Sun Frontier Fudousan Co., Ltd.

Consolidated Financial Results for
the First Nine Months of the Fiscal
Year ending March 31, 2016
Our goal is to become the real estate company best loved and most chosen bycustomers worldwide.

Executive Summary

Results for the First Nine Months of the FY ending
Mar 31, 2016
Future activities
1) Business environment

2-16
17-19

2) Managerial policy and business model

20-323) Growth strategies

33-41

Securities code: 8934

Company Overview
Corporate name

Sun Frontier Fudousan Co., Ltd.

Head Office

Toho Hibiya Building (Hibiya Chanter) 14F
2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo

EstablishedApr. 8, 1999

Capital¥8,387 million (as of Dec. 31, 2015)

Representative

President, Director: Tomoaki Horiguchi

No. of employees

269 Consolidated (as of Dec. 31, 2015)

Business contents

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

2. Real Estate Services Business
Rental Brokerage/ Property Management/ Building Maintenance/ Sales
Brokerage/ Construction Solutions/ Delinquent Rent Guarantees
Fiscal year end
Listed in

MarchFirst Section of the Tokyo Stock Exchange (securities code: 8934)

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

1

< Executive Summary >Results for the First Nine Monthsof the FY ending Mar 31, 2016

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

2

Highlights of the results for the 3rd. quarter
Revision of Full-Year Earnings Forecasts for Fiscal Year Ending Mar. 31, 2016
and Revision of Dividend Forecasts(¥ million)
9 months ended
Dec. 31, 2015

yr/yrchange%Previous forecasts
announced May 8

Revised forecasts
announced Feb. 4

Percentage change

Sales

17,356-2,706-13.5％

33,00033,000―Operating income

4,521

-65

-1.4％

6,300

7,300

＋15.9％

Ordinary income

4,221

-168

-3.8％

6,000

7,000

＋16.7％Net income

4,283

+404

+10.4％

5,300

7,200

＋35.8％

Annual dividends per share

¥17.5

¥25.0

＋42.9％The profit margin of the Revitalization business increased . Segment Profit margin is 30.2%,
which is higher than the profit margin for the 3rd quarter of the previous year (23.8%).
As for the projects expected, we have revised our forecasts.
On the strategic assets management taking into consideration for the importance of scale andterm of each project, the gain on fixed asset sold contributed the highest profit for the period.
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

3

Summary of the results for the 3rd. quarter(¥ million)
Progress
rate withrespect tothe initial
forecast

Apr. to Dec. in
the FY ended
Mar 31, 2015

Apr. to Dec. in
the FY ending
Mar 31, 2016

Profitmargin to
sales

Increasefrom thesame periodof theprevious year

Sales

20,062

17,356―-13.5％

33,00052.6％

Operatingincome

4,587

4,521

26.1％

- 1.4％

7,300

61.9％

Ordinary
income

4,390

4,221

24.3％

- 3.8％

7,000

60.3％

Net
income

3,878

4,283

24.7％

+ 10.4％

7,200

59.5％

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4

Revised forecasts
for the FY ending
Mar 31, 2016

Revenue/Profit Summary(¥ million)
Apr. to Dec. in the FY
ended Mar 31, 2015

Apr. to Dec. in the FY
ending Mar 31, 2016

Apr. to Dec. in the FY
ended Mar 31, 2015

Apr. to Dec. in the FY
ending Mar 31, 2016

20,062

17,356

4,587

4,521

Real estate revitalization

15,98012,821Non-operating income

1413Real estate securitization

403

145

Non-operating expenses

211

313

Rental building business

1330

1,592

4,390

4,221

Brokerage

878

1,233

Extraordinary loss/income

13

1,245

Property management

955

1,097

Corporate income tax, etc.

437

1,186

Other businesses

514

466

Minority interests in income

88-2Gross profit on sales

6,853

7,048

3,878

4,283

Real estate revitalization

4,315

4,246

Real estate securitization

403

145

Rental building business

714

825

Brokerage

746

1,082

Property management

417

499

Other businesses

255

248

2,265

2,526

Sales

Selling and generaladministrative expenses

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5

Operating income

Ordinary income

Net income

 The profit margin of the Revitalization business increased,
improving ordinary income margin.
 The gain on fixed asset sold contributed the highest profit forthe period.
 The Brokerage business grew considerably.
 Stable income structure covering SG&A
The income from rental building and realty service businesses(2,656 million yen) exceeds the SG&A(2,305 million yen),excluding Revitalization sales commissions.

Consolidated balance sheet-Assets(¥ million)
End of Mar.
2014

Increase/decrease(from the end of
Mar. 2015)

End of Mar. 2015

End of Dec. 2015

31,44637,45247,412+9,959Cash and deposits

11,18012,686

11,853-833

Inventory assets

18,72923,48033,856+10,375

Other current assets

1,536

1,285

1,702

+416

2,464

2,971

3,299

+327

2,164

2,483

2,481

-1

Intangible assets

11

76

249

+173

Investments and other assets

287

412

567

+155

33,91040,42450,711+10,286

Current assets

Noncurrent assets
Property plant and equipment

Total assets

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6

Consolidated balance sheet-Liabilities/EquityEnd of Mar. 2014

End of Mar. 2015

End of Dec. 2015

Increase/decrease(from the end of
Mar. 2015)

3,023

3,550

5,577

+2,027

Short-term loans payable, etc.

1,006

1,004

1,995

+990

Income taxes payable, etc.

266

221

1,041

+819

Other current liabilities

1,750

2,324

2,541

+216

12,417

14,172

18,855+4,682Long-term loans and bonds
payable11,35912,98817,514+4,526

Other noncurrent liabilities

1,057

1,183

1,340

+156

15,44017,72324,433+6,71018,217

22,693

26,270+3,577

252

8

7

-0

Total net assets

18,46922,701

26,278+3,576

Total capital and liabilities

33,91040,42450,711+10,286

Current liabilities

Noncurrent liabilities

Total liabilities
Shareholders’ equity
Otherscapital adequacy ratios of at least 50%

As the purchasing of revitalized property progressed, the interest-bearing liabilities
increased from 13.9 billion yen as of the end of the previous year to 19.5 billion yen.

End of Mar. 2014

End of Mar. 2015

End of Dec. 2015

53.7%

56.2%

51.8%

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Retained earnings increased doe to the difference between quarterly net income(+ 4.2 billion yen) and term-end dividend payment (-700 million yen).

7(¥ million)

Performance of

Revitalization business(¥ million)

Sales

Apr. to Dec. in
the FY ended
Mar 31, 2015

Apr. to Dec. in
the FY ending
Mar 31, 2016

15,98012,821

Increase/decrease(¥ million)-19.8%

Segment income (Note 1)

3,795

3,871

+2.0%

Profit margin

23.8%

30.2%

+6.4%pNo. of procuredbuildings

26

24

+2

No. of sold buildings

20

16

-4

No. of buildings in stock
as of the end of the term

27

35

+8

■ Profit margin increased considerably to 30.2%.
■ The average business period for selling a property is 287 days.
■ The stocks of revitalization property as of the end of the third quarter

18,00050%

14,00012,821

12,00010,000
8,000

40%
33.5%
30.2%

23.8%

4,000

3,795

2,000

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

30%

7,018

6,000

0

8

60%
15,98016,000are 35 buildings, worth 33.8 billion yen.

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Sales
Segment income
Profit margin

20%
3,871

2,352

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Dec.
Apr. to Dec.
Apr. to Dec.

10%0%

Extended the processing period to create
higher-margin
60.0%●2012.4 - 2015.3●2015.4 - 2015.9

Taking more months to reachcommercialization, we generatehigh values.

︵％︶
粗利率（％）
Gross
Profit

50.0%

40.0%

30.0%

20.0%
20.0％

10.0%

0.0%
0

100

200

180
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300
400
Day for 事業期間（日）selling a property

9

500

600

Performance ofRental building business(¥ million)

Sales
Segment income
Profit margin

Apr. to Dec. in
the FY ended
Mar 31, 2015

Apr. to Dec. in
the FY ending
Mar 31, 2016

1,330

1,592

702
52.8%

808
50.8%

Increase/decrease(¥ million)+19.7%+15.0%-2.0%p

1,800

Sales
Segment income
Profit margin

100%
1,592

1,600
1,400

80%

1,330

1,200

 Increasing stable income, as a result of steady
growth of sales and profit.

1,000
800

 The increase in income from rents of mid to longterm revitalized properties contributed.

60%
51.0%

50.8%
52.8%

808

702

689

40%

600
400

352

20%

200
0

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10

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Dec.
Apr. to Dec.
Apr. to Dec.

0%

Performance ofReal estate securitization business
Apr. to Dec. in
the FY ended
Mar 31, 2015

Apr. to Dec. in
the FY ending
Mar 31, 2016

Sales

403

145

-63.9%

Segment income

403

145

-63.9%(¥ million)

Profit margin

100.0%

100.0%

Increase/decrease(¥ million)－

There was the income from investment allocation in
conformity with the sale of collaborative investment
projects, but both sales and profits dropped.

500

Sales
Segment income
Profit margin
100.0%

100%
100.0%

100.0%

403 403

400

80%

300

60%

200

40%
145 145

100

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11

20%
8

8

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Dec.
Apr. to Dec.
Apr. to Dec.

0%

Performance ofBrokerage business(¥ million)

Sales
Segment income
Profit margin

Apr. to Dec. in
the FY ended
Mar 31, 2015

Apr. to Dec. in
the FY ending
Mar 31, 2016

878

1,233

740
84.4%

1,080
87.6%

Increase/decrease(¥ million)

1,600+40.4%

1,400+45.9%+3.2%p

Sales
Segment income
Profit margin

100%
84.4%

1,300 77.6%

87.6%

80%

1,233

1,200

1,080

< Sales brokerage>
1,000 As for the sales brokerage business, we mostly focused on
the relationship with the other departments or the agents800
to obtain the effective information and introduction, put
more time, made effort into them and added the value on.
600
In such a way we succeeded to take some chances as
repeated business from customer to another customer, both
400
sales and profits grew considerably in comparison to thesame period of the previous year.
200< Rental brokerage>
 We concentrated on solving the worries and difficulties ofowners and finding tenants for revitalized buildings,
which is generating to the creation of the future profits forthe entire company.
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12

0

1,009

60%

878
740

40%

20%

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Dec.
Apr. to Dec.
Apr. to Dec.

0%

Performance ofProperty management business
Apr. to Dec. in
the FY ended
Mar 31, 2015

Apr. to Dec. in
the FY ending
Mar 31, 2016

Sales

955

1,097

+14.9%

Segment income

417

499

+19.7%

Profit margin

43.7%

45.5%

+1.8%p(¥ million)

Increase/decrease<Property management business>Sales increased about 15%, and profits increased about 20%.

No. of entrusted buildings: 315 (up 60 compared to the same
period of the previous year)Occupancy rate: 96.3% (down by 0.9%)【the number of entrusted buildings and occupancy rate】
No. of entrusted buildings Occupancy rate
End of Dec. 2013
190
96.4%
End of Dec. 2014
243
97.2%
End of Dec. 2015
306
96.3%

(¥ million)

1,200



We made efforts to increase projects in cooperation with otherbusiness divisions. As a result, both sales and profits increased.

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13

80%
1,097

1,000

955

60%
800

814
43.5%

43.7%

45.5%

600

40%
499

400

417
353

20%
200
0

<Building maintenance business>

Sales
Segment income
Profit margin

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Dec.
Apr. to Dec.
Apr. to Dec.

0%

Performance of

Other Business (delinquent rent guarantee,
construction solution, space rental, hotel)
Apr. to Dec. in
the FY ended
Mar 31, 2015

Apr. to Dec. in
the FY ending
Mar 31, 2016

Sales

514

466

-9.4%

Segment income

255

248

-2.7%

(¥ million)

Profit margin

49.7%

53.4%

Increase/decrease(¥ million)+3.6%p< Delinquent rent guarantee business>We strengthened the relationship with in-house departments
including real estate broker and partner companies, so thatboth sales and profits increased.

800

648
49.6%

600
38.9%

400

14

255

248

20%

200

0
< Hotel business >We have agreed to make a business alliance for the hotelbusiness in Japan with Spring Group, which runs tour services
and airline in China and Japan. We get a move into proactive
approach toward the needs of foreign tourists.

40%

514
466

252

<Space rental business>Income covered the whole expenditure during the third quarterof consolidated fiscal year by the improvement of therecognition by active marketing.

60%
53.4%

<Construction solution business>Sales and profits decreased compared to the previous year

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Sales
Segment income
Profit margin

FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2014
2015
2016
Apr. to Dec.
Apr. to Dec.
Apr. to Dec.

0%Key Performance Indicators■ Ordinary income margin■ Capital adequacy ratio( million yen）

( million yen）

35,00035.0%

30,000

30.0%

24.3%
25.0%

24.4%

25,00080.0%

純資産
Net asset
自己資本比率Capital adequacy ratio

Full-year forecast

売上⾼
Sales
Ordinary
経常利益 income
Profitmargin to sales
経常利益率

35,00068.5%

30,00070.0%

25,000 57.5%

56.2%

20.2%

53.7%

19.3%

60.0%

51.8%

20.0%

20,000

50.0%

15.0%

15,000

40.0%

10.0%

10,000

30.0%

5,000

5.0%

5,000

20.0%

0

0.0%

0

10.0%

20,00015,000Full-year forecast

11.5%
10,00003/201203/201303/201403/2015

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12/2015

03/201215

03/201303/201403/2015

12/2015

Profits and dividend
03/2011
Ordinary income(¥ million)
Net income(¥ million)
Net income per share(yen)
Dividends per share(yen)

03/201203/201303/201403/2016

03/2015

forecast

541

799

2,039

4,341

5,593

7,000

363

928

2,483

4,020

5,053

7,200

9.77

24.98

66.50

94.03

118.18168.39

0.00

3.50

8.50

13.50

16.50

25.00

dividend payout ratio

0.0%

14.0%

12.8%

14.4%

14.0%

14.8%

30 yennet income/share and dividend/share
Dividend per share

168.39 yen

Net income per share

180 yen
160 yen

25 yen140 yen118.18 yen
20 yen120 yen
94.03 yen

100 yen

15 yen66.50 yen25.0 yen

10 yen5 yen

80 yen60 yen13.5 yen

24.98 yen

16.5 yen

40 yen8.5 yen

9.77 yen

20 yen3.5 yen
0 yen

0 yen
FY ended Mar 31,
2011

FY ended Mar 31,
2012

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FY ended Mar 31,
2013

16

FY ended Mar 31,
2014

FY ended Mar 31,
2015

FY ending Mar 31,
2016 (* estimate)< Future activities>
1. Business environment
2. Managerial policy and business model
3. Growth strategies

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17

Business environment
The global
economymoderates to asustainablegrowth.

The global economy is expected to grow moderately, because of low oil prices and the healthy U.S. economy,
but we need to pay attention to the sluggish growth of the Chinese economy, the downturn of Europe, etc.

Financial inflow
by strengthen
the easy-money
policy, andgrowth offoreign tourists’consumption
The demand of
urban officebuilding market
will be growing

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

The Japanese economy will keep recovering sustainably for getting out of deflation, as corporate
performances, employment situations, and incomes are being improved, thanks to the monetary easing policy,
the yen depreciation, etc.
Under the vision with Tokyo Olympics 2020 being a springboard, urban infrastructure will be upgraded, and“the world’s best city Tokyo” in the aspects of the environment, safety, convenience, etc. is about to be
actualized.

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 19.7 million people in the end of December, the government
had set a target "20 million people in 2020" ware likely to be achieved this year. Along with this, the supply ofaccommodation in hotels and in metropolitan areas has become a socially urgent.
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 wards of Tokyo, the demand-supply balance will betightened 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.

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18

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

Average vacancy rate [%]

（％）

（yen）

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

Peak of vacancy rate
Aug. 2003
Vacancy rate: 8.57%

Average rent in Dec.

17,692 yen

Increase for24 months in a row(+9.2% fromthe bottom value)

Vacancy rate in Dec.

4.03%

Improved 5.4% during
the last 42 months

Bottom average rent
Oct. 2004
17,526 yen
Bottom vacancy rate
Nov. 2007
Vacancy rate: 2.49%

Bottom average rent
Dec. 201316,207 yen

year* 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.
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19

Average rent

Vacancy rate

Peak of average rent
Aug. 2008
22,901 yen2. Managerial policy and business model
forwarding the management for ensure medium- to long-term growth
Emphasize high-margin, wealthy individuals and operational capability

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20

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

Clients

Building owners, asset holders, and wealthy individualsCorebusiness

Real estate revitalization (utilization)

Policies

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

Strategies

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

OfficeStrength21

Tenant finding
capability

Real estate
Revitalization
capability

Building operation
capability

Group Statement

How we want to be
Philosophy• Secure all employees, pursue happiness and coexistence while contributing to theprosperity of society and humanity.
Vision• Our Goal is to Become the Real Estate Company Best Loved and Most Chosen by
Customers Worldwide.
Policy• Stay true to the perspective of clients and solve problems.
Clients• Building owners, investors, the wealthy
Core Business• Real Estate Property Revitalization
Specialties• Skilled at finding tenants for small and medium office buildings in central Tokyo andwith the conceptual power of real estate revitalization, the company sincerely works on
managing buildings and utilizing real estate properties
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22

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

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

AbroadTaking over the investment by Taiwanese investors
Public housing in Indonesia
Hotel and housing Developments in Vietnam

23

High-quality, swift management system
specialized in the urban center
1. Specializing in the center of Tokyo

Ueno

Our Head Quarter and 8 branches are all locatedin Tokyo Central Business District
So that we have Strong leasing capabilities infinding tenants for Office and Commercial
buildings.
2. Various Solutions to Property Owner

Ikebukuro

Kanda

Kudan
Koujimachi

Nihonbashi

Imperial
PalaceShinjuku

Not only leasing brokerage related services,
we provide the property owners with various
solutions to their problems and produce
various revenue opportunities.

Aoyama

HQ in
Hibiya24

Ginza
Shinbashi

Akasaka

Close relationship with and consultation for theproperty owners, we may purchase buildings forrevitalization business purpose.

Tokyo

Toranomon

Shibuya

3. Procure buildings for Revitalization

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Akihabara

Ebisu

Hamamatsu-choShinagawa

Yokohama(

indicate the main target areasof our branches.)

Real Estate Revitalization and the Cycle of
Added ValueIn the vertical service business, we survey and solve complaints, inconveniences, and discomforts, while
listening to clients’ voices. We combine the know-how and grasped needs, apply them to used buildings weacquired, and then② Revitalize the real estate with added values in the horizontal 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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25

Company credo “altruism”
We aim to offer greater happiness to customers and promote the business operation among
all employees.

Issuescustomers’ requests andtroublesSolutions

Value

Provision to inheritancetax
Business succession
Sales brokerage
Rental brokerage

Manufacturing
Development
Regeneration
construction

resolveproducting

viewpoint ofcustomers

Maximization of customers’ profit is just “altruism”.
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26

Follow Up
Property Management
Building MaintenanceRepairRedesigned

operations

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.

27

Maintain Higher Occupancy Rate andEnhance PM operations
Variation in the occupancy rate and entrustment area of entrusted real estate
100％

Entrusted area
Occupancy rate of entrusted real estate
Occupancy rate of middle-sized buildings in 23 wards in Tokyo(㎡)

615,119

60000096.3％(As of the end of Dec. 2015)97.41％

500000Occupancy rate of PM entrustment buildings

95％

400000
Entrusted area

30000090％20000094.4％(As of Dec. 2015)

100000Occupancy rate of middle-sized buildings in 23
wards in Tokyo85％

01/2008

07/2008

01/2009

07/2009

01/201007/201001/201107/201101/201207/201201/201307/201301/201407/201401/2015

07/20150

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 entrusted 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.

28

Building operation capability(the reason why customers chose us)
A general management company① leasing management②property management③construction management

Continuation of fulloccupancy

Repression for vacancy
and delinquency

Maintaining compliance④High added-value product⑤solution capability

Maximization in assets value

to solve troubles of clients’
whole of assets

Sun Frontier Fudousan
We offer customers one-stop consecutive real estate services .
We provide fuss-free after sale services with self-manufactured operations.
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

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 actualize a prosperity of our society.
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.
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, 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.

30

Businessmanagement
based on the
viewpoint ofcustomers

Mentalmanagement
based on our
ethos andphilosophy

Management among
all employees based on
the account for eachdivision

Employees play major roles.
Resonant business administration.

High added-value generated from
our all-hands operation
Appearance

Ａｆｔｅｒ

Indoor After

Our renovation is from the viewpointof applicants.
PSO—Premium setup office

Lease contracts have been signed withrent being about 30% higher than themarket value.

entry hall with a premium feelroof terrace

Ａｆｔｅｒin full blossom

Property outline■Location: Kudan-kita, Chiyoda-ku, Tokyo

roof terrace Before■Structure: a steel reinforced concrete and light-gauge steel flatroofed 6-story building■Date of completion: 1990
■Purposes of use: office, parking

5 or 6-story tenants' very own roof terrace with plants,having views of the moat around the castle■Land area: 233.24㎡■Gross floor area: 995.40㎡
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

We offer comfortable office lives, by utilizing space.
Appearance

Ａｆｔｅｒ

Indoor Afterreassurance by antiseismic
reinforcement
Lease contracts have beensigned with rent being about
20% higher than the amountat purchase.

Entry hall Before

Property outline■Location: Shiba, Minato-ku, Tokyo■Structure: a steel reinforced concreteand light-gauge steel flat-roofed 9-story
building■Date of completion: 1981
■Purposes of use: office, shop
■Land area: 182.21㎡
Entry hall■Gross floor area: 1,191.09㎡
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

Ａｆｔｅｒ

3. Growth strategies

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

33

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.

34

Rental Assets for Hotels
Sanco Inn Numazu-ekimae

Hotel Frontier Iwaki

View

Guest room

Guest room

Guest room

Communal bathroom■Location: Daikumachi, Taira, Iwaki-shi, Fukushima Prefecture(6 min. on foot from Iwaki Station of JR Joban Line)■No. of guest rooms: 150 (equipped with a communal bathroom,a bedrock bath, a loess bath, etc.)■Year built: Mar. 2007 (8 years old)
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

■Location: Ohte-machi, Numazu-shi, Shizuoka Prefecture(2 min. on foot from Numazu Station of JR Tokaido Main Line)■No. of guest rooms: 152 (1st and 2nd floors are occupied by stores)■Year built: Nov. 2007 (8 years old)35

Hotel development, revitalization,and operation businesses
As for hotel operation, we have surveyed the market, and discussed business plans and commercialization. As
the number of foreign visitors who stay in Japan has been increasing rapidly, our company decided to develop
and revitalize hotels by utilizing our accumulated know-how. Furthermore, we will develop a system for
operating hotels, and establish a hotel planning/operation company inside our corporate group, in order tooffer investment products to wealthy people in Asia, including Japan.
Variations in the number of foreign visitors
to Japan and consumption amount(million persons)( billion yen)【Outline of the company to be established】

4,000

40.0

Consumption amount■Corporate name: Sun Frontier Hotel Management Inc.

3,500

No. of foreign visitors to Japan

3,477

35.0

■Representative: Tomoaki Horiguchi■Location: Chuo-ku, Tokyo■Date of establishment: Aug. 2015 (scheduled)

3,000

30.0

2,500

25.0

2,028

19.7

2,000

■Capital: 200 million yen■Business contents: Planning, operation, etc. of accommodation

1,500

facilities, such as hotels

1,000
500

20.0

1,417

15.0

1,085

13.4

814

6.2

8.4

10.0

10.4
5.0

0

0.0
2011

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

36

2012

2013

2014

2015

Strategic Alliance with The Spring Group- Hotel BusinessOur company has agreed to make an business alliance with
Shanghai Spring Investment Management Co., Ltd. for the hotelbusiness in Japan.
Through this partnership, we aim to accelerate the expansion of“urban hotels for enjoying the Japanese style” targeted at foreign
visitors to Japan, by combining our ability to revitalize real estate,
our “altruistic” spirit, and the Spring Group’s capability ofescorting Chinese tourists to Japan.

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

37

SpringSunny Hotel Nagoya Tokoname
newly opened
Appearance

Guest room Before

Feb. 1 pre-opend
Apr. 25 complete open
Guest room

Ａｆｔｅｒ

HOTEL

We aim to be heat-warming for
excursion tourists or personal
travelers.

Location : 3-174-1 Shinkaichou, Tokoname, Aichi, Japan
Rooms : 194
Date of completion: 2008
Copyright © 2016 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38

M&A－Capital and business tie-ups

Reorganization of an asset consulting/housing managementcompany into an affiliate【Outline of the invested company】■Corporate name: Power Consulting Networks Co., Ltd.
■Location of the headquarters: 6-12-20 Jingu-mae, Shibuya-ku, Tokyo■Business contents: consulting about real estate, rental management,
seminar business, etc.
■Capital: 75 million yen (capital reserve: 35 million yen)■No. of employees: 50 for the non-consolidated (105 for the corporate group)■No. of shares acquired: 20% of outstanding shares
Headquarter building

Mainly office buildings

Mainly rental housing

Capability of
proposing utilization

Consulting capability
Capability of managing
rental housing

39

Synergetic effect

PCN

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

When the two companies, having
different business fields and client
bases, cooperate each other, it ispossible to exert the strengths ofboth and provide more customers
with high added values. It will
improve our corporate value.

SF
Capability of revitalizing real estate

Capability of operation
Capability of finding office tenantsOverseas expansion - Two directions

We will develop new investment products,
hone our operation ability to operate
hotels, and play an role of receiving
investments from wealthy people in Asia.

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

40

Overseas expansion － Two directions －(2) Start of local businesses in Indonesia and Vietnam
Jakarta, Indonesia

Da Nang, Vietnam--Sale of urban housing--Urban hotel business《Images of houses under construction》《Images of a business hotel under construction》

We are constructing urban houses for sale, in thecenter of Jakarta. We are preparing for theestablishment of a local affiliate in order tooperate the business in Indonesia on a full scale.

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

On the riverside of the largest ward Da Nang incentral Vietnam, we will commercialize a smallscale hotel as a development project.We arepreparing for the establishment of a local affiliate.

41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.

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

42