Sun Frontier Fudousan Co., Ltd.

Consolidated Financial Results for theFirst 3 Months of the Fiscal Year ending
March 31, 2017
Our Goal is to Become the Real Estate Company Best Loved
and Most Chosen by Customers Worldwide

Company Overview

1

Executive Summary

Results for the First 3 Months of the FY ending Mar 31, 2017
Future activities
1) Business environment

2-12
13-15

2) Managerial policy and business model

16-253) Growth strategies

26-37

Sun Frontier Fudousan Co., Ltd.

Company Overview
Name
Head Office
Representative
Established
Stock Listing
Capital
Employees
Main Group
Companies: Sun Frontier Fudousan Co., Ltd.
: Toho Hibiya Building (Hibiya Chanter) 14F
2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006: President, Tomoaki Horiguchi: April 8, 1999
: First Section of the Tokyo Stock Exchange
on February 26, 2007 (Stock code 8934): ¥8,387 million: 312 Consolidated (as of July 31, 2016): SF Building Support Inc.
: Sun Frontier Real Estate Investment Advisors Inc.
: K.K.Yubi: Sun Frontier Taiwan: Sun Frontier Hotel Management

Businesses
1. Real Estate Revitalization Business
Replanning Business/ Building Rental Business

2. Real Estate Services Business
Rental Brokerage/ Property Management/ Building Maintenance/ Sales Brokerage/
Construction Solutions/ Delinquent Rent Guarantees

3.Hotel development, operation
Investment, development, operating
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Sun Frontier Fudousan Co., Ltd.

Highlights of the results for the first quarter
Summary of the first quarter for Fiscal Year Ending Mar. 31, 2017

increase the quarterly profit of 1st quarter for 3 consecutive terms(¥ million)

3 months ended
June 30, 2016

yr/yr change

increase rate

Forecast announced
May 10, 2016

Sales

10,403+4,342+71.7％

41,000Operating income

3,570+2,147+150.9％8,500

Ordinary income

3,468+2,100+153.7％8,200

Net income

2,525+1,341+113.3％

5,600

Profit margin of Revitalization Business improved to 40%• By linking up and combining our specialties through theeach process of acquisition, commodification and sales,with inventive approach, we have maximized the value
extracted from properties.
• Much increases both in profit and profit rate by sale of a
middle size property as a relatively long-term project.
Segment Profit margin is 41.0%, which is higher than the
profit margin for the previous year (26.6%).
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2

Successful start-up our new business lines• "SpringSunny Hotel Nagoya Tokoname"Grand-opened in April, and occupancy rate
grow up to 97.7% in July.
• "The Blossom City" hotel completed in Augustin Da Nang, the largest city of central Vietnam.
• "Space Rental" users are increasing andexpanding this business by taking over new
rental offices.
Sun Frontier Fudousan Co., Ltd.

Summary of the results for the first quarter(¥ million)
Profit margin
to salesIncrease fromthe same
period of theprevious year

Forecasts for the FY
ending Mar 31, 2017

Progress ratewith respect tothe initial
forecast

10,403―＋71.7％

41,000

25.4％

1,423

3,570

34.3％ ＋150.9％

8,500

42.0％

Ordinary
income

1,367

3,468

33.3％ ＋153.7％

8,200

42.3％

Net
income

1,183

2,525

24.3％

5,600

45.1％

Apr. to June in
the FY ended
Mar 31, 2016

Apr. to June in
the FY ending
Mar 31, 2017

Sales

6,060

Operatingincome+113.3％

Each class profit have made gains over 40% to the forecast of fiscal year by the extended-term project.
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

3

Sun Frontier Fudousan Co., Ltd.

Revenue/Profit Summary
Apr. to June in the
FY ended Mar 31,
2016

Apr. to June in the
FY ending Mar 31,
2017

Apr. to June in
the FY ended
Mar 31, 2016

Apr. to June in
the FY ending
Mar 31, 2017

6,060

10,403Operating income

1,423

3,570

4,665

8,920

Non-operating income

35Real estate securitization－－

Non-operating expenses

59

107

Rental building business

497

436

1,367

3,468

Brokerage

405

226

Extraordinary loss/income▲10－

Property management

358

430

Corporate income tax, etc.

172

942

Other businesses

133

388

1,183

2,525

Gross profit on sales

2,191

4,657

Real estate revitalization

1,323

3,865

Real estate securitization－－

Rental building business

271

211

Brokerage

368

182

Property management

166

202

Other businesses

62

195

768

1,086

Sales
Real estate revitalization

Selling and generaladministrative expenses
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

4

Ordinary income

Net income(¥ million)• Revitalization business sales increases double, profit
increases threefold. Much growth of revitalization profit
margin drive force of ordinary income margin higher.
• The margin of Gross profit on sales is 43.3%, remarkably
higher than the previous year 30.1%.
Space Rental and Hotel business established in the previous
year enhanced performance.

Expanded profit cut down the tax loss carried forward,
and tax cost increased.
Income taxes-deferred 571 million yen booked.
Sun Frontier Fudousan Co., Ltd.

Consolidated balance sheet-Assets(¥ million)
Increase/decrease(from the end of
Mar. 2016)

End of Mar. 2015

End of Mar. 2016

End of June 2016

37,45251,36550,902▲462

Cash and deposits

12,686

15,413

16,661+1,247

Inventory assets

23,48032,714

31,396▲1,317

Other current assets

1,285

3,237

2,844

▲392

2,971

2,718

2,720

+1

2,483

1,919

1,922

+2

Intangible assets

76

278

273

▲5

Investments and other assets

412

520

525

+4

40,42454,08453,623▲460

Current assets

Noncurrent assets
Property plant and equipment

Total assets

sales of the middle size properties successfully practiced, inventory assets decrease 1.3B yen.
sales 5 properties, acquisition 7 properties
571 million yen deferred tax asset for Income taxes-deferred booked
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5

Sun Frontier Fudousan Co., Ltd.

Consolidated balance sheet-Liabilities/Equity(¥ million)
End of Mar. 2015

End of Mar. 2016

End of June 2016

Increase/decrease(from the end of
Mar. 2016)

3,550

7,641

7,663

+22

Short-term loans payable, etc.

1,004

3,353

4,000

+646

Income taxes payable, etc.

221

973

434

▲538

Other current liabilities

2,324

3,314

3,229

▲84

14,172

16,29814,369▲1,928Long-term loans and bonds
payable12,98815,055

13,098▲1,956

Other noncurrent liabilities

1,183

1,242

1,270

+27

17,72323,93922,033▲1,906

22,69330,14431,601+1,456

8

▲0

▲11

▲11

Total net assets

22,70130,144

31,590+1,445

Total capital and liabilities

40,42454,08453,623▲460

Current liabilities

Noncurrent liabilities

Total liabilities
Shareholders’ equity
Otherscapital adequacy ratios of at least 50%
End of Mar. 2015

End of Mar. 2016

End of June 2016

56.2%

55.7%

58.9%

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Property sales make gain, interest-bearing debt decrease from 18.4 B
yen to 17.0 B yen

Net income(+2.52 B yen) and dividend payment(▲1.06 B yen)

6

Sun Frontier Fudousan Co., Ltd.

Performance of

Revitalization business(¥ million)
Sales
Segment income (Note)
Profit margin

Apr. to June in
the FY ended
Mar 31, 2016

Apr. to June in
the FY ending
Mar 31, 2017

Increase/decrease

4,665

8,920

+91.2%

1,239
26.6%

3,661
41.0%

10,000

50%
8,920

9,000

45%

+195.3%8,000

41.0% 40%

7,000

35%

6,000

30%

+14.5%pNo. of procuredbuildings

5

7

+2

No. of sold buildings

5

5

±0

25

40

+15

No. of buildings in stock
as of the end of theterm(¥ million)

sales
segment income
profit margin

26.6%
4,665

5,000
4,000

18.8%

25%
3,661

3,206

15%

3,000
 Taking the project period longer to create more value-added,
commodification to win the admiration maximum, and adoption oflimited sales process have brought high income margin over 43%.
 The average business day for selling a property is 309 (except for
middle-term project).
 The stocks of revitalization property as of the end of the first quarterare 40 buildings, worth 31.2 billion yen.

20%

10%

2,000
1,239
1,000

5%

601

0%

0
2015/3 1Q

2016/3 1Q

2017/3 1Q(Note) “Segment income” is calculated by subtracting the expenses for respective businesses, such as interest paid, sales commission, and goodwill
amortization, from gross profit on sales.

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

7

Sun Frontier Fudousan Co., Ltd.

Performance ofRental building business(¥ million)

Sales

sales
segment income
profit margin(¥ million)

Apr. to June in
the FY ended
Mar 31, 2016

Apr. to June in
the FY ending
Mar 31, 2017

Increase/decrease497

436▲12.2%

600

Profit margin

266
53.7%

207
47.6%

▲22.1%

80%
436

421

70%

400

▲6.1％p52.5%
300

 Number of buildings and the worth
increased and our operating performance
secured high occupancy rate and stable
income gain.

60%

53.7%
47.6%
266

221

207

200

50%
40%
30%
20%

100

10%

 By the disposition of high-earning property,
both sales and profits decreased from theprevious year.

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

90%

497

500

Segment income

100%

0

0%
2015/3 1Q

8

2016/3 1Q

2017/3 1Q

Sun Frontier Fudousan Co., Ltd.

Performance ofBrokerage business(¥ million)

Apr. to June in
the FY ended
Mar 31, 2016

Apr. to June in
the FY ending
Mar 31, 2017

Increase/decrease

sales
segment income
profit margin(¥ million)

450

Sales

405

226

▲44.1%

405
400

Segment income

366

182

▲50.3%

Profit margin

90.2%

80.3%

▲9.9%p

79.6%

100%

90.2%

90%

366

80.3%

350

80%
70%

300

60%
250

< Sales brokerage> As a result of an environmental change, there areuncertain outlook for the economy, which leads todecline in transactions, resulting in sales and income
drops.
 The number of inquiry is increasing, so we will set
the matters to close them.

200

50%
182

177

150

9

40%
30%

100

< Rental brokerage>
 We concentrated on solving the worries and difficulties
of owners and finding tenants for revitalized buildings,
which is generating to the creation of the future profits
for the entire company.

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

226

222

20%

50

10%

0

0%
2015/3 1Q

2016/3 1Q

2017/3 1Q

Sun Frontier Fudousan Co., Ltd.

Performance ofProperty management business
Apr. to June in
the FY ended
Mar 31, 2016

Apr. to June in
the FY ending
Mar 31, 2017

Increase/decrease

Sales

358

430

+22.2%

Segment income

166

202

+21.4%(¥ million)

sales
segment income
profit margin(¥ million)

500

46.8%

46.5%

47.0%

450

45%

430

400
Profit margin

46.5%

47.0%

40%

+0.5%p358

350<Property management business>Both sales and profit increased.

300



No. of managing properties : 345 (up 53 compared to the same periodof the previous year)250

Occupancy rate: 95.3% (down by 0.8%)
No. of properties

Occupancy rate

End of June 2014

242

97.3%

End of June 2015

292

96.1%

End of June 2016

345

95.3%

150

Though newly entrusted buildings brought downslide the occupancy rate
temporary, leasing progress is going to produce a recovery.
<Building maintenance business>


307

30%
25%
202
166
143

10

20%
15%

100

10%

50

5%

0

0%
2015/3 1Q

Growth of PM entrusted properties has an effect on BM growth. It
contributed to the result that both sales and profit increased.

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35%

200

【Variations in the number of entrusted buildings and occupancy rate】

50%

2016/3 1Q

2017/3 1Q

Sun Frontier Fudousan Co., Ltd.

Performance of Other Business(Rent Receivables Guarantee, Construction and Renovation Service, Rental
Conference Room and Virtual Office, Hotel Operations)(¥ million)

Apr. to June in
the FY ended
Mar 31, 2016

Apr. to June in
the FY ending
Mar 31, 2017

Increase/decrease

sales
segment income
profit margin(¥ million)

90%

450

Sales

133

388

+191.4%400

Segment income
Profit margin

62

195

+211.8%

47.2%

50.5%

+3.3%p

350

69.3%

70%
60%

300
47.2%

250

< Rent Receivables Guarantee>
We strengthened the relationship with in-house departments including realestate broker and partner companies, so that both sales and profits increased.

150
100

<Rental Conference Room and Virtual Office>
Our new business established the previous term both sales and profits
increased remarkably.

11

50%
40%
30%

133
101

20%
70

< Hotel Operations>
We have agreed to make a business alliance with Shanghai Spring Group forthe hotel business in Japan. April 25, 2016, “SPRINGSUNNY Hotel Nagoya
Tokoname” opened. We have high occupancy rate and average daily roomrate are continuing to run high.

50.5%
195

200

<Construction and Renovation Service>
Sales and profits decreased compared to the previous year.

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

80%

388

62

50

10%

0

0%
2015/3 1Q

2016/3 1Q

2017/3 1Q

Sun Frontier Fudousan Co., Ltd.

Key Performance Indicators■ Ordinary income margin■ Capital adequacy ratio(¥ million)(¥ million)
45,000

33.3%

売上⾼
Sales
Ordinary
経常利益income
Profit
利益率margin to sales

40,00035,00024.4%

30,00035%

40,00035,000

30%

22.9%

68.5%

70%

56.2%

30,000
25%

58.9%
55.7%

60%

53.7%

20.2%

19.3%

80%

Net
純資産
asset
自己資本比率Capitaladequacy ratio

25,00050%

20,00040%

15,00030%

10,000

20%

5,000

10%

20%

25,00020,00015%

15,00010%
10,000
5%
5,000

0%

0

2013/3

2014/3

2015/3

2016/3Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

0%0

2017/3
2016/6

2013/312

2014/3

2015/3

2016/32017/3
2016/6Sun Frontier Fudousan Co., Ltd.

<Future activities>
1) Business environment2) Managerial policy and business model3) Growth strategies

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13

Sun Frontier Fudousan Co., Ltd.

Business environment
The global economy
moderates to asustainable growth,
but with risks.

The global economy is expected to grow moderately, because of the healthy U.S. economy.

There is heightened sense of uncertainty about the future, we need to pay attention to the risks of theinternational environment surrounding. Sluggish growth of the Chinese economy, international conflict, issues
posed by terrorism, exchange market and equity market become susceptible to a geopolitical repercussions.
The Government continuously pursues to expand the economic virtuous cycles, through directing growing
corporate profits towards investment, wage increase and further improvement in the employment situation.

Financial inflow bystrengthen the easymoney policy, andtourism demand
growth to services.

Negative interest policy will provide a financial inflow to the real estate market.

As population is aging and the fund procurement environment is favorable because of low interest rates, there
is a growing demand for the purchase of real estate, for coping with inheritance tax, managing assets, andbracing for inflation.
The number of foreign tourists to Japan reached about 11.7 million people in this first half year, the supply ofaccommodation has become a socially urgent.

The demand of
urban office building
market will be
growing

Based on healthy corporate performance, the transaction of relocating to a larger office, enlarging the officespaces etc. becomes more achieve than before. In the five center district wards of Tokyo, the demand-supply
balance will be tightened due to the decline in supply, and this leads the rent upward and vacancy rate
downward.
Mainly for urban office buildings in good locations, the advertised rents will be raised, or rent increasenegotiation at the renewal of contract is necessary. This enhances the advantage of lessors. But Cap Rate has
little scope to down. Caution and prudence are required.

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14

Sun Frontier Fudousan Co., Ltd.

Changes in office rent and vacancy rate
in center district 5 wards in Tokyo
Averagerent
rent[yen/tsubo][yen/tsubo]
Average

Average
Averagevacancy
vacancyrate
rate[%]
[%]

（％）

（yen）

Average rent in June

18,179 yen

Peak of vacancy rate
Jun. 2012
Vacancy rate: 9.43%

Increase for
30 months in a row(+12.2% fromthe bottom value)

Average rent

Vacancy rate

Peak of average rent
Aug. 2008
22,901 yen
Peak of vacancy rate
Aug. 2003
Vacancy rate: 8.57%

Vacancy rate in June

4.07%

Improved 5.36% during
the last 4 years

Bottom vacancy rate
Nov. 2007
Vacancy rate: 2.49%

Bottom average rent
Dec. 201316,207 yen* Source: Produced by our company based on the “office report” of Miki Shoji. This researched the office buildings whose reference floor’s area is over 100 tsubo in 5 wards in Tokyo.

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

15

Sun Frontier Fudousan Co., Ltd.

2. Managerial policy and business modelNot to seek gain, we wish to win the trust.
We change ourselves. Based on the viewpoint of customers, and wesolve any real estate related difficulties.

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16

Sun Frontier Fudousan Co., Ltd.

Sun Frontier’s Vision and Policies
VisionWe aim to become the real estate company loved and chosen
the most by clients in the world as “professionals in real estateutilization”

Clients

Building owners, asset holders, and wealthy individualsCorebusiness

Real estate revitalization and utilization

Policies

Strategies

To focus on people, rather than property
To keep the viewpoint of customers, and solve any real estaterelated difficulties

Urban
centerCopyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

OfficeStrength

Tenant finding
capability

Real estate
Revitalization
capability

Building operation capability
17

Sun Frontier Fudousan Co., Ltd.

Classification chart of our business
Office buildings
Real Estate Revitalization Business
Re-planning Business
Building Rental Business
Real Estate Securitization Business

Hotel business
Operations
Development, Regeneration
Stock holdings, Funding

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Real Estate Services Business
Rental Brokerage Sales Brokerage
Property Management
Building MaintenanceConstruction Solutions
Delinquent Rent Guarantees
Space Rental, Small officeAbroadTaking over the investment by Taiwanese investors
Public housing and Serviced Apartment in Indonesia
Hotel and housing Developments in Vietnam

18

Sun Frontier Fudousan Co., Ltd.

To offer services to nearby owners
1. Specializing in the center of Tokyo
10 footholds in Chiyoda, Chuo, Minato, Shinjuku
Shibuya Wards, and Yokohama
We excel at finding tenants for office buildings,
by utilizing our familiarity with local areas.
2.We are not only broker
rental, but also listen to and solve
the troubles of owners, and thenproduce various earning opportunities.
3. We have various consultations such as
renovation, sale of the building with owners
through the conclusion of the contract. As aresult, we procure real estate to be revitalized.

Contribution by solving any realestate related difficulties, based on
the viewpoint of customers.

Prioritized districts

Akihabara
Ikebukuro

Kanda

Kudan
Koujimachi

Nihonbashi
Imperial
PalaceShinjuku

Aoyama

HQ in
Hibiya

Tokyo

Ginza

Toranomon
Shimbashi

Shibuya

Akasaka
Hamamatsu-cho

Ebisu
Shinagawa

Yokohama(

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Ueno

19

indicate the main target areas of our branches.)
Sun Frontier Fudousan Co., Ltd.

Real Estate Revitalization and the Cycle of
Added Value
In real estate service business, we survey and solve complaints, inconveniences, and discomforts, while
listening to clients’ voices. We combine the know-how and grasped needs, and apply them to used buildings
we acquired, and then② revitalize the real estate with added values in real estate revitalization business, and sell them.
①

Asset consultancy

Rent guarantee

Construction
planning

Building management

Brokerage in rental

Brokerage in sale

Acquisition ofproperty

Real estate
revitalization

Added value-linked products

To research how to solve clients’ troubles
at the site, and offer solutions

Clients (Building owners, asset owners, and wealthy people)
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20

Sun Frontier Fudousan Co., Ltd.

Earning Opportunities even after sale
“Revitalized buildings with one price for one buildings” located at good places in the urban center
We increase market values with excellent quality and attractive features, and sell real estate
to asset holders and wealthy people at the right price. Even after the sale, we have important earning
opportunities.

Menu of after-sale services
Sale of revitalized
property

Building
management/
maintenanceRentalbrokerage

Rent
guarantee

Interior
finishing・Accountmanagement
・To listen toopinions
・Accounting report
・Negotiation withtenants
・Buildingmaintenance・Emergency
measures・Equipment
management

・To findoccupants
・brokage for
furnished office・Nonpayment is

・Interiorplanning
・Design・Interiorfinishing・Restoration tothe original state・Undertaking of
tenant’s
construction

・Marketing
・Consultancy

immediately
guaranteed
・To guarantee
rent, etc. forup to 18 months

RenewalAssetconsultancy

Sales
brokerage

・Renewal of theentrance, airconditioner,
outer walls,
etc.
・Repair
・Buildinginspection

・Specialist
consultation
・Measures forinheritance tax
・Assetmanagement
・Business
succession
・Consultancy

・Purchase of new
real estate
・Sale of assets
・Replacement bypurchase of new
real estate forbusiness
・Replacement ofassetsBusinesses of both revitalizing real estate and operating rental buildings
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Sun Frontier Fudousan Co., Ltd.

2008

2009

2010

2011

2012

2013

2014

2015

2016

Entrusted area by PM and clients are
increasing steadily.
Variation in the occupancy rate and area under our property management
100％

95.0％

650,329(As of July 2016)

Occupancy rate of PM entrusted buildings

700,000
600,000

97.23％
500,000

95％
400,000
Entrusted area
300,000
90％
200,000

95.2％(As of July 2016)

100,000

Occupancy rate of middle-sized buildings
in 23 wards in Tokyo

0

85％
'08/1

'08/7

'09/1

'09/7

'10/1

'10/7

'11/1

'11/7

'12/1

'12/7

'13/1

'13/7

'14/1

'14/7

'15/1

'15/7

'16/1

'16/7

※Source: the occupancy rate of middle‐sized buildings in 23 wards in Tokyo was produced by our company based on "Market Data Rent and Vacancy" of Sanko Estate Co., Ltd.

Top-ranked companies in the number of owners※
2015

2014

1

Vortex

360

283

2

XYMAX

251

243

3

Sun Frontier Fudousan

207

159

4

RIO CONSULTING

191

－

5

Itochu Urban Community

180

180

Note: Occupancy rate of our managing buildings under our company for
management
In the 4th quarter of fiscal year 2014, important tenants relocated to larger
offices, vacating some units. Consequently, occupancy rate declined temporarily
at the end of the term.
Later, tenants have been moving in steadily, recovering occupancy rate.

※Source: Produced by our company based on the Nov. 2015 issue of “Monthly Property Management”
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

22

Sun Frontier Fudousan Co., Ltd.

Basic Principles for our business
1. Mental management based on our ethos
and philosophy• We have upheld “altruism” since the establishmentof our company.
• We together clean our office, etc. and read thephilosophy booklet every morning, to share thevalue “the pleasure of others pleases us.”
• We aim to offer greater happiness to customers, andcontribute to the actualization of a rich society.

Businessmanagement
based on the
viewpoint ofcustomers

2. Management among all employees based on theaccounting for each division• By developing and diffusing the accounting systemfor each division (Amoeba management), we
enhance employees’ profit awareness and promote
the business operation among all employees withmanagement perspective.

Management among
all employees based on
the account for eachdivision

3. Business management based on the
viewpoint of customers• We listen to customers’ requests carefully, deal withand solve even minor troubles, without stint.
• We change ourselves from the viewpoint ofcustomers, and challenge, create, and advance.
• Based on the collaboration among different sections,
we create high added values that are linked to one
another.
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Mentalmanagement
based on our
ethos andphilosophy

Employees play major roles.
Resonant business administration.
23

Sun Frontier Fudousan Co., Ltd.

Revitalization case 1
Sourcing and Add-value creation
appearance renewed

entrance Before

Rental brokerage mediator made continuous
efforts to solve any real estate related difficulties,
we won the trust of the client. Based on theperformance, we purchased the property directly.
Lease contracts have been signed with rent being
about 20% higher than the previous contracts.
entrance Ａｆｔｅｒ

Renewal work brought the most out of classy atmosphere produced by archedceiling & marble【Property outline】
Location: Yoyogi, Shibuya-ku, Tokyo
Structure: a steel reinforced concrete and lightgauge steel flat-roofed 10-story
building
Date of completion: 1992
Purposes of use: residence, officeLand area: 153.05 ㎡
Gross floor area: 1,097.25 ㎡
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Beautiful Welcome flower arrangement replaced in every two weeks

24

Sun Frontier Fudousan Co., Ltd.

Revitalization case 2
Middle-term projectappearance renewedNewroof terrace Ａｆｔｅｒ

Taking the project period
2.5 years to create morevalue-added,
commodification to win
the admiration maximum,
and adoption of limited
sales process .

office inside Ａｆｔｅｒentrance Ａｆｔｅｒ【Property outline】
Location: Shimomeguro, Meguro-ku, Tokyo
Structure: a steel reinforced concrete and lightgauge steel flat-roofed 9-story
building
Date of completion: 1968
Purposes of use: office, shop
Land area: 1,245.42 ㎡
Gross floor area: 9,582.09 ㎡
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

25

Sun Frontier Fudousan Co., Ltd.

3. Growth strategies

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Sun Frontier Fudousan Co., Ltd.

Activities of “three growth directions”

1) Strengthen our existing business

Expanding office business&hotel business, high demand of inbound2) M&A

capital alliancebusiness alliance3) Overseas expansion

Indonesia
Vietnam

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

Sun Frontier Fudousan Co., Ltd.

Strengthen our existing business<Rental Conference Room and Virtual Office business>
Vision Center Tokyo

Rental Conference Room and Virtual Office business established inthis term has started to achieve positive monthly financial result
since 3rd quarter of the previous fiscal year. We have strong leasing
capability in finding tenants for office buildings, and that has been
producing new branches in excellent locations.

New branches in progress

1 min. on foot from Tokyo Station of
JR Lines
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Vision Office Kanda

Vision Office Shinjuku

1 min. on foot from Kanda
Station of JR Lines

1 min. on foot from Shinjuku
Station of JR Lines28

Sun Frontier Fudousan Co., Ltd.

The Grand Opening of the heart-warming hotel

SPRINGSUNNY Hotel Nagoya Tokoname
Sun Frontier Fudousan has agreed to make a business alliance with Shanghai
Spring Group for the development of inbound city-tourism hotel. Apr. 25,“SPRINGSUNNY Hotel Nagoya Tokoname” opened its doors to global
travelers as the first hotel of our collaborative brand.
We are operating “SPRINGSUNNY Hotel Nagoya Tokoname” together by
combining our strength of revitalization and operation of real estate from theperspective of customers, and the Spring Group’s strength of attracting thecustomers in travel and air transport business and tourist-sending to Japan.
Aiming at becoming “heart-warming” hotel which is attractive to foreign group
tourists and independent travelers, we are trying our best to make
improvements every day.

【Property outline】
Location: Shinkaichou, Tokoname, Aichi
The Number of Rooms: 194 rooms
large bath: “maneki-yu”of artificial hot spring using
natural mineral togoal
Date of completion: 2008
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

ceremony for our business luck

floral tributeinterview

Japanese-inspired twin room

29

Sun Frontier Fudousan Co., Ltd.

Relaunch to reach for the heart-warming
hotel, and sales improved remarkably
Renewal Items

Changes of gross sales and occupancy rate
Sales: benchmark index to 100 as Dec. 2015

100%

97.7%

gross sales

300

 Beds addition, replace to convenient headboard

occupancy rate
250

90%

2.8 times of ouroperation beginning Strengthened safeguard  Exterior mending Redesign of entrance
entrance Before

283

80%

200

70%

150

 elevator added to 3

 Restaurant extension
restaurant Ａｆｔｅｒ

 spa

100

60%
56.8%
Dec. 2015
acquisition

50%

100
50

 parking for 10 motor coaches  hotel toiletries
40%

Jan. Feb. Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
2015

0

2016

After beginning of our operation, we wholly redesign the hotel andimplement the measures to reach for “heart-warming hotel”. Re-form
staff consciousness brought the quality progress and 2.8 times of sales.
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Sun Frontier Fudousan Co., Ltd.

Changes in Visitor Arrivals
The government positioned tourism industry as a key industry in the national growth strategy. The number of foreign tourists toJapan reached about 11.7 million people in this first half year.
The number of Chinese visitors to Japan is expected to increase more, as considering to total visitors in ratio to population. We
will develop inbound city-tourism hotel chain, to expand our scope of business to target foreign tourists visiting Japan mainly.
2014
visitors

Total visitors
ratio topopulation

increase rate

2016（Jan.-June）

2015

2014-2015
visitors

Total visitors
ratio topopulation

visitors

Population

Total visitors
ratio topopulation（million)

1

China

2,409,158

0.18%

107.28%4,993,805

0.37%

3,076,640

0.22%

1,367.82

2

Korea

2,755,313

5.46%

45.25%

4,002,094

7.94%

2,382,951

4.73%

50.42

3

Taiwan2,829,821

12.08%

29.94%

3,677,065

15.69%

2,155,798

9.20%

23.43

4

Hong Kong

925,975

12.75%

64.61%

1,524,291

21.00%

868,148

11.96%

7.26

5

USA

891,668

0.28%

15.88%

1,033,239

0.32%

611,2830.19%

319.05

6

Thailand

657,570

0.96%

21.16%

796,708

1.16%

485,914

0.71%

68.66

7

Australia

302,6561.28%

24.28%

376,153

1.59%

233,342

0.99%

23.59

8

Malaysia

249,5210.82%

22.44%

305,502

1.01%

183,520

0.61%

30.26

9

Philippines

184,204

0.19%

45.67%

268,3390.27%

181,330

0.18%

99.43

10

Singapore

227,9624.17%

35.45%

308,777

5.64%

160,880

2.94%

5.47

－

others1,979,619

0.04%

23.83%

2,451,456

0.05%

1,374,010

0.03%

5,109.76

13,413,467

0.19%

47.15%

19,737,429

0.28%

11,713,816

0.16%

7,105.15

total

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Sun Frontier Fudousan Co., Ltd.

GDP per capita and visitors
GDP per capita of major ASEAN countries has been steadily extended, and to foreign visitors to Japan also grow to 47.3%
increasing of previous year. In these countries, by the improvement of income, people gain a better standard of living and travel
demand increased. Under such circumstances, successful as policies aimed at "Tourism Nation" that was including Japan visa
deregulation, is expected to further increase to visit Japan along with the charm of the tourism resources of Japan in the future.
GDP per capita
US$60,00050,000GDP per capita of major ASEAN countries and to foreign visitors
visitors to JapanJapan
Malaysia
Indonesia

Singapore
Korea
China

HongKong
TaiwanThailand

Visitors : thousand
23,50025,000Singapore
19,73720,000

HongKong
40,000Japan

15,00013,413Korea

30,00010,364
8,347
20,000
6,138

6,728

8,611

8,351

7,334

6,790

0

6,219

TaiwanChina

Thailand

10,00010,000

8,358

Malaysia
5,000

Indonesia

2004

2005

2006

2007

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2008

2009

2010

32

2011

2012

2013

2014

2015

2016

0

Sun Frontier Fudousan Co., Ltd.

Future development of hotel business
Kofu

We promote the collaborative brand “SPRINGSUNNY” of Shanghai
Spring Group and Sun Frontier Group and the our house brand forurban upper-middle use focusing to inbound city-tourism hotel chain
house brandcollaborative brand

＆

Osaka
MaihamaGinza area, Kyoto, Narita
and other major cities’
hotel projects are underconsideration.
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Sun Frontier Fudousan Co., Ltd.

Overseas expansion - Two directions -We will develop new investment
products, hone our operation ability
to operate hotels, and play an role ofreceiving investments from wealthypeople in Asia.

Produced by the Cartographic Research Lab University of Alabama
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Sun Frontier Fudousan Co., Ltd.

Da Nang, Vietnam-Urban hotel “The Blossom City” opened
Aug. 1 2016 opened
Taking advantage of its location for beautiful waterside view, we
provide a relaxing and clean space to customers with the concept
of “warm-hearted hotel” by “omotenashi” hospitality anddevoted smile of Vietnam staff.

appearance Before

appearance Ａｆｔｅｒthe Guest Room (Han River could be seen)

Property outline
Location: 147-149, Tran Hung Dao Street,
Son Tra District, Da Nang City, Vietnam
The Number of Rooms: 45 rooms
Maximum Accommodation Capacity： 90 people
Supplementary Amenities：
Restaurant Bar with 60 seats, provide breakfast（including
light Japanese meals), lunch and supper
Parking lot for 2 passenger cars and 10 motorbikes

the Opening Ceremony on August 1st

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Entrance

Night View

Sun Frontier Fudousan Co., Ltd.

Da Nang, Vietnam-Urban high-rise condominium
In “Expedia Japan”, the Japan site of Expedia, one of the largest online travel companies in
the world, Da Nang ranked top in 2014 and made top3 in 2015 among the popular travel
destination cities (Rise rate is up 89% from the previous year.)Japanese spring holidays
ranking of popular visiting city
rank

city

Our second project “Garden Tower”
y/y1

Da Nang

389%

2

Macao

200%

3

Busan, Korea

181%

4

Kaohsiung, Taiwan

167%

5

Sydney, Sydney

162%

Conceptional Design

Da Nang, situated midway between Hanoi in the north and Ho Chi Minhin the south, is the No.1 economic and cultural city in central Vietnam. It
is also the municipality and rapidly growing city which is accepting
investment from abroad actively. The city infrastructure is well developed
and provides a ready accessibility to the international airport from thecenter of the city by car in 10 minutes. In recent years, it is chosen to be
the host of many international events such as 2017 Asia-Pacific Economic
Cooperation (APEC) summit.
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

28 story 312units

36

Sun Frontier Fudousan Co., Ltd.

Jakarta, Indonesia-Sale of urban housing
We are constructing urban houses for sale, in the center of Jakarta. We arepreparing for the establishment of a local affiliate in order to operate the businessin Indonesia on a full scale.
1st. Project : urban houses for sale

Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

37

Sun Frontier Fudousan Co., Ltd.

Disclaimer
This reference material is intended for providing information, not for soliciting or promoting you topurchase a specific product. When you invest, please do so based on your own judgment and responsibility.
If you want to purchase the shares of our company, please contact securities companies.
The information included in this material may not follow the Financial Instruments and Exchange Act, theBuilding Lots and Buildings Transaction Business Act, the regulations for the companies listed in Tokyo
Stock Exchange, or the like.
This reference material mentions our future business performance, but it does not guarantee theperformance.
This reference material was produced carefully, but we do not guarantee the accuracy and certainty of its
contents.
In addition, the contents may be changed or deleted without notice.
We would appreciate your understanding.

<Sun Frontier Fudousan IR Desk>
Phone：+81-3-5521-1551
URL:http://www.sunfrt.co.jp/en/
Mail:ir-contact@sunfrt.co.jp