The First Quarter Financial Statements of
the FY ending March 31, 2016
Our goal is to be a real estate company most loved andchosen by customers in the world.

Executive Summary

Results of the 1st Quarter Financial
Statements of the FY ending Mar 31, 2016
Future activities
1) Business environment

2-15
16-20

2) Managerial policy and business model

21-333) Growth strategies

34-40

Reference materials

Aug. 6, 2015

42-45

Securities code: 8934

Corporate profile
Corporate name

Sun Frontier Fudousan Co., Ltd.

Location of theheadquarters

1-2-2 Yuraku-cho, Chiyoda-ku, Tokyo

Date ofestablishment

Apr. 8, 1999

Capital8,387 million yen

Representative

President,Representative Director: Tomoaki Horiguchi

No. of employees

267 consolidated base (average age: 33.2 years old)

Business contents

Revitalization of real estate
Realty services

Fiscal year end
Listed inReal estate management, brokerage, construction
planning, rent guarantee, property management
asset management

MarchFirst Section of the Tokyo Stock Exchange (securities code: 8934)(as of the end of Jun. 2015)

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Executive Summary

Summary of the 1st Quarter Financial
Statements of the FY ending Mar 31, 2016

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2

Summary of the 1st Quarter Financial Statementsof the FY ending Mar 31, 2016
1st lquarter Financial Statements of the FY ending Mar 31, 2016

Firm grows of business performance
Results

YoY

Growth rateSales

6,060 million yen＋1,398 million yen+30.0％

Operating income

1,423 million yen＋396 million yen+38.7％

Ordinary income

1,367 million yen＋410 million yen+42.8％Net income（※）

1,183 million yen＋296 million yen+33.4％（※）Net profit attributable to the parent company’s shareholders

Outcome in the 1st quarter
1) The results for the 1st quarter marked
a record high for two consecutive years.
From the same period of the previous year
Sales: up by 30% (+ 1,300 million yen)
Operating income: up by 39% (+ 300 million yen)
Ordinary income: up by 43% (+ 400 million yen)

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2) Thanks to the revitalization
business, profit margin increased.
By grasping the needs of tenants, we wereable to improve the ability to create additional
values. Then, ordinary income marginincreased to 22.6%. (full-year ordinary income
margin in the previous year: 20.2%)

33) Aggressive business operation
Growth strategy: “3 arrows”
We launched a hotel business, while
expanding our current businesses,
conducting M&A, and operating
overseas businesses. We proceedsteadily with the development of a new
foundation for earning profit.

Summary of the results for the first quarter[unit: million yen]
Profitmargin to
sales

Increasefrom thesame periodof thepreviousyear

Initial forecast
for the FY ending
Mar 31, 2016

Progress
rate withrespect tothe initial
forecast

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

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

Sales

4,661

6,060

―

＋30.0％

33,00018.4％

Operatingincome

1,026

1,423

23.5％

＋38.7％

6,300

22.6％

Ordinary
income

957

1,367

22.6％

＋42.8％

6,000

22.8％

Net
income

887

1,183

19.5％

＋33.4％

5,300

22.3％

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4

Consolidated profit-and-loss statement[unit: million yen]
Apr. to Jun. in the FY
ended Mar 31, 2015

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

4,661

6,060

Real estate revitalization

3,206

4,665

Real estate securitization

403

0

Rental building business

421

497

Brokerage

222

405

Property management

307

358

Other businesses

101

133

Gross profit on sales

1,754

2,191

Real estate revitalization

733

1,323

Real estate securitization

403

0

Rental building business

224

271

Brokerage

178

368

Property management

143

166

Other businesses

70

62

727

768

Sales

Selling and general administrative
expenses
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Apr. to Jun. in the FY
ended Mar. 2015

Apr. to Jun. in the FY
ending Mar. 2016

1,026

1,423

Non-operating income

43Non-operating expenses

74

59

957

1,367

Extraordinary loss/income

6▲10

Corporate income tax, etc.

75

172

887

1,183

Operating income

Ordinary income

Net income

The profit margin of the Revitalization business increased,
improving ordinary income margin
・The gross profit margin of the Revitalization business for the 1stquarter is 28.4%, which is higher than the profit margin for the 1stquarter of the previous year (22.9%) and the full-year profit
margin for the previous year (25.4%).
Stable income structure covering SG&A
・The income from rental building and realty service businesses(868 million yen) exceeds the SG&A(732 million yen), excluding
Revitalization sales commissions.

5Consolidated balance sheet -Assets[unit: million yen]

End of Mar. 2014

End of Mar. 2015

End of Jun. 2015

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

31,44637,452

36,639▲813

Cash and deposits

11,18012,686

12,010▲676

Inventory assets

18,72923,47923,305▲174

Other current assets

1,536

1,285

1,322

+36

2,464

2,971

3,585

+614

2,164

2,483

3,056

+573

Intangible assets

11

76

92

+16

Investments and other assets

287

412

436

+24

33,91040,42440,225▲199

Current assets

Noncurrent assets
Property plant and equipment

Total assets

The balance of inventory assets has remained on a plateau (5 buildings sold, 4 buildings and 1 piece of land procured in thisquarter). Additionally, the real estate property in the process of procurement contract, amounts to 12.2 billion yen including fixed
assets, as of the end of July.
The amount of deposit for purchasing noncurrent assets (rental buildings) increased, and then cash and deposits
decreased with it.

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

6

Consolidated balance sheet–Liabilities and net assets[unit: million yen]

End of Mar. 2014

End of Mar. 2015

End of Jun. 2015

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

3,023

3,550

3,855

+305

1,006

1,004

1,117

+113

266

221

177

▲43

1,750

2,324

2,560

+235

12,417

14,172

13,187▲984

Long-term loans and bonds
payable11,35912,98812,129▲859

Other noncurrent liabilities

1,057

1,183

1,058

▲125

15,44017,723

17,043▲679

18,217

22,69323,171

+478

252

8

9

1

Total net assets

18,46922,701

23,181+480

Total capital and liabilities

33,91040,42440,225▲199

Current liabilities
Short-term loans payable, etc.
Income taxes payable, etc.
Other current liabilities
Noncurrent liabilities

Total liabilities
Shareholders’ equity
OthersVariation in capital-to-asset ratio

As the sale of revitalized property progressed, the interest-bearing liabilities
decreased from 13.9 billion yen as of the end of the previous year to 13.2 billion yen.

End of Mar. 2014

End of Mar. 2015

End of Jun. 2015

53.7%

56.2%

57.6%

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Retained earnings increased doe to the difference between quarterly net
income (+ 1.18 billion yen) and term-end dividend payment (-700 million yen).

7

Performance of

Revitalization business
Apr. to Jun. in
the FY ended
Mar 31, 2015

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

3,206

4,665

+45.5%

601

1,239+106.2%

18.8%

26.6%

+7.8%pNo. of procuredbuildings

7

5

▲2

No. of sold buildings

6[unit: million yen]

Sales
Segment income (Note 1)
Profit margin

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

Increase/decrease

Sales
Segment income
Profit margin(million yen)

5,000

40%
4,665

4,500

35%

4,000

30%
3,500
3,000

5

▲1

3,206

26.6%

20.7%

2,500
22

25(Note 2)

20%

+3

18.8%

2,000

15%

■ Both sales and profit grew, and profit margin increased considerably.
■ 4 buildings (for Revitalization) and 1 piece of land (for a hotel) procured; 5 buildings
sold

1,500

25%

1,317

1,239

10%

1,000

■The average business day for selling a property is 224.

601

500

■ The stocks of revitalization property as of the end of the first quarter are 25
buildings, worth 22.1 billion yen(Note 2)※As of the end of July, the real estate in the process of procurement contract was 4
buildings for revitalization, worth 3.8 billion yen. In addition, there were 1 building and 2
pieces of land for hotels, 1 rental building as noncurrent assets, which are worth 8.4

0

5%

272

FY ended Mar 31,
2014
Apr. to Jun.

FY ended Mar 31,
2015
Apr. to Jun.

FY ending Mar 31,
2016
Apr. to Jun.

0%billion yen. The total amount is 12.2 billion yen.
(Note 1) “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.
(Note 2) Projects for procuring and developing land are included in Revitalization stocks.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

8Performance ofRental building business[unit: million yen]

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

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

Increase/decrease

Sales
Segment income
Profit margin(million yen)

100%

600
Sales

421

497

+18.0%

90%
Segment income

221

266

497

500

+20.7%

80%
421

Profit margin

52.5%

53.7%

+1.2%

70%

400
58.4%
52.5%

300

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

53.7%

266

 The increase in income from rents of mid tolong-term revitalized properties contributed.

100

50%
40%

221

200

60%

184

30%
20%

107

10%
0

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9

FY ended Mar 31,
2014
Apr. to Jun.

FY ended Mar 31,
2015
Apr. to Jun.

FY ending Mar 31,
2016
Apr. to Jun.

0%

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

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

Sales

403

0

▲100.0%400

Segment income

403

0▲100.0%350[unit: million yen]

Profit margin

100.0%(million yen)

Increase/decrease－

Sales
Segment income
Profit margin450

100.0%

100.0%

100%

403 403

90%
80%
70%

300

－

60%

250

50%
200


In the same period of the previous year, there
was the income from investment allocation in
conformity with the sale of collaborative
investment projects, but in the current firstquarter, there were no such projects.

40%

150

30%

100

20%

50

10%

0

0.5

10

0

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

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

0

0.5

Apr. to Jun.

Apr. to Jun.

0%

Performance ofBrokerage business[unit: million yen]

Sales

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

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

222

405

Increase/decrease

Sales
Segment income
Profit margin(million yen)

+82.5%

450

405 90.2%400
Segment income

177

366

100%

83.0%

+106.8%

79.6%

366

350
Profit margin

79.6%

90.2%

+10.6%

250< Sales brokerage>
As the property market has been vibrant, the number ofsuccessful transactions increased, and the scale ofprojects got larger. Consequently, both sales and profits
grew considerably.

The transactions with overseas investors, mainly from
Taiwan are increasing.

80%
70%

288

60%
239

222

50%
200

177

40%

150

< Rental brokerage>Both sales and profits were on a plateau, but weconcentrated on solving the worries and difficulties ofowners and finding tenants for revitalized buildings,
which is generating to the creation of the future profits
for the entire company.

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300

90%

11

30%

100

20%

50

10%

0

0%

FY ended Mar 31,
2014
Apr. to Jun.

FY ended Mar 31,
2015
Apr. to Jun.

FY ending Mar 31,
2016
Apr. to Jun.

Performance ofProperty management business[unit: million yen]

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

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

Increase/decrease

Sales
Segment income
Profit margin(million yen)

48%

400
Sales

307

358

+16.6%

46.8%

350
Segment income

143

166

358

47%
46.5%

+15.9%

46%

307

300
Profit margin

46.8%

46.5%

45%

272

▲0.3%

250

44%

200

43%

<Property management business>Both sales and profits increased by over 15%.



No. of entrusted buildings: 292 (up 50 compared to the same
period of the previous year)



166

150

Occupancy rate: 96.1% (down by 1.2%)【Variations in the number of entrusted buildings and occupancy rate】
No. of entrusted buildings
End of Jun. 2013

190

95.7%

End of Jun. 2014

242

97.3%

End of Jun. 2015

292

96.1%

41%

100
40%
50
0

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

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41.5%
112

Occupancy rate

<Building maintenance business>


42%

143

12

39%
FY ended Mar 31,
2014

FY ended Mar 31,
2015

FY ending Mar 31,
2016

Apr. to Jun.

Apr. to Jun.

Apr. to Jun.

38%

Performance of

Other Business (delinquent rent guarantee,

construction solution, space rental)[unit: million yen]

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

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

Increase/decrease

Sales
Segment income
Profit margin(million yen)

80%

250
Sales

101

133

+31.7%
69.3%

Segment
incomeProfit margin70

62▲10.4%

70%

208

200
60%

69.3%

47.2%

▲22.1%
47.2%

150< Delinquent rent guarantee business>
We concentrated on in-house introduction andcooperation with influential companies. As a result, theratio of successful transactions exceeded by 40%,
compared to the previous FY, which increased bothsales and profits.

133

40%

37.5%
101

100

30%
77

70
62

20%

50

<Construction solution business>
The contract amount per construction was raised,
increasing both sales and profits.

10%0<Space rental business>
The number of users of “Vision Office Tokyo,” which wasstarted as a new business in April this year, isincreasing, but it is still in the red.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

50%

13

FY ended Mar 31,
2014

FY ended Mar 31,
2015

FY ending Mar 31,
2016

Apr. to Jun.

Apr. to Jun.

Apr. to Jun.

0%

Target managerial indexes[ Value-added Management ]1) Ordinary profit margin: over 20%[ Financial stability ]2) Capital adequacy ratio: over 50%

To research the values and interests of clients, adopt bold schemes,
improve the quality of services and products with high added values,
evolve by ourselves and make progress while emphasizing profits rather
than sales, and managing risks.

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14

Variations in target managerial indexes■ Variation in capital adequacy ratio■ Variation in ordinary profit margin( million yen）
35,000Sales
売上⾼
Ordinary profit
経常利益
Ordinary profit margin
経常利益率

24.4%

25,00020.2%
20,000100.0%Net asset
純資産
Full-year forecast

30,000( million yen）
25,00035.0%

Capital adequacy ratio
⾃⼰資本⽐率

30.0%

90.0%

80.0%

20,000

68.5%

25.0%

70.0%

22.6%

19.3%

57.5%

53.7% 56.2% 57.6%

60.0%

15,000

20.0%

50.0%
15,000

15.0%

11.5%

40.0%

10,00010.0%

10,000Full-year forecast

5,000

30.0%

5.0%
10.0%
0.0%

0

2012/3

2013/3

2014/30.0%

02015/3 2015/6
2015/6

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20.0%

5,000

2012/315

2013/3

2014/3

2015/3

2015/6
2015/6

Future activities
1) Business environment2) Managerial policies andbusiness models3) Growth strategies
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16

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, the hikein interest rates in the U.S., etc.

Financial andhuman inflow
from inside andoutside JapanAs 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 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 “theworld’s best city Tokyo” in the aspects of the environment, safety, convenience, etc. is about to be actualized.

The inflow of funds from overseas investors will become remarkable, because of Japan’s growth strategies, theyen depreciation, and the economic growth in Asia, and then the needs for the acquisition of real estate willgrow.
The consumption by foreign visitors to Japan will increase, and the demand for commercial and accommodation
facilities will expand.

The urban
office building
market is
improving.

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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17

GDP ranking among cities in the world
city nameGDP[unit: billion dollars]city nameGDP[unit: billion dollars]Tokyo is the huge market that has

1 Tokyo (Japan)

1,616.8

16 Hong Kong

416.0

2 New York (the U.S.)

1,403.5

17 Dallas (the U.S.)

412.7

3 Los Angeles (the U.S.)

860.5

18 Mexico city (Mexico)

403.6

world, surpassing New York. Its

4 Seoul-Incheon (South Korea)

845.9

19 Guangzhou (China)

380.3

market scale is larger than the real

5 London (the U.K.)

835.7

20 Tianjin (China)372.0

GDP of South Korea (1.2 trillion

6 Paris (France)

715.1

21 Singapore (Singapore)

365.9

7 Osaka-Kobe (Japan)

671.3

22 Nagoya (Japan)

363.8

8 Shanghai (China)

594.0

23 Shenzhen (China)

363.2

9 Chicago (the U.S.)

563.2

24 Boston (the U.S.)

360.1

10 Moscow (Russia)

553.3

25 Istanbul (Turkey)

348.7

11 Beijing (China)

506.1

26 Philadelphia (the U.S.)

346.5

12 Koln-Dusseldorf (Germany)

485.2

27 Suzhou (China)

339.0

13 Houston (the U.S.)

483.2

28 San Francisco (the U.S.)

331.0

14 Washington (the U.S.)

442.2

29 Taipei (Taiwan)

327.3

15 Sao Paulo (Brazil)

430.5

30 Jakarta (Indonesia)

321.3

the highest GDP among cities in thedollars), and so Tokyo is our maincompetition field.

* Source: Produced by our company based on the reference materials released by the Brookings Institute. “GDP ranking among cities in 2013-2014” (based on purchasing power parity)<<No. of outbound bullet trains from Tokyo>> ･･･17 trains/hour (1 hour from 8:00 am in the season) *The number of seats of N700 series is 1,323 (22,491 seats/hour)

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

18

No. of foreign visitors to Japan andconsumption amount in JapanThe visitors from mainly Asian countries to Japan and their consumption amount in Japan have increased steeply, because of theeconomic growth in Asia, the decline in relative prices due to the yen depreciation, the easing of regulations for visas, etc., the enhance ofoutward promotion, the development of towns comfortable to foreign people, the establishment of systems for welcoming foreign visitors,
etc. In 2020, the number of visitors is expected to reach 25 million, much larger than the governmental goal: 20 million.

Variations in the number of foreign visitors
to Japan and consumption amount(10,000 people)(100 million yen)
30,00025,0001,744Consumption amountNo. of foreign visitors to Japan

20,0001,036
15,00010,0008,135

Taiwan2,829,821

21.1%

3,544

17.5%

125,2481,600

2South Korea

2,755,313

20.5%

2,090

10.3%

75,852

1,400

3

China

2,409,158

18.0%

5,583

27.5%

231,753

1,200

4Hong Kong

925,975

6.9%

1,370

6.8%

147,958

5

The U.S.

891,668

6.6%

1,475

7.3%

165,381

6

Thailand

657,570

4.9%

960

4.7%

146,029

7

Australia

302,656

2.3%

690

3.4%

227,823600

8

Malaysia

249,521

1.9%

363

1.8%

145,466400

9Singapore

227,962

1.7%

355

1.8%

155,792

200

10The U.K.

220,060

1.6%

412

2.0%

187,239

Total for top 10 countries

11,469,704

85.5%

16,842

83.1%

800

622

20,278
14,167

5,000

1

1,000

836

10,8490

Travel expense
per person[yen/person]

Nationality/region

2,000

No. of visitors to Japan

Consumption
during travel [100million yen]

Rank

（Estimate） 1,800

1,341

No. of visitors from top 10 countries and consumption (2014)

0
2011

2012

2013

2014

2015

*Source: produced by our company based on the reference material released by Japan Tourism Agency※Source: Our company produced the data till 2014 based on the reference material released by JNTO
and the estimated number of foreign visitors to Japan in 2015 based on the reference material releasedby Nomura Securities.
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19

Variations in office rent and vacancy rate in 5 wards
in Tokyo
Average rent [yen/tsubo]

Average vacancy rate [%]

（％）

（yen）

Peak of average rent
Aug. 2008
22,901 yen

Vacancy rate in Jun.

5.12%

Improved 4.3% during
the last 3 years

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

Average rent in Jun.

17,401 yen

Increase for 18 months
in a row(+7.4% from the bottom
value)）

Bottom average rent
Oct. 2004
17,526 yen
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.
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20

Average rent

Vacancy rate

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

2) Managerial policies and business models

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21

Managerial policies and business models

Vision and policies of Sun Frontier
VisionWe aim to become the real estate company loved andchosen the most by clients in the world as “professionals
in real estate utilization”

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 realestate-related difficulties

Strategies

Urban
centerCopyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Strength

Office22

Tenantfinding
capability

Real estate
Revitalization
capability

Building operation
capability

Managerial policies and business models

Business structure of Sun Frontier① In the vertical service business, we survey and solve complaints, inconveniences, and discomforts, while listening toclients’ 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 the horizontal real estate revitalization business, and sell them.

Asset consultancy

Rent guarantee

Construction planning

Building management

Brokerage in rental

Brokerage in sale

Acquisitionof property

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)
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

23

Case of real estate revitalization--Profit-earning building in Hirakawa-cho

By utilizing space, we offer comfortable office lives.
Renovation from theviewpoint ofapplicants
Lease contracts havebeen signed with rent
being about 30%“Setup office” whose interior finish
work is conducted before
occupation

higher than themarket value.

Appearance Before【Property outline】

Appearance

Ａｆｔｅｒ■Location: Hirakawa-cho, Chiyoda-ku, Tokyo■Structure: a steel reinforced concrete and light-gauge
steel flat-roofed 9-story building with one basement■Date of completion: 1984 (31 years old)
■Purposes of use: store, office, apartment, garage,
residence■Land area: 186.17 ㎡ (56.31 tsubo)■Gross floor area: 1,222.53 ㎡ (369.81 tsubo)
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

By developing a refreshing space in the rooftop, which has not beenutilized, we create comfortable time for tenants.

24

Case of real estate revitalization

New renovation style

PSO—Premium setup office
We plan renovation based on the characteristics of locations and market trends,
for tenants considering.

We produce topnotch space in small to medium-sized buildings.
Comfortable office space at the rooftop lounge forTenants on the top floor
Office space with open ceiling spacethat adds a sense of openness

Classy entrance with the design
rendering the flow of water
Bathroom like a hotel’s

Serene office with downlights
Bright elevator hall

A dignified drawing room for real estate in areas
where there are many intellectual professionals

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

25

Acquisition of fixed assets--Ginza Buildings A and B《Appearance》《Access》
5 min. on foot from “Ginza” Station of Tokyo Metro Ginza Line,
Hibiya Line, and Marunouchi Line
5 min. on foot from “Yurakucho” Station of JR lines
10 min. on foot from “Tokyo” Station of JR lines
2 min. on foot from “Ginza 1-chome” Station of Tokyo Metro Yurakucho Line

《Map》

Location that has the brand of Ginza and canstrongly appeal to the enterprises that pursue
commercial prosperity■Location: 1-6-5 Ginza, Chuo-ku, Tokyo■Structure: a steel reinforced concrete and reinforced concrete flatroofed 9-story building with one basement■Date of completion: 1982 (33 years old) *Aseismic reinforcement
completed

We improve the efficiency of utilization of real estate through■Purposes of use: store and officeconversion by using our strengths, and contribute to the growth■Area of premises: 740.37㎡ (223.96 tsubo)■Gross floor area: 5,277.05㎡ (1,596.30 tsubo)
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

of local community.

26

To offer services to nearby owners withour branch network specialized in the urban center
Prioritized districts
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.

Ueno
Akihabara

Ikebukuro

Kanda

Kudan
Koujimachi

Nihonbashi
Imperial
PalaceShinjuku

AoyamaShibuya

HQ in
HibiyaToranomon

Tokyo

Ginza
Shinbashi

Akasaka
Hamamatsu-cho

Ebisu
Shinagawa

Yokohama

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27(

indicate the main target areasof our branches.)

Introduction of a new branch—Nihonbashi Store《Map of the branch》

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

《Members of Nihonbashi Store》

Branch on the first floor facing Eitai Street《Location》
1st floor of Annex of Kabutocho Kaisei
Bldg., 13-1 Nihonbashi-kabutocho,
Chuo-ku, Tokyo《Access》■1 min. on foot from “Kayabacho” Stationof Tokyo Metro Touzai Line and Hibiya Line
■3 min. on foot from “Nihonbashi” Stationof Tokyo Metro Touzai Line, Ginza Line, andToei Asakusa Line
■10 min. on foot from “Tokyo” Station of
JR lines《Appearance of the building where the branch enters》

This branch was established at alocation accessible to anywhere in the
Nihonbashi area in 10 min.
We will emphasize local community
further, and aim to be loved by local
residents by solving any kinds oftroubles about real estate, by utilizing
our familiarity with local areas.

28

High-quality, swift management system
specialized in the urban center
67% of the entrusted buildings are concentrated in 5 wards in Tokyo, where we conduct community-based sales activities
and are good at finding tenants.
Distribution of entrusted buildings under
our PM department(as of the end of Apr. 2015)

5 wards in Tokyo 188 buildings

66.7%

The other wards 73 buildings

25.9%

Others21 buildings

7.4%

Total

282 buildings

100%

Others
7.4％

The other
wards
25.9％

5 wards
in Tokyo

66.7％

Among the entrusted buildings, about 75% are over 20 years old.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

Entrusted area by PM and clients are
increasing steadily.
Top-ranked companies in entrustment area*[thousand㎡]

1

XYMAX

8,327

2

Mitsui Fudosan Building Management

7,860

3

Mitsubishi Jisho Property Management

6,510

・・・

Top-ranked companies in the number ofowners*2014

1 Mitsubishi Jisho Property Management

400

2 Vortex

283

3 XYMAX243

22 Taisei-Yuraku Real Estate615

4 Itochu Urban Community

180

23 BMS566

5 Sun Frontier Fudousan

159

24 Sun Frontier Fudousan

474

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 theend of the term.
Later, tenants have been moving in
steadily, recovering occupancy rate.

※Source: Produced by our company based on the Nov. 2014
issue of “Monthly Property Management”(㎡)

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

575,03896.1％(as of the end of Jun.
2015)

97.41％

600000500000Occupancy rate of PM entrustment buildings

95％

40000030000090％20000093.1％(As of Jun. 2015)

100000Occupancy rate of middle-sized buildings in
23 wards in Tokyo

85％

0
08/1

08/7

09/1

09/7

10/1

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

10/7

11/1

11/7

30

12/1

12/7

13/1

13/7

14/1

14/7

15/1

We excel at operating rental buildings.
We find 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/
maintenance・Account management
・To listen to opinions
・Accounting report
・Negotiation withtenants
・Buildingmaintenance・Emergency measures
・Equipment

Rentalbrokerage

Rent
guarantee

・To findoccupants
・brokage for
furnished office・Nonpayment is・Marketing
・Consultancy

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

Interior
finishing

Renewal・Interior planning・Design・Interior finishing・Restoration tothe original state・Undertaking of
tenant’s
construction

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

management

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

Sales
brokerage
・Purchase of new
real estate
・Sale of assets
・Replacement bypurchase of new realestate for business・Replacement ofassetsBusinesses of both revitalizing real estate and operating rental buildings
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Under the basic principles among all employees
Change and challenge—3 principles for our business
1. Mental management based on our
ethos and philosophy• We have upheld “altruism” since the establishment ofour company.
• We together clean our office, etc. and read thephilosophy booklet every morning, to share the value“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 system foreach division (Amoeba management), we enhance
employees’ profit awareness and promote the business
operation among all employees with management
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 with andsolve even minor troubles, without stint.
• We change ourselves from the viewpoint of customers,
and challenge, create, and advance.
• Based on the collaboration among different sections,
we create high added values that are linked to one
another.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Mentalmanagement
based on our
ethos andphilosophy

Employees play major roles.
Resonant business administration.

32

Introduction of corporate culture

To clean every morning

Sporting camp involving all club members on July 3 and 4, 2015

New employee training

To read the philosophy booklet every morning
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

In-house birthday party in Jan. 201533

Baseball club

Tennis club3) Detailed contents of the growth strategy“Three Arrows”
Growth strategy“Three Arrows”
1) Expanding actual businesses2) M&A
3) Overseas expansion

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Expanding actual businesses- Rental space opened in front of Tokyo Station
Appearance

Seminar room
【Assumed purposes of use】
(1) Event hall that can accommodate over 300 people(2) Over 10 rental rooms with various sizes(3) Space for the events for tasting local special foods
and introducing sightseeing spots cosponsored byseveral municipalities (1st basement)

Facility name: Vision Center Tokyo
Location: KI Kousan Tokyo Bldg., Yaesu, Chuo-ku,
Tokyo

Event space

Facility scale: total of 2,043.69 ㎡ (618.19 tsubo)
1st basement: 267.98 ㎡ (81.06 tsubo) 4th floor: 463.65 ㎡ (140.25
tsubo) 5th floor: 463.65 ㎡ (140.25 tsubo) 6th floor: 465.07 ㎡（140.67 tsubo） 7th floor: 383.34㎡（115.96 tsubo）

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Good location min. onfoot from South Exit ofTokyo Station

Map

Rental officeRental meetingroomNew business- Shift from hotel rental to hotel operation
businesses
Sankou Inn Numazuekimae

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 bedrockbath, a loess bath, etc.)■Year built: Mar. 2007 (8 years old)

Copyright © 2015 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)36

New business

Hotel development, revitalization,and operation businesses
As for hotel operation, we have surveyed the market, and discussed business plans and commercialization. As thenumber of foreign visitors who stay in Japan has been increasing rapidly, our company decided to develop andrevitalize 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 to offer investment products
to wealthy people in Asia, including Japan.

Ratio of foreign hotel guests[million guests]【Outline of the company to be established】

500■Corporate name: Sun Frontier Hotel Management Co., Ltd.
■Representative: Tomoaki Horiguchi■Location: Chuo-ku, Tokyo■Date of establishment: Aug. 2015 (scheduled)■Capital: 80 million yen■Investment ratio: 90% from our company, 10% form Mizuho Shoji■Business contents: Planning, operation, etc. of accommodation
facilities, such as hotels

450
400
350

10%

474

9%
8%

7.2%

7%

6.0%

6%

300
250

4.4%

5%

200

4%

150

3%

100

Regarding Mizuho Shoji Co., Ltd.
■Representative: Hisao Ishii■Location: Ochi-gun, Shimane Prefecture■Capital: 76.75 million yen■Business contents: operation of hotels, inns, and ski resorts

439
417

466

9.5%

50
0

Ratio ofbusiness
hotels
38％

39％

2011年

2012年

Business hotel
Resort hotel
Others

40％

41％

2%
1%
0%

2013年

2014年

Urban hotel
Inn
Ratio of foreign hotel guests* Produced by our company based on the reference materials released by Japan Tourism Agency.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

37

M&A－Capital and business tie-ups- Reorganization of an asset consulting/housing
management company 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

38

Synergetic effect

ＰＣＮ

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

When the two companies, having different
business fields and client bases, cooperatewith each other, it is possible to exert thestrengths of both and provide morecustomers 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 －(1) As a receiving source of investment for Asia

Tokyo Youkou
東京陽光不動産
Fudousan（2013年設立）(established in 2013)

Da Nang

We will develop new investment products, hone ouroperation ability to operate hotels, and play an role ofreceiving investments from wealthy people in Asia.

1. To promote wealthy people outside Japan to invest in Tokyo
To lead the energy of Asian growth to Tokyo, and contribute to the growthof Japan (Tokyo Youkou Fudousan [established in Taipei in 2013], Hong Kong, Singapore, etc.)

2. To make inroads into large cities in Southeast Asia, which
are growing rapidly and to contribute to the happiness of
local people with outbound services(Indonesia, Vietnam, etc.)
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

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 to be sold, in thecenter of Jakarta. We are preparing for theestablishment of a local affiliate in order to operate
the business in Indonesia on a full scale.

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

In the riverside of the largest ward Da Nang in central
Vietnam, we will commercialize a small-scale hotel as adevelopment project.
We are preparing for the establishment of a local affiliate.

40

(Reference material)

Sharing profits with shareholders
FY ended Mar
31, 2011

FY ended Mar
31, 2012

FY ended Mar
31, 2013

FY ended Mar
31, 2014

FY ended Mar
31, 2015

FY ending Mar
31, 2016(*estimate)

363

928

2,483

4,020

5,053

5,300

Net income pershare

9.8 yen25.0 yen

66.5 yen

94.0 yen

118.2 yen

124.0 yen

Dividend per
share

0.0 yen

3.5 yen

8.5 yen13.5 yen

16.5 yen

17.5 yen

Net income

Variations in net income/share and dividend/share
20 yen18 yenDividend per share

Net income per share

118.2 yen

Dividend has
increased steadily
since the resumptionof dividend payment

124.0 yen

140 yen
120 yen

16 yen94.0 yen

14 yen12 yen

100 yen
80 yen66.5 yen

10 yen16.5 yen

8 yen

17.5 yen

13.5 yen

6 yen

25.0 yen

4 yen
2 yen

The highest profit
after the bankruptcy
of Lehman Brothers

60 yen40 yen8.5 yen

9.8 yen

20 yen3.5 yen

0 yen

0 yen
FY ended Mar 31, FY ended Mar 31, FY ended Mar 31, FY ended Mar 31, FY ended Mar 31, FY ending Mar 31,
2011

2012

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2013

2014

42

2015

2016 (* estimate)(Reference material)

Enrichment of corporate governanceReasons for appointing 4 external executives
Toshio Takahara (external director)•As an executive of “UniCharm,” he grew businesses and has plenty of experience.
•In the decision making process of the board of directors of our company, he gives effective and appropriate advices, fromthe standpoint independent from the management that executes businesses.

Yukitoshi Kubo (external director)•He is the former chief of the Screening Section of Tokyo Stock Exchange, and qualified as a certified public accountant, andhas the expertise and plenty of experience in the Financial Instruments and Exchange Act, the Companies Act, and financial
affairs.
•In the decision making process of the board of directors of our company, he gives unbiased, fair, appropriate advices, fromthe standpoint independent from the management that executes businesses.

Koichi Kase (external auditor)•He is versed in tax affairs and accounting as a tax accountant, and audits the business operation of directors strictly, basedon his knowledge of finance and accounting.
•He possesses the profound knowledge of philosophy and amoeba management, as a student of Seiwa Juku.

Koichi Moriya (external auditor)•As a lawyer, he specializes in real estate and finance, has accumulated plenty of experience, and gives appropriate advices
for improving our systems for complying with law.
•He also has the experience of serving as an external auditor of “Tamura Corporation” and “Samantha Thavasa Japan
Limited.”

Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

43

(reference material)

Variation in return on equity (ROE)
By conducting businesses focused on the urban center, offices, etc., along with “high profit margin” and“early revitalization”, the high percentage of ROE is realized.
ROE ranking among top 25 real estate companies(in the non-housing sector) for total market value

30.0%

25.0%

ROE (After taking into accounteffective tax rate *）

23.6%

24.5%

24.7%

20.0%
15.5%

16.3%

16.3%

17.2%

15.0%

10.0%

5.0%

Corporate name

ROE [%]

1

Nippon Commercial Development

35.3

2

Tokyo Tatemono

33.2

3

Sun Frontier Fudousan

24.7

4

Raysum20.9

5

Aeon Delight

12.0

6

Nippon Kanzai

12.0

7

Hulic

11.8

8

Kyoritsu Maintenance

10.8

9

Sumitomo Realty & Development

10.5

10

Nomura Real Estate Holdings

10.3

11

Jowa Holdings

9.8

12

Mie Kotsu Group Holdings

9.4

13

Tosei

9.2

14

NTT Urban Development

8.4

15

Aeon Mall

7.9

16

Tokyu Fudosan Holdings

6.6

17

Mitsui Fudosan

6.4

18

TOC

6.0

19

Parco

5.7

20

Keihanshin Building

5.5

21

Mitsubishi Estate

5.2

22

Diebiru

3.8

23

Showa Aircraft Industry

3.1

24

Kabuki-za

3.0

25

Heiwa Real Estate

2.8

ROE

6.8%

10.9%

4.6%

The average ROE among top 25
real estate companies for total
market value (in the non-housing
sector), excluding our company is
10.4%.

0.0%
2011/3

2012/3

2013/3

2014/3* Estimated under the assumption that effective tax rate (35.64%) was imposed, while removing theeffect of tax burden reduction due to tax loss carried forward.
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

44

2015/3■Produced by our company based on Shikiho (quarterly report on Japanesecompanies)(Total market prices were calculated from the closing prices on Aug. 4, 2015.)

(Reference material)

Introduction of Ginza 1-chome Project
Appearance

Map

Bathroom

OfficeRooftop terrace【Outline of real estate】■Location: 1-19-12 Ginza, Chuo-ku, Tokyo■Structure: A 9-story steel-framed building with
one basement■Year of completion: 1980 (35 years old)
■Purposes of use: store and office■Area of premises: 98.17㎡ (29.69 tsubo)■Gross floor area: 763.01㎡ (230.81 tsubo)
Copyright © 2015 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

45

Thank you for visiting us today.
We would appreciate yourcontinued support.
 This reference material is intended for providing information, not for soliciting or promoting you to purchase a specific product.
When you invest, please do so based on your own judgment and responsibility. If you want to purchase the shares of ourcompany, please contact securities companies.
 The information included in this material may not follow the Financial Instruments and Exchange Act, the Building Lots andBuildings 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 the performance.
 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.

<For inquiries about this material>
Sun Frontier Fudousan Co., Ltd.
Management Planning Dept.
Phone: 03-5521-1551
URL: http://www.sunfrt.co.jp/
Mail: ir-contact@sunfrt.co.jp