Sun Frontier Fudousan Co., Ltd.

Consolidated Financial Statements for
the Third Quarter of the Fiscal Year ending March 2020

We are aiming to be the real estate company of the world’s most
loved, trusted and selected by clients.
1) Overview of the Q3 Results of the FY Ending March 2020

1 - 102) Insight for Business Environment

11 - 133) Initiatives in the 3Q of the FY Ending March 202014 - 24

4) Future Strategies

25 - 33

5) ESG Initiatives

34 - 41

6) Company Information and Reference Materials

42 - 46

February 6, 2020

Stock Code: 8934

Performance Summary of 3Q of FY ending March 2020
Full-year Performance and Expected Dividends are Revised Upward
Results

ProfitMarginFrom the Same Periodof the Previous FY

Growth Rate

Full-year Forecast(Announced on
May 9, 2019)

Revised Forecast

Progression
Rate

Net Sales

54,631 million yen-+ 9,435 million yen+ 20.9%70,000 million yen

72,500 million yen+ 3.6%

Operating Income

13,560 million yen

24.8%+ 1,397 million yen+ 11.5%

14,500 million yen

15,900 million yen+ 9.7%

Ordinary Income

13,297 million yen

24.3%+ 1,550 million yen+ 13.2%

14,000 million yen

15,500 million yen+ 10.7%Net Income *8,976 million yen

16.4%+ 1,012 million yen+ 12.7%9,500 million yen

10,200 million yen+ 7.4%

Dividend pershare

39.5 yen42.0 yen+ 6.3%*"Net Income" represents net income attributable to shareholders of the parent company.

Performance Highlights
2) Steady growth in Operation Business

1) Significant increase of Net Sales and Incomes of RP Business *••In RP Business, sales of buildings significantly increased to 33 buildings (7 more thanthose in the same period of the previous year), and the segment income ratio was
further improved (from 32.8% in the same period of the previous year to 33.3%). Net
Sales and Incomes renewed the all-time high.
Our company’s unique business model to maximize the attractiveness of buildings isdeepened by bringing together the expertise of each division of the company throughall processes, including purchase, commercialization and sales, and by repeatedlyusing our ingenuity which has captured the sources of added values from the clients’point of view.

••

In Hotel Operation Business, newly opened hotels contributed to earnings and
Net Sales rose as much as 45% year-on-year. HIYORI Hotel Tokyo Ginza EAST
officially opened and 14 hotels with 1,953 rooms are in operation in Japan as ofthe end of December. A hotel (with 155 rooms) will open in Kurashiki in February
while another (with 194 rooms) will open in Kashima in April.
In Conference Room Rental Business, Vison Center Hibiya newly opened in
December. The number of sites has increased to 19 (with 7,000 seats in total) asof December. We are aiming to expand the business further by strengthening ourinternal system.

*“RP Business" represents Replanning Business.

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1

Sun Frontier Fudousan Co., Ltd.

Consolidated Income Statement(Unit: 1 million yen)

FY ended March2019
Q3 (Apr. to Dec.)

FY ending March
2020
Q3 (Apr. to Dec.)

Net Sales

45,19654,631

Real Estate Revitalization Business

39,57245,131

Replanning Business(including Hotel Development)

37,36142,299Rental Buildings and Sublease

2,210

2,832

Real Estate Service Business

2,483

2,566

Operation Business

2,967

4,335

Other Business

772

3,574

Adjustment

▲599

▲976

Gross Profit

16,515

19,132

Real Estate Revitalization Business

14,073

16,223Replanning Business(including hotel development)

13,07015,086

Rental Buildings and Subease

1,002

1,136

Real Estate Service Business

1,528

1,646

Operation Business

419

310

Other Business

546

1,066

Adjustment

▲53

▲113

4,352

5,572

Selling, general and administrative expenses
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2

FY ended March2019
Q3 (Apr. to Dec.)

FY ending March
2020
Q3 (Apr. to Dec.)

12,162

13,560Non-operating Income

36

231

Non-operating Expenses

452

494

11,746

13,297

0

3

Corporate Income Taxes

3,782

4,329

Non-controlling gain or loss

▲0

▲4

7,963

8,976

Operating Income

Ordinary Income
Extraordinary Gains (losses)

Net Income• RP Business has a gross profit margin of 35.7%, a higher level
than the same period of the last FY’s 35.0%.

• Steady growth was made in new business areas, such as
Operation Business and other business, etc. Total Net Sales
reported a year-on-year increase by 111.5% to ¥7.9 billion. On
the other hand, Gross Profit made an increase by 42.5% to¥1.37 billion due to an increase in costs associated with the
opening of new hotels and unrealized losses on a part ofInventory Assets in Overseas Business.

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Assets (Unit: 1 million yen)

FY Ended
March 2018

FY Ended
March 2019

FY EndingMarch 2020
As of
End of Dec. 2019

Increase/Decrease(Compared to
End of March 2019)80,174

97,149107,013+ 9,864

Cash and deposits

23,892

20,257

17,949▲2,307

Inventory Assets

54,59374,32986,022+ 11,693

Breakdown) RP

45,52562,14370,216+ 8,073

Hotel

5,291

7,552

12,004+ 4,452

Overseas, etc.

3,775

4,634

3,802

▲ 832

1,687

2,562

3,040

+ 478

11,587

13,74917,782+ 4,032

8,565

9,339

11,893+ 2,554

474

863

771

▲91

2,546

3,546

5,117

+ 1,570

91,761

110,898

124,795+ 13,897

Current Assets

Other Current Assets

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

Total Assets

Inventory Assets increased by 11.7 billion yen in total due to the purchase of RP properties and others.
Among them ¥8 billion increased in RP Business projects while ¥4.4 billion increased in Hotel Business projects.

Property, Plant and Equipment increased about ¥2.5 billion due to progress in construction work related to hotel development.
Cash and deposits decreased by ¥2.3 billion, reflecting steady purchase in RP Business projects for the next FY.

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3

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet – Liabilities/Equity –(Unit: 1 million yen)

10,155

12,859FY Ended
March 2019
As of
End of Dec. 2019
14,633

Short-term Loans Payable, etc.

2,716

2,248

3,702

+ 1,454

Income Taxes Payable, etc.

3,178

2,661

2,216

▲ 445

Other Current Liabilities

4,260

7,949

8,714

+ 765

32,75642,17947,052+ 4,873

Long-term Loans Bonds Payable

30,86539,751

44,466+ 4,715

Other Noncurrent Liabilities

1,890

2,428

2,585

+ 157

42,91255,03861,686+ 6,647

48,75055,90062,999+ 7,099

99

▲40

110

+ 150

Total Net Assets

48,84955,86063,109+ 7,249

Total Liabilities and Capital

91,761

110,898

124,795+ 13,897

FY Ended
March 2018
Current Liabilities

Noncurrent Liabilities

Total Liabilities
Shareholders’ Equity
OthersTransition of Equity Ratio
End of March 2018 End of March 201953.2%

End of Dec. 2019

50.3%

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

50.4%

FY Ended
March 2019

Increase/Decrease(Compared to
End of March 2019)+ 1,774

As purchases of RP properties progressed, borrowings increased by approximately 6.1
billion yen from the end of the previous FY, and the balance of interest-bearing debt was
48.1 billion yen.
Retained Earnings increased by 7.1 billion yen as a difference between current Net Income(+ ¥8.97 billion) and year-end dividend payment (▲ 1.87 billion yen).

4

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Replanning Business (Replanning (RP) / Hotel Development)(Unit: 1 million yen)

Net Sales
Segment Income(Note 1)

FY ended
March 2019
Apr. to Dec.

FY endingMarch 2020
Apr. to Dec.

37,36142,299

Increase/
Decrease(1 million yen)

+ 13.2%45,00040,00012,126

13,924+ 14.8%Net Sales
Segment Income
Profit Margin
42,29937,36160%

50%

35,000
Profit Margin

32.5%

32.9%

+ 0.5% pt
30,000

Number of items
purchased

37 cases

Number of properties
sold

26 cases

Number of stocks at
the end of Q2

69 cases

32 cases40%▲ 5 cases

32.9%

25,00033 cases
72 cases(Note 2)

+ 7 cases+ 3 cases Both Net Sales and Income surgesed. The attractiveness of buildings was maximized by
identifying sources for added values through each process of purchase, commercialization andsales, and by repeatedly using our ingenuity to increase them. The segment profit margin
remained at a high level of 32.9%.

20,00015,000 Purchase progressed favorably, with 72 properties in term-end inventory (62 RP Businessrelated properties and 10 Hotel Business-related properties). ¥82.2 billion in inventories (¥70.2
billion for RP Business-related and ¥12 billion for Hotel Business-related).
*Excluding those related to Overseas Business*In addition to the above, there are 12 RP properties of ¥13.6 billion which were purchased, settled andcontracted by the end of January.

5

12,126

13,92420%

10,000 The average business period was 400 days (+ 49 days from the previous year). The averagebusiness period was prolonged because we extended the period of commercialization (over 500
days) in order to create higher added values in some cases (4 cases out of the properties sold.)

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

30%

32.5%

10%
5,000
0%

0
FY ended March
2019
April to Dec.

FY ending March
2020
April to Dec.

(Note 1) "Segment Income" is calculated by deducting specific costs of each segment,
including interest expenses, sales commission and goodwill depreciation expense from
Gross Profit.
(Note 2) Projects of Land Purchase and Development are included in RP inventory.

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Rental Building Business (Rental Buildings / Sub-leases)
FY ended
March 2019
Apr. to Dec.

FY endingMarch 2020
Apr. to Dec.

Net Sales

2,210

2,832

+ 28.1%2,800

Segment Income

1,002

1,137

+ 13.4%2,400(Unit: 1 million yen)

Increase/
Decrease

Net Sales
Segment Income
Profit Margin(1 million yen)

3,200

100%
2,832

75%
2,210

Profit Margin

45.4%

40.2%

▲5.2% pt

2,000
1,600

 Net Sales increased by 28% from the same period of the previous

40.2%

year since Inventory increased due to the increased purchasing of RP
properties and also Sub-leases rent increased due to newly opened

50%

45.4%

1,200

1,137
1,002

hotels.

800

 On the other hand, Segment income increased by 13% and profit

25%

margin decreased by 5%pt from the same period of the previous

400

year affected by the period of vacancy for replacement of tenants
during the process of commercialization of PR properties and also0by the increased proportion of sub-leases.
 We aim to focus on purchasing properties for the medium and long-0%
FY ended March 2019 FY ending March 2020
April to Dec.
April to Dec.

term RP projects to increase rent revenue.
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6

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Real Estate Service Business(Unit: 1 million yen)

FY ended
March 2019
Apr. to Dec.

FY endingMarch 2020
Apr. to Dec.

(Property Management / Building
Maintenance / Brokerage / Leasing)

Increase/
Decrease(1 million yen)

Net Sales
Segment Income
Profit Margin

3,000

2,483

Net Sales

2,566

100%

+ 3.4%

2,566

Segment Income

1,528

1,646

+ 7.7%

Profit Margin

61.6%

64.1%

+ 2.6% pt

2,500

2,000

2,483
80%

61.6%

<PM and BM Businesses>

64.1%
1,646

 In PM and BM businesses, we provide our clients with high added value
services by meticulously taking care of tenants, solving any and all problemsof our clients as well as improving revenues from building management. Thus,
our PM and BM businesses have expanded the tenant and business bases ofthe building owners in central Tokyo and contributed to the revenue of thewhole group.

1,500

60%

1,528

40%
1,000

[Number of PM Managing Buildings and Occupancy Rate][Number of Managing Buildings]

End of Dec. 2017
End of Dec. 2018
End of Dec. 2019369 buildings
377 buildings
391 buildings[Occupancy Rate]

95.5%
97.8%
98.4%

<Brokerage and Leasing> Both Net Sales and Income slightly increased compared to the same period of
the previous FY. They have contributed to the revenue of the whole group,working as driving force to create high added values from the clients’ point ofview in terms of the process of purchase, commercialization and sales of the
RP Business.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

20%

500

7

0

0%
FY ended March 2019 FY ending March 2020
April to Dec.
April to Dec.
Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Operation Business(Hotel Management and Conference Room Rental Business)

FY ended
March 2019
Apr. to Dec.

FY endingMarch 2020
Apr. to Dec.

Net Sales

2,967

4,335

+ 46.1%

5,000

Hotel operation business

2,312

3,346

+ 44.7%

4,500

Conference room rental
business

655

989+ 51.1%

Segment Income

374

178

▲52.5%

Hotel operation business

257

▲4

▲101.7%

Conference room rental
business

117

182+ 55.6%

3,000

Profit Margin

12.6%

4.1%

▲8.5% pt

2,500

Hotel operation business

11.1%

▲0.1%

▲11.3% pt

Conference room rental
business

17.9%

18.5%

0.5% pt(Unit: 1 million yen)

Increase/
Decrease(1 million yen)

40%
4,335

4,000
30%
3,500
2,967
20%

2,000
12.6%
1,500

<Hotel Operation Business>

 Net Sales saw a 44.7% increase. Sales of Tabino Hotel Sado which opened last year
contributed to the whole-year sales while the sales of HIYORI Hotel Osaka Namba Ekimae 1,000
and COURTYARD BY MARRIOTT Osaka Honmachi were also added from June and Octoberrespectively. On the other hand, Segment Income decreased due to the start-up expenses
500
for 3 new hotels which opened in this quarter and other expenses.
<Conference Room Rental Business>
 Vision Center Hibiya newly opened in December. The number of sites has expanded to
19 (+6 from the previous FY) in total as of end of December. Both Net Sales and income
steadily increased. We will further accelerate the pace of opening new facilities
especially in the five wards of central Tokyo.
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Net Sales
Segment Income
Profit Margin

8

10%
4.1%
374
178

0

0%
FY ended March 2019

FY ending March 2020

April to Dec.

April to Dec.
Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Others (Rent Guarantee, Construction and Overseas Business, etc.)(Unit: 1 million yen)

FY ended
March 2019
Apr. to Dec.

FY endingMarch 2020
Apr. to Dec.

772

3,574

+ 362.9%499

882+ 76.7%

64.7%

24.7%

▲40.0%pt

Increase/
Decrease(1 million yen)

Net Sales
Segment Income
Profit Margin

4,000
Net Sales
Segment Income
Profit Margin

100%
3,574

3,500
3,000

75%
64.7%

The whole Net Sales and Income increased largely due to the sale of the landfor development in Overseas Business and the increased sales of construction
services of Kouwa Corporation which became our consolidated subsidiarythrough M&A. On the other hand, Profit Margin decreased by 40%pt due tothe increased ratios of sales of Overseas Business and Construction Business.
<Rent Guarantee Business>
 The number of new and renewed guarantees handled remained steady,which has led to higher Net Sales and Income. With the major revision ofdebt-related provisions (to be enforced in April) by the Civil Code, as
demand for institutional guarantees is expected to increase, we will enforce
seminars and other events for building owners.

2,500
2,000
1,500

24.7%

1,000

882

772

<Construction Business> Both Net Sales and Income increased as the positive results of Kouwa
Corporation were added.

500<Overseas Business>
 The land for development in Da Nang was sold after we obtained all approvals andlicenses and its profit on sale was recognized.
 A condominium project in Da Nang, HIYORI Garden Tower was completed in
December. Its rooms are now being delivered one after another and one fifth of
the rooms were already delivered as of the end of December, which will contributeto the results of 4Q
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50%

9

25%

499

0

0%
FY ended March 2019

FY ending March 2020

April to Dec.

April to Dec.
Sun Frontier Fudousan Co., Ltd.

Trends in Key Management Indicator■Changes in Equity Ratio(Pursuing High-Value-Added Management)(Building a Stable Financial Base)(1 million yen）

80,000

売上高
Net
IncomeOrdinary
経常利益Income

70,000Ratio
of ordinary income
経常利益率

22.9%

60,000

22.0%

22.7%

24.0%

full-year forecast■Changes in Ordinary Income Ratio
30%(1million yen）

60,000

24.3%

80%

純資産
Net Assets
Equity Ratio
自己資本比率70%

25%
50,000

20.2%

56.2%

55.7%

56.0%
53.2%

20%

60%
50.3%

50.4%

50%

50,00040,00040,00040%

15%30,000full-year forecast

20,00030%

30,00010%

20%
20,0005%
10,00010%

02015/3

2016/32017/3

2018/3Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2019/3 2019/12
2020/30%

10,0002015/310

2016/32017/3

2018/3

2019/3 2019/12
2020/30%

Sun Frontier Fudousan Co., Ltd.

2) Insight for Business Environment

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11

Sun Frontier Fudousan Co., Ltd.

Business Environment
1． Although the risk of its rapid decline has eased, the global economy as a whole is on a downward trend and the outlook remains uncertain.
◆The IMF has downgraded the outlook for the world economy 6 times in a row and the global growth rate is forecasted to slow down to 2.9% in
2019.
◆There is growing concern that as the results of the spread of new coronavirus the world economy may stagnate.
◆The situation in the Middle East became tense at the beginning of the year and geopolitical risks are smoldering. On the other hand, the USChina trade negotiations have made progress and concerns have receded.
2． Although the Japanese economy continues to grow at a moderate pace, it has started to show clearer signs of a slowdown due to the impact of
the global economy.
◆While the Japanese economy continues to expand for the longest time after the end of World War II, its future outlook maintains a sense of
caution due to the slowing growth of the world economy.
◆Although the number of foreign visitors to Japan reached a record high in 2019, it has been sluggish due to a decrease in visitors from Korea andthe impact of the new coronavirus.
◆Although the impact of consumption tax hike is limited, the stagnation of world trade cast a shadow on a part of recent corporate performances.

3． As for the office building market in central Tokyo, its vacancy rate is in the historically low level and the rising trend of room rents continues.
◆Demand for office space has been robust due to the increasing number of shared offices and workers as well as investments in recruitment.
◆The vacancy rate is in the lowest level for the first time in 28 years since 1991 and the shortage of office spaces still continues.
◆While financial institutions’ lending attitudes toward real estate have become cautious partly, willingness to invest in real estate remains firmamong funds and other financial organizations.

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12

Sun Frontier Fudousan Co., Ltd.

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

(Yen)
Average rent (yen/tsubo)

The average rent
in December 201922,206 yen(+ 140 yen from the previous month)

Average vacancy rate (%)

Peak of the vacancy rate
9.43%
June 2012
Peak ofthe average rent
22,901 yen
August 2008
Peak of the vacancy
rate
8.57%
August 2003
Bottom of the average
rent
16,207 yen
December 2013
Bottom of the average
rent
17,526 yen
October 2004

Bottom of the vacancy
rate
2.49%
November 2007

The average vacancy rate
in December 2019
1.55%(▲0.01% pt from the previous month)*Source: Prepared by our company based on Miki Shoji’s "Office Reports.“ Subjects are office buildings with a standard floor space of 100 tsubo or more in the 5 wards in the Central Tokyo.

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13

Sun Frontier Fudousan Co., Ltd.

3) Initiatives in the Third Quarter of

the FY Ending March 2020

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14

Sun Frontier Fudousan Co., Ltd.

Business Progress and Policies

We Aim for solid growth while maintaining our highly profitable structure
The number of buildings sold in RP Business has progressed ahead of the schedule of the full-yearsales plan. Also, Net Sales and Incomes renewed the all-time high due to further improvement in
profit margin.
[Ordinary Income] Changes of Annual Forecast and 3Q Progress(Unit: 1 million yen）

Full-year
通期予想
Forecast
3Q Results[Preplanning Business] Changes of Return on Cost

86%
3QProgression Rate
第3Q進捗率*afterupward revision※上方修正後99%

16,000

60%

100%
95%

80%

90%
72%

80%
3Q Results

12,00070%

8,000

51.34%

50%

40.52%
49.94%

40%

70%
60%

30%

50%
40%

43.85%

40.25%
30.22%

20%

30%

4,000

20%

10%

10%

0

0%

0%
2015/3

2016/32017/3

2018/3

2019/3

2015/32020/3

2016/32017/3

2018/3

2019/3 2019/12
2020/3
2019/12We are not seeking for a short-term growth but we challenge to achieve the management “which
has both growth and stability” in the long term by pursuing the improvement of the essential valueof real estate.
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15

Sun Frontier Fudousan Co., Ltd.

To create differentiated added values

Consistent Office Building Business① In vertical real estate utilization business, we survey and solve difficulties on site by listening to our clients’ problems.
② In horizontal real estate revitalization business, we put together our know-how and our clients’ needs learned fromthe process above, and apply this knowledge to transform the pre-owned buildings that we purchased into higher value
RP products, and then to market them.

Funding Advice

Asset Consulting

Rent Guarantee

Construction Planning

Property Management

Leasing

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

Clients (Building owners, Asset holders and Wealthy individuals)
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16

Sun Frontier Fudousan Co., Ltd.

- Example of Replanning Business -- A whole building revitalization for monetization in Shinjuku -We created spaces where both workers and visitors can relax naturally.
In the renewal of this property, we provided a large and full renovation over 1,000 tsubo spaces including extension.
The large lounge for a non-territorial office is designed to create a spacious interior space to encouragecommunication among employees. Offices furnished with wood-grain furniture and interior goods create acomfortable and relaxing atmosphere for both workers and visitors.

BeforeAfter

A spacious lounge in front of the EV

Interior with a high-quality and relaxing atmosphere▲Office space▲Lounge
The top floor is renovated to a refreshing space

After

In the renewal of this property, we extended
and renovated its double-height space which
had not been used after the tenant left, byapplying the extra building volume so that thebuilding increased its floor space by 45 tsubo
to improve its profitability. We will increase
the value of real estate by finding and utilizing
hidden potential of buildings.

[Outline of property]■Address: Daikyo-cho, Shinjuku-ku, Tokyo■Structure: Steel-framed reinforced concretea 9-story building with a deck roof and a basement■Original completion: 1986 (32 years old)
■Usage: Office spaces and a parking lot■Site area: about 1,078 ㎡ (326 tsubo)■Total floor area: about 5,481 ㎡ (1,658 tsubo)

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

▲Rooftop common space for refreshing (* Image drawing)

17

Sun Frontier Fudousan Co., Ltd.

- Leasing Business -We have expanded our network of branches which focuses on
local communities to solve our clients’ problems.
1.

2.

3.

4.

We specialize in small and medium-sized office buildings
in central Tokyo.
We opened a new branch at Hamamatsucho to extend
our network of branches to 12 locations.
Ikebukuro
We are good at careful tenant placement by having close
ties with the local communities and utilizing our local
knowledge.
Shinjuku
Courtesy extended to our clients have come to trust andwe have become “the partner for their real estate
management.”
Shibuya
We are their trustworthy point of contact to consult andEbisu
solve any of their problems.
We meet tenants’ needs by understanding them andconstantly changing our company according to thetenents’ voice.

Ueno
Akihabara

Kodenma-cho

Kanda

Kudan

Nihonbashi
Tokyo

Kojimachi
Hibiya Head
OfficeAoyamaAkasaka

Toranomon

MeguroThe network finds big hints for our Real Estate
Revitalization Business, which is the base for us to
improve the value of real estate further day by day.

Shimbashi

Hamamatsucho

Gotanda

Ginza

New

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

Yokohama
Appearance of the building where
Hamamatsucho Branch is locatedCopyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

18

Sun Frontier Fudousan Co., Ltd.

- Property Management Business -We have achieved stable and highly profitable building management andexpanded entrusted business.
98.4%

Entrusted floor area (Right Axis)
Occupancy rate of entrusted assets (Left Axis)
Occupancy rate in 23 wards of Tokyo (Left Axis)(As of the end of Dec. 2019)

Operating rate of our PM entrusted
properties

98.2%(As of Jan. 1, 2020)

Averageoccupancy
rate of medium-sized
Averageof medium-sizedbuildings inbuildings
in23
in TokyoTokyo's 23 wards,wards
occupancy
rate<2019 PM Client Rankings>
Top Companies in Terms of Number ofContracted Owners*

Our strength, “the comprehensive abilities to solve problems regarding realestate” is demonstrated when we are requested for consultations by ourclients on the renovation and replacement of their properties asapproximately 87% of the PM entrusted properties are more than 20 years
old.

March 2009

March 2010

2019

2018

1

Vortex

778

690

2

Xymax

510

495

3 Sun Frontier Fudousan Co., Ltd.

264

271

4

SHIMIZU COMPREHENSIVE DEVELOMENT

214

-

5

RIO HOLDINGS CO., LTD.

208-

March 2011 March 2012 March 2013 March 2014 March 2015 March 2016 March 2017 March 2018 March 2019 March 2020

*Source: Our research based on "Monthly Office Market Research Report" by Sanko Estate Co., Ltd., for the average occupancy rates of medium-sized buildings in 23 wards in Tokyo.
*Source: As for PM Client Ranking, our research based on the November 2018 issue, "Monthly Property Management."*Operating rate: (Total operating area)/(Total lent available area).

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

19

Sun Frontier Fudousan Co., Ltd.

- Conference Room Rental Business -We will expand our business sites to achieve 45 sites in FY ending March 2023
Rental conference room (Vision Center)・・・ 11 sites

VO Kanda
VO Kanda ANNEX

Rental Office (Vision Office)Coworking Space (Vision Works)

・・・ 4 sites

VC Kanda

VR Nihonbashi Kayabacho
VC Tokyo Nihonbashi
VC Tokyo Ekimae

Smart Conference Room (Vision Rooms)

・・・ 4 sites

VC Yaesu South Exit
Kanda

VC Shinjuku

Nihonbashi

VO Shinjuku
Shinjuku

VC Nagatacho

VR Yaesu Central Entrance
VR Ginza 1-chomeTokyo●VC Hibiya(Appearance of the building)

Ginza
Yurakucho

VW Tokyo Yurakucho
Nagatacho
Hamamatsucho

VC Tamachi
VC Yokohama

VC Tokyo Yurakucho
VC Hibiya

ShinagawaNew

TamachiYokohama

VC Hamamatsucho

VR Hamamatsucho

The total number of sites is 19 sites with 7,000 seats as of today. We are strengthening our internal system for thefurther expansion of sites.
*The seat number of rental conference rooms is calculated, using the school format (three-seat per desk.)
Seats allocated in a square shape are calculated for the rooms to which the school format cannot be applied.

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

20

Sun Frontier Fudousan Co., Ltd.

- Rent Guarantee Business -Strengthening Rent Guarantee Business,
Taking the Opportunity of the Revision of the Civil CodeThe requirements of personal guarantees will be tightened due to major revisions of the Civil Code (Law of
Obligations) which will become effective from April 2020. It will burden lessors (building owners) much andtheir needs for institutional guarantees are expected to increase and so we will strengthen seminars on the
major revisions of the Civil Code for them.

Strengthening Seminars for Lessors[Major Changes]
・Tightening confirmation of intention of individual
third parties’ guarantees concerning the business(confirmation with notarial deeds).
・Limit of maximum amount of personal guarantees.
・Clarification of the scope of personal guarantees.
・Addition of accountability of lessees to personal
guarantors.
・Addition of accountability of lessors to personal
guarantors.

[Number of seminars held]◆Number of seminars held
108 seminars◆Cumulative number of Approx. 1,600 participants
participants->Lessors will have to bare a greater burden due toa trend to protect individual guarantors.
Every seminar is full of owners because of their great deal of interest.

We relieve concerns of building owners by throwing ourselves into a role of their building managementadvisor. As the most selected institutional guarantee company, we will contribute to the realization of afair and impartial leasing market.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Sun Frontier Fudousan Co., Ltd.

Enjoy TOKYO at our “Warm-Hearted Hotel,” located within walking distance from Ginza and Tokyo Stations

Ground opening of “HIYORI Hotel Tokyo Ginza EAST” with open-air bath in Ginza
The hotel is located within walking distance from “Ginza Station” which is suitable for both sightseeing and business, and is also
close to “Hatchōbori Station, Shintomicho Station, and Takaracho Station.” HIYORI Hotel Tokyo Ginza East is “the real hotel to enjoy
and appreciate TOKYO” whose guests can walk not only to Ginza but also to various destinations in Tokyo including Tokyo Station,
Nihonbashi and Tsukiji.
Its greatest feature is an “open-air bath" on the 11th floor, which is the top floor. Even though the hotel is located in the deadcenter of the city, we offer an exquisite space where guests can indulge themselves in a comfortable stay. The large and spacious
bath with the Japanese traditional open-air bath will help guests relieve the fatigue of travel, making them so comfortable that theywould forget they are in the middle of Tokyo.
Hotel Service by "Warm-Hearted Staff”

Appearance
GRAND OPEN
On December 1, 2019

A relaxing modern Japanese room with Ryukyu
Tatami mats

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

22

An open-air bath with a large bath, which is veryrare in central Tokyo

Sky Terrace with night views and aview of the Sky Tree

Sun Frontier Fudousan Co., Ltd.

A Warm-Hearted and Comfortable Hotel

Ground opening of “Tabino Hotel Kurashiki Mizushima”
Tabino Hotel Kurashiki Mizushima in Kurashiki City, Okayama Prefecture opened as the third hotel of “the Tabino Hotel brand.” Thehotel specializes in accommodating guests who can use it casually as a foothold for sightseeing or business. The hotel is close to theMizushima Industrial Complex, serving not only as a base for business travelers who visit the industrial complex where more than
200 offices locate and approximately 24,000 people work, but also as a base of sightseeing for tourists who go around the city where
the historical flavor of the shogunate demesne remains. This is “the warm-hearted and comfortable hotel” we have meticulously
designed for our guests who want to enjoy a long stay.
Appearance

Bright interior with a theme of“Ocean, Mountain and Sky”

Yakuseki Hot Spring,“Tenryono-Yu”

GRAND OPEN
On February 1, 2020

Local Okayama dishes and a variety of breakfast foods
are one of our features
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Extensive amenities
For a long stay23

Warm-Hearted staff provides
meticulous hospitality

Sun Frontier Fudousan Co., Ltd.

- Hotel Business -List of hotels under operation and development
Ongoing Development to equip 5,000 guest rooms in FY Ending March 2023
<Domestic hotels>

Open (Plan)

In operation

April 2016

SSH Nagoya Tokoname

194

In operation-

Sky Heart Hotel Kawasaki

200

In operation-

Sky Heart Hotel Koiwa

105

2,108 rooms

In operation-

Sky Heart Hotel Narita

100

Under construction 848 rooms

Running or Leasing

In operation-

Sky Heart Hotel Hakata

159

Under Planning

Under construction or
Planning

In operation

April 2017

HIYORI Hotel Maihama

80

Running

456 rooms

3,412 rooms

Total*As of February 6, 2020*"Running" is the total of “in operation” and “Renting” inthe right table.

ToyamaKyoto Nijo
MiyakoIslandHakataOsaka Honmachi
Kurashiki
Mizushima

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

Osaka Namba Ekimae

In operation

May 2018

In operation-

Tabino Hotel Takayama

80

Sky Heart Hotel Shimonoseki

105
111

HIYORI Hotel Osaka Namba Ekimae

224

In operation

October 2019

COURTYARD BY MARRIOTT Osaka
Honmachi

193

MatsumotoIn operation

December
2019

HIYORI Hotel Tokyo Ginza EAST

135

Kashima

In operation

February 2020

Tabino Hotel Kurashiki Mizushima

155

Under
construction

April 2020

Tabino Hotel Kashima

194

Under
construction

October 2020

Onna, Okinawa

204

Under
construction

January 2021

Kyoto Nijo Kawaramachi

205

Under
construction

August 2021

Miyako-Island

111

Under
construction

April 2022

Kyoto Shijo Kawaramachi

134

Under
Planning

July 2021

Matsumoto

176

Under
Planning

April 2022

Ishigaki Island

132

Ginza Higashi
Chuo-ku, Tokyo
Kawasaki

57

Tabino Hotel Sado

Koiwa
Tokoname

210

Azuma Sado

July 2018

NaritaShimonoseki

Toyama-May 2019

Maihama

Kyoto Shijo-

In operation

Takayama

Onna, Okinawa

Renting
In operation

In operation

Sado (Chigusa)
Sado (Azuma)

Ishigaki
IslandHotel Name Location

No. ofRooms

StatusUnder
May 2022
Chuo-ku, Tokyo
Planning*The
schedule and scale are current plans and may change in the future.

24

148

Sun Frontier Fudousan Co., Ltd.

4) Future Strategies
Our Belief~ Not for profit, but for trust ~Business is a competition of usefulness.
How many people can we be of service to?

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

25

Sun Frontier Fudousan Co., Ltd.

Medium-term Management Plan

We aim for steady achievements and sustainable growth.
We aim for not a temporal achievement but for“sustainable and steady growth”
and “steady achievements with profitability, safety and growth.”<Basic policy>
Development of business focusing on urban areas and growth markets<Three Policies>
1. To deepen and expand “office building business in central Tokyo” which
has strong influences
2. To focus on growth markets of “hotels and Asia”
3. To actively utilize “M&A” to accelerate a growth of our company<Quantitative Target>
FY ending March 2023

(Unit: 1 million yen)

100,000

Net Sales

100 billion yen

80,000Ordinary Income

20 billion yen

60,000Net Income

14 billion yen

40,000Equity Ratio

50% or more

Ratio of Ordinary
Income20% or more

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

To achieve stable growth over the medium to longterm, we will strengthen value creation andmanagement of real estate and build our firm
revenue structure based on

Changes over the Last 7 Years and Targets for FY ending March 2023

Net
売上高
Sales

Ordinary
経常利益
Income100,000

72,50040,39447,46353,291

27,741 30,625

20,00017,772
15,50012,81320,000 10,580
8,894 10,755
4,341 5,593 7,024
2,039
02023/32020/3
2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 (Forecast)
2020/3 2021/3・・・・2022/3 (Forecast)
2023/326

Sun Frontier Fudousan Co., Ltd.

Growth Strategies of “Four Arrows”
1) Expansion of Core
Business

office building business

2) Hotel BusinessTo develop accommodation hotels
for tourism and business3) Overseas
Development

To develop housing related businessTo deepen and expand

in Vietnam and Indonesia

To expand the existing businesses4) M&Aand invest in start-up business
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

Sun Frontier Fudousan Co., Ltd.

1) Expansion of Core Business
To Deepen and Expand the Office Building Business

For Office Building Business, Net Sales target for FY ending March 2023: 80 billion yen<Replanning Business>
We capture evolving needs of offices, towns, and work styles in the future and aspire for“production & service” to design work styles. We aim to deepen and expand our Building
Revitalization Business by providing new high value-added products and offices that tenants have
not yet noticed.
<Real Estate Service Business (Leasing, Property Management, etc.)>
Being kind and polite, contributing to building owners with specialized services unparalleled by ourcompetitors. By repeatedly delivering solutions to their small concerns, we deepen our bonds withthem to become a trusted “real estate partner” with whom our clients feel free to consult on any
topics.
Our strength lies in “a client base of office building owners in central Tokyo.”<Conference Room Rental Business>
Leveraging our expertise and experiences to improve added values of office buildings, we are rapidly
expanding the sharing business, such as conference room rental business that utilize vacant spaces
and idle times.

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

28

Sun Frontier Fudousan Co., Ltd.

Expansion of Business

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

20th
Anniversary
Securitiza

10th
Anniversary
Early stage ofestablishment-tion ofReal
EstateBrokerage

RentalBuilding
RentalBusiness inCentral Tokyo

PM

OfficeBuilding
Business inCentral Tokyo

Brokerage

Leasing

Sub
Leasing

Building

Construction

Brokerage

PM
Sub

Office Furniture

Replanning-tion

RentalConference
Room

OfficeBuilding
Business In
Central Tokyo
AssetsConsulting

Rent
Guarantee

Rent
Guarantee

Leasing

Drone
Business

PM
Share

BM

Leasing
Leasing

RentalConstruc

Storage・・・・

Building

Office Building-tion ofReal
EstateRentalSecuritiza Replanning

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

29

Sun Frontier Fudousan Co., Ltd.

2) The Hotel Business
Proactive Expansion into Growth Markets

We are aiming to have 5,000 rooms in operation by FY ending March 2023.
Taking advantage of the increasing number of visitors to Japan, we are expanding into urban andregional tourism areas.

<Theme> Warm-Hearted Hotels
1.
2.
3.

Hotels that grow by their employees
Hotels that grow by listening to their guests
Hotels that grow and fit in with the community

Self-reliance, Cooperation with Others andCorporate Social Responsibility
We will continue togrow every day withthese three important factors

Hotels provide a warm, high quality, comfortable and personal service by kind employees who
work from the guests’ viewpoint.

<Two Strategies to Increase the Number of Operating Rooms>
1 Our flagship hotel brand "HIYORI HOTELS & RESORTS" is developed from a vacant lot.
We are aiming to become a well-known brand among upper brands.
2) Utilizing revitalization, M&A, and brand change, we will increase the number of guest rooms ina flexible way to respond to diverse needs and markets.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Sun Frontier Fudousan Co., Ltd.

3) Overseas Operations
PJ in Progress in Da Nang, Vietnam

High-rise condominium PJ<Philosophy of Overseas Business:“Providing comfort to the people of Asia, together with our partners.” >“HIYORI Garden Tower”

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

Completed
In December 2019

Entrance hall

There are 7 direct flights a week from
Narita Airport to Da Nang,
7 direct flights a week from KansaiInternational Airport
and also 7 direct flights a week fromHaneda Airport.
There are 247 direct flights a week from
Korea,
24 direct flights a week from China.

Delivery in progress

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

A View overlooking the city

31

This is the area where many companies
are willing to expand their business and aresort which attracts many visitors fromAsia.
Sun Frontier Fudousan Co., Ltd.

4) M&A
To Expand Existing Businesses and Invest in Start-up BusinessWe accelerate the growth of peripheral businesses by introducing human resources, technologies and platforms
to our group and expanding optimal services in line with changes in the business environment.

<M&A and Business Acquisition Results>
Year

Company name and business name

① 2010

Sonomamma (just like that) Office !

② 2012

Yubi(Currently known as SF Building Maintenance)

Vision Center and Vision Office③⇒Horiguchi will take a lead role in teaching the employees of theOutline of businessacquired companies our company philosophy, talking about theSpecialized sites for furnishedoffices

life purpose, motivating them and developing their enthusiasm

Building maintenanceand ability in order to revitalize our business with their power.

Rental conference rooms andoffices

Hotel AU Tokoname④

2016(Currently known as Spring Sunny Hotel
Nagoya Tokoname)

Sky Court Hotel(Currently Known as Sky Heart Hotel)⑤

Sado Resort Hotel Azuma⑥

We will carry out M&A which is so inspiring that our employees
are strongly motivated and cast their sparkling eyes at

Hotelprospective future projects.

Hotel～ “Development of Human Resource”
to enlarge their mental capacity ～Long-established Japanesestyle hotel(Sado Island)

VIP Nangoku
⑦

2018

⑧
⑨
⑩

(Currently known as Sky Heart Hotel
Shimonoseki)

Hotel

20cm
(Ability)
10cm(Ability)

Okesa Kanko Taxi

Taxi and sightseeing bus(Sado Island)

Kouwa Corporation

Interior finishing work foroffices

Sado Biyori

Information site on Sado Island

10cm(Thinking)2019

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

32

20cm
(Enthusiasm)

10cm(Enthusiasm)

Individual Power
before M&A

20cm(Thinking)Individual Powerafter M&A＋

Teamwork
to support one
another

Sun Frontier Fudousan Co., Ltd.

4) M&A
To Expand Existing Business and Invest in Start-up BusinessWe formed a capital and business alliance with SKY ESTATE which provides services
including an exterior wall survey using drones.
We strengthen inspection services by accurately assessing the state of aging of buildings
through surveys of their exterior walls to propose the best repair work to our clients.
[Outline of the Investee]

Advantages of Exterior Wall Survey with a Drone
1.
2.
3.

4.

It is possible to detect even 0.2 mm cracks and floatingtiles by using infrared rays.
High-rise buildings can be surveyed without scaffolding.
With no scaffolding or gondola required, operation canbe done faster and more safely.
Also, costs can be reduced to about 1/3.
Applicable for periodic reporting for specified buildings.

Specialized drones are used
for exterior wall andinfrastructure surveys■Name■Location■Major Services■Capital Stock■Established■ Number of
Shares Acquired: SKY ESTATE Inc.
: 1-5-4, Higashiyama,
Meguro-ku, Tokyo: Drone school management,
exterior wall survey: 36.9 million yen: September 28, 2016
: 20.1% of Issued shares

Infrared rays canidentify floating tiles

Sun Frontier Fudousan, which manages approximately 430 office buildings in central Tokyo will
cooperate with SKY ESTATE which has cutting-edge drone piloting technology to create new values
that differ from the conventional building management by introducing new technologies andinnovative services for building management.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Sun Frontier Fudousan Co., Ltd.

5) ESG initiatives

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

34

Sun Frontier Fudousan Co., Ltd.

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

Philosophy is a source of
our ESG initiatives

Altruism

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

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

35

Sun Frontier Fudousan Co., Ltd.

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

Environment

We revitalize dilapidated buildings without destroying them. We develop the Real Estate Revitalization
Business, which grows in harmony with the environment.
(391 buildings were revitalized as of the end of December 2019.)
We operate a circulation market of furnished offices with an aim to reduce waste materials generated by
office relocation.
We promote the reduction of energy consumption at the buildings we manage in Property Management
Business, utilizing the Energy-saving Subsidy and others. (→ P.38)
We have introduced the renewable electric power service to 4 buildings we own. (→ P.37)

SocialIn our Real Estate Revitalization Businss, we promote the revitalization of buildings to meet the social
needs. → P.39)
Under the slogan, “Cheer up Japan!” we develop Regional Revitalization Business from the aspect of
tourism. → P.40)
We have supported the Japanese language courses at Da Nang University in Vietnam since 2016. Also,
we have started to employ 6 technical intern trainees from Vietnam in the aim of “human resources
development” which is the base of mutual development of Japan and Vietnam.
We go ahead with the introduction of the drone technology to accelerate the innovation in the realestate industry.

Governance

When we acquire properties, we clarify their possible risks, improve their legal compliance and correct
shoddy workmanship on them through the process of commercialization and then supply them to themarket. We turn the properties into a real estate stock with high social values and sell them.
We have established “Nomination and Compensation Committee” as a voluntary advisory body to theBoard of Directors in order to improve objectivity and transparency of the procedures regarding
appointment and dismissal of the directors and their compensations.
We have improved our monitoring function for the corporate management by appointing 5
independent outside directors out of 10 directors.

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

36

Sun Frontier Fudousan Co., Ltd.

ESG initiatives of Sun Frontier Fudousan Group

Launch of Renewable Energy Power Services [E]
We started the first renewable electricity service for office building tenants in Japan, working with
JAPAN ENERGY & ECOLOGY which supports energy procurement for corporate clients.
Main Features of the Service•••

This is the first service in Japan that supports even building tenants to meet the requirements of environment
initiatives, such as “RE 100” and “RE Action” if they occupy more than one floor of the building.
By purchasing electricity cheaply, building owners can reduce costs in line with their environmental measures.
On behalf of the building owners, we take care of the whole cumbersome approval process for environmental
values (J-Credit).

Concept Diagram
コンセプト図Electric Power
Company

JAPAN ENERGY &ECOLOGY

Sun Frontier
Fudousanenvironmentallyadvanced
Company

foreignCompanies

Building introduced
the service

Tenancy
Electricity
SupplyRenewable
Energy PowerRE100
certifiedelectricity

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

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

Renewable
Energy PowerService

Entire Building
environmentallyadvanced
Company

Domestic
Companies

Environmentallyfriendly

Tenancy
Cost Reduction

One Floor Only37

Sun Frontier Fudousan Co., Ltd.

ESG initiatives of Sun Frontier Fudousan GroupThrough the Property Management, we engage in environmental
contribution activities with our building owners [E]As part of our efforts to improve the value of buildings, we propose the owners the replacement of facilities
utilizing the Energy-saving Subsidy.
“Replacement to LED lights in a whole building,” “renewal to gas heat pump type air conditioning” and“introduction of energy management system” were adopted in the following case of a building renovation.
[Detailed works]
Electricity Usage All 1,472 fluorescent lights in a building replaced with
LED lights.
 Air conditioning system was replaced with GHP (Gas
Heat Pump).
 All 78 air conditioners are now monitored 24 hours a
day with the introduction of an energy management
system.
They are automatically controlled for optimal energy
efficient operation.
 In order to verificate of the effect of reducing energy
consumption and to further promote environmental
contribution activities, our energy consumption report
is submitted on a monthly basis.

Appearance of the building(Before and after energysaving project)

Reducedby 21.9%

2015

2018

Taking advantage our position that we can propose and promote the replacement of facilities to ourclients through our management and revitalization work of many buildings, we will promote theefficient energy usage in business and introduce facilities that contribute to energy-saving, andthereby strive to enhance efforts to reduce CO2 emissions through our real estate business.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38

Sun Frontier Fudousan Co., Ltd.

ESG initiatives of Sun Frontier Fudousan Group

Contribution to the Revitalization of Local Communities and Society [S]We promote the revitalization of buildings for the most suitable utilization thatmeets the needs of society
We rent the buildings to our clients who can support people’s life at all stages. We revitalize them to meet the needs of the region.
BeforeAfter

Originally, for office-use
Revitalization as a nursery school from the 1st basement floor to 4th floor, as an after school forelementary students on the 5th floor and a support center for cancer patients on the 6th floor

In industry-government-academia cooperation we create a recreational waterfront space where local people can get together.
BeforeAfter

We changed the usage of the first floor from a parking lot to a restaurant and connected it with aboardwalk along the canal, which creates an attractive waterfront scenery
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

Sun Frontier Fudousan Co., Ltd.

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

Sun Frontier Sado Inc.
Hotel
Business

Transportation
Infrastructure Project

Hotel AZUMAHighlight Finding
Project

Tourism and Travel
Business

Kanko
Oyasumidokoro

Okesa Kanko Taxi

Web Advertising
Business

Travel Agency

Sado Biyori

Rental Car
Business

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

40

Sun Frontier Fudousan Co., Ltd.

ESG initiatives of Sun Frontier Fudousan Group

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

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

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

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

41

Sun Frontier Fudousan Co., Ltd.

6) Company Information and Reference Materials

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

42

Sun Frontier Fudousan Co., Ltd.

Vision and Policy
VisionClients
Core Business
PolicyStrategy

As “professionals of real estate utilization”
we aim to be “the real estate company” of the world’s most
loved, trusted and selected
Building owners, asset holders, wealthy individuals
Real estate revitalization and utilization
・Not for profit, but for trustl
To solve problems from the clients’ point of view・To focus on people rather than property
・One-stop solutions to any and all problems
CentralTokyo

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

OfficeStrength43

Tenantmediation

Real estate
revitalization

Effective operation
Creativity
Sun Frontier Fudousan Co., Ltd.

Changes in Net Sales, Ordinary Income, andNumber of Employees
Both Net Sales and Ordinary Income remained strong.
The number of employees is steadily increasing.

(1 million yen)

70,000(number of people)

72,500650

売上高
Net Income

60,000600

Ordinary Income
経常利益53,291

Employees
従業員

50,00048,15047,46330,62526,87027,741
206

20,000681

10,000
1

1,771
52
24

0 140

70

3,588
377 501

84
5,003
791

96

16,730134 125

7,760
1,437

(10,000)(20,000)
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

8,289

400

380

35,25430,000

0

500

522

40,39440,000

2

700

152

141

181

14,469142 139

6,346

4,289

3,474

10,580(3,776)44799 2,039

300

276

223

15,5004,341 5,593

200

12,813

17,772

6,923

541(17,794)

199

329

7,024

8,894 10,755

100

0(forecast)

(100)

(200)
Sun Frontier Fudousan Co., Ltd.

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

Seiichi Saito

New title

3) Biography of the new president
Current title

ChairmanPresident

President

Executive Vice
President and Vice
President Executive
Officer

Name

Seiichi Saito

Biography

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

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

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

45

Sun Frontier Fudousan Co., Ltd.

Corporate Profile
Company Name

Sun Frontier Fudosan Co., Ltd.

Location of Head
Quarters

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

Date of Foundation

April 8, 1999

Date of Lsting

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

Capital Stock ※11,965 million yen

Representative

Tomoaki Horiguchi, President

Number of Consolidated
598 full-time employees (1,011 including part-timers and temporary workers)
Employees ※Average Age of
Employees※

34.1 years old(※ As of December 31, 2019)

Real estate revitalization
Business Profile:

Real estate services

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

Hotel development and management
Accounting Month
Listed Market

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

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

46

Sun Frontier Fudousan Co., Ltd.

We will appreciate yourfurther supports.

Sun Frontier Fudousan Co., Ltd.

 The purpose of this document is to provide information that can be used as a reference, not for soliciting or promoting you
to purchase a specific product. Please make your decision by your own discretion and responsibility when you make an
investment. If you want to purchase shares of our company, please contact securities companies.
 The information provided in this document is not necessarily in compliance with the Financial Instruments and Exchange Act,
the Building Lots and Buildings Transaction Business Act, the Listing Rules for the Tokyo Stock Exchange and other related
laws and regulations.
 Forward-looking statements included in this document do not guarantee future performance.
 Although we have made every effort to ensure the contents of this document, we can not guarantee their accuracy or
certainty. Please note that they are subject to change or cancellation without notice.

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