FY22/2 Q1 Corporate Presentation
January
2021
July 14,13,
2021

Ichigo (2337)© Ichigo Inc. All rights reserved.

www.ichigo.gr.jp/en

We would like to express our deepest condolences
to all those affected by the Covid pandemic globally,
and our wishes for the earliest and fullest possible
recovery.
Take care, be safe.

© Ichigo Inc. All rights reserved.

2

Make The World
More Sustainable© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

© Ichigo Inc. All rights reserved.

Contents
FY22/2 Q1 Earnings‒ FY22/2 Q1 Summary‒ Operating Profit -14%, Net Income -29%, EPS -27% (YOY)‒ Segment Earnings Details‒ Covid Impacts

Powerful Value-Add Business Model Underpins Growth‒ Business Model (1) Stock + Flow Earnings‒ Business Model (2) Embedded Forward Earnings‒ Business Model (3) Value-Add Drives Durable Value Growth‒ Business Model (4) Robust Cash Generation‒ Strong Financial Base

Sustainable Growth as a Sustainable Infrastructure
Company‒ Sustainable Real Estate: Selective on Acquisitions & Sales‒ Ichigo Owners: Strong Foundation for Growth‒ Ichigo Owners: Driving Stable Long-Term Earnings‒ Asset Management: Growth Support for Ichigo REITs &Ichigo Green‒ Clean Energy: Scaling Rapidly (In-Pipeline Plants +25%)‒ Clean Energy: Japanese Energy Policy Creating New
Growth Opportunities‒ PROPERA: Market Size & Customer Acquisition Target‒ PROPERA: Accelerating External Sales‒ Accelerated RE100 Target by 15 Years from 2040 to 2025
‒ Delivering on Sustainability‒ Share Buybacks‒ Ichigo J.League Shareholder Program

Appendices
Ichigo’s Sustainability Commitment (ESG)
Financial & Real Estate Data
Ichigo 2030: Ichigo as a Sustainable Infrastructure Company
Ichigo 2030: New Initiatives© Ichigo Inc. All rights reserved.

6

FY22/2 Q1 Earnings© Ichigo Inc. All rights reserved.

7

FY22/2 Q1 Summary– Slow Hotel Earnings Recovery due to Prolonged Covid
Impact– Ichigo Owners Residential & Logistics Assets Sales


2 Logistics Assets (value-add completed, GPM 33.6%)– No Covid Impact on Clean Energy – Growth on Track

Stock Earnings +18% YOY– Launching New Businesses in Line With Ichigo 2030 Vision

Launched Ichigo Owners Co-Ownership BusinessFull-Scale Rollout of PROPERA – Began External Sales
Promotion of Ichigo’s PROPERA AI-Based Hotel Revenue
Management System– Accelerated RE100 Target by 15 Years from 2040 to 2025
© Ichigo Inc. All rights reserved.

8

FY22/2 Q1 Summary
Durable Earnings Model
Robust Stock Earnings-0.2%
Stock Earnings/Fixed Expenses

198%(JPY million)

Sustainable
Real EstateCashEarnings
JPY 6.1B

Asset Management

−11%
4,041

4,033

+18%
2,511

2,239

+14%

Cash Earnings = Gross Profit + Fixed Asset Gainson Sales + Depreciation Expenses (Non-Cash)

Clean Energy
Stock Earnings +18% YOY

FY21/2
Q1

FY22/2
Q1

FY21/2
Q1

FY22/2
Q1

New Businesses
Ichigo Owners Co-Ownership
Business– Full-year contribution from Ichigo’s
first wind power plant, Ichigo
Yonezawa Itaya ECO Power Plant(7.3MW)・ Launched new service to expand
customer base & drive stock earnings– Bringing 12 plants online during
FY22/2 – forecast JPY 4.4B stockearnings (+16% YOY on a full-yearbasis)

・ Began external sales promotion in May
・ Initial addressable market: 20,000
Japanese hotels© Ichigo Inc. All rights reserved.

Clean Energy

Full-Scale PROPERA Rollout

441

503

FY21/2
Q1

FY22/2
Q1

2,479
1,089

1,290
3,136

FY21/2
Q1

FY22/2
Q1

Share Buybacks –5th Consecutive Year
– FY22/2 To-Date Buyback Amount:
JPY 1.5B– 5-Year Cumulative Buyback Amount:
JPY 13.5B (7.4% of shares)9

Operating Profit -14%, Net Income -29%, EPS -27% (YOY)− Flat Stock Earnings, Flow Earnings -8% YOY− Cash EPS -6% YOY(JPY million)

FY21/2
Q1

FY22/2
Q1

YOY

Full-Year Forecast

Operating Profit

3,650

3,159

-13.5%

9,100 – 12,000

Recurring Profit

3,303

2,384

-27.8%

6,000 – 8,900

Net Income

2,164

1,546

-28.6%

5,000 – 8,000

Cash Net Income

3,169

2,906

-8.3%

10,518 – 13,518

EPS

JPY 4.49

JPY 3.28-27.0%

JPY 10.69 – JPY 17.10

Cash EPS

JPY 6.58

JPY 6.17-6.3%

JPY 22.48 – JPY 28.90

Cash Net Income = Net Income + Depreciation Expenses (Non-Cash)© Ichigo Inc. All rights reserved.

10

Segment Earnings Details− Asset Management: Decrease in Ichigo Hotel (3463) base AM fees
& performance fees
− Sustainable Real Estate
Stock Earnings: Covid negative impact on hotel earnings
Flow Earnings: Sold 2 logistics assets (value-add completed)− Clean Energy: Continued growth, full-year wind plant earnings contribution(JPY million)

Operating Profit
Segment

Asset Management (AM)FY21/2 Q1

FY22/2 Q1

YOY

Gross Profit
Full-Year Forecast

FY21/2 Q1 FY22/2 Q1

Earnings Drivers(Parentheses show YOY change in Gross
Profit)Base AM Fees 478 (+61)
Acquisition/Disposition Fees – (-22)
Ichigo Office Cash Flow Performance Fees – (-37)
Ichigo Green Operator Fees 12 (–)

334

353

+5.8%

1,300

501

503

2,748

2,061

-25.0%

5,700 – 8,600

4,046

3,359

Rental Income 1,289* (‐564)* Net of Depreciation Expense 950 (+292)
Gains on Sales 2,070 (-122)

Clean Energy (CE)

594

743

+25.1%

2,100

742

880

Power Generation Revenue 880* (+137)* Net of Depreciation Expense 410 (+63)

Adjustments (including offsets ofcross-segment transactions)

-26

–

–

–

–

–

3,650

3,159

-13.5%

9,100 – 12,000

5,289

4,743

Sustainable Real Estate (SRE)

Total© Ichigo Inc. All rights reserved.

11

Covid Impacts
Stock Earnings
Asset TypeEarnings Impact

OfficeLow

Mid-size office demand continues to be strong

Hotel

High

Flat hotel demand due to new state of emergency,
expected recovery on vaccine rollout. Upfront costs on
accelerating Hakata Hotels’ growth with new contracts

RetailLow

Limited earnings impact overall. Restaurants are worst
performer & continue to be hard hit

Residential

NoneOver-supply in certain areas, but robust overall

Clean Energy

None

No impact, growth on track, stable earnings driver

Flow Earnings
Asset TypeEarnings Impact

OfficeHotel

HighHigh investment demand, transaction price gap between
buyers and sellers closing

NoneHigh earnings stability driving active transactions

RetailResidential
Logistics© Ichigo Inc. All rights reserved.

12Powerful Value-Add Business Model Underpins Growth© Ichigo Inc. All rights reserved.

13

Business Model (1) Stock + Flow Earnings
Stock Earnings (Primarily Rental Income, Power Generation Revenues, Depreciation (Non-Cash), & Base AM Fees)
Flow Earnings (Primarily Gains on Value-Add Real Estate Sales )Fixed Expenses (Fixed SG&A + Interest Expenses)

37,016

Cash Earnings(JPY million)

33,75927,95326,551

18,567
15,273

22,132

20,915

12,146

13,0155,850

18,45018,485

15,065

14,939
6,371

7,071

7,727

7,877

7,723

14,405

14,405

6,103
2,070

7,896

7,896

FY22/2 Forecast
Bottom of Range

FY22/2 Forecast
Top of Range

4,033
2,034

FY18/2

FY19/2

FY20/2

FY21/2

FY22/2 Q1

Note: Cash Earnings = Gross Profit + Fixed Asset Gains on Sales + Depreciation Expenses (Non-Cash)© Ichigo Inc. All rights reserved.

14

Business Model (2) Embedded Forward Earnings
Full Economic Earnings From Value-Add Exceed Accounting Earnings
Value-Add Thus Generates Significant Unrealized Gains That Are Earnings
Bank for Future Periods(JPY billion)

63.9
45.4

50.9

56.2

36.8

FY17/2

FY18/2

FY19/2

FY20/2

FY21/2

Appraisal Value-Based Unrealized Gains© Ichigo Inc. All rights reserved.

15

Business Model (3) Value-Add Drives Durable Value Growth
Gains on Sales Consistently Exceed Appraisal Value-Based Unrealized Gains
2.8X

Appraisal Value-Based Unrealized Gains
Gains on Sales (Gross Profit)

2.5X
4.4X

JPY 17.1B
JPY 15.0B

1.9X

JPY 12.0B

JPY 5.9B

JPY 6.1B

2.8X

JPY 5.7B
JPY 3.0B

JPY 2.7B

JPY 2.0B
JPY 0.7B

FY18/2© Ichigo Inc. All rights reserved.

FY19/2

FY20/2

FY21/2

FY22/2 Q1
16

Business Model (4) Robust Cash Generation
Economic Operating Cash Flow Exceeds Net Income(JPY billion)

3.6X

Net Income
Economic Operating Cash Flow

1.7X

1.4X
1.2X
29.5

25.5

2.1X

21.5
14.9

14.0

16.7

15.4
10.4
8.2
5.0

FY20/2
FY17/2
FY18/2
FY19/2
Note: Economic Operating Cash Flow = Cash Flows from Operations excluding net change in Real Estate and Power Plants for Sale
© Ichigo Inc. All rights reserved.

FY21/217

Strong Financial Base
Average Interest Rate & Loan Term

Weighted Average Loan Period
Weighted Average Remaining Loan Maturity
Weighted Average Interest Rate

(Interest Rate)(Loan Term, Years)

12

2.5%
10.8 years
10.2 years

10.3 years

10.0 years

10.0 years

9.9 years

9.6 years

8.7 years

92.0%
7.6 years

7.6 years

8.3 years

7.8 years

7.2 years

6.9 years
6

1.5%
1.41%
1.04%

1.24%
1.0%

0.97%

0.91%

0.92%

0.90%

FY19/2

FY20/2

FY21/2

FY22/2 Q1

3

0

0.5%
FY16/2

FY17/2

FY18/2

Term Structure of Loans
Short-Term

8% (JPY 14.9B)

10% (JPY 18.1B)

91%(JPY 157.5B)

92%(JPY 162.7B)

90%(JPY 168.7B)

FY20/2

FY21/2

FY22/2 Q1

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

8% (JPY 11.3B)

9% (JPY 15.6B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

92%(JPY 132.1B)

FY16/2

FY17/2

FY18/2

FY19/2Long-Term© Ichigo Inc. All rights reserved.

18

Sustainable Growth as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

19

Sustainable Real Estate

Selective on Acquisitions & Sales
FY22/2 Q1 Net Acquisitions: JPY 1.8B
(JPY million)

Acquisitions
No. OfBook Value (A)AssetsSales
No. OfAssetsSale Price (B)Difference(A) - (B)

Residential

9

8,307

4

538

+7,769Logistics

–

–

2

6,011

-6,011

Other

2

41

1

29

+12

Office/Hotel/Retail

–

–

–

–

–

Total

11

8,347

7

6,578

+1,769Book Value of Sales is JPY 4.4B

Ichigo Owners Acquisitions & Sales− Acquisitions: 8 Residential Assets (JPY 8.2B, 98% of total)− No Sales During FY22/2 Q1

No significant changes in market environment from previous FY
Continued heavy transaction activity in residential & logistics assets© Ichigo Inc. All rights reserved.

20

Ichigo Owners

Strong Foundation for Growth
Significant Track Record & Capability in Residential Assets(JPY billion)

30.7

Ichigo Owners Residential Acquisitions & Sales Since Launch■ Acquisitions■ Sales

28.5

24.4

13.7
11.7

29 Assets
32 Assets

8.1
5.5

12 Assets

9 Assets

27 Assets

14 Assets
10 Assets

2.4
3 Assets

FY18/2© Ichigo Inc. All rights reserved.

FY19/2

FY20/2

FY21/221

Ichigo Owners

Driving Stable Long-Term Earnings− Launch of Co-Ownership Business− Driving Stable Long-Term Earnings & Expanding Customer Base
Existing Ichigo Owners BusinessResidential
Asset
Flow Earnings
Sell

Individual &Institutional Investors

Gains on Sale

Flow + Stock Earnings
Gains on Sale, Management Fees

New Ichigo Owners Co-Ownership BusinessResidential
Asset
Sell

Private Funds

Grow Stable Long-Term Earnings
10+ Year Earnings Stream

Flow Earnings

Stock Earnings

Flow Earnings

Gains on SaleManagement Fees

Performance Fee

Partnership

Asset Management
Partnership Operations

Asset Sale

(Small-Lot Investments)

Individual Investors' Small-Lot Investment Needs
・ Savings & diversification needs
・ Liquidity & inheritance planning needs© Ichigo Inc. All rights reserved.

Large Addressable Market
・ JPN investors with >JPY 500M assets:
JPY 75 trillion
・ JPN investors with JPY 100M~JPY 500M assets:
JPY 197 trillion
22

Asset Management

Growth Support for Ichigo REITs & Ichigo Green
OfficeHotel

Ichigo Office(8975)

Ichigo Hotel(3463)

Green Infrastructure

Ichigo Green(9282)

Portfolio
86 Assets JPY 206.1B

Portfolio
23 Hotels JPY 51.9B

Portfolio
15 Solar Power Plants JPY 11.4B

Dividend Yield (as of 2021/7/9)
4.3%

Dividend Yield (as of 2021/7/9)
1.7%

Dividend Yield (as of 2021/7/9)
5.7%

・ Entered FTSE Global REIT Index, a key
benchmark for global investors

・ Geographically diversified portfolio
focused on lodging-focused hotels

・ Ichigo Office & Ichigo Hotel only J-REITs
to implement no fixed fee, performancefee-only structure

・ Ichigo Office & Ichigo Hotel only J-REITs
to implement no fixed fee, performancefee-only structure

・ Solar power producer focused on driving
shareholder value via income stability andearnings growth and contributing toJapan’s self-sufficiency in clean energy

・ Transition to renewable energy acrossassets by April 2022 (excluding 15
partially-owned and co-owned assets)

・ Driving earnings & value growth via valueadd, strategic asset acquisitions & sales, &share buybacks

Ichigo Growth Support

Ichigo Growth Support

Ichigo Growth Support

Providing comprehensive coverage to Ichigo
Office assets via Ichigo’s disaster response
systemProvided subordinated debt (JPY 500M) to
support IHR’s financial base & reduce
operator risk by bringing in Hakata Hotels

Operating all plants and providing ongoing
performance guarantee

Ichigo-Wide
Initiatives© Ichigo Inc. All rights reserved.

UN Global Compact
RE100
ESG & Value-Add

・ Portfolio of robust assets that havesuffered no injuries or damages fromnatural disasters

Includes Ichigo Office, Ichigo Hotel, & Ichigo GreenGroup-wide RE100 targets & strengthened environmental initiatives
Accelerating ESG & sustainable value-add initiatives
23

Clean Energy

Scaling Rapidly
Ichigo’s First Wind Power Plant Online This Quarter
12 New Plants (Total 23.9MW) Online in FY22/2

1.4(Forecast)

3.8

IchigoOperating Plants: JPY 36.1B (127.9MW)
In-Pipeline Plants: JPY 12.4B (41.5MW)
Reference: Ichigo Green (9282)
Operating Plants: 29.4MW

4.4

2.9

3.0

38.7
(+19%)
2.5

1.5

48.6
(+26%)
12.4

Stock Earnings (JPY B)

21.0(+192%)
Total Capex(JPY B)
Power Generation
Avg FIT

23.6(+12%)

30.0(+27%)

32.5
(+8%)

36.1

36.1

FY21/2120.6MWJPY 32.8

FY22/2144.5MWJPY 30.8

FY23/2 ~169.5MWJPY 30.9

7.2
FY17/2
28.4MW
JPY 37.3© Ichigo Inc. All rights reserved.

FY18/2
72.3MW
JPY 36.4

FY19/2
83.6MW
JPY 35.3

FY20/2106.8MWJPY 34.3

24

Clean Energy

Japanese Energy Policy Creating New Growth Opportunities
Significant Increase in Japan’s Renewable Energy Target Creating New
Growth Opportunities
Japan Renewable Energy Contribution■ Renewable Energy■ Non-Renewable Energy

Revised Act on Promotion of Global WarmingCountermeasures (May 2021)
Target: Greenhouse Gas Emissions to Net Zero by 2050
Decrease 46% by 2030 (vs. 2013)

Currently
underreview for
upwardrevision・ Community-led acceleration of renewable energy→ Increase opportunities via community-driven initiatives
・ Improve continuity & viability of renewable energy policies
50~60%

18%
2020
ActualReference: 2050 Zero Carbon Cities: 298 (Total Population: 100M)

24~26%
2030
Target2050
Target(under review)

6th Basic Energy Plan
Revised Target Under METI Review

Reference: 2050 Greenhouse Gas Reduction Targets Towards Net Zero Carbon
Japan: 80% Reduction (vs. 2005)
US: >80% Reduction (vs. 2005)
Germany: 80-95% Reduction (vs. 1990)
China: N/A (2060 Target)© Ichigo Inc. All rights reserved.

25

PROPERA

Market Size & Customer Acquisition Target
Customer Acquisition Target: 2,000 Hotels Within 5 Yearsc. 50,000

No. Of Japanese Hotels

c. 33,000

No. Of Japanese Hotels With
Online Booking Systems

c. 20,000

No. Of Japanese Hotels
Deploying Site Controllers

2,000
Hotels

5-Year Target
Site controller: A channel management system that integrates & coordinates information
across multiple online distribution channels© Ichigo Inc. All rights reserved.

26

PROPERA

Accelerating External Sales
Two Key Initiatives to Increase Market Share
1. Drive Customer Growth via
PROPERA Lite
PROPERA Lite・ Price trend visualization only・ Pricing requires manual intervention
・ Usage fee: JPY 24K monthly per hotel

2. Tightly Integrate With Site Controllers
Hotel Benefits of Tight Integration
・High operational efficiency
・Standardized interface allows for fast, low-cost
PROPERA installation
2021 Forecast PROPERA Site Controller Integration Will
Give Access to c. 16,000 Hotels (80% of all Japanese
hotels with site controllers)

Increase Share to 2,000 Hotels Within 5 Years
Drive Earnings via Shift From PROPERA Lite to PROPERAPROPERAPROPERA Sample Earnings Model・ Fully Automated Revenue Optimization
・ Usage Fee: 1% of Revenue*

Hotel with RevPAR JPY 6,000 and 100 rooms
Annual Ichigo Earnings: c. JPY 2M*Standard Plan
© Ichigo Inc. All rights reserved.

27

Accelerating RE100 Target by 15 Years From 2040 to 2025
Further Lowering Energy Impacts as a Sustainable Infrastructure Company
Ichigo RE100 Target

100% Renewable Electricity by 2025
Ichigo is committed to sourcing 100% renewable electricity across its operations,
including Ichigo Office (8975) and Ichigo Hotel (3463)

RE100
A global initiative bringing together businesses committed to 100% renewable electricity,
including solar, wind, hydro, and biomass energy, and accelerating the change towards
a zero carbon society.

CDP
A global initiative that runs the global disclosure system for companies to manage theirenvironmental impacts. Companies are assessed on governance, risk management,
business strategy, goals and progress, and engagement, and are ranked from A to D.

© Ichigo Inc. All rights reserved.

28

Delivering on Sustainability
Clean Energy Business Growth Addressing Critical Environmental Issues
Ichigo is Net Zero Carbon Today
Total Ichigo Power Plant CO2 Reductions

Total Ichigo CO2 Emissions■ Ichigo (93,526 tons)■ Ichigo Green (22,357 tons)■ Ichigo (28,763 tons)■ Ichigo Office (22,727 tons)■ Ichigo Hotel (7,745 tons)

115,884

59,235tons

tons

FY21/2 Actuals

Note: Ichigo CO2 reductions are also significantly greater than pre-Covid emissions. FY20/2 CO2 Emissions: 75,807 tons
© Ichigo Inc. All rights reserved.

29

Share Buybacks
Ichigo 2030: Flexible Deployment of Share Buybacks
5th Consecutive Year of Share Buybacks (JPY 13.5B, 7.4% of Shares)
April 2021 Buyback
AmountNumber of Shares
Buyback Period

JPY 1.5B
4,363,500(0.9% of shares outstanding, net of treasury shares)
April 20, 2021 – June 4, 2021
Number of Shares
Purchased(% of Shares Outstanding)

Average PurchasePrice

AmountFY21/2

9,645,800(1.9%)

JPY 311

JPY 3 billion

FY20/2

7,081,200(1.4%)

JPY 424

JPY 3 billion

FY19/2

7,869,700(1.6%)

JPY 381

JPY 3 billion

FY18/28,436,500(1.7%)

JPY 355

JPY 3 billion© Ichigo Inc. All rights reserved.

30

Ichigo J.League Shareholder Program
Represents Two Firsts for a Shareholder Program in Japan− First Japanese company to include not just its own shareholders, but also theshareholders of the REITs and listed solar power producer that it manages, in its
shareholder program (65,000 shareholders in total)− First company to offer shareholders free tickets to every J.League game at every
J.League club (currently paused due to Covid)

Ichigo is deepening its partnership with the J.League and working tofurther Ichigo’s mission of promoting local community development.
Events & Presents− Ichigo Kids J.League Events
 Escort players onto field High-fives with players
 Other participatory programs− J.League Merchandise Autographed jerseys from all
J.League clubs
 Ichigo original J.League towels− J.League Online Events
Ichigo J.League Shareholder Program Website Landing Page
© Ichigo Inc. All rights reserved.

31

Appendix: Ichigo’s Sustainability Commitment (ESG)© Ichigo Inc. All rights reserved.

32

Ichigo Sustainability Policy
Harmony with the Environment
Ichigo actively monitors and minimizes the environmental impact of its business operations.

Energy Conservation, CO2 Reduction, and Recycling
Ichigo seeks to contribute to a low-carbon, low-waste society by reducing energy
consumption, extending the useful life of assets, actively recycling, reducing waste
production and water consumption, and implementing green procurement measures.

Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independently
established environmental rules. Ichigo also carefully monitors and complies with all applicablechanges in laws and regulations.

Training and AwarenessIchigo promotes understanding of its Sustainability Policy and works to increase sustainability
awareness among all Ichigo employees.

Sustainability Performance Communication and Disclosure
Ichigo communicates its Sustainability Policy and Ichigo’s sustainability initiatives to society atlarge. Ichigo also obtains certifications for its sustainability activities on an ongoing basis.

© Ichigo Inc. All rights reserved.

33

Sustainability Initiatives
Joining Third-Party Initiatives to Accelerate Ichigo’s Sustainability Activities
UN Global Compact
UN Global Compact is a global sustainability initiative that calls forcompanies and organizations to take leadership and take actions as
members of society to implement universal sustainability principles.
Companies and organizations that sign the UN Global Compact are
required to achieve the Ten Principles regarding human rights, labor,
environment, and anti-corruption based on CEO commitments.

CDP
CDP is a global initiative led by a non-profit organization
representing over 500 global investors to assess companies andorganizations of their environmental performance. Assessment isbased on governance, risk management, business strategy, targets
and actuals, etc., and companies are scored from from D- to A.
Ichigo’s score for 2020 (1st year): B

RE100
RE100 is a global initiative bringing together the world’s mostinfluential businesses committed to 100% renewable power. The
RE100’s mission is to accelerate change towards a net zero carbon
society.

Ichigo’s
RE100 Target

100% Renewable Electricity by 2025

Fun to ShareFun to Share is the Ministry of Environment’s campaign to promote
the achievement of a low-carbon society by sharing the most up-todate information openly and broadly.
© Ichigo Inc. All rights reserved.

34

Sustainability Report
Promoting Awareness of Ichigo’s Sustainability Initiatives via Ichigo
Sustainability Report
Table of Contents
–
–
–
–
–
–
–
–

–

–

–

Senior Management Message – Chairman Scott Callon
Senior Management Message – President Takuma Hasegawa
Ichigo Code of Corporate Ethics
Ichigo Sustainability Policy
Ichigo Governance Structure
Third-Party Assessments & Initiatives
ESG/SDGs Financing
Ichigo 2030
• Driving Long-Term Growth as a Sustainable Infrastructure
Company• Management Targets (KPIs)
Sustainable Business Management – Sustainable Real Estate• Ichigo's Sustainable Real Estate• Extending Useful Life of Real Estate Beyond 100 Years• Retail Asset Value-Add• Revitalizing a Hotel to Thrive Another 50 Years
Sustainable Business Management – Clean Energy• Clean Energy Production• One of the Largest Solar Power Plants in the Kanto Region• Sustainable Energy Supports Local Community Vibrancy
Sustainable Business Management – Asset Management• Economic Revitalization via Real Estate Investment• First & Only J-REITs with No Fixed Fee, Performance FeeOnly Asset Management Structure• Ichigo Investment Advisors’ Sustainability Policy

4
5
6
7
8
9
10

–

11
12

–

13
14
15

16
17

18

–

–

Ichigo ESG – Environmental• Producing Safe & Clean Energy• Making Productive Use of Idle Land to Produce Clean
Energy & Contribute to Local Communities• First REAFF-Approved Power Plant in Kanto Region• Reduction of Energy Consumption & Net Zero Initiatives• Third-Party Assessment of GHG Emissions• Disaster Response• Rapid Disaster Response Leveraging IT• Protecting the Environment via IT
Ichigo ESG – Social• Supporting Human Rights, Children with Illnesses, & People
with Disabilities• Supporting Students• Supply Chain• Value Chain• Respect for Human Rights• Mental Health Care & Harassment Prevention Guidelines• Ichigo HR Policy• Employment Options Catering to Different Lifestyles• Health Initiatives• Safety Initiatives• Ichigo University for Employee Education• Promoting Internal Start-Ups
Ichigo ESG – Governance• Global Best Practice Governance Structure• Compliance & Whistleblower System• Integrity, Honesty, & Fairness• Risk Management
Appendix – Reference Data

19
20
21

22
23
24
25
26

27
28
29
30
31
32
33
34
35
36

Ichigo Sustainability Reportwww.ichigo.gr.jp/pdf/esg/Ichigo_Sustainability_Report_ENG.pdf© Ichigo Inc. All rights reserved.

35

Ichigo ESG – Environmental
Sustainable Real Estate
Preserve & Improve Real Estate to End Wasteful
Demolition‒ Lengthen useful life of real estate‒ Shrink environmental footprint by reducing
wasteful demolition & consumption of raw
materials, energy, & human talent in construction
Wasteful
Demolition

LowestImpactContributing to a Low-Carbon World
Clean Energy
Ichigo RE100 Target: 100% Renewable Electricity(including Ichigo Office & Ichigo Hotel) by 2025

Annual Power Generation 175,581,824 kWh
Equivalent to annual energy consumption of
58,500 households
The Federation of Electric Power Companies ofJapan - Annual energy consumption perhousehold 3,000kWh

HighestEfficiency

Productive Use of Idle Land for Clean Energy
Environmental Annual CO2 Reduction 115,884,001 kg
Ichigo will not build power plants that require theSustainability
Equivalent to annual CO2 emission of 50,400
clearing of wooded land or the altering of thecars
landscape in a way that increases the risk of floods, For a Better
Ministry of Environment
Worldlandslides, or other water-related disasters, or that
Annual CO2 emission per car c. 2,300kg(FY21/2 Actuals – Ichigo & Ichigo Green)face opposition from local communities.

Sustainable Real Estate – Environmental Certifications
Ichigo Group-Wide
CASBEE: 12 Assets

Ichigo Office (8975)
Green Star (Highest Ranking)4 years in a row

BELS: 2 Assets
DBJ Green Building: 1 Asset
Ichigo Kakyoin Building

Ichigo Hakata
Ekimae Square© Ichigo Inc. All rights reserved.

Ichigo Hakata Meiji Dori Building36

Ichigo ESG – Social
Supporting Local Communities

Working with Tenants− Conduct tenant surveys to understand needs toimplement effective value-add− Exclusive investor for Oshii Mamoru’s new
anime VLADLOVE to promote Japan’s anime
culture and build synergies with Ichigo’s retailasset AKIBA CULTURES ZONE
− Support tenant sales channel expansion andsales growth− Operate self-storage and laundromats to
support livelihood− Ichigo’s Boutique Hotel THE KNOT
A place where visitors, communities, and the oldand the new can come together− Miyako City, Nanbu Wholesale Market
Foster community interactions− J.League Top Partner
Promote community development, revitalize local
economies, and renovate & upgrade stadiums− Smart Agriculture

Make The World More Sustainable
HR & Internal Start-Ups− Ichigo University for employees
Taught by subject matter experts
Internal online communication tool,
Ichigo University Media in place tosupport WFH employees−Support for Employees
100% return rate for employees whotake maternity/paternity leave− Women in Leadership
32% of managerial positions held by women© Ichigo Inc. All rights reserved.

Sports & Arts
− Support National & World-Class
Athletes− Support community-basedsoccer clubs− Support artists withdisabilities− Support University ofMiyazaki’s Program forChildren with Cancer
Weightlifter Hiromi Miyake

Disaster Response− Typhoon disaster preventative
measures− Rapid damage assessment− Rapid disaster response
On-site inspections and measures toprevent secondary disasters, preserve
asset value, and supply essential
items to local communities− Neighborhood watch− Street cleaning and snow shoveling37

Ichigo ESG – Governance
Majority Independent Director Board
Underpins Strong Governance

Early Adopter of Global Best PracticeCorporate Governance Structure− Adopted Independent Director-led, committeebased governance system in 2006 to incorporate
global best practice− Exceeded legal requirements by establishingCompliance Committee in addition to Nominating,
Audit, and Compensation Committees− Nominating Committee: 5 members(3 Independent Directors)− Audit Committee: 3 members(All Independent Directors)− Compensation Committee: 5 members(3 Independent Directors)− Compliance Committee: 4 members(2 Independent Directors)− Of 9 members of Ichigo’s Board of Directors, 5
are Independent Directors− Includes former CEOs of TSE 1st Section
companies− Current:
Masatoshi Matsuzaki (former CEO of Konica
Minolta)Nobuhide Nakaido (former CEO of SCSK)− Former CEO board retirements since FY18/2:
Takashi Kawamura (former CEO of Hitachi;
stepped down from Ichigo’s board in May 2017upon appointment as Chairman of TEPCO)
Kosuke Nishimoto (former CEO of Meitec;
stepped down from Ichigo’s board in May 2019
upon appointment as EVP of Misumi Group)

Strong Governance Supports Environmental & Social Contributions
Board of Directors Evaluation– Assessment of the Board by each Director, followed by collective analysis and review
 Board Composition
Evaluation Results
The Board confirmed that its deliberation
 Board Operationand decision-making processes are Board Effectivenesseffective & also received third-party Board Support Resources
confirmation with respect to this result.
 Engagement with Shareholders and Stakeholders– Third-party confirmation of the effectiveness of Ichigo’s Board Evaluation by JMA Research Institute© Ichigo Inc. All rights reserved.

38

Appendix: Financial & Real Estate Data

© Ichigo Inc. All rights reserved.

39

Covid Countermeasures− Infection control & response, communication with tenants, thoroughinformation gathering, & extensive safety measures for tenants
General Covid Infection Countermeasures

Covid Awareness & Prevention
Promotion Poster

Provide touchless hand sanitizers ubiquitously
Cover touch surfaces with antibacterial sheets
Post awareness & prevention promotion posters, distribute countermeasure
best-practice guidelines
Limit capacity indoors
Thorough disinfection and cleaning
Countermeasures by Asset Type
OfficeInstall thermal cameras for temperature checks & otherinfection prevention tools

Hotel

Provide guest rooms for Covid patients
Provide space for vaccination venue

RetailHold events that meet countermeasure best-practiceguidelines & drive customer satisfaction, such as silent
bingo and small workshops

Residential

Provide free Wi-Fi at all assets to facilitate remote work

© Ichigo Inc. All rights reserved.

40

Significant Unrealized Gains on Balance Sheet
Real Estate Directly Held by Ichigo(JPY million)

LocationBook Value as of
May 31, 2021 (A)Appraisal NOI(B)

Cap Rate(B)/(A)

Appraisal Value(C)

Unrealized Gains(C) - (A)Tokyo

93,036

5,330

5.7%

126,972+33,936

Outside Tokyo

104,709

6,843

6.5%

130,844+26,135

Total

197,745

12,173

6.2%

257,816+60,071

Notes: Excludes Ichigo Owners, Centro, and self-storage assets (book value JPY 55.23B)© Ichigo Inc. All rights reserved.

41

Risk-Based Balance Sheet
Mark-to-Market Consolidated Balance Sheet: JPY 415.7B(Book Value JPY 351.4B + Unrealized Gains JPY 64.3B)
Cash & Cash Equivalents

JPY 43.8B

Non-Recourse Loans &Related Liabilities

JPY 46.1B
Non-Recourse Loans &Related Assets

Consolidated Risk-Based Balance Sheet: JPY 325.7B(Book Value JPY 261.4B + Unrealized Gains JPY 64.3B)

JPY 63.1B

Non-Recourse Loan-Related ICH Equity

Operational Loan Investments
JPY 1.3B

Operational Loan Investments
JPY 1.3B

JPY 17.0B

Operational Securities Investments
JPY 0.6B

Corporate Loans & Bonds

JPY 186.9B
Real Estate for Sale

JPY 68.0B

Debt
JPY
255.4B

Operational Securiti6s Investments
JPY 0.6B

Corporate Loans & Bonds
Real Estate for Sale

JPY 68.0B

Security Deposits Received
JPY 4.9B

Other JPY 17.3B

Other JPY 17.3B
Fixed Assets

JPY 159.3B

JPY 159.3B

Securities Investments
JPY 5.3B

Unrealized Gains
JPY 64.3B

Mark-toMarket
Shareholder
Equity Ratio

33.8%

Other JPY 9.7B

Post-Tax Unrealized
Gains JPY 44.6B
Tax JPY 19.6B

Debt
JPY
165.4B
Security Deposits Received
JPY 4.9B

Fixed Assets

Shareholder
EquityJPY 96.0B

JPY 143.0B

Securities Investments
JPY 5.3B

Shareholder
EquityJPY 96.0B

Other JPY 9.7B

Unrealized Gains
JPY 64.3B

Risk-Based
Shareholder
Equity Ratio

43.2%

Post-Tax Unrealized
Gains JPY 44.6B
Tax JPY 19.6B

Note: Risk-Based Balance Sheet excludes client and non-recourse assets & liabilities and nets out Cash & Cash Equivalents.
© Ichigo Inc. All rights reserved.

42

Cash Flow Maximization
Maximal Use of Depreciation to Increase Cash Flow
Real Estate for Sale & Fixed Assets
Fixed Assets (SRE)
Real Estate for Sale (SRE)

15.2%

Fixed Asset Ratio
84.4%
84.4%

30.1%

(JPY billion)

12.8%

30.9

32.0

Reclassification of
Sustainable Real Estate
Assets to Fixed Assets in
FY20/2

140.2
164.9

162.3
167.2

173.3

FY 20/2

FY 21/2

60.4
24.3

29.1

FY 17/2

FY 18/2

FY 19/2

Maximal use ofdepreciation allowances
lowers stated accounting
earnings, but creates value
by being cash-generative
to fund growth investments

Note: Excludes Ichigo Owners, Centro, and self-storage assets© Ichigo Inc. All rights reserved.

43

Robust Cash Flow Generation & Strong Earnings BaseKey Ichigo Strength: Robust Cash Generation to Fund Growth− Maximal use of non-cash depreciation allowances− Majority of cash earnings are Stock Earnings− Stock Earnings/Fixed Expenses Ratio – even amidst Covid – isconsistently c. 200%
(JPY million)
FY22/2

FY17/2

FY18/2

FY19/2

FY20/2

FY21/2

12,57814,502

14,93918,48518,45015,065

4,033

14,405

14,405

Depreciation

731

716

967

1,632

2,507

4,603

1,360

5,518

5,518

Flow Earnings

8,986

14,13913,015

15,273

18,567

5,850

2,070

7,727

12,146

Cash Earnings

21,56328,641

27,95333,75937,016

20,915

6,103

22,132

26,551

Fixed Expenses (B)

5,846

6,502

6,371

7,071

7,877

7,723

2,034

7,896

7,896

Stock Earnings/
Fixed Expenses (A/B)

215%

223%

234%

261%

234%

195%

198%

182%

182%

Stock Earnings (A)FY22/2 Q1 Bottom of Range

FY22/2Top of Range

FY16/2

Note: Cash Earnings = Gross Profit + Fixed Asset Gains on Sales + Depreciation Expenses (Non-Cash)© Ichigo Inc. All rights reserved.

44

Post-GFC Shift in Earnings Base & Financial Position

Stock Earnings/
Fixed Expenses
Coverage Ratio

FY09/2GFC

FY14/2Start of Shift Up MTP

FY21/2

vs. GFC

75%

140%

195%

2.6X

10.2 years
Loan Maturity(Weighted avg.,
corporate + non-recourse loans)

3.6X

5.6 years
2.8 years

93%% of <3 Year Loans(corporate + non-recourse loans)Interest Cost
(Weighted avg., corporate loans)© Ichigo Inc. All rights reserved.

>3 years
7%28%<3 years
28%<3 years
93%>3 years
72%

2.22%

1.96%

17%
<3 years
17%-76%>3 years
83%

0.92%

-59%

45

Business Segments

Asset Management

Asset Management (AM) generates fee income via management of
Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282),
and private real estate funds.

Sustainable
Real Estate

Sustainable Real Estate (SRE) preserves and improves real estate.
Ichigo receives rental income during the period in which it carries out
its value-add, along with earning gains on sales that reflect the realestate’s higher value after the value-add is complete.

Clean Energy

Clean Energy (CE) is utility-scale solar and wind power productionthat produces clean energy and brings productive use to idle land.

Note: The Sustainable Real Estate segment was formerly called Value-Add. In keeping with its Ichigo 2030 vision, Ichigo changed thesegment name to Sustainable Real Estate in 2019 in order to put full focus on Ichigo’s commitment to preserving and improving realestate as a sustainable infrastructure company.
© Ichigo Inc. All rights reserved.

46

Consolidated Balance Sheet: Segment Breakdown(JPY million)
Operational
Loan
Investments

Operational
Securities
Investments

Real Estate for
SalePower Plants
for SaleFixed Assets

–

–

–

–

–

–

Sustainable Real Estate (SRE)

19,534

1,324

602

68,082–

Clean Energy

3,483

–

–

–

Company-Wide Assets

28,459

–

–

Total

51,477

1,324

602

Segment

Asset Management (AM)© Ichigo Inc. All rights reserved.

Cash andCash
Equivalents

Intangible
AssetsSecurities
Investments

Other Assets

683

135

1,150

1,969

183,195

2,900

3,583

2,853

282,077–

30,357

183

–

1,912

35,937

–

–

100

110

1,629

1,136

31,43768,082–

213,653

3,879

5,349

7,052

351,422

Total Assets

47

Consolidated P&L: Segment Breakdown(JPY million)

Gross Profit
Segment

YOY
ChangeOperating Profit
YOY
FY22/2 Q1ChangeFY21/2 Q1

FY22/2 Q1

501

503

+0.4%

334

353

+5.8%

1,300

Base AM Fees

441

503

+14.1%––––

Acquisition/Disposition Fees

60

–

–

–

–

–

–

4,046

3,359

-17.0%

2,748

2,061

-25.0%

5,700 - 8,600

Rental Income

1,853

1,289

-30.4%––––

Asset Sales

2,200

2,075

-5.7%

–

–

–

–

-7

-4

–

–

–

–

–

742

880

+18.6%

594

743+25.1%

2,100

–

–

–

-26

–

–

–

5,289

4,743

-10.3%

3,650

3,159

Asset Management (AM)

Sustainable Real Estate (SRE)

Other Flow Earnings
Clean Energy (CE)
Adjustment (including offsets of crosssegment transactions)
Total© Ichigo Inc. All rights reserved.

FY21/2 Q1

FY22/2 Forecast-13.5% 9,100 - 12,000

48Asset Management AUM Detail

Ichigo Office(8975)

Ichigo Hotel(3463)

Ichigo Green(9282)
Private Equity
Real Estate Funds(excluding
consolidated funds)
Total(excluding
consolidated funds)

FY17/2(12M)

FY18/2(12M)

FY19/2(12M)

FY20/2(12M)

FY21/2(12M)

FY22/2 Q1(3M)

AUM (Fiscal Year End)JPY 194.5B

JPY 196.9B

JPY 203.0B

JPY 203.2B

JPY 206.1B

JPY 206.1B

Base AM Fee Gross Profit (Actual)

JPY 1,291M

JPY 1,373M

JPY 1,426M

JPY 1,436M

JPY 1,524M

JPY 408M

AUM (Fiscal Year End)JPY 47.6B

JPY 50.9B

JPY 50.7B

JPY 50.8B

JPY 51.9B

JPY 51.9B

Base AM Fee Gross Profit (Actual)

JPY 287M

JPY 450M

JPY461M

JPY 381M

JPY 42M

JPY 25M

AUM (Fiscal Year End)JPY 10.0B

JPY 11.4B

JPY 11.4B

JPY 11.4B

JPY 11.4B

JPY 11.4B

Base AM Fee Gross Profit (Actual)

JPY 11M

JPY 77M

JPY 85M

JPY 82M

JPY 79M

JPY 22M

AUM (Fiscal Year End)JPY 6.4B

JPY 12.3B

JPY 20.6B

JPY 36.8B

JPY 36.8B

JPY 36.8B

Base AM Fee Gross Profit (Actual)

JPY 27M

JPY 12M

JPY 41M

JPY 116M

JPY 137M

JPY 34M

AUM (Fiscal Year End)JPY 258.6B

JPY 271.7B

JPY 285.8B

JPY 302.4B

JPY 306.4B

JPY 306.4B

Base AM Fee Gross Profit (Actual)

JPY 1,617M

JPY 1,914M

JPY 2,014M

JPY 2,016M

JPY 1,782M

JPY 491M

Ichigo Green Base AM Fee Gross Profit (Actual) includes operator fees.

© Ichigo Inc. All rights reserved.

49

Powerful Sustainable Real Estate Business Model
Significant Synergies Between Ichigo’s Sustainable Real Estate & AssetManagement Businesses
Sustainable Real Estate Business Model
Green
Infrastructure

Solar Plants
Buy

Ichigo Green(9282)
OfficeIchigo Office(8975)
Hotel

Ichigo Hotel(3463)© Ichigo Inc. All rights reserved.

Sell

Real
不動産
EstateSustainable
Value-Add
Preserve &ImproveReal
EstateThirdParty
Investors

Sell

Buy
50

Sustainable Real Estate Social SignificanceSustainable Infrastructure for a Sustainable Society
End Wasteful Demolishment and Embrace Sustainable Real Estate‒ Improve quality of assets via Sustainable Value-Add‒ Preserve and improve highly functional real estate to contribute toenvironmental conservation and sustainability‒ Lengthening buildings’ useful lives beyond 100 years© Ichigo Inc. All rights reserved.

51

Ichigo Sustainable Real Estate Earnings Model Example
5.5% NOI Yield, JPY 2B Purchase, LTV 75%, 1.5% Interest Rate, JPY 50M
Capex, 15% Increase in NOI, 3-Year Value-Add Period
Value-Add Measures: Improved exterior, interior, & tenant services; seismic
strengthening; increased energy efficiency; new tenant leasing; etc.
NOI at Acquisition(JPY 110M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 87.5M NOI/yearNOI÷ Initial Investment ＝17.5% NOI return during investment period
.

Debt
Asset

JPY1.5B

JPY
2.0B

NOI after Value-Add(JPY 126.5M NOI/year) － (JPY 22.5M interest/year) ＝ JPY 104M NOI/year
NOI ÷ Total Investment (JPY 500M + JPY 50M) ＝18.9% NOI return during
investment period.

EquityJPY 0.5B

Capital Gain
The 15% increase in NOI at an equivalent cap rate increases the exit price by
15%: JPY 2B * 115% = JPY 2.3B
JPY 2.3B – (JPY 2B + JPY 50M) = JPY 250M capital gain.

Value-Add (Capex JPY 50M )© Ichigo Inc. All rights reserved.

OutcomeJPY 550M investment generates JPY 512M over 3 years → 31.1% p.a.

52

Sustainable Real Estate: Gross Profit Margin (GPM)
Ichigo Sustainable Value-Add Supports Ongoing High GPM

FY18/2

FY19/2

FY20/2

FY21/2

FY22/2 Q1

GPM(vs. Revenue)

33.7%

25.5%

28.3%

13.9%

31.1%

GPM
(vs. Book Value)

50.9%

34.3%

39.5%

16.2%

45.1%

Revenue(JPY M)

35,73358,69360,601

41,4306,578

Gross Profit(JPY M)

12,05014,986

17,158

5,762

2,045

* FY21/2 Results include revenue and gross profit from fixed asset sales© Ichigo Inc. All rights reserved.

53

Ichigo-Owned Real Estate Portfolio
By Location

By Asset TypeGround Lease
1%
Other
4%
Logistics
1%

Sendai 2%
Osaka 3%
Hokkaido 3%

Retail27%

Office25%

Hokkaido
7.1

Other
5%

Nagoya 3%

Residential
17%(JPY billion)

Tokyo
Metro*
10%

Tokyo
54%

Fukuoka
20%

Hotel
25%

Sendai
5.8*Ex-Tokyo

By Asset Size

>JPY10B
11%<JPY 1B
21%

Tokyo
133.2

Nagoya7.3

Fukuoka
49.3

Osaka
7.0

Tokyo
Metro
(ExTokyo)
24.0

Other
15.2

JPY 5B-10B
22%

JPY1B-5B
46%

Total Ichigo-Owned Assets: JPY 248.9B
Including Ichigo-Managed AUM: JPY 555.3B* Acquisition price basis
Ichigo-Managed AUM includes JPY 11.4B Ichigo Green assets.
Total Ichigo-Owned Assets Q1-End Book Value: JPY 250.9B© Ichigo Inc. All rights reserved.

54

Sustainable Real Estate Asset Breakdown (1)183 Assets, JPY 248.9 B, Appraisal NOI JPY 12.1B (6.2% Yield)
No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected

Ichigo Equity
Investment

1

NOI/Year

Forecast
EquityMultiple2

Forecast
IRR

3

1

Wholesale Market

Fixed Asset

Matsudo, Chiba

JPY 2B-3B

2005/0649 years–

JPY 1,900M

–

–

2

RetailFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2005/1052 years

JPY 136M

JPY 1,033M

–

–

3

RetailFixed Asset

Minato-ku, Tokyo>JPY 3B

2006/0335 years

JPY 165M

JPY 1,356M

–

–

4

RetailFixed Asset

Yokohama

JPY 1B-2B

2006/09

16 years

JPY 60M

JPY 1,157M

–

–

5

OfficeFixed Asset

Sendai>JPY 3B

2006/10

13 years

JPY 240M

JPY 1,042M

–

–

6

OfficeFixed Asset

Fukuoka>JPY 3B

2006/12

12 years

JPY 350M

JPY 1,339M

–

–

10

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/06

41 years

JPY 85M

JPY 240M––

11

RetailFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2007/06

40 years

JPY 125M

JPY 233M––

14

Ground Lease

Fixed Asset

Atsugi, Kanagawa

JPY 1B-2B

2011/06–

JPY 172M

JPY 147M––

15

RetailFixed Asset

Hiratsuka, Kanagawa<JPY 1B

2012/0225 years

JPY 77M

JPY 172M––

16

RetailFixed Asset

Yokohama<JPY 1B

2012/10

7 years

JPY 34M

JPY 171M––

17

RetailFixed AssetToshima-ku, Tokyo>JPY 3B

2013/0310 years

JPY 244M

JPY 340M––

18

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2013/05

34 years

JPY 57M

JPY 154M––

19

RetailFixed Asset

Chofu, Tokyo

JPY 1B-2B

2013/06

36 years

JPY 135M

JPY 310M––

21

Residential

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2013/06

5 years

JPY 47M

JPY 203M––

Note: 6.2% yield excludes Ichigo Owners, Centro, and self-storage assets.
1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

55

Sustainable Real Estate Asset Breakdown (2)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
1

NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

27

RetailFixed Asset

Tokorozawa, Saitama

JPY 1B-2B

2013/11

13 years

JPY 76M

JPY 92M––

29

Ground Lease

Fixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2014/03–

JPY 114M

JPY 273M––

30

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2014/0337 years

JPY 51M

JPY 108M––

32

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/04

15 years

JPY 58M

JPY 279M––

35

OfficeFixed Asset

Minato-ku, Tokyo

JPY 2B-3B

2014/05

12 years

JPY 144M

JPY 434M––

37

RetailFixed Asset

Minato-ku, Tokyo<JPY 1B

2014/0748 years

JPY 47M

JPY 77M––

39

RetailFixed Asset

Fukuoka<JPY 1B

2014/0717 years

JPY 52M

JPY 213M––

40

RetailFixed Asset

Fukuoka<JPY 1B

2014/09

36 years

JPY 49M

JPY 252M

–

–

41

Hotel

Fixed Asset

Utsunomiya, Tochigi

JPY 1B-2B

2014/09

34 years

JPY 143M

JPY 400M––

42

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/0920 years

JPY 60M

JPY 177M––

43

RetailFixed AssetOsaka

JPY 1B-2B

2014/09

19 years

JPY 117M

JPY 301M––

45

RetailFixed Asset

Fukuoka

JPY 1B-2B

2014/1118 years

JPY 92M

JPY 135M––

57

Residential

Fixed Asset

Minato-ku, Tokyo

JPY 1B-2B

2014/1217 years

JPY 56M

JPY 186M––

62

RetailFixed Asset

Fukuoka<JPY 1B

2014/1217 years

JPY 41M

JPY 212M––

63

RetailFixed Asset

Meguro-ku, Tokyo

JPY 1B-2B

2014/12

14 years

JPY 85M

JPY 129M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

56

Sustainable Real Estate Asset Breakdown (3)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
1
NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

64

RetailFixed Asset

Shinagawa-ku, Tokyo<JPY 1B

2015/01–

JPY 26M

–

–

–

66

RetailFixed Asset

Sendai<JPY 1B

2015/0217 years

JPY 65M

JPY 8M––

68

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2015/04

19 years

JPY 46M

JPY 79M

–

–

69

Hotel

Fixed AssetOsaka

JPY 2B-3B

2015/05

18 years

JPY 170M

JPY 633M––

71

RetailFixed Asset

Fujisawa, Kanagawa

JPY 1B-2B

2015/07

6 years

JPY 99M

JPY 126M

–

–

110

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/0335 years

JPY 273M

JPY 905M

–

–

111

Hotel

Fixed Asset

Yokohama

JPY 2B-3B

2016/0337 years

JPY 207M

JPY 228M

–

–

112

Hotel

Fixed Asset

Yokohama>JPY 3B

2016/0333 years

JPY 239M

JPY 354M

–

–

113

Hotel

Fixed Asset

Yokohama>JPY 3B

2016/0333 years

JPY 288M

JPY 344M

–

–

114

Hotel

Fixed Asset

Fukuoka>JPY 3B

2016/04

31 years

JPY 183M

JPY 550M

–

–

115

Hotel

Fixed AssetOsaka

JPY 2B-3B

2016/04

14 years

JPY 130M

JPY 274M

–

–

116

RetailFixed Asset

Sendai<JPY 1B

2016/04

32 years

JPY 63M

JPY 86M––

118

RetailFixed Asset

NagoyaJPY 1B-2B

2016/06

23 years

JPY 83M

JPY 102M

–

–

119

RetailFixed Asset

Shibuya-ku, Tokyo<JPY 1B

2016/06

33 years

JPY 42M

JPY 136M

–

–

120

Hotel

Fixed Asset

Shinjuku-ku, Tokyo>JPY 3B

2016/09

41 years

JPY 554M

JPY 349M––

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

57

Sustainable Real Estate Asset Breakdown (4)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
1
NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

121

OfficeFixed Asset

Minato-ku, Tokyo>JPY 3B

2016/1020 years

JPY 1,540M

JPY 3,450M

–

–

122

Hotel

Fixed Asset

Shima, Mie<JPY 1B

2017/01

23 years

JPY 78M

JPY 73M

–

–

133

Hotel

Fixed Asset

Minato-ku, Tokyo<JPY 1B

2017/04

19 years

JPY 46M

JPY 152M

–

–

138

Hotel

Fixed Asset

Ogaki, Gifu

JPY 1B-2B

2017/05

31 years

JPY 116M

–

–

–

144

OfficeFixed Asset

Chiyoda-ku, Tokyo

JPY 1B-2B

2018/0233 years

JPY 129M

JPY 268M

–

–

145

Hotel

Fixed Asset

Fukuoka

JPY 2B-3B

2018/033 years

JPY 194M

JPY 301M

–

–

146

RetailFixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2018/08

30 years

JPY 32M

–

–

–

147

Hotel

Fixed Asset

Kyoto>JPY 3B

2018/08

2 years

JPY 327M

JPY 1,666M

–

–

148

Office (Land)

Fixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2018/08–

JPY 54M

JPY 166M

–

–

149

RetailFixed Asset

Chiyoda-ku, Tokyo>JPY 3B

2018/09

31 years

JPY 308M

JPY 2,269M

–

–

151

OfficeFixed Asset

Fukuoka<JPY 1B

2018/1022 years

JPY 33M

JPY 38M––

152

OfficeFixed Asset

Fukuoka

JPY 2B-3B

2019/0233 years

JPY 174M

JPY 382M

–

–

154

Residential

Fixed Asset

Kita Kyushu, Fukuoka

JPY 1B-2B

2019/03

7 years

JPY 83M

JPY 181M

–

–

155

OfficeFixed Asset

Shinagawa-ku, Tokyo

JPY 2B-3B

2019/0336 years

JPY 169M

JPY 616M

–

–

157

OfficeFixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2019/04

38 years

JPY 52M

–

–

–

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

58

Sustainable Real Estate Asset Breakdown (5)No.

Asset TypeClassification

Location

AcquisitionPrice

Acquisition
Date

Building
Age

Expected
NOI/Year1

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

158

Other

Fixed Asset

Chuo-ku, Tokyo

JPY 1B-2B

2019/05–

JPY 12M

–

–

–

159

RetailFixed Asset

Shibuya-ku, Tokyo

JPY 2B-3B

2019/05

41 years

JPY 123M

JPY 210M

–

–

160

OfficeFixed Asset

Fukuoka

JPY 2B-3B

2019/06

23 years

JPY 129M

JPY 248M

–

–

161

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/07

26 years

JPY 368M

JPY 1,636M

–

–

162

Hotel

Fixed Asset

Fukuoka>JPY 3B

2019/0722 years

JPY 353M

JPY 1,170M

–

–

164

Hotel

Fixed Asset

Chiyoda-ku, Tokyo<JPY 1B

2020/03

12 years

JPY 61M

JPY 62M

–

–

165

Hotel

Fixed Asset

Sapporo>JPY 3B

2020/031 year

JPY 268M

JPY 700M

–

–

167

Hotel

Fixed Asset

Hiroshima>JPY 3B

2020/08

1 yearJPY 306M–––

JPY 10,531M JPY 30,828M––

68 Fixed Assets

JPY 171,695M
JPY 172,641M (Q1-End Book Value)

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

59

Sustainable Real Estate Asset Breakdown (6)No.

Asset TypeClassification

Location

Expected

AcquisitionPrice

Acquisition
Date

Building
Age

NOI/Year1

Ichigo Equity
Investment

Forecast
EquityMultiple2

Forecast
IRR

3

61

RetailOperational Loan

Shinjuku-ku, Tokyo

JPY 1B-2B

2014/1258 years

JPY 120M

JPY 57M

15.26X

51.7%

89

OfficeReal Estate for Sale

Musashino, Tokyo>JPY 3B

2015/0732 years

JPY 131M

JPY 670M

1.72X

13.3%

92

OfficeReal Estate for Sale

Fukuoka

JPY 1B-2B

2015/07

13 years

JPY 85M

JPY 353M

1.82X

17.7%

143

RetailReal Estate for Sale

Fukuoka

JPY 1B-2B

2017/09

36 years

JPY 106M

JPY 223M

3.78X

19.9%

150

RetailReal Estate for Sale

Chuo-ku, Tokyo>JPY 3B

2018/1033 years

JPY 359M

JPY 1,161M

6.17X

24.7%

153

Hotel

Real Estate for Sale

Fukuoka

JPY 2B-3B

2019/0228 years

JPY 110M

–

–

–

156

Logistics

Real Estate for Sale

Fukuoka>JPY 3B

2019/0333 years

JPY 150M

JPY 651M

3.60X

30.0%

163

RetailReal Estate for Sale

Nagoya>JPY 3B

2019/08

23 years

JPY 479M

JPY 1,146M

3.47X

17.0%

166

RetailReal Estate for Sale

Shibuya-ku, Tokyo<JPY 1B

2020/0315 years

JPY 39M

JPY 83M

3.23X

13.5%

168

OfficeReal Estate for Sale

Koto-ku, Tokyo

JPY 1B-2B

2020/1131 years

JPY 100M

–

3.17X

53.6%

JPY 1,678M

JPY 4,343M

3.99X

24.9%

JPY 12,210M JPY 35,171M––

10 Real Estate for Sale

Subtotal 78 Assets

JPY 27,840M
JPY 28,081M (Q1-End Book Value)
JPY 199,536M
JPY 200,723M (Q1-End Book Value)

1

Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.
Forecast Equity Multiple is based on the business plan of each asset and is the sum of forecast rental income and gains on sales divided by Ichigo Investment.
3 Forecast IRR is the forecast internal rate of return based on each asset’s actual cash flow. The total Forecast Equity Multiple and Forecast IRR are for Real Estatefor Sale assets acquired from FY15/2 onward and exclude Fixed Assets.
2© Ichigo Inc. All rights reserved.

60

Sustainable Real Estate Asset Breakdown (7)Acquisition
Price

Asset TypeNo.

NOI/Year

Ichigo Equity
Investment

Forecast
EquityMultiple

Forecast
IRR

Expectedvs. FY20/2 Q4

1

A

Ichigo Owners (Residential)

32 Assets

JPY 29,775M+JPY 7,817M

JPY 1,337M

JPY 9,026M

–

–

B

Ichigo Owners (Other)

16 Assets

JPY 8,013M-JPY 506M

JPY 481M

JPY 2,894M

–

–

C

Centro (Primarily Office & Residential)

22 Assets

JPY 7,896M+JPY 100M

JPY 580M

JPY 2,039M

–

–

C

Self-Storage

35 Assets

JPY 3,751M–

JPY 413M

JPY 896M––

JPY 15,022M

JPY 50,028M––

JPY 7,935M

JPY 348M

JPY 2,120M––

JPY 17M

–

–

–

–

Total 183 Assets
Assets acquired in FY22/2 Q1 (3M)

Total 11 Assets

Assets acquired and sold in FY22/2*

Total 1 Asset

JPY 248,973M
JPY 250,903M (Q1-End Book Value)* Sold 1 Centro assets
1 Expected NOI/ Year is based on the business plan of each asset and is the expected NOI after value-add is completed.

© Ichigo Inc. All rights reserved.

61

Ichigo Solar & Wind Power Plant Portfolio
Ichigo Solar Power Plants (Operating)

Ichigo Solar Power Plants (In Pipeline)

Ichigo Tokushima Higashi-Okinosu

Shikoku

Panel
Output(MW)
2.52

Ichigo Fuchu Jogecho Yano

Chugoku

0.99

Ichigo Yubetsu Barou

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 40Aug 2013

Ichigo Chiba Wakaba-ku Omiyacho Nishi

Kanto

Panel
Output(MW)
0.74

JPY 14

Sep 2021

JPY 40Mar 2014

Ichigo Chiba Wakaba-ku Omiyacho Higashi

Kanto

0.74

JPY 14

Sep 2021
Oct 2021

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

Hokkaido

0.80

JPY 40

Apr 2014

Ichigo Komagane Akaho Minami

Chubu

0.74

JPY 14

Ichigo Maebashi Naegashima

Kanto

0.67

JPY 40

Apr 2014

Ichigo Komagane Akaho Kita

Chubu

0.39

JPY 14

Oct 2021

Ichigo Kijo Takajo

Kyushu0.89

JPY 40

Apr 2014

Ichigo Tatsunomachi Sawasoko

Chubu

0.74

JPY 14

Oct 2021

Ichigo Betsukai Kawakamicho

Hokkaido

0.88

JPY 40

Oct 2014

Ichigo Kasaoka Idachiike

Chugoku

2.66

JPY 18

Oct 2021

Ichigo Toyokoro Sasadamachi

Hokkaido

0.60

JPY 40

Oct 2014

Ichigo Obu Yoshidamachi

Chubu

1.10

JPY 18

Jan 2022

Ichigo Higashi-Hiroshima Saijocho Taguchi

Chugoku

2.72

JPY 40Jan 2015

Ichigo Kobe Pompuike

Kansai

2.47

JPY 18

Jan 2022

Ichigo Akkeshi Shirahama

Hokkaido

0.80

JPY 40Mar 2015

Ichigo Hamanaka Bokujo Tsurunokotai

Tohoku2.31

JPY 36

Dec 2015

Ichigo Sera Shimotsuda

Chugoku

2.93

JPY 18Feb 2022

Ichigo Yonago Izumi

Chugoku

2.61

JPY 40Jan 2016

Ichigo Kasaoka Takumicho

Chugoku

1.11

JPY 32

Mar 2016

Ichigo Toki Oroshicho

Chubu

1.39

JPY 36

Jun 2016

Ichigo Toride Shimotakai Kita

Kanto

1.03

JPY 32

Jul 2016

Ichigo Toride Shimotakai Minami

Kanto

0.54

JPY 32

Jul 2016

Ichigo Hamanaka Bokujo Kajibayashi

Tohoku2.31

JPY 36

Oct 2016

Ichigo Sera Tsukuchi

Chugoku

2.54

JPY 32

Feb 2017

Ichigo Sera Aomizu

Chugoku

2.87

JPY 32Aug 2017

Ichigo Showamura Ogose

Kanto

43.34

JPY 36

Sep 2017

Ichigo Memuro Nishi-Shikari

Hokkaido

1.32

JPY 40Feb 2018

Ichigo Kure Yasuuracho Nakahata

Chugoku

2.90

JPY 36

Mar 2018

Ichigo Tsu

Chubu

2.94

JPY 24

Mar 2018

Ichigo Kasaoka Iwanoike

Chugoku

2.64

JPY 24

Mar 2018

Ichigo Toki Tsurusatocho Kakino

Chubu

1.31

JPY 24

Apr 2018

Ichigo Itoshima Iwara

Kyushu1.48

JPY 36

Jan 2019

Ichigo Sakahogi Fukagaya

Chubu

2.89

JPY 21

May 2019

Ichigo Sennan Kitsuneike

Kansai

2.86

JPY 21

Jul 2019

Ichigo Minakami Aramaki

Kanto

12.02

JPY 36

Jan 2020

Ichigo Takashima Kutsuki

Kansai

3.74

JPY 32

Jan 2020

Ichigo Toki Tsurusatocho Kakino Higashi

Chubu

1.67

JPY 21

Feb 2020

Ichigo Hitachiomiya

Kanto

2.99

JPY 24

Mar 2020

Ichigo Hokota Aoyagi

Kanto

2.48

JPY 27

Apr 2020

Ichigo Kasaoka Osakaike

Chugoku

2.66

JPY 21

Apr 2020

Ichigo Minokamo Hachiyacho Kamihachiya

Chubu

1.29

JPY 18

Sep 2020

Ichigo Seto Jokojicho

Chubu

1.45

JPY 18

Oct 2020

Ichigo Toride Shimotakai Nishi
Total (Operating)

Kanto
2.84
JPY 1836 Plants 120.6MW

Jan 2021© Ichigo Inc. All rights reserved.

Ichigo Ueda Yoshidaike

Chubu

1.01

JPY 18Feb 2022

Ichigo Miyakonojo Takazakicho Tsumagirishima

Kyushu2.96

JPY 32

Feb 2022

Ichigo Ebino Suenaga

Kyushu13.99

JPY 40Jan 2024

Total (In-Development)

12 Plants 30.5MW

Total (Operating & In-Development)

48 Plants 151.1MW

48 Ichigo Solar Power Plants (Operating/In Pipeline) 151.1MW
Ichigo Wind Power Plants (Operating)Wind Power Plant
Ichigo Yonezawa Itaya
Total

Panel
FIT
Output(Pre-tax)(MW)
Tohoku7.39
JPY 22
1 Plant 7.39MW
Area

Operation
Start Date
Mar 2021

Ichigo Wind Power Plants (In Pipeline)
Wind Power Plant
Ichigo Takashinoyama
Ichigo Onjuku Iwawada Nishi
Ichigo Onjuku Iwawada Higashi
Total

Panel
FIT
Output(Pre-tax)(MW)
Tohoku6.99
JPY 21
Kanto
1.99
JPY 22
Kanto
1.99
JPY 223 Plants 10.9MW
Area

Operation
Start Date
Dec 2023
Dec 2024
Dec 2024

4 Ichigo Wind Power Plants (Operating/In Pipeline) 18.3MW

Total: 52 Plants (169.5MW)
62

Ichigo Green (9282) Solar Power Plant Portfolio
Ichigo Green Solar Power Plants (Operating)

Ichigo Kiryu Okuzawa

Kanto

Panel
Output(MW)
1.33

Ichigo Motomombetsu

Hokkaido

1.40

Solar Power Plant

Area

FIT
(Pre-tax)

Operation
Start Date

JPY 40

Sep 2013

JPY 40Feb 2014

Ichigo Muroran Hatchodaira

Hokkaido

1.24

JPY 40Mar 2014

Ichigo Engaru Kiyokawa

Hokkaido

1.12

JPY 40Mar 2014

Ichigo Iyo Nakayamacho Izubuchi

Shikoku

1.23

JPY 40

Apr 2014

Ichigo Nakashibetsu Midorigaoka

Hokkaido

1.93

JPY 40

Nov 2014

Ichigo Abira Toasa

Hokkaido

1.16

JPY 40Dec 2014

Ichigo Toyokoro

Hokkaido

1.02

JPY 40Dec 2014

Ichigo Nago Futami
Ichigo Engaru Higashimachi

Okinawa
Hokkaido

8.44
1.24

JPY 40JPY 40Feb 2015
Feb 2015

Ichigo Takamatsu Kokubunjicho Nii

Shikoku

2.43

JPY 36

Jun 2015

Ichigo Miyakonojo Yasuhisacho

Kyushu1.44

JPY 40Jul 2015

Ichigo Toyokawa Mitocho Sawakihama Chubu

1.80

JPY 32

Sep 2015

Ichigo Yamaguchi Aionishi

Chugoku

1.24

JPY 40Dec 2015

Ichigo Yamaguchi Sayama

Chugoku

2.35

JPY 36

Apr 2016

Ichigo Total: 198.9MW (Operating/In Pipeline)
Solar Power Plants

151.1MWWind Power Plants

18.3MW

Ichigo Green (9282)
Solar Power Plants

29.4MW

15 Plants 29.4MW

Total (Operating)

Reference: Japan’s Feed-In Tariff (FIT)• A policy mechanism to encourage investment in renewable energies by guaranteeing a fixed purchase price for electricity over a 20-year
contract period• The fixed price for new contracts is adjusted every year, but locked in for the duration of the contract period
Wind Power FIT

Solar Power FIT
Contract Date

FIT

Guarantee
PeriodContract Date

FIT

Guarantee
PeriodFY2012

JPY 4020 years

FY2017 (4/1~9/30)

JPY 2220 years

FY2013

JPY 3620 years

FY2017 (10/1~3/31)

JPY 2120 years

FY2014

JPY 3220 years

FY2018JPY 2020 years

FY2015 (4/1~6/30)

JPY 2920 years

FY2019JPY 1920 years

FY2015 (7/1~3/31)

JPY 2720 years

FY2020

JPY 1820 years

FY2016

JPY 2420 years

FY2021–FY2017~

Determined via
1
auction process

Determined via
auction process2–© Ichigo Inc. All rights reserved.

1 2017 FIT for >2MW non-residential, 2019 FIT for>0.5MW non-residential, and 2020~ FIT >0.25MW
non-residential solar power production
2 FIT for >0.25MW wind power generation

63

Ichigo-Owned Solar Power Plant Portfolio
Total Operating and In-Pipeline Ichigo-Owned Solar Power Plants: 48 Plants (151.1MW)
By Feed-In Tariff

By Customer(Electric Power Utility Co)
Hokkaido
3%
Tohoku3%

By Years in Operation

Shikoku2%

JPY 142%

Kyushu13%
Kansai
6%

TEPCO
44%

Chubu
11%

JPY 272%

JPY 1810%
JPY 21
7%
JPY 24
7%
JPY 32
10%

Chugoku18%

JPY 4019%<1 year4%>5 years
13%
In Development20%

1-3 years
22%

JPY 3643%

3-5 years
41%

By Solar Intensity

By OutputC(In-Development)
2%

>10MW
(In-Development)
2-10MW
9%(In-Development)
7%
<2MW
12%

<2MW
(In-Development)
4%

2-10MW
31%
>10MW
37%

Panel Output and FIT by Customer

A(In-Development)
B
4%(In-Development)
14%

Area

A
45%

C
8%
B
27%

TEPCO
Chugoku
KyushuChubu
KansaiTohokuHokkaido
Shikoku
Total

Operating
Panel
FIT
Output(Pre-tax)
(MW)
(JPY)
66.0
18 – 40
21.1
21 – 40
2.4
36 – 40
13.0
18 – 36
6.6
21 – 32
4.6
36
4.4
40
2.5
40
120.6

Solar Intensity Rank
A: ≥4.00 B: ≥3.75, <4.00
Unit: kWh/m2 per day© Ichigo Inc. All rights reserved.

C: ≥3.50, <3.75

In Pipeline
Panel
FIT
Output(Pre-tax)
(MW)
(JPY)
1.5
14
5.6
18
17.0
32 – 40
4.0
14 – 18
2.5
18
–
–
–
–
–
–
30.5
D: <3.564

Green Biomass Entry
Fully Local Green Biomass as Third Renewable Energy Business− Diversify & stabilize power production− Procure biomass feedstock via Ichigo’s community relationships
Characteristics

Weather
Impacts

Solar Power・ Lots of potential plant site candidates, able to make effective use ofunused land

YesWind Power・ Night time power production capability

Yes・ 24-hour power generation capacity regardless of weather conditions
・ Able to control power generation
・ Stable supply of biomass energy sources is necessaryNo

Biomass

Maintain & Conserve Forests− Support biodiversity & contribute to fight against climate change
Use Japan’s Abundant Forest Resources− Japan’s forest ratio is 66% (2nd highest amongst OECD countries), 7th largest
cultivated forest area in the world− Productive use of unused domestic wood as biomass energy source© Ichigo Inc. All rights reserved.

65

Consolidated Balance Sheet: Assets(JPY million)

FY18/2
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar and wind power plants (net)Land
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets© Ichigo Inc. All rights reserved.

FY19/2

FY20/2

FY21/2

FY22/2 Q1

vs. FY21/2

45,510
1,097
1,324
2
180,789
342
2,643
-28
231,681

50,225
1,344
1,324
1,218
161,322–2,156-2
217,590

41,067
2,308
1,324
902
68,290–3,721-6
117,608

50,832
1,382
1,324
590
64,109–2,698-167
120,771

51,477
2,116
1,324
602
68,082–
2,193-167
125,628

+645
+734
–
+12
+3,973–-505–+4,857

10,60019,773
26,993
1,190
58,55820,33819,05849,924
5,655
94,97655,05023,425
122,114
5,607
206,198

60,67324,191
122,592
6,935
214,392

59,99727,271
122,597
3,787
213,653-676+3,080+5-3,148
-739

1,600
135
233
1,968

1,346
316
331
1,993

1,090
687
705
2,482

968
1,272
1,797
4,038

931
1,272
1,675
3,879

-37
–
-122
-159

2,184
10
68
2,132
-91
4,303
64,831
296,512

2,455
10
177
2,231
-91
4,782
101,752
319,343

4,321
510
568
2,128
-91
7,436
216,118
333,726

5,147
10
605
2,202
-91
7,874
226,305
347,076

5,349
292
569
2,141
-91
8,260
225,793351,422

+202
+282
-36
-61
–
+386
-512
+4,34666

Consolidated Balance Sheet: Liabilities & Net Assets(JPY million)

FY18/2
Liabilities
Current Liabilities
Short-term loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within one
year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive Income
Valuation gains (losses) on other securities
Deferred gains (losses) on long-term interest rate
hedgesTotal Accumulated Other Comprehensive Income
Stock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets© Ichigo Inc. All rights reserved.

FY19/2

FY20/2

FY21/2

FY22/2 Q1

vs. FY21/2

1,042
112
4,449

3,275
112
7,881

3,086
274
12,277

4,879
274
9,751

7,989
274
9,870

+3,110
–
+119

3,921

1,666

1,178

1,358

1,358

–

1,609
494
34
4,652
16,316

3,760
–
31
5,178
21,905

2,416
–
33
5,013
24,280

573
–
9
5,527
22,374

801
–
168
3,363
23,826+228–+159-2,164+1,452

520
112,366
63,588
1,744
8,492
758
187,470
203,787

538
131,569
51,068
2,164
8,292
946
194,579
216,484

6,082
151,483
39,156
1,890
8,118
1,107
207,838
232,119

5,878
156,890
40,974
1,868
7,795
1,039
214,446
236,820

5,837
162,943
40,822
1,844
7,685
1,119
220,252
244,079-41+6,053
-152
-24
-110
+80
+5,806+7,25926,723
11,11354,324-2,99589,16526,820
11,207
66,730-5,98898,76926,885
11,272
71,505-8,988100,674

26,888
11,27573,160-11,988
99,33526,888
11,27571,402-13,286
96,278––-1,758-1,298-3,057

543

386

158

90

145

+55

-372

-408

-397

-375

-360

+15

171
666
2,722
92,725296,512

-21
827
3,283
102,859
319,343

-239
988
184
101,607
333,726-285
1,007
10,197110,255
347,076-214
1,026
10,251
107,342
351,422

+71
+19
+54
-2,913+4,34667

Consolidated P&L(JPY million)
FY18/2(12M)
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Mark-to-market gains on long-term interest
rate hedges
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expenses
Mark-to-market losses on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gains on sales of fixed assets
Gains on sales of securities investments
Gains on sales of shares in affiliates
Gains on sales of subsidiary shares
Other
Total Extraordinary Gains
Extraordinary Losses
Loss on disposal of fixed assets
Valuation losses on securities investments
Impairment loss
Covid writedown of real estate for sale
Other
Total Extraordinary Losses
Pre-Tax Income
Income Taxes - Current
Income Taxes - Deferred
Total Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income© Ichigo Inc. All rights reserved.

FY19/2(12M)

FY20/2(12M)

FY21/2(12M)

FY22/2 Q1(3M)

FY21/2 Q1(3M)

Change(YOY)

FY22/2Full-Year
Forecast

vs.
Forecast

57,84630,86026,986
5,067
21,91983,54051,41332,126
5,847
26,27987,36052,851
34,5096,787
27,721

61,36845,776
15,591
5,923
9,668

12,674
7,931
4,743
1,583
3,159

22,73017,440
5,289
1,638
3,650

-10,056-9,509
-546
-55
-491

–
–
–
–
9,100 – 12,000––––
26.3% – 34.7%

3
57

3
68

8
78

17
78

5
5

3
54

+2
-49

–
–

–
–

–

5

–

243

8

239

-231

–

–

100
161

70
147

62
150

78
417

43
62

16
314

+27
-252

–
–

–
–

2,249

2,328

2,293

2,338

593

573

+20

–

–

270

491

336

29

175

10

+165

–

–

207
168
2,895
19,185

327
203
3,350
23,076

538
307
3,476
24,395

279
258
2,906
7,179

24
44
837
2,384

7
69
660
3,303

+17
-25
+177
-919

–
–
–
6,000 – 8,900–––
26.8% – 39.7%

–
–
1,221
–
41
1,263

–
2
–
–
–
2

–
11
–
169
35
215

720
–
–
–
–
720

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

11
–
327
–
–
339
20,109––5,923
14,185167
14,018––––––23,079––7,333
15,746373
15,373

27
229
319
7,487
–
8,065
16,545
7,990
-584
7,406
9,139
938
8,201

–
114
27
–
146
288
7,610
2,622
-58
2,564
5,046
18
5,027

–
–
–
–
–
–
2,384
1,014
-231
782
1,601
55
1,546

–
114
–
–
–
115
3,188
905
118
1,023
2,165
1
2,164

–
-114
–
–
–
-115
-804
+109
-349
-241
-564
+54
-618

–
–
–
–
–
–
–
–
–
–
–
–
5,000 – 8,000

–
–
–
–
–
–
–
–
–
–
–
–
19.3% – 30.9%

68

Consolidated Cash Flows: Operations(JPY million)
FY18/2 (12M)
Cash Flows from Operations
Pre-tax income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Losses (gains) on sales of subsidiary shares
Losses (gains) on sales of shares in affiliates
Losses (gains) on sales of securities investments
Losses (gains) on sales of fixed assets
Impairment loss
Valuation losses on securities investments
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational securities investments
Decrease (increase) in real estate for sale
Covid writedown of real estate for sale
Decrease (increase) in power plant for sale
Valuation losses on SPC capital contributions
Decrease (increase) in advances paid
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in security deposits received
Other
Sub-TotalInterest and dividend income received
Interest expenses paid
Income taxes paid and refunded
Net Cash from (Used for) Operations© Ichigo Inc. All rights reserved.

20,109
1,015
215
111
32
-355
-61
2,249
–
-1,221
–
–
327
–
-468
1,663
-8,112
–
996
–
871
-10
573
-47
30
125
585
18,62861-2,231-5,854
10,603

FY19/2 (12M)
23,079
1,696
213
254
-3
-26
-71
2,328
–
–
-2
–
–
–
-247
3,509
-3,163
–
–
–
-333
-399
-332
25
269
-264
1,887
28,42071-2,118-4,61021,762

FY20/2 (12M)
16,545
2,630
194
174
2
4
-86
2,293
-169
–
-11
–
319
229
-903
11,682-17,447
7,487
–
–
16
29
201
-36
-285
-169
600
23,30486-2,068-9,43011,892

FY21/2 (12M)
7,610
4,797
21
121
-24
161
-96
2,338
–
–
–
-720
27
114
925
343
5,342
–
–
4
61
16
-437
94
-57
-323
1,550
21,87096-2,119-4,384
15,463

FY22/2 Q1 (3M)
2,384
1,413
19
36
159
–
-10
593
–
–
–
–
–
–
-733
-11
-3,972
–
–
–
106
125
-1,075
29
–
-109
-491
-1,53610-504-528-2,55969

Consolidated Cash Flows: Investments & Financing(JPY million)
FY18/2 (12M)
Cash Flows from Investments
Payments into time deposits
Proceeds from withdrawal from time deposits
Payments for securities investments
Proceeds from sales of securities investments
Acquisitions of property, plant, and equipment
Proceeds from sale of property, plant, andequipment
Acquisitions of intangible assets
Payments of SPC capital contributions
Redemptions of SPC capital contributions
Payments of security deposits
Acquisitions of subsidiary shares resulting in change ofconsolidation scope
Sales of subsidiary shares resulting in change ofconsolidation scope
Acquisitions of consolidated subsidiary
Other
Net Cash from (Used for ) Investments
Cash Flows from Financing
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Repayment of maturing bond principal to bondholders
Redemption of non-recourse bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Share buyback
Proceeds from minority interests
Payments to minority interests
Sales of subsidiary shares resulting in no change ofconsolidation scope
Dividends paid to minority interests
Dividends paid
Net Cash from (Used for ) Financing© Ichigo Inc. All rights reserved.

FY19/2 (12M)

FY20/2 (12M)

FY21/2 (12M)

FY22/2 Q1 (3M)

-6
–
-140
–
-4,796

-118
1,060
-539
32
-15,440-113
5,033-2,361
111-11,244

-7
–
-547
10
-16,447

-2
–
-120
–
-907

–

–

–

2,850

–

-83
-28
–
-36

-425
-6
32
-16

-562
-2
–
-34

-1,468
-3
15
–

-72
-3
–
-16

-2,619

–

–

–

–

2,096

–

–

–

–

–
-32
-5,645–-181-15,602-187-902-10,263–-30-15,630–-281-1,403

-306
-611
–
-112
-100
32,660-13,402
3,518-22,366
110-2,999
–
–

2,232
–
129
-112
–
43,062-20,352
3,500-18,473143-2,999
90
–

426
–
5,828
-193
–
49,957-26,475
5,300-17,701
95-2,999–-1,276

1,793
–
70
-274
–
51,877-48,996
3,300-1,301
4-2,99910,000
–

3,110
–
–
-40
–
11,087-4,922–-151–-1,298
–
–

–

100

–

–

–

–
-2,513-6,124–-2,9724,346-8-3,4169,537-5-3,298
10,167–-3,177
4,606

70

Ichigo 2030: Ichigo as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

71

Go for Growth
Grow & Expand Ichigo’s Core Businesses into New Areas, Creating New
Earnings Streams and Increasing Both Earnings and Earnings Stability
Sustainability

Infrastructure

Sustainability is integral to the health anddevelopment of people, society, and the environment.

Ichigo has a direct and critically important role inpreserving and improving the social infrastructure that
supports the quality of people’s lives.

Ichigo’s current core business of preserving andimproving real estate is a highly sustainable businessmodel that combines high efficiency with low
environmental impact.
Under Ichigo 2030, Ichigo will continue its longstanding commitment to sustainability whiledeveloping new technologies to extend the lives ofkey social infrastructure beyond 100 years.

By expanding its current real estate and clean energy
businesses into other infrastructure areas, Ichigo will
integrate the “hard” physical elements and “soft”
service elements of infrastructure to serve broadclient needs.
Critical to success will be unifying Ichigo’s
Sustainable Value-Add and IT capabilities. Ichigo will
work to deliver first-in-class and best-in-classsolutions to drive significant value for clients andsociety across a diverse set of infrastructures. Being
one of many is not enough. Ichigo needs to lead.

Ichigo as a Sustainable Infrastructure Company© Ichigo Inc. All rights reserved.

72

Addressing Needs of Diverse Individuals & Communities© Ichigo Inc. All rights reserved.

73

KPI Targets
1. High Capital Efficiency− FY20/2~FY30/2 Average ROE >15%
 Increase long-term ROE by driving higher capital efficiency & earnings stability
 Via high ROE, grow long-term EPS as a key driver of shareholder value− FY20/2~FY30/2 Continuous JPX-Nikkei 400 Index Inclusion Target 11 consecutive years of inclusion

2. High Cash Flow Generation− FY20/2~FY30/2 Continuous Economic Operating Cash Flow > Net Income
 Ichigo’s robust cash flows fund both growth investments and shareholder returns
 Target 11 consecutive years of EOCF > NI

3. High Earnings Stability− FY30/2 Stock Earnings Ratio >60%
 Raise Stock Earnings ratio from FY19/2’s 53%
 Concurrently increase and diversify Flow Earnings, which are currently centered on
Sustainable Real Estate Gains on Sales

Note: Economic Operating Cash Flow = Cash Flows from Operations excluding net investment in Real Estate and Power Plants for Sale
© Ichigo Inc. All rights reserved.

74

Shareholder Return Policy
Ichigo Dividend Policy: Growth, Certainty, & Stability− Progressive Dividend Policy
 Ichigo’s progressive dividend policy underscores our commitment todriving continued organic earnings and dividend growth forshareholders. Under this policy, the dividend is maintained or raised
every year (but not cut), providing shareholders with the security of adurable dividend.
− DOE (Dividend on Equity) Payout Ratio of >3%
 Stable and growing dividend unaffected by short-term earnings volatility− Flexible Deployment of Share Buybacks (New)Dividend growth via
DOE > 3% Policy

 Conduct share buybacks to optimize capital
structure and drive shareholder value

9 Consecutive Years of
Dividend Growth
JPY 5

JPY 6

JPY 7

JPY 7

JPY 7

JPY 7

FY19/2

FY20/2

FY21/2

FY22/2(Forecast)

JPY 3
JPY 1*

JPY 1.1 JPY 1.3

FY13/2
FY14/2
FY15/2* Adjusted to reflect 200:1 stock split© Ichigo Inc. All rights reserved.

FY16/2

FY17/2

FY18/275

Ichigo 2030: New Initiatives© Ichigo Inc. All rights reserved.

76

Real Estate x Sports

Top Partner of J.League, Japan’s Professional Soccer League
Partner with J.League to Promote Community Development, Revitalize Local
Economies, & Help People Enjoy Fuller and Healthier Lives
J.League’s 100-Year Vision:
Promote Sports Development

Ichigo’s Mission:Serve Important Social Needs

J.League’s mission is to establish sports clubs rooted in local
communities, cooperating with local residents, businesses, andmunicipalities to promote community development

Ichigo believes that companies exist to serve society, andseeks to contribute to local communities as a sustainableinfrastructure company

Ichigo’s role as the only real estate company that is a J.League Top Partner:– Renovate and upgrade stadiums and help local governments find solutions for the rising costs ofoperating stadiums– Work to build stronger and healthier communities in cooperation with local residents, businesses, andmunicipalities©J.LEAGUE© Ichigo Inc. All rights reserved.

77

Real Estate x IT x Tourism

PROPERA: Ichigo's AI Hotel Revenue Management System− Maximizes Hotel Revenues & Increases Labor Productivity− Solves Issues Faced by Hotels and Supports Competitiveness− Developed PROPERA-Lite* Tailored to Hotels’ Needs* Provides limited information on pricing levels

Number of Lodging Facilities
in Japan

50,000

Number of Hotel Booking
System Users

Revenue Managers- Determine prices based on guest room
reservations and market research- Reflect prices in hotel booking
system

20,000Issues Faced by Lodging Facilities
Managing Check-in/Check-out and Revenue-

Managing Multiple Reservation Sites

Lack of revenue managers
Dependent on managers’ know-how
Differences in skill levels
Labor-intensive

Hotel
Booking System

Core Hotel System

From People to AI
Reservation
Information

Optimal Pricing
Information onreservations andsales conditions

Actual Sales Information

PROPERABusiness Alliance withTEMAIRAZU used by hotel
reservation sites such as
Booking.com

Lead time between installing algorithm leveraging Ichigo know-how
and system implementation is shortest in the industry© Ichigo Inc. All rights reserved.

78

Real Estate x Tourism

Hakata Hotels: Hotel Operations
Hotel Operator in Kyushu/Yamaguchi Region
Seeing Inbound Tourism Growth– Started operations at 3 hotels on June 1, 2019
& will operate 14 hotels as of September 1,
2021

PROPERA Deployment– Generating 10 to 40% revenue increases p.a.
– Sales of PROPERA to non-Ichigo hotel
operators expected to drive Ichigo non-asset
revenue streams

Ichigo’s Hotel Il Palazzo in Fukuoka was the first building outside theU.S. to win an American Institute of Architects Honor Award in 1991

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

The Hakata Hotels logo features hakata-ori woven silk textiles that are a local Fukuoka
craft, including the koukou shima weaving pattern in which a thick vertical line issurrounded by thin vertical lines. The thin lines represent children, and the thick lines
parents, expressing the sense of care shown within families. The multiple colors reflect
Ichigo’s values of respect for diversity. The values represented in the logo are also
resonant with Ichigo’s philosophy of Ichigo Ichie, literally meaning “One lifetime, one
encounter.”AgricultureEntertainment

Public WorksSportsCulture© Ichigo Inc. All rights reserved.

Tourism

Medical Care

EnergyOther

79

Real Estate x Entertainment x Culture x Tourism

Ichigo Animation: Anime + Real Estate Synergies
Released the Complete Series of New Anime VLADLOVE Written & Directedby Mamoru Oshii, with Co-Director Junji Nishimura– Established Ichigo Animation in April 2019
– Introducing tenant collaboration initiatives that go beyond typical owner/tenant,hands-off leasing relationships– Collaborating across multiple industries to drive new synergies with Ichigo’s existing
businesses

New Earnings via Anime Content Streaming & Sales of DVDs, CDs, & Goods
Promote Ichigo’s AKIBA CULTURES ZONE (ACZ) as Global Anime Landmark– Increase ACZ’s value by integrating anime content & events(anime, dance, music, entertainment, retail, tourism, etc.)
 Anime-related events & sales of goods at ACZ will drive
both customer traffic & higher earnings

Responding
to Diverse
Nursing Care
Needs

Child Care
Education

Senior Business

Tourism

Medical Care×
© Ichigo Inc. All rights reserved.

Public WorksSportsCulture©2020 Mamoru Oshii/Ichigo Animation

AgricultureEntertainment

AKIBA CULTURES ZONE

EnergyOther

80

These materials were prepared to explain Ichigo’s businesses and are not for the purpose of soliciting investment inmarketable securities issued by Ichigo. Ichigo does not guarantee the accuracy of the figures, information, estimates, orother statements included herein, and accepts no responsibility for damages or losses arising through the use of the
figures, information, estimates, or other statements contained herein.
These materials are based upon information available as of the publication date, and may contain forward-looking
statements pertaining to Ichigo’s expectations, targets, plans, and strategies. Such forward-looking statements are notfacts, but are the result of management’s judgment based on information currently available. Actual operating results ordevelopments concerning Ichigo may differ substantially from those indicated by forward-looking statements. The
information enclosed is subject to revision without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation,
the Japanese version shall prevail.

Make The World
More Sustainable

Contact:
Ichigo (TSE First Section 2337)
Investor Relations
TEL: +81-3-3502-4818
E-mail： ir@ichigo.gr.jp
www.ichigo.gr.jp/en
Ichigo is Japan’s first zero-carbon listed real estate company.
We are taking responsibility for our environmental footprint by offsetting ourcarbon emissions and investing in low-carbon technologies such as solar energy.

© Ichigo Inc. All rights reserved.

81