Logistics Facility Project

Approx.
¥75.0–¥80.0
billionCompletion

Start construction*3 54,000 m2

Estimated
Investment

Completion

87,100 m2

Misato-shi Hikoito Project

Estimated NOI(Stable Operation)

Completion

Start construction

109,700 m2

34,500 m2

2030

Under consideration

Toyosu 4-2 Development Project

Capital gains¥24.0 bn

Under consideration

17.0

Mixed-use
offices

FY2025

Start construction

9.82030 target¥14.0 bn

Residential: Completion

Start construction

FY2023 (forecast)

FY2024

Start construction

Start construction

FY2022¥28.0 bn

Logistics: Completion

67,000 m2

FY202166.0 billion¥

Toyosu Front

Residential Business
Sale of four properties,
primarily rental housing

14,700 m2

FY2020¥5.0 bn

Office: t he ARGYLE aoyama
Use: Office
NOI Cap Rate: 2.9%*1
the ARGYLE aoyama
Logista LogicrossIbaraki Saito (Buildings A and B)
Use: Logistics facility
NOI Cap Rate: B uilding A: 4.2% /Building B: 4.3%*2
Residential Business
Sale of 19 properties, including residential
housing and nursing homes

Osaka Dojimahama Tower

FY2019Residential: FY2022Major Property Sales

3rd MINAMI AOYAMA

134.3¥7.0 bnToyosu Front(partial ownership)
Use: Office
NOI Cap Rate: 3.8%*1

64.0

139.3

¥35.0 bn

Logistics: Major Property Sales

66.0

143.4

Office: Despite a difficult operating environment for acquiring projects, the domestic asset business fully mobilized the Mitsubishi EstateGroup’s sourcing capabilities to promote investments centered on the capital-recycling business. With the accumulation of development projects focused on offices and logistics facilities that will serve as a source of future profits, the domestic asset business willfurther expand its project lineup.

0

22¥7.0 bn

215.3

145.9

Domestic condominiums and other housing

Residential: FY2021

Project Lineup 

100Income gains¥8.0 bn

215.2

153.8

billion*1 Announced by Japan Real Estate Investment Corporation*2 Announced by Mitsubishi Estate Logistics REIT Investment Corporation

300

215.8

¥215.0LOGIPORT Kawasaki Bay

vs. FY2019(Billions of yen)

¥24.0 bn

Logistics:  OGIPORT Kawasaki Bay
L
Use: Logistics facility
NOI Cap Rate: 4.3%*2

Business Profit 
Target:Office: Major Property Sales
Link Square Shinjuku(partial ownership)
Use: Office
NOI Cap Rate: 4.0%*1

Market Environment (Risks and Opportunities)  stablishment of diversified workstyles, such as workingEremotely, due to the COVID-19 pandemic and reconsideration of the purpose and meaningfulness of offices
Risk of changing and declining demand for offices, housing,etc., as population decline continues
Accelerating inflation stemming from the pandemic and theRussia–Ukraine situation. Also, rising utility, construction,and other costs
Risk of rising interest rates¥1.035trillion

Capital gain results: Consistently recording highly profitable capital gains through various assets
FY2020

Opportunities

and student
residences
28%

Rental housing
72%

Domestic AssetBusiness

Risks

78%

Retail facilities
13%

New and Other Businesses

Real Estate Services BusinessArchitectural Design &Engineering Business

Investment Management
Business

Operation and Management
and Brokerage Businesses

Condominium Sale andLeasing Business

Management BusinessAirport Operation Business

Hotel Business
Development Business

Logistics Facility Business

Outlet Mall Business

Operation andManagement Business

Development and Leasing
Business

Retail Facility Business

Office Building BusinessResidential Business

International Business

Commercial Property Business

PROGRESS OF LONG-TERM MANAGEMENT PLAN 2030

Domestic Asset Business Start construction
Start construction

Completion

Completion
Under consideration

Start construction

Project announced after launch of Long-Term Management Plan 2030

Completion

Start construction

Completion
Under consideration
Start construction

Completion*1 Includes properties expected to be sold by 2030
*2 Total floor area unless otherwise noted*3 Site area

23

The Mitsubishi Estate Group’s Strategies

Progress of Long-Term Management Plan 2030
Capital Gains (Capital-Recycling Business) Book Value of the Overseas Assets*
ノン アセット事
業of the Residential BusinessBusinesses 
New and Other Businesses

Real Estate Services BusinessArchitectural Design &Engineering Business

Investment Management
Business

Operation and Management
and Brokerage Businesses

Condominium Sale andLeasing Business

Management BusinessAirport Operation Business

Hotel Business
Development Business

Logistics Facility Business

Outlet Mall Business

Operation andManagement Business

Development and Leasing
Business

Retail Facility Business

Office Building BusinessResidential Business

Asia
27%

International Business

Commercial Property Business

Offices andmixed-use facilities
7%
Retail facilities

Other
2%

Residential
housing9%Book Value as ofMarch 31, 2023
¥950.0 billion

and data centers
20%
Rentalhousing12%

United States
46%
Hybridmodel
investment
57%

Europe27%* Inventories + Equity investments + Total property,
plant and equipment
Excluding core asset (Manhattan property),which the Company will continue to own

Residential
housing40%

Europe27%

Rental housing
5%

Offices andmixed-use facilities
41%

Other
7%

Hybrid-model investment
10%

Asia
27%

Offices andmixed-use facilities
78%

Hybrid-model
investment
12%

 everaging the contribution of its capital-recycling business in the United States (¥10.0 billion–¥20.0 billion annually), theLinternational asset business seeks to stabilize and further expand capital gains through the ongoing contribution of its capitalrecycling business in Europe and the expansion of its portfolio in Asia.

International
Asset Business

Market Environment (Risks and Opportunities) 

The Mitsubishi Estate Group’s Strategies

United States
46%

Breakdown of Asset Types by Region

PROGRESS OF LONG-TERM MANAGEMENT PLAN 2030

International Asset Business 

12.0

FY2020resultRisks

Opportunities

 stablishment of diversified workstyles, such as workingEremotely, due to the COVID-19 pandemic and reconsideration of the purpose and meaningfulness of officesChanges in country risks as a result of the Russia–Ukraine
situation, the return of COVID-19, etc.
Accelerating inflation stemming from the pandemic and theRussia–Ukraine situation
Impact on the real estate market from accelerating interest
rate increases centered on Europe and the United States tocurb inflation

 usiness promotion leveraging a variety of experience andBknow-how gained through development projects in Europe
and the United States over several decades. Also, investment decision-making based on extensive knowledge ofmarket trends gained through years of experienceAn investment strategy managing asset types and level ofrisk by region, defining Europe and the United States as
highly mature markets and Asia as a high-growth market
Minimization of country risks and volatility arising fromboom-and-bust cycles by maintaining a globally diversified
portfolio with a focus on Europe, the United States, and Asia
Maintenance of a globally diversified portfolio while making
selective individual investments in central business districts, densely populated areas, etc., by leveraging our pastexperience and the expertise of leading local partners¥
billion,centered on the U.S.

29.0¥
billionthrough logistics facilities
in the U.S., offices in Asia, etc.

FY2021
result610.0 billion in various regions, notably Europe(Billions of yen)
80

61.0

60

¥

FY2022
resultBreakdown of Capital Gains by Region

40

Central St. Giles
Location: London
Use: Office
Building Scale: Approx.
66,000 m2
EIRR: Over 10%

Hanover
Location: Pennsylvania
Use: Logistics
Size: 42,100 m2
EIRR: Approx. 100%

Val Verde
Location: California
Use: Logistics
Size: 26,900 m2
EIRR: Over 100%

Liv Crossroads
Location: Arizona
Use: Rental apartment
Size: 356 units
EIRR: Approx. 30%

39.0
29.0

28.0
20

16.0

0

11.0
12.0
12.0

FY2019FY2020

United States

22.0

18.0

12.0

FY2021

EuropeFY2022

Asia

Project Lineup With a vast project lineup in various regions, we will capitalize on market trends to generate revenues and profits in a timely manner.

Target:+¥50.0 billion
vs. FY2019(Billions of yen)
120

89.4
80

55.8
40

0

46.1

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

24

37.9

61.0

29.0

28.0

12.0

18.1

25.9

26.8

FY2019FY2020

FY2021

Income gains

Total Floor
Area*2
Trinity Tower (Indonesia)
Office, Commercial 143,200 m2
Hangzhou ALPHA PARK (China) Office233,600 m2
CapitaSpring (Singapore)
Mixed Use
93,400 m2
180 George Street (Australia)
Office, Commercial *3 55,000 m2
One City Centre (Thailand)
Office, Commercial 116,000 m2
Asia
The Grand Outlet (Indonesia)
Outlet Malls
49,000 m2
Parkline Place (Australia)
Office, Commercial
65,900 m2
Suzhou ALPHA PARK (China)
Office220,400 m2
One Circular Quay (Australia)
Hotels, etc.
86,800 m2
Oasis Central Sudirman (Indonesia) Mixed Use
307,000 m2
Warwick Court (London)
Renovation
29,000 m2
8 Bishopsgate (London)
Office, Commercial
85,000 m2
The Blossoms (London)
Rental Apartment
338 Units
Europe3dMoura1 (Spain)
Office* 11,000 m2
3
Grace (Sweden)
Renovation* 7,800 m2
60-72 Upper Ground (London)
Office, Commercial *4 10,400 m2
Stateline 77 Building 1 and 2 (South Carolina) Logistics*3 93,600 m2
55 Paradise (New York)
Logistics*3 16,700 m2
Virginia Data Center Building (Building 1) Data Center*5 51,000 m2
Virginia Data Center Building (Building 2) Data Center
sol38 (Arizona)
Rental Apartment
360 Units
PATTEN GRAY (Colorado)
Rental Apartment
250 Units31072 West Peachtree (Georgia) Mixed Use* 49,300 m2
600 Fifth Street NW (Washington, D.C.) Office*3 37,000 m2
60,800 m2
United Heritage, Chula Vista (California) Logistics
States Spotswood (New Jersey)
Logistics
28,200 m2
Paradigm RiNo (Colorado)
Office28,200 m2
10 Constitution Ave. (New Jersey) Logistics
13,600 m2
Spartanburg 221 (South Carolina) Logistics
94,600 m2
Nellis Logistics Center (Nevada) Logistics
12,600 m2
3102 N Lamb (Nevada)
Logistics
13,500 m2
16 Dupont (New York)
Rental Apartment
43,100 m2
Vista (Alabama)
Rental Apartment
23,000 m2
E 2nd Martin (Colorado)
Rental Apartment
23,600 m2
Property Name (Location)*1

Business Profit 

54.0
30.0

28.4
FY202224.0
FY2023 (forecast)

2030 target

Capital gains

Income Gains Achieving steady growth through strategies to gain income in every region
United States: The increases in both profits resulting from the renovation of our flagship building in Manhattan (1271 Avenue of theAmericas) and profits in conjunction with hybrid-model investments, a collaboration with the Investment
Management Business, contributed to income gain growth.
Europe: A lthough income gains due to the sale of properties and the closure of buildings for renovation have declined temporarily,
an abundance of new projects, including large-scale projects, are scheduled to steadily contribute to profits.
Asia: The international asset business is promoting developments in various countries (including Australia, Vietnam, Thailand, andIndonesia), beginning with condominiums.

Type

FY2021

FY2022

FY2023

FY2024FY2025–2030

Estimated NOI(Stable Operation)

Estimated
Investment

Approx.
¥40.0 billion

Approx.
¥500.0 billion

Completion
Completion
Completion
Completion
Completion
Start construction

Completion

Start construction

Completion
Start construction

Completion

Start construction

Completion
Start construction

Completion

Completion
Completion
Completion
Completion
Start construction

Completion
Completion

Completion
Start construction

Completion
Start construction

Completion
Start construction

Start construction

Completion
Completion

Start construction

Completion

Start construction

Completion
Start construction

Start construction

Completion
Completion

Start construction

Completion

Start construction

Project announced after launch of Long-Term Management Plan 2030

Completion
Start construction

Completion

Start construction

Completion

Start construction
Start construction
Start construction

Completion
Completion
Completion

Start construction

Completion
Start construction

Completion*1 Includes properties expected to be sold by 2030
*2 Total floor area unless otherwise noted*3 Leasable area

*4 Site area
*5 Total of two buildings

25

The Mitsubishi Estate Group’s Strategies

Progress of Long-Term Management Plan 2030
Hotel Management Business Businesses 
New and Other Businesses

Real Estate Services BusinessArchitectural Design &Engineering Business

Operation and Management
and Brokerage Businesses

Condominium Sale andLeasing BusinessAirport Operation Business

Management Business

Development Business

Logistics Facility Business

Outlet Mall Business

Retail Facility Business

Operation andManagement Business

Development and Leasing
Business

Investment Management
Business

Residential Business

Hotel Business

International Business

Commercial Property Business
Office Building Business

Non-Asset(Fee-Based) BusinessAlthough the hotel management business was significantly affected by the COVID-19 pandemic, occupancy rates and average dailyrates (ADR) in March 2023 achieved a conspicuous recovery. At over 80% and approximately ¥20,000, respectively, both hotel occupancy rates and ADR almost recovered to their pre-COVID-19 levels.
With the recovery in inbound tourism demand, particularly from Chinese visitors to Japan, we expect revenues in the hotelmanagement business to improve from FY2023.
Occupancy Rate / ADR / Revenue per Available Room
(Yen)(%)
20,000

78.4%
63.7%

15,00049.5%
10,000

42.8%

48.9%

61.1%

53.1%

74.1%

60

49.9%
40

22.4%

5,000

20

4.7%
0

0

1Q

2Q

3Q

4Q

1Q

FY2020Occupancy rate (right scale)Market Environment (Risks and Opportunities)
Risks

Hotel Management Business xpansion in demand stemming from the recovery ofEinbound tourism
Provision of experiential value tailored to diversifying customer needs
Reduction of labor and improvements in operational efficiency by increasing the use of IT and the Internet ofThings (IoT) isk of decline in consumption demand stemming fromRconcerns over economic recession
Increasing utility costs, etc., as a result of inflation
Labor shortages due to the turnover of human resources
during COVID-19
Investment Management Business isk of decrease in inflows of capital to real estate investR
ment funds over fears of an economic recession
Risk of decline in valuation of assets under management(AuM) due to rising interest rates

ADR

2Q

3Q

4Q

1Q

FY2021

2Q

3Q

4Q

FY2022

RevPAR

Investment Management Business 

Opportunities

Hotel Management Business
The Mitsubishi Estate Group’s Strategies

80

65.9%

PROGRESS OF LONG-TERM MANAGEMENT PLAN 2030

Non-Asset (Fee-Based) Business 

Although profits were down in FY2022 due to a decline in a portion of the incentive fees posted in the previous fiscal year, reflecting
a decrease in the market valuation of our investment fund in the United States, operating profit grew steadily to approximately¥10.0 billion, due in part to base fee income. AuM surpassed ¥5.0 trillion, which had been our target for the mid-2020s. In March
2023, we set new targets for AuM and operating profit for FY2030 of ¥10.0 trillion and ¥30.0 billion, respectively.
Changes
ノン アセット事業in AuM (Billions of yen)

Europe450.0

Europe450.0

JRE
1,050.0

Total:
Approx.

Investment Management Business ontinuous expansion of assets under management
Cthrough the creation and management of stable real estate
investment funds that are highly resilient, even during an
economic recession
Capturing of relatively inexpensive value-added investments in anticipation of rising valuations in the futurewhen the economy recovers

Asia and Oceania
200.0

Japan
1,890.0

Asia and
Oceania120.0¥3.6 trillion
Overseas1,770.0

UnitedStates1,200.0

MJIA
840.0

Overseas3,200.0JRE
1,100.0

Total:
Approx.
¥5.4
U.S.
trillion
2,550.0

Target:10.0 trillion¥
MJIA
1,100.0Japan
2,200.0

As of March 31, 2020

As of March 31, 2023

As of March 31, 2031

AuM: ¥3.6 trillion
Operating Profit: ¥4.4 billion

AuM: ¥5.4 trillion
Operating Profit: ¥8.0 billion

AuM: ¥10.0 trillion (target)
Operating Profit: ¥30.0 billion (target)

Creation of New Businesses 

Business Profit 
Target:+¥50.0 billion
vs. FY2019(Billions of yen)70

As part of our efforts to create new businesses, we have established seven focus areas: 1) agriculture; 2) renewable energy; 3)
infrastructure, public and private partnerships (PPPs), and private finance initiatives (PFIs); 4) real estate-related services; 5) content, entertainment, and sports; 6) tourism, inbound-related businesses, and regional revitalization; and 7) healthcare and food, withthe aim of creating new sources of earnings.

60

Status of Initiatives for New Businesses

50
40

32.2

30

12.3

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

20

26

10
0
–10

15.7

9.3

12.2
4.4
–0.9

10.7
5.9
–7.3

FY2019FY2020Investment Management Business

Focus Areas
19.0

25.0

Agriculture

11.7
1.3

Renewable energy

26.5

11.7

12.0

–6.7

8.0
–0.6

FY2021

FY2022

FY2023 (forecast)Hotel management business

Other businesses

2030 target

Investment Targets

Mitsubishi Estate’s New Businesses
Agriculture business
Biomass power generation business

Infrastructure, public and private partnerships(PPPs), and private finance initiatives (PFIs)

Real estate-related services
Content, entertainment, and sports  

Tourism, inbound-related businesses, andregional revitalization

Healthcare and food27

The Mitsubishi Estate Group’s Strategies

Progress of Long-Term Management Plan 2030

Note: Please refer to the table on pages 98 and 99 for information on other major KPIs.

CO2 and Other GHG Emissions 

Financial Strategies

FY2030 targets*1

1 Long-term, low-interest financing taking advantage of iven the uncertainty over interest rate policy andG
trends in Japan going forward, concerns remain thatinterest rates may rise.
Rising central bank interest rates, primarily inEurope and the United States, have led to a deterioration in the environment for foreign currencydenominated borrowing.

Mitsubishi Estate’s credibility
take advantage of market conditions favorable for making
acquisitions while further solidifying its credibility throughcontrol of financial discipline
3 Maintenance of high credit ratings and pursuit of flexible
and optimal financing leveraging them, even under
uncertain financial conditions

Scope 3

Reduction of at least 50%(all within the Group’s value chains*2)(all within the Group’s value chains*2)

Note: Obtained Corporate Net-Zero Standard certification from the SBTi in June 2022

Reduction of CO2 andother GHG emissions

2 Ensuring of financial strength that allows the Company to

Scope 1 and Scope 2

Reduction of at least 70%

Net-zero emissions
Reduction within the Group’s value chains*2: more than 90%
Neutralization*3: less than 10%
1.5ºC scenario(New Net-Zero Standard)

2050 targets*1
SBTi’s scenarios*1 Reduction targets with FY2019 as the base year
*2 Reduction within the Group’s value chains*3 Neutralization of residual emissions that cannot be fully reduced through forest absorption,
carbon-removal technology, and other methods

Breakdown of CO2 Emissions and Major Reduction
Strategies (FY2022 Results)

PROGRESS OF LONG-TERM MANAGEMENT PLAN 2030

In FY2021, Mitsubishi Estate significantly revised its targets regarding CO2 and other greenhouse gas (GHG) emissions, the percentage of electricity it sources from renewable energy, and its percentage of female managers. The Company has therefore strengthened initiatives to achieve these targets.

Financial Strategy (Corporate Foundations
Underpinning Our Businesses) Market Conditions

Sustainability 

Scope 1: Direct GHG emissions by business operators
Major emissions: Utilization of gas
Reduction methods :	Expectations of new energy sources andtechnologies (carbon-neutral liquid
nitrogen gas, etc.)
Scope 2:	Indirect GHG emissions from the use of electricity, heat,and steam supplied by other companies
Major emissions: Utilization of electricity
Reduction methods :	1 Switch to electricity from renewableenergy sources87.4%
				2 Procurement of electricity withadditionality
Scope 3: Indirect emissions other than those of Scope 1 and Scope 2
Major emissions: 1 Future emissions through soldproperties*				2 Emissions associated with capital
investments
FY2022
Reduction methods :	1 Reduction resulting from lowering
Scope 2 emissions
				2 Development of manual for calculating
CO2 emissions associated with construction materials and adoption of lowcarbon construction materials
				3 Development of products with highenergy performance (ZEB and ZEH)
* Calculation method: Floor area sold × Intensity (t-CO2/m2/year, Scope 1 andScope 2) for the previous fiscal year × 50 years

5.3%
7.3%

1

Long-term, low-interest financing taking advantage of Mitsubishi Estate’s credibility (Thousands of tons)
5,000

The growth of liabilities is a feature of the real estate industry. For this reason, appropriate control through financial strategies isessential. Taking advantage of its credibility, Mitsubishi Estate pursues long-term, low-interest financing; approximately 93% of its
consolidated interest-bearing debt is long term and approximately 87% is fixed. In addition, the average duration of its nonconsolidated interest-bearing debt is slightly less than eight years, and the total average interest rate is 0.80%. In these ways, theCompany implements optimum financing while closely monitoring market conditions.
The Mitsubishi Estate Group’s Strategies

Scope 1 and Scope 2
reduction of at least 70%
Scope 3 reductionof at least 50%
Reduction of
more than 90%
Neutralizationof less than 10%

2,534
2,099

2,000
1,000

(Years)(%)
12

0

2.0

FY2019

1.72%
1.54%

9

1.55%

1.52%

1.41%

1.27%
6

1.05%

1.07%

0.72%

0.70%

5.55
years

5.58
years

0

FY2011FY2012

0.96%

1.38%

0.96%

0.95%

0.62%

0.61%

0.66%

5.45
years

5.71
years

6.18
years

FY2013

FY2014FY2015

0.87%

3

1.5

1.32%

1.24%

1.09%

0.96%

0.91%

1.0

0.78%

0.74%

0.80%
0.74%

0.5

0.97%

0.92%
0.71%

0.84%
0.68%

0.63%

0.60%

6.36
years

6.79
years

6.69
years

7.23
years

8.16
years

8.20
years

7.83
years

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022Credit rating agency

FY2020

Scope 2

FY2021

FY2030 Neutralization
target2050
targetFY2022

Scope 3

Percentage of Electricity from Renewable Energy Sources RE100 Achievement
Time LineFY2025

Examples of Initiatives

Total average interest rate (right scale)(%)

FY2025
RE100 achievement100

Net Interest-Bearing Debt/EBITDA Ratio and Debt-Equity (D/E) Ratio(Billions of yen)

9

6.6
6.1

(As of April 3, 2023)
Long-term debt rating

Short-term debt rating

Moody’s

A2

P-1

S&P Global

A+

A-1

Rating and Investment
Information, Inc.

AA–

a-1+

Japan Credit Ratings Agency,
Ltd.

AA+

J-1+

(Times)

3,000

2,000

Credit Ratings

Scope 10

Control of financial discipline 

Mitsubishi Estate maintains scrupulous financial discipline
so that it can pursue flexible financing according to realestate market conditions. The Company’s financial management aims to maintain its current credit ratings and a net
interest-bearing debt to EBITDA ratio of less than 8.0 times.

3

1.14%

0.75%

Interest-bearing debt: Average duration (left scale)
Bonds: Average interest rate (right scale)
Borrowings: Average interest rate (right scale)2

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

3,533

3,000

Interest-Bearing Debt, Average Interest Rate, and Average Duration of Loans (Non-Consolidated)

28

4,038

4,000

7.1
6.6

7.3
6.6

6.6
6

6.2

1,000

2,216.8 2,041.8 2,353.8 2,196.3 2,504.3 2,346.8 2,645.9 2,488.4 2,750.0 2,592.5

1.40

1.36

1.37

1.33

1.35

1.18

1.18

1.19

1.17

1.19

0

3

FY2020

FY2021

FY20221.1%

3.1%

FY2019FY2020

FY2021

FY202250

FY205040%
FY204030%30Date of issue

Bond type

Financing amountJune 2018
May 2020
November 2021
July 2022
October 2022
March 2023
May 2023

Green bond (publicly offered bond)
Sustainability-linked loan
Positive-impact finance
Sustainability-linked bond
Sustainability-linked loan
Sustainability-linked loan
Sustainability-linked bond

¥20.0 billion¥11.5 billion¥5.0 billion¥60.0 billion¥50.0 billion¥30.0 billion¥60.0 billion

Examples of Initiatives

(%)

40

Financing Using ESG Finance

FY2025

FY2030: Over 20%
FY2040: 30%
FY2050: 40%

Target for Percentage
of Female Managers

FY2023 (forecast)Net-interest bearing debt (left scale)
Net-interest bearing debt (after hybrid debt deductions) (left scale)
Net-interest bearing debt/EBITDA ratio (right scale)
Net-interest bearing debt/EBITDA ratio (after hybrid debt deductions) (right scale)
D/E ratio (right scale)
D/E ratio (after hybrid debt deductions) (right scale)

31%

Percentage of Female Managers 

0FY201951%

200Flexible and optimal financing 

In addition to normal borrowing and bond issuing, theCompany proactively uses ESG finance.
Since becoming the first comprehensive real estate company
in Japan to issue a green bond in 2018, we have secured
financing to the tune of ¥236.5 billion using ESG finance.
We received the Gold Award in the Fundraiser category at
the Ministry of the Environment’s Fourth ESG Finance Awards
Japan (Minister of Environment Award) in February 2023.

60
40

6.9
6.2

80

In FY2022, Mitsubishi Estate switched to electricity
from renewable energy sources not only in the
Otemachi, Marunouchi, and Yurakucho areas but
also at its 50 Company-owned office buildings andretail facilities in the Tokyo metropolitan area andin the city of Yokohama, as well as at Companyowned office buildings and retail facilities in
Sendai and Hiroshima.
Going forward, we will further expand the use ofrenewable electricity to Company-owned buildings
and facilities in other parts of Japan to achieve ourtarget for FY2025.

FY2030
20%

20
10

5.8%

6.6%

7.2%

7.3%

0
Beginning of Beginning of Beginning of Beginning of
FY2020
FY2021
FY2022
FY2023

FY2030FY2040FY2050 nhancement of the personnel system with the aim ofE
developing a working environment where women canhave a good work–life balance (please refer to page 65)
Strengthening of the recruitment of mid-career
female employees at the assistant-manager levelImplementation of initiatives and holding of events
providing support for women to balance life eventsand a career through a working group for promoting
the active participation of women in the workplace
Holding of events to promote networking amongfemale employees
Implementation of seminars on women’s health aspart of training for managers

29

The Mitsubishi Estate Group’s Strategies

CFO Message

fresh supply of office space in central Tokyo between 2023 and 2025, I believe the leading position of Mitsubishi Estate’s portfolio in the Marunouchi area will remain unshakable. We will take advantage of our strength in managing not only each building
but also the entire area. The large-scale, mixed-use development projects scheduled for completion in the second half of the

CFO MESSAGE

for a high-quality portfolio in an outstanding location as well as the Group’s strong leasing capabilities. Although there will be a

2020s are expected to drive the growth of rental profit. In addition, the total investment in assets for sale currently stands at¥1.25 trillion, so we are confident in our ability to continuously record high-level capital gains in the years to come.
International Asset Business

In FY2022, the International Business recorded operating profit of ¥89.4 billion, mainly due to capital gains in the United

Long-Term Management Plan 2030: Progress

Kingdom, thereby achieving ahead of schedule the target set out in Long-Term Management Plan 2030 of a ¥50.0 billion
increase in operating profit (compared with FY2019). Capital gains from various regions will continue to be a growth driver

Very Well Since Its Launch Three Years Ago.

in FY2023 and beyond. On this point, some of you may be concerned that sharp rises in interest rates and other uncertain-

Now, We Acknowledge Growing Uncertainty

However, in the United States, where we face the greatest exposure in the International Business, we have limited ourin the Global Market.

ties in various countries are beginning to negatively impact real estate markets.
investments in offices for some years now. Instead, we have focused our investments on logistics facilities, rental housing,and data centers. As a result, we have maintained a portfolio that is relatively resilient to adverse effects, even in today’s
real estate market in the United States, with its uncertain outlook. In addition, income gains at our flagship office building in
Manhattan, New York, are stable owing to long-term lease contracts.
In the United Kingdom, we have developed a large office building in the City of London. We have had a significant numberof inquiries, hence the rent is expected to increase on the back of strong demand for new buildings. We are also diversifying
investments in rental housing and other projects in the United Kingdom.

The Mitsubishi Estate Group’s Strategies

In addition, we have established a track record of expanding into Asian countries, mainly through joint ventures with

Naoki Umeda
Senior Executive OfficerMarch 31, 2023, our AuM reached the interim target of ¥5.0 trillion ahead of schedule. We have therefore established new

FY2022 Performance and FY2023 Forecast
Record Highs for Operating Revenue, Operating Profit, and Net Income in FY2022 andHigher Dividends Forecast for FY2023
In FY2022, the fiscal year ended March 31, 2023, Mitsubishi Estate posted operating revenue of ¥1.37 trillion (up ¥28.3
achieving record highs for each. With the Company capturing on favorable real estate market conditions in Japan and overseas, these results were primarily attributable to an increase in capital gains. In particular, we posted a significant capitalgain in the United Kingdom.

targets for FY2030 of ¥10.0 trillion for AuM and ¥30.0 billion for operating profit.
The recovery of the hotel management business from the pandemic became clear in the second half of 2022, and sinceApril 2023, recovery has surpassed the pre-pandemic level. We look forward to the expected further expansion of inboundtourism demand providing a positive boost.

Market Environment
Our Strength Lies in Overcoming Short-Term Macroeconomic Uncertainty and Managing from aLong-Term Perspective
Looking at near-term business conditions, I sense that inflationary pressure is growing for the first time in approximately

In FY2023, although we anticipate a decrease in operating profit due to a decline in capital gains in the International

30 years in Japan. While not to the same extent as the United States or the United Kingdom, energy, food, and other costs

Business compared with FY2022, we expect to post a record high for net income for the third consecutive year thanks to an

are increasing, and I often hear people discussing rising prices. In relation to real estate, room charges at certain exclusive

improvement in extraordinary income / loss. We also plan to issue record cash dividends of ¥40.0 per share (up ¥2.0 fromhotels have more than doubled compared with five years ago. Similarly, condominium prices are rising steadily on an

FY2022), representing an increase of 5.2%.

almost nationwide basis. Rents for rental apartment is also gradually increasing. With material costs rising due to the

In light of market conditions in locations including the United States and the United Kingdom, which have experienced

weakening yen and overseas inflation and labor costs skyrocketing, construction costs have increased significantly. As asharp rises in interest rates, it will not be easy to sell properties as we did in previous years. On the other hand, conditions

result, real estate-development businesses are facing a difficult situation. With that said, generally speaking, moderateremain favorable in the real estate market in Japan. From a long-term portfolio management perspective, we aim to realize

inflation is viewed as facilitating favorable business conditions for real estate companies. In that light, inflation for the firstgains on sales in Japan and overseas when the timing is appropriate.

time in 30 years may be something that Mitsubishi Estate should welcome in the long run.

In terms of domestic income gains, although rental income will decrease temporarily due to the closure of existing buildMITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Non-Asset BusinessIn the Investment Management Business, despite temporary fluctuations in incentive fees, base fees and other income
sources are growing steadily in step with the expansion of assets under management (AuM). Standing at ¥5.4 trillion as ofbillion year on year), operating profit of ¥296.7 billion (up ¥17.7 billion), and net income of ¥165.3 billion (up ¥10.1 billion),30

leading local partners.

At the same time, there are concerns over long-term demand for offices and housing as Japan’s birth rate continues toings as a result of redevelopment projects in Tokiwabashi, Yurakucho, and other areas, the impact is as was predicted in

decline and its population ages. From a long-term perspective, we will therefore have to provide even higher-quality offices

Long-Term Management Plan 2030. The redevelopment projects will contribute to profits when they are completed.

and housing, in good locations. Such a scenario is more likely to provide Mitsubishi Estate, with its many outstanding assets
in prime locations and its own development capabilities, with greater opportunities to demonstrate its strengths. Constantly

Progress of Long-Term Management Plan 2030
Both Domestic and International Businesses Making Good Progress on Long-Term Management
Plan 2030 Projections
Domestic Asset Business

While the vacancy rate in the Tokyo office market has remained at the 6% mark since around summer 2021, the office vacancy

looking one step ahead, I am determined to ensure that Mitsubishi Estate remains a company that takes the lead in promoting new lifestyles and workstyles.
Looking overseas, we must pay close attention to the shift in policies in many countries from monetary easing due to thepandemic to monetary tightening. I feel that uncertainty in the real estate market stemming from soaring interest rates is
the highest it has been in several years. Although I believe our portfolio is solid and not subject to significant risks,
I will be extra cautious with regard to investments and financing.

rate of our buildings in the Marunouchi area stands at 2.43% (as of March 31, 2023), demonstrating the continuing solid demand

31

The Mitsubishi Estate Group’s Strategies

CFO Message

Strategy for Increasing Social Value

Flexible Capital Policies Based on Market Trends and Proactive Shareholder Returns

Proactively Leveraging ESG Finance

Under Long-Term Management Plan 2030, we aim to improve our corporate value by pursuing capital policies based on realLong-Term Management Plan 2030 targets the improvement of both shareholder and social value. We believe environmen-

estate, and financial markets. We will advance steadily toward achieving our key performance indicator (KPI) targets fortal, social, and governance (ESG) initiatives—which are directly connected to the improvement of social value—lead in due

2030 while maintaining a balance between financial soundness and investments, capital recovery, and shareholder returns.

course to the improvement of shareholder value. We therefore view ESG activities as one of our most important manage-

Behind this policy lies the idea that management should always be one or two steps ahead of the real estate market, which

ment tasks.

is an inherently long-term business.

With studies demonstrating that rent prices vary depending on whether buildings are environmentally friendly and on

Three years have passed since we unveiled Long-Term Management Plan 2030. Despite unexpected events, such as thetheir level of adoption of renewable energy, there is no doubt ESG initiatives affect real estate prices and corporate value.

pandemic, we have enjoyed excellent investment opportunities over these three years in Japan and overseas for achieving

With this in mind, we aim to achieve the highest standards for our assets from the perspectives of the environment andfuture profit growth. As a result, cash outflows from investing activities have surpassed cash inflows from operating activi-

well-being, as well as physical building performance. We believe building an asset portfolio that will be selected by manyties, which has led to ongoing negative free cash flow. However, given that this period has seen us prioritize investments forpeople through such initiatives will help improve shareholder value by increasing our corporate value. Hence, we will makefuture growth, I would say this outcome was as expected. Despite all this, we have issued shareholder returns to the extent

Groupwide efforts to promote ESG initiatives.

possible. In addition to maintaining a payout ratio of 30%, we have continuously executed share buybacks. Our total share-In our financing activities, we proactively leverage ESG finance, borrowing ¥263.5 billion in this way to date. In FY2022,

holder return ratio since FY2019 comes to more than 50% based on a three-year moving average. This represents the high-

we issued a sustainability-linked bond totaling ¥60.0 billion in July 2022. Earning high praise from the Ministry of theest rate of return among companies in the real estate industry in Japan.

Environment, we received the Gold Award—the highest honor—for this method of financing in the Fundraiser category at

Looking ahead, I expect Mitsubishi Estate to continue investments in redevelopment and other projects in Japan. Further
investment opportunities may also emerge in some parts of the overseas markets, where the outlook is currently unclear.

the ministry’s ESG Finance Awards Japan.

Commitment to Long-Term Management Plan 2030

At the same time, we are seeing major changes in the sentiment of financial markets, in terms of interest rates, exchange
rates, and other variables. We will likely be required to be prudent to maintain financial soundness. We will proceed under

Staying One Step Ahead to Realize Our Long-Term Potential

these flexible capital policies while giving due consideration to making better returns to shareholders.
The Mitsubishi Estate Group’s Strategies

CFO MESSAGE

Capital Policies (Investments and Shareholder Returns)

Three years ago, nobody could have imagined that we would face a pandemic, skyrocketing prices for natural resources

Progress of KPIs

and materials, inflation, sharply rising interest rates, and other headwinds. Although future prospects are uncertain, they
are uncertain in every era and the unexpected happens time and again. The key is to respond flexibly, regardless of the situ-

KPIs Progressing as Expected as We Aim for Further Improvement in the Second Half ofLong-Term Management Plan 2030

ation. To that end, making management decisions with an eye firmly on the future is crucial.
Mitsubishi Estate will proceed in the right direction by responding to unforeseen circumstances flexibly and rationally

Long-Term Management Plan 2030 established efficiency indicators, such as return on assets (ROA), return on equity (ROE),

while steadfastly maintaining its long-term vision. Given the rapid pace of change, we have no intention of simply doing as

and earnings per share (EPS) as KPIs. In terms of our progress thus far, EPS is growing steadily, supported by the favorable

we have done before, and we ourselves must change. I am determined to support President & CEO Atsushi Nakajima, who is

growth of net income and the effect of a reduction in the number of shares due to continuous share buybacks. While achiev-a Change Maker, in his endeavors for the Company to make value propositions that are further ahead of the times. I will also

ing our target of ¥200.00 will be no easy task, we will further increase EPS through both profit growth and equity control.

earnestly aim to achieve the KPI targets in Long-Term Management Plan 2030 and ongoing corporate growth. I very muchhope that you will trust this commitment and in our long-term growth potential. We ask for your continued support.

On the other hand, it can be said that ROA and ROE are not improving fast enough to achieve our 2030 targets. Reasonsfor this include expansion on the balance sheet as a result of proactive investments over the past three years, the fact that
it will take time for such investments to yield profits, and the temporary decline in revenues from the closure of buildings
for redevelopment. However, we had anticipated such a scenario from the outset. In addition to increasing profits as projected, we will continue to grow ROA and ROE to achieve our 2030 targets while implementing flexible capital policies,
including shareholders returns.
Changes in ROA,* ROE, and EPS

Shareholder Returns(Yen)(%)
12.0

150

(Billions of yen)

130.08100

5.2

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

50

32

5.6

6.6

3.3

3.6

52.85 60.13

74.00

3.2

7.3
86.78
3.8

7.8
96.97
4.0

8.5
108.644.1

7.6
101.343.8

8.1
116.45
4.4

7.9

120

7.7

8.0

3.8

4.0

125.54
4.4

Total shareholder return
ratio of more than 50% since
unveiling of Long-Term
Management Plan 2030(%)

Share buybacks of¥230.0 billion

160

52.7

52.9

59.3

80

57.0

80

0

40

29.6

26.3

26.6

27.8 29.3

27.7

36.0

100.0

30.0

45.8

54.2

40

0

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023(forecast)

EPS (left scale)
ROA (right scale)ROE (right scale)* Since FY2020, ROA has been calculated as business profit ÷ total assets (average of theamount at the beginning and end of the fiscal period).

0

60

46.1

20

19.4

22.1

41.6

44.6

41.4

47.7

47.7

50.6
0

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023(forecast)

Dividends (left scale)
Share buybacks (left scale)
Total shareholder return ratio* (right scale)* Three-year moving average

33

1
The Mitsubishi Estate Group’s Strategies: Domestic Asset BusinessOpening of FUKAYA-HANAZONOPREMIUM OUTLETS®

Overview of the Outlet Mall Business 
Undertaking the development, ownership, and management of outlet malls, Mitsubishi Estate • Simon operates 10 facilities
throughout Japan, beginning with the opening of GOTEMBA PREMIUM OUTLETS® in 2000. Under a basic strategy of opening
outlet malls in locations near expressway interchanges that are rich in tourism resources and situated a certain distancefrom urban areas, the outlet mall business helps invigorate the areas it operates in through tie-ups with tourist attractions
and other partners. Capitalizing on its first-rate leasing capabilities that draw on the development competency of Mitsubishi
Estate and the global relationships of the Simon Property Group as its strengths, the business operates facilities throughout
Japan that have a wide range of tenants.
The outlet mall business was adversely affected by a temporary loss of inbound tourism demand, restrictions on the
movements of people and goods in Japan, and other factors stemming from the spread of COVID-19 from FY2019. Despite

Mitsubishi Estate • Simon Co., Ltd., opened FUKAYA-HANAZONO PREMIUM OUTLETS in Fukaya City,
Saitama Prefecture, the 10th in the series of PREMIUM OUTLETS® in Japan, under the concept of coexisting in harmony with the local community and offering various fun and memorable experiences.
®

such circumstances, the business proceeded along

Business Performancethe road to recovery relatively quickly thanks to var-

(Millions of yen)ious factors. These included recognition of outlet

The Mitsubishi Estate Group’s Strategies

51,069biles, which are private spaces, and which allow
customers to enjoy shopping in an outdoor setting.

A New Information and Tourism Hub Coexisting in Harmony with the
Local Community and Offering Enjoyment to Customers

60,000malls as places that can be accessed by automo45,462

46,65946,39344,17740,03040,000Demand in Japan has almost returned to preCOVID-19 levels while inbound tourism demand ison a recovery trend following the lifting of border

20,00018,94019,673

18,963

16,78919,257

14,619FUKAYA HANAZONO PREMIUM OUTLETS® opened in October 2022 with the aim of becoming an outlet mall that

controls in October 2022. The outlet mall businessfurther enhances the appeal of the Fukaya area, including its nature, industry, and culture. Under the concept ofaims to achieve further growth by continuously

coexisting in harmony with the local community, FUKAYA HANAZONO PREMIUM OUTLETS® seeks to boost the

expanding and updating existing facilities and

FY2017allure of Fukaya City and the northwest of Saitama Prefecture as well as fulfill a role as a collaborative hub

examining the possibility of opening new ones.

Operating profit

0
FY2018FY2019FY2020

FY2021

FY2022

Operating revenue

linking neighboring cities, towns and villages, and community resources, as part of Fukaya City’s promotion of
the Hanazono IC Area Improvement Project. The outlet mall’s design takes inspiration from Fukaya’s history andthe lush green landscape of the northwest of Saitama Prefecture, and its restaurants offer menus using local
foodstuffs, including leeks. In addition, as a new, experience-oriented premium outlet mall more rooted in thelocal community, it offers visiting customers an environment where they can enjoy spending time as theyplease. For example, they can experience Japan’s first attraction based on GariGariKun, a popsicle made andsold by a local company. It also maintains the extraordinary appeal offered by other premium outlet malls in theseries. FUKAYA HANAZONO PREMIUM OUTLETS® will also create social value in several ways as a new premium outlet mall. For example, it will serve as a tourism hub for the northwest of Saitama Prefecture, including
through the planning of events in cooperation with the neighboring Fukaya Terrace Park, and help invigorate thearea as a whole by attracting more customers from other parts of Japan.

1

COMMENTMITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Making FUKAYA-HANAZONO PREMIUM OUTLETS®
a Special Place

34

Coexisting in Harmony with the Local Community 

Enhancing Experiential Value 

A Design in Harmony with
the Surrounding Environment

Gourmet Dining Using Local
Foodstuffs

GariGarikun PlaygroundIn a complete departure from the PREMIUM
OUTLETS® series’ traditional outlet mall
design imitating overseas townscapes, we
adopted a design calling for the use of bricks
associated with Fukaya City and lilies, ofwhich Fukaya City is one of the biggest producers in Japan.

The outlet mall features well-known restaurants associated with Saitama Prefecture anda lineup of local restaurants and food outlets
showcasing the appeal of the area by offering
local gourmet and limited-edition products.

We have created an attraction for people of
all ages, from small children to adults, toenjoy themselves in a space that allows them
to appreciate the worldview of GariGarikun, amuch-loved character throughout Japan.

1

As its first project under the concept of an outlet mall coexisting in harmony with thelocal community, Mitsubishi Estate • Simon communicated closely from the planningstage with a range of stakeholders, including Fukaya City and other local government
bodies, chambers of commerce, and local residents, carefully refining plans for FUKAYAHANAZONO PREMIUM OUTLETS® to make it a place that helps invigorate the local area.
We are also proposing new ways for customers to enjoy themselves while drawing on
the strengths of our other premium outlet malls to create an experience-oriented facility
Mitsubishi Estate • Simon Co., Ltd.
offering more than shopping. In terms of infrastructure, we overhauled our outlet mallregulations to make meticulous changes, including to storefronts, the visibility of signage, and the selection and arrangement of plants and furniture. In addition, we have
Takashi Kamehara
Sen Shiga
realized initiatives for achieving a decarbonized society, such as completely powering
Senior Manager,
Manager,the facility using electricity from renewable energy sources.
Development Department
Development Department
Recently, we have received a wide range of requests from various stakeholders, includ(left)(right)ing calls for measures to facilitate sustainable management and enhance experiential
value. We will continue taking on new challenges to cater to the requests of our customers
so that we can continuously offer memorable shopping experiences and pleasant services to all our customers and create outlet malls that local people
can visit with peace of mind. In an increasingly competitive commercial environment, we will continue working to develop and manage sustainablepremium outlet malls by further leveraging both the experience gained through the development of FUKAYA-HANAZONO PREMIUM OUTLETS® and the
Mitsubishi Estate Group’s network.

35

2
The Mitsubishi Estate Group’s Strategies: International Asset Business

Mitsubishi Estate’s Projects in Australia (Sydney) 
180 George Street
180 George Street offers highly functional
offices in Circular Quay, the sea gateway to
Sydney and home to numerous tourist attractions, such as the Sydney Opera House andSydney Harbour Bridge, while bringing
vibrancy to its surrounding precinct.

Creation of Value in
the Australian Market

Building Use
Offices, retail, public facilities, and plaza

Total Floor Area
Approx. 62,710 m2

Precinct Completion

Since its entry in 2016, the Mitsubishi Estate Group has been investing and delivering carefully selected,
highly sought-after development opportunities in Australia. In partnership with best-in-class local
developers, the Group has established a firm foothold in the Australian market by delivering multiple
prominent developments and aims to continue its effective investment strategy to contribute to its growthin the Asia and Oceania regions.

April 2023

Capitalizing on the Mitsubishi Estate Group’s Strengths in the Growing
Australian Market
Following its participation in Melbourne Quarter in 2016, where Mitsubishi Estate started its business in Australia,

The Mitsubishi Estate Group’s Strategies

180 George Street, and One Sydney Harbour Residences One, Mitsubishi Estate established its Sydney branch
office in 2021 to substantially enhance its market presence by both proactively engaging in the management of

One Circular Quay

One Sydney Harbour

Parkline Placeexisting projects and capturing new attractive opportunities. With Australia’s ever-growing market, as evidenced

In the Circular Quay area, One
Circular Quay will serve as a luxurious, high-rise residential tower ofthe finest quality and a five-star
hotel, becoming the latest landmark
development in Sydney.

Located in the recently redeveloped
Barangaroo area along the westernoceanfront of Sydney’s central business district, the development is surrounded by sophisticated offices andvibrant retail precincts. This development will offer luxurious residences
overlooking the Sydney Opera Houseand Sydney Harbour Bridge.

Located in Sydney’s pulsating business and retail heart, Parkline Place
offers premium offices that commit
to the environment and sustainability while emphasizing well-being.

by the continuous rise of gross domestic product over the past 30 years, the office and residential development
projects in which Mitsubishi Estate participates have been exhibiting strong performance in terms of lease-up andsales. Valuing its highly transparent market, its resilient economy, and the promising investment opportunities
presented to us, we place Australia as a high-priority market where we make proactive investments.
Through joint ventures and partnerships with major market-leading developers, our business in Australia
seeks to capture stable and high levels of income by investing in top-quality projects while carefully assessing

Building Use

Building Use

Building Usevarious factors, including the location and quality of the relevant properties and supply and demand in the

Residences, hotel, retail, and parking lots

Offices, retail, and parking lots

market. In addition to its proven investment track record of approximately ¥150.0 billion and its high-profile

Total Floor Area

Residences, retail, parking lots, andpublic facilities

Approx. 86,800 m2

Total Number of Units

Approx. 65,900 m2

market presence, Mitsubishi Estate has earned reputable market recognition from many local developers, whousually invest and develop with like-minded capital partners, with its transaction execution abilities, backed byits strong financial position, prompt decision-making, and project delivery capabilities supported by extensive

Total Floor Area

Residence

Hotel

R1: 315; R2: 322

Completion

161 Units

220 Rooms

Completion

2024 (planned)

Completion

2024 (planned)

2027 (planned)

experience. As a result, we have realized a position as one of the most active joint venture partners in the2market for large-scale development projects in major Australian cities.

COMMENT
Projects in Sydney

Aiming to Establish a MarketLeading Position in Australia

Harbour Bridge
One Circular Quay
One Sydney Harbour

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Sydney Place（180 George Street）

36

SydneyParkline Place

Opera House

Mitsubishi Estate’s top-class transaction execution andproject management capabilities have earned strong recognition from the market and business partners alike inAustralia. In addition, the strong on-the-ground presence;expertise in identifying opportunities; and know-how onlaws and regulations, the tax system, and other matters
cultivated through participation in multiple large-scale
projects have enabled us to evaluate and determine business risks and returns with great certainty, which in turnhas allowed us to continuously achieve steady results in
the rapidly expanding Australian market. Going forward,
we intend to further expand our investment platform,
including the use of external capital, and accelerate
investments in high-caliber large-scale development projects. In these ways, we aim to establish a firm marketleading position in Australia.
Yuzo Nishiyama
Executive Director

2

Mitsubishi Estate Asia Pte. Ltd. Australia Branch(Back row, from left)

Yuzo Nishiyama

Hiroaki Sugiyama

Keisuke Utsuno Shusuke Aoji

Executive Director

General Manager

General Manager

Jessica HO

Hideyuki Nagai

Tomono Matsuda Mari Tokui

ManagerManagerManagerManager(Front row, from left)

Accounting &Admin Manager

37

3
The Mitsubishi Estate Group’s Strategies: Non-Asset BusinessOpening of the Royal Park
Canvas Ginza Corridor

Overview of the Hotel Business 
Mitsubishi Estate has positioned the hotel management business as part of its growth strategies for existing non-asset businesses in Long-Term Management Plan 2030, which is currently in progress. Royal Park Hotels and Resorts manages andoperates full-service hotels in Sendai, Nihonbashi in Tokyo, and Yokohama. Using the hospitality expertise cultivated throughthese efforts, the company also operates a series of limited-service hotels throughout Japan. In addition to participating in
Mitsubishi Estate’s own development projects, the company adopts a diverse array of methods—which include particpatingin the development projects of other companies and operating projects on a contractual basis—to capture new opportunities
to open hotels. When publicly announced, including ongoing development projects, the number of hotel rooms offered by
Mitsubishi Estate comes to 4,920, doubling in number over the last six or so years.
Although the COVID-19 pandemic had a significant impact on the hotel management business for a certain period, theoccupancy rate and average daily rate (ADR) had largely returned to their pre-pandemic levels as of March 2023 thanks toRoyal Park Hotels and Resorts Co., Ltd., which operates the Royal Park Hotels chain, the core of the
Mitsubishi Estate Group’s hotel business, opened the Royal Park Canvas Ginza Corridor, the chain’s 19thhotel in Japan, in November 2022. Under the concept of “exhilaration,” the new hotel will offer the bestnightlife in Tokyo through a wide range of experiences based on drink, music, light, cuisine, andentertainment.

efforts to stimulate demand—such as a government

Hotels (ADR, RevPAR,* Occupancy Rate)

program for supporting tourism throughout Japan—(Yen)(%)

and to a recovery in inbound tourism demand follow-

20,00080

15,00060

A Hotel for a New Era Reflecting the Appeal of the Ginza Corridor Area

hotel rooms offered through new hotel openings,

10,000

40

5,000

20

The Royal Park Canvas Ginza Corridor focuses on facilitating communication between
people, creating a bustling atmosphere, and offering enjoyment through visits to the

The Mitsubishi Estate Group’s Strategies

hotel. Situated in the Ginza Corridor area, one of Tokyo’s foremost entertainment dis-

ing the lifting of border controls. The hotelmanagement business will continue efforts to achieve
further profit growth by expanding the number ofenhancing the profitability of existing hotels, capturing
inbound tourism demand, using digital transformation
to improve customer experiential value and operational efficiency, and other efforts.

0

0
1Q

tricts and a renowned nightspot, the hotel realizes different ways for visitors to enjoy

2Q

3Q

FY2020the area at night in accordance with various categories, regardless of their nationality.

ADR (left scale)

The driving force behind the “exhilaration” concept is our desire for visitors to expe-

4Q

1Q

2Q

3Q

4Q

1Q

FY2021

RevPAR (right scale)

2Q

3Q

4Q

FY2022

Occupancy rate (right scale)* Revenue per available room

rience the excitement provided by not only drink but also music, film, cuisine, andentertainment. To achieve this goal, we designed the Royal Park Canvas Ginza Corridor,
a hotel offering unprecedented value, to create the impression that it was inside a bar.
For example, the hotel features three different types of bars for visitors to enjoy barhopping and three differently themed rooms fragranced with alcohol essences, with all
rooms equipped with projectors, high-performance speakers, audio equipment in thebathrooms, and other features.

Three different types of bars 
3

COMMENT
Spreading the Enjoyment of Taking On Challenges

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

PROSECCO BAR38

CANVAS LOUNGE
produced by P.C.M.

OMIKI BAR

Three differently themed rooms under the concept of “exhilaration” 

PROSECCOCANVAS

OMIKI

Amid the severe impact of the COVID-19 pandemic on the hotel management business,
we developed the Royal Park Canvas Ginza Corridor with the aim of deviating significantly from the traditional concept for Royal Park Hotels. Reflecting on our previous
experience, there were times during the development when we wondered if we might begoing too far. However, we advanced the development with the belief that we had nochoice but to do so as we doubted whether simply creating a hotel complete with thetraditional features and functions would be successful in a market environment seeing
remarkable changes in customer needs. Thanks to this conviction, coupled with therecovery in inbound tourism demand, our results in attracting customers have exceeded
our initial expectations.
The Mitsubishi Estate Group must also adapt in response to the dramatic changes in
the market environment. We have always believed that we can make a greater contribution to the Group as one of its few business-to-customer businesses. With this project,
we are confident that we have created a potential new income source. While doing
something new certainly entails various difficulties, we enjoyed taking on a challengethrough this project, a feeling we aim to communicate to younger employees. If we canincrease the number of such interesting projects, we can use them as stepping stones
for overseas expansion. We hope to continue to proactively support such new value creation going forward.

3

Royal Park Hotels and Resorts Co., Ltd.

Kengo Oba

Masafumi Ota

Manager,
Facility Product Planning
Department andDevelopment Promotion
Department(left)

General Manager,
the Royal Park Canvas Ginza
Corridor(right)39

Business Review
Overview of Business Segments
The Mitsubishi Estate Group operates the office building business and various other businesses in Japan and overseas.

Commercial Property Business Group

Under Long-Term Management Plan 2030, we will enhance our earnings power in each segment through businessstrategies that leverage our competitive advantages, as well as actively working to establish new businesses and

Please see pages 42 to 47 for details.

services that pursue synergies with our established businesses.

Millions of yen

Fiscal year ended March 31, 2023 (consolidated)

2% 1%Operating Revenue Operating Profit (Loss) Total Assets

Commercial Property
Business

777,424

188,852 4,434,331

Office Building Business

4%

3%
19%

2% 1%

13%

Residential Business

346,41935,037

834,751

Operating Profit
Approx.

28%

International Business

176,130

296,702 million¥

89,400 1,270,849

Retail Facility BusinessThis is Mitsubishi Estate’s core business, which
engages in the development, leasing, and property
management of office buildings, mainly in the
Marunouchi area of Tokyo and other major
Japanese cities. We promote urban developmentthat contributes to the increased appeal of cities
while maintaining a balance between properties forlease and properties for sale in our asset portfolio.

Outlet Mall Business

Promoting the development of various types ofretail facilities tailored to the characteristics oflocations across Japan, the Mitsubishi EstateGroup operates this business using a comprehensive system whereby it remains continuously
involved from facility planning, development, andtenant leasing through to operation after opening.

We conduct the nationwide development andoperation of our PREMIUM OUTLETS®, whichboast the top customer-drawing power inJapan.

Operating Revenue
Approx.

Investment
Management Business

35,8788,054

1,377,827million

112,590¥12%

Architectural Design &Engineering Business andReal Estate Services Business

60,774

Other Businesses

11,801(2,121)

27,599Eliminations or Corporate(30,602)(26,696)

130,610

4,176

61,225

Total Assets
Approx.

25%
11%

6,871,959 million¥

Logistics Facility Business

58%
55%

Business Review

66%

Total

1,377,827

296,702 6,871,959

Note: P
 ercentages in the graph for the Architectural Design & Engineering Business and Real
Estate Services Business include other businesses.



MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

New and Other Businesses

Real Estate Services BusinessArchitectural Design &Engineering Business

Investment Management Business

Operation and Management andBrokerage Businesses

Condominium Sale and Leasing
Business

Airport Operation Business

Management Business

Development Business

Logistics Facility Business

Outlet Mall Business

Non-Asset
Business

Retail Facility Business

International
Asset Business

Operation and Management Business

Development and Leasing Business

40

Domestic AssetBusiness

Hotel Business

International Business

Office Building BusinessResidential Business

Please see pages 48 to 49 for details.

We offer services to meet a variety ofneeds for condominiums, rental apartments, custom-built housing, purchaseand sales, leasing, brokerage areas, renovations, and management. As the circulation of existing homes expands andpeople’s lifestyles grow increasingly
diverse, we are strengthening our reformand renovation business to seize uponsuch changes.

For investors seeking real estate asset
management, we provide a wide range ofservices based on our specialized expertise, utilizing collaboration among our operating bases in Japan, the United States,
Europe, and Asia excluding Japan. These
services include real estate investment
trusts (REITs) to meet management needs
for long-term stability as well as private
placement funds to meet the specific management needs of institutional investors.

The airport operation business promotes theinvigoration of airports and their localities
through its involvement in the operation of 10
airports across Japan. The airports contribute toregional development by acting in unison with
their local communities to increase the non-resident population and improve regional value.

International Business

Please see pages 50 to 51 for details.

The Mitsubishi Estate Group has pursued
business overseas since the 1970s,
undertaking real estate leasing anddevelopment businesses in the UnitedStates and the United Kingdom. In recent
years, we have also been actively developing our office building, residential,commercial facility, and other real estatebusinesses in Asia and Oceania, which
are seeing rapid expansion, and advancing into continental Europe.

Investment Management Business

Airport Operation BusinessWorking together with hotel operators in Japanand overseas, we conduct a hotel development
business across a wide range of categories
matching location characteristics as well aspracticing nationwide hotel business operations under the Royal Park Hotels brand andthe Marunouchi Hotel.

Residential BusinessBusiness Groups and Segments under Long-Term Management Plan 2030
Commercial Property Business

Hotel Business

Under the Logicross brand, Mitsubishi Estate ispursuing logistics facility business opportunities nationwide. To take advantage of the rapid
growth in the domestic logistics market on theback of the expansion of e-commerce andother factors, we are promoting development
projects at locations suited to logistics nearby
major terminals, such as metropolitan areas,
main roads, ports, and airports.

Please see page 52 for details.

Architectural Design & Engineering Businessand Real Estate Services Business

Please see page 53 for details.

This full-service architectural design andengineering business meets social
needs through construction, civil engineering, urban and regional development
planning, and consulting. Meanwhile, theReal Estate Services Business provides
one-stop, real estate problem-solving
solutions, including real estate brokerage and condominium and office building
leasing management support.

41

Commercial Property Business
Operating Revenue / Operating Profit(Results and Forecasts)

Commercial Property Business Group Breakdown

Vacancy Rates

Average Rents (All Uses in Japan; Non-Consolidated)(Fiscal year ended March 31, 2023)(Yen / tsubo-month)(Millions of yen)

Breakdown by Business Model

Breakdown by Real Estate
Leasing Asset Type(%)
1030,000(Millions of yen)

(Millions of yen)

1,000,000

250,000

836,000

800,000

672,441

180,775

760,658 189,909

777,424 188,852

42,00042,00032,000600,000

Others123,240

200,000

188,000
45,000400,000

Propertysales
105,228150,000

100,000

148,775

147,909

146,852

00Income gains

548,954

FY2023 (forecast)

20,0006.41%

615,000Operating
Revenue

4

3.73%
10,000548,954

2.43%

2

¥

5,000

millionTokyo area(outside of
Marunouchi)
145,827

29,221

25,0008

Approx.

Breakdown

million

Real estate leasing

Marunouchi
area
253,5250005/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3

Office buildings
461,266

05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3

Vacancy rates nationwide; all uses in Japan (non-consolidated)
Vacancy rates for offices in Marunouchi (non-consolidated)
Vacancy rates in Tokyo central five wards (market)

Capital gains

Note: The Graph was prepared using property data from Miki Shoji Co., Ltd., and Mitsubishi Estate.

Total Operating Floor Space (Non-Consolidated)(Thousand m2)

Office Building Business 

7,000
6,000

5,804

5,743

Commercial Property Business

Operating revenue (left scale)Operating profit (right scale)

FY2022

777,424

Outside ofTokyo
61,914¥50,000

FY2021

Operating
Revenue
Approx.

143,000

200,000

FY2020Outletmalls
51,052Others36,6345,000

Domestic Asset Business
Overview

Business Concept

Marunouchi area
(mainly the leasing business)
Income Gains

Non-Asset Business

Major business areas in Japan(mainly the capital-recycling business)
Capital Gains

Property management

4,000
3,000

2,920

2,000

1,987

1,000

Marunouchi Area 

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Business
Strategies42 ositioning urban development from 2020 onward as part of Marunouchi NEXT Stage, we will establish a “co-creation platform forP
innovation through companies, employees, and visitors” through digital transformation (DX), the spurring of innovation, and fieldtrials using the entire Marunouchi area.
We will seek to maximize rental profits and actualize unrealized gains by increasing floor space and raising rents through redevelopment. In addition to enhancing the value of individual assets, we will increase the value of the Marunouchi area as a whole byimproving the entire area’s contents and service menu.

04/3

05/3

06/3

07/3

Marunouchi

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

Redeveloped buildings in Marunouchi

24/3(forecast)

Pipeline
FY2019Marunouchi Area

Competitive
Advantages

 wnership of about 30 office buildings in the Marunouchi area, a leading business area in Japan with one of the world’s greatest
Oconcentrations of companies.
Expansion of rental profits through the promotion of stable and continuous redevelopment in the Marunouchi area.
Promotion of urban development in major cities throughout Japan by applying development know-how cultivated over a history of
more than 130 years to urban development in a variety of areas.
Leasing capabilities underpinned by relationships with companies and information networks built through the Group’s wide-ranging
businesses.
Relationships with the central and local governments built through public and private sector cooperation in urban development.
Resilient urban development and area management facilitating cooperation with local communities through area-wide development, rather than the construction of individual buildings.

03/3

All of Japan (total)

 e will make selective investments in the main office areas of major cities across Japan. Positioning the office building businessW
as a capital-recycling business, we aim to incorporate high-performance assets with high turnover rates emphasizing asset efficiency into our portfolio and capture high-level and continuous capital gains.

Property Management  e aim to maintain and increase asset value over the long term and capture fee income as a non-asset business by conductingW
property management on a Groupwide basis after the completion of properties.


FY2021

Tokiwabashi Tower(Building A)

FY2022

FY2023

Uchikanda 1-chome Project(tentative name)

FY2025Torch Tower(Building B)

FY2027

Yurakucho Redevelopment Project(number of buildings to be confirmed)

to be confirmed
Total Floor Area: 180,900 m2
Completion: September 2020
FY2020Total Floor Area: 146,000 m2
Completion: June 2021
FY2021

Total Floor Area: 85,200 m2
Completion: November 2025
FY2022

Total Floor Area: 544,000 m2
Completion: FY2027
FY2023

FY2025

FY2027

Link Square Shinjuku

CO ∙ MO ∙ RE YOTSUYA

3rd MINAMI AOYAMA

Toyosu 4-2 Development
Project (tentative name)

Akasaka 2 · 6-chome Development
Project (tentative name)

Total Floor Area: 43,800 m2
Completion: August 2019

Total Floor Area: 139,600 m2
Completion: January 2020

Total Floor Area: 14,700 m2
Completion: February 2023

Total Floor Area: 136,000 m2
Completion: June 2025

Total Floor Area: 210,000 m2
Completion: FY2028

FY2019Main Office Areas in Japan 

FY2020Mizuho Marunouchi Tower, Ginkokaikan,
and Marunouchi Terrace

FY2019

Tokyo (Other Than
Marunouchi)

MarketEnvironment

Opportunities
Creation of offices offering value unique to in-person
environments
Provision of flexible working spaces tailored to a variety ofworkstyles
Introduction of the latest technologies and promotion ofenvironment-friendly office buildings

Other Than Tokyo

Business Review

0

Risks
Declining office demand due to the spread of various
workstyles
Increasing competition among different areas resulting
from the supply of a large volume of office space
Steep rise in the cost of construction materials andincreasing utility costs, etc., as a result of inflation

FY2020

FY2021

FY2022

FY2023

FY2025

FY2027

Osaka Dojimahama Tower

Nishiki 3-25 Development
Project (tentative name)

Tenjin 1-7 Project(tentative name)

Kobe Sannomiya Kumoi Dori
5-chome Redevelopment Project

GRAND GREEN OSAKA(Umekita Phase II)

Total Floor Area: 67,000 m2
Completion: April 2024

Total Floor Area: 109,700 m2
Completion: March 2026

Total Floor Area: 74,000 m2
Completion: March 2026

Total Floor Area: 98,600 m2
Completion: FY2027

Completion: FY2027

For information on sustainability initiatives in the office building business, please refer to pages 70 to 71.

43Commercial Property Business
Retail Facility Business / Outlet Mall Business MarketEnvironment

Business
Strategies

Opportunities
Expansion in demand stemming from the recovery of
inbound tourism
Recovery in demand led by increasing number of people
working in offices
Provision of experiential value tailored to diversifying customer needs

Risks
Intensifying competition for land acquisition due to theentry of new players
Steep rise in the cost of construction materials andincreasing utility costs, etc., as a result of inflation

MarketEnvironment

Competitive
Advantages

 he top customer-drawing power in Japan of PREMIUM OUTLETS®.
TInformation networks and tenant relationships built through wide-ranging Group businesses, including developments in the
Marunouchi area.
Extensive development and management know-how gained through a portfolio consisting of three different business formats—
namely, urban mixed-use retail facilities, stand-alone retail facilities, and PREMIUM OUTLETS®—business coverage in Japan
stretching beyond Tokyo, all the way from Hokkaido to Kyushu, and an extensive tenant network.
 ith urban mixed-use retail facilities, we are aiming to deliver wide-ranging eating and drinking options and shops as well as various
W
service providers to offer better amenities and convenience for office workers while also drawing in people for shopping and tourism.
Regarding stand-alone retail facilities, we are developing distinctive facilities tailored to diverse demand based on detailed analyses of the location, local demand characteristics, tourism potential, and discussions with tenants.
With PREMIUM OUTLETS®, we will continue to expand and refurbish existing facilities and develop new ones to offer visitors uniquespaces and meet their needs for a fun, one-of-a-kind experience.

Opportunities
Increasing logistics needs resulting from expansion in
e-commerce demandIntroduction of the latest technologies and promotion ofenvironment-friendly logistics facilities

 business platform with a broad range of functions related to logistics facilities, from land acquisition and development toAbuilding operations, ownership, and asset management.
Tenant relationships and information networks through wide-ranging Group businesses, including developments in the
Marunouchi area.
Management know-how and experience gained through Tokyo Ryutsu Center Inc. (TRC) and its competitiveness underpinned
by being based in Heiwajima, a location providing excellent access to central Tokyo and Haneda Airport.
 e intend to make acquisitions of land and undertake leasing operations by making use of our multiple information networks andWtenant relationships.
We aim to generate stable capital gains by leveraging our logistics facility business platform to sell developed properties to
Mitsubishi Estate Logistics REIT Investment Corporation, which is managed by Mitsubishi Jisho Investment Advisors, Inc.,and other parties.
We intend to generate synergies Groupwide by sharing the information networks and management know-how acquired by TRC,
which has been involved in logistics facility business operations for over 50 years.

Business
Strategies

Changes in Gains on Sales

Total Assets(Billions of yen)

Area Map of Main Retail Facilities

Operating Revenue, Operating Profit, andStore Area of the Outlet Mall BusinessChanges in ROA and Total Assets of theOutlet Mall Business(FY2022)

Business Review

maruyama class(%)

51,069 million¥
AQUA CITY ODAIBAIZUMI PARK TOWN Tapio

FUKAYA-HANAZONOPREMIUM OUTLETS®

SANO PREMIUM OUTLETS®

GOTEMBA PREMIUM
OUTLETS®

SHISUI PREMIUM OUTLETS®
MARK IS Minatomirai
MARK IS Shizuoka
RINKU PREMIUM OUTLETS®

Operating Profit 

19,257 million

¥

200

15

13.6%
12.6%

14.7%

150
5

5

I ncrease resulting from theopening of FUKAYA-HANAZONOPREMIUM OUTLETS®

0

2

7.0

0

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

ROA (left axis)

Total assets (right axis)

GOTEMBA PREMIUM OUTLETS®

Projects Sold
Facility Name

Location

Total Floor Area

Atsugi, Kanagawa Prefecture
29,900 m2
Kobe, Hyogo Prefecture
12,900 m2
Narashino, Chiba Prefecture
36,400 m2
Osaka, Osaka Prefecture
36,600 m2
Nagoya, Aichi Prefecture
72,400 m2
Kawasaki, Kanagawa Prefecture 289,900 m2
Atsugi, Kanagawa Prefecture
35,100 m2
Yokohama, Kanagawa Prefecture 16,400 m2
Ibaraki, Osaka Prefecture
108,500 m2
Ibaraki, Osaka Prefecture
31,100 m2

Month and Year Net Operating Income(NOI) Cap Rateof Completion
March 2017
4.5%
June 2017
5.1%
March 2018
4.3%
September 2018
4.3%
January 2019
5.0%
May 2019
4.3%
July 2019
4.4%
May 2019
4.1%
May 2021
4.2%
April 2021
4.3%

Logicross Atsugi II

Logicross Yokohama Kohoku

Note 1: Includes examples of major transactions only
Note 2: NOI cap rates are those announced by Mitsubishi Estate Logistics REIT Investment Corporation.

Sustainability Initiative

Sustainability Initiative

Promoting the Use of Renewable Electricity at PREMIUM OUTLETS®

Developing Logistics Facilities That Proactively Advance Initiatives for Reducing
Environmental Impact

FUKAYA-HANAZONO PREMIUM OUTLETS®, which opened in October 2022, operates the entire outlet mall, including tenant areas, using only electricity from renewable energy sources, a first for the PREMIUM OUTLETS® series.
The facility will use electricity generated by solar panels and green power certificates to cover the approximately
8,000 MWh (estimated annual consumption) of electricity expected to be used at the entire outlet mall, comprising communal and tenant areas. FUKAYA-HANAZONO PREMIUM OUTLETS® also enhances the visitor environmentand reduces energy consumption through its adoption of a design that maximizes the use of natural light andnatural ventilation.

Assets underdevelopment
87% (13 buildings)

Note 1: Ratio by value
Note 2: Excluding TRC

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

Logicross Atsugi
Logicross Kobe Sanda
Logicross Narashino
Logicross Osaka
Logicross Nagoya Kasadera
LOGIPORT Kawasaki Bay
Logicross Atsugi II
Logicross Yokohama Kohoku
Logista Logicross Ibaraki Saito (Building A)
Logista Logicross Ibaraki Saito (Building B)
FUKAYA-HANAZONO PREMIUM OUTLETS®

(As of March 31,
2023)

Assets under development
64% (8 buildings)

050¥113.0 billion(As of March 31,
2020)

4.0

100

TOSU PREMIUM OUTLETS®

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

8.0

2.0

MARK IS Fukuoka Momochi

Mitsubishi Estate has adopted a general policy for the Logicross series of obtaining Building-Housing EnergyEfficiency Labelling System (BELS)* certification for all logistics facilities since the November 2020 development of
Logicross Ebina. Completed in November 2022, Logicross Osaka Katano obtained a five-star rating, the highest
under the BELS certification system. In addition, Logicross Zama Komatsubara, completed in March 2022, obtained
Zero Energy Building (ZEB) certification, a first for Mitsubishi Estate, by utilizing an in-house consumption scheme
using electricity generated at the facility through solar panels.
FUKAYA-HANAZONO PREMIUM OUTLETS®

44¥27.0 billion
8.0

10373,100 m

Assets in operation
13% (3 buildings)

Assets in operation
36% (2 buildings)

14.0

10

17.9% 18.0% 17.3%

Store Area 

KOBE-SANDA PREMIUM OUTLETS®

MARK IS Minatomirai

15(Billions of yen)

20

Operating Revenue 

Commercial Property Business

Competitive
Advantages

Risks
Potential decline in consumer demand due to rising prices
Changing consumer behavior reflecting the spread ofe-commerce
Steep rise in the cost of construction materials andincreasing utility costs, etc., as a result of inflation

Logistics Facility Business * A system established by the Ministry of Land, Infrastructure, Transport and Tourism to label the energy-efficiency performance of buildings.
Under the system, third-party assessment institutions assess the energy-efficiency performance of new and existing buildings.

Logicross Zama Komatsubara

45

Commercial Property Business
Hotel Business 

Hilton Okinawa Miyakojima Resort 
New Opening

Overview

MarketEnvironment

Business
Strategies

Domestic Asset Business

Non-Asset Business

Rental profits and capital gains secured throughthe development and ownership of hotel assets

Profits generated through the operation of hotels under
the Royal Park Hotels brand, etc.

Risks
Potential decline in consumer demand due to rising prices
Steep rise in the cost of construction materials andincreasing utility costs, etc., as a result of inflation
Labor shortages due to the turnover of human resources
during COVID-19

 everaging our development expertise and the tenant relationships we have built by handling diverse real estate assets as a comL
prehensive developer in order to acquire sites for hotels and promote hotel development.
Applying more than 30 years of hotel management experience with the Royal Park Hotels brand to expand our networks of fullservice hotels and accommodation-oriented, limited-service hotels.

Business Review

Number of Rooms at Royal Park Hotels(Publicly Announced Projects)(Rooms)
5,000

4,920
4,129

4,000

4,415

3,815
3,399
2,809
2,434 2,434

2,000

1,000

0

FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023(forecast)MarketEnvironment

Competitive
Advantage

Royal Park Hotels
Location
Hokkaido
MiyagiName
Number of Rooms
The Royal Park Canvas Sapporo Odori Park
134
Sendai Royal Park Hotel
110
Royal Park Hotel
419
The Royal Park Canvas Ginza 8
121
The Royal Park Hotel Iconic Tokyo Shiodome
490
Tokyo
The Royal Park Hotel Tokyo Haneda
313
The Royal Park Canvas Ginza Corridor
161
Kanagawa Yokohama Royal Park Hotel603
The Royal Park Canvas Nagoya
153
Aichi
The Royal Park Hotel Iconic Nagoya (scheduled to open in February 2024)
250
The Royal Park Canvas Osaka Kitahama
238
Osaka
The Royal Park Hotel Iconic Osaka Midosuji
352
The Royal Park Hotel Kyoto Sanjo
172
The Royal Park Hotel Kyoto Shijo
127
The Royal Park Hotel Kyoto Umekoji
246
Kyoto
The Royal Park Canvas Kyoto Nijo
180
The Royal Park Hotel Iconic Kyoto
125
Hyogo
The Royal Park Canvas Kobe Sannomiya
170
Hiroshima The Royal Park Hotel Hiroshima Riverside
127
The Royal Park Hotel Fukuoka
174
Fukuoka
The Royal Park Canvas Fukuoka Nakasu (scheduled for completion in August 2023)
255

Sustainability Initiative
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Airport Operation Business  e focus on the development of hotels under the Royal Park Hotels brand on sites we have acquired ourselves while actively lookW
ing to lease properties to other operators and generate capital gains through the sale of properties after holding them for a certain
period of time.
With the Royal Park Hotels brand, we aim to steadily increase operating profit by improving the operating profit ratio at existing
hotels while opening three to four new hotels on a yearly basis through the leasing of properties developed by other companies
and the utilization of various schemes, including management contracts and franchise contracts.

3,000

46

* Under management contract schemes, we outsource the management of hotels we own and operate to external
companies.

Opportunities
Expansion in demand stemming from the recovery of
inbound tourism
Provision of experiential value tailored to diversifying customer needs
Reduction of labor and improvements in operational efficiency
by increasing the use of IT and the Internet of Things (IoT)

Initiatives for Reducing Food Loss
With the cooperation of customers who use its restaurants and reception facilities and of business partners, theYokohama Royal Park Hotel implements initiatives to reduce the volume of edible food that is thrown away (food loss).

Business
Strategies

Risks
Potential decline in consumer demand due to rising prices
Steep rise in the cost of construction materials andincreasing utility costs, etc., as a result of inflation
Labor shortages due to turnover of human resources peration of airports by Mitsubishi Estate leveraging its track record of operating several airports, the expertise gained in busiO
nesses related to inbound tourism through outlet malls and hotels, and its cooperation with other businesses in the Mitsubishi
Estate Group.

 e aim to ensure stable operation at each airport while seeking to achieve operational efficiency and sophistication through interW
airport cooperation.
We will work to invigorate regions by leveraging our urban development expertise and to increase revenues for passenger terminal buildings by harnessing our expertise in the development and operation of retail facilities.

The Mitsubishi Estate Group is involved in the operation of Takamatsu Airport, Miyako Shimojishima Airport Terminal, Mt. Fuji Shizuoka Airport, andseven airports in Hokkaido. Each airport will contribute to regional development by acting in unison with their local communities to increase the nonresident population and improve regional value while leveraging the distinctive characteristics of their respective regions.

Operation of Airports 
4 Seven Airports in Hokkaido• Launch of airport building facility business for theseven Hokkaido airports in January 2020
• Commencement of business operations at New
Chitose Airport in June 2020
• Beginning of business operations at Asahikawa
Airport in October 2020
• Launch of business operations at Wakkanai,
Kushiro, Hakodate, Obihiro, and Memanbetsu
airports in March 2021
2 Miyako Shimojishima Airport Terminal
Opening of passenger terminal facilities and commencement of a business operating the terminal at
the end of March 2019

Examples of Initiatives • Reducing replenishments of food supplies by measuring and understanding volumes of food thrown away foreach buffet item

Opportunities
Expansion in demand stemming from the recovery of
inbound tourism
Provision of experiential value tailored to diversifying customer needs
Reduction of labor and improvements in operational efficiency
by increasing the use of IT and the Internet of Things (IoT)
Capturing of various business opportunities in surrounding
areas

Commercial Property Business

Competitive
Advantages

Business Concept

Hilton Okinawa Miyakojima Resort opened in June 2023 as Mitsubishi Estate’s firstbeach resort hotel development project in Japan and Hilton’s first foray into an outlying
island in Okinawa. The Mitsubishi Estate Group develops upper-middle scale hotels witha focus on leasing schemes on the main island of Okinawa and luxury hotels centeredon management contract schemes* on Miyakojima. As part of these efforts, the Groupplans to open Rosewood Miyakojima in 2024. With the post-COVID-19 recovery in tourism demand, we expect Miyakojima to continue developing further as a resort
destination.

New Chitose Airport

3 Mt. Fuji Shizuoka Airport
Launch of business operating airport in April 2019

1 Takamatsu Airport
Launch of business operating airport in April 2018

• Using vegetable scraps as stock or bouillon (vegetable broth) rather than throwing them away
The hotel was also certified and registered as a Kanagawa SDGs Partner in May 2022 and obtained the highestrated certification under the Y-SDGs system in July of the same year by promoting a variety of initiatives. These
include introducing biodegradable straws in all of its restaurants and bars and treating miscellaneous waste water
and water from kitchens within the hotel as flushing water for its toilets. In these ways, the Yokohama Royal Park
Hotel is contributing to the creation of a sustainable society.

Making effective use of vegetable scraps

47

Residential Business
Operating Revenue / Operating Profit (Results and Forecasts)

Condominium Business

Rental Apartment Business(Millions of yen)

Land Bank Breakdown in Reporting Term

Total Assets(March 31, 2023)(March 31, 2023)

500,000

50,000400,000

380,959

362,755

381,000
346,419 35,037

40,00036,00030,173300,000

30,0005,000

24,06819,00024,0007,000

200,000

20,00025,173100,000

10,00017,06817,00011,0370

FY2029 onward
5,200 units

In the domestic condominium business in FY2022, the number of units solddecreased, leading to a decline in operating revenue. However, operating
profit increased thanks to a higher profit margin—as a result of increased
sales prices, lower costs, and other factors—and to an increase in capitalgains through the sale of rental and other housing.
While we anticipate a decline in capital gains from rental and other housing in FY2023, we expect operating profit to remain on a par with that of theprevious fiscal year due to factors including an increase in the number ofcondominiums sold.

Total:
16,500 units

FY2021MarketEnvironment

FY2022

Income gains

FY2023 (forecast)

FY2026–FY2028
5,150 units

Note: Ratio by value

Non-Asset Business

Capital gains

Risks
Adverse impact on housing demand stemming from concerns regarding rising interest rates
Contraction in the housing market due to a population
decline in Japan
Soaring construction material costs caused by inflation

Ranking of Condominium Management Companies Based on
Number of Units under Management

Changes in Gains on Sales(2023)(Billions of yen)Opportunities
Diversification of housing needs brought about by workstyle and lifestyle changes
Expansion of business opportunities resulting from population inflows into cities
Digitalization of real estate transactions and increasing
adoption of IoT devices in living spaces

1 Tokyu Community

501,870

2 Nihon Housing

489,666

3 Daikyo Astage

427,864

4 Haseko Community

390,08525

276,473

7 Gojinsha Keikaku Kenkyujo

233,222

Business Review

 he power of The Parkhouse condominium and The Parkhabio rental apartment brands backed by outstanding technologies,
T
uncompromising product quality control, and a long and extensive track record.
Quality control of The Parkhouse brand at all stages of the development process—from design and construction to completion—with “Check Eyes,” our quality management and performance indication system, which reflects our dedication to all aspects of theproperties we offer.
Product-planning capabilities that ensure our buildings keep people safe through resilience in natural disasters and offer both
comfort and cost performance and which respect the environment and local regions by paying careful attention to preserving biodiversity and helping realize a low-carbon society.
The ability to provide services to meet all housing-related needs.

19.0

15

5 Mitsubishi Jisho Community 327,900
6 Daiwa LifeNext

24.0

20

10

11.0

10.0
7.0

8 Mitsui Fudosan Residential Service 207,539

Competitive
Advantages

Approx.
¥155.0 billion

Residential Business

FY2020

FY2023–FY2025
6,150 units

Assets in operation
61% (39 buildings)

0Operating revenue (left scale)Operating profit (right scale)

Assets underdevelopment
39% (50 buildings)

5.0

59 Sumitomo Fudosan Tatemono Service 176,472
10 Nomura Real Estate Partners 174,9310

Note: Source: “Ranking of condominium management companies based on number of units undermanagement (2023),” Mansion Kanri Shimbun

Note: Capital gains, etc., in the Residential Business

The Parkhouse Kawagoe Tower

The Parkhabio Himonya

FY2018FY2019FY2020

FY2021

FY2022

FY2023(forecast)

Domestic Condominiums Business
Strategies

 e aim to expand our customer base by strengthening our brand power through the enhancement of product appeal, reliability,Wand services and by leveraging said brand power to acquire loyal “fans.”
We intend to optimize material costs and construction costs by utilizing our leading business scale in residential condominium
development in Japan.
We are promoting redevelopment projects that make full use of our abundant know-how related to real estate development and of
the comprehensive capabilities of the Mitsubishi Estate Group.

The Parkhouse Gran Sanbancho 26

The Parkhabio Minami-Oi

Rental Apartments  e are aiming to stabilize segment profits through capital gains from rental apartments and other investment-purposed properW
ties in the Residential Business.

Non-Asset Businesses 

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

 e aim to strengthen non-asset businesses involving existing properties in such areas as residence management, brokerage, cusW
tom-built housing, and renovation.

48

Residential Business Value Chain  e are providing one-stop services as a corporate group making full use of all of the phases of the value chain, from land acquisiWtion, development, sales, and management through to brokerage.

Offering New Asset Types

Mitsubishi Jisho Residence ClubIn light of the aging population of Japan and changing social needs inthe country, Mitsubishi Estate Residence Co., Ltd., has entered into businesses for commercial nursing homes and student residences,regarded as new asset types. With more than 20 commercial nursing
home projects already underway, the development of such real estatefor investment purposes will contribute to segment profits in the formof capital gains.

In 2018, we integrated the housing membership organizations and customer information managed by various Group companies into the
Residential Business Group to establish the Mitsubishi Jisho Residence
Club. At approximately 660,000
households, the number of customers eligible to join is the largest in the industry, and the cluboffers comprehensive support
covering all of the housing needsof customers. Through the club’s
activities, we aim to further
enhance the satisfaction andconvenience of potential buyers
and strengthen the Mitsubishi
Estate Group’s value chain.

Charm Premier Eifuku

The Park Hive Itabashi Akatsuka

For information on the sustainability initiatives of the Residential Business, please refer to pages 58 to 69.

49International Business
United States 

Operating Revenue / Operating Profit (Results and Forecasts)(Millions of yen)
250,000

100,000

Competitive
Advantages

89,40080,000200,000

In FY2022, the International Business achieved increases in operating revenue and operating profit thanks to a significant rise in capital gains associated with the sale of Central St. Giles, an office building in London, and oflogistics facilities in the United States.
In FY2023, while we anticipate capital gains to contract compared withFY2022, we are working to capture carefully selected investment opportunities to achieve our 2030 targets.

176,130
158,000

150,000

55,816
121,234

114,457
100,000

29,00037,93260,00054,00061,00030,00040,00012,00050,00020,00025,932

28,40026,81624,0000

0

FY2020

FY2021

Income gains

FY2023 (forecast)

EuropeUnited States
Asia and Oceania

 itsubishi Estate London
M
Limited ockefeller GroupR
International, Inc.

 itsubishi Estate Asia Pte. Ltd.
M
• Yangon Branch• Australia BranchEuropa Capital Group*First time to participate in a data center development
business in the United States
Site Area: approximately 587,000 m2
Electricity for entire facility (part developed by
Mitsubishi Estate: approximately 165 MW (total for twobuildings))
Completion: Building 1 in 2025 and Building 2 in 2025

Mitsubishi Estate New York Inc.

Competitive
Advantages

TA Realty LLC*

PT. Mitsubishi Estate Indonesia
Mitsubishi Estate (Thailand) Co., Ltd.
Mitsubishi Estate (Shanghai) Ltd.
Mitsubishi Estate Taiwan Ltd.
MEC Global Partners Asia Pte. Ltd.** Group companies under the Investment Management Business segment

Business
Strategies
Asia
45%

Asia
45%
United States35%

 now-how and broad network based on a business track record ofK
approximately 40 years
Our business in Europe has a track record in many Group-led developments for highly individualized and difficult projects requiringconsultations with government bodies and applications for approval,
as well as know-how cultivated through such activities.
Europa Capital’s extensive network
Since 1995, Europa Capital has put together and managed 13 funds,
investing a total of more than €13.4 billion in 21 countries in Europe.
During this time, it has built relationships with over 120 institutional
investors, primarily in North America and Europe.

Most Recent Initiatives 

8 Bishopsgate(City of London, United Kingdom)
A 51-floor, high-rise office building in the center ofLondonUse: offices, stores, and an observation gallery
Size: 51 aboveground floors / three belowgroundfloors / one rooftop floor
Total Floor Area: approximately 85,000 m2
Completion: during 2023

Implementation of investments and returns with a focus on balancing
profit stability and capital efficiency
Promotion of business development centered on large-scale projects
that have already been decided
Expected return from investment IRR: 8%–10%

United States
40%

Total assets
Approx.

Business profit
Approx.

¥¥

1.5 trillion

 einforcement of capital-recycling business leveraging know-how
Rof RGII
Promotion of joint ventures with local partners
Expected return from investment IRR: 8%–10%Europe  itsubishi Estate Vietnam Company Limited
M• Hanoi BranchBusiness Review

Data Center Development Business   * Source: Real Capital Analytics (based on transaction amounts from July, 1 2007 to June 30,2022)

Capital gains

Business
Strategies

Targets for 2030

Most Recent Initiatives International Business

Operating revenue (left scale)Operating profit (right scale)

FY2022

 ockefeller Group International, Inc’s (RGII), development know-howRand name recognition
In addition to large-scale and mixed-use developments, as exemplified by the Rockefeller Center, RGII has established an abundantdevelopment track record throughout its approximately 90-year history, managing a variety of real estate, including logistics facilities
and residences (for selling and leasing).
TA Realty LLC’s sourcing powerWith a focus on logistics facilities and rental housing, TA Realty has
invested and managed in a wide range of markets across the UnitedStates, thereby also contributing to the Group’s sourcing power in the
country. In particular, TA Realty boasts a leading record* across theUnited States in terms of transaction amounts for logistics facilities.

90.0 billion
Asia and Oceania Europe20%

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

MarketEnvironment

50Competitive
Advantages

Risks
Reconsideration of the purpose and meaningfulness ofoffices as diversified workstyles become establishedSoaring construction material costs and rising utility costs
due to accelerating inflation
Stagnation in the market for buying and selling real estate
due to rising interest rates
Risks particular to various areas and countries

Europe15%

Competitive
Advantages

Opportunities
Reaffirmation of the value of real settings, such as offices
Opportunities to invest in growth assets that match socialand economic changes
Economic growth over the medium to long term centeredon Asia and Oceania
Invigoration of the real estate market due to a reduction in
financial instability

 usiness promotion capabilities leveraging a variety of experience and know-how gained through development projects in EuropeB
and the United States over several decades
Minimization of country risks and volatility arising from boom-and-bust cycles by maintaining a globally diversified portfolio with afocus on Europe, the United States, and Asia
An investment strategy managing asset types and level of risks by region, defining Europe and the United States as highly mature
markets and Asia as a high-growth market

Business
Strategies

 romotion of businesses in 10 countries and regions in Asia andP
OceaniaWe develop businesses in a wide range of countries, including
Singapore, Vietnam, Thailand, and China. Most recently, we opened abranch office in Australia in May 2021, where we are also expanding
the scope of our businesses.
The network of MEC Global Partners Asia Pte, Ltd., a joint venture weestablished with CLSAMEC Global Partners Asia puts together and operates core funds targeting investments in a diverse array of real estate, such as offices,
retail facilities, logistics facilities, and residences.

Most Recent Initiatives Suzhou Business Park
Joint Project Developing Large-Scale Offices in China
 otal Floor Area: approx. 220,400 m2
TScale: four high-rise buildings with 13 to 18 aboveground floors and one belowground floor
Seven low-rise buildings with five to 10 abovegroundfloors and one belowground floor
Completion: 2024Increase in investment balance and establishment of a capitalrecycling portfolio
Business promotion based on the two approaches of business development in which we have a major share and of joint business withlocal partners
Expected return from investment:
IRR (developed countries): 8%–10%;
IRR (emerging countries): Over 10%

51

Architectural Design & Engineering Businessand Real Estate Services Business

Investment Management Business
Operating Revenue / Operating Profit (Results and Forecasts)

Operating Revenue / Operating Profit (Results and Forecasts)(Millions of yen)

(Millions of yen)

50,00080,00046,70243,000In FY2022, operating revenue and operating profit in the Investment
Management Business decreased owing to a decline in incentive fees compared with FY2021. However, we expect factors including increases in various fees to grow operating revenue and operating profit in FY2023. We havealso established new targets calling for the achievement of assets undermanagement (AuM) of ¥10.0 trillion and operating profit of ¥30.0 billion by
the end of FY2030. We aim to establish a position as leading global player inthe real estate investment management domain.

40,00035,87830,00026,53722,19920,0008,054

10,00012,0005,966
067,00060,000

FY2021

FY2022

6,000

5,000
4,176

40,000

4,000

2,802
20,0002,000

959

FY2023 (forecast)

Operating profit

Europe450.0

Europe450.0

JRE
1,050.0

Total
Approx.

¥3.6 trillion
UnitedStates1,200.0

MJIA
840.0

JRE
1,100.0

Overseas3,200.0

Target:10 trillionJapan
2,200.0

United States
2,550.0

As of March 31, 2020

As of March 31, 2023

As of March 31, 2031

AuM: ¥3.6 trillion
Operating Profit: ¥4.4 billion

AuM: ¥5.4 trillion
Operating Profit: ¥8.0 billion

AuM: ¥10.0 trillion (target)
Operating Profit: ¥30.0 billion (target)

MarketEnvironment

Risks
Decrease in inflows of capital to real estate investment funds over fears of an economic recession
Decline in valuation of assets under management
due to rising interest rates
Opportunities
Continuously maintaining and expanding AuM
through the creation and management of stablereal estate investment funds that are highly resilient, even during an economic recession
Capturing of underpriced, value-added investment
opportunities in anticipation of future economic
recoveryCompetitive
Advantages¥

MJIA¥5.4 trillion 1,100.0

Business
Strategies

Mitsubishi Estate Global Partners

EuropeUnited States

Europa Capital

TA Realty

Asia-Pacific
Globally, we havecombined assets
under managementof approximately¥5.4 trillion.

Business
Strategies

 bility to meet inbound and outbound investment
Aneeds through relationships with institutional investors in Japan and overseas capitalizing on foundations established in Japan
Local expertise, networks, and track records in various markets through M&As overseas
An extensive product lineup and solid cross-bordersales set-up from maintaining management companies in Japan, the United States, Europe, and Asia asGroup companies

FY2023 (forecast)

Operating profit (right scale) he Architectural Design & Engineering Business has extensive experience and expertise in urban planning and development, fromT
the design and management of buildings for various applications—including large-scale, mixed-use developments in the
Marunouchi area—and proposal-based consulting to the planning and design of underground networks, transport hubs, and infrastructure facilities.
We undertake design and management with an in-depth understanding of operation, maintenance, and management from the perspectives of business operators and clients based on experience cultivated as a comprehensive developer’s in-house design office.
We have an abundant information network established in Asia and Oceania centered on local subsidiaries in Shanghai and Singapore.
 sing the technologies and networks developed over its long history,U
Mitsubishi Jisho Design Inc. offers a wide range of design services inJapan and overseas, comprising everything from construction design,planning, and consulting to interior design.
In addition to handling design project orders from within the Groupand from long-established clients, the Architectural Design &Engineering Business is working closely with the Business
Development, Client Relations & Solutions Group to win new orders.
We are expanding our earnings base by focusing on growth fields,such as construction management work involving the comprehensive
management of projects—including schedule, budgetary, and quality
control—renovations, expansion of wooden architecture, including
wooden materials, achievement of carbon neutrality for existing buildings, and smart-city projects.
We provide technological support to Group companies and seek togenerate synergies therewith.

MEC Global Partners Asia

Order

Company Name

Architectural Design & Engineering
Business Net Sales (millions of yen)

1

NIKKEN SEKKEI

47,977(13.9)

2

NTT FACILITIES

21,133(–14.4)3

Mitsubishi Jisho Design

19,922(–0.6)(3.3)

4

NIHON SEKKEI

17,6005

Azusa Sekkei

12,351(0.6)

6

KUME SEKKEI

11,695(–7.4)

7

JR East Design

10,383(–12.7)

8

YAMASHITA SEKKEI

7,571(–8.0)

9

NIKKI SEKKEI

7,053

(6.5)

10

Yasui Architects &Engineers

7,048

(7.9)

Note: Figures in parentheses indicate change from the previous fiscal year(%).
Source: Nikkei Architecture, Architectural Design Office White Paper 2022

Carry out marketing and research and establish funds worldwide
Provide global opportunities to worldwide investors

Real Estate Services Business JapanCompetitive
Advantages

FY2022

Architectural Design & Engineering Business 

Asia and Oceania
200.0

Total
Approx.
Overseas1,770.0

FY2021

Operating revenue (left scale)Japan
1,890.0

Asia and
Oceania120.0

0

FY2020Changes in
ノン アセット事
業AuM (Billions of yen)

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

57,78056,064In FY2022, order amounts and operating revenue exceeded the levels of theprevious fiscal year in the Architectural Design & Engineering Business. In
the Real Estate Services Business, real estate brokerage, parking-lot management, and other businesses performed favorably.
We expect both the Architectural Design & Engineering Business and theReal Estate Services Business to again see further increases in operating
revenue and operating profit in FY2023 through factors including the capturing of projects that capitalize on the Group’s comprehensive strengths andan improvement in the operating environment.

Investment Management Business / Architectural Design & Engineering Business and Real Estate Services Business

Operating revenue

52

60,7740

FY2020Business Review

8,000Japan Real Estate AssetManagement Co., Ltd. (JRE)Groupwide
Synergy

Mitsubishi Jisho
Investment Advisors, Inc.
(MJIA)

Competitive
Advantages

 he Real Estate Services Business offers one-stop solutions leveraging a wide-ranging service menu (including support utilizingT
CRE* information and real estate brokerage) and the Mitsubishi Estate Group’s comprehensive strengths.
We provide solutions throughout Japan using our nationwide branch network backed by specialist expertise and knowledge.
* Corporate real estate (CRE): Real estate held or used by a business enterprise or organization for its own operational purposes. In recent years, there has been growing interest in
using CRE strategically to contribute to increasing corporate value.

The Group’s network for investment and development and management and services

 e have established a global platform (Mitsubishi Estate Global Partners (MEGP)), which facilitates cooperation among various
Wbases in Japan, the United States, Europe, and Asia. Promoting MEGP as a global brand, we offer services in response to demand
from investors in Japan and overseas seeking diversified investment effects.
We leverage hybrid-model investment, whereby we invest in and manage funds created by Group companies using our funds andthe funds of third-party investors. Through these efforts, we simultaneously pursue the expansion of our portfolio and diversified
investment effects overseas and the capturing of greater service opportunities and fees from third-party investors.

Business
Strategies

 he Real Estate Services Business offers a host of services in relation to real estate, including real estate brokerage and leasingTmanagement support of condominiums and office buildings through Mitsubishi Real Estate Services Co., Ltd., and parking-lot management (operating a business under the PARKS PARK brand) through Mitsubishi Estate Parks Co., Ltd.
We are aiming to be the leading company in CRE strategy support, real estate consulting, and recreational land and recreational
facility management by providing services to enterprises and high-net-worth individuals as our core customers.
We are strengthening our value chain, which combines a variety of service menus of the Business Development, Client Relations &Solutions Group and of each of the Group’s businesses, while expanding the range of services we provide to existing customers.

53

Innovation and Business Transformation
Group
Overview

The Innovation and Business Transformation Group aims to promote the creation of new value in the business model innovation domain.

Innovation andBusiness
Transformation
Group

Business Review

Business
Strategies

Competitive
Advantages

1
2

 reation of new businessesCCreation of frameworks and promotion of open innovation initiatives aimed
at the creation of new businesses ecurement of new sources of earnings
SHeightening of earnings and increases in productivity by refining existing
business models and work processes
3 Establishment of a Groupwide IT platform and promotion of Groupwide IT
governance and cybersecurity
1

DX Promotion
Department

2

Risks
Changes in demand in existing domains resulting from the
spread of a variety of workstyles, etc.
Risk of becoming an outdated company due to delays inpromoting digitalization
Loss of business opportunities arising in an era of volatility,
uncertainty, complexity, and ambiguity
Increasing risk of information leaks resulting from aging IT
security

Opportunities
Raising the efficiency of real estate operations leveraging
digital technologies
Expansion of new businesses through business reforms
Establishment of platforms and ecosystems using newtechnologies

 ur wide-ranging business portfolio in the real estate domain as a comprehensive developer.
OOur business-to-consumer contact points with workers and visitors in area development districts such as Otemachi, Marunouchi,
and Yurakucho, with visitors to retail facilities and airports, and with residents and other parties based on our position among theleading companies in Japan in terms of number of condominiums supplied and assets under management.
Relationships established with diverse tenants and corporate business partners, from leading major companies from various industries to start-up companies that have become tenants at our innovation hubs, including Inspired.Lab., FINOLAB, and EGG JAPAN.

Improvement of proposal capabilities based on business model creation proposals with contents
that anticipate the needs of the era
Business Development, Client Relations & Solutions Group
Business Development, Consulting &Solutions Department

Office Leasing and
Tenant Relations Department

Collaborative Creation
Sales Department(proposals for the sale of all types of real estate)(office leasing)(development of partnerships and contents and matching)

Further identification of customer-focused needs andreinforcement of relationships

Sales support through the provision of proposal contents
and building of business models based on cooperation

Collaboration
partners
Partners with unique andcompetitive contents andknow-how(the arts, entertainment,
wellness, etc.)

Client Strategy Planning Department

The Mitsubishi Estate Group’s variety of business opportunities and apparent needs
Other departments / Group companies / New services and business models

Initiatives for Future Generations (Forward-Looking DNA) 
Flexible Workspace Business Offering workspaces designed for all working people itsubishi Estate offers flexible offices accommodating a diverse array of workstyles
M
to create urban areas with even more comfortable working environments where
people can assemble and interact. As part of these efforts, we established the specialized Flexible Workspace Planning and Operation Department.
Under the xLINK brand, we operate six flexible workspace facilities in the Marunouchi area,accommodating the wide-ranging needs of companies and a broad spectrum of workstyles, including through private rooms for two to 20 people and partially set-up offices.
In February 2023, we acquired Regus Japan Holdings Co., Ltd. With this acquisition, we
captured a market share of the flexible workspace business domain all at once. Using
Regus Japan’s globally expanding platform, we aim to create synergies with the
Marunouchi area, including through office leasing.

xTECH Business (Start-Up Support) Innovating Urban Development by Sensitively Reflecting the Trends of the Times

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Existing customers / new customers

Further reinforcement of capabilities for cultivating new customers and making proposals thereto
that have thus far been beyond the ability of individual departments, by strengthening organic
collaboration among sales departmentsIn response to latent social needs, we will seek new earnings opportunities by accumulating and analyzing available data.
Leveraging our knowledge cultivated in the real estate business, we will expand our business domains by proactively cooperatingwith external partners. As a field for verifying the business structures born of such cooperation, the Group will utilize diverse realestate stock that it owns and manages. Initiatives to date include elecinema, Ecofurni (a business reselling used office furniture),and 5G-infrastructure sharing.
We will drive automation and laborsaving processes by using IT and digital tools to increase productivity cross-organizationallyand across the entire Group.
We will promote the increased efficiency and sophistication of real estate-related processes by leveraging technologies while creating new value and functions for real estate.
We will proactively conduct investments and accelerators to promote open innovation while leveraging our New Business Proposal
System to uncover new business seeds from within the Company, thereby driving new business creation both internally and externally.

The Innovation and Business Transformation Group plays a major role in increasing revenues and profits in the nonasset business domain and service content provision domain under Long-Term Management Plan 2030. Furthermore, we
are accelerating the development of new businesses and the transformation of existing businesses by proactively promoting open innovation with a variety of external stakeholders, including real estate technology companies and entities
from other industries. Against this backdrop, in June 2021 Mitsubishi Estate unveiled the Mitsubishi Estate Digital Vision,
defining the future direction of the Company’s lifestyle and urban development efforts beyond digital transformation (DX).
Accurately identifying customer needs by analyzing the information that we acquire and accumulate from diverse customer contact points in a cross-sectional manner, we will solve issues and uncover new business opportunities in existing business domains while realizing a user experience loop that delivers optimized experiences to each and every user
by further enhancing user experiences for customers. Meanwhile, in April 2022 the Company established the Mitsubishi
Estate Computer Security Incident Response Team, an organization to promote security within the DX Promotion
Department. As chief information security officer, I will strengthen the promotion of cybersecurity for the entire Group.

Various apparent and latent needs of customers

Comprehensive adjustment functions

Message from the Executive Officer in Charge of the Business Creation and
DX Promotion Departments

54

Overview

 he Business Development, Client Relations & Solutions Group will deliver the most effective proposals to customers by centrallyTmanaging customer contact point information with the aim of maximizing the acquisition of business opportunities for the Group.
Acting as a Companywide contact point, the Business Development, Consulting & Solutions Department will make proposals
making full use of the Company’s resources in response to all manner of customer real estate utilization needs.
The Office Leasing and Tenant Relations Department will carry out extensive office leasing activities by leveraging the Group’s
diverse assets and customer relationships.
In addition to functions for identifying contents and cultivating new customers, the Collaborative Creation Sales Department willconduct differentiated sales activities anticipating the needs of the era.

Innovation and Business Transformation Group / Business Development, Client Relations & Solutions Group

MarketEnvironment

Business Creation
Department

Business Development, Client Relations &Solutions Group

Creating and developing an ecosystem for start-ups

Keiji Takano
Senior Executive Officer

 he xTECH business operates working facilities serving as bases for various companies, such as start-ups and non-Japanese companies making
Tforays into Japan, and bases for collaborations with academia. It also focuses on providing business development support and support for holding
events promoting interactions, etc.
xTECH aims to help add value to the Marunouchi area and enhance Japan’s competitiveness by establishing it as an area with plentiful opportunities
for cooperation and co-creation among companies promoting new businesses and with academia by supplementing the current lineup of companies in
the Marunouchi area with start-ups and growing Japanese and overseas companies.
Business Menu
Provision of business development support services
Arrangement and holding of events promoting interactions and operation of organizations for facilitating ongoing interactions
Arrangement and implementation of field trials
Investments and implementation of the Corporate Accelerator Program

EGG following refurbishment

Inspired.Lab

55

Sustainability (ESG) Section
The basic mission of the Mitsubishi Estate Group is “to contribute to society through urban development.” Adopting along-term view, the Group believes that it is of great importance to pursue business activities in harmony with society.
In light of the growing momentum in Japan and overseas behind environmental, social, and governance (ESG) investment, as well as initiatives for achieving the Sustainable Development Goals (SDGs), we aim to realize the ongoing
improvement of corporate value and achieve a sustainable society by conducting corporate governance more rigorously
than ever before while pursuing initiatives that pay close attention to society and the environment.

History of Sustainability Committee Meetings (over past two fiscal years)
Date

Major topics• Implementation status of incentive system for sustainability-related initiatives• Supply chain management initiatives

February 17, 2023

• Analysis of external evaluation results• Information on OMY SDGs ACT5 2022 and other sustainability activities• Status of initiatives toward achieving Mitsubishi Estate Group 2030 Goals for the SDGs

Sustainability-Related Policies and KPIs

FY2022• Report on previous fiscal year’s energy and waste management results as well as forecasts• Report on stakeholder engagement

Please refer to pages 20 and 21 for an overview of the Mitsubishi Estate Group’s sustainability initiatives and to pages 98 and• Information on OMY SDGs ACT5 2022 activities and implementation of hands-on training program related tosocial issues

July 11, 2022

99 for information on sustainability-related KPIs and progress toward the accomplishment of the associated targets.

• Information on the relationship between the steep rise in energy prices and renewable energy• Status of initiatives toward achieving Mitsubishi Estate Group 2030 Goals for the SDGs

Sustainability Frameworks•R evisions to energy-related targets (SBT and RE)

Mitsubishi Estate takes a Groupwide approach to sustainability. Chaired by the president & chief executive officer of Mitsubishi• Revisions to CSR procurement guidelines and status of supply chain management-related initiatives
February 25, 2022

Estate and with the director responsible for sustainability (the executive officer in charge of the Sustainability Management
and Promotion Department at Mitsubishi Estate) as the deputy chair, the Group’s Sustainability Committee comprises executives in charge of respective functional and business groups and the executive in charge of the Corporate Group, as well aspresidents of major Group companies, and it ensures effective Groupwide promotion of sustainability. The Sustainability
Subcommittee serves as a forum for detailed discussions to prepare for Sustainability Committee meetings.

• Raising of the target for percentage of female managers• Report on activities for OMY SDGs ACT5 project• Status of initiatives toward achieving Mitsubishi Estate Group 2030 Goals for the SDGs

FY2021•R eview of energy-related targets (SBT and RE)
July 7, 2021

• Report on Energy and Urban Development Action 2050
• Information on activities for OMY SDGs ACT5 2021 and status of their implementation• Status of initiatives toward achieving Mitsubishi Estate Group 2030 Goals for the SDGs

The Sustainability Committee typically meets twice a year to deliberate on important matters and report on topics related
to sustainability. Prior to the meetings of the Sustainability Committee, the Sustainability Subcommittee conducts preliminary
discussions and topic reporting while compiling information on efforts to promote sustainability made by business groups.
Reports on important matters discussed or reported at meetings of the Sustainability Committee are reported at the following meeting of the Board of Directors by the individual responsible for overseeing sustainability initiatives. This arrange-

Sustainability (ESG) Section

ment allows for oversight by the Board of Directors.

External Evaluations of ESG Performance (as of July 2023)
Mitsubishi Estate has been selected for inclusion in the following ESG indices for socially responsible investment.

In implementing sustainability-related measures, the director responsible for sustainability oversees the process, while
the sustainability managers and staff of each department at Mitsubishi Estate and each Mitsubishi Estate Group company andReal Estateof the Sustainability Promotion Executive Office (Sustainability Management and Promotion Department at Mitsubishi Estate)

Sustainability
Yearbook Member

Mitsubishi Estate Co., Ltd.

S&P Global ESG Score 2022

together head the execution of specific activities and studies.

72 /100

Board of Directors
ReportAs of February 7, 2023.
Position and Score are industry specific and reflect exclusion
screening criteria. Learn more at spglobal.com/esg/yearbook

Supervision

Sustainability Committee
Committee chairperson: • President & chief executive officer of Mitsubishi Estate
Deputy committee chair: • Executive officer in charge of Mitsubishi Estate’s Sustainability
Management and Promotion Department• Executives in charge of respective functional and business groups,
Committee
executive in charge of the Corporate Group, presidents of Major Group
members:
companies, and others as members• Chairperson • Standing statutory auditors• Outside experts and others (invited as necessary)

Chief Sustainability Officer

Instruction

Sustainability Subcommittee
Committee chairperson: • General manager of Sustainability Management and Promotion Department• Executive officer in charge of Mitsubishi Estate’s Sustainability Management
Committee
and Promotion Department, general managers of line and staff departments
members andfor functional and business groups, executive of the Corporate Group, andothers:sustainability managers and staff at major Group companies, and others•G eneral manager of Internal Audit Office•G eneral manager of Mitsubishi Estate’s Audit Committee Office

Deliberation /ReportDow Jones Sustainability
World Index*1

Dow Jones Sustainability
Asia Pacific Index, 3rd consecutive year

S&P Global Sustainability
Yearbook Member 2023

FTSE4Good Global Index,
22nd consecutive year

FTSE Blossom Japan Index,
7th consecutive year

FTSE Blossom Japan Sector
Relative Index,
2nd consecutive year

Executive officer in charge of Mitsubishi Estate
Sustainability Management and Promotion
Department

Sustainability Promotion
Executive OfficeSustainability managers
and staff

Mitsubishi Estate’s
Sustainability Management
and Promotion Department

Each Mitsubishi Estate
department and Mitsubishi
Estate Group company

MSCI Japan ESG Select Leaders
Index,*2 7th consecutive year

MSCI Japan Empowering Women
Select Index,*2 6th consecutive year

S&P/JPX Carbon Efficient Index, 6thconsecutive year

5-Star Rating, the highest rank, in
GRESB Standing Investments
Benchmark,*3 3rd consecutive year

4-Star Rating in GRESB
Development Benchmark*4

CDP 2022 Supplier Engagement
LeaderSOMPO Sustainability Index, 12th
consecutive year

GRESB Public Disclosure, 6thconsecutive year

CDP Climate Change 2022
Questionnaire “A”
CDP Water Security Questionnaire“A–”
CDP Forests Questionnaire 2022
“B”

Certified in 2023 as Outstanding
Health and Productivity
Management Organization

Monitoring Frameworks
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

The Mitsubishi Estate Group monitors progress toward the accomplishment of its targets for the key themes and key perfor-

56

mance indicators (KPIs) described in Mitsubishi Estate Group 2030 Goals for the SDGs (see pages 98 and 99). Single-year targets and initiatives will be defined in the annual plans for business groups and functional groups, and these targets andinitiatives will be monitored. Information on the status of target accomplishment and details of initiatives are compiled by the
Mitsubishi Estate Sustainability Management and Promotion Department, which functions as the secretariat for sustainability
initiatives. This information is then reported to the Sustainability Committee and the Sustainability Subcommittee. After meetings of the Sustainability Committee, the executive officer in charge of the Mitsubishi Estate Sustainability Management andPromotion Department, who is responsible for overseeing sustainability initiatives, reports on the deliberations of the meetingin question at the following meeting of the Board of Directors. Moreover, the accomplishment of annual plan targets is used
as one of the qualitative evaluation items for determining the remuneration paid to officers.

*1 The Dow Jones Sustainability World Index represents the top 10% global sustainability leaders of the 3,500 largest market capitalization companies in the world. In 2022, 322 companies, including 36
Japanese companies, were selected.
*2 Please refer to the following disclaimer for details on MSCI. http://info.msci.com/l/36252/2017-06-27/kj5n9b*3 Assessment of the performance of existing portfolios*4 Assessment of new development and large-scale renovation portfolios

57Environment 
Promoting ZEB and ZEH in New Buildings and Rental Apartments to Reduce Environmental Impact 

Sustainability is included as part of the Mitsubishi Estate Group Guidelines for Conduct based on the recognition that the global environment is an important issue needing to be considered in business activities alongside customers, shareholders, and other stakeholders.
As a specific provision, these guidelines state that we actively work to address climate change and other global environmental issues.
The Group develops, holds, and operates a diverse portfolio of assets, and we realize that eliminating carbon emissions from real estate
assets and managing waste production from facilities are important tasks to be addressed. Based on these policies and issues as wellas on the opportunities and risks described on page 21, we have established the following KPIs and are acting based thereon.

Mitsubishi Estate acquired its first ZEB Ready (office category) certification for a high-rise tenant office building, tentatively called the
Uchi-Kanda 1-chome Project, which is scheduled for completion at the end of November 2025. The energy conservation measures
employed in this project are tested at the Group’s headquarters to ensure they are energy efficient and facilitate a comfortable environment. Starting with this property, the Group aims to achieve high environmental performance in line with ZEB requirements for all newbuildings to be developed.
Furthermore, in February 2023 Mitsubishi Estate Residence started construction on (tentativename) the Osaka Abeno Showa-cho 3-chome Project,*1 the first rental apartment building in the
Kansai region to meet ZEH standards. In addition to meeting ZEH-M Oriented standards, the apartment building will use solar panels to generate electricity used in communal areas. These initiatives are part of Mitsubishi Estate Residence’s goal to meet or exceed the ZEH-M Oriented Standard(Tentative name)(Tentative name)in new condominiums and new rental apartments under its CO2 emissions reduction strategies
Uchi-Kanda
Osaka Abeno(formulated in January 2022). The entire Group will work together to reduce the environmental
1-chome ProjectShowa-cho
3-chome Project
impact of its buildings and to provide new value.

Please refer to the Mitsubishi Estate Group’s sustainability website for information on other KPIs and data.
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/

KPIs
Targets
Reduce Scope 1 and Scope 2 emissions by 70% or more and Scope 3 emissions by 50% or more by FY2030 compared with
FY2019 emissions
Achieve net-zero emissions*2 in Scope 1, Scope 2, and Scope 3 by 2050 (targets approved by SBTi*1 in June 2022)
100% by FY2025 (joined RE100)
20% reduction per m2 by 2030, compared with FY2019
90% by 2030

CO2 emissions
Renewable energy (%)
Waste disposal (kg/m2)
Waste recycling rate (%)

The Mitsubishi Estate Group’s Initiatives to Reduce Greenhouse Gas Emissions to Realize a
Decarbonized Society Based on the SBTi’s Net-Zero Standard (1.5ºC Scenario)

Sustainability (ESG) Section

476 thousand tons

FY2019Net-zero emissions
Reduction of
by 2050
70% or more in value	Over90%
chain (VC) emissions
reduction in VC
by FY2030
emissions	Neutralization of
the residual
Aim to Achieve
10% or less ofRE100
emissions
by FY2025
FY2025

FY2030

Neutralization

New Medium- to Long-Term Targets: Scope 3 Emissions

3,560 thousand tons

Net-zero emissions
Reduction of
by 2050
50% or more in	Over90%
VC emissions by
reduction in VC
FY2030emissions	Neutralization of
the residual 10%
or less ofemissions

FY2019Neutralization

FY20302050

2050*1 An international initiative aiming to limit the average global temperature rise resulting from climate change to below 2ºC above pre-industrial levels*2 Emissions that remain unabated within the value chain in the target fiscal year are termed “residual emissions.” The SBTi standard requires neutralizing any residual emissions outside the value chain
using forest-absorption and carbon-removal technologies to counterbalance the impact of these unabated emissions and to achieve net-zero emissions.

Scope 1
Scope 2
Scope 3

Direct burning of fuel (gas and heavy oil) from the heating supply business and the operation of emergency power generators
Direct burning of fuel due to use of purchased electricity, steam, cold and hot water, etc.
Emissions from other business activities (building construction, use of sold real estate, etc.)

The Mitsubishi Estate Group is working toward achieving its CO2 emissions reduction targets, which are in line with the SBTi Corporate
Net-Zero Standard and were approved by the SBTi in June 2022.
In order to reduce Scope 2 emissions, we are endeavoring to introduce renewable energy to our properties. In addition, we aim toachieve high environmental performance and energy efficiency in our properties under development. We are also actively pursuing theacquisition of Zero Energy Building (ZEB) and Zero Energy House (ZEH) certifications, among others. Furthermore, to promote thereduction of emissions in Scope 3, which mainly result from the use of construction materials in building construction, we are committed to deepening our collaboration with relevant stakeholders in the development and building construction supply chain.

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Accelerating the Transition to Renewable Energy Sources to Achieve RE100 

58

The Mitsubishi Estate Group has been actively introducing renewable energy since FY2021 to achieve
RE100.*3 In FY2022, the rate of renewable electricity reached approximately 50% as a result of transitioning to electricity derived from renewable sources at almost all of the 50 Company-owned officebuildings and commercial facilities*4 located in Tokyo and Yokohama, as well as Company-ownedbuildings and facilities in Hiroshima and Sendai. The renewable electricity introduced by the Group
complies with RE100, combining green electricity and FIT non-fossil-fuel energy certificates withtracking information. Since the buildings will be powered entirely by renewable electricity,*5 the tenants of said buildings are effectively deemed to be using renewable electricity.
*3 RE100 is a collaborative initiative bringing together corporations committed to 100% renewable power. Joining forces, these corporations send a
powerful signal to investors and governments aiming to accelerate the shift to renewable electricity. In Japan, the Japan Climate Leaders’Partnership (JCLP) supports membership and activities by Japanese corporations as a regional RE100 partner.
*4 “Company-owned buildings and comercial facilities” refers to buildings and commercial facilities of which the Company owns a 50% equity stakeor higher, excluding buildings owned in the capital-recycling business and buildings slated to be redeveloped. Regarding buildings and commercial
facilities of which the Company owns less than a 50% equity stake, the Company intends to introduce renewable energy-based electricity at certain
properties in collaboration with building operators and other parties.
*5 Electricity supplied by gas cogeneration systems, etc., is generated using carbon-neutral city gas.

*1 This project falls under a basic agreement and general planning subcontracting agreement between ENEOS Corporation and Mitsubishi Estate Residence. The scheme designates ENEOS as the primary owner, while Mitsubishi Estate Residence is responsible for the project’s design and other specifications as the general planner.

Promoting Green Urban Development with GRAND GREEN OSAKA 

Overview of the Mitsubishi Estate Group’s Decarbonization Pathway toward FY2050
New Medium- to Long-Term Targets: Scope 1 Emissions + Scope 2 Emissions

ENVIRONMENT

Target and Initiative Policies 

Mitsubishi Estate Co., Ltd., is leading the Umekita 2nd Project, a joint venture of nine companies(JV9)*2 to develop the area in front of JR Osaka Station. The urban development project will be
named GRAND GREEN OSAKA, an open space that integrates lush greenery and innovation. We
have commenced the project, which includes the construction of a 45,000 m2 park that aims toenhance the city’s appeal in collaboration with Osaka City and Urban Renaissance Agency. As such,
GRAND GREEN OSAKA was selected for the Ministry of Land, Infrastructure, Transport andTourism’s 2021 Sustainable Building Leadership Project (CO2 Leadership Project). The landscapedesign offers a sense of local flair, and environmental planning considers biodiversity. In addition,
the project introduces cutting-edge technologies, such as geothermal and wastewater energy andsolar photoelectric generators, as well as infrastructure that contributes to resource recycling. The
project has been awarded gold certification (plan certification) in the LEED Neighborhood
Development (LEED ND) category for area developments by Leadership in Energy andEnvironmental Design (LEED), an internationally recognized green building rating system developedby the U.S. Green Building Council. We will continue to promote green urban development with aview to the advanced opening of the Umekita 2nd Project district, scheduled for summer 2024.

Panoramic view of GRAND GREEN OSAKA(rendering of completed project)

GRAND GREEN OSAKA obtained LEED Goldcertification.

*2 Mitsubishi Estate Co., Ltd., Osaka Gas Urban Development Co., Ltd., ORIX Real Estate Corporation, Kanden Realty & Development Co., Ltd, Sekisui House, Ltd., Takenaka Corporation, Hankyu Corporation,
Mitsubishi Estate Residence Co., Ltd., and Umekita Development Specific Purpose Company (SPC funded by Obayashi Corporation)

Rolling Out Various Initiatives That Promote the Value of Wood 
The Mitsubishi Estate Group promotes the sustainable use of timber. At the JAPAN WOOD DESIGNAWARD 2022 (hosted by the Japan Wood Design Association), a total of seven properties belonging
to six companies, including Mitsubishi Estate, won awards. MOKUWELL HOUSE, Japan’s first prefabricated wood house using cross laminated timber (CLT) designed by MEC Industry Co., Ltd., won
the grand prize (the Ministry of Agriculture, Forestry and Fisheries Award).
Additionally, Mitsubishi Estate Home Co., Ltd., launched a digital platform called KIDZUKI to promote wood construction and conversion and entered into an agreement with Tamagawa Gakuen in
October 2022 to collaborate on various initiatives centered on the use of timber. In the future, theMitsubishi Estate Group will deepen collaborative efforts from the perspective of environmental
education, create new value centered on timber, and contribute to the resolution of environmental
and social issues. Aiming for wood construction and conversion in urban areas, each Group company will work in synergy to promote initiatives that leverage the appeal of wood.

Exterior

Interior

MOKUWELL HOUSE

Participating in Projects to Recycle Used Cooking Oil into Sustainable Aviation Fuel and Biodiesel 
IZUMI PARK TOWN Tapio

As part of the third phase of Circular City Marunouchi, an initiative focusing on resource recycling in the Marunouchi area with the aimof achieving a waste recycling rate of 100%, Mitsubishi Estate became the first comprehensive real estate company*3 to participate in a
project that recycles used cooking oil from eating and drinking establishments in the Marunouchi area into sustainable aviation fuel(SAF). SAF is a liquid fuel used in commercial aviation and is made from non-fossil fuels. When the source (feedstock) is 100% usedcooking oil, it can reduce CO2 emissions throughout the value chain by about 80% compared with conventional aviation fuel.

In March 2023, the Group also began recycling used cooking oil into biodiesel, which is being used to fuel trucks that collect usedcooking oil. In tandem with the utilization of SAF in the future, we will establish a circular fuel economy in the Marunouchi area.
*3 Source: Mitsubishi Estate Co., Ltd.
Shin Hiroshima
Building

Otemachi Building

59

Environment 

TCFD 
Regarding the TCFD’s Recommendations 

Mitsubishi Estate has launched a nature-positive initiative in Minakami, located in Gunma
Prefecture, to halt the loss of local biodiversity and allow nature to recover. In February 2023, theCompany signed a 10-year partnership agreement with Minakami and the Nature Conservation
Society of Japan (NACS-J). This agreement is the first large-scale collaboration project in Japan totake advantage of the corporate furusato nozei tax rate (a tax system that supports regional revitalization), and Mitsubishi Estate will donate ¥0.6 billion to Minakami in support of environmental
Atsushi Nakajima, Executive Vice President ofand biodiversity conservation within the 10-year partnership period.
Mitsubishi Estate (left)
Major initiatives include restoring planted forests with deteriorating biodiversity back to natural
Kenichi Abe, Mayor of Minakami (center)
forests, conserving and restoring mountain villages and neighboring agricultural or forest areas,
Tomoko Shimura, Executive Director andSecretary General, the Nature Conservationand maintaining the sparse population of sika deer. While providing nature-based solutions
Society of Japan (right)
Photo taken February 2023
through these initiatives, we also hope to undertake quantitative evaluation of biodiversity conservation. Minakami, located near the source of the Tone River, which supplies water to the Kanto
region, Mitsubishi Estate, operating businesses centered on the Marunouchi area, which is served by the Tone River, and NACS-J, an
environmental NGO active across Japan with a high level of expertise in biodiversity conservation, will collaborate closely to realize anature-positive society while making use of their expertise as a municipality, company, and NGO, respectively.

In accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), we utilized the Carbon
Risk Real Estate Monitor (CRREM) methodology to identify transition risks and to analyze two scenarios, including the below 2ºC scenario, thereby assessing the future impact of climate change on the Mitsubishi Estate Group’s primary businesses. As follows, we havedisclosed an overview of the four themes of corporate governance, strategy, risk management, and metrics and targets set out undersaid recommendations, taking into consideration the analysis results. See below for details.



ENVIRONMENTTaking on Nature-Positive Activities in Minakami, Gunma Prefecture 

Please refer to the Mitsubishi Estate Group website for information on the TCFD. Information
Disclosure Based on TCFD Recommendations:
https://mec.disclosure.site/e/sustainability/activities/environment/tcfd/

Risk Analysis Using CRREM 
Overview of CRREM (Carbon Risk Real Estate Monitor)
CRREM is a tool developed by European research institutes and organizations to evaluate and analyze the transition risks faced bycommercial real estate properties. Using CRREM, it is possible to calculate the timing and percentage of stranded assets as well as thecost and associated implications of future emissions by comparing the greenhouse gas (GHG) emissions pathways up to 2050 thatmeet the 2°C and 1.5°C targets outlined by the Paris Agreement with the emissions pathway of a company’s properties. As a result,companies can consider countermeasures and their effects. Note that properties are liable to become “stranded assets” when the
decarbonization pathways in a company’s portfolio exceed the 2°C and 1.5°C pathways, thereby increasing transition risks.
Using CRREM to Analyze Mitsubishi Estate’s Transition Risk
We utilized the CRREM methodology to quantitatively assess the impact of future climate change on our businesses, particularly thetransition risk of the properties we own.

Sustainability (ESG) Section

An unmanaged planted forest

Regeneration felling and planting

Original natural forest region currently undergoing regeneration

Accelerating the Utilization of Sustainability-Linked Finance 
Based on the Sustainability Vision 2050-Linked Finance Framework formulated on March 30, 2023,
Mitsubishi Estate is working toward achieving the targets set out in the 2050 Net-Zero Declaration(in accordance with the SBTi Corporate Net-Zero Standard), as well as numerical targets such asincreasing the percentage of female managers, by issuing sustainability-linked bonds*1 and borrowing sustainability-linked loans.*2

Issuance of Mitsubishi Estate Sustainability-Linked Bonds
ESG Finance Awards Japan
Following on from Mitsubishi Estate’s first sustainability-linked bond issued on July 22, 2022
(amount raised: ¥60.0 billion), the Company issued its second sustainability-linked bond on May 2,2023 (amount raised: ¥60.0 billion).
The Company won a Gold Award in the Issuers/Borrowers category for its first bond at the Japanese Ministry of Environment’s
fourth ESG Finance Awards, receiving high praise for issuing ultra-long-term bonds that consider long-term business models, aligningsustainability performance targets (SPT) with the new Net-Zero Standard set by the SBTi, and for incorporating diversity and otherimportant perspectives.
Conclusion of Sustainability-Linked Loans with Financial Institutions
Mitsubishi Estate has concluded sustainability-linked loans with multiple financial institutions:
October 14, 2022, Norinchukin Bank (amount raised: ¥50.0 billion)
March 30, 2023, MUFG Bank (amount raised: ¥30.0 billion)

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

*1 Sustainability-linked bonds are bonds that may change financially and structurally in response to a company’s achievement of predefined sustainability goals.
*2 Sustainability-linked loans seek to promote and support environmentally and socially sustainable economic activity and economic growth by, in principle, setting sustainability performance targets(SPTs) linked to borrowers’ sustainability goals, linking loan terms such as interest rates to borrowers’ performance against SPTs and thereby providing incentives to achieve SPTs.

60[Reference] In June 2018, Mitsubishi Estate became the firstcomprehensive real estate company in Japan to issue
green bonds and since then it has raised ¥236.5
billion through sustainable finance.

Bond type

Financing amountJune 2018

Date of issue

Green bond (publicly offered bond)¥20.0 billion

May 2020

Sustainability-linked loan

¥11.5 billion

November 2021

Positive-impact finance¥5.0 billion

July 2022

Sustainability-linked bond¥60.0 billion

October 2022

Sustainability-linked loan

¥50.0 billion

March 2023

Sustainability-linked loan

¥30.0 billion

May 2023

Sustainability-linked bond¥60.0 billion[Scope of Analysis]	The analysis covers a total of 84 properties owned by the Company as of the end of FY2021, including office, retail,and logistics facilities, selected from properties subject to GRESB* reporting in 2022.
[Defining Case Parameters]	In addition to our existing decarbonization efforts, this case takes into account the strengthening of		Case 1 :energy-saving measures (air-conditioning, LEDs, etc.) and the introduction of green energy.
Supplementing case 1 with the introduction of renewable energy through electricity contracts with non		Case 2 :fossil-fuel energy certificates, this case assumes all properties have transitioned to renewable electricity by FY2025.
[Case Analysis Results]	Each case was compared with the emissions pathways for the 2°C and 1.5°C targets outlined by theParis Agreement. The results are as follows.
Despite strengthening energy-saving measures and introducing green energy, as well as contributing to		Case 1 :lowered grid emission factors, emission levels are expected to exceed the 1.5°C pathway around 2037.
Therefore, the initiatives taken in this case might not be sufficient.
There will be no emissions from electricity after FY2025 following the transition to renewable electricity.
		
Case 2 :However, as there are still likely to be emissions caused by district heating and cooling, as well as energy
generated from gas, it is possible that emission levels will exceed the 1.5°C pathway around 2047.

[Measures and Initiatives Based on Case Analysis (Including Opportunities)]
This case analysis is based on properties owned at the end of FY2021 and assumes there will be no change until 2050. However, in
reality, GHG emissions intensity is expected to improve due to the reconstruction of properties to ensure superior energy-saving performance, new property acquisitions, and so forth.
To achieve our goal of adopting 100% renewable energy by
GHG Intensity Pathway
全物件での再エネへのFY2025, we will further advance the use of electricity contracts(kg-CO e/m)
切替完了（2025 年）
100with non-fossil-fuel energy certificates, which we have thus far
Complete transition to
Point where emission levels
renewable energy forexceed 1.5ºC pathway inbeen promoting, and examine the introduction of corporate
all properties (2025)
case 1 (around 2037)
80
power purchase agreements (PPA), along with other contracts.
Point where emission levels
60
exceed 1.5ºC pathway in
In addition, we will strive to improve GHG emissions intensity
case 2 (around 2047)
40
and increase the rate of buildings with superior energy-saving
performance by aiming to achieve high environmental perfor20
mance in line with ZEB requirements for all new buildings to0
be developed.
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050
2

* GRESB (Global Real Estate Sustainability Benchmark) is a benchmark established mainly by agroup of European pension funds to assess the consideration given by real estate companies
and real estate investment institutions to the environment, society, and other areas.

2

1.5ºC pathway

2ºC pathway

Case 1Case 2For more information, please see our sustainability website homepage > Sustainability Activities (ESG) > Environment > Adopting
Sustainable Finance:
https://mec.disclosure.site/e/sustainability/activities/environment/sustainable-finance/

61Diversity & Inclusion 

Vision for Our Ideal Human Resources and Organization 
The Mitsubishi Estate Group promotes a wide range of businesses on a Groupwide basis, including the Commercial Property, Residential,
International, and Investment Management businesses.
The Group believes it needs human resources who can fulfill the two roles of Change Makers and Professionals while possessing
the five traits it requires of them to achieve further business expansion. The Group also adopted the slogan of “as one team” to reflect
its vision of the ideal organization, one that harnesses the strengths of each and every employee.

Sustainability (ESG) Section

Organizational Vision

Change Maker

1

People with Vision

Professional

Human resources who create new value using their specialist expertise

As One TeamAn organization that maximizes value by combining the strengths of each of its employees

Definition

Desired strengths

Measures

People who can visualize what theywant to achieve and have the determination and dynamism to do so

The ability to create andpromote their vision
with determination andcourageImplementation of job-level-specific training
on the topic of visionIntroduction of a support system for employees to obtain qualifications relevant to theirrespective business domains

2P eople with Frontline
Capabilities and the Required
Skill Sets for Their Role

People who develop their skills andknowledge as a professional in boththeir field of specialization and the realestate industry and who have the ability to drive business forward

The ability to makesound judgments, becustomer-oriented, anddrive business forward
while also being productive and possessing risk
management skills aswell as professionallevel skills andknowledge

3

People with Integrity

People with high ethical standards,
who act with integrity and fairness, andwho build good relationships withthose around them

Open-mindedness andhigh ethical standards

 olding of Groupwide compliance trainingH
for new employees, recently promoted
employees, and new mid-career hires

4P eople with Team-Building
SkillsPeople capable of carrying out humanresource development and management in order to increase the competitiveness of the organization

The ability to nurturetalent, work as part of ateam, and deploy management skills

 rrangement of one-on-one meetings toAimprove the quality and volume of communication within the organization

5P eople with a Passion for
Taking On Challenges andInnovation

People who are not bound by precedentor convention and who have the spirit
to take on challenges and act without
fear of failure

Challenge-oriented andinnovative

 ew Business Proposal System
NSecondary Job Program10% Rule System
Job-level-specific training on the topic oftaking on challenges and innovation

Initiatives Related to People with a Passion for Taking On Challenges and Innovation 

People with Vision

People with Frontline
Capabilities and theRequired Skill Sets for
Their Role

People with Integrity

Among the five traits, we particularly focus on initiatives related to people with a passion for taking on challenges and innovation.
People with Team-Building
SkillsPeople with a Passion for
Taking On Challenges andInnovation

Distinguishing features of the Group’s businesses and the human resources it requires
1 Long-Term View of Urban Development

2 New Value Creation Unbound by Existing Frameworks

Distinguishing Features of the Group’s Businesses and the Human Resources It Requires 
1
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Five traits

Human resources who take on challenges and spur innovation by leveraging our long-term
perspective and forward-looking DNA to augment each other’s strengths through collaborations

Five foundational Traits

62

The Mitsubishi Estate Group has defined the human resources it requires as people who possess the five traits outlined below.
Although our employees fulfill a diverse range of roles according to business conditions and their own career aspirations, possessionof the five traits is a requirement for all employees. As a result, we take measures emphasizing these five traits in our recruitment anddevelopment of employees.

All employees fulfill the roles of Change
Makers and Professionals (the weight given
to the roles of employees varies according
to respective position, duties,
and experience.).

Creating Value as the
Mitsubishi Estate Group

Roles Required ofIndividuals

Five Traits 

DIVERSITY & INCLUSION

The Mitsubishi Estate Group believes human resources are an important asset for realizing Long-Term Management Plan 2030 andcreating new value for society. In addition, the Group formulates the vision for its human resources and organization based on the distinguishing features of its business model and its future business policies.

Long-term view of urban development 

Implementing urban development under a long-term perspective looking several decades ahead, the Mitsubishi Estate Group has built
a long-term business model encompassing everything from land acquisition to development, management, and other activities.
A distinguishing feature of the Group’s urban development is that each and every employee cooperates with a diverse array of
stakeholders in a broad range of business process areas. For this reason, the Group requires human resources with expertise on its
business processes as a whole who are able to manage relationships with stakeholders.
2

New value creation unbound by existing frameworks Long-Term Management Plan 2030 calls for the Company to work to create new value by proactively promoting its international asset and nonasset businesses as well as its domestic asset business. Achieving this goal requires human resources who can create value in new domains.

New Business Proposal System—Mitsubishi Estate Group Innovation Challenge (MEIC)
Through the New Business Proposal System, launched in 2009, we have extensively sought businessproposals and ideas from employees. The system has realized new initiatives that have helped diversify the Group’s sources of earnings and strengthen its core business, such as GYMM, a pay-as-you-go
gym, and Ecofurni, a business reselling used office furniture.
In 2021, in light of a rapidly changing business environment, we expanded the scope of this system to encompass Group companies and launched a new program, the Mitsubishi Estate Group Innovation Challenge (MEIC), in order to further promote this system.
We will continue striving to strengthen systems for encouraging employees to take on challenges with the aim of spurring
Groupwide innovation.
The 10% Rule System
We have introduced a system that seeks to have employees dedicate
10% of business hours to activities promoting business model innovation, or activities improving operational efficiency and transforming
our corporate culture that contribute to such innovation. The content
of the activities is included in assessments of human resources.
Employees are free to choose how they use their time and are
currently working on a wide range of topics, such as developing measures to improve efficiency in their daily work, building networks withexternal parties, and preparing applications for the New Business
Proposal System.
An internal survey found almost 70% of employees were engaged
in business model innovation through such initiatives. We aim toincrease that percentage further.

Percentage of Employees Engaging in Business Model Innovation
(%)
100

80

80

69.5

68.4

70

FY2021(result)

FY2022(result)

FY2023(target)

60
40
20
0

FY2030(target)63

Diversity & Inclusion 
Measures to Develop Change Makers and Professionals / Groupwide Interactions among Human Resources

Change Makers: Human resources who augment each other’s strengths through collaboration by leveraging
our long-term perspective and forward-looking DNA
A distinguishing feature of the Mitsubishi Estate Group’s business model is the creation of new value through collaboration with a vastinternal and external network in urban development, which is a long-term business activity.
The Group requires employees to have the spirit to take on challenges without being bound by precedent, so that they can identify
issues from fresh perspectives and augment each other’s strengths through collaboration by using internal and external networks
while leveraging the Group’s strengths of a long-term perspective and forward-looking DNA.

Measure 1 : Establishing the Collaborative Creation Sales Department (April 2022)
Matching support by the Collaborative Creation Sales Department
In April 2022, we established the Collaborative Creation Sales Department as an organization to create new value by matching the Mitsubishi Estate Group with competitive content
Mitsubishi Estate
External partner
partners who anticipate the needs of the times. The department builds a content-driven
Groupcompanies
database and collects information extensively from Group employees, while also sharing
and publicizing information. As a result, the department has steadily established a trackrecord on a variety of topics, including pets, leisure, art, the environment, and industry–
Creation of new businesses
academia collaborations.

Sustainability (ESG) Section

Measure 2 : Drive Information
Mitsubishi Estate has created an information platform that Group companies can also join toaccelerate (drive) the promotion of businesses through access to information. Using the platform, employees communicate information internally and externally of their own accord.
Regularly held PLAZA events, to which external guests are invited, contribute to the construction of networks, the development of fresh perspectives, and other innovations.

Achieve further business growth byrefining strengths

Recruit and develop human resources
who contribute to steady businessgrowth and strengthen expertise invarious domains

Personnel strategies related
to Professionals

Proactively recruit specialist
human resources for businessdomains to be strategicallystrengthened
Ensure the appropriate deployment, training, etc., of specialist
human resourcesImplement departmental training
to enhance expertise levels

International Asset Business

Non-Asset Business

Expand into growth markets

Take on new challenges in anticipationof changes in the environment andthe new era

Recruit and train global humanresources
Recruit graduates of overseas universities and non-Japanese humanresources
Carry out Company-sponsoredoverseas study program
Hold overseas training program

As One Team: maximizing organizational value by connecting and combining individual strengths 
The Mitsubishi Estate Group recognizes that accommodating diverse human resources and workstyles is crucial to managing andoperating its businesses. The Group therefore aims to maintain a well-balanced composition of employees in terms of nationality,
gender, age, career stage (graduate recruits and mid-career recruits), and other characteristics.
In particular, Mitsubishi Estate focuses on ensuring diversity in its recruitment through a range of initiatives, such as setting a target
for female employees to account for more than 40% of its workforce every year, introducing a recruitment process for non-Japanesehuman resources in its graduate recruitment, and strengthening recruitment of mid-career hires (mid-career hires account for approximately 40% of new recruits in the average year).
We also encourage a diversity of opinions to create an environment where employees can freely express their diverse values andviews with peace of mind. In this way, the Group aims to achieve ongoing growth by creating a vibrant workplace.

ԣՆԱՊԵՀӨԢՉՇՈԱԺՂԱԲՀՍӪ～ԌՍӨԣՆԱՊԵՀӨԚԵԴԺԱӨԏԴԺՈՃՆՇ
ԝԵՋӨՋԱՍՇӨՈՃӨՈՆԱՊԵՀӨԺՂӨՈԸԵӨԶՉՈՉՆԵӨԱՂԴӨՋԸԱՈӨԺՈӨՈԱԽԵՇӨՈՃӨԲԵӨԳԸՃՇԵՂ～In addition to steadily advancing large-scale developments in Japan, Mitsubishi Estate recognizes it must strengthen its International
Business, expand its non-asset business, and advance into the services and content domain, while enabling human resources withspecialist expertise in various domains to accelerate the development of businesses to create value to achieve Long-Term Management
Plan 2030. Based on this view, the Company has improved its recruitment of specialist human resources in various domains andinvested proactively in training programs to help all employees acquire and strengthen the expertise they require.

Business strategies

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

ԟԙԋԩԋ ԏՊԵՂՈ

Professionals: Human resources who create new value using their ­specialist expertise Domestic Asset Business

64

Please refer to our website for details.
https://www.mec.co.jp/en/service/collaborative/

In the Mitsubishi Estate Group, Group companies with employees who have a strong awareness of their role as Professionals are
responsible for various specialist domains, including the Residential Business, businesses for operating and managing buildings, andthe design, real estate brokerage, and Investment Management businesses.
In addition, the Group implements initiatives to broaden the two roles of Professionals and Change Makers through Groupwide interactions among human resources, such as secondments from Mitsubishi Estate to Group companies to broaden the role ofProfessionals and secondments from Group companies to Mitsubishi Estate to broaden the role of Change Makers.
The Group also encourages communication across organizational lines in various other ways, including through joint training sessions
for newly hired employees of the Mitsubishi Estate Group (with the participation of over 20 companies) and through Takanawa House, aGroup dormitory for young, unmarried employees who have been with the Group less than three years (used by eight companies).

DIVERSITY & INCLUSION

Vision for Our Ideal Human Resources and Organization 

Recruit and develop specialist humanresources for the IT and robotics
domain and the digital transformation(DX) domain
Proactively recruit humanresources who are specialists inthe DX domain
Establish a digital specialist category (beginning in FY2024) to properly assess specialist humanresources in the DX domainImplement DX training for all
employees

Competency Development Program
Competency development program providing support for employees by subsidizing the cost of external training andcourses chosen by them(Training and courses on a total of 21 topics, including foreign languages, the DX domain, the SDGs domain, and liberal arts)
Note: The program subsidizes up to ¥300,000 per employee in costs annually.

Diversity of Opinions

The Group’s vision for having diversity of opinions entails creating and maintaining an environment where all employees, regardless ofduty, job title, employment status, gender, age, or other attributes, can freely express their views with peace of mind and have themtaken into account. In addition to harnessing the strengths of all employees, the Group believes such an environment enables it tomake appropriate value judgments as a company, which in turn helps improve corporate value. The Group has also promoted awareness of and created a culture conducive to having a diversity of opinions by distributing more than 300 posters with a QR code that
employees can scan to read an outline of the idea behind having diversity of opinions for displaying in various meeting rooms andother locations.

In conjunction with these efforts, we have established a range of programs, such as the flextime program and childcare leave ofabsence, to comprehensively enhance work and everyday life to a point where they become a single entity (work–life integration), without creating barriers between the two.
Below is a list of Mitsubishi Estate’s various programs, benefits, and initiatives related to the promotion of employees’ health and work–life
integration.
Name of Program

Flextime program

Overview of Program (Excerpt)In principle, eligible employees can on prescribed working days work between 6.00 a.m. and 8.00 p.m.
Note: The Company officially abolished core working hours (the period when employees are required to attend work) in April 2023.

Childcare leave of absence

Can be used until the end of the fiscal year in which a child turns three years old(14 days of paid leave from the day on which childcare leave starts)

Nursing care leave of absence

Can be used for a maximum of three years (can be divided into shorter durations up to three times)

Nursing care leave of absence
for children

Can be used until the end of March after a child begins third grade of elementary school
Can be used as a special paid leave of absence until a child enters elementary school

Nursing care leave of absence
for family members

Can be used as a special paid leave of absence

Shortened working hours forchildcare

Can be used until the end of March after a child begins third grade of elementary school
Possible to shorten daily working hours by up to 2.5 hours in increments of 15 minutes

Shortened working hours fornursing care

Can be used within three years of the start of use for each eligible person in a family
Possible to shorten daily working hours by up to 2.5 hours in increments of 15 minutes

Reemployment program forformer employees

Can be used following a specific interview when an employee resigns due to childcare reasons,nursing care for family members, changing jobs, or starting a business

Leave system for the transfer ofa spouse or partner

Possible to take up to three years’ leave for accompanying a spouse or partner on a relatively shorttransfer (overseas traineeship / study of approximately one to two years)

Note: The legally stipulated period in Japan is until a child’s first birthday as a general rule (or until a child turns two years’ old as a maximum in
special circumstances).

For details on programs related to work–life integration, please refer to our website.
https://mec.disclosure.site/e/sustainability/activities/social/diversity/

65Diversity & Inclusion 
Using Sustainably Sourced Timber for Concrete Form Panels 

On April 1, 2022, the Group established the Mitsubishi Estate Group Supplier Code of Conduct, which stipulates items that must be
observed in the business activities of the Group to achieve its goal of creating a sustainable and truly meaningful society as humanrights and labor issues as well as climate change and other issues grow more serious.
The Group stipulates compliance with the Supplier Code of Conduct in quotation specifications and conducts surveys via a questionnaire to verify the status of compliance for the construction and cleaning sectors, which it has deemed to have a marked tendency
toward causing high sustainability risks* in the supply chain. The Group surveys not only tier-one suppliers (direct business partners)
but also tier-two suppliers and below (contractors used by business partners) to identify latent risks. Based on the survey results, werequest suppliers deemed to face such risks implement improvement initiatives.

Many of the concrete form panels*1 used when constructing office buildings, housing, andother structures are made from timber from Southeast Asian countries such as Malaysia
and Indonesia. Nongovernmental organizations and other bodies have pointed out that the
procurement of logged timber may be done via illegal means, such as through the seizureof indigenous peoples’ land and the destruction of the environment. Taking into consideration human rights and environmental preservation, the Mitsubishi Estate Group uses
timber equivalent to that specified in the Sustainable Sourcing Code*2 (Certified Wood andDomestically Produced Wood), aiming to achieve a use rate of 100% by FY2030.

FY2022 Initiatives *1 Plywood for the concrete formwork employed in the construction of buildings. Plywood is used to assemble the formwork, into whichconcrete is poured to construct concrete buildings.
*2 The code defines standards and operational procedures for ensuring procurement that takes sustainability into account with respect
to international agreements and codes of conduct in fields relevant to sustainability.

In FY2022, we conducted surveys using a questionnaire of 60 companies in total—43 construction companies and 17 cleaning companies—including tier-two contractors and below. After conducting the surveys of construction companies, we interviewed workers at
supplier companies to properly understand the status of sustainability promotion among suppliers. Beginning in FY2023, we plan tostart interviews at cleaning companies. After gaining an understanding of the actual conditions of suppliers, we will examine measures
for addressing issues and strengthen our supply chain management.
* Criteria for identifying suppliers with a marked tendency toward causing high sustainability risks
1 The supplier is likely to employ workers who can be in a vulnerable position, such as foreign workers or foreign technical interns
2 The impact on the environment is significant
3 The supplier’s multi-level contracting structure makes it difficult to understand and identify risks in certain cases

Sustainability (ESG) Section

Assessment of Human Rights and Environmental Risks Associated with Construction Materials 
In FY2022, Mitsubishi Estate assessed human rights and environmental risks associated with each of the construction materials usedat its construction sites. Identifying the materials used in each of more than 20 varieties of construction materials with the highest
weight ratios used at our construction sites, we checked the principal places of production and importing countries of 18 staple materials
and determined related human rights and environmental risks. We plan to examine countermeasures regarding construction material
risks to focus on in the future.

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Formwork concrete panel use

Well-Being Initiatives 
The Marunouchi Infirmary was created based on input from working women. Helping
address health issues that specifically affect the physical and mental well-being of
women, including pre-menstrual stress, pregnancy, childbirth, and menopause, the infirmary conducts activities to enhance health literacy to increase understanding in theworkplace and among women and provide health support.
Through these activities, Mitsubishi Estate will promote well-being in its urban development, not only by itself but together with other companies that endorse its efforts, torealize a women-friendly work environment and culture so as to expand choices forworking women at various life stages.
A large-scale, hands-on wellness event(Marunouchi Building, first floor, Maru Cube)

Assessment of Human Rights Risks Associated with Technology 
The Company has set out the Mitsubishi Estate Digital Vision, which aims to promote new urban development that allows people toexperience convenient living environments through digital transformation (DX).
In FY2022, we identified and assessed the actual and potential impact on human rights of services and products related to technology for realizing our vision based on a human rights assessment process to promote business activities with consideration for humanrights. We will explore appropriate countermeasures for preventing and mitigating human rights risks.

Launching and Holding the Construction and Real Estate Human Rights Due Diligence Promotion
Council* 

66

DIVERSITY & INCLUSION

Supply Chain Management Initiatives 

Industry-, academia-, and healthcare-focused wellness-at-workseminar for employees in charge of personnel and healthand productivity management

Creating opportunities for health checkups in cooperation
with women-only clinics in the Marunouchi area

Acting as the organizer, Mitsubishi Estate launched the Construction and Real Estate
Human Rights Due Diligence Study Group in September 2018 with the participation ofeight real estate and construction companies. The United Nations Guiding Principles on
Human Rights call on companies to avoid causing and exacerbating direct negative
impacts on human rights as well as to endeavor to avoid and mitigate any adverse
impacts on human rights with which they are indirectly involved in all facets of their business, including in their value chains. In light of this call, Mitsubishi Estate established thestudy group in collaboration with other companies in the real estate industry and withconstruction companies, with the aim of developing mechanisms to ensure human rights
due diligence that also encompasses the supply chain.
The study group identifies impacts on human rights arising from business activities
and investigates and researches methods for addressing such impacts in order to fulfill
the responsibilities called for by the United Nations Guiding Principles on Human Rights.
Specifically, these responsibilities are to avoid infringing on the human rights of others
and to devise measures to prevent, mitigate, and correct human rights violations withwhich study group participant companies are involved.

Examples of Initiatives: 1 Supporting Better Health Literacy in the Marunouchi Area * Name changed from Human Rights Due Diligence Study Group to Human Rights Due Diligence Promotion Council in April 2023

Mitsubishi Estate has appointed the director in charge of human resources as the health management promotion officer to promotehealth and productivity management, which the Company tackles strategically from a business perspective of managing the health of its
employees. We have formulated Health Management 2030, under which we have set KPIs for 2030 on the percentage of employees in
the high-risk group for metabolic syndrome, the percentage of employees in the healthy group, the cancer screening rate, and employees with high levels of stress. By promoting various measures in relation to these KPIs, we aim to improve the health of employees.

The Online Marunouchi Infirmary holds online seminars for men and women to learn about women’s healthcare and related matters topromote mutual understanding. It has also established a contact point for consultations and counseling. In these ways, the Online
Marunouchi Infirmary extensively promotes health support through Marunouchi-based companies and for general visitors to the area.

Examples of Initiatives: 2 Visualizing Working Women’s Health Issues Faced by Companies 
Working Women’s Health Scores* is a measure using data to visualize women’s health, working environments, and other conditions by
14 companies centered on the Marunouchi area in cooperation with Femmes Medicaux, which offers consulting on women’s healthcare, including on addressing the health issues of modern women, and Mitsubishi Estate.
Mitsubishi Estate and Femmes Medicaux plan to extensively promote a service identifying issues based on the health scores of women,
which will use the scores to highlight issues faced by working women at participating companies and propose solutions to the issues.
* With the cooperation of Kanagawa University of Human Services, we developed survey categories based on an epidemiological survey. Approximately 3,400 women responded to the survey through thepersonnel departments of the 14 companies.

Promoting Health and Productivity Management 67

Resilience Target and Initiative Policies 

Target and Initiative Policies 

Under Long-Term Management Plan 2030, the Mitsubishi Estate Group positions new businesses, such as those utilizing artificial intelligence, robotics, and other new technologies, as new fields for non-asset businesses. Going forward, we will work to create new business models and opportunities in these fields while coordinating with outside partners. Such coordination with outside partners
boasting new and advanced technologies will be imperative to the realization of a sustainable society. For this reason, we plan topursue initiatives that go beyond the boundaries of companies.

Improving the natural disaster resilience of real estate properties is crucial to ensuring the safety of visitors and workers as well as forguaranteeing the safety of the surrounding areas and the business continuity of tenants. In addition to earthquakes, we must prepare
for potential increases in the frequency and intensity of urban flooding as a result of climate change. The resilience of buildings willthus become even more important going forward. Accordingly, Mitsubishi Estate is implementing earthquake and water damage countermeasures and developing systems for stable power supply on an individual-building basis. We are also instituting non-infrastructure
measures for providing environments that facilitate business continuity even during times of disaster and for establishing schemes for
temporarily housing people who cannot return home because of a disaster. Furthermore, the Company is enhancing systems for thecomprehensive operation of multiple buildings and for intra-area coordination. In this manner, we aim to contribute to safer and moresecure cities.

Offering Enriched Lifestyles by Interconnecting Smart Home Services Capitalizing on its knowledge as a comprehensive developer, Mitsubishi Estate developed HOMETACT,* a smart home service that canbe readily incorporated into Japanese homes, and installed it at The Parkhabio, Mitsubishi Estate Residence’s rental apartment series.
The Company also offers the service to external parties.
Connecting HOMETACT with smart locks and facial recognition systems enables us to strengthen functions for promoting the digitaltransformation (DX) of real estate management, such as unaccompanied inspections and drop-off deliveries. Under an agreement tocollaborate in energy management with LIXIL Corporation and mui Lab, Inc., we are also jointly promoting the development of homeenergy management system functions that help reduce CO2 emissions. In addition to significantly broadening the range of connectablehousing equipment, the collaboration will improve awareness of electricity saving amongusers and support environmentally conscious lifestyles by developing an interface thatallows people to understand household energy consumption intuitively. This ecosystem,
created in cooperation with more than 20 companies, is expanding continuously.
* A smart home service using a smartphone app or smart speaker to control a wide range of Internet of Things (IoT) devices of multiple manufacturers, such as air-conditioning, televisions, lighting, and curtains

Sustainability (ESG) Section

Strengthening Industry–Academia Collaboration to Address a Diverse Array of Social Issues Mitsubishi Estate is strengthening industry–academia collaboration to address multilayered social issues. In October 2022, we concluded a decade-long industry–academia agreement with Tokyo University, resulting in the launch of the MEC-UTokyo-Lab. Defining thearea from Tokyo University’s principal base in Hongo to Otemachi, Marunouchi, and Yurakucho, where Mitsubishi Estate promotes
urban development, as the “Honmaru” area, we are advancing joint research, field trials, and collaborations with start-ups in the area.
In December 2022, we concluded a comprehensive partnership agreement with Tokyo University of the Arts. By enhancing the creativity of companies and individuals in the Otemachi, Marunouchi, and Yurakucho areas through the power of art, we will facilitate thecreation of business ideas and new industries.
～ 地球と人類社会の豊かな未来へ～ Hitotsubashi University in March 2023 on creating value for spaces in a
In addition, we entered into a joint
research contract with
data-driven society. With this,『三菱地所東大ラボ』が始動
we will help resolve social issues through open innovation by strengthening cooperation with the faculty
and graduate school of social data複層する社会課題の解決に向けて、
science, established in FY2023.
本丸エリアから東京・日本の未来を創造します

柏キャンパス

東京大学
本郷キャンパス

Research and implementation of nextgeneration urban development focused on
post-COVID-19 society

Creation of an ecosystem to accelerate thegrowth of start-ups

東京藝術大学本丸エリア
東京医科歯科大学

INNOVATION / RESILIENCE

Innovation 

Area Disaster Preparedness Initiative: Verification Tests of Disaster Dashboard Beta+ 
Mitsubishi Estate continuously takes steps in preparation for a potential disaster in the Marunouchi area (Otemachi, Marunouchi, andYurakucho). Between December 2022 and February 2023, the Company implemented verification tests of Disaster Dashboard Beta+,
a platform for sharing information among disaster-response agencies and providing information to stranded commuters throughpublic–private cooperation with Chiyoda Ward.
For these tests, we made a prototype of a digital map displaying the locations of evacuation areas, buildings designated as shelters
for stranded commuters, and a disaster hub hospital. Certain facilities in Chiyoda Ward and other entities would share information
under a scenario that would provide information during a disaster to stranded commuters
through a QR code available inside train stations and other locations. Along with the digital
signage and website versions of the map, we are building the forthcoming disaster dashboard with Chiyoda Ward. We also conducted verification tests with Chiyoda Ward to checkthe usefulness of a system for collecting, arranging, and streaming a live-camera feed
during a disaster. In these ways, we continuously contribute to the promotion of safety andsecurity, which includes establishing the functions of next-generation disaster preparedness centers to cope with an inland earthquake and other disasters in Tokyo and fulfilling
Example of a verification test streaming a live-camera feed
the functions of a smart city.

Strengthening Systems for Local Disaster Preparedness and Mutual Assistance in Preparation fora Major Disaster Given the absence of management associations or disaster preparedness plans at its rental apartments, Mitsubishi Estate ResidenceCo., Ltd., proposed disaster preparedness initiatives at The Parkhabio Nakano Fujimicho Garden. Mitsubishi Estate Residence provides
support through infrastructure and non-infrastructure measures, including the creation of a First Mission Box®
containing an instruction card to ensure residents act quickly and confidently during a disaster and the installation of a system for storing and using surplus electricity generated using solar power generators.
In addition, in February 2023, Mitsubishi Estate Residence and Mitsubishi Estate Community Co., Ltd., conducted the first joint disaster-prevention drills at the two residences that comprise The Park House Harumi
Towers in cooperation with the management association and residents’ association. We will promote disasterresilient urban development by strengthening systems for local disaster preparedness and mutual assistance.
Disaster prevention drill

Hitotsubashi University’s East Main Building (a registered tangible cultural asset),
which is due for renovation into an incubation and exchange hub
Development of humanresources to shape the future

Strengthening of smart cities

丸の内
エリア

本郷から丸の内エリアを『本丸エリア』と位置づけ

Overview of industry–academia
collaboration with Tokyo University
ハードソフト両面でのイノベーションを加速し、国内外の人企業とつながるエコシステムを形成します。

駒場キャンパス

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Supporting the Creation of Communities for Spurring Innovation in the Marunouchi Area 

68

Mitsubishi Estate is bolstering initiatives to spur open innovation in the Marunouchi area
(Otemachi, Marunouchi, and Yurakucho). The M Cube, operated by Mitsubishi Estate, is an
open innovation community with a focus on start-ups. With EGG, formerly named EGG JAPAN,
an innovation hub in the Shin-Marunouchi Building acting as its base, the M Cube supportsbusiness development by offering a place for companies to meet through events andactivities. Together with the Tokyo Marunouchi Innovation Platform, which is operated by
the Association for Creating Sustainability in Urban Development of the Otemachi,
Marunouchi, and Yurakucho Districts (the Ecozzeria Association), the M Cube has launched
MiiTs, a community creating opportunities for collaboration among major companies andstart-ups. In these ways, the M Cube aims to spur innovation by consolidating know-how
on new technologies while leveraging the networks and assets it has accumulated.

Conducting Verification Tests for a Rain Garden, Green Infrastructure on
Marunouchi Naka-dori Avenue 
Mitsubishi Estate conducted verification tests for a rain garden in a portion of roadside greenbelts on Marunouchi Naka-dori Avenue
over a six-month period from May 2022 to October 2022 as a green infrastructure initiative for the Marunouchi area (Otemachi,
Marunouchi, and Yurakucho). We simultaneously conducted research on six issues, including permeability, water-retention capacity, thegrowth conditions of plants, and the effect of landscaping, to examine the possibility of establishing a rain garden in the area. As aresult, we confirmed a rain garden could be expected to be effective in various ways, such as minimizing road flooding during torrential
rainfall, with the rain garden’s greenbelts temporarily storing rainwater to delay it flowing into drainpipes. Following discussions withthe relevant parties, we decided to leave the rain garden in place after the tests were completed. We intend to ensure it also helps the area prepare for and minimize damage fromnatural disasters and mitigate the urban heat-island phenomenon.

EGG
Roadside greenbelts

69

Realizing Sustainable Actions in the Otemachi, Marunouchi, and Yurakucho Areas
In FY2022, the project carried out 63 actions through partnerships with 84 organizations—involving the participation of a total of
16,168 people—during its core seven-month period from May 2022 to November 2022.

ACT

1

TOPIC

Examples of Actions in FY2022 

Sustainable Food

“SUSTABLE” 2022—Food Seminars to Change the Future

OMY SDGs ACT5 
Based in the area in front of Tokyo Station and the Otemachi, Marunouchi, and Yurakucho areas (Daimaruyu area), OMY SDGs
ACT5 was launched in 2020 as a project to promote activities for achieving the Sustainable Development Goals (SDGs) throughcoordination among companies and organizations both inside and outside the Daimaruyu area. With an executive committee
comprising Mitsubishi Estate, a comprehensive developer, The Norinchukin Bank, a financial institution providing support forregional primary producers, and Nikkei Inc., Japan’s leading economic media outlet, the project aims to give rise to specific sustainable actions by consolidating the various resources of each of its participant companies.

In FY2022, OMY SDGs ACT5 again held “SUSTABLE,” (a portmanteau of the words “sustainable” and “table”) a food-sampling seminar launched in FY2021 with the aim of popularizing dishes made with sustainability in mind. Using TOKYO TORCH Tokiwabashi Tower as avenue for the second consecutive year, SUSTABLE outlined various food issues and showcased sustainable food that provides solutions to such issues over the course of six seminars. By giving a platform to chefs, who are food users, together with producers andconsumers, the seminars encouraged participants to go beyond learning and change
their own behavior by reflecting on the future of food from multiple perspectives.

Distinctive Features

ACT

2

Participants at the third SUSTABLE 2022 seminar, which
was on land-based farming of marine products for supporting the future

Environment

Sustainability (ESG) Section

Re;POST Clothing Collection Project

1

2

3

Forming Communities

Connecting Resources

Utilizing an App

Cooperating by transcending their individual corporate boundaries, companies
based in the Daimaruyu area have formed
communities oriented toward solving social
issues, with the Daimaruyu area as theirstarting point.

By connecting their respective resources
organically, participating companies havemade progress in exploring and establishing projects on a wide range of themes thatthey would not be able to tackle individually.

The OMY SDGs ACT5 project facilitateschanges in the behavior of visitors andworkers by setting an app as the foundation for all of its activities. The project aims
to accelerate the formation of communities
and the connection of resources throughthe analysis of data obtained from the app.

The Re;POST project set up postbox-shaped receptacles in 13 locations in the Daimaruyu
area to collect unwanted clothing from area visitors and workers. The clothing donated by atotal of more than 2,500 people weighed approximately 1,350 kg. By minimizing the incineration of clothing and emphasizing its reuse rather than recycling as materials, the project
facilitates resource recycling with a low environmental impact. With approximately 88% of
the clothing collected reused in Japan and overseas, the project prevented approximately
1,000 kg of CO2 emissions that would have been generated through incineration.

ACT

Charity Walking—Facilitating Charity Donations While Promoting Health throughWalking

Focus Themes

Utilizing the step-counting function on the ACT5 Member Point App, OMY SDGs ACT5 held
an ongoing initiative during the core period from May to November that allowed users toearn points for walking more than 8,000 steps a day. The points are donated to seven organizations engaged in activities to achieve the SDGs. The initiative also held a walking contest in October for a limited two-week period, helping improve the health of participantsand encourage donations.

Sustainable Food

Establishment ofFive Themes

Environment

Well-Being of People and Society

Communication

ACT

The project’s executive committee has chosen key focus themes from among the wide range of themes included in the SDGs.

Developing the ACT5 Member Point App 
The project has developed the ACT5 Member Point App with the goals of encouraging changes in the behavior of individuals andanalyzing the attributes and tendencies of participants. With the cooperation of many stores in the Daimaruyu area, the app has
created opportunities for participation in actions related to the SDGs throughout the area in several ways, such as granting points
for recycling used clothes or using their own drink receptacles.

ACT5 Member Point App
Participate to accrue points!
Use accrued points productively!

ACT5 Member Point App

Take action

Get points

Participate in
SDGs activities
at cooperating
stores, etc.

App users
receive points
in accordancewith theirdegree ofparticipation in
activities.

Use accrued points productively

Get special
benefits

Exchange for
SDGs benefits,etc.

5Communication

Daimaruyu Film Festival 2022—Showing Feature-Length Films with Themes
Relevant to the SDGs

Contribute to the SDGs through the ACT5 Member Point App
Participate to accrue points

Diversity and Inclusion

E&J Lab is an ally community advancing D&I initiatives and is where anyone can think about
the future of diversity while having fun. In FY2022, it again heard from a diverse range of interested parties and other guests, strengthening understanding of D&I through interaction.
FY2022 also saw the launch of a D&I research community for those in charge of personnel matters and D&I, which provided opportunities
for such individuals to collect information for promoting D&I at their own companies and readily consult with others. With many individuals
from companies centered on the Daimaruyu area taking part to share cutting-edge case studies, the community received a favorable
response for creating opportunities for those responsible for personnel matters and D&I at different companies to interact with each other.

ACT

The actions of
all participants
create a brighter
future.

4

Enjoy & Join (E&J)—a Diversity and Inclusion (D&I) Research Community for
Those in Charge of Personnel Matters and D&I

DL the App now!
(Japanese only)

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Well-Being (Note: Name changed to Well-Being of People and Society in FY2023)

Five Focus Themes and Respective Actions 

Diversity and Inclusion

70

3

or

or
Exchange

DonateExchange forpoints that canbe used for
shopping in
Marunouchi

Donate toorganizations
promoting the
SDGs

Daimaruyu Film Festival 2022, celebrating its third year, held 10 screenings (nine of which
included discussion events) over a period of approximately three weeks from August 30 to
September 22.
In light of the current Russia–Ukraine situation the festival selected two movies focusedon the refugee issue. In addition to receiving support from the Japan Association for theUnited Nations High Commissioner for Refugees (UNHCR), MIYAVI, a UNHCR goodwill ambassador, and Tomoko Nagano, its media
director, attended the festival’s opening movie, Sonita, as discussion guests.
Filled with many new elements, including the showing of the first outdoor screening at TOKYO TORCH Park and closing of the festival at the Tokyo International Forum, which became a member of the executive committee in FY2022, the festival’s 10 screenings
provided opportunities for around 700 people to take an interest in the SDGs.

71

Corporate Governance

SASB

Message from the Chairperson of the Board

Notes
We are classified in the Real Estate industry under the infrastructure sector according to SICS®, so we disclose the following
information based on the standards for this industry.
Sustainability Disclosure Topics and Accounting Metrics (FY2022)
Energy Management
UNIT OF MEASURE

CODE
Environmental data>(2) Other>Basic Data on Target Properties
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_1

Energy consumption data coverage as a percentage of total
floor area, by property subsector

Percentage (%) byfloor area

Total energy consumed by portfolio area with data coverage, percentage grid electricity, and percentage renewable,
by property subsector

MWh, %

IF-RE-130a.2

Like-for-like percentage change in energy consumption forthe portfolio area with data coverage%

IF-RE-130a.3

Environmental data>(2) Other>1. Climate Change (GHG Reduction and Energy Management)
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_2

Percentage of eligible portfolio that has an energy rating
and is certified to ENERGY STAR, by property subsector

Percentage (%) byfloor area

IF-RE-130a.4

Environmental data>(2) Other>5. Green Building Certification
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_6

UNIT OF MEASURE

CODE

n/a

IF-RE-130a.5

Description of how building energy management considerations are integrated into property investment analysis andoperational strategy

IF-RE-130a.1 Environmental data>(2) Other>1. Climate Change (GHG Reduction and Energy Management)>GHG Emissions, Energy Use, and Other Data by Type of Property
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_2_3
Environmental data>(1) KPI>1. Climate Change (GHG Emissions and Energy Use)
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_1_1
Environmental data>(2) Other>1. Climate Change (GHG Reduction and Energy Management)
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_2

Environment>Climate Change Strategies
https://mec.disclosure.site/e/sustainability/activities/environment/climate-change/

UNIT OF MEASURE

CODE

Water withdrawal data coverage as a percentage of total
floor area and floor area in regions with High or ExtremelyHigh Baseline Water Stress, by property subsector

Percentage (%) byfloor area

IF-RE-140a.1

Total water withdrawn by portfolio area with data coverageand percentage in regions with High or Extremely HighBaseline Water Stress, by property subsector

Thousand m3, %IF-RE-140a.2

Environmental data>(2) Other>3. Water
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_4

Like-for-like percentage change in water withdrawn for
portfolio area with data coverage, by property subsector%

IF-RE-140a.3

Environmental data>(2) Other>3. Water
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_4

Description of water management risks and discussion ofstrategies and practices to mitigate those risks

UNIT OF MEASURE

CODE

n/a

IF-RE-140a.4

Environmental data>(2) Other>Basic Data on Target Properties
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_1
Environmental data>(2) Other>3. Water>Water Usage by Type of Property
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_4_2

Environment>Conserving Water Resources
https://mec.disclosure.site/e/sustainability/activities/environment/water/Management of Tenant Sustainability Impacts
UNIT OF MEASURE

CODE

Percentage of new leases that contain a cost recovery
clause for resource efficiency-related capital improvements
and associated leased floor area, by property subsector

Percentage (%) byfloor area

IF-RE-410a.1—

Percentage of tenants that are separately metered orsubmetered for grid electricity consumption and water
withdrawals, by property subsector

Percentage (%) byfloor area

IF-RE-410a.2—

UNIT OF MEASURE

CODE



Corporate Governance

Sustainability (ESG) Section

Water Management

After serving as president & chief executive officer (CEO) of Mitsubishi Estate Co., Ltd., for six years from April 2017, I was appointed
chairperson of the Board in April 2023. Although we achieved all of the numerical targets set in the previous medium-term management
plan launched in FY2017—the start of which coincided with my appointment as president & CEO—the conventional three-year mediumterm management plan focused on short-term targets and thus to a certain degree did not align with the long-term, urban developmentoriented approach we should have been pursuing. Accordingly, in January 2020 we formulated a 10-year plan, Long-Term Management
Plan 2030, with the idea of boldly pursuing growth in new domains through initiatives to be carried out over the long term, by setting targets over a period more appropriate to our original business model of raising the value of areas from a long-term perspective.
As a matter of utmost importance, all members of the Board of Directors continue striving to fulfill the Mitsubishi Estate Group’s
mission and ensure that stakeholders recognize the value of its efforts in doing so. Long-Term Management Plan 2030, which was
painstakingly formulated over a period of more than a year, focuses on realizing the basic mission of the Group by simultaneously
increasing social value and shareholder value.
As we enter the fourth year of Long-Term Management Plan 2030, we are confronted with challenges such as the COVID-19 pandemic,
global instability sparked by the Russia–Ukraine situation, and frequent natural disasters. During my tenure as president & CEO, I consistently maintained the belief that the Group’s strengths lie in its talented human resources. I also believe that all companies, including
Mitsubishi Estate, have a responsibility to provide an environment enabling talented personnel to take on new challenges and where they
can grow, and it is through the establishment of such an environment that we are seeing the seeds of our efforts gradually reach fruition.
We have laid the foundation for achieving the goals set forth in Long-Term Management Plan 2030. However, if we are to achievethese goals over the course of the plan, we must implement changes while responding to the needs of a new generation. With further
development and promotion needed to achieve said goals, we felt that now was the perfect time to appoint a new president & CEO.
The Board of Directors and the Nominating Committee have engaged in ongoing discussions centered on the Succession Plan for the
President & Chief Executive Officer and are confident that Atsushi Nakajima is a leader who can create new value not only in the
Marunouchi area, a key location for the Group, but also in the International Business, which we have positioned as a growth area.
Speaking personally, my appointment as chairperson of the Board has renewed my determination to sustainably enhance
Mitsubishi Estate’s corporate value by ensuring effective corporate governance. Since transitioning to a Company with Nominating
Committee, etc., in 2016, the Company has made continuous efforts to strengthen its corporate governance system through suchmeasures as appointing outside directors as chairpersons of the three committees, composing the Nominating and Remunerationcommittees entirely of outside directors, and conducting third-party evaluations to aid in evaluating the effectiveness of the Board of
Directors. I have been closely involved in the development of the Company’s corporate governance system in my capacity as amember of the Board from FY2016 and as president & CEO during my six-year tenure. I hope to leverage my experience to ensurethat discussions at Board of Directors’ meetings are even more dynamic and constructive.
The Board of Directors has discussed on many occasions what is needed to create opportunities from change, to gain the support of
stakeholders, and to continue to grow on a Groupwide basis. Such discussions are based on the awareness that the rapid changes seen in
the external environment in recent years will also bring about changes in the types of value expected of the Group. Moving forward in myrole as chairperson, I will continue to encourage and lead active discussions among the Board of Directors, which comprises members witha diverse range of knowledge and experience, while utilizing my extensive experience as an executive to establish a management oversight
structure from a long-term perspective, with a view to achieving the goals of Long-Term Management Plan 2030. Guided by the Company’s
basic mission, the Board of Directors will remain committed to meeting the expectations of all stakeholders, including shareholders andinvestors, by doing all it can to guide the Company in a way that considers future changes in society and the business environment.

MESSAGE FROM THE CHAIRPERSON OF THE BOARD

Information Disclosure Based on SASB Standards August 2023

Environment>Climate Change Strategies
https://mec.disclosure.site/e/sustainability/activities/environment/climate-change/
Discussion of approach to measuring, incentivizing, andimproving sustainability impacts of tenants

n/aIF-RE-410a.3

Environment>Reducing Waste and Preventing Pollution
https://mec.disclosure.site/e/sustainability/activities/environment/waste/
Environment>Conserving Water Resources
https://mec.disclosure.site/e/sustainability/activities/environment/water/

Climate Change Adaptation
Area of properties located in 100-year flood zones, byproperty subsector

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Description of climate change risk exposure analysis,
degree of systematic portfolio exposure, and strategies for
mitigating risks

72

UNIT OF MEASURE

CODE

m2

IF-RE-450a.1

UNIT OF MEASURE

CODE

n/a

IF-RE-450a.2—

Environment>Information Disclosure Based on TCFD Recommendations
https://mec.disclosure.site/e/sustainability/activities/environment/tcfd/

Chairperson of the Board
Mitsubishi Estate Co., Ltd.

Activity Metrics
UNIT OF MEASURE

CODE

Number of assets, by property subsector

Number

IF-RE-000.A

Environmental data>(2) Other>Basic Data on Target Properties
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_1

Leasable floor area, by property subsector*

m2

IF-RE-000.B

Environmental data>(2) Other>Basic Data on Target Properties
https://mec.disclosure.site/e/sustainability/activities/esg-data/environment/#sec_1_2_1

Percentage of indirectly managed assets, by property
subsector
Average occupancy rate, by property subsector

Percentage (%) byfloor area

IF-RE-000.C—%

IF-RE-000.D—* Indicates the total floor area

Please refer to our website for detailed information on the SASB.
https://mec.disclosure.site/e/sustainability/table-of-contents/sasb-index/

73

Corporate GovernanceCorporate Governance System
Basic Policy Board of Directors 

Mitsubishi Estate aims to realize the enhancement of corporate value through a harmonious balance between corpo-

The Board of Directors decides the basic policy of the Company’s management, and it also carries out supervision ofrate growth and the interests of its various stakeholders by following its brand slogan, “A Love for People. A Love forthe execution of duties by directors and corporate executive officers. As of June 29, 2023, the Board of Directors con-the City,” based on its basic mission of “contributing to society through urban development.” The Company shall posi-sists of 14 directors, of whom seven are outside directors. The role of chairperson of the Board of Directors is held bytion the development and promotion of its corporate governance system as one of the most important management

the chairperson of the Board of the Company, who does not concurrently serve as a corporate executive officer.

issues in realizing this goal.

The membership of the Board of Directors is appropriately balanced with members from a diverse range of

In developing and promoting our corporate governance system, to bring about greater clarity with regard to roles
and the strengthening of functions in both the supervision of management and the execution of business while also
fulfilling accountability to our shareholders and other stakeholders, the basic policy shall work to ensure the trans-

backgrounds.
Proportion of Outside Directors

parency and objectivity of management.

Proportion of Non-Executive Directors

Outsidedirectors:
7

System Structure 

7/14

As a Company with Nominating Committee, etc., Mitsubishi Estate has established the Nominating Committee andExecutive officers
concurrently
serving as
directors:
4

50.0%

the Remuneration Committee, which are composed entirely of outside directors, and the Audit Committee, which is

Proportion of Female Directors
Femaledirectors:
2

10/14

2/14

71.4%

14.2%

membered solely by non-executive directors. Positioned under the Board of Directors, these committees help promote high standards and ensure transparency in the decision-making process.

Inside directors(not concurrently serving as
executive officers)

Outside directors

Inside directors(concurrently serving as
executive officers)

Nonexecutive
directors:
10

Insidedirectors:
7

Chairperson andcommittee chair

Nominating Committee, Audit Committee, and Remuneration Committee 

Composition of the Board of Directors

Corporate GovernanceCommittee Duties

General Meeting of Shareholders

Board of Directors

Cooperate

Audit Committee

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Accounting Auditor

Composition of the Audit
Committee

74

Audit Committee OfficeDelegate
authority to
executebusiness andsupervise

Nominating Committee

Remuneration Committee

Composition of theNominating Committee

Composition of theRemuneration Committee

Committee Activities(FY2022)

Cooperate Audit

Membership*
Cooperate

Audit

Internal Audit Office

Risk Management & Compliance Committee

Sustainability Committee

Risk Management & Compliance Subcommittee

Sustainability Subcommittee

Internal audit(As of June 29, 2023)

President & Chief Executive Officer

Corporate Strategy Committee

Corporate Executive Officers

Functional Groups, Business Groups, and Corporate Staff Departments

Executive CommitteeMale
directors:
12

Name

Inside/outside

Tsuyoshi Okamoto

OutsideTetsuo Narukawa

OutsideMasaaki Shirakawa

OutsideNominating Committee

Audit Committee

Remuneration Committee	Decision-making on the detailsof the proposals to the General
Meeting of Shareholders related
to the appointment and dismissal of directors

	Auditing and compilation of audit
reports pertaining to the performance of duties by corporate
executive officers and directors
	Decision-making on the detailsof the proposals related to theappointment, dismissal, andnon-reappointment of theaccounting auditor	Formulation of remuneration
policies for corporate executive
officers and directors
	Decision-making on remuneration amounts for individual corporate executive officers anddirectors

Six meetings in FY2022
	Determination of candidates forserving on the Board of
Directors in the next fiscal year
based on standards for nominating director candidates formulated by the Nominating
Committee	Reports and deliberations withregard to the nomination of corporate executive officers prior
to the resolution by the Board of
Directors
	Discussions on the selection andappointment of the president &chief executive officer centered on
the Succession Plan for the
President & Chief Executive Officer	15 meetings in FY2022
	Performance of audits throughcoordination with the accounting auditor and internal audit
divisions based on audit standards and plans	Attendance at important meetings, review of important documents, and visits to internal
divisions, branches, and subsidiaries by full-time members of
the Audit Committee	Six meetings in FY2022
	Decision-making on individual
remuneration amounts basedon the remuneration system

4 (4 outside)

5 (3 outside, 2 inside)

4 (4 outside)

Nominating Committee

Audit Committee

Remuneration Committee

—
—

—
—

Shin Nagase

Outside——Group Strategy Committee

Wataru Sueyoshi

Outside——

Ayako Sonoda

Outside—Strategic Investment Committee

Melanie Brock

Outside—Noboru Nishigai

Inside——Hiroshi Katayama

Inside——* All three committees are composed solely of non-executive directors.

Chairperson

Committee
member75

Corporate GovernanceCorporate Governance System

Evolution of Corporate Governance System 
Mitsubishi Estate has positioned the development and promotion of its corporate governance system as one of its most importantbalance. The Board also revised the officer remuneration system to strengthen the linkage between said system and Long-Termmanagement issues.

Management Plan 2030, thereby enhancing the commitment of officers to achieving the goals of the plan and further aligning

Since transitioning to a Company with Nominating Committee, etc., in 2016, the Company’s basic policy has been to “develop andshareholders’ and officers’ interests by raising the percentage of remuneration linked to the Company’s shares and share price.

promote its corporate governance system to bring about greater clarity with regard to roles and the strengthening of functions inFurthermore, as part of the capital policies set out in Long-Term Management Plan 2030, the Board resolved to execute share buy-

both management supervision and business execution, while also working to ensure the transparency and objectivity of manage-

backs of ¥100.0 billion in order to improve capital efficiency and enhance shareholder value. The Board also canceled treasury stock

ment in order to fulfill its obligation to be accountable to its shareholders and other stakeholders.” To this end, the Company has

amounting to 4.83% of the total number of issued shares prior to the cancellation.

steadily promoted the improvement of its corporate governance system, giving due consideration to changes in social conditions

In June 2023, we reduced the number of inside directors from eight to seven, resulting in an equal number of inside and outside
directors, in an attempt to further improve the transparency and effectiveness of the Board of Directors.

and the business environment as well as to the demands of its stakeholders.
In FY2022, in an attempt to improve gender diversity, the Board of Directors increased the number of female directors among its

The following is an overview of the changes made to our corporate governance system to date.

membership from one to two, thereby achieving a composition with a more diverse range of backgrounds and an appropriate

Organizational
structure andoutsidedirectors

2015

2016

 hange in outsideC
directors (improvementof independence andgender diversity) ransition to Company
Twith Nominating
Committee, etc., structureIncrease in ratio ofoutside directors (7 of 15)

2017

Composed of a majority of outside directors

2018

2019

 aking of all committeeM
members into nonexecutive directors
Membership ofRemuneration Committee
comprising exclusively
outside directors

 hange of chairperson ofC
Audit Committee tooutside director
Membership ofNominating Committee
composed completely ofoutside directors

Composed solely of­non-executive directors

2020

2021

 isclosure of a skills
Dmatrix2022

Improvement of gender diversity

Composed solely of outside directors

Corporate Governance Nominating
Committee

Composed solely of non-executive directors

An outside director serves as the chairperson AuditCommittee

Composed of a majority of outside directors

Composed solely ofoutside directors Remuneration
Committee

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Officerremuneration

76

Other aspectsof corporate
governanceOutside directors

Introduction of restricted
stock compensation
system larification of the roles ofC
those who supervise
management and those
who execute businessIntroduction of a Group
executive officer system

Inside directors(not concurrently serving as
executive officers)

Inside directors(concurrently serving as
executive officers)Introduction of
performance-based
incentive system ommencement of evaluCations of the effectivenessof the Board of Directors
Establishment of the
Mitsubishi Estate Co., Ltd.,
Corporate Governance
Guidelines

 xecution of share buyEbacks of approximately¥100.0 billion (introduction of flexible capital policies based on market
conditions)Decision not to renew thecountermeasure program
regarding possible hostile
takeover attempts

Implementation of thirdparty evaluations indetermining the effectiveness of the Board of
Directors

 etailed disclosure of theD
officer remuneration
system doption of a revised officer remunerationAsystem (to improve the linkage between theofficer remuneration system and the attainment of the targets of Long-Term
Management Plan 2030 and to further alignofficers’ interests with those of shareholders
following the increase in the percentage ofvariable remuneration)

 xecution of share buyEbacks of ¥30.0 billion

 esolution to execute share buybacks ofR¥100.0 billion (buyback period: November
2022 to November 2023)
Cancellation of treasury stock (equivalent to4.83% of the total number of issued sharesprior to cancellation)

Chairperson

77Corporate GovernanceCorporate Governance System

Appointment Standards for Director Candidates 

Independence Standards for Independent Outside Directors 

1. Purpose

Candidates for the outside director position shall fulfill a duty of care as a prudent manager toward the Company;

These guidelines shall establish guidelines for the nomination of directors by the Nominating Committee.

understand the Group’s basic mission of contributing to the creation of a truly meaningful society by building attrac-

2. Director Candidates

tive, environmentally sound communities where people can live, work, and relax with contentment; apply their quali-

Director candidates shall fulfill a duty of care as a prudent manager toward the Company, in addition to understandingties and capabilities to contribute to enhancing medium- to long-term sustainable corporate value, as well as their

the Group’s basic mission of contributing to the creation of a truly meaningful society by building attractive, environ-experience and knowledge in specialized fields such as global business, finance, and risk management, in view of thementally sound communities where people can live, work, and relax with contentment. Furthermore, director candi-Group’s business characteristics, such as supporting urban development in the Marunouchi area; and have personal-

dates shall be endowed with the necessary skills in accordance with management strategies while having the qualities

ity and knowledge enabling objective and fair judgments, based on the perspective that they shall contribute to theand capabilities to contribute to enhancing medium- to long-term sustainable corporate value in consideration of thecommon interests of shareholders without bias toward the interest of any particular party of interest. However, as acharacteristics of the Company’s business, such as supporting urban development in the Marunouchi area.

general principle, candidates are not elected if the Tokyo Stock Exchange’s standards for independence and the fol-

(1) Inside Director Candidates

lowing independence standards for outside directors apply to them.

For directors from within the Company, in addition to displaying the abovementioned qualities and capabilities—(1)	A shareholder or executive member of an entity holding voting rights exceeding 10% of the total voting rights ofspecifically, demonstrating outstanding integrity, leadership, and foresight—candidates to be nominated shall becorporate officers in charge of one of the Company’s business groups or corporate officers in charge of corporate
staff who have extensive knowledge and experience related to the Group’s business, who can perform oversightthe Company(2)	A transaction party or executive member of an entity whose transactional amounts in the most recent fiscal year
have exceeded 2% of consolidated operating revenue of the Company

roles with a Companywide perspective, and who are highly trained, or, alternatively, personnel with such experience(3)	A representative employee, employee, or member of staff of the Company’s accounting auditor

or personnel with translatable experience.

(4)	An attorney, certified public accountant, tax accountant, consultant, or other party who has received compensation(2) Outside Director Candidates

from the Company exceeding ¥10 million in the most recent fiscal year

For outside directors, in addition to the abovementioned qualities and capabilities, candidates shall be nominated fortheir operational and management experience, for the application of their experience and knowledge in specialized
fields such as global business and risk management, for having the personality and knowledge enabling objective
and fair judgments based on the perspective that they will contribute to the common interests of shareholders with-

Attendance Rates of Outside Directors in FY2022 and Contributions Made Nameout bias toward the interest of any particular party of interest, and for satisfying the Independence Standards for
Independent Outside Directors.
Corporate Governance3. The Revision or Abolishment of These Standards Shall Require a Resolution of the Nominating Committee.

Tsuyoshi Okamoto

Attendance at Meetings of the Boardof Directors and Committees

Overview of Contributions Made and Work Performed to Fulfill Expectations of Role

9/9
6/6

Tsuyoshi Okamoto poses pertinent questions and offers valuable advice froman objective viewpoint independent of management executives in charge ofbusiness affairs, by leveraging his management experience at a comprehensive energy company. In this way, he fulfills supervisory and monitoring functions of the Company’s management.

Board of Directors
Nominating
Committee
Remuneration
Committee

6/6

Board of Directors’ Skills Matrix 
In January 2020, the Company formulated Long-Term Management Plan 2030 based on the Group’s medium- tolong-term management strategies and business strategies. To realize the plan, the Company has identified the skills

Tetsuo Narukawa

Board of Directors
Audit Committee

9/9
15/15

Masaaki Shirakawa

Board of Directors
Nominating
Committee
Remuneration
Committee

9/9
6/6

Shin Nagase

Board of Directors
Audit Committee

9/9
15/15

Setsuko Egami

Board of Directors
Nominating
Committee
Remuneration
Committee

9/9
6/6

Iwao Taka

Board of Directors
Audit Committee

9/9
15/15

Melanie Brock

Board of Directors
Nominating
Committee
Remuneration
Committee

7/7
6/6(knowledge, experience, and capabilities) needed for the Company’s Board of Directors to exercise its management
oversight function and monitoring function effectively.
The skills of the Company’s directors are provided below.

NameLong-term vision
on urban­development(industry insight)

Corporate­management
experience

Organizational
strategy /Business strategy

International
knowledge

Treasury,
Compliance /­accounting, andRisk management
finance

ESG /Sustainability

6/6

Junichi Yoshida
Inside directors

Atsushi Nakajima
Bunroku Naganuma
Naoki Umeda
Mikihito Hirai
Noboru Nishigai
Hiroshi Katayama

6/6

78

Outside directors

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Tsuyoshi Okamoto
Tetsuo Narukawa
Masaaki Shirakawa
Shin Nagase
Wataru Sueyoshi
Ayako Sonoda
Melanie Brock
Note: To clarify the composition of skills of members of the Board of Directors, of the skills possessed by each director, the Company has selected the most relevant skills here, andall skills (knowledge, experience, and capabilities) are not listed.

4/4

Tetsuo Narukawa poses pertinent questions and offers valuable advice from an
objective viewpoint independent of management executives in charge of business affairs, by leveraging his international experience as well as management
experience at financial institutions and real estate companies. In this way, hefulfills supervisory and monitoring functions of the Company’s management.
Masaaki Shirakawa poses pertinent questions and offers valuable advice froman objective viewpoint independent of management executives in charge ofbusiness affairs, by leveraging his knowledge in finance and economics,
among other fields, gained through his experience working at a central bank. In
this way, he fulfills supervisory and monitoring functions of the Company’s
management.
Shin Nagase poses pertinent questions and offers valuable advice from an
objective viewpoint independent of management executives in charge of business affairs, by leveraging his management experience at an airline company.
In this way, he fulfills supervisory and monitoring functions of the Company’s
management.
Setsuko Egami poses pertinent questions and offers valuable advice from an
objective viewpoint independent of management executives in charge of business affairs, by leveraging her abundant knowledge of corporate strategy, marketing strategy, and human resource development. In this way, she fulfills
supervisory and monitoring functions of the Company’s management.
Iwao Taka poses pertinent questions and offers valuable advice from an objective viewpoint independent of management executives in charge of businessaffairs, by leveraging his extensive knowledge regarding business ethics andcompliance, among other fields. In this way, he fulfills supervisory and monitoring functions of the Company’s management.
Melanie Brock is tasked with supervising and overseeing the management of
the Company by leveraging the broad range of expertise she has cultivatedthrough her involvement in international consulting activities in areas such as
marketing, business strategy, and the promotion of diversity and by utilizing
her ability to ask questions and give advice as appropriate from a global andobjective perspective independent of the executive management team.

Note: As Melanie Brock became a director on June 29, 2022, the number of meetings she was able to attend differs from that of other directors.

79

Corporate GovernanceEvaluation of the Effectiveness of the Board of Directors
Purpose of Evaluating the Effectiveness of the Board of Directors

2. Results of Evaluation and Future Initiatives With the aim of confirming that the Board of Directors is functioning effectively through its oversight function to(Results of Evaluation)

improve corporate value on a medium- to long-term basis and to enhance corporate governance, the Board of(Analysis of Results) 	In the questionnaire on the evaluation of Board effectiveness completed by each direc-

The Board of Directors deemed that it was functioning effectively.

Directors analyses and evaluates its effectiveness as a whole based on evaluations conducted annually by eachtor, a significant number of items received a high ratio of “appropriate” as the

director. In addition, the Board discloses a summary of the evaluation results and subsequently formulates andresponse. Furthermore, a constructive exchange of opinions took place for each evalu-

implements policies based thereon to enhance its effectiveness where necessary.

ation item, including issues pointed out by directors and their suggestions for the
future. In particular, with respect to appropriate monitoring of Long-Term Management

Initiatives Undertaken Thus Far to Realize the Desired Role of the Board of Directors

Plan 2030, a high level of awareness was observed regarding such matters as the con-

Mitsubishi Estate transitioned to a Company with Nominating Committee, etc., structure in June 2016. The Company

tents of reporting by corporate executive officers on business execution, themes fordefines the primary duties of the Board of Directors as deciding on basic management policies and important mat-

improving the strength of monitoring, and the balance between the time used for brief-ters of business execution as well as supervising the execution of duties by directors and corporate executive offi-

ings and the time used for discussions.

cers from the perspective of bringing about greater clarity with regard to roles and the strengthening of functions inboth management supervision and business execution. In accordance with the results of the analysis of the annual
evaluation of the Board of Directors’ effectiveness, the Board has thus far implemented initiatives to enable it to carryout its role appropriately. These include enhancing discussions regarding management plans by carefully examining
agenda items as well as increasing opportunities for and improving the content of reporting from corporate executive officers, in addition to ensuring that information is provided more extensively to outside directors.
In FY2020, based on Long-Term Management Plan 2030—unveiled in January 2020—the Company began including items regarding initiatives to be improved going forward in addition to existing items from the perspective of(1) Main Items Improved Since the Previous Evaluation
Major Tasks for Further Enhancing Board Effectiveness Since the FY2021 Effectiveness Evaluation and Future
Initiatives
Expansion of monitoring function and engagement in more substantive discussions, including in relation to theevaluation of progress regarding Long-Term Management Plan 2030 and revision of the plan’s strategies inappropriately monitoring management to increase shareholder value and social value over the long term.

accordance with changes in the management environment

Furthermore, the Company received advice from a third-party evaluation organization at each phase of the evalua-Ongoing implementation of initiatives designed to further raise the level of diversity of the Board of Directors,

tion process, including in the creation of questionnaires, the analysis of responses, and the sharing of issues. An

centered on the Nominating Committee

overview of the evaluation process and results of the third-party evaluation carried out on the effectiveness of the

Corporate Governance

Board of Directors in FY2022 are as follows.

1. Process of Evaluation (1) Method of Evaluation
All directors conducted self-evaluations in the form of a response to a questionnaire related to the composition,
operation, effectiveness, etc., of the Board of Directors and each of the Nominating, Audit, and Remuneration committees. Taking these results into consideration, directors discussed the issues with each other and examined proposedcorrective measures at Board of Directors’ meetings.

FY2022 Initiatives
Having continuously organized briefings on the Company’s businesses for outside directors and exchanged
opinions with them, the Board of Directors dedicated sufficient time to monitoring (including through reports,
discussions, and exchanges of opinions) the state of execution with regard to addressing Companywide issues
outlined in Long-Term Management Plan 2030, including recent changes in the business environment, as well

Step 1

Step 2Issuance of a questionnaire to all
directors

Discussion at a meeting of theBoard of Directors in light of theevaluation results

Step 3
Launch of initiatives based on
the Board’s approvalas the progress of the strategy for increasing social value. The Board also revised its officer remuneration
system in FY2022 from the perspective of compensation governance and resolved to execute share buybacks
as part of the Company’s capital policies.
Regarding the level of diversity of members of the Board of Directors and the skills that they should possess to(2) Items of Evaluationachieve Long-Term Management Plan 2030, the necessary skills have been fulfilled and diversity and inclusion

In terms of evaluation items based on Long-Term Management Plan 2030, the Company has confirmed “diversity forwith regard to gender and nationality has been improved.

fulfilling the oversight function of the Board of Directors” as part of the evaluation of the Board’s composition and“topics to be fleshed out in future discussions for monitoring and the nature of reports on the status of business execution from corporate executive officers” as part of the evaluation of the Board’s effectiveness and operation.

(2) Main Issues and Future Initiatives Aimed at Further Improvements in Board Effectiveness

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Through a process of examination and discussion at Board of Directors’ meetings, the following points were

80

Composition of theBoard of Directors

Proportion of outside directors, size of membership, diversity, and skills

Effectiveness of theBoard of Directors

Management plan, monitoring of execution of business and risk management systems, dialogue with shareholders and investors, operation of the Nominating, Audit, and Remuneration committees, etc.

Operation of theBoard of Directors

Method and frequency of meetings, required time, report on status of business execution of corporate executive officers, provision of information outside of Board of Directors’ meetings, questions and answers, training,etc.

Others

Method of the evaluation of the effectiveness of the Board of Directors, etc.

identified.
The expansion of the Board’s monitoring function and other such measures must undergo constant review inorder to tighten supervision of the state of execution of management strategies that respond to changes in thebusiness environment, such as geopolitical risks and inflation.
To promote understanding of the Company’s operations among outside directors, opportunities to confirm theprogress of measures implemented in response to changes in the business environment must be increased
through activities such as visits to business sites, which could not be conducted during the COVID-19 pandemic.
Examinations of the composition and diversity of the Board of Directors must be implemented on an ongoingbasis to further improve the Board’s effectiveness.

81

Corporate Governance

Remuneration
The decision-making policy concerning details of remuneration for each director and corporate executive officer of(2) Remuneration by Shares with Restriction on Transfer (Fixed and Variable Components)

the Company is deliberated at meetings of the Remuneration Committee. The Remuneration Committee also con-1

Form of remuneration: Sharesfirms that the method for deciding the details of remuneration paid to each director and corporate executive officer

2

Restricted stock period: Until an officer resigns

for each fiscal year as well as the details of each decided amount of remuneration are consistent with said policy.

3

Performance evaluation and method for determining remuneration

shareholders following the increase in the percentage of variable remuneration.

 ith the objectives of creating incentives for officers to achieve sustainable growth and of further aligning officers’ interests withW
those of shareholders, the Company adopted stock-based remuneration with a restricted transfer period that runs until the time an
officer resigns. The amount of monetary compensation that can be claimed when allocating stock is determined by the
Remuneration Committee.

Total Remuneration Paid to Directors, Corporate Executive Officers, and Statutory Auditors in FY2022

 he Company will determine the method for deciding variable remuneration and the major evaluation items by using the sameTevaluation items as those for (1) Performance-based monetary compensation.

Category

Total remuneration(Millions of yen)Fixed remuneration(Millions of yen)

Performance-based
remuneration (Millions of yen)

Recipients

359
1,228
143

359
569
143

—
658
—

5
14
8

Inside directors
Corporate executive officers
Outside directors

Note 1: Remuneration for the Company’s directors who concurrently serve as corporate executive officers is included in the remuneration for corporate executive officers.
Note 2: The figures above include two inside directors and one outside director who resigned during FY2022.

Board Policies and Procedures in Determining the Remuneration of Senior Management and Directors(i) Procedures for Deciding Remuneration Paid to Officers
The policy concerning decisions on the details of remuneration paid to directors and corporate executive officers of the Company
and the details of remuneration for each person shall be decided upon by a resolution of the Remuneration Committee, which comprises solely outside directors.
(ii) The Basic Policy for Deciding Remuneration for Officers

Indicators and Process for Calculating the Evaluation Index
Companywide performance: 50*

In FY2022, the remuneration system was revised to improve the linkage between officer remuneration and theattainment of the targets of Long-Term Management Plan 2030 and to further align officers’ interests with those of•	The remuneration system shall be linked with our medium- to long-term performance targets, etc., aimed at in management strategies
and medium-term management plans and realize sustained corporate value improvement and the sharing of value with shareholders.
•	The remuneration system shall allow for the giving of incentives to management executives to encourage them to take on challenges
and conduct appropriate risk-taking in line with the above strategies’ targets and expectations of shareholders and other stakeholders.
•	The remuneration system shall make it possible to fulfill high accountability for the benefit of our shareholders and other stakeholders through objective deliberations and judgments by the Remuneration Committee.

Corporate Governance(iii) Remuneration Systems for Officers
Remuneration systems for directors and corporate executive officers shall be separately established in consideration of their respectivefunctions and roles to be fulfilled for the purpose of achieving sustained corporate value improvement. In addition, directors who concurrently serve as corporate executive officers shall be paid remuneration as corporate executive officers.
•	Directors (excluding directors who concurrently serve as corporate executive officers)	In consideration of their function and role of supervising the performance of duties by corporate executive officers and directors,
they shall receive, in principle, only basic remuneration in the form of cash, and the standards shall be decided upon individually
taking into account factors such as their position and responsibilities as directors and whether they are full-time or part-time.

Performance of responsible division: 50*

The basic policy for deciding remuneration for directors and corporate executive officers of the Company is as follows.

Achievement ratio
compared with performance over the last
five fiscal years10 se the four indicators of consolidated business profit, ROA, ROE, and EPS (1:1:1:1)
U
Use standard deviation to calculate the level of difficulty of achieving the performance of therelevant fiscal year compared with performance over the last five fiscal years
Fluctuation range of 200%–0%Achievement ratio
compared with annual
business plan targets

30

 se the four indicators of consolidated business profit, ROA, ROE, and EPS (1:1:1:1)
ULevel of payment determined through comparisons with figures for the above four indicators
under annual business plans(Level of payment is 100% if achievement is in line with the plan’s targets but fluctuates
between 200% and 0% depending on the level of achievement)

Level of achievementcompared with targets
for three businesses
stipulated in Long-Term
Management Plan 2030

10

 evel of payment determined through comparisons with targets for three businesses (domestic,Linternational, and non-asset) stipulated in Long-Term Management Plan 2030
(Qualitative assessment using five levels (200%, 150%, 100%, 50%, and 0%))Level of achievement ofdivisional annual targets for achieving thegoals of Long-Term
Management Plan 2030

50

* Targets for each item listed in annual business plans, with evaluations conducted using the details of these targets with abase score of 100%

Other Executive Officers
Use the four indicators of “level of achievement toward the business group budget,” “mediumterm initiatives,” “initiatives to establish new business models,” and “initiatives to realize earnings for the entire Mitsubishi Estate Group” at a ratio of 10:10:10:20
Evaluation method the same as that for controlling officers and Group executive officers•	Corporate executive officers
	In consideration of their function and role of taking charge of business execution of the Company, their remuneration shall, in principle, comprise basic remuneration and variable remuneration. Variable remuneration comprises monetary compensation that is
paid based on short-term performance, etc., and stock compensation, etc. (including monetary compensation paid based on indicators such as stock price), that is paid with a view to realizing the medium- to long-term sharing of value with shareholders. The
standards and ratios of basic remuneration and variable remuneration, valuation indicators for variable remuneration, and othermatters shall be decided upon taking into account medium- to long-term performance targets, etc., aimed at in management strategies and the current management plan and factors such as position and responsibilities as corporate executive officers.

Composition of the Remuneration of Corporate Executive Officers
Performance-based component (40%)(Enhances the linkage of evaluation items with those of Long-Term Management Plan 2030)

Basic remuneration
40%

Performance-based monetarycompensation
30%

Fixed remuneration (40%)

Share price-linked component(30%)

Restricted stock compensation(Variable compo- (Fixed component)nent) 10%
10%

Phantom stock10%

Controlling Officers and Group Executive Officers
The following four indicators used at a ratio of 20:10:10:10
 1 Level of achievement toward the business group budget: Use consolidated business profit asa general rule (level of achievement toward the individual company budget for Group executive officers) 2 Medium-term initiatives: approximately covering upcoming five years, includes ESG initiatives
 3 Initiatives to establish new business models: new business creation, non-asset businesses,
service and content provision, etc.
 4 Initiatives to realize earnings for the entire Mitsubishi Estate Group: initiatives that go beyond
the business group, etc. (initiatives that go beyond individual companies in the case of Group
executive officers)Officers interviewed by the president & chief executive officer, who assesses them on each item
using five levels (200%, 150%, 100%, 50%, and 0%*)* Accounts for 15% of total remuneration(3) Medium- to Long-Term Performance-Based Remuneration (Phantom Stock)1

Form of remuneration: Cash

2

Performance evaluation period: Approximately three years

3

Performance evaluation and method for determining remuneration

With the objectives of creating an incentive to work for sustainable growth and of promoting the further sharing of value with shareholders, the amount of phantom stock remuneration varies depending on the share price and on an indicator based on the
Company’s total shareholder return (TSR) ranking relative to five peer companies.*1 The base amount by position and the final
remuneration amount are determined by the Remuneration Committee.
*1 Five peer companies:
Nomura Real Estate Holdings, Inc., Tokyu Fudosan Holdings Corporation, Mitsui Fudosan Co., Ltd., Tokyo Tatemono Co., Ltd., and Sumitomo Realty & Development Co., Ltd.
4

Calculation method for individual amount paid
Remuneration
amountVariable remuneration (60%)=

Remuneration baseamount*2

×

Share price in final month of performance evaluation period
Issue price×

Vesting ratio*3*2 Remuneration base amount
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Overview of Performance-Based Remuneration

82(1) Performance-Based Monetary Compensation1

Form of remuneration: Cash

2

Performance evaluation and method for determining remuneration

 ith the aim of achieving further corporate growth and greater efficiency while guaranteeing financial soundness, the amount ofW
remuneration varies depending on consolidated business profit, ROA, ROE, EPS, and the target level of business profit in the divisions for which the individual officers are responsible.
 hen determining remuneration, the amount is calculated using the actual indicators, etc., for the previous fiscal year, to which isW
added an evaluation of qualitative aspects, established during interviews with the president, including the degree of contribution to
performance over the medium to long term and the status of ESG-related initiatives, the level of progress of each business (domestic, international, and non-asset) in achieving targets stipulated in Long-Term Management Plan 2030, with the final remuneration
amount being decided by the Remuneration Committee. Please see the table on page 83 for details.

The remuneration base amount corresponds to the rank of the officer eligible for payment, as listed below.

President & chief executive officer¥19,647,000

Deputy president¥12,675,000

Executive vice president¥10,413,000

Senior executive officer¥8,352,000

Corporate executive officer¥6,288,000*3 Vesting ratio
A rank is given to the TSR of the Company and its peers. The percentages in the table below correspond to the Company’s TSR rank, with 100% being the upper limit.

TSR rank
Vesting ratio

1st
100%

2nd
80%

3rd
60%

4th
40%

5th
20%

6th
0%

TSR is calculated using the formula below.

TSR=(Share price for the final month of the performance evaluation period – Share price for the first month ofthe performance evaluation period) + Total dividends per share for dividend distributions with a record datewithin the performance evaluation period (excluding the final month of the performance evaluation period)
Share price for the first month of the performance evaluation period83Corporate GovernanceDialogues with Shareholders and Investors (ESG Meetings)
Mitsubishi Estate holds integrated ESG meetings that focus on the non-financial aspects of its ESG activities toenable shareholders and investors to gain an understanding of the direction of its management over the long term.
We relay the opinions, requests, proposals, and other feedback that we receive through such dialogues to seniorEmanagement at meetings of the Board of Directors. By incorporating the results of the dialogues into a plan–do–
check–act (PDCA) cycle, we aim to achieve continuous growth.

Step 1
Hold ESG meetings

Step 2
Implement a questionnaire of meeting
participants

Step 3

Step 4

Discuss matters based on
the content of the meetings and the results of thequestionnaire and identify issues

Take action in response to
the identified issues

S(1) Achievements over the Last Two Fiscal Years
In addition to the Sustainability Management and Promotion Department, which is in charge of environmental andsocial matters, and the General Affairs Department, which oversees corporate governance, the Company holds ESG
meetings with the attendance of the Investor Relations Office when requested.

Corporate Governance

The total number of ESG meetings held by the Company in FY2021 and FY2022 is as follows.

G

Number of companies for which meetings were held
(total number of companies)

Distribution ratio (number of shares issued)*

Corporate shareholders andinstitutional investors in Japan

25

Approximately 30%

Overseas institutional investors

17

Approximately 16%

Total

42

Approximately 46%

 an Mitsubishi Estate bring forward the schedule forCachieving its goal in relation to RE100?

 rought forward significantly the schedule for achieving
B
the Company’s goal in relation to RE100 from 2050 to 2025

	The low level of the target for increasing the percentage
of female managers is a matter of concern.

	Upwardly revised the targets for the percentage offemale managers from 10% by 2030 to over 20% by
FY2030, 30% by FY2040, and 40% by FY2050

 he percentage of male employees taking childcare leaveTof absence is low. Efforts are required to eliminate differences between male and female employees in taking
childcare leave.

 ith the ultimate goal of maintaining a childcare leave ofW
absence rate of at least 100% among relevant male
employees by FY2030, strengthened calls to such
employees and achieved goal in FY2022 (110.6%)

 n oversight function is necessary for the entire supplyA
chain, including second- and third-tier suppliers.

 stablished the Mitsubishi Estate Group Supplier Code ofE
Conduct and carried out a survey via questionnaire ofsecond- and third-tier suppliers. Currently looking atways of implementing the survey that will enable a
deeper understanding of the supply chain in the future	The number of female directors must be increased todiversify the composition of the Board of Directors.

Increased the number of female directors

 he Company must disclose a skills matrix and a processTfor selecting directors based on such a skills matrix.

 isclosed a skills matrix and revised appointment stanDdards for director candidates

 third-party evaluation of the Board of Directors isArecommended.

Introduced a third-party evaluation component to theeffectiveness evaluation of the Board of Directors, with
the Board confirming a policy to implement the thirdparty evaluation once every several years

 he Company should consider more detailed disclosure ofT
milestones for overall remuneration, KPIs for single-year,
performance-based compensation, and other systems.

 arried out more detailed disclosure regarding the remuC
neration system through the Company’s website andintegrated report and disclosed information on thesystem in English

 s the alignment of long-term interests between officers
Aand shareholders is weak, the Company should consider
raising the percentage of share-based remuneration.

 evised the remuneration system: increased the percentRage of performance-based and share-based remuneration, while extending the restricted stock transfer period
to the time when an officer resigns

Shares Held for Strategic Purposes(2) Questionnaire Results (Meeting Participants in FY2022)
At the close of ESG meetings, we implemented a questionnaire of participants regarding their level of satisfaction
with the dialogue and their rating of our ESG initiatives, in order to measure the effectiveness of integrated ESG

The Company acquires and holds shares for other than purely investment purposes if it deems such shareholdings

meetings and ascertain areas of improvement and other matters to reflect in future dialogues.

to be useful in facilitating the Group’s business activities smoothly in cases such as when seeking to maintain or
reinforce medium- to long-term transactional relationships or in procuring funds on a stable basis.

ions in a comprehensive manner in an integrated ESG meeting was instructive and efficient. In addition to 100% of

In regard to the holding of listed shares as investment shares for other than purely investment purposes, weparticipants responding that they were “satisfied” or “generally satisfied” with the dialogue, approximately 40% of theexamine the rationality of such holdings from the perspective of whether they are useful or not in facilitating thecompanies that participated responded that the meetings helped improve their rating of Mitsubishi Estate.

Group’s business activities smoothly, focusing on such aspects as the background of the acquisition, record of trans-

Changes in Shareholders’
and Investors’ Evaluation of
Mitsubishi Estate’s Dialogue
Efforts

Satisfaction with Dialogue

Worsened0%

Somewhatdissatisfied
0%

actions, status of cooperative and collaborative relationships, and level of dividend payouts. The findings of these

Evaluation of ESG Activities

examinations, as well as the number of reductions of such shares and the policy on reductions going forward, are(%)

reported to the Board of Directors at least once a year, and we are proceeding with sales in an appropriate manner.

100

In addition, the Company has been conducting ongoing investments in venture businesses since FY2015. Centered

80

Dissatisfied
0%

on the Innovation and Business Transformation Group, these efforts are aimed at heightening the value of existing

60

businesses and expanding the Company’s business domains through the utilization of technologies and coordination

40

Improved
38%
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Status of responses	Declared goal of achieving net-zero carbon emissions by
2050 in accordance with the standards of the Science
Based Targets (SBT) initiative* Estimated based on the results of a shareholder identification survey outsourced to a third-party institution inquiring into beneficial owners using the shareholders’ register(as of March 31, 2023)

In the results of the FY2022 questionnaire, many participants commented that the opportunity to exchange opin-

84

Comments and proposals

	Given the increasing number of companies declaring netzero carbon emissions targets for 2050, Mitsubishi Estateshould also consider making such a declaration.

Unchanged
62%

with external partners.

20

Generallysatisfied
36%

0

Satisfied
64%

E (initiatives) E (disclosure) S (initiatives) S (disclosure) G (initiatives) G (disclosure)

Excellent

Good

Average

Somewhat insufficient

Poor

Holdings of Shares Held for Strategic Purposes(Total for Listed and Non-Listed Companies)

Sales Amount (Listed Shares)

170

20

160

17.9
4

150

15

8

16

140
130

(3) Major Issues Addressed in Response to Issues Raised during Meetings
We have communicated the comments and proposals received at ESG meetings to the Board of Directors and arecontinuously examining ways to address them in order to make further improvements.
The status of our responses to the issues hitherto raised is as follows.

(Billions of yen)

2

166

22

30

34

41

152

120

12.2
10

164
148
138

110

134

133

129

8.4

5
127

100

1.4
0

FY2014FY2015FY2016FY2017FY2018Non-new business-related holdings

FY2019FY2020

FY2021

FY2022FY2015FY20164.2

4.2

FY2019FY20205.7

0.0

FY2017FY2018FY2021

FY2022New business-related holdings

Please refer to our Corporate Governance Report for more information on our corporate governance system.
https://www.mec.co.jp/assets/img/governance/corpo230707e.pdf

85Corporate GovernanceDirectors

Corporate Executive Officers, Executive Officers, and Group
Executive Officers(As of June 29, 2023)(As of April 1, 2023)

Atsushi Nakajima

Bunroku Naganuma

Naoki Umeda

Atsushi Nakajima

Futoshi Chiba

Kenji Hosokane

Yuji Fujioka

Bunroku Naganuma

Chairperson of the Board 

DirectorDirectorDirector

2016
108,437 shares

2022
41,304 shares

2023
40,417 shares

2022
24,710 shares

Representative Corporate
Executive Officer,
President & Chief
Executive Officer

Representative Corporate
Executive Officer,
Deputy President

Representative Corporate
Executive Officer,
Deputy President

Representative Corporate
Executive Officer,
Executive Vice President

Representative Corporate
Executive Officer,
Executive Vice President

Mikihito Hirai

Noboru Nishigai

Hiroshi Katayama

Tsuyoshi Okamoto

Yutaro Yotsuzuka

Keiji Takano

Toru Kimura

Ikuo Ono

Naoki Umeda

Director

Director

Director

Outside Director

Senior Executive Officer

Senior Executive Officer

Senior Executive Officer

Senior Executive Officer

2023
8,319 shares

2021
29,801 shares

2016
38,370 shares

2019
2,100 shares

Representative Corporate
Executive Officer,
Executive Vice President

Tetsuo Narukawa

Masaaki Shirakawa

Shin Nagase

Wataru Sueyoshi

Ryozo Kawabata

Haruhiko Araki

Masato Aikawa

Hirofumi Kato

Hitoshi Kubo

Outside Director

Outside Director

Outside Director

Outside Director

Senior Executive Officer

Senior Executive Officer

Senior Executive Officer

Senior Executive Officer

Group Executive Officer*

2018
2,600 shares

2016– shares2016
500 shares2023– shares

Corporate Governance

Junichi Yoshida* Appointed on June 29, 2023

Corporate Executive
Officer

Mikihito Hirai*

Masanori Iwase

Masaki Yamagishi

Toru Takeda

Masaharu Miyajima

Executive Officers

Masahiro Murai

Tetsuya Okusa

Takashi Kobari

Satoshi Iwata

Atsuhiko Oida

Toshiyuki Inoue

Junji Inagawa

Tomohiro Okada

Seijin Chino

Kiyoshi Ota

Koji Kurebayashi

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

* Appointed on June 29, 2023

86

Ayako Sonoda

Melanie Brock

Outside Director

Outside Director2023– shares2022
400 shares

Name
Position
Appointment year
Number of shares held
(As reported in the Notice ofConvocation of the 124th
Ordinary General Meeting of
Shareholders)

Masaki Yamagishi

Masaharu MiyajimaGroup Executive Officer

Group Executive Officer

Group Executive
Officers

Shuichi Shimizu

Hitoshi Kubo

87

Corporate Governance

Message from an Outside Director
determining the scale of the impact of a given matter, rather than making decisions based on presumptions. The help
provided by the two full-time members of the Audit Committee for advance preparations is essential for allowing me
to make such decisions. Communicating with those tasked with business execution, management divisions, andfrontline sales employees in advance, the full-time members of the Audit Committee collect and provide information

In my role as an outside director,

on the Group as a whole as well as on specific issues and the progress of matters. Their reports and opinions, which
are highly detailed, candid, and fair, enable appropriate decision-making. Accordingly, with its highly sophisticated

I will provide support for initiatives

functions, I can confirm that the effectiveness of the Audit Committee’s structure is most satisfactory.

that contribute to the improvement ofCommunicating the Progress of Strategies Using Easily Understandable Indicators to Shareholders and Investors

Mitsubishi Estate’s corporate value to

The formulation of Long-Term Management Plan 2030 has been the single-most epoch-making event at thebuild co-creative relationships

urban development and forward-looking DNA enabled the plan’s formulation, which can be said to address demands

MESSAGE FROM AN OUTSIDE DIRECTOR

wide-ranging expertise and experience, in order to confirm various matters, such as by verifying facts and properly

Mitsubishi Estate Group since I became an outside director. The strength that is the Group’s long-term perspective on

between the Company and its

for a long-term perspective from the market and from shareholders and investors. Discussions at meetings of theshareholders and investors.

on the plan, the need to make revisions, and large-scale projects in preparation for the future. In addition, given the

Board of Directors have focused on how the plan is progressing, the impact of changes in the operating environment
significant changes in the Company’s operating environment triggered by the COVID-19 pandemic and the RussiaUkraine situation, I believe that it is vital to swiftly address various governance issues, such as ensuring that theBoard of Directors performs its functions, maintaining diversity among the Company’s key human resources, andTetsuo Narukawa
Outside Director
Chairperson of the Audit Committee

tackling sustainability issues. Mitsubishi Estate must offer easily understandable explanations on how results arereflected in remuneration, particularly with regard to remuneration systems developed according to a pay-for-performance approach,* which is of particular interest to overseas shareholders and investors. For example, I am of theopinion that monitoring using total shareholder return (TSR), which the Company has adopted for a portion of executive remuneration, would be useful as a performance indicator. Since the rate is a management indicator that
includes share price as well as performance, it has attracted increasing attention as a shareholder value indicator in

Corporate GovernanceJapan, and I believe that it will become an important indicator when determining the remuneration of directors.
I recognize that the sustainability initiatives in the strategies established by the Company for increasing social
value in Long-Term Management Plan 2030 are producing excellent results, including those pertaining to the envi-

Japan’s Governance Reform and Mitsubishi Estate’s Governance Evolution

ronment. However, I feel that the Company must better emphasize the merits of such results to its shareholders and

The revision of the Companies Act in 2014 and the introduction of the Corporate Governance Code in 2015 signifi-

investors. Continuously emphasizing the merits of specific key performance indicators formulated to be clear andcantly advanced corporate governance reform in Japan. I became an outside director of Mitsubishi Estate in 2018, so

easily understandable and of recognition from external entities will be crucial. Constructive engagement is essential

I have witnessed the development and strengthening of its governance in step with governance reform in Japan.

for maintaining productive relationships over the long term with shareholders and investors and building co-creative

The Company’s wide-ranging governance reform has included its transition to a Company with Nominating

relationships. At the same time, communicating information on targets that make sense to shareholders and inves-

Committee, etc., structure, promotion of the diversity of the Board of Directors, revision of the officer remuneration

tors is essential with regard to the results of environmental, social, and governance initiatives.

system to improve its linkage with Long-Term Management Plan 2030, and disclosure of a skills matrix for the Board* A method and pay structure determining remuneration according to the level of achievement of resultsof Directors. Particularly from my perspective as someone who has been involved with corporate management, I
believe that reducing the number of inside directors by one to bring the number of both inside and outside directors

Drawing on My Experience in the Real Estate Development Industry to Improve Mitsubishi Estate’s Corporate Valueto seven in June 2023 was a major step and an important decision.

I have more than a decade’s worth of experience working in the real estate development industry, prior to which I

While corporate governance reform in Japan is still in progress, I believe that best practices of globally accepted management structures must become more widespread if Japanese companies are to enhance their presence in global society and create new value. On this point, however, I am optimistic because I am convinced that such management
structures will spread quickly once Japanese companies begin adopting them, in the same way that the governance systems of Japanese companies evolved rapidly to their present state following the revision of the Companies Act in 2014
and the introduction of the Corporate Governance Code in 2015. Since the recognition of companies as social entities that

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

take the lead in creating value and addressing social issues from a long-term perspective is deeply rooted in Japan’s his-88

tory, it could be said that the country has an environment that is conducive to the spread of systems for creating value.

How the Audit Committee’s Structure Enables It to Fulfill Its Extensive Duties
Being responsible for overseeing various risks and issues, the scope of the duties covered by the Audit Committee islived in Germany for over 15 years, during which I was involved in the development of office buildings, among otheractivities. Urban development in Germany adopts a unified and highly sustainable approach, focusing strongly on
giving the utmost priority to people’s lifestyles, with both offices and housing developed in full consideration of theenvironment. Such urban development is advanced under a structure in which the national government decides
policy and regional public bodies—which are tasked with development—determine a master plan, based on whichreal estate companies build offices, housing, and other amenities. In Japan’s case, on the other hand, the authorities
determine only the regulations, within the parameters of which real estate companies undertake urban development.
Accordingly, the sense of responsibility toward urban development is completely different for Japanese real estatecompanies. Ensuring that overseas shareholders and investors understand such special characteristics of theCompany’s business model is crucial.
I believe that I can contribute to Mitsubishi Estate by providing support for its initiatives, drawing on my career in

extensive. For this reason, one of my roles as chairperson of the committee is to set an order of priority for its duties

real estate. Anticipating various changes and advancing initiatives ahead of such changes is important. I therefore

to ensure that it focuses on discussing the most important and urgent issues first. For certain agenda items, I try to

aim to contribute in some small way to the Company’s future growth by engaging deeply in the reform of its corpo-

present my opinion at subsequent committee meetings after collecting and examining relevant information outside

rate governance, which serves as the foundation for such initiatives. To achieve this goal, I intend to share my experi-of the committee’s usual meeting times. I also strive to present the final opinion of the Audit Committee to the Board

ence by proactively communicating with not only members of the Board of Directors and other managementof Directors on reports of risks and issues after listening to the opinions of committee members, who possess

personnel but also younger employees who will forge Mitsubishi Estate’s future.

89

Corporate GovernanceRoundtable Discussion among Members of the Nominating Committee

something new at every Board meeting from their contribu-

committee is composed solely of outside directors that ittions, which are informed by their respective areas of exper-

is conscious of proactively making connections within thetise, and I believe that inside directors feel the same way.

Company, including through opportunities for directly

With this in mind, when I contribute to discussions I strive to

receiving explanations from the executive side and visits

think carefully about what I want to communicate while

to the front lines. Such opportunities are also created sys-

remaining conscious of my comparative advantage and con-tematically for the committee. By consistently pursuingsidering how I can be of service at meetings.

such opportunities, the committee has established a

Masaaki Shirakawa

Tsuyoshi Okamoto

Melanie Brock

Outside Director, Member of
the Nominating Committee

Outside Director, Member of theNominating Committee

Outside Director, Chairperson of
the Nominating Committee

Outside Director, Member of
the Nominating Committee

In April 2023, Atsushi Nakajima became the new president & chief executive officer (CEO) of Mitsubishi Estate.
The appointment marks the first change of president since Mitsubishi Estate transitioned to a Company with
Nominating Committee, etc., structure in 2016 and since the Nominating Committee became membered solely byoutside directors in 2019. In this roundtable discussion, members of the Nominating Committee talked about the roleof the committee, including their response to this year’s change of president, and the effectiveness of the Board of

Corporate GovernanceDirectors (participants were committee members at the time of the roundtable discussion.).

candidates, including their characters.

individuals inside and outside the Company. Rather thandepending solely on figures, strategies, executive

took part in the process for appointing the new president

approaches, market environment analyses, and other infor-with a renewed sense of the heavy responsibility of being

mation supplied to the Board of Directors, I believe that it isinvolved in such an appointment. The fact that the final

crucial for outside directors to visit the front lines to gain

decision lay with the Nominating Committee, in order toperspectives that are not reflected in such information.

avoid various forms of bias that can occur in organiza-

Given that the Company’s business activities entail manytions, created a positive pressure for the members andlarge-scale projects extending over long periods of time,

facilitated an appropriate process. In selecting the new

their essence cannot possibly be conveyed on a piece ofpresident, the committee’s assessments of candidates

paper. Ensuring that outside directors are well informed

were in alignment with those of the executive side, and I

through information fromfelt that their conclusions were extremely fair.

the Company and visits toMelanie

Although the process for appointing the new

the front lines facilitatespresident proceeded amid considerable tension, the commit-

the creation of fresh per-tee members were able to concentrate on the process with

spectives when theygreat peace of mind and navigate this heavy responsibility

interact with employees,

thanks to the efforts ofwhich in turn leads to ful-

Chairperson Okamoto in

filling, enriched, andleading the committee. I

effective Board meetings.
Melanie

With major

kind of president that the Company should appoint and what

committee could ulti-

upheaval in the operating environment expected to con-should be expected of the Nominating Committee in order tomately appoint an out-tinue, the skills required of members of the Board offacilitate that appointment. The appointment steps taken bystanding individual but

Directors will change as the strategies that Mitsubishi

the Nominating Committee over the past three years in par-also that it has in place

Estate must adopt evolve in accordance with such

Company with Nominating Committee, etc., structure. The

ticular deserve high praise.

such a robust appoint-

upheaval.

committee then became membered solely by outside

Shirakawadirectors in 2019.

Directors’ skills matrix in December 2021, it had previously

The Role of the Nominating Committee
OkamotoIn 2016, Mitsubishi Estate transitioned to a

Although the Company unveiled the Board ofment process.

Amid these circumstances, efforts to maintain the

The widespread recognition on the executive

effectiveness of the Board of Directors are vital. These will

endeavored to appointside of the need for an individual capable of making man-entail revising the skills required of directors on an ongo-skills matrix for the Board of Directors and raising thehuman resources withagement decisions, taking into consideration changes ining basis and continuously examining the composition ofpercentage of female directors, the Company reduced thethe skills required for thethe operating environment, the attitudes and values of

the Board of Directors, in terms of size, diversity, andnumber of directors from 15 to 14 in 2023, thereby ensur-

operations of the Board

stakeholders, and qualitative and quantitative assess-other aspects, to ensure and improve its effectiveness.

ing that its seven outside directors represent half of theof Directors using its

ments, led to considerable convergence within the com-

Okamotototal number of directors.

appointment standards

mittee on the appointment process.

tion to business execution should be entrusted to thefor director candidates. I

OkamotoNaturally, much is expected of President & CEO

executive side to the greatest extent possible, while theregard the skills matrix

Atsushi Nakajima, who was appointed through this process.

role of outside directors, who ensure independence on

Committee takes part in

as a fresh visualization of

While I am fully aware of the organizational leadershipbehalf of shareholders, should be to offer assessments

the Succession Plan forthese standards.

Furthermore, beyond to nominating director candidates, the Nominating

Egami

I think that specific decision-making in rela-capabilities that have enabled him to achieve resultsfrom an external perspective on major plans and courses

While a skills matrix is still a novel concept inexceeding expectations throughout his career, I hope thatof action put forward by the executive side. I believe thatJapan, I think that it will become increasingly important

he will manage Mitsubishi Estate in a way that allows it tothis division of roles is the appropriate way for the Board

committee members,

for promoting understanding among stakeholders. I alsoachieve further growth going forward by combining a long-of Directors to function. Assuming, for example, the exis-

how do you view the role

feel that the current composition of the Board of Directors

term vision and a near-term strategy to realize that vision.

tence of a framework for thinking that directors feel con-of the Nominating

is suited to Mitsubishi Estate’s businesses.

Committee?

Okamotothe President & Chief
MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

As a member of the Nominating Committee, I

am proud not only that the

Thereafter, in addition to formulating and disclosing a

90

In my view, it is the role of the Board of

Directors to create various changes by interacting with

Shirakawa

Setsuko Egami

Egami

system for its members to gain a full understanding of

Executive Officer. As

Egami

The transition to a Company with Nominating

Melanie

The Nominating Committee, which is mem-

bered solely by outside directors, has earned high praise

ROUNDTABLE DISCUSSION AMONG MEMBERS OF THE NOMINATING COMMITTEE

making appointments. However, it is precisely because theflicted about going beyond when engaging in discussions

Points for Improving the Effectiveness of
the Board of Directors

at Mitsubishi Estate, I believe that outside directors must
provide the stimulus that allows discussions to transcendsuch a framework. I aim to concentrate efforts on ensur-

Committee, etc., structure in 2016 was a major turning point.

from stakeholders for its transparency and oversightAmid significant changes in the operating environment, thefunctions. That being said, I appreciate that concerns

Shirakawatransition enabled continuous full-fledged discussions on theremain over whether it is fully utilizing its effectiveness inprises members with truly diverse backgrounds. I learn

Mitsubishi Estate’s Board of Directors com-

ing that outside directors continue offering new insight tothe executive side to fulfill our mission.

91

Corporate GovernanceRisk Management
The Mitsubishi Estate Group has established the Mitsubishi Estate Group Risk Management Rules and has set up a

Risk Map

risk management system to manage risks in all of its business activities. Mitsubishi Estate has also established theModerate

Risk Management & Compliance Committee to oversee the Group’s risk management and formed the Risk

High

Risk Impact

Management & Compliance Subcommittee as a working-level consulting body responsible for such matters as theance is appointed by resolution of the Board of Directors to take responsibility for overseeing risk management, andgeneral managers of business groups and general managers from Group departments have been designated as risk

Risks that necessitate theimprovement of existing measuresor introduction of new measures

Status of Control

collection of risk management-related information. The corporate officer in charge of risk management and compli-

management officers. We promote risk management activities through the Mitsubishi Estate Legal & ComplianceDepartment, which serves as the secretariat.
We have also established and implemented action guidelines, contact and initial response systems, and business

Risks that are appropriately dealt withby continuing existing measures

Candidates for risks needing countermeasuresin the future

Key risks requiring countermeasures during
the fiscal year

Ongoing risks requiring countermeasures(moderate impact)

Ongoing risks requiring countermeasures(high impact)

continuity plans for use in times of crisis.

Risk Management and Compliance System

Risk Management Related to Investment Projects (As of April 2023)

Among the various risks recognized by the Mitsubishi Estate Group, risks related to investment projects are identified

Board of Directors

Corporate Officer in Charge of Risk Management and ComplianceAppointment

Decision of basic
policy supervision

Reporting= Responsible for overseeing risk management= Responsible for overseeing compliance
Overallmanagement

Risk Management & Compliance Committee

business viability. Prior to the deliberation of important investment projects by the Executive Committee, which ischaired by the president & chief executive officer and is responsible for strategy planning for the entire Group andReportingmonitoring of the progress of each business toward realizing their strategies, the Strategic Investment Committee

Risk Management and Compliance-Related Deliberation and Decision-Making Bodies

Mitsubishi Estate
Vice-Chairperson

Chairperson

Mitsubishi Estate
Corporate Officer in Charge of Risk
Management and Compliance

Mitsubishi Estate President & Chief
Executive Officer

Directions
through eachduty

Risk Management
Promotion Officers(Line and Staff Departments,
Others)deliberates and evaluates profitability, the nature of risks and related countermeasures, and other matters. At eachphase, risk assessments are also conducted from legal and financial aspects in order to grasp an overall picture ofCompliance Promotion
Officers

the aforementioned risks.

(General Managers)

Strategic Investment Committee Committee Members

Corporate Governance

Mitsubishi Estate Directors, Representatives from Main Group Companies
Mitsubishi Estate

ReportRisk Management
Promotion Personnel

Compliance Promotion
Personnel

In its deliberations, in addition to assessing the economic viability of a given project using multiple indicators, theGuidance AssistanceOutside Experts

Chairperson of the Board
Full-Time Members of the Audit Committee
General Manager of Internal Audit Officeby the Strategic Investment Office, which is responsible for investment decision rules, through assessments to verify

Strategic Investment Committee verifies the appropriateness of various aspects of premises, such as rents, unit
selling prices, and construction costs. For risks, in particular, simulations of upside and downside scenarios are(Invited as necessary)Group Company

incorporated into investment decision rules. The difference between the scenario set by the responsible businessgroup in charge of the project and the downside scenario is recognized as risk. The Strategic Investment Committee

Risk Management Officer

Compliance Officer

holds discussions on the acceptable limits of that risk.

Risk Evaluation Process for Individual Projects

Risk Management & Compliance Subcommittee

Scenarios anticipated by business units

Risk Management and Compliance-Related Deliberation and Reporting Bodies
Consultation

General Managers of Line and Staff
Departments for Functionaland Business Groups

Corporate Officer in Charge of Risk
Management and Compliance
General Managers of and Other Management
Personnel in Corporate Group Departments

People Designated by Presidents ofMain Group Companies

General Manager of Internal Audit Office
General Manager of Mitsubishi Estate
Audit Committee Office

Note: Other individuals nominated by the
corporate officer in charge of compliance
may also participate.

Executive
Committee

AdviceRisk Management Promotion Secretariat / Compliance Promotion Secretariat(Mitsubishi Estate Legal & Compliance Department)

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Presentation of scenarios anticipatedby business units with major investment projects

 reparation of the responPsible business group’s
anticipated scenarios with
important investment
projects and submission
thereof to the Strategic
Investment Committee

Risk Management Activities

92

Business Groups erification of individualV
investment projects• Verification of consistency
with strategies of eachbusiness group• Verification of economic
viability

1

2

Risk Management Activities of Each Individual Business andFunctional Group and Group Company

Identification and Monitoring of Key Risks That Need ParticularAttention from the Group

Individual Group companies and functional and business groups identify
important risks based on a risk analysis and carry out activities throughout the year to reduce the risks identified. In addition, the general managers of each functional and business group ascertain the status of risk
management activities of different business companies under the jurisdiction of each business and functional group and provide coordinationand support.

To accurately grasp the risks facing the Group as a whole, and by selecting
and mapping key risks that require measures to be taken, the risks thatmust be addressed and their level of priority are brought to light. Whilemonitoring risks throughout the year, particularly key risks, support isprovided as necessary.

Strategic Investment Office• Information gathering andanalysis for investment
strategy planning• Preparation and use ofinvestment decision rules

Strategic Investment Committee[Role]
Discussion on and verification of
the appropriateness of importantinvestment projects

Executive Committee[Role]
Investment decisions
regarding important
projects

 erification of the responsible
Vbusiness group’s anticipatedscenarios• Verification of consistency with
Companywide strategies• Verification of consistency withbusiness group strategies• Verification of economic viability• Verification of appropriateness ofassumptions (such as rents andconstruction costs)

 erification of importantV
investment projects• Verification of consistency
with Companywide
strategies• Verification of consistency
with business group
strategies• Verification of economic
viability here necessary, the Strategic
W
Investment Office prepares separate anticipated scenarios andsubmits them to the Executive
Committee.
Jurisdiction

Anticipation of scenarios byStrategic Investment Office

Sharing of visualized risks and areas of concern for business viability

93Corporate Governance

Financial Section

Corporate Governance System

Status of Shareholdings

Dealing with Major Risks 

Stocks held for purposes other than pure investment, theBelow are some examples of major risks that have come to light in the Mitsubishi Estate Group through risk management activities

number of shares, and their total value as of March 31, 2023,

and various business activities and countermeasures that have been taken.

recorded on the balance sheet are as follows.

Risks

Risks of Natural
and Man-MadeDisasters, etc.

Risks of a
Deterioration in Real
Estate Market
Conditions

Risks of Fluctuations
in Exchange Rates

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Risks of Increases inInterest Rates

94

Information Security
Risks, Such as
Cyberattacks,
Including Leaks of
Personal Information

1,083

Mitsubishi Gas Chemical Company, Inc.

431,405

846

Shizuoka Financial Group, Inc.*3

886,750

843

Nippon Yusen Kabushiki Kaisha

258,363798

2,340,000

758

TOKAI CARBON CO., LTD.

588,250741

KUBOTA Corporation

359,000717

amounts shown on the balance sheet for specific investment

NIPPON EXPRESS HOLDINGS, INC.

89,483713

shares and deemed holdings of equity shares are as follows.

SHINAGAWA REFRACTORIES CO., LTD.

138,150

631

Specific Investment Shares

Matsuya Co., Ltd.

545,300

601

NOHMI BOSAI LTD.

345,000

583

1,509,000

559

Number ofsharesCountermeasures

At facilities that it owns or operates, the Mitsubishi EstateGroup prepares business continuity plans for use in theevent of a natural or man-made disaster. In addition,
redevelopment projects promoted by the Group put inplace advanced disaster-management functions and adopt
disaster countermeasures through area management.

The Group’s performance may be adversely affected if realestate market conditions were to deteriorate in accordancewith an economic downturn caused by domestic andoverseas factors. In such circumstances, the Group would
need to pay particular attention to the progress ofoccupancy rates in the Tokyo office leasing market and tomulti-use development, redevelopment, and other plans,as these entail large-scale investments over long-term
development time frames.

The basic policy of the Group is to conclude relatively longterm lease contracts with customers in its office building
leasing business. The resultant prospect of stable lease
revenues mitigates to a certain degree the risk of sharp
economic fluctuations.

If material prices rose in conjunction with a steep increasein raw material and crude oil prices due to domestic andoverseas factors, the Group may not necessarily be able tooffset this through increased sales prices and rental feesin its real estate development business, which may havean adverse effect on performance.

The Group implements cost control measures, such as theearly placement of construction material orders, and will
monitor trends in material prices in a timely manner going
forward while adopting a multifaceted response thatencompasses adjusting investment and development
plans and consulting with its partners.

The Group’s business operations are affected byfluctuations in exchange rates. Appreciation of the yen
reduces the yen conversion amount in foreign currencydenominated transactions. In addition, a portion of theGroup’s assets and liabilities are converted into Japanese
yen for the preparation of consolidated financial
statements. Accordingly, even if there was no change inthe value of said assets and liabilities in local currency
terms, their value may be affected after yen conversion.

660,500

The Group strives to minimize risks of fluctuations in
exchange rates through such efforts as procuring funds inthe relevant foreign currency when acquiring foreign currency-denominated assets.

Unlisted Shares

106

9,328

Shares Other Than Unlisted Shares

62

253,626

Information on the number of shares for each company andCompany

The Group hedges interest rate risk on a portion of its
variable interest rate financing through interest rate
swaps to convert its interest rate payments into fixed
payments. The Group plans to continue procuring funds inconsideration of the balance between outstanding
borrowings and corporate bonds with fixed and variableinterest rates.

The Group’s performance could be affected in the unlikely
event of external leaks of confidential information or thematerialization of system risks due to unforeseen
circumstances, such as information security incidents
resulting from cyberattacks, computer viruses, or the like.

The Group has established regulations in relation to
information management, based on which it implements arigorous information management system, and complies
appropriately with revisions to laws, such as the Act on theProtection of Personal Information. Moreover, in order toraise the IT security level Groupwide, the Group has
positioned its DX Promotion Department at the center ofefforts to standardize its IT systems and make them moresecure. The Group is also enhancing collaboration among
DX Promotion Department IT security personnel andbetween the department and external security companies,
thereby providing Groupwide support.

Number ofsharesAmountbooked onbalancesheet(¥ million)

Mebuki Financial Group, Inc.

THE HYAKUGO BANK, LTD.

Mitsubishi Corporation

13,088,457

62,183

Tokyo Kaikan Co., Ltd.

131,140

445

Mitsubishi UFJ Financial Group, Inc.

27,730,542

23,512

P.S. Mitsubishi Construction Co., Ltd.

496,000

324

Japan Airport Terminal Co., Ltd.

3,111,400

20,535RENAISSANCE INCORPORATED

307,100

284

HEIWA REAL ESTATE CO., LTD.

4,274,100

16,177

Kodensha Co., Ltd.

58,500255

AGC Inc.

3,220,906

15,862

GS Yuasa Corporation

73,670175

Mitsubishi Heavy Industries, Ltd.

2,346,997

11,443The 77 Bank, Ltd.

70,687152

Mitsubishi Logistics Corporation

3,665,554

11,399Mitsubishi Kakoki Kaisha, Ltd.

66,586148

Taisei Corporation

2,426,690

9,937

Kyushu Financial Group, Inc.

256,410122

Mitsubishi Electric Corporation

5,577,294

8,803

NANTO BANK, LTD.

50,440117

Shin-Etsu Chemical Co., Ltd.

1,541,060

6,588

HOTEL NEWGRAND CO., LTD.

24,20094

East Japan Railway Company

857,300

6,288

Nikki Co., Ltd.

49,30092

Central Japan Railway Company

367,900

5,816

ELEMENTS, Inc.

75,00085

TOYOTA MOTOR CORPORATION

2,992,310

5,625

gooddays Holdings, Inc.

57,00067

NIKON CORPORATION

3,510,000

4,756

Mitsubishi Steel Mfg. Co., Ltd.

56,272

65

794,100

4,026

Concordia Financial Group, Ltd.

120,000

58

Kirin Holdings Company, Limited

1,675,538

3,511

Mitsubishi HC Capital Inc.

3,760,000

2,571

Obayashi Corporation

2,404,961

2,436

Company

Mitsubishi Research Institute, Inc.

447,500

2,282

Tokio Marine Holdings, Inc.

20,788,500

52,948PIA Corporation

680,200

2,183

Mitsubishi Electric Corporation

10,656,000

16,820Mitsubishi Chemical Group Corporation*1

2,723,000

2,139

Mitsubishi UFJ Financial Group, Inc.

4,306,400

3,651

SHIMIZU CORPORATION

2,738,650

2,053

MITSUBISHI MOTORS CORPORATION

700,000365

THE HACHIJUNI BANK, LTD.

3,441,500

1,978

913,100

1,969

1,275,900

1,862

621,600

1,584

1,852,000

1,583

Note: With regard to the largest shares in terms of the amounts recorded on the balance sheet,specific investment shares and deemed holdings of equity shares for investment purposes
are not included in aggregate totals.
*1 Mitsubishi Chemical Holdings Corporation changed its name to Mitsubishi Chemical Group
Corporation on July 1, 2022.
*2 Nippon Suisan Kaisha, Ltd., changed its name to Nissui Corporation on December 1, 2022.
*3 The Shizuoka Bank, Ltd., established Shizuoka Financial Group, Inc., as a wholly owned parent
company through a share transfer on October 3, 2022. As a result of the share transfer, one
share of common stock of Shizuoka Financial Group was allotted for each share of common
stock of The Shizuoka Bank.

901,000

1,549

2,789,900

1,514

TOHO CO., LTD.

The Bank of Japan (BOJ) has implemented a policy ofquantitative and qualitative monetary easing with yield
curve control in response to the credit crunch in financial
markets and the slowdown in the global economy.
However, a rise in interest rates due to a change in the
BOJ’s policy or a deterioration in the demand–supply
balance for Japanese government bonds (JGBs) caused by
growth in the issuance of JGBs may negatively affect theperformance, financial position, or other aspects of theGroup’s business.

Total amount bookedon balance sheet(¥ million)

Mitsubishi Materials Corporation
Seino Holdings Co., Ltd.
Fukuoka Financial Group, Inc.
Chiba Bank, Ltd.
Odakyu Electric Railway Co., Ltd.
Nissui Corporation*2

Financial Section

Corporate Governance

Risks of Substantial
Rises in Material
PricesAmid growing social interest in the way companies
respond in the event of pandemics and natural disasters,such as typhoons, in the unlikely event of shortcomings ina response deemed appropriate by the Group, safety
management, reputational, and other risks could emerge,
which might affect the Group’s business promotion andperformance.

T&D Holdings, Inc.

Deemed Holdings of Equity Shares
Number ofsharesAmount bookedon balance
sheet (¥ million)

Please refer to the Company’s website for information on the purpose of holding
shares and on business alliances.
https://www.mec.co.jp/en/ir/governance/others/95

Financial Section

Eleven-Year Summary of Selected Financial Data (Consolidated)
Years ended March 31

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Operating revenue¥  927,157¥1,075,285¥1,110,259¥1,009,408¥1,125,405¥1,194,049¥1,263,283¥1,302,196¥1,207,594¥1,349,489¥1,377,827

Operating profit

118,349

161,271

156,332

166,199

192,495

213,047

229,178

240,768

224,394

278,977

296,702

Ordinary profit

92,381

139,638

133,113

144,851

169,851

190,506

206,587

219,572

210,965

253,710

271,819

Profit attributable to owners of parent

45,50764,29773,33883,426102,681

120,443

134,608

148,451

135,655

155,171

165,343¥4,711,521¥4,765,368¥4,901,526¥5,311,840¥5,484,115¥5,801,450¥5,774,193¥5,858,236¥6,072,519¥6,493,917¥6,871,959

Total equity*

1,239,547

1,329,057

1,495,838

1,509,680

1,592,777

1,698,348

1,770,643

1,734,462

1,851,899

2,003,225

2,157,561

Interest-bearing debt

2,085,417

1,973,042

1,929,355

2,291,038

2,396,994

2,481,675

2,319,597

2,429,883

2,526,142

2,738,632

2,871,677¥  122,286¥  336,489¥  200,078¥  135,821¥  168,527¥  293,338¥  345,954¥  341,766¥  207,414¥  280,090¥  269,914

Financial Results (Millions of yen)

Financial Position (Millions of yen)
Total assets
1

Cash Flows (Millions of yen)
Cash flows from operating activities  Of which, depreciation and amortization

73,36474,80572,696

74,24575,97477,54580,336

84,941

89,107

91,581

93,459Cash flows from investing activities(217,992)(133,537)(46,568)(231,003)(327,292)(286,841)(271,083)(277,440)(297,303)(313,778)(312,046)  Of which, capital expenditures(208,135)(159,677)(177,331)(275,316)(275,372)(289,570)(285,089)(331,857)(319,841)(329,115)(286,523)

Cash flows from financing activities

27,150(177,514)(189,109)309,237(4,921)

37,203(192,473)(28,886)

50,42590,97330,457

Cash and cash equivalents at the end of year

191,837

224,739

198,489

412,392

243,341

286,859

179,308

213,008

172,307234,244

225,772

Earnings¥    32.79¥    46.34¥    52.85¥    60.13¥    74.00¥    86.78¥    96.97¥   108.64¥   101.34¥   116.45¥   125.54

Cash dividends       12       12       14       16       20       26       30      33      31      36       38¥  240,998¥  224,701¥  279,310¥  296,962¥  200,587¥  246,332¥  239,934¥  252,034¥  279,718¥  302,424¥  320,641  336,784  331,821  381,434  402,221

2.6%

3.4%

3.2%

3.3%

3.6%

3.8%

4.0%

4.1%

3.8%

4.4%

4.4%

5.0

7.5

7.7

8.5

8.7

9.5

10.1

11.3

11.2

13.9

12.2

Financial Section

Per-Share Amounts (Yen)

Principal Financial Indicators
Business profit*2 (Millions of yen)
EBITDA*3 (Millions of yen)
ROA*

4

Interest coverage ratio*5 (ICR) (Times)
ROE

3.6%

5.0%

5.2%

5.6%

6.6%

7.3%

7.8%

8.5%

7.6%

8.1%

7.9%

Payout ratio

36.6%

25.9%

26.5%

26.6%

27.0%

30.0%

30.9%

30.4%

30.6%

30.9%

30.3%

¥    2,596¥    2,446¥    2,787¥   2,090.5¥    2,030¥  1,798.5¥  2,005.5¥    1,595¥  1,932.5¥    1,819¥  1,576.5

1,390,397

1,390,397

1,390,397

1,390,397

1,390,685

1,390,908

1,391,038

1,391,174

1,391,328

1,391,478

1,324,288

Stock Information
Stock price*6 (Yen)
Number of shares issued and outstanding (Thousands of shares)

5,000

Mitsubishi Estate’s Stock
Price Changes on theTokyo Stock Exchange

Yen
4,000

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

3,000

96

2,000

1,000

0
2012/3

2013/3

2014/3*1 Total equity is calculated by deducting non-controlling interests and stock acquisition rights from total net assets.
*2 Business profit is calculated as operating profit + equity in earnings of unconsolidated subsidiaries and affiliates.
*3 EBITDA is calculated as the sum total of operating profit, interest and dividend income, equity in earnings of unconsolidated subsidiaries and affiliates, depreciation and amortization, and goodwill.
*4 ROA was calculated as operating profit ÷ total assets (average of the amount at the beginning and end of the fiscal period) until FY2018. However, since FY2019 ROA has been calculated as business profit ÷ total assets(average of the amount at the beginning and end of the fiscal period).
*5 The interest coverage ratio (ICR) is calculated by dividing the sum total of operating profit, interest and dividend income, and equity in earnings of unconsolidated subsidiaries and affiliates by the sum total of interest expenses
and commercial paper interest.
*6 As of the last trading day in March

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/32023/3To see the consolidated financial statements in full, please refer to the Company’s website.
https://www.mec.co.jp/en/ir/library/97

Financial Section

The following table contains certain of our KPIs. Please visit our website to view all our KPIs.
https://mec.disclosure.site/e/sustainability/activities/esg-data/

Targets and Results of the Key Themes and Major Initiatives Laid Out in
Mitsubishi Estate Group 2030 Goals for the SDGs
ThemesBenchmarks
Greenhouse gas emissions, such as CO2

Climate Change
Percentage of power from renewable energy sources

Waste disposal amount per m2

Numerical Targets
GHG emissions (Scope 1 + Scope 2 + Scope 3) for the entire Group compared with FY2019• Reduce the total of Scope 1 and Scope 2 emissions by at least 70% and Scope 3 emissions byat least 50% by FY2030• Achieve net-zero emissions for Scope 1, Scope 2, and Scope 3 by 2050 (Certified by the
Science Based Targets (SBT) initiative in June 2022)• 100% by FY2025(Joined RE100 in January 2020)

20% reduction by 2030, compared with FY2019

FY2021 Results
2,534,820 t-CO2

31%

5.1kg/m2

Environment

Waste

Financial Section

Diversity

Waste recycling rate

90% by 2030

58%

Percentage of female managers

Over 20% by FY2030, 30% by FY2040, and 40% by FY2050

6.6%(as of April 1, 2021)

Percentage of female employees among
new-graduate hires

40% every fiscal year

38.3%

Percentage of female employees among
mid-career hires

40% every fiscal year

24.4%

Rate of male employees taking
childcare leave of absence*1

Maintain at 100% or higher every year through FY2030

75.5%

Rate of female employees taking childcare leave of absence

100% every year through FY2030

98.7%

Rate of reinstatement to work after childcare /maternity leave

100% every year through FY2030

100%

Rate of use of wood equivalent to that in the Sustainable
Sourcing Code*2 (Certified Wood and Domestically Produced
Wood)

100% by FY2030—

Diversity & Inclusion

Human Rights

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Innovation

98

Resilience

Operation of
Incubation Facilities

FY2022 / Major Initiatives

Initiatives Going Forward

CO2 and Other GHG Emissions: 2,099 thousand t-CO2
Ratio of renewable electricity: 51%• Introduced electricity from renewable energy sources at all Company-owned officebuildings and retail facilities (50 such buildings and facilities) in the Tokyo metropolitan area and in the city of Yokohama, as well as at Company-owned office buildings
and retail facilities in Sendai and Hiroshima

Aim to achieve FY2025 target by accelerating the introduction of renewable electricity at office buildings and retail facilities in locations other than those described on the left

Mitsubishi Estate Group*3

Waste disposal amount per m2: 5.6 kg/m2
Waste recycling rate: 59%• Weighed each retail tenant’s volume of garbage and promoted awareness among
tenants of the importance of reducing and separating their garbage• Continuously improved garbage separation at the Mitsubishi Estate Head Office andstrengthened calls for tenants to also improve garbage separation• Implemented Circular City Marunouchi, a resource-recycling initiative in the
Marunouchi area. The first phase of the initiative saw the launch of the
MARUNOUCHI TO GO Project, an activity for taking home leftover food as part ofmeasures to reduce food loss.
Second phase: Promoted Bottle to Bottle, an activity for recycling plastic bottles
Third phase: Reused cooking oil used at restaurants, etc., as sustainable aviationfuel and biodiesel fuel• Improve each retail facility tenant’s awareness of weighing, reducing, and separating garbage• Continuously improve garbage separation at the Mitsubishi Estate Head Office and strengthen calls
for tenants to also improve garbage separation• Take part in verification tests aimed at building a resource-recycling model for plastics disposed of
at offices

Mitsubishi Estate Group*3

In addition to continuing to pursue the initiatives described on the left, plan to analyze the results ofan internal survey promoting gender diversity and examine possible measures for achieving thatgoal

Mitsubishi Estate Co., Ltd.

Beyond continuing to pursue the initiatives described on the left, continue to improve the disclosureof information on the active roles of and working environments for women

Mitsubishi Estate Co., Ltd.

Beyond continuing to pursue the initiatives described on the left, continue to improve the disclosureof information on the active roles of and working environments for women

Mitsubishi Estate Co., Ltd.

In addition to continuing the initiatives described on the left, plan to implement the following initiatives• Monitor the ratio of male employees taking childcare leave (contact male employees who have nottaken childcare leave for more than a certain period after the birth of their child and confirm theirintentions and other relevant information)

Mitsubishi Estate Co., Ltd.

•H
 old events and execute other activities to enable women to create networks and navigate life events
through a working group for promoting the active participation of women in the workplace• Continue to pursue the initiatives described on the left

Five Mitsubishi Estate Group
companies*4

Continue to pursue the initiatives described on the left

Five Mitsubishi Estate Group
companies*4• Continue to check and implement the operation described on the left

Mitsubishi Estate Group• Aim to increase the number of companies surveyed by 2025
• Continue to interview construction company employees• Begin interviews of employees at cleaning companies

Mitsubishi Estate, Mitsubishi
Estate Residence, Mitsubishi
Estate Project Management,
Royal Park Hotels andResorts, and Mitsubishi EstateCommunity

Further diversify the community by attracting start-up companies engaging in new industries

Mitsubishi Estate Co., Ltd.

7.2% (as of April 1, 2022)• Strengthened recruitment of women among mid-career and new-graduate hires• Endeavored to create an environment that allows women to continue working• Implemented a survey to promote gender diversity
35.7% (as of April 1, 2022)
Implemented the following initiatives to raise the percentage of women among new
graduates at the application stage:• Held roundtable discussions with women• Organized seminars for women with female speakers
36.5%
Implemented the following initiatives to raise the percentage of women among midcareer hires at the application stage:• Arranged for female employees to speak at presentations on Mitsubishi Estate• Featured interviews with female employees in the recruitment section of theCompany’s website
110.6%•D isclosed the percentage of male employees taking childcare leave•E ncouraged the taking of childcare leave (periodically issued literature on taking
childcare leave to male employees with newborns while encouraging employees
who had yet to take childcare leave to discuss doing so with their superiors)•F acilitated roundtable discussions among male employees with experience of taking
childcare leave (held roundtable discussions with male employees who have taken
childcare leave to share their experiences with fellow Company employees)•C reate and promote awareness of a handbook on pre- and post-childbirth leave andchildcare leave summarizing childcare and other types of leave of absence and procedures for leave takers to follow
100%• Provided a handbook offering support regarding pregnancy, childbirth, and reinstatement to work
• Carried out consultation sessions• Held platforms (such as roundtable discussions and lectures) offering information
helpful to achieving a work–life balance and developing a career• Carried out interviews for employees with their department and with the Human
Resources Department when they are reinstated to work following childcare leave100%• Held platforms (such as roundtable discussions and lectures) offering information
helpful to achieving a work–life balance and developing a career• Carried out interviews for employees with their department and with the Human
Resources Department when they are reinstated to work following childcare ormaternity leave• Confirmed the level of compliance in every Mitsubishi Estate project• Mitsubishi Estate Residence Co., Ltd., established a scheme to develop properties byobtaining Forest Stewardship Council (FSC) project certification.
60 companies• Surveyed construction and cleaning companies• Interviewed employees in addition to conducting surveys at some of the construction
companies

Scope

Surveys of suppliers using a questionnaire——

Area of facilities—

Approx. 1,300 m (FY2006)

Number of tenant companies—

12 companies(as of May 2007)

202 companies

Percentage of employees with first aid provider
qualifications

100% every year through FY2030

72.4%

75.3%

Taking into account COVID-19 conditions, endeavor to raise the percentage of first aid provider qualification holders by encouraging employees to undergo training to the extent possible

Two Mitsubishi Estate Group
companies*5—

Implemented• Implement comprehensive emergency drills in the Marunouchi area through public
and private sector cooperation, as has been done continuously since 1926
• Carry out verification tests of Disaster Dashboard Beta+, a platform for sharing
information among disaster-response agencies and communicating information tostranded commuters during a disaster• Implement disaster prevention drills in cooperation with management and residents’ associations at The Park House Harumi Towers condominiums (Mitsubishi
Estate Residence and Mitsubishi Estate Community)• Expand drills by individual buildings to ensure the effectiveness of drills (spearheaded by Mitsubishi Estate Project Management)• Utilize Disaster Dashboard Beta+, a platform for sharing information among disaster-response
agencies and communicating information to stranded commuters during a disaster• Implement disaster prevention drills at condominiums in cooperation with management associations and other organizations (Mitsubishi Estate Residence and Mitsubishi Estate Community)

—

—

100%

100%

—

New*6 and large-scale*7 retailfacilities in Japan

Disaster Preparedness Implementation of emergency drills

Percentage of buildings designated as shelters for stranded
commuters

2*1 Ratio (b/a) of the number of male employees taking childcare leave in a given fiscal year (b) to the number of male employees whose spouse gave birth in the same fiscal year (a)Through FY2020(b): Covers male employees taking childcare leave in the fiscal year that their spouse gave birth
From FY2021(b): Since the rate of male employees taking childcare leave in a given fiscal year includes those who did not take said leave during the fiscal year in which their spouse gave birth, the rate may exceed 100% insome fiscal years.
*2 D efines standards and operational procedures for ensuring procurement with consideration for sustainability with respect to international agreements and codes of conduct in fields relevant to sustainability

Approx. 13,000 m2
Remodeled EGG JAPAN, Marunouchi’s flagship innovation hub, and relaunched it as
EGG to attract more domestic and overseas growth companies going forward andcreate an area with abundant opportunities for companies to promote new technologies and businesses and cooperate and co-create with each other

Relevant SDGs

*3 Mitsubishi Estate Group: Group companies have been selected based on control criteria. Properties for which the Group’s ownership or share of beneficial interests in trust is less than 50% have been excluded from thescope of calculations.
*4 Five Mitsubishi Estate Group companies: Mitsubishi Estate Co., Ltd., Mitsubishi Jisho Property Management Co., Ltd., Mitsubishi Estate Residence Co., Ltd., Mitsubishi Jisho Sekkei Inc., and Mitsubishi Real Estate Services Co., Ltd.
*5 Two Mitsubishi Estate Group companies: Mitsubishi Estate Co., Ltd., and Mitsubishi Jisho Property Management Co., Ltd.
*6 New: Completed from 2002 onward*7 Large-scale: Floor area of 100,000 m2 and above

99

Corporate Data

Principal Mitsubishi Estate Group Companies
Commercial Property
Business

Address

Business activities

Share ofvoting rights(%)

Building development and leasing business

Address

Real Estate Brokerage Business

Sunshine City Corporation

World Import Mart Building, Sunshine City, 1,
Higashi-Ikebukuro 3-chome, Toshima-ku, Tokyo 170-8630

Management of Sunshine City and other buildings

63.2

Mitsubishi Jisho House Net Co., Ltd.

Tokyo Kotsu Kaikan Co., Ltd.

Tokyo Kotsu Kaikan, 10-1, Yurakucho 2-chome, Chiyoda-ku, Tokyo
100-0006

Management of Tokyo Kotsu Kaikan and other buildings

50.0

Custom-Built Housing

Yokohama Sky Building Co., Ltd.

19-12, Takashima 2-chome, Nishi-ku, Yokohama, Kanagawa
Prefecture 220-0011

Management of the Sky Building and the Yokohama
Shintoshi Building

62.0

Office Building Management Business
Mitsubishi Jisho Property Management Co., Ltd. Marunouchi Nakadori Building, 2-3, Marunouchi 2-chome,
Chiyoda-ku, Tokyo 100-0005

Comprehensive operation and management of officebuildings and retail facilities

100.0

Sanno Grand Building, 14-2, Nagatacho 2-chome, Chiyoda-ku,
Tokyo 100-0014

Tokiwabashi Tower, 6-4, Otemachi 2-chome, Chiyoda-ku,
Tokyo 100-0004

Ikebukuro District Heating and Cooling Co., Ltd. World Import Mart Building, Sunshine City, 1, Higashi-Ikebukuro
3-chome, Toshima-ku, Tokyo 170-8630

Operation and management of building garages and saleof various gasoline products

54.9

Cooling and heating supply business in the Marunouchi,
Otemachi, Yurakucho, and other districts

65.6

Cooling and heating supply business in the HigashiIkebukuro district

68.0

Retail facility business
Mitsubishi Estate • Simon Co., Ltd.

Purchase, sale, and leasing brokerage of homes forindividuals and leasing management

100.0

Shinjuku East Side Square, 27-30, Shinjuku 6-chome, Shinjuku-ku,
Tokyo 160-0022

Design and construction of single-unit homes and housing
complexes, renovation of homes and retail shops, etc.

100.0

Mitsubishi Estate Housing Components Co., Ltd. 228-4, Shinminato, Mihama-ku, Chiba, Chiba Prefecture 261-0002

Manufacture, processing, and sale of construction materials

100.0604-3, Omika, Oyama-cho, Sunto-gun, Shizuoka Prefecture 410-1308

Management and landscaping of the Higashi Fuji Country Club

100.0

MEC Eco LIFE Co., Ltd.

The Park Rex Tennoz, 3-15, Higashi-Shinagawa 1-chome,
Shinagawa-ku, Tokyo 140-0002

Research and proposals on the environment and design

100.0

Ryoei Life Service Co., Ltd.

Royal Life Okusawa, 33-13, Okusawa 3-chome, Setagaya-ku, Tokyo
158-0083

Operation of commercial nursing homes

100.0

Rockefeller Group International, Inc.

1271 Avenue of the Americas, 24th Fl. New York, NY 10020 U.S.A.

Real estate operations in the United States

100.0

Mitsubishi Estate London Limited

5 Golden Square London, W1F 9HT, U.K.

Real estate operations in Europe

100.0

Mitsubishi Estate Asia Pte. Ltd.

138 Market Street #27-03 CapitaGreen, Singapore 048946

Real estate operations in Asia

100.0

Specialist real estate investment management services(real estate investment advisory and other services)

100.0

Mitsubishi Estate Home Co., Ltd.

Recreational Facilities

OthersDistrict Heating and Cooling Business
Marunouchi Heat Supply Co., Ltd.

Shinjuku Front Tower, 21-1, Kita-Shinjuku 2-chome, Shinjuku-ku,
Tokyo 169-0074

Higashi-Fuji Green Co., Ltd.

Parking BusinessTokyo Garage Co., Ltd.

Business activities

Share ofvoting rights(%)

Otemachi Financial City South Tower, 9-7, Otemachi 1-chome,
Chiyoda-ku, Tokyo 100-0004

Management of outlet malls

1-1, Heiwajima 6-chome, Ota-ku, Tokyo 143-0006

Leasing, operation, and management of logistics andoffice buildings

60.0International Business

Logistics facility businessCorporate Data

Tokyo Ryutsu Center Inc.

60.5

Hotel business

Investment Management Business
Mitsubishi Jisho Investment Advisors, Inc.

Marunouchi North Exit Building, 6-5, Marunouchi 1- chome,
Chiyoda-ku, Tokyo 100-0005

Royal Park Hotels and Resorts Co., Ltd.

TOKIWA Bridge, 7-1, Otemachi 2-chome, Chiyoda-ku, Tokyo
100-0004

Comprehensive supervision and management of hotelbusiness

100.0Japan Real Estate Asset Management Co., Ltd.

Otemachi Park Building, 1-1, Otemachi 1-chome, Chiyoda-ku, Tokyo Investment corporation asset management
100-0004

100.0

Marunouchi Hotel Co., Ltd.

6-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005

Management and operation of the Marunouchi Hotel

100.0

TA Realty

One Federal Street, 17th Floor, Boston, MA 02110, U.S.A.

80.39

Shin Kokusai Building, 4-1, Marunouchi 3-chome, Chiyoda-ku,
Tokyo 100-0005

Dark fiber leasing and data center housing businesses in
the Marunouchi and Otemachi districts

51.0

Architectural Design & Engineering Business and Real Estate Services Business

Investment management business in the United States

OthersMarunouchi Direct Access Limited

Architectural Design & Engineering BusinessResidential Business

Mitsubishi Jisho Design Inc.

Marunouchi 2-chome Building, 5-1, Marunouchi 2-chome,
Chiyoda-ku, Tokyo 100-0005

Renovations concerning architectural design and engineering—such as construction and civil engineering—urban and regional development, and various consulting
services

100.0

Inui Building Kachidoki, 13-1, Kachidoki 1-chome, Chuo-ku, Tokyo
104-0054

Interior design administration and construction,
manufacture, and sale of furniture and household items

100.0

Mitsubishi Real Estate Services Co., Ltd.

Otemachi Financial City Grand Cube, 1-9-2, Chiyoda-ku, Tokyo
100-0004

Purchase, sale, and leasing brokerage of corporate realestate, leasing management, real estate appraisal, andparking business

100.0

Mitsubishi Estate Parks Co., Ltd.

3F, Seitoh Kaikan, 5-7, Sanbancho, Chiyoda-ku, Tokyo 102-0075

Operation and management of parking lots and parking-lot
consulting

100.0

MEC Human Resources, Inc.

Otemachi Building, 6-1, Otemachi 1-chome, Chiyoda-ku, Tokyo
100-0004

Human resource-related services

100.0

Mitsubishi Jisho IT Solutions Co., Ltd.

Marunouchi Kitaguchi Building, 6-5, Marunouchi 1- chome,
Chiyoda-ku, Tokyo 100-0005

System planning, development, maintenance, and operationin addition to services providing support for customer
businesses

100.0Real Estate Sales
Mitsubishi Estate Residence Co., Ltd.

Otemachi Financial City Grand Cube 9-2, Otemachi 1- chome,
Chiyoda-ku, Tokyo 100-8189

Real estate development, sales, leasing, management,
real estate ownership, and management

100.0

MEC Design International

URBAN LIFE Co., Ltd.

Meiji Yasuda Seimei Osaka Umeda Building, 3-20, Umeda
3-chome, Kita-ku, Osaka, Osaka Prefecture 530-0001

Leasing business in the Kansai area and real estate sales(sale of renovated condominiums)

100.0Real Estate Services Business

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Residence Management Business

100

Mitsubishi Jisho Community Holdings Co., Ltd.

6-1, Sanban-cho, Chiyoda-ku, Tokyo 102-0075

Business management and operations related to thecondominium management business

71.5

Mitsubishi Jisho Community Co., Ltd.

6-1, Sanban-cho, Chiyoda-ku, Tokyo 102-0075

Overall condominium and building management,
renovations, and related businesses

100.0

Izumi Park Town Service Co., Ltd.

7-2, Takamori, Izumi-ku, Sendai, Miyagi Prefecture 981-3203

Comprehensive management of Izumi Park Town

100.0

OthersNote: Share of voting rights held is as of March 31, 2023. Figures stated are from the Company’s securities report for FY2022.

101

Corporate Data

Organization

Corporate Information

As of April 1, 2023

As of March 31, 2023

Business Development, Client Relations & Solutions Group
Client Strategy Planning Department
Business Development, Consulting & Solutions Department

Stock Information 

Collaborative Creation Sales Department
Office Leasing and Tenant Relations Department

Global Marketing and Promotion Office
Relocation Management Office
Master Lease Sales OfficeWorkplace Solutions Office
Facility Management Consultancy OfficeInnovation and Business Transformation Group
Business Creation Department

5G Infrastructure Sharing Business Office

DX Promotion Department

Computer Security Incident Response Team (CSIRT)

Corporate Strategy Committee

Meeting of Shareholders

Commercial Property Business Group

Executive Committee
Group Strategy Committee

Commercial Property Business Planning Department

Group Companies Management OfficeCommercial Property Business Strategy Department

Okinawa Business Planning Office

President & Chief Executive Officer

Chairperson of the Board

Board of Directors

Stock Details
Number of authorized shares: 1,980,000,000 shares

Area Management Planning Department

Individuals and others
9.12%

Content Business Planning and Operation Department

Logistics Facilities Development Department

Government and local
public authorities
0.00%

Logistics Facilities Tenant Relation OfficeHotel Business Department

Hotel Asset Management Office

Mixed Use Development Department

Marunouchi Development Office
Yurakucho Development Planning Office
Uchi-kanda Development Office
Akasaka Development Office

Overseas individuals
and companies
43.64%

Toyosu Development OfficeTOKYO TORCH Department

Corporate Data

¥142,414 million

Financial institutions
34.23%

Kudan Development Planning OfficeUrban Redevelopment Department

Ikebukuro Development OfficeSustainability Committee

Commercial Property Management Department

Retail Property Strategy & Marketing Planning OfficeSustainability Subcommittee

xTECH Leasing and Promotion Department
Flexible Workspace Planning and Operation Department

Financial instruments
business operators
3.36%
Operating and othercompanies
9.65%

Number ofshares held(Thousandsof shares)

Percentage ofequity held (%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

210,705

16.25

Custody Bank of Japan, Ltd. (Trust Account)

71,090

5.48

Meiji Yasuda Life Insurance Company

42,194

3.25

JP MORGAN CHASE BANK 380055

34,1582.63

SSBTC CLIENT OMNIBUS ACCOUNT

29,951

2.31

STATE STREET BANK WEST CLIENT – TREATY
505234

21,558

1.66

GOVERNMENT OF NORWAY

19,407

1.49

Takenaka Corporation

18,1501.40

Obayashi Corporation

16,422

1.26

SHIMIZU CORPORATION

16,367

1.26

Major Shareholders
OCA TOKYO Business Promotion Office

Museum Management Office

Audit Committee

Paid-in Capital 

Shareholder Composition (Percentage of number of shares to total)

Project Planning Department

Airport Business Department

Nominating
Committee

May 7, 1937

Number of shareholders: 99,381(Increase of 25,779 shareholders compared with the end of theprevious fiscal year)

Urban Project Development Department

Internal Audit
OfficeDate of Establishment 

Number of shares issued and outstanding: 1,324,288,306(67,190,400 decrease in number of shares from the previous
fiscal year-end)

Urban Planning Department

Urban Energy Strategy Planning Department
Strategic Investment Committee

Company Name 
Mitsubishi Estate Co., Ltd.

Residential Business Group

Audit Committee
OfficeRemuneration
Committee

Residential Business Planning Department

Residential Value Chain Management Office

CLT Business, Residential Land & Recreational
Facilities Management Department

Wood Design Business Promotion OfficeInternational Business GroupInternational Business Planning Department

Investment Management Group

Risk Management & Compliance
Committee

Investment Management Business Department

Corporate Group
Risk Management & Compliance Subcommittee

Corporate Planning Department

Corporate Planning Department Affiliated Group Office
Strategic Investment OfficeSustainability Management and Promotion Department
Finance & Accounting Department

MITSUBISHI ESTATE CO., LTD. Integrated Report 2023

Corporate Communications Department

102

Investor Relations Office
Rugby Marketing Office

Human Resources Department

Human Resources Compliance & Diversity Promotion Office

General Affairs Department

Secretary Office

Legal & Compliance Department

Hokkaido Branch
Tohoku Branch
Yokohama Branch
Chubu Branch
Kansai Branch

GRAND FRONT OSAKA Office

Chushikoku Branch

GRAND GREEN OSAKA Office

Kyushu Branch

IMS Development Office

Note: The percentage of equity held is calculated after deducting the shares of treasury stock fromthe issued shares of the Company.

Business Activities 
Development, leasing, and management of office buildings, retail,and other facilities
Development of real estate for investment purposes and asset
management
Development and sale of land for housing, research, and otherfacility use
Management of leisure and other facilities
Sale and brokerage of real estate and related consulting services
Number of Employees (excluding temporary staff)
Non-consolidated: 1,013
Consolidated: 10,655

Website https://www.mec.co.jp/en

Head Office
Otemachi Park Building, 1-1, Otemachi 1-chome, Chiyoda-ku,
Tokyo 100-8133
Phone: +81-3-3287-5100
Hokkaido Branch
New Hokkaido Building, 3-1, Kitashichijo Nishi 4-chome, Kita-ku, Sapporo,
Hokkaido 060-0807
Phone: +81-11-728-2170
Tohoku Branch
Sendai Park Building, 6-1, Kokubun-cho 3-chome, Aoba-ku,
Sendai, Miyagi Prefecture 980-0803
Phone: +81-22-261-1361
Yokohama Branch
Yokohama Landmark Tower, 2-1, Minato Mirai 2-chome,
Nishi-ku, Yokohama, Kanagawa Prefecture 220-8115
Phone: +81-45-224-2211
Chubu Branch
Nagoya Hirokoji Building, 3-1, Sakae 2-chome, Naka-ku,
Nagoya, Aichi Prefecture 460-0008
Phone: +81-52-218-7755
Kansai Branch
OAP Tower, 8-30, Tenmabashi 1-chome, Kita-ku,
Osaka, Osaka Prefecture 530-6009
Phone: +81-6-6881-5160
Chushikoku Branch
Hiroshima Park Building, 7-5, Otemachi 3-chome, Naka-ku,
Hiroshima, Hiroshima Prefecture 730-0051
Phone: +81-82-245-1241
Kyushu Branch
Tenjin Twin Building, 6-8, Tenjin 1-chome, Chuo-ku, Fukuoka,
Fukuoka Prefecture 810-0001
Phone: +81-92-731-2211

103