September 29, 2016
Sun Frontier Fudousan Co., Ltd.
(Stock code: 8934)
Listing: First Section, Tokyo Stock Exchange

Notice of Hotel Development Business in Kyoto
Please note that this document is a translation of the official announcement that was released inTokyo. The translation is prepared and provided for the purpose of the readers’ convenience only.
All readers are strongly recommended to refer to the original Japanese version of the news releasefor complete and accurate information.
This is a notice about the development business start of “Inbound City-tourism Hotel” in Kyoto.
１．Business Purpose
Due to the success of the tourism nation policy including relaxation of visa requirements, the needs oftourists to Japan is increasing significantly. Considering meeting the demands of accommodations fromtourists to Japan could benefits the creation of society interests, we are developing the “Inbound City-tourismHotel” where tourists including foreigners could experience beautiful nature and “omotenashi” hospitality ofJapan. In this April, “SPRINGSUNNY”, the first hotel of our collaborative brand with the Spring Group which
is developing travel and air transport business in China, fully opened in Tokoname city, Aichi prefecture. As
the result of our efforts on building the “heart-warming” hotel, the occupancy rate and average daily rate areimproving remarkably.
In Shijo Kawaramachi, the largest shopping and entertainment district in Kyoto, with the purpose ofopening the high-class flagship hotel, we purchased a land to start the development business.
The project land faces Kawaramachi-dori Street and is one minute’s walk from Shijo Kawaramachi
Crossing. It’s the optimal location for visiting Kyoto, because from here, all the representative and wellknown sightseeing spots are accessible by walk, such as Gion in typical Kyoto atmosphere, Pontocho linedwith Ochaya (a place where guests are entertained by the performance of traditional Kyoto femaleentertainers), beautiful shining rivers Kamo-gawa and Takase-gawa, the Kitchen of Kyoto Nishiki Market,
Yasaka-jinja Shrine, Maruyama Park, etc.
In “Japan Revitalization Strategy” with a goal of nominal GDP ¥600 trillion, the realization of Japan as atourism nation is one of the major projects. Aiming at creating a “Japan which the world wants to visit”, thegovernment has been engaging in the action program consisting of the review of tourism related regulations
and the effective use of tourism resources. Against this background, we consider that the business for Japaninbound tourists could make big contributions for national interests. Thus, from last year, we started the hotelbusiness and are working on it actively with the intention of making it the second main pillar following ouroffice business. As an ancient city of 1,200 years’ history and tradition, Kyoto is attracting attention aroundthe world. By developing the business project in Kyoto, we are trying to expand and spread our hotel brandwhich cherish Japan culture very much.
2. Acquired Noncurrent Asset and Business Overview
L o c a t i o n : Shimogyo-ku Ward, Kyoto City (Please refer to the attached map below.)
Registered Land Area: 887.24 m²
B u i l d i n g P l a n : Steel-reinforced building, 10 storeys above ground and 1 basement storey, gross floorarea 6,199.39 m²
Summary of Facilities: 189 guest rooms (plan), restaurant, big bath, parking lot, etc.
A c c e s s : one minute’s walk from Kawaramachi Station, Hankyu Kyoto Line; five minutes’ walkfrom Gion-shijo Station, Keihan Main Line.
O p e n i n g d a t e : the second half of 2018 (plan)
Note: All the schedule, building structure and scale are subject to change.

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＜the Land for Project＞

3. Business Scale
The total project cost is expected to 10 billion yen.
About acquisition cost of the asset, we didn’t get the disclosure agreement from acquisition destination, so
we will keep it undisclosed.
4. About the Location
In Shijo Kawaramachi where the hotel land is located, there are many large-scale commercial facilities andrestaurants. It’s a very bustling area where lots of foreign tourists like to visit. One minute’s walk fromKawaramachi Station by Hankyu Kyoto Line, five minutes’ walk from Gion-shijo Station by Keihan Main
Line, the access is very convenient. Big customer-drawing facilities, such as Kyoto BAL and mina Kyoto, arealso within the walking distance. In this area, there is a lot of traffic and it is a place filed with many tourists.
We will fully utilize this good location and try our best to operate the high-class hotel specialized in staytype accommodation.
5. About Foreign Visitors to JapanJNTO announced that visitor arrivals of Japan in this August went up by 12.8% to 2.049 million from ayear earlier, exceeded 2 million as the previous month and it is the highest number ever. As cumulative sumof year to date, the figure exceeded 15 million 2 month earlier and went up to 16.059 million. Besides thecontinuous promotion of trips to Japan, the increase of cruise ship calls and expansion of airline routes also
have large effects on the steady growth of foreign visitors to Japan.
Moreover, many of these foreign visitors are visiting Kyoto and experiencing tradition and culture of Japan.
The percentage of foreign visitors to Kyoto is 29.7% (According to ”Consumption Trend Survey forForeigners Visiting Japan” of Japan Tourism Agency ), very high percentage within Japan ranked fourth afterTokyo, Chiba and Osaka. There are more than 17 world heritage sites such as Nijo-jo Castle and Kiyomizudera Temple. With the intention to share the valuable properties readily with international visitors to Kyoto,
we are aiming at the operation of “heart-warming hotel” through this project.
6. Future Outlook
The acquisition of the noncurrent asset may only slightly influence the consolidated financial results for
the Fiscal Year Ending March 31, 2017.

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