Sun Frontier Fudosan Co., Ltd.

Financial Results for the First Quarter of
Fiscal Year Ending March 31, 2023
We are aiming to be the visionary company of theworld’s most loved by clients.

1) Overview of the 1Q Results for FY ending March 2023

1-122) Business Progress and Initiatives

13-213) Management Principle, ESG

22-284) Business Model

29-385) Medium-term Management Plan

39-42

6) Reference Materials

43-50

August 10, 2022

Securities Code : 8934

Overview of the 1Q Results of FY ending
March 2023
Led by Real Estate Revitalization Business. Strong start for the fiscal year under review.
(unit: million yen)

Results

Net Sales
Operating
ProfitOrdinary
ProfitProfit *ProfitmarginYear-on-year

Growthrate

Full-Year
Forecast

Progression
Rate

22,903--8,309-26.6%

84,000

27.3%

6,668

29.1%

-672

-9.2%

13,300

50.1%

6,690

29.2%

-587

-8.1%

12,800

52.3%

8,300

56.5%

4,690

20.4%

-111

-2.3%

*”Profit” represents profit attributable to owners of parent

Performance Highlights
1) Strong start from Replanning Business to drive performance inthe fiscal year under review•

2) Real Estate Service Business is steady, while
Hotel and Tourism Business is recovering•

In Replanning Business, the number of units sold was 10 (8 units year-onyear) as planned. Although both net sales and gross profit saw year-on-year

pandemic of COVID-19 in clients' point of view, and its performance grew indeclines due to the sale of three properties owned over the medium - toall areas of brokerage, management, rent guarantee, and rental conference

long-term in the previous year, the full-year earnings forecast has started

room. Double-digit growth in net sales (+15.9% year-on-year) and profit (+24.6% year-on-year)

well as planned.
•

Real Estate Service Business responded to changing needs through the•

Although central Tokyo office rents are on a moderate downward trend,With the lifting of social action restrictions, people's flow has returned, andsome of them have started to show signs of bottoming out, and the real

the performance of hotel operation in Hotel and Tourism Business has

estate market is booming. As properties with high added value, they can berecovered. As a result, losses have decreased compared to the previous

sold at high profit margin.

year.

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1

Consolidated Income Statement(Unit: million yen)

Net Sales

FY ended
Mar 2022
Apr-Jun
31,213

FY endingYear-on- Composition
Mar 2023
Ratio
year Change
Apr-Jun
22,903-26.6%
100.0%

Real Estate Revitalization Business

27,45018,582-32.3%

80.1%

Replanning Business

26,92418,062-32.9%

77.9%

Rental Buildings Business

526

519

-1.3%

2.2%

Real Estate Service Business

2,060

2,387

15.9%

10.3%

Hotel and Tourism Business

1,346

1,917

42.4%

8.3%

Other Business

469

306

-34.8%

1.3%

Adjustments

-114

-290

-

-

Gross Profit (Loss)

9,306

8,519

-8.5%

100.0%

Real Estate Revitalization Business

8,465

7,299

-13.8%

81.9%

Replanning Business

8,329

7,167

-14.0%

80.4%

136

132

-2.9%

1.5%

Real Estate Service Business

1,257

1,565

24.5%

17.6%

Hotel and Tourism Business

-393

-170

-

-

Rental Buildings and Sub-leases

Income Statement Points<Real Estate Revitalization Business>
High profit margin contributed significantly tothe start of fiscal year under review. Completed
sales of 10 units of RP properties as planned(including one in New York).
<Real Estate Service Business>
Responded to changing needs, solved problems
in clients' point of view, and made profits inaccumulation. Increased people's flow led to arecovery in Conference Room Rental Businessdemand.

Other Business

30

48

60.0%

0.5%

Adjustments
Selling, General and Administrative
Expenses
Operating Profit (Loss)

-53

-224

-

-

1,965

1,850

-5.9%

<Hotel and Tourism Business>

7,340

6,668

-9.2%

Non-operating Income

64

167

160.9%

Non-operating Expenses

127

145

14.2%

Ordinary Profit (Loss)

7,277

6,690

-8.1%

With the lifting of social action restrictions, occupancy
rate and unit prices started to rise due to increased
people's flow, reducing losses compared to theprevious year.

Profit

4,802

4,690

-2.3%

Ordinary Profit Margin

23.3%

29.2%

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⚫
⚫

2

Selling, general and administrative expenses decreased mainly due to decreases in salescommission, taxes and duties, etc.
Non-operating income, was mainly due to foreign exchange gains.

Consolidated Balance Sheet - Assets <Cash and deposits>

Increased 5.2 billion yen due to realization of cash mainly from sale of RP properties<Inventories>

Sales in RP properties exceeded those in purchase, resulting in a decrease of 6 billion yen<Non-current assets> Increased 200 million yen due to construction of hotel properties and capital investment(Unit: million yen)

FY 2021
As of End of
March 2021

FY 2022
As of End of
March 2022

FY 2023
As of End ofJune 2022

Increase/decrease(compared to the
End of March 2022)

110,785
21,50886,087110,92030,05377,340111,11135,327
71,243+191+5,274-6,096

71,34913,917822

63,424
13,516400

57,333
13,425485- 6,091-91+85

Non-current assets

3,189
16,7003,527
25,591

4,540
25,574+1,013-16

Property, Plant and Equipment

10,52818,79618,996

+200

701

572

581

+9

5,470

6,222

5,996

-226

127,485

136,512

136,686+174

Current assets
Cash and deposits
Inventories
Breakdown) RP
Hotel
Overseas, etc.
Other current assets

Intangible assets
Investments and Other assets

Total assets

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3

Consolidated Balance Sheet- Liabilities/Equity <Interest-bearing debt> Decreased 2.9 billion yen as repayments from the sale of properties exceededborrowings from purchase. Interest-bearing debt balance was 48 billion yen.

<Net assets>

Increased 3.6 billion yen mainly due to profit (4.6 billion yen) despite dividend
payment (-1.1 billion yen).

(Unit: million yen)

FY 2021
As of End of
March 2021

FY 2022
As of End of
March 2022

Changes of Equity Ratio
End of March
2021

End of March2022

End of June
2022

52.3%

52.2%

54.8%

FY 2023
As of End ofJune 2022

Increase/decrease(compared to the
End of March
2022)

Current liabilities

13,358

16,21013,547-2,662

Short-term borrowings, etc.

5,530

6,904

4,830

-2,074

Income taxes payable, etc.

901

3,528

1,948

-1,579Other Current liabilities

6,926

5,777

6,768

+991

Non-current liabilities

44,35445,84945,020-828Long-term borrowings and Bonds payable

41,991

44,16943,264-905

Other Non-current liabilities

2,363

1,680

1,756

+76

Total liabilities

57,71262,06058,568-3,491

Shareholders' equity

66,916

71,26074,679+3,419

Other

2,856

3,191

3,438

+246

Total Net assets

69,77374,452

78,117+3,665

Total Liabilities and Net assets

127,485

136,512

136,686+174

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4

Operation Results by Business Segment

Real Estate Revitalization Business(Replanning and Rental buildings)<Replanning Business>◼ Number of sales was 10 units, up 2 units from the same period of the(million yen)previous year (8). Sales and profit decreased compared to the previous fiscal
year when 3 properties owned over the medium- to long-term were sold.
30,000However, several properties with particularly high profit margin were
included and segment profit margin was pushed up.
◼ While average business period was 643 days (down 28 days year-on-year), weare focusing on leasing and working to shorten the operating period.
* In addition to the number of stocks at the end of FY listed below, there are 7
properties (9.85 billion yen) that have already been purchased by the end ofJune. Purchase (contract basis) for the fiscal year under review was 13.16 billion 20,000
yen.

(Unit: million yen)

FY ended
March 2022
April - June

FY endingMarch 2023
April - June

27,45018,582-32.3%

Replanning Business

26,92418,062-32.9%

Rental Building Business

526

519

-1.2%

Segment Profit (Note 1)

8,235

7,087

-13.9%

Replanning Business

8,104

6,955

-14.2%

130

132

+1.4%

Profit Margin

30.0%

38.1%

+8.1%pt

Replanning Business

30.1%

38.5%

+8.4%pt

Rental Building Business

24.8%

25.5%

+0.7%pt

Number of properties purchased

2 cases

3 cases+1 caseNumber of properties sold

8 cases

10 cases+2 cases48 cases (Note 2)

47 cases (Note 2)-1 caseNumber of stocks at the end of FY

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50%

27,45038.1%
30.0%

18,58240%

30%

Increase/decrease

Net Sales

Rental Building Business

Net Sales
Segment Profit
Profit Margin

520%
10,000

8,235

7,087
10%

0

0%
FY ended March 2022 FY ending March 2023
April - June
April - June
(Note 1) "Segment profit" is calculated by deducting specific costs of eachsegment, including interest expenses, sales commission andamortization of goodwill from gross profit.
(Note 2) Projects of land purchase and development are included.

Operation Results by Business Segment

Real Estate Service Business(Property Management, Building Maintenance, Sales Brokerage, Lease Brokerage, Rental Conference Room, Rent Guarantee, etc.)<Property Management/Building Maintenance>◼ Sales and profits increased in the PM business due to an increase in thenumber of entrusted buildings.
◼ BM business was flat in net sales and increased profits due to improved
profit margin.

(million yen)

3,000

<Brokerage>◼ Sales and profits increased in Sales Brokerage due to the steady conclusionof projects introduced by other divisions.
◼ Lease Brokerage sales increased and the profits were remained mostly
unchanged as leasing costs were incurred.
<Rental Conference Room>◼ Sales and profits increased as demand recovered and occupancy rate
improved.

FY endingMarch 2023
April - June

Increase/
Decrease

Net Sales

2,060

2,387

+15.9%

Segment Profit

1,252

1,561

+24.6%

Profit Margin

60.8%

65.4%

+4.6%pt(unit: million yen)

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100%

2,387
2,060

80%

65.4%

2,000

60.8%

1,561

<Rent Guarantee>◼ Sales and profits increased due to an increase in the number of newcontracts compared to the previous year.
FY ended
March 2022
April - June

Net Sales
Segment Profit
Profit Margin

60%

1,252
40%
1,000
20%

6

0

0%
FY ended March 2022 FY ending March 2023
April - June
April - JuneOperating Results by Business Segment

Hotel and Tourism Business (Hotel Development, Hotel Operation, etc.)<Hotel Development Business>

Net Sales◼ Sales decreased due to a reaction from sales of 43 HIYORI OCEAN(million yen)Segment Profit
Profit Margin

RESORT OKINAWA lots in the previous year. The sale of hotel
3,000

properties is scheduled in 2nd quarter or later.

30%<Hotel Operation Business>◼ Tourism demand is recovering. While the recovery in urban areas has

1,917

2,000

been slow, occupancy rate has improved at hotels in rural areas. The

20%

loss decreased compared to the previous year, despite the recording

1,346

of Hotel start-up expenses in Kyoto Shijo Kawaramachi.
FY endingMarch 2023
April - June

Increase/
Decrease

1,346

1,917

+42.4%

Hotel Development Business

604

0

-

Hotel Operation Business

742

1,917

+158.3%

-584

-252

-

Hotel Development Business

122

-30

-

Hotel Operation Business

-707

-222

-

-

-

-

Hotel Development Business

20.3%

-

-

Hotel Operation Business, etc.

-

-

-

(Unit: million yen)

Net Sales

Segment Profit

Profit Margin

FY ended
March 2022
April - June

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7

1,000

10%

0

0%

-252
-584
-1,000-10%
FY ended March 2022 FY ending March 2023
April - June
April - June

(Note 1) “Segment Profit” is calculated by deducting specific costs of each segment, includinginterest expenses, sales commission and amortization of goodwill from gross profit.

Operating Results by Business Segment

Other Business (Construction Business and Overseas Development Business, etc.)<Construction Business>(million yen)

◼ Profit increased due to improved performance of subsidiaries

600

that recorded losses in the previous fiscal year, despite lower

Net Sales
Segment Profit
Profit Margin30%

sales due to a decrease in interior finishing work.

469<Overseas Development Business>◼ Revenue increased due to condominium management

400

20%

revenue in Vietnam, but unrealized loss of inventory in

306

Indonesia (3.7 million yen) was recorded.

11.8%

FY ended
Mar 2022
April - June

FY ending
Mar 2023
April - June

Net Sales

469

306

-34.8%

Segment Profit

1536+134.5%(Unit: million yen)

Increase/
Decrease

200

10%

3.3%
15

36

0

Profit Margin

3.3%

11.8%

+8.5%pt

0%
FY ended March 2022
April - June

FY ending March 2023
April - June

(Note 1) "Segment Profit" means gross profit to interest expenses, salescommission calculated by deducting specific expenses such as goodwill
depreciation.

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8

Changes in Ordinary Profit over the Last Five Years
Strong sales in RP properties and growth in service business drove earnings ahead of schedule.
(million yen)

1Q

2Q

3Q

4Q

20,00016,127
15,00010,000Initialforecast
10,00010,755Initialforecast
11,80012,813

Initialforecast
14,000Initial forecast

2,830

1,067

2,255

3,002

1,284

Initialforecast
11,500Initialforecast
6,500

3,997

5,000

12,800

232
2,698

3,561
1,853

12,215

7,524

2,008

962
1,178

9,758
3,325

3,432

7,277

6,690

22/3
22/3期

23/3
(Forecast)
23/3期

4,747
2,016

1,952

0
18/3
18/3期

19/3
19/3期

20/3
20/3期

21/3
21/3期

Despite a year-on-year decline, steady progress toward achieving full-year profit growth
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9

Business Environment Awareness1. Global economy’s increasing concern is a slowdown due to inflation and interest rate hikes in various countries anda lockdown in China.
◆ The International Monetary Fund (IMF) cut its forecast for global economic growth to 3.2%, raising concerns over a
sharp economic slowdown.
◆ In May and July, the U.S. Federal Reserve Board raised interest rates by a total of 1.5% to curb inflation, butconcerns over economic slowdown are growing.
2. In Japan monetary easing amid rising prices and depreciation of yen has continued and the economy is recovering
within coexisting with COVID-19.
◆ While each country has raised interest rates to control inflation, the Bank of Japan has continued to ease monetary
policy and interest rate differentials cause the yen to depreciate.
◆ Despite the current 7th wave of COVID-19 infections, efforts are made to recover social and economic activities
without restricting activities.
3. In the central Tokyo office buildings market, while hybrid working styles are partly established, needs arediversifying.
◆ Average vacancy rate of central Tokyo offices remains unchanged. Although the decrease in rents continues slowly,
there are signs of recovery of the number of workers at office.
◆ Despite strong desire to invest in real estate partly due to the impact of the yen's depreciation, attention should be
paid to the impact of interest rate hikes in various countries.
4. Despite concerns about the seventh wave of COVID-19, hotel and tourism market is recovering with no restrictions
on activity.
◆ Although nationwide travel support was postponed due to the impact of the 7th wave, travel demand is recovering.
◆ Foreign investors are eager to invest in hotels partly due to the yen's depreciation, while caution is required tointerest rate hikes in various countries.
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10

Progress against Forecast for the Fiscal Year ending
March 31, 2023
Steady progress in Real Estate Revitalization Business and Real Estate Service Business.
In the Hotel and Tourism Business, hotel operation is recovering. Hotel sales planned in 2Q or later.
(Unit: million yen)

FY ending March 2023
Earnings Forecast

FY ending March 2023
1Q Results

Progress rate

Net sales

84,00022,90327.3%(1) Real Estate Revitalization Business

56,70018,58254,7002,000

18,062519

Adjustments

7,300
18,600
1,900
-500

2,387
1,917
306
-290

32.8%
33.0%
26.0%
32.7%
10.3%
16.1%
-

Gross profit

22,000

8,519

38.7%

(1) Real Estate Revitalization Business

16,0007,299

15,500
500

7,167
132

(2) Real Estate Service Business(3) Hotel and Tourism Business(4) Others
Adjustments

3,900
1,800
300

1,565
-170
48

0

-224

45.6%
46.2%
26.4%
40.1%
16.0%
-

Selling General and Administrative Expenses

8,700

1,850

21.3%

Operating profit

13,300

6,668

50.1%

Ordinary profit

12,800

6,690

52.3%

8,300

4,690

56.5%

170.67 yen

96.45 yen

56.5%

Replanning
Rental buildings(2) Real Estate Service Business(3) Hotel and Tourism Business(4) Others

Replanning
Rental buildings

ProfitEPS (Earnings per share)
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11

Progress in Purchasing Properties
As of the end of 1Q, RP properties purchase was 13.1 billion yen on a contractual basis.
Strengthening purchase activities to reach the level before the pandemic of COVID-19.
(million yen)

40,00036,82235,75336,46630,00025,18020,00015,036

13,160 *10,000

18/3
18/3期

19/3
19/3期

20/3
20/3期

21/3
21/3期

22/3
22/3期

1Q 23/3
23/3期1Q* Including 9.85 billion yen for contracted properties

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12

Business Progress and Initiatives

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13

Replanning Business, Examples of Initiatives (1)Replanning buildings in excess of FAR to create buildings with legal compliance and profitability
BeforeAfter①
New evacuation
balcony

Conversion②
1F parking spaceconverted to office

Parking lot on the first floor that was used
as a warehouse

Increase profitability of buildings by converting
to offices

Although the parking lot on the 1st floor was used as a warehouse, which exceeded the floor area ratio, by installing new
evacuation balconies on the 2nd to 5th floors excess of floor area ratio was corrected. Improved profitability of thebuilding by converting parking lots on the first floor into office space.

Created a high-profit building with full occupancy by leasing tenants on the first to ninth floors thathave been replanned.
6 out of 8 tenants use rent guarantee service.

[Building appearance (after replanning)]
Nihonbashitomizawacho, Chuo-ku, Tokyo
One building profit building
Deck roof, steel-framed reinforced concrete, 9stories high with 1 basement

Clients (repeat customers) of PM (management) purchase theproperty as a profitable property.
Even after the sale, we are entrusted with PM (management) by ourclients (repeat customers).

Purchase

RP

Management

Leasing

Sale

Warranty

We demonstrate in-house strengths in procurement, RP, leasing, sales, and management.

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14

Replanning Business, Examples of Initiatives (2)Converted unused space and sold to overseas investors as high-profit investment real estate
After

BeforeConversion
Parking lot on the first floor

Created value in the unused basement by connecting the 1st floor and the
1st basement floor with stairs.

Conversion
Warehouse on the 1st basement floor, which
had no elevator and was unused.

[Building appearance (after replanning)]
Hatchobori, Chuo-ku, Tokyo
One building profit building
Deck roof, steel-framed reinforced concrete, 10
stories high with 1 basement

Converted the parking lot on the 1st
floor and the basement storage space
into a maisonette-type office by utilizing
the surplus volume.
→ Increaseed floor space for rent andimproved profitability.

A client, a repeat Taiwanese investor, who
was unable to come to Japan due to thepandemic of COVID-19, made a purchasethrough online viewing etc. PM(management) after sale is also entrusted.

Demonstrate RP's ability to create added value, sell while foreign investors are unable to visit Japan, also entrusted with management
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15

Specified Joint Real Estate Ventures

Promote Sales of Small-lot Real Estate Property
Sales of a nursery school, a medical and educational mall that contribute to the lives of
local communities as small-lot products.
Compass Magome

Compass Ueno

Ota Ward New Medical and Educational Mall

A Newly built licensed nursery school, Ueno,Tokyo

2-28-4 Kitamagome, Ota-ku, Tokyo
2-minute walk from Magome Station on Toei Subway
Asakusa Line
3-story building with a total floor area of 1,274.89
square meters

Fourth period on sale(persons)
250

A new mall with the theme of “medical care andeducation”, in which after-school childcare, English
conversation school, etc. enter as tenants, centeredon a drugstore with a large medical corporation and adispensing pharmacy that has strengths in
hemodialysis.

3-45 Taito, Taito-ku, Tokyo
2-minute walk from Naka-okachimachi Station on
Tokyo Metro Hibiya Line.
6-minute walk from Okachimachi Station on JR
Yamanote and Keihin-Tohoku Lines
4-story building with a total floor area of 546.77
square meters

Sales started 6/13
First period on sale

A newly built licensed nursery school that is in linewith SDGs and ESG investments, including
eliminating the problems of children waiting foradmission and promoting women’s activities

Number of Investors in Small-Lot Real Estate Property

200

Sales network (tax accountants and financial
institutions)

167

150
100
50

Over 180 companies

66
29

0

FY
2020
20/3期

FY
2021
21/3期

FY
2022
22/3期

FY 2023(Forecast)
23/3期

Increasing number of clients are investing in small-lot products to meet real estate investment
needs
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16

Expanding, aiming to reach over 200
companies

Real Estate Service Business Continues to Expand
Its Customer Base
Real Estate Service Business, which specializes in the central Tokyo area, increases clientsand strengthens its operating base.
Number of Entrusted Buildings in Property Management

（棟）

500
(buildings)
400
300[Property Management entrusted property
distribution]

333

362

372

373

392

397

421

440

276
Chuoku200
100
Distri
ct

0
15/3期
16/3期
17/3期
18/3期
19/3期
FY
2015 FY
2016 FY
2017 FY
2018 FY
2019 FY20/3期
2020

21/3期
23/3期1Q
FY
2021 FY22/3期
2022 Q1
FY 2023P(cases)（件）【Rent Guarantee Percentage of new contracts * by area】

Changes in the Number of Rent Guarantee Contracts

4,000
3,000

2,035
2,000

1,290

2,370

2,658

2,989

3,099

3,261

3,345

OthersIn Tokyo9%

4%

Chiyoda-ku
20%

16%

1,642

Chuo-ku
17%

Shinjuku-ku
8%
Shibuya-ku Minato-ku
14%
12%

0
16/3期

17/3期

18/3期

■ 5 wards of central
Tokyo 71%

Other 23 wards

1,000

15/3期

Entrusted properties of the Company

19/3期

20/3期

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21/3期

22/3期 23/3期1Q

17■ Other Tokyo 20%
Total of 91% in Tokyo* As of March 31, 2022 : 652 new contracts

Continue High Profitability in Office Building Business1Q includes several properties with particularly high profit margin, driving
performance as highly a profitable business with high added value.

● Replanning Business maintains high profit margin(million yen)

38.5%

70,00032.4%

60,000
27.8%

28.2%

35.0%

31.2%

30.0%

50,000

29.2%

30.0%

24.3%

22.1%

25.0%

40,000
売上高
Net sales
Segment profit
セグメント利益
Profit margin
セグメント利益率

20.0%
30,00018,06320,000

0
‘16/3
16/3期

‘17/3
17/3期

‘18/3
18/3期

‘19/3
19/3期

● Real Estate Service Business continues to grow steadily

Rent
guarantee
滞納賃料保証

‘21/3
21/3期

‘22/3
22/3期

1Q ‘23/3
1Q
23/3期

Sales Brokerage and Conference Room Rental Business made a goodstart, contributing to earnings with a high progress rate.

3,804

4,000
3,206

BM
PM
Leasing
賃貸仲介
brokerage
Sales
売買仲介
brokerage

‘20/3
20/3期

(million yen)

3,000

5.0%
0.0%

’15/3
15/3期

Rental conference
貸会議室
room

15.0%
10.0%

6,955

10,000

Segment profit

40.0%

2,821
2,330

2,491

3,408

2,829

2,508

1,561

2,000
1,000
0
’15/3
15/3期

‘16/3
16/3期

‘17/3
17/3期

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

‘18/3
18/3期

18

‘19/3
19/3期

‘20/3
20/3期

‘21/3
21/3期

‘22/3
22/3期

1Q ‘23/3
23/3期

Hotel and Tourism BusinessShijo Kawaramachi Onsen Hotel OpenA “new Japanese Inn” with two different styles has opened in Kyoto’s largest downtown area
Upon opening on June 20, media
announcement and private
viewing were implemented.
A hotel where you can actively enjoy your trip as a sitefor Kyoto sightseeing, with 102 guest rooms equippedwith Kyoto-like Japanese-style relaxing spaces

A hotel with 32 luxurious guest rooms facing theHigashiyama side. All rooms are equipped withprivate hot spring an open-air bath

Many articles and programs werebroadcast in newspapers, TV, and news
agencies such as Nikkei Shimbun, Asahi
Television, and Kyodo News.

View from the rooftop terrace overlooking the Higashiyama Mountain Range

Appearance
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

19

DX Initiatives
Promote DX in business models of various businesses and improvevalue creation capabilities
Started collaboration with estie Co., Ltd. to improve property performance

Unmanned Aerial Vehicles (Drones) conduct exterior wall surveys

Started to record sales as new business and entered growth phase
Started linking various office business data with external corporation data
Data linkage
startedStarted construction of a system to strengthen digital contacts for Hotel Business

External
corporation
database

Started to begin customer
relationship management,
which each hotelcooperates to makeproposals to clients.

A project is underway to maximize lifetime value by making proposals
in a timely manner in line with the phases of tenant companies.

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20

Branding and Marketing
Instill the philosophy, develop human resources, and promote improvementof brand valueMarketing Training Program
started

Vision Project
Organize the Sun Frontier Philosophy
systematically and implement
initiatives to maintain and evolve
our philosophy management

Credo

Started a training program for the first 30
employees based on the idea that “marketingis management”.

MissionVisionValue

Production and distribution of theCompany blog "FRONTIER JOURNEY"
startedSocial Media"Sun Frontier Communication"
distribution started

Distribute weekly coverage articles focusing on "people"
Distribute to approximately 100,000 affiliated companies

On Facebook/Twitter/Instagram

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Management Principle, ESG

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22

Philosophy
Systematize and further promote the Sun Frontier Philosophy

Top-level concept
Credo (Company policy)

MissionVisionValue

What for?
How youwant to be

Course of
ActionCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Altruism
We believe in helping others, as many as we can,throughout our lives.
Our mission is to co-create a rich and sustainable
society as we look after every employee and pursue
the happiness of both mind and matter.
Our vision is to become the most appreciatedvisionary company that fully utilizes limited resources
and continues the challenges to create new values.
1. Work For Your colleagues

5. Be GENBA-Centric

2. Stay Humble, Thankful, And
Respectful

6. Always Work Creatively

3. Do The Right Thing
4. Absolute Proactiveness23

7. Be Open-Minded Cheerful and
WonderfulBusiness area
Contribute to solving social issues through real estateutilization, the core businessRealization of a Sustainable Society

Environmental
Protection

Office Business

Human Resource
Development

Hotel Business

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Shima Yume Project

24

Regional
Revitalization

Overseas BusinessSustainability
Sustainability Vision
We will contribute to the realization of a sustainable society through businessactivities while respecting the heart of altruism, the Company policy.

Materiality (Important Issues)
Important Issues

VisionPolicyIncrease environmental■ Extend the life and health of real estate
Environmental sustainability by significantly■ Energy conservation and reduction of environmental
reducing waste and greenhouse gas
impact by Real Estate Revitalization Businessprotection
emissions, as a frontier of Real■ Expanded use of renewable energy
Estate Revitalization Business

Regional
revitalization■ Create buildings, offices, and spaces with “jobCreate sustainable growth ofsatisfaction” and “creativity” that contribute toregional economies through offices,
economic growth
hotels, and tourism, as a frontier■ Prevent and mitigate disaster through regional
for sustainable regional
cooperation
revitalization■ Solve regional issues through community activationand creation

Human
resource
development

Spread the concept of "altruism"that is indispensable for realizing asustainable society, as a frontier ofphilosophy management■Create workplaces with job satisfaction, creativity andgrowth opportunities■ Respect and utilize diversity■ Disseminate information on philosophy
management to foster next-generation managers

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25

Mainly relevant SDGs

Agreeing to TCFD Recommendations
Support for the recommendations of the TCFD (Task Force on Climaterelated Financial Disclosures) and participation in the TCFD Consortium
A project team set up by the Financial Stability Board (FSB) in 2015 at therequest of the G20 to examine how climate-related information
disclosure and responses from financial institutions can be implemented.
Under the revision of the TSE Corporate Governance Code announced inJune 2021, companies listed on the prime market are required to disclose
climate change-related information based on the TCFD disclosure
standards.
The Group has expressed its support for the preparation of disclosure
based on the TCFD recommendations from the Annual Securities Report
to be submitted in June 2023.

Established in 2019 as a forum for discussions on effective corporate
information disclosure and initiatives to link disclosed information toappropriate investment decisions in financial institutions etc.. Companies
and institutions that support TCFD recommendations promote initiatives.
Promote information collection and utilization through participation in
the TCFD Consortium and promote voluntary and proactive information
disclosure.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Transition to an Audit & Supervisory
Committee System
Improve management transparency and fairness by effectively promoting delegation of
authority, enabling flexible and prompt management decisions, and strengthening Boardof Directors' advisory and supervisory functions<Board of Directors System>
Board of Directors*

Full-time

Full-time Full-time

Audit & Supervisory Committee

Full-time

Full-time

Full-time

OutsideDelegation of authority, advice and supervision
Full-time Boardof Directors

OutsideFull-time

OutsideOutsideFull-time*Ratio of outside directors: 36.4%, 1 female out of 11 people

Full-time

OutsideOutsideDirector who is an Audit & Supervisory
Committee Member: 1
Executive Officers: 6 (including 1 female)Observers

Full-time
Directors: 6

Nomination and Compensation Committee (optional)<Outside Directors>
Name

Officers

CareerSkillsNomination /remuneration
MemberHas extensive knowledge and experience in a wide range of fields including
corporate compliance and CSR. Served as an expert member of various
government offices and a secretary of economic organizations and ahs audit
experience at a major audit corporation.

▶ Accounting and finance▶ Legal, compliance and risk management▶ IT / Digital▶ CSR / ESG / Sustainability

Worked in various divisions of the petroleum business at Mitsubishi
Corporation and worked in the United States and India and consistently
involved in international business in the energy sector. Also has experience incorporate management at Lithium Energy Japan Co., Ltd. and KH Neochem Co.,Ltd..

▶ Corporate management▶ M&A▶ Overseas

Is qualified as a Certified Public Accountant in the United States. Has a wealthof experience as a corporate manager and in business outside Japan and broad
knowledge in the financial industry and the sustainability field.

▶ Corporate management▶ Accounting and finance▶ CSR / ESG / Sustainability▶ Overseas

Worked as the head of the legal department at the Panasonic Group, as aboard member and inspector at the Japan Pension Service, and as an outside
director at a listed company. Also has wide-ranging knowledge in promoting
the active participation of women.

▶ Legal, compliance and risk management▶ CSR / ESG / Sustainability▶ M&A▶ Overseas

Kazutaka
Okubo

Director who is not an
Audit & Supervisory
Commitee Member

KeiichiAsai

Director who is not an
Audit & Supervisory
Commitee Member-

Hidetaka
TanakaDirector who is an
Audit & Supervisory
Commitee Member

Nomination /remuneration
MemberTsuneko
MurataDirector who is an
Audit & Supervisory
Commitee Member-

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

ESG Data
Environment

SocialGovernance

As of June 30, 2022

Actual numberof RP buildings

Carbon Offset
Cumulative total
2,057 tons

As of April 1, 2022

Ratio of male and female employees inmanagerial positions(people)400

386 people

300

242
people62.7%
144people
37.3%

200

Total
449 buildings
Establishment of
SF Ocean Power
Generation Co., Ltd.

Research and study
for the realization of
new-energy
infrastructure

RE100
12 buildings
1,746 tons

(persons)

100
0

100

50

0

Seven
people8.5%

Transition to an
Audit & Supervisory
Committee system

Ratio of outside
directors
1/3 or more

Board of Directors
Audit & Supervisory
Committee

External
36.4%

Full-time
63.6%

Management
管理職

Employee
社員

Human resource
development

Utilization rate 100%

Training at least 10%of set working hours

Female Directors
1 out of 11

11.5
%

%
retur…

RP construction
8 buildings
183 tons

82 people
75
people91.5％

Childcare leave
Mori no Denki
7 buildings
128 tons■ Male ■ Female

As of June 30, 2022

Nomination andremuneration committee(optional)
2 out of 4 Outside Directors

Full-time Full-time

Outside Outside

From childcare leave
93.3% return to work

Ensuring transparency
and soundness

・ RE100 ・ ・ ・ ・ Carbon offset using J-credit derived from renewable energy. Initiatives to become the first in Japan to introduce this system on each floor. Achieve 0 Co2 emissions per tenant company.
・ "Mori no Denki" ・ ・ ・ Carbon offset using J-credit derived from forests. We can feel that we are supporting forests side-by-side and moving into the building will contribute to the environment.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

28

Business Model

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29

Strategy in Office Business
Provide services to solve client’s every problem, mainly in the five cities of central Tokyo.

RP
12

14

11

*As of the end of June 2022

Leasing
Brokerage

A community-based network ten branches

PM

More than 80% of the 440 entrusted
properties are located in the five cities ofcentral Tokyo. *As of the end of June 2022

BM

Of the 205 buildings under comprehensive
management, 85% are located in the five cities
of central Tokyo. *As of the end of June 2022

Rent
Guarantee

Of the 652 new contracts signed, 90% are in thefive cities of central Tokyo.

20
70

Of the total number of RPs over 449
properties, 80% are located in the five cities
of central Tokyo and adjacent cities.

130

41

46
11

Ginza, Kanda, Nihonbashi, Kodemmacho, Kojimachi,
Shinjuku, Shibuya,Gotanda,Hamamatsucho, Yokohama*Results for FY 2022

7

Rental18 of the 19 sites are located in the five cities
Conference of central Tokyo.
Room*As of the end of June 2022/One site in Yokohama* The numbers on the columns in the map are the cumulative number of RPs.
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Strengths in Office Business
Solve various problems by in-house manufacturing from purchase to development,
occupancy, sales and support, and by understanding the client’s intentions in detail.

1. Real Estate Utilization
To be a partner to solve difficulties from our client’s point of view

Fundraising Consulting

Asset consulting

Rent guarantee

Construction planning

Property management

Leasing brokerage

Sales brokerage

Property
purchase

2. Real Estate
Revitalization
Building
development ofvalue chain

Property
sales

Clients
1. Real estate utilization: Get close to clients at the site and solve problems. Capture the source of added value
from clients’ voices.
2. Real estate revitalization: Reflect our expertise to increase asset value and the needs we have identified inrevitalized buildings to increase their value and sell them.
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Business Model for Replanning Business
Renovate office buildings in need of large-scale repairs due to declining occupancy rates
into high-value-added real estate that is sought after by society through renovation fromthe “clients’ point of view.”

Low-occupancy and lowprofit buildings
・ Aging degradation
・ Earthquake
resistance anxiety
・ Violation of legal
compliance, etc.

Creativity

Leasing power

Design offices in clients'
point of view and carryout renovation and repair
work in pursuit of safety
and security.

A community-based branch
network keep the building inhigh occupancy and becomesthe closest contact point for
any kind of consultation.

Buying power

Rent guarantee

Purchase of lowoccupancy and nonoccupancy buildings
using various routes andmethods.

Encourage tenants tomove into the building andguarantee stable income
for the owner in the eventof rent arrears.

Clients =Building owners

Sales force

Management

Stay close to clients of asset
holders and meet needs
with high levels of difficulty
beyond expectation.

Provide high-quality
services, maintain highoccupancy rate, andstabilize building
revenues.

・ Asset management, inheritancemeasures, etc.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

High-occupancy andhigh-profit buildingssought by owners
・ Full occupancy
・ Improve
income andexpenditure
・ Stable income

Replanning BusinessAccelerate the Growth of Tenant Companies
Set-up offices focusing on the clients' point of view accelerate business growth.
Set-up office

An office that differs from the interior of a normal rental office in that it has a
reception area, reception room, and other facilities, as well as highly designoriented interior construction in the office area, with some facilities and fixtures
already installed.

Set-up office
Four benefits

Save laborNo need tasks such as devising
office interiors or selecting interior
decorators, greatly reducing thetime and effort of managers.

Reducemanagement
burdenImproveproductivity
Office interiors with a high level ofdesign, with a focus on creativity,
functionality, and a variety of usage
scenarios, improve the recruitment of
human resources, employee
motivation, and office productivity.

Immediately
available
after
relocation

Client =Tenant company

Improve
recruitment,
motivation, andproductivity

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Shorten the
periodReducefinancialburden33

No need for any work other thanwiring and moving, significantly
shortening the relocation period
and increasing the net available
period by shortening theconstruction period for interior
finishing and restoration.

ReduceburdenSignificantly reduced costs foroffice interiors and other costs.
Tenants do not have to accountfor interior decoration assets.

Replanning Business

Create both Customer Value and Social ValueContribute to the resolution of social issues through contributions to our clients' businesses.
Contribute to the business growth ofbuilding owners and tenant companies
through Replanning Business.

Comparison of resource input over 50 years(kg / ㎡)

3,991

7,000

40.9% ↓

4,000

Comparison of CO ₂ emissions over 50 years(t-CO ₂)

6,399=

19.1% ↓

Reduce the waste of non-reproducible
resources and contribute to the prosperityof humankind, plants and animals on theearth.

3,000

2,357

2,000

5,179

1,000

5,000

0
Rebuilding
建替
New bldg
新築

Clients’
value

6,000

Renovation
改修

Rebuilding
建替

Renovation
改修

Repair
修繕

Comparison of waste generation over 50 years(kg / ㎡)

4,000

3,000

801

49.3% ↓

800

2,000
600

406

400

Economic
value

Social
value

1,000

200
0
Rebuilding
New bldg

新築

建替

Rebuilding

建替

0

Renovation

改修

RepairRenovation

修繕

改修

Demolition

解体

Standard
標準
New新築
bldg
Maintenance

維持管理

Renovation
改修

Repair
修繕 Renovation改修
Disposal
Energy

廃棄エネルギー<Assumptions and rationale> Assuming a 30-year-old office building of approximately 3,000 square meters, the environmental contribution over a 50-year period (the service life of SRC office buildings) was
estimated based on the Architectural Institute of Japan's LCA Tool (*).
・ Rebuilding: “In the case of rebuilding every 35 years” ・ Renovation: "Regeneration without destroying old buildings (long-life buildings)" ・ Standard: "Assuming a 30-year-old unrenovated building"*Architectural I "LCA Tool for Buildings Ver5.0 - Evaluation Tool for Global Warming, Resource Consumption and Waste Management”, estimated with the cooperation of Engineering Research Institute of Japan.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Business Models for Hotel Business Growth
Increase added value by developing and acquiring some properties in addition to operating revenues, and aim for growth throughsynergies with sales revenues.
<Hotel Business Model Case>

Land・ Hotel development
model case

Land

Management

Sell

Purchase

Owner

Management

Development Construction

Company

Company

Sun Frontier
Hotel Management

Sun Frontier
Hotel Management

Hotel name and location

NumberAcquisition and openingof rooms

StatusSpring Sunny H Nagoya Tokoname Station

194

2016.4

AcquiredOwn

4 Sky Heart Hotels (excluding Shimonoseki)564

2016.12AcquiredLending and leasing

Hiyori Hotel Maihama

80

2017.4

Newly constructed

Sold leaseback

Sado Resort Hotel Azuma

57

2018.4

Acquired

Own

Tabino Hotel Hida Takayama

80

2018.5

Newly constructed

Own (leased)

Sky Heart Hotel Shimonoseki

105

2018.6

Acquired

Own

Tabino Hotel Sado111

2018.7

Newly constructed

Lending and leasing

Hiyori Hotel Osaka Namba Station

224

2019.5

Newly constructed

Lending and leasing

Courtyard by Marriot Osaka Honmachi

193

2019.1

Newly constructed

Lending and leasing

Hiyori Hotel Tokyo Ginza EAST

135

2019.12

Newly constructed

Own

Tabino Hotel Kurashiki Mizushima

155

2020.2

Newly constructed

Lending and leasing

Tabino Hotel Kashima

194

2020.4

Newly constructed

Own (leased)

HIYORI Ocean Resort Okinawa

203

2021.2

Newly constructed

Sold leaseback*Hotel Osado

74

2021.4

Acquired

Own

HIYORI Chapter Kyoto

2032021.6

Newly constructed

Own (leased)

Tabi no Hotel Lit Miyakojima

111

2021.6

Newly constructed

Own

Tabi no Hotel Lit Matsumoto

176

2021.7

Newly constructed

Lending and leasing

Sora Niwa Terrace Kyoto / Bettei Kamogawa

1342022.6

Newly constructed

Own

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Sell

Purchase

Company

Lease
contract

Owner

Sun Frontier
Hotel Management(room)
3,000

Number of Operating Hotel Rooms

2,859

2,993

2,295

2,500

1,898

2,000

1,191

1,500
1,000

Company
Sun Frontier
Hotel Management

758

838

17/3期
17/3

18/3期
18/3

500
0
19/3期
19/3

20/3期
20/3

21/3期
21/3

22/3期
22/3

23/3期1Q
1Q 23/3

In the future, we will focus on the development of the Tabi-no-Hotel Series
and small luxury hotels.
Tabi no Hotel Series

Tabi no Hotel Lit Miyakojima

35

Small Luxury Hotel

Tabino Hotel Lit Matsumoto Sora Niwa Terrace Kyoto / Bettei Kamogawa

Hotel and Tourism Business

Focus on Creating Enthusiastic Fans
Continue efforts to create enthusiastic fans by creating services that exceed expectations fromthe clients’ point of view.
Brand development

Luxury Class
Shijo Kawaramachi Onsen Bettei
Kamogawa
HIYORI OCEAN RESORT OKINAWA

Sado (Chigusa)
Sado (Aikawa Oura)

Upper Class

Upper Middle Class

Sado (Aikawa Kabuse)

Kasugazaki Onsen Hotel Osado

HIYORI Hotel Tokyo Ginza East

Sado Resort Hotel AZUMAHIYORI Hotel Maihama

HIYORI Chapter Kyoto

HIYORI Hotel HIYORI Hotel Osaka
Namba Ekimae

Shijo Kawaramachi Onsen Soraniwa
Terrace Kyoto

Tabi no Hotel Lit Matsumoto

COURTYARD BY MARRIOTT Osaka
HonmachiTabi no Hotel Lit Miyakojima

Matsumoto
Onna,
Okinawa

Kyoto Shijo

MiyakoIslandTakayama

Kashima
Maihama

Kyoto Nijo

Spring Sunny H Nagoya Tokoname
EkimaeNaritaShimonoseki

Koiwa
Tokoname

HakataKurashiki
Mizushima

Osaka
Honmachi

Ginza
Kawasaki

Osaka Namba

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36

Economy Class

Budget ClassDONDEN Highland Lodge Natural Resort
Sado

SKY HEART Hotel Narita

Tabino Hotel Sado

SKY HEART Hotel Koiwa

Tabino Hotel Hida-Takayama

SKY HEART Hotel Kawasaki

Tabino Hotel Kashima

SKY HEART Hotel Hakata

Tabino Hotel Kurashiki Mizushima

SKY HEART Hotel Shimonoseki

Business Model of Overseas BusinessContributing to the development of local communities by creating client's joy andhappiness through the creation of new businesses.
A total business that includes acquisition of land, development and construction, delivery after completion, and management and mediation.

Acquireland

Development
Construction

Completion
DeliveryManageUrban
Develop
ment

Contribute to future performance through systematic andcontinuous development efforts
China
Hanoi

Land
acquisition

Development
Land
acquisition

Laos

Completiondelivery
Development

Land
acquisition

Hai PhongHue

ThailandCompletiondeliveryCambodia

Development

CompletiondeliveryVietnamHo Chi Minh

Rooted in the local community in Vietnam, we work together with local partners to ensure high construction quality,a safe, organized, and beautiful construction site.

Next project in progress!
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Da Nang City
Hoi An37

Regional Revitalization Business Dream Project
SADO OUTDOOR BASE

<We will energize Sado Island through tourism!>

Sado Outdoor Base

When rural areas are energized, so Japan as a whole will be. As the number of visitors to Japan rapidly
increases, spurred by fascination (culture, history, nature, food, hot spring, hospitality and others) thatJapan is proud of, we will take on the challenge of regional revitalization projects that focus on theattractiveness and features unique to regions, in particular the regions that possess the “Wonderfulness ofJapan.” With the addition of Osado in April 2021 and the Sado Outdoor Base in December 2021, the area
will be further revitalized.

・ Tap room

Sun Frontier Sado Inc.
Hotel Business
Tabino Hotel Sado

・ CafeTransportation Infrastructure
Project

・ Item rental

Tourism and Travel
Business

Okesa Kanko Taxi

Happy Sado Travel

・ Rental bicycles

Web Advertising
Business
Sado Biyori

Kigaruni Rent a Car

Hotel AZUMA

Hotel Osado

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Vacation Rental Le Blue

Sado SAWANE

38

DONDEN Highland Lodge

Sado Outdoor Base

Video "The Sea of Clouds from the
DONDEN Highland Lodge"

Video "Adventure Island SADO"

Medium-term Management Plan

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

Basic Policy and Growth Strategies in Medium-termManagement Plan
Basic Policy
Providing “a place where people gather and communicate with each other, andcreate social development and happiness for people"

Growth strategy
OfficeDeepen and expand the Office Building Business

Hotel

Create services that go beyond satisfaction and excitementwith a sharp concept

Offshore

Expand housing-related business in Vietnam
Invest in peripheral businesses to expand the current
business and invest in start-ups in growth fields

M&A

Key Points

ESG

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Digital40

Cash flow

MarketingMedium-term Management PlanFY ending March 2023
First quarter Result(100 million yen)

1,200
1,000

Net Sales

Ordinary Profit

FY ending March 2023
Forecast

FY ending March 2025
TargetNet sales

22.9 billion yen

84 billion yen

100 billion yen

Ordinary profit

6.6 billion yen

12.8 billion yen

20 billion yen

Net profit

4.6 billion yen

8.3 billion yen

14 billion yen

Ordinary profit ratio

29.2%

15.2%

20%

Equity ratio

54.8%

50% level

50% level-

10% or more

10% or more

ROE

1,000

Net
ProfitProfit

840
800
600

732

712
596

533

400
200
0

128

FY 2019
19/3

161
88

200
107

FY 2020
20/3

122

75 44
FY 2021
21/3

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

FY 2022
22/3

41

74

128

83

FY 2023
23/3 (Forecast)140

FY 2025
25/3 (Forecast)Medium-term Investment Plan (FY ended March 2022 – FY ending March 2025)
Overseas Business

Hotel Business

Office Business
Balance at the end of
March 2021

72.8 billion yen

Balance at the end of
March 2021

21.8 billion yen

Balance at the end of
March 2021

0.6 billion yen

Investment amount

200 billion yen

Investment amount

7 billion yen

Investment amount

8 billion yen

Amount collected

182.8 billion yen

Amount collected

5.8 billion yen

Amount collected

2.5 billion yen

Balance at the end of
March 2025

23 billion yen

Balance at the end of
March 2025

6.1 billion yen

Balance at the end of
March 2025

90 billion yen

Plan procurement and development to achieve business growth while
recovering investments at a constant turnover rate.
Refocus on purchasing properties while holding back during the
confusion caused by the pandemic of COVID-19.
Make sound investments in short-term, medium- to long-term, andnew construction development.

Complete the hotels under construction. Aim to achieve
profitability in operating existing hotels. Collect funds
through the sale of land and buildings, operating themeffectively.
Planned hotel completed. Sell, collect, and reinvest.

Continuously and systematically invest in
condominium development projects for the future.
Land acquisition procedure is in progress for the
next development projects.

Digitalization 3 billion yen
Continue to actively invest in data-driven management

M&A 5 billion yen
Systematically invest in peripheral businesses and growth areas to expand existing businesses

Building databases
Developing drone image
analysis AI

Diversification and customer
expansion to create businesssynergies

Generate free cash flow
Ensuring positive free cash flow through systematic investment and recovery
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42

Reference Materials

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

43

Trends in Office Vacancy Rates and Rents
In Five Cities of Central Tokyo(%)
Five cities average
rent(yen/tsubo)

Five cities
average vacancy
rate (%)

Average rent as of June
2022

Peak average rent
August 2008
22,901 yen

20,273 yen(down 46 yen MoM)
Average vacancy rate in June
2022

6.39%
(up 0.02%pt MoM)
Peak vacancy rate
June 2012
Vacancy rate: 9.43%
Peak vacancy
rateAugust 2003
Vacancy rate:
8.57%
Bottom of average
rent
October 2004
17,526 yen

Bottom of vacancy
rate
November 2007
Vacancy rate:
2.49%

Bottom of average
rent
December 201316,207 yen

Peak average rent
July 2020
23,014 yen

Bottom of vacancy rate
February 2020
Vacancy rate: 1.49%* Source: Compiled by the Company based on Miki Shoji's "Office Report.”
Office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered.
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

44

(Yen)

Long-term Trends
in Office Vacancy Rate and Rent

(Yen)

(％)

50,00045,000

Average rent
平均賃料
(L axis)44,193
8.08

9.01

Vacancy rate
空室率
(R axis)8.12

40,000

Average vacancy rate inJune 2022

10

6.39%

9

Average rent as of June
2022

8

20,273 yen

35,0007

6.33 6.39
30,0006

25,0005

22,18620,00020,273
4

17,577

16,2073.77
15,00021,999

3

3.17
2.65

10,000

2

1.79
1.55

5,000

1

0.39
0

0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Compiled by the Company based on Miki Shoji's "Office Report"
Target office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered.
Figures for 2021 and earlier are taken as of December of each year.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

45

Age Distribution of Office Buildingsin Tokyo’s 23 Cities
Solving social issues through the revitalization and utilization of aging small-to- medium-sized buildings
Tokyo 23 cities 9,378 buildings
75

Small and medium-sized(Total floor area: 300 to 5,000 tsubo)

8,620 buildings

Large-sized

70(Total floor area: Over 5,000 tsubo)

65758 buildings

60

Old seismic code:
2,132 buildings (25%)

Old seismic code:
122 buildings (16%)

55
50
45

20 years old or more:

7,523 buildings

40

20 years old:

（87％）

35

440 buildings（58％）

Age of buildings

30
25
20
15

Less than 20 years old:

Less than 20 years old:

10

1,097 buildings (13%)

318 buildings (42%)

5
0

800

600

400

200

0

200

400

600

800

Number of buildings
Source : Created by us based on "Tokyo 23 cities Office Pyramid 2022 (based on the number of buildings)" (Xymax Real Estate Institute)

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46

Market Size and Number of Corporations
in Tokyo
Contributing to the development of society and the happiness of people in Tokyo,
a city where people and companies gather(Thousand people)

Ratio of Tokyo population to Japanese population (estimate)
Population of
東京都人口
Tokyo

160,000

Population of
日本人口
Japan

Population of Tokyo as a percentage of the population of Japan
東京人口が日本人口に占める割合

25.0%

140,000
20.0%

120,000
100,000

15.0%

80,00060,00040,000

10.6%

10.3%

11.1%

11.4%

11.7%

11.9%

12.6%

9.5%

9.8%

12,064

12,577

13,15913,515

13,85013,97913,93813,754

13,458

2000年

2005年

2010年

2015年

2020年

2025年

2030年

2035年

2040年

10.0%
5.0%

20,0000

0.0%

Source: Compiled by the Company based on Tokyo Metropolitan Government statistics - "Population of Tokyo (Estimate).”Top 10 Prefectures in Number of Corporations
Tokyo
東
京
Osaka
大
阪
Kanagawa
神 奈 川
Aichi
愛
知
Saitama埼
玉Hokkaido
北 海 道
Chiba
千
葉
Hyogo
兵
庫
Fukuoka福岡Shizuoka静岡575,234
223,407
184,363

153,694130,108
119,564
107,704
94,01383,562
76,981
Source: Compiled by the Company based on the National Tax Agency‘s “Number of Corporations by Prefecture”.

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47

Population Movement in the Three Major
Metropolitan Areas and Local Areas
The past economic crisis was the starting point for the number of people moving into the Tokyo area to increase.
（Ten thousand people）

40

First peak of population
inflow (1961)

20

Net Inflow

10Second peak of
population inflow (1987)

Tokyo area

30

Third peak of population
inflow (2007)

Fourth peak of
population inflow (2019)

Osaka area
Nagoya area

0
(10)
(20)
(30)
Oil crisis(40)

Collapse of bubble economy

Local area

Global financial
crisisCOVID-19
crisis

(50)
(60)
(70)

Source: Compiled by the Company based on "Number of people moving in by place of residence before the move and number ofpeople moving out by place of residence after the move" from the Statistics Bureau of the Ministry of Internal Affairs andCommunications.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

48

Transition and Present
Change, challenge and create new value with the Sun Frontier Spirit

100,000

Ordinary Profit

Net
売上高

120,000

COVID19 Crisis

経常利益率
MarginSales

20.6% 21.3%

24.4%

GlobalFinancial
Crisis

23.5%
20.8%

22.0% 22.7%

100,000

24.0%
84,00073,218

15.8%
14.0%

60,00013.2%
48,15012.6%

53,292
47,46440,39530,626
27,741

11.5%

35,25540,00026,871
16,731

20,000
5,004
681 1,771 3,588

14,4697,761

4,290 6,924

25.0%

22.0%

20.2%

19.3%

18.5%

80,000

22.9%

30.0%

20.0%

71,251
20.0%

59,632

15.0%

17.1%
12.6%

10.0%

17,772
10,581

5.0%

0

0.0%
01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3 24/3 25/3
(Forecast)(Forecast)2001 to 20092010 to 2020

2021～

Basic construction of Replanning Business

Evolution and expansion of Replanning Business

Deepening and diversifying theReplanning Business

Replanning business
Set-up office
Hotel
Rental space
Overseas

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49

Company Profile
Company Name

Sun Frontier Fudosan Co., Ltd.

Location of Head Quarters 1-2-2, Yurakucho, Chiyoda-ku, Tokyo
Date of Foundation

April 8, 1999

Date of Listing

February 26, 2007 (Currently Tokyo Stock Exchange Prime)

Capital Stock *11,965 million yen

Representative

Tomoaki Horiguchi, Chairman Representative Director
Seiichi Saito, President Representative Director

Number of Consolidated
Employees *Average Age of
Employees*

712 full-time employees (1,287 including part-timers and temporary workers)
35.7 years old
Real estate revitalization

Business Profile

Real estate service

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

Hotel and tourism
Accounting Month
Listed Market

March
Full-time directors
From the left in the front row : Seiichi Saito, President and Representative Director ; Tomoaki
Horiguchi, Chairman and Representative Director.
From the left in the back row: Mitsuhiro Ninomiya, Director; Yasushi Yamada, Senior Managing
Director; Izumi Nakamura, Executive Vice President; Kenji Honda, Director.

Tokyo Stock Exchange Prime (Code number: 8934)* As of the end of June 2022

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50

Sun Frontier Fudosan Co., Ltd.

Thank you for your continued support.
◆ 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 ExchangeAct, the Building Lots and Buildings Transaction Business Act, the Listing Rules for the Tokyo Stock Exchange and otherrelated 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 removal 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