Sun Frontier Fudousan Co., Ltd.

Consolidated Financial Statements for
the First Quarter of Fiscal Year ending March 2021
We are aiming to be the real estate company of the world’s most
loved, trusted and selected by clients.

1) Overview of the Q1 Results of FY ending March 2021

1-102) The Forecast of Consolidated Operating Performance andDividend for FY ending March 2021

11-143) Impact of the Spread of the new coronavirus (COVID-19)
Infection and Immediate Management Policy

15-204) Specific Initiatives in Growth Strategies

21-33

5) Company Information and Reference Materials

34-44

August 6, 2020

Stock Code: 8934

Performance Summary of 1Q of FY ending March 2021
Due to the impact of the new coronavirus (COVID-19) infection and the rebound from the previous
year, sales and profits decreased sharply, but secured a profit.
(Unit: 1 million yen)
Results

Profit Margin

Year-on-Year

Growth Rate

Full-year Forecast

Progression Rate

Net Sales

13,672--18,980-58.1%

70,00019.5%

Operating Income

2,095

15.3%

-7,771-78.8%

6,930

30.2%

Ordinary Income

1,952

14.3%

-7,806-80.0%

6,500

30.0%

Net Income *

1,238

9.1%

-5,458-81.5%

4,100

30.2%

Dividend per share

42.0 yen*“Net Income” represents net income attributable to shareholders of the parent company.

Topics1) The sale of 5 properties completed as planned in RP Business

2) Announced full-year earnings forecast and dividend forecast that had
been undecided due to the COVID-19 outbreak• The number of sales in RP Business was 5 (14 fewer than those in the same period of
the previous year), but the segment income ratio remained high (27.7%, -7.1% yearon-year) and remained solid even in the COVID-19 outbreak. However, there was areactionary decline due to the concentration of property sales including large-scale
projects in the same period of the previous year, and both sales and profits decreased
significantly compared to the same period of the previous year.
• In such circumstances, we will raise the sensitivity to client's voices in the field morethan ever, firmly grasp changes in offices, towns and work styles, and promote thecreation of offices that will be selected even in the new normal.

The full-year forecast is expected to decline significantly, but dividend is expected tobe the same as in the previous year.
• We forecast sales to fall 4% and ordinary income to fall about 60% compared tothe previous fiscal year. In the Hotel Business, a sale of a large-scale condominium
project, “Hiyori Ocean Resort Okinawa” is expected, but a decrease in the numberof buildings sold and a decline in the profit margin are expected in RP Business,
which accounts for a large portion of the overall performance (See pages 12 to 13
for details).
• Dividend per share will be maintained at 42 yen, the same amount as in theprevious fiscal year (See page 14 for details).

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Sun Frontier Fudousan Co., Ltd.

Consolidated Income Statement（Unit: 1 million yen）
FY ended March
2020
April to June

FY ending March 2021
April to June

Increase/
Decrease

Real Estate Revitalization Business

32,65230,447

13,672
10,354-58.1％-66.0%

Replanning Business(including Hotel Development)

29,5949,438-68.1%

Rental Building and Sublease

Real Estate Revitalization Business

852
844
1,277
335
-251
11,897
11,186

915
820
589
2,206
-297
3,875
3,119

7.4%
-2.8%
-53.9%
558.5%－-67.4%-72.1%

Replanning Business(including Hotel Development)

10,8272,918-73.0%

Rental buildings and Sublease

359
544
124
62
- 19

201
552
-343
651
-106

-44.0%
1.5%－
950.0%－

Selling and general administrative
expenses

2,030

1,779

-12.4%

Operating Income

9,867
28
137
9,758
－
-3,062
-1
6,697

2,095
33
176
1,952
-6
-711
3
1,238

-78.8%
17.9%
28.5%-80.0%－-76.8%－-81.5%Net Sales

Real Estate Service Business
Operation Business
Other Business
Adjustment
Gross Profit

Real Estate Service Business
Operation Business
Other Business
Adjustment

Non-operating Income
Non-operating Expenses
Ordinary Income
Extraordinary Gains (losses)
Corporate Income Taxes
Non-controlling gain or loss
Net Income

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Income Statement Points• The number of sales for RP Business was 5 buildings in the current period. Since
sales of properties including large-scale projects were concentrated in the 1Q
previous year, both sales and profits decreased sharply compared with thesame period of the previous year.
• In Other Businesses, the delivery of condominiums in Da Nang City, Vietnam
proceeded smoothly, contributing significantly to the business results. For thecurrent period, the delivery amount from January 2020 to the end of March
2020 was recorded.

Major impacts of COVID-19 on performance<Hotel Operation Business>• Up to 7 hotels have been temporarily closed since April. Although they have
gradually been reopened since late June, the average occupancy rate remains
sluggish. Under such circumstances, "Tabino Hotel Kashima," which opened
in April, was able to capture business demand, and was fully occupied for 10
days in June.
<Conference Room Rental Business>• Following the declaration of the state of emergency, cancellations occurred
one after another from April to May, and the business performance dropped
significantly, but we started thorough measures to prevent COVID-19
infection and new services. In June, demand for events which were
postponed in April and May recovered, and the results for the month of June
recovered to the same level as in the same period of the previous year.

2

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Assets • Inventory assets increased by ¥1.8 billion in total due to purchases of RP properties and others. Among them ¥3 billion increased in RP business projectsand ¥1.2 billion decreased in overseas projects due to sales of development sites.
• Cash and deposits decreased by ¥4.2 billion due to income taxes, dividend payments in the previous period, and purchases of properties for the next period
and beyond.
• Other current assets decreased by ¥1.6 billion due to decreases in accrued consumption tax and advance payment.

(Unit: 1 million yen)

FY ended March2019

FY ended March
2020

FY endingMarch 2021
As of
End of June 2020

Increase/Decrease(Compared to
end of March 2020)

97,149113,842

109,811-4,030Cash and deposits

20,257

18,627

14,388-4,239Inventory Assets

74,32991,766

93,602+1,836

Breakdown) RP

62,14371,35374,356+3,003

Hotel

7,552

17,01917,086+67

Overseas, etc.

4,634

3,395

2,160

-1,235

2,562

3,448

1,821

-1,627

13,74916,45016,468+17

9,339

10,413

10,593

+179

863

712

669

-43

3,546

5,324

5,205

-118

110,898

130,293

126,280-4,012Current Assets

Other Current Assets

Noncurrent Assets
Property, Plant and Equipment
Intangible Assets
Investments and other Assets

Total Assets
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3

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet -Liabilities/Equity • As purchases of RP properties progressed, borrowings increased by approximately ¥1.5 billion
from the end of the previous fiscal year, and the balance of interest-bearing debt was ¥50.8
billion.
• Retained Earnings included in shareholder’s equity decreased by approximately ¥0.8 billion due
to net income (+¥1.23 billion) and year-end dividend payment (-¥2.0 billion).

(Unit: 1 million yen)

Current Liabilities

FY ended
March 2019

Changes in Equity Ratio
End of March 2019 End of March 2020

50.3%

49.6%

FY endingMarch 2021
As of
End of June 2020

FY ended
March 2020

End of June 2020

50.4%
Increase/Decrease(Compared to

end of March 2020)

12,85918,052

17,240-811

Short-term Loans Payable, etc.

2,248

4,463

7,864

+3,400

Income Taxes Payable, etc.

2,661

3,566

583

-2,982Other Current Liabilities

7,949

10,022

8,792-1,22942,17947,43145,222-2,209Long-term Loans Bonds Payable

39,75144,90643,023-1,883

Other Noncurrent Liabilities

2,428

2,525

2,199

-325

55,03865,48362,463-3,02055,90064,69063,880

-809

-40

119

-63

-182

Total Net Assets

55,86064,80963,817-991

Total Liabilities and Capital

110,898

130,293

126,280-4,012

Noncurrent Liabilities

Total Liabilities
Shareholders’ Equity
OthersCopyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

4

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Replanning Business (Replanning (RP)/ Hotel Development)◼ The number of buildings sold decreased significantly from the previous year (19 cases)
to 5 cases due to the facts that economic activity was restrained by the state of
emergency declaration in the current period and that the sale of properties including
large-scale projects was concentrated in the same period of the previous year.
◼ The average RP Business period was 484 days (+75 days from the previous year). The
business period has been extended due to efforts to commercialize buildings to raise
their rent levels, but a high profit margin on sales was maintained.
◼ Purchases of projects contracted before February were settled as planned.
The number of properties in year-end inventory was 74 (62 RP Business-related
properties and 12 Hotel Business-related properties).
Inventory asset was ¥91.4 billion (¥74.3 billion for RP Business-related and ¥17 billion
for Hotel Business-related).

FY ended
March 2020
April to June

FY endingMarch 2021
April to June

Net sales

29,5949,438-68.1%

Segment Income

10,3052,618-74.6%(Note 1)

Increase/
Decrease

34.8%

27.7%

-7.1%pt

Number of Items
Purchased

14 cases

8 cases-6 cases

Number of Properties
Sold

19 casesProfit Margin

Number of Stocks atthe End of Fiscal Year

64 cases(Note2)

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35,00030,00060%
29,59450%

25,00040%

34.8%

20,000*Excluding those related to Overseas Business.

(Unit: 1 million yen)

(1 million yen)

Net Sales
Segment Income
Profit Margin

5 cases*Including 1 case of
primary composition

74 cases(Note 2)-14 cases+10 cases
5

27.7%

30%

15,00010,00010,305

20%

9,438

10%

5,000
2,618
0

0%
FY ended March 2020 FY ended March 2021
April to June
April to June
(Note 1) “Segment Income” is calculated by deducting specific costs of each segment,
including interest expenses, sales commission and goodwill depreciation expense fromgross profit.
(Note 2) Projects of land purchase and development are included in RP inventory.

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Rental Building Business (Rental Buildings/ Sub-leases)◼ Net sales increased due to a steady progress in attracting tenants
to RP inventory properties and Sublease Business, but segment
income decreased due to rent exemption due to temporary
closure of some hotels and decline in occupancy rate.

Net Sales
Segment Income
Profit Margin(1 million yen)

1,000

100%
915

◼ We aim to focus on purchasing properties for medium to longterm RP projects to increase rent revenue.

852
800
75%

600

(Unit: 1 million yen)

Net Sales

FY ended
March 2020
April to June

FY endingMarch 2021
April to June

852

915

42.2%

Increase/
Decrease

400

50%
359

+7.4%

22.0%
201

200
Segment Income

Profit Margin

359

201

-44.2%

42.2%

22.0%

-20.3%pt

00%
FY ended March 2020
April to June

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6

25%

FY ended March 2021
April to June

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Real Estate Service Business<PM and BM Businesses>◼ In PM Business, the number of PM managing buildings significantly
increased, resulting in higher sales and profits. In BM Business, sales andprofits decreased due to a decrease in revenue gained from sales of RP
properties.

(Property Management/ Building
Maintenance/ Brokerage/ Leasing)

1,000[Number of PM Managing Buildings and Occupancy Rate]
End of March 2018
End of March 2019
End of March 2020

[Number of Managing Buildings][Occupancy Rate]

381 buildings
374 buildings
397 buildings

95.9%
97.6%
97.9%

844

FY endingMarch 2021
April to June

Net Sales

844

820

-2.8%

Segment Income

544

552

+1.6%

64.4%

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67.3%

820
80%

64.4%

FY ended
March 2020
April to June

Profit Margin

100%

800

<Brokerage and Leasing>◼ Sales and profits of Brokerage increased significantly due to sales to overseas
investors. Although Leasing contributed to the commercialization of RP
properties, sales and profits of Leasing decreased due to a decrease incontracts for managed properties and general properties in external revenue
due to the impact of the COVID-19 outbreak.

(Unit: 1 million yen)

Net Sales
Segment Income
Profit Margin(1 million yen)

Increase/
Decrease+2.9%pt

7

600

544

67.3%

552

60%

400

40%

200

20%

0

0%
FY ended March 2020
April to June

FY ended March 2021
April to June

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Operation Business(Hotel Management and Conference Room Rental Business)<Hotel Operation Business>◼ Up to 7 hotels were temporarily closed, mainly under the state of emergency
declaration following the spread of COVID-19 infection. Despite the favorable
performance of “Tabino Hotel Kashima,” which opened in April and recorded fulloccupancy for successive days in June, the average occupancy rate of operating
hotels declined significantly, resulting in a significant decrease in revenue and aloss was recorded.
<Conference Room Rental Business>◼ There were a series of cancellations due to the spread of COVID-19 infection, but
after the state of emergency declaration was lifted, the demand for events that
had been postponed recovered, and we launched thorough countermeasuresagainst infections and new services. As a result, our performance in June
recovered to the same level as in the same period in the pervious year.

FY ended
March 2020
April to June

FY endingMarch 2021
April to June

1,277

589

-53.9%

Hotel Operation Business

928

259

-72.0%

Conference Room Rental
Business

349

329

-5.8%

Segment Income

108

-357

－

Hotel Operation Business

15

-429

－

Conference Room Rental
Business

9272-22.3%

8.5%－－

Hotel Operation Business

1.7%

－

－

Conference Room Rental
Business

26.5%

21.9%

-4.6%pt(Unit: 1 million yen)

Net Sales

Profit Margin

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Increase/
Decrease

8(1 million yen)

1,400

Net Sales
Segment Income
Profit Margin

40%

1,277

1,200
30%

1,000
800

20%

589

600
400
200

8.5%

10%

108
0%

0
-200

-10%

-400

-357

-600

-20%
FY ended March 2020
April to June

FY ended March 2021
April to June

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Others (Rent Guarantee, Construction and Overseas Business, etc.)<Rent Guarantee Business>◼ Although sales activities stagnated due to the spread of COVID-19
infections, the number of new and renewed guarantees handled
remained steady and net sales increased. However, profit decreased
due to increased provision for guarantee performance.

(1 million yen)

2,500

2,000
75%

<Overseas Business>◼ Delivery of the condominium "HIYORI Garden Tower" in Da Nangproceeded steady, and as of the end of March, delivery was completed
in four-fifths of the lots. The delivery between January and March has
contributed to the business performance in the current period.

Net Sales
Segment Income
Profit Margin

1,500
50%

FY ended
March 2020
April to June

FY endingMarch 2021
April to June

335

2,206

+558.5%41635+1440.7%

12.3%

28.8%

+16.5%pt

Increase/
Decrease

1,000
28.8%
635
500

0

9

25%

355
12.3%
41
FY ended March 2020
April to June

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100%
2,206

<Construction Business>◼ Although sales of SF Engineering contributed, sales and profits
decreased due to a decrease in large-scale construction orders for
managed properties.

(Unit: 1 million yen)

Net Sales
Segment Income
Profit Margin

0%
FY ended March 2021
April to June

Sun Frontier Fudousan Co., Ltd.

Trends in Key Management Indicator■ Changes in Ordinary Income Ratio(1 million yen)

80,000(1 million yen)

70,00030%

Net Income
売上高
Ordinary Income
経常利益(Building a Stable Financial Base)80%

Net Assets
純資産
Equity Ratio
自己資本比率Ratio of ordinary income
経常利益率

24.0%

22.9%

22.7%
22.0%

22.0%

70%

full-year forecast

70,00060,000■ Changes in Equity Ratio(Pursuing High-Value-Added Management)

60,00025%

55.7% 56.0%

50,000

20%

60%

53.2%
50.3%

50.4%
50%

50,00049.6%

40,00014.3%
15%40,00010%

30,00040%

30%

30,000full-year forecast

20,00010,0000

2016/3 2017/3 2018/3 2019/3 2020/3 2020/6
2021/3Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

20%
5%

20,00010%

0%10,00010

2016/3 2017/3 2018/3 2019/3 2020/3 2020/6
2021/30%

Sun Frontier Fudousan Co., Ltd.

2) The Forecast of Consolidated Operating

Performance and Dividend for FY ending March
2021

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11

Sun Frontier Fudousan Co., Ltd.

Forecast for FY ending March 2021
The consolidated financial results and dividend forecast for the FY ending
March 31, 2021 were previously undecided because it was difficult toestimate them appropriately and reasonably due to the COVID-19 outbreak.
However, in light of the situation in which economic activity is gradually
resuming due to the lifting of the state of emergency in Japan and therelaxation of lockdown and movement restrictions abroad, we have decided
to announce the consolidated earnings forecast based on the information
available at this time.
Regarding the future outlook, although the prospects of the COVID-19
outbreak is still uncertain, it is planned on the assumption that the
pandemic will be contained with no major changes toward the end of the
fiscal year.

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12

Sun Frontier Fudousan Co., Ltd.

Forecast for FY ending March 2021
FY ended
March 2020

FY endingMarch 2021
(Forecast)

73,21870,000-4.4%(1) Real Estate Revitalization Business

60,061

59,220-1.4%

Replanning Business (including Hotel Development)

56,127
3,933

55,610
3,610

-1.0%
-8.2%

(2) Real Estate Service Business

3,476

3,020

-13.1%(3) Operation Business(4) Other Business
Adjustment

5,405
5,659
-1,3844,380
4,380-1,000-19.0%-22.6%－

Gross Profit

24,02813,930-42.0%(1) Real Estate Revitalization Business

20,314
18,8301,484

11,34010,740600-44.2%-43.0%-59.6%(2) Real Estate Service Business

2,253

1,790

-20.6%(3) Operation Business(4) Other Business
Adjustment

-41
1,615
-115

-370
1,260
-90

－
-22.0%－

Selling and general administrative expenses

7,456

7,000

-6.1%

Operating Income

16,571

6,930-58.2%

Ordinary Income

16,1276,500-59.7%Net Income

10,6664,100-61.6%Cash Dividend per share (yen)

42.00

42.00

+0.0%

Net Sales

Rental Building and Sublease

Replanning Business (including Hotel Development)
Rental Building and Sublease

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13

Increase/
Decrease

Office Building Business in central Tokyo is the corebusiness.
• Stable sales will be recorded in the Revitalization
Business that brings together the strengths of theentire company.
• For hotel development, the development PJ
proceeding in Onna, Okinawa will be booked inthis fiscal year.
• In Other Business, we expect a 23% year-on-year
decrease as a result of recording a large-scale
project in the overseas business in the previous
fiscal year.
• The RP gross margin is set based on the current
market environment. Rent levels are expected tofall, and profits are steadily generated while
reducing profit margins.
FY ended March 2019 : 34.6%
FY ended March 2020 : 33.5%⇒FY ending March 2021: 19.3％• Hotel Operation Business expects a loss due tothe impact of the new coronavirus.
• SG&A expenses are expected to decrease yearon-year by reducing personnel expenses andcutting expenses.
• The dividend is expected to remain unchanged at42.0 yen.
Sun Frontier Fudousan Co., Ltd.

The Forecast of Dividend for FY ending March 2021
Our profit distribution is based on the following basic policy, and we are working on the premisethat it will contribute comprehensively to the interests of shareholders. In the current fiscal year, theoutlook is still difficult to predict due to the impact of COVID-19. In order to respond to the
expectations of our shareholders who continue to support us even under the current circumstance,
we would like to set the dividend forecast for this fiscal year to 42 yen per share, which is the sameamount as in the previous year.
Basic policy of profit distribution

Changes in Net Income per Share and Dividends① strive to provide long-term and stable profit returns to shareholders,② secure investment funds for future growth, and at the same time
③ contribute comprehensively to shareholders' interests by taking into
account the stability of financial resources.

FY ending
FY ended
FY ended
FY ended
2021
March 2018 March 2019 March 2020 March(Forecast)
Net Income per share

167.62 yen 180.35 yen 219.03 yen

84.19 yen

Cash Dividend per share

33.50 yen

38.50 yen

42.00 yen

42.00 yen

Dividend Payout Ratio

20.0%

21.3%

19.2%

49.9%

Dividend per share (Left axis)
Net income per share (Right axis)

50.00 yen180.35 yen
40.00 yen 167.62 yen

14

42.00 yen 42.00 yen

30.00 yen

160.00 yen

38.50 yen

20.00 yen33.50 yen

84.19 yen

80.00 yen

10.00 yen

0.00 yen

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

240.00 yen

219.03 yen

March
2018

March
2019

March
2020

0.00 yenMarch2021 (forecast)

Sun Frontier Fudousan Co., Ltd.

3) Impact of the Spread of the new coronavirus(COVID-19) Infection and Immediate
Management Policy

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15

Sun Frontier Fudousan Co., Ltd.

Impact on Main Businesses and Recent Movements
Business

Impacts➢ About 20% of tenants in the managed properties requested rent reduction orcancellation. There were many such requests from tenants, such as
restaurants and gyms, which had closed due to the COVID-19 outbreak, andwe worked closely with building owners to respond to them.

• Leasing Business• Property Management Business• Building Maintenance Business➢ The spread of remote work has led to a reduction in the size of offices,
especially in large companies. The need for relocation to small and mediumsized buildings, which we are good at, is increasing. There is a growinginterest in setup offices to which relocation can be made at low initial costs.
➢ Due to the COVID-19 outbreak, there have been increasing opportunities toreceive orders for disinfection of buildings and others in SF Building
Maintenance business.
➢ Office rents have been steady, partly due to the government’s rent support
and others.

• Replanning Business

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➢ Although the real estate sales market is currently in the wait-and-see mood,the sale of 5 properties in the real estate revitalization business wascompleted in June as planned. (Including the first composition of the secondcase of Act on Specified Joint Real Estate Ventures)➢ We continue the commercialization of renewal work and others byencouraging creativity on site, while making every effort to prevent infection.

16

Sun Frontier Fudousan Co., Ltd.

Impact on Main Businesses and Recent Movements
Business

Impacts• Conference Room Rental
Business➢ Since March, reservation cancellations have occurred one after another, andthe occupancy rate has declined. However, the impact on the results waslimited as demand for events which were previously postponed recovered
after June, we have captured new needs for satellite offices and others, andthe new service that flexibly responds to the needs of clients has produced
certain effects.

• Hotel Business➢ Temporarily closed 7 hotels (Maihama, Tokoname, Osaka (2 hotels), Sado,
Takayama and Hakata).
➢ The occupancy rate of operating hotels from April to May has fallen to
approximately 20%.
Meanwhile the occupancy rate of hotels that are capturing business demandhas been steady. Tabino Hotel Kashima has recorded high occupancy rates,
having been fully
occupied for 10 days in June.
➢ Since June, 6 hotels reopened (Hakata, Sado, Osaka (2 hotels), Maihama,Takayama). However, due to the effects of the spread of COVID-19 infection in
urban areas and the fact that Tokyo was excluded from the government's
tourism support measures, the hotels in Osaka (Namba) and Ginza were closed
again, and the situation remains unstable.

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17

Sun Frontier Fudousan Co., Ltd.

Business Environment Awareness
1.

The Japanese economy has been severely affected by the spread of COVID-19 infection, and it will take some time
to recover.
◆ Despite the largest-scale economic measures in history, some companies have fallen into bankruptcy,
unemployment rate has also risen, and there is a risk of a further economic downturn.
◆ Remaining alert to the possibility of a second wave of infection, the situation remains unforeseeable. The
economic stagnation seems likely to be prolonged.
◆ Until a safe vaccine is produced, economic activities will continue to be unstable under the new lifestyle with
COVID-19.
◆ Foreign visitors to Japan have virtually disappeared, with only 2,600 visitors recorded in June (decreased by 99.9%
from the same month in the previous year). The aviation and tourism industries are facing a predicament.

2.

The world economy is decelerating rapidly. Each country was severely affected by the spread of COVID-19 infection
and is facing a serious recession.
◆ IMF predicts a worst recession since Great Depression, significantly downgrading its growth forecast to -4.9% (theprevious forecast was -3%).

◆ The COVID-19 outbreak is causing compressed changes in the digital transformation of society.
◆ Attention will be paid to trends in East Asian countries, such as China and Taiwan, where the spread of COVID-19
infection has been gradually ending.
3.

The office building market in central Tokyo was booming for a long time, but it has peaked out due to COVID-19
infection and is in a gradual downward phase.
◆ Demand for offices is expected to decline due to the forecast of a economic recession and the scaling down ofoffice space by the spread of remote work.
◆ We are wary of the rising vacancy rate and falling average rents due to the business contraction and deteriorationof employment caused by the recession.

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

18

Sun Frontier Fudousan Co., Ltd.

Immediate Management Policy① Prevent the Spread of COVID-19
Infection

Three
Policies② Maintain and Continue Business③ Concentrate Resources on our
Main Business “Regeneration andUtilization of Real Estate"

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

19

Sun Frontier Fudousan Co., Ltd.

Concentrating Resources on our Main Business “Regeneration and Utilization of Real Estate"

We improve real estate profitability
and generate solid profits
Unlike the financial crisis in 2008 when real estate needs disappeared, there is a strong need in the trading market forinvestment in real estate with stable profitability. We will use our knowledge to continue to improve our profitability in thereal estate service business to transform our properties into real estate that generates stable rents, and even if the profit
margin declines sharply, we expect to generate solid profits.
FY ended March 2018

FY ended March 2019

FY ended March 2020

FY ending March 2021
(Forecast)

Net Sales of RP properties

42.5 billion yen

56.1 billion yen

44.3 billion yen

Sales Cost of RP properties

27.8 billion yen

37.3 billion yen

36.2 billion yen

RP Gross Profit(sales margin)
Acquired
during period +(35%)

Sold innext FY

Construction costs
and others

Year-end RP property inventorySoldduring18.8 billion yen periodSoldduring14.7 billion yen
periodSold innext FY44.5 billion yen(34%)

46.5 billion yen
Hold
over

45.5 billion yen

62.1 billion yen
Continuous
holding

71.3 billion yen
Continuous
holding[Unrealized gains on year-end RP inventory]*Reference: Profit margin results for the current fiscal year

Sold innext FY
Hold
overContinuous
holding

Sales Margin: 15% as a premise

8.1 billion yen

Soldduringperiod

(18%)

35-45
billion yen
70-80
billion yen

Hold
over

13-14
billion yen

is approximately 34%→We create value that is expected to generate solid profit, even if the sales
margin declines by about 20% from the previous fiscal year.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

20

Sun Frontier Fudousan Co., Ltd.

4) Specific Initiatives in Growth Strategies

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Sun Frontier Fudousan Co., Ltd.

To create differentiated added values

We create added value in a business chain and deepen thebusiness model that maximizes the attractiveness of buildings① In vertical real estate utilization business, we survey and solve difficulties on site by listening to our clients’ problems.
② In horizontal real estate revitalization business, We bring together the expertise of each division of the Company andreflect the knowledge and experience cultivated on-site in the commercialization. Revitalize and sell buildings throughour value chain.

Funding Advice

Asset Consulting

Rent Guarantee

Construction Planning

Property Management

Leasing

Brokerage
Acquisitionof property②
Real Estate
Revitalization
Value-added
products① Real Estate Utilization
To be a partner to solve difficulties from our clients’point of view

Clients (Building owners, Asset holders and Wealthy individuals)
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

22

Sun Frontier Fudousan Co., Ltd.

~one profit building in Ikebukuro~- Example of Replanning Business -Real estate revitalization based on our accumulated
experience and wisdom
This building was originally built as a tutoring school, with a parking lot on the basement 1st and 1st floor, and an
entrance on the 2nd floor, creating an inconvenient traffic line. Furthermore, the building had many problems, such as
an illegal expansion on the top floor and the use of the parking lot for another purpose. We addressed these problems
and commercialized the property, drawing on the knowledge, accumulated through 400 revitalization projects; anexcess calculation of the floor area ratio, transfer verification, conformance to various laws and regulations associatedwith the relocation of the entrance to the first floor and the removal of stairs have been carefully carried out. Fully
renovated to create a safe, stable and hassle-free property for the medium to long term use.
BeforeAfter▲Entrance▼Office Space

After

Renovated into a stately entrance with granite stone

After

Created an open space with a view of the city center and natural light

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

23

Sun Frontier Fudousan Co., Ltd.

- Example of Replanning Business -The setup office that is selected even during the recession
period exerts its power
Costs for move-in can be reduced, and interior equipment which are the lender’s asset can reduce thefinancial burden of the borrower. The office of choice during this recession.
6 values creates by a setup office

BeforeBefore

After

After

① Design, functionality, comfort, luxury② Easy to control relocation costs③ Reducing the burden on the manager(by developing the interior and others)④ Shortening the time to complete the move
⑤ Improvement of motivation andproductivity of employees⑥ Effective in recruiting and retaining
employees

After

Office space

Refresh room

An open office with a maximum ceiling heightof 2,900 mm creates a stylish and creative
space.

A rental room with an inconvenient shape
was transformed to bring out the potentialof the building

Reception space & meeting room

In pursuit of design and functionality, a
reception and a glass partition meetingroom were set up.

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

24

Sun Frontier Fudousan Co., Ltd.

- Leasing Business -We expanded our network of branches which focuses on local
communities to solve our clients’ problems
1. We specialize in small and medium-sized officebuildings in central Tokyo.
We extended our network of branches to 12
locations.
We are good at careful tenant placement by having
close ties with the local communities and utilizing
our local knowledge.
2. We extend to our clients unfailing courtesy andbecome “a real estate company closest to clients.”
We are their trustworthy point of contact to consult
and solve any of their problems.

Ueno

Kodenma-cho

Kanda

Kudan

Nihonbashi

ShinjukuTokyo

Kojimachi
Hibiya Head
OfficeShibuya

AoyamaAkasaka

Toranomon

Ebisu

3. We meet tenants’ needs by understanding them andconstantly changing our Company according to theirneeds.

Ginza

Shimbashi

MeguroHamamatsucho

Gotanda4. The network finds big hints for our Real Estate
Revitalization Business, which is the base for us tocapture our clients’ changing needs and improve thevalue of real estate.

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Akihabara

Ikebukuro

Shinagawa

Yokohama

are locations of the core branches.
Is a location of a new branch.

25

Sun Frontier Fudousan Co., Ltd.

- Property Management Business -We achieved stable and highly profitable building management
and expanded entrusted business
100%

98%

96%

98.2%

Entrusted floor area (Right Axis)
Occupancy rate of entrusted assets (Left Axis)
Occupancy rate in 23 wards of Tokyo (Left Axis)

900,000(㎡)(As of the end of June 2020)

800,000

Operating rate of our PM
entrusted properties

700,000

600,000

94%

92%

97.7％
(As of July 1, 2020)

Average occupancy rate of mediumsized buildings in 23 wards in Tokyo

500,000

400,000<2019 PM Client Rankings>

90%

Top Companies in Terms of Number ofContracted Owners*
1 Vortex

88%

86%

84%

Our strength, “the comprehensive abilities to solve problems
regarding real estate” is demonstrated when we are requested
for consultations by our clients on the renovation andreplacement of their properties as approximately 89% of the
PM entrusted properties are more than 20 years old.

2019

2018

778

690

2 Xymax

510

495

3 Sun Frontier Fudousan

264

271

214

－

208

－

SHIMIZU COMPREHENSIVE
4DEVELOMENT
5 RIO HOLDINGS1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q…
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q …
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q…1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

300,000

200,000

100,000

0March 2009 March 2010 March 2011 March 2012 March 2013 March 2014 March 2015 March 2016 March 2017 March 2018 March 2019 March 2020
*Source: Our research based on “Monthly Office Market Research Report” by Sanko Estate Co., Ltd., for the average occupancy rates of medium-sized buildings in 23 wards inTokyo.
*Source: As for PM Client Ranking, our research based on the November 2019 issue, “Monthly Property Management.”*Operating rate: (Total operating area)/(Total lent available area).
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Sun Frontier Fudousan Co., Ltd.

- Rent Guarantee Business -While the rental guarantee market is expected to be disrupted due to the
COVID-19 outbreak, we will utilize our experience and knowledge toprovide secure and stable building management
As a pioneer in Rent Guarantee Business, SF Building Support, which develops Rent Guarantee Business, aims tocontribute to the realization of a fair and equitable leasing market by converting rent guarantee for business into asocial infrastructure. We will continue to support building owners with reliable and stable building management byleveraging our wealth of experience and accumulated knowledge in the COVID-19 outbreak.
Guarantee System[Competitive Differentiation]• Extensive survey record of over 30,000 companies andLease Agreement

precise and strict examination.
• A guarantee system that takes responsibility forsubrogation and surrender in case of delinquency.
• Improving ability to attract clients by reducing rental andsecurity deposits.

LenderBorrower
Guarantee

Guarantee Warranty

Guarantee Consignment
Contract[Guarantee Business Results]◆ Total guarantee warranties◆ Incident rate of building vacating
litigation(Compulsory execution rate)

5,185 cases

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

SF Building Support
Date of

Casualty Insurance
Contract

July 2005 (16years)
Foundation
設立：2005年7月（16年目）

2.8%

Representative Izumi Nakamura(0.6%)
27

General Insurance
Company
Sun Frontier Fudousan Co., Ltd.

- Conference Room Rental Business -We research and explore services that are acceptedand chosen by clients in a new era
・・・ 11 sites

Rental conference room (Vision Center)
Rental Office (Vision Office)Coworking Space (Vision Works)

VO Kanda
VO Kanda ANNEX

・・・ 4 sites

VC Kanda

VR Nihonbashi Kayabacho
VC Tokyo Nihonbashi

VC Tokyo Ekimae・・・ 6 sites

Smart Conference Room (Vision Rooms)

VC Yaesu South Exit
VR Yaesu Central Entrance
Kanda

VR Ginza-Ichome

VC Shinjuku

Nihonbashi

VR Yotsuya
VO Shinjuku

VR Ginza-Ichome Annex
Tokyo

Shinjuku

YotsuyaGinza
Nagatacho

Yurakucho
Hamamatsucho

VC Nagatacho

VC Yokohama

VC Hibiya

VC Hamamatsucho

ShinagawaCopyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

VC Tokyo Yurakucho

VR Hamamatsucho

TamachiYokohama

VW Tokyo Yurakucho

VC Tamachi

28●VC Ginza-Ichome(Appearance of the building)

Sun Frontier Fudousan Co., Ltd.

- Hotel Business -List of Hotels under Operation
and Development
We strive to stabilize operations and improve profitability (by reducing operating
expenses).
We focus on operations with due consideration given to health and safety as
currently required.
New development has been suspended. The Onna project in Okinawa completed
the framework in July and is in progress toward completion.
Running or Renting<Domestic hotels>

Under construction

Running

2,302 rooms
Under construction 830 rooms

3,132 rooms

Total

Sado (Chigusa)
Sado (Azuma)*As of August 06, 2020*"Running" is the total of “in operation” and “Renting” inthe right table.

No. ofRooms

In operation

SSH Nagoya Tokoname

194

In operation

Hiyori Hotel Maihama

80

In operation

Hiyori Hotel Osaka Namba Station

224

In operation

Hiyori Hotel Tokyo Ginza EAST

135

In operation

Tabino Hotel Hida Takayama

80

In operation

Tabino Hotel Sado

111

In operation

Tabino Hotel Kurashiki Mizushima

155

In operation

Tabino Hotel Kashima

194

In operation

Sky Heart Hotel Kawasaki

200

In operation

Sky Heart Hotel Koiwa

105

In operation

Sky Heart Hotel Narita

100

In operation

Sky Heart Hotel Hakata

159

In operation

Sky Heart Hotel Shimonoseki

105

In operation

Courtyard by Marriott Osaka Honmachi

193

In operation

Sado Resort Hotel Azuma

57

Toyama210

Underconstruction

Onna, Okinawa

204

Under
construction

Kyoto Nijo Kawaramachi

205

Under
construction

Miyako-Island

111

Under
construction

Kyoto Shijo Kawaramachi

134

Under
construction

Matsumoto

176

Matsumoto

ToyamaHotel Name Location

StatusKashimaTakayama
Onna, Okinawa
Kyoto Nijo

Maihama

Kyoto Shijo
Miyako Island

Renting

NaritaShimonoseki
Koiwa
Ginza

Tokoname
HakataOsaka Honmachi

Kawasaki
Kurashiki
Osaka Namba Ekimae
Mizushima*The schedule, hotel scale and others are based on the current plan, which may change in the future.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

Sun Frontier Fudousan Co., Ltd.

- Hotel Business – (Onna, Okinawa)“HIYORI OCEAN RESORT OKINAWA” IN PROGRESS TOWARDSCOMPLETION IN NOVEMBER

Completion of the framework in July. In
progress towards completion in November

Located on a hill overlooking the beautiful sea of Okinawa shining in emerald
green surrounded by coral

Hotel Appearance

First to fourth sales
140 plots sold out（all 204 plots）

A restaurant with a terrace where guest can enjoy ameal while looking out at the sea

View from the living room

30

Sun Frontier Fudousan Co., Ltd.

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

－Overseas Business (Da Nang, Vietnam)－“HIYORI Garden Tower” Completed in December 2019
High-rise condominium PJ<Philosophy of Overseas Business:“Providing comfort to the people of Asia, together with our partners.” >“HIYORI Garden Tower”

Providing high-quality housing with sophisticated quality and planning in accordance with theJapanese standards, we will contribute to the economic development in the region by meeting
the growing demand for housing there.
A View overlooking the city

Local signboard

The delivery of “HIYORI Garden Tower” has almost completed by this time (98%).
The delivery after January will contribute to the business results for FY ending March 2021.
In Danang, we will concentrate on the condominium business and develop the "HIYORI"
brand into a brand that is appreciated and loved by citizens through development andbuilding management services.
Currently, there are restrictions on travel from Japan to Da Nang, Vietnam.
Although it has been announced that domestic flights in Vietnam have resumed operations,
restrictions on entry from overseas continue. Before the COVID-19 outbreak, there were 247
direct flights from South Korea and 24 direct flights from China per week, but the impact of
COVID-19 has continued.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Sun Frontier Fudousan Co., Ltd.

Medium-term Management Plan

We aim for steady achievements and sustainable growth
Although the business environment will change significantly due to the spreadof COVID-19 infection, we aim to achieve our goals for the final year, the fiscal
year ending March 2023 without revisions.
<Policy towards the post-COVID-19 era>With a view to “the new normal” with COVID-19
that will start after the resumption of economic
activities, we will research changes in the systems
of products and services and needs on-site fromthe client’s point of view. With the power ofchange as our greatest strength, we will adopt
and change flexibly and speedily in each business.

<Basic Strategy>
Without changing the basic strategy, we will actively
utilize M&A and others to expand existing businesses anddevelop peripheral services. while further refining the
Office Building Business model in central Tokyo andstrengthening the financial base.
<Quantitative Target>
FY ending March 2023

Net Sales
Ordinary Income

Net Income
Equity Ratio
Ratio of Ordinary
Income100 billion yen
20 billion yen(Unit: 1 million yen)

100,000
80,00040,00050% or more

20,000

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Net
売上高

100,000

Ordinary
経常利益

Sales

Income73,21870,00053,29160,000

14 billion yen

20% or more

Changes over the Last 9 Years and Targets for FY ending March 2023

40,39427,741
10,5802,039

30,625

17,772
4,341

47,463

5,593

7,024

2015/3

2016/38,894

10,755

12,8132017/3

2018/3

2019/36,500

0
2013/3

2014/332

20,00016,1272020/32021/32023/32021/3 ・・・・2022/3
2023/3・・・ (Forecast)(Forecast)

Sun Frontier Fudousan Co., Ltd.

Deepen and Expand the Highly Influential “Office Building Business in Central Tokyo”

Focusing on the central Tokyo area and small and medium-sized office buildings,
we continuously keep refining our Company's unique strengths
We focus on the business area where we can exert
our influence and keep on refining our business tomake it distinctive and highly profitable by listening
to our clients’ voice.

20th
Anniversary

10th
Anniversary

Securitiza Replanning-tion ofConstrucReal-tion
EstateEarly stage ofestablishment

RentalBuilding
RentalBuilding

Office Building
Business inCentral Tokyo

RentalReplanni
Securitizang-tion ofConstrucReal
tion
EstateBrokerage

PM

OfficeBuilding
Business inCentral Tokyo

Brokerage

Sub
Leasing

Leasing

Smart
Conference
Room

Building

Brokerage

PM
Sub

RentalConference
Room

OfficeBuilding
Business In
Central Tokyo

Rent
Guarantee

PMReal estateretailproducts

BM

Leasing

Leasing

Drone
Business

AssetsConsulting

Rent
Guarantee

Leasing・・・・・⇒ We will expand our existing business further and at the same time, we will challenge new fields ofbusiness by utilizing M&A, the IT and others. We will improve our strengths in the business field of
medium and small office buildings in central Tokyo.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Sun Frontier Fudousan Co., Ltd.

5) Company Information and Reference Materials

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Sun Frontier Fudousan Co., Ltd.

Vision and Policy
Visionwe aim to be “the real estate company” of the world’s most
loved, trusted and selected

Clients

Building owners, asset holders, wealthy individualsCore Business
PolicyStrategy

Real estate revitalization and utilization
・-Not for profit, but for trustChange ourselves, Solve difficulties from our clients’point of view
・Focus on people rather than property
・One-stop solutions to any and all problems
CentralTokyo

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

OfficeStrength

Tenant mediation Effective operation
Real estate
revitalization

35

Creativity
Sun Frontier Fudousan Co., Ltd.

Sun Frontier, a Company of Philosophy-oriented management
Company policy

Philosophy is a source of
our ESG initiatives

Altruism

Management Philosophy
With a vision to protect all employees and to pursue both spiritual and material happiness,at the same time, we will contribute to the prosperity of humankind and society with aspirit of symbiosis.

Corporate Philosophy
We, the employees through our business improve our knowledge, technical skills andpersonalities with our strong enthusiasm and dedicate ourselves to utilization anddistribution of real estate stock, thereby we reduce the waste of non-reproducible
resources and contribute to permanent prosperities of mankind, flora and fauna on theearth.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

36

Sun Frontier Fudousan Co., Ltd.

Outlines of our ESG Initiatives
Through our initiatives heavily based on the viewpoints of ESG, we will achieve
our sustainable growth and a long-term improvement in our corporate value.

Environment

 We revitalize dilapidated buildings without destroying them. We develop the Real Estate Revitalization
Business, which grows in harmony with the environment.
(405 buildings were revitalized as of the end of June 2020.)
 We operate a circulation market of furnished offices with an aim to reduce waste materials generated by
office relocation.
 We promote the reduction of energy consumption at the buildings we manage in Property Management
Business, utilizing the Energy-saving Subsidy and others.
 We have introduced the renewable electric power service to 6 buildings we own.

Social In our Real Estate Revitalization Businss, we promote the revitalization of buildings to meet the social
needs.
 Under the slogan, “Cheer up Japan!” we develop Regional Revitalization Business from the aspect of
tourism.
 We have supported the Japanese language courses at Da Nang University in Vietnam since 2016. Also,
we have started to employ 6 technical intern trainees from Vietnam in the aim of “human resources
development” which is the base of mutual development of Japan and Vietnam.
 We go ahead with the introduction of the drone technology to accelerate the innovation in the realestate industry.

Governance When we acquire properties, we clarify their possible risks, improve their legal compliance and correct
shoddy workmanship on them through the process of commercialization and then supply them to themarket. We turn the properties into a real estate stock with high social values and sell them.
 We have established “Nomination and Compensation Committee” as a voluntary advisory body to theBoard of Directors in order to improve objectivity and transparency of the procedures regarding
appointment and dismissal of the directors and their compensations.
 We have improved our monitoring function for the corporate management by appointing 5 independent
outside directors out of 12 directors.

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

37

Sun Frontier Fudousan Co., Ltd.

ESG initiatives of Sun Frontier Fudousan Group

Launch of Renewable Energy Power Services [E]
We started the first renewable electricity service for office building tenants in Japan, working with
JAPAN ENERGY & ECOLOGY which supports energy procurement for corporate clients.
Currently the service has been installed in 6 buildings we own.
Main Features of the Service• This is the first service in Japan that supports even building tenants to meet the requirements of environment
initiatives, such as “RE 100” and “RE Action” if they occupy more than one floor of the building.
• By purchasing electricity cheaply, building owners can reduce costs in line with their environmental measures.
• On behalf of the building owners, we take care of the whole cumbersome approval process for environmental
values (J-Credit).
コンセプト
Concept Diagram
図Electric Power
Company

Building introduced the service
JAPAN ENERGY &ECOLOGY

Sun Frontier
Fudousanenvironmentallyadvanced
Company

foreignCompanies

Tenancy
Electricity
SupplyRenewable
Energy PowerRE100
certifiedelectricity

They take care of thewhole cumbersome
approval process forenergy procurement
and environmental
values (J-Credit)
Environmental
Values(J-Credit)

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Renewable
Energy PowerService

Entire Building
environmentallyadvanced
Company

Domestic
Companies

Environmentallyfriendly

Tenancy
Cost Reduction

One Floor Only38

Sun Frontier Fudousan Co., Ltd.

ESG Initiatives

Regional Revitalization Business ~Project in progress on Sado Island~ (S)<We will energize Sado Island through tourism!>
When rural areas are energized, so Japan as a whole will be. As the number of foreign visitors to Japan rapidly
increases, spurred by fascination (culture, history, nature, food, hot spring, hospitality and others) that Japan isproud of, we will take on the challenge of regional revitalization projects that focus on the attractiveness andfeatures unique to regions, in particular the regions that possess the “Wonderfulness of Japan.” The first will be
Sado, where we are familiar with. We have already created jobs for over 100 employees.

Sun Frontier Sado Inc.
Hotel
Business

Transportation
Infrastructure Project

Hotel AZUMA

Okesa Kanko Taxi

Highlight Finding
Project
Anaguchi-tei(Café & Restaurant)

Tourism and Travel
Business
New

Happy Sado
TravelWeb Advertising
Business
Sado Biyori

New
DONDEN
Highland Lodge

Tabino Hotel Sado

Kigaruni Rent a Car

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

Sun Frontier Fudousan Co., Ltd.

ESG initiatives

Our Initiatives for Governance (G)In our Company, we have an idea of “right humanity” as judgement criterion for all of our executives
and employees to execute business assignments. We endeavor to strengthen our system ofgovernance to ensure the execution.

 We have established Nomination and Compensation Committee.
We have established “Nomination and Compensation Committee” as a voluntary advisory body to the Board of
Directors in order to improve objectivity and transparency of the procedures regarding appointment and dismissalof the directors and their compensations.
The majority of the committee members are outside directors to ensure sound management of the Company.

 We have ensured our risk management at the time of acquisition of properties andour compliance with laws and regulations at the time of their sale.
When we acquire properties, we make a comprehensive business judgement, considering not only theirprofitability but also their key risks, environmental impacts, compliance and others. We have also established
our three-step checking system to identify risks in a broad context not only by our departments in charge but incooperation with legal and audit departments. As for sale of the pre-owned buildings which are disqualified, we
first make them qualified enough to meet legal compliance requirements and market them.

 We conduct a monthly training on compliance.
We give all the employees a monthly training on compliance in order to establish an efficient system of legal
compliance. The training has a broad range of themes, such as “prevention of insider trades,” “prevention of tradeswith antisocial forces,” “information management,” etc. We will devote ourselves to sound business operation.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

40

Sun Frontier Fudousan Co., Ltd.

Changes in Net Sales, Ordinary Income, andNumber of Employees(1 million yen)

70,00060,000Both Net Sales and Ordinary Income remained strong.
The number of employees is steadily increasing.
売上高
Net Income

612

Ordinary Income
経常利益53,291

Employees
従業員数48,15050,00047,46340,39440,00035,25410,000030,62527,741 276

26,87030,00020,000(number of people)

73,218700
70,0002 681 1,771
84 96
70
52
8,289 6,346
24
7,760
1
5,003
3,588
1,437 3,474
0 140 377 501 791(10,000)(20,000)
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

199

600

500

400

300

223

200
16,127
12,813
17,772
10,755142 139
10,580
8,894
100
7,024
6,923
6,500
5,593
4,341
4,289
2,039
541 799
014,46916,730152
134 125
141

206

329

381

522

635

(3,776)(17,794)

41

181

(100)

(200)
Sun Frontier Fudousan Co., Ltd.

Trends in Vacancy Rate and Office Rents
in 5 Wards of the Central Tokyo
(%)

(yen)

Average rent (yen/tsubo)

Average vacancy rate (%)

The average rent
in July 2020

23,014 yen(+134 yen from the previous month)

Peak of the vacancy rate
9.43%
June 2012
Peak ofthe average rent
22,901 yen
August 2008
Peak of the vacancy
rate
8.57%
August 2003
Bottom of theaverage rent
17,526 yen
October 2004

Bottom of theaverage rent
16,207 yen
December 2013

Bottom of thevacancy rate
2.49%
November 2007

The average vacancy ratein July 2020

2.77％（+0.80％pt fromthe previous month)*Source: Prepared by our Company based on Miki Shoji’s “Office Reports.” Subjects are office buildings with a standard floor space of 100 tsubo or more in the 5 wards in the Central Tokyo.

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

42

Sun Frontier Fudousan Co., Ltd.

Change of Representative Director (President)
Sun Frontier Fudousan Co., Ltd. made the decision to change the Representative Director (President) as of April 1, 2020.
1) Specifics of the change
Name
Tomoaki Horiguchi

Seiichi Saito

New title

3) Biography of the new president
Current title

ChairmanPresident

President

Executive Vice
President and Vice
President Executive
Officer

Name

Seiichi Saito

Biography 2005: Joined Sun Frontier Fudousan
2006: Director, General Manager of Administration Division
2008: Senior Managing Director
2012: Vice President and Vice President Executive Officer
2014: Executive Vice President
and Vice President Executive Officer
2015: General Manager of Asset Management Division

2) Reason for the change• We have devoted ourselves and worked as one to deliver our clients solutions concerned with real estate under our consistent motto,“Altruism” since our foundation on April 1999. Thanks to all of you, we celebrated the 20th anniversary last April, and now we are
steadily making progress to achieve the goals of the Medium-Term Management Plan which sets the final year in the FY ending March2023.
• Under these circumstances, we have worked on the development of the human resource for the next generation and the further
strengthening of our management base, and made this decision in order to improve the long-term and sustainable corporate value of
our Company.
• Tomoaki Horiguchi, the current President will keep the right of representation and continue to commit himself to help the Sun Frontier
Fudousan Group achieve further development as the Chairman.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

43

Sun Frontier Fudousan Co., Ltd.

Corporate Profile
Company Name

Sun Frontier Fudosan Co., Ltd.

Location of Head
Quarters

2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo

Date of Foundation

April 8, 1999

Date of Lsting

November 19, 2004 (Jasdaq Stock Exchange)
February 26, 2007 (First Section of Tokyo Stock Exchange)

Capital Stock ※Representative

11,965 million yen
Tomoaki Horiguchi, Chairman
Seiichi Saito, President

Number of Consolidated
657 full-time employees (1,040 including part-timers and temporary workers)
Employees ※Average Age of
Employees※

34.5 years old(※ As of end of June 2020)

Real estate revitalization
Business Profile:

Real estate services

Real estate management, brokerage, construction
planning, non-payment guarantee, operation ofrental buildings, asset consulting

Hotel development and management
Accounting Month
Listed Market

March
Tokyo Stock Exchange, First Section (Code number: 8934)

Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

44

From the left: Saito and Horiguchi

Sun Frontier Fudousan Co., Ltd.

We will appreciate yourfurther supports.

Sun Frontier Fudousan Co., Ltd.

◆ The purpose of this document is to provide information that can be used as a reference, not for soliciting or promoting you
to purchase a specific product. Please make your decision by your own discretion and responsibility when you make an

investment. If you want to purchase shares of our Company, please contact securities companies.
◆ The information provided in this document is not necessarily in compliance with the Financial Instruments and Exchange Act,
the Building Lots and Buildings Transaction Business Act, the Listing Rules for the Tokyo Stock Exchange and other related
laws and regulations.

◆ Forward-looking statements included in this document do not guarantee future performance.
◆ Although we have made every effort to ensure the contents of this document, we can not guarantee their accuracy or
certainty. Please note that they are subject to change or cancellation without notice.

<Inquiries about this document>
Sun Frontier Fudousan Co., Ltd. IR Desk
Phone : +81-3-5521-1551
URL : https://www.sunfrt.co.jp/
Mail : ir-contact@sunfrt.co.jp