Sun Frontier Fudousan Co., Ltd.

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

1) Overview of the 2Q Results of FY ending March 2021

1-102) Impact of the Spread of the new coronavirus (COVID-19)
Infection and Immediate Management Policy

11-153) Specific Initiatives in Growth Strategies and ESG
Initiatives

16-384) Company Information and Reference Materials

39-46

November 11, 2020

Stock Code: 8934

Performance Summary of 2Q of FY ending March 2021
Sales and profits fell sharply due to the impact of new coronavirus (COVID-19) and a reactionary
fall from the previous fiscal year, but progressed ahead of the full-year forecast. (Unit: 1 million yen)
Results

Profit Margin

Year-on-Year

Growth Rate

Full-year Forecast

Progression Rate

Net Sales

32,164―-8,471-20.9%

70,00046.0%

Operating Profit

5,667

17.6％

-5,524-49.4%

6,930

81.8%

Ordinary Profit

5,384

16.7％

-5,657-51.2%

6,500

82.8%

Profit*

3,459

10.8％

-4,082-54.1%

4,100

84.4%

*”Profit” represents net income attributable to shareholders of the parent company.

Dividend per share

42.0 yen

Topics2) Performance of Real Estate Service and Overseas Businesses
contributed to companywide results

1) Solid performance in RP Business drove companywide results• The number of sales in RP Business was 15, and the segment profit
ratio remained high (27.4%, -6.9% year on year). The solid
performance drove the companywide performance even in the
COVID-19 outbreak. However, sales and profits fell sharply year on
year, partly due to a reactionary fall from the previous fiscal year.
• In such circumstances, we will continue to grow by taking
advantage of the fact that our strength lies in the internalizationof purchasing, development, leasing, sales, and support, graspingclient’s intentions in detail, and utilizing them for the
improvement of new products, and that we are a company thatvalue users’ perspectives.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

• Results in the Real Estate Services segment remained solid despite
the COVID-19 outbreak, with sales and profits at the same level as
the previous fiscal year. Growth in each business in conjunction
with RP Business supported companywide results.
• In Overseas Business, the delivery of HIYORI Garden Tower, acondominium development project in Danang, Vietnam, wascompleted. Sales and profits increased significantly andcontributed to companywide results.

1

Sun Frontier Fudousan Co., Ltd.

Consolidated Income Statement（Unit： 1 million yen）

Net Sales
Real Estate Revitalization Business
Replanning Business(including Hotel Development)

Rental Building and Sublease

Real Estate Service Business
Operation Business
Other Business
Adjustment

Gross Profit
Real Estate Revitalization Business
Replanning Business(including Hotel Development)

Rental Building and Sublease

Real Estate Service Business
Operation Business
Other Business
Adjustment
Selling, general and administrative expenses

Operating Profit
Non-operating Income
Non-operating Expenses

Ordinary Profit
Extraordinary Income and Losses
Income Tax
Profit Attributable to Non-controlling Interests

ProfitFY ended
March 2020
April - September

FY endingMarch 2021
April - September

40,63535,61533,870
1,744
1,715
2,715
1,141
-551
14,884
13,15812,479
679
1,105
321
387
-87
3,692
11,192215
365
11,042
3
3,508
5
7,542

32,164
26,13824,308
1,829
1,707
1,378
3,498
-558
9,010
7,629
7,151
478
1,141
-592
992
-160
3,343
5,667
87
370
5,384
-6
1,925
6
3,459

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

Income Statement Points

Increase/
Decrease-20.8%-26.6%-28.2%
4.8%-0.5%-49.2%
206.5%-39.5%-42.0%-42.7%-29.6%
3.3%
156.3%-9.5%-49.4%-59.5%
1.4%-51.2%-45.1%-54.1%

2<RP Business>
Partly due to a reactionary fall from 1Q of the previous fiscal year,
sales were down to ¥24.3 billion (down 28% year on year) andgross profit fell sharply to ¥7.1 billion (down 42% year on year), but
RP Business continued to drive companywide results.

<Hotel Operation Business>
Hotel Operation Business suffered a decline in performance due tothe impact of the COVID-19 outbreak. Although there are recent
signs of recovery thanks to the effects of the GoTo Travel campaign,sales were down to ¥1.3 million (down 49% year on year) and grossprofit posted a loss of approximately ¥0.6 billion.
<Other Businesses>
In Overseas Business (Vietnam), the delivery of condominiums forsale was completed. Overall sales increased to ¥3.5 billion (up 207%
year on year) and gross profit increased approximately to ¥1.0
billion (up 156% year on year), contributing to earnings.
<Selling, general and administrative expenses>
SG&A expenses were ¥3.3 billion, down approximately 10%
from the same period of the previous fiscal year, due tocompany-wide cost-cutting efforts and the promotions ofdigitalization to improve business processes.
Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Assets decreased by ¥5.2 billion due to the sale of properties. Among them ¥5.0 billion decreased in RP business projects,¥1.5 billion increased in hotel projects due to the progress of construction in Okinawa, and ¥1.7 billion decreased inoverseas projects due to the delivery of condominiums for sale and other factors.
<Cash and time deposits > increased by ¥7.1 billion due to the sale of RP properties and overseas projects, as well as borrowings fromfinancial institutions.

<Inventories>< Other current assets >decreased by ¥1.4 billion due to a decrease in consumption tax receivables and advance payments.

（Unit: 1 million yen）

FY ended March
2019

Current Assets

FY ended March
2020

FY ending March 2021
As of End of
September 2020

Increase/Decrease(Compared to End of
March 2020）

97,149113,842

114,311+469

Cash and time deposits

20,257

18,62725,759+7,132Inventories

74,32991,76686,549-5,217

62,14371,353

66,317-5,036

Hotel

7,552

17,01918,558+1,539Overseas,

4,634

3,395

1,674

-1,724

Other Current Assets

2,562

3,448

2,002

-1,446

Non-current Assets

13,74916,45016,641+190

Property, Plant andEquipment

9,339

10,413

10,526+112

Intangible Assets

863

712

629

-83

3,546

5,324

5,485

+161

110,898

130,293

130,952+659

Breakdown） RP

etc.

Investments and Other Assets

Total Assets
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3

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Liabilities/Equity <Interest-bearing Debt> decreased by approximately ¥1 billion from the end of theprevious fiscal year to ¥48.3 billion due to the sale ofproperties and other factors.

Change in Equity Ratio<Net Assets> increased by ¥4.3 billion due to profit (¥3.4 billion) and the issuance ofpreferred stock of subsidiaries (¥3.0 billion), despite the payment ofdividends in the previous fiscal year (¥2.0 billion).

（Unit: 1 million yen）
Current Liabilities

FY ended
March 2019

End of March2019

End of March
2020

End of Sep.
2020

50.3%

49.6%

50.4%

FY endingMarch 2021
As of end of
September 2020

FY ended
March 2020

Increase/Decrease(Compared to end
of March 2020）

12,85918,052

21,827+3,775

Short-term Borrowings, etc.

2,248

4,463

10,588+6,124

Income Taxes Payable, etc.

2,661

3,566

2,183

-1,382Other Current Liabilities

7,949

10,022

9,055

-966

Non-current Liabilities

42,17947,431

39,988-7,443Long-term Borrowings and Bonds
Payable39,75144,90637,752-7,153

Other Non-current Liabilities

2,428

2,525

2,235

-289

55,03865,483

61,815-3,66855,90064,69066,102+1,412

-40

119

3,035

+2,915

Total Net Assets

55,86064,80969,137+4,327

Total Liabilities and Net Assets

110,898

130,293

130,952+659

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

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Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Replanning Business (Replanning (RP)/ Hotel Development)◼ The number of buildings sold was 15 cases and decreased significantly from theprevious period (24 cases) due to the facts that economic activity was restrained by
the state of emergency declaration in the current period and that the sale ofproperties including large-scale projects was concentrated in the same period of theprevious year.
◼ The average RP Business period was 490 days (+81 days from the previous year). The
business period has been extended due to efforts to commercialize buildings to raise
their rent levels, but a high profit margin on sales was maintained.
◼ Purchases of projects contracted before February were settled as planned.
The number of properties in year-end inventory was 64 (52 RP Business-related
properties and 12 Hotel Business-related properties).
Inventories were ¥84.8 billion (¥66.3 billion for RP Business-related and ¥18.5 billion
for Hotel Business-related).

(1 million yen)

Net Sales
Segment Profit
Profit Margin

40,00035,00060%
33,87050%

30,00025,00034.3%

40%

24,308*Excluding those related to Overseas Business.

(Unit: 1 million yen)

Net Sales
Segment Profit(Note 1)

FY ended
March 2020
Apr. to Sep.

FY endingMarch 2021
Apr. to Sep.

33,87024,30820,000
Increase/
Decrease30%

20%

11,615
10,00011,6156,658-42.7%

27.4%-6.9%pt

Number of Items
Purchased

28 cases

9 cases-19 cases

Number of Properties
Sold

24 cases

Number of Stocks atthe End of Fiscal Year

15,000-28.2%

34.3%

Profit Margin

27.4%

76 cases(Note2)

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

15 cases*Including 1 case of
primary composition

64 cases(Note 2)-9 cases-12 cases
5

6,658
5,000
0

10%

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

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Rental Building Business (Rental Buildings/ Sub-leases)◼ Net sales increased due to a steady progress in attracting tenants
to RP inventory properties and Sublease Business, but segment
profit decreased due to rent exemption because some hotels andwere temporarily closed and occupancy rate was declined.

Net Sales
Segment Profit
Profit Margin(1 million yen)

2,000
1,800

100%
1,829

1,744

1,600
75%
1,400
1,200

(Unit: 1 million yen)

Net Sales

FY ended
March 2020
Apr. to Sep.

FY endingMarch 2021
Apr. to Sep.

1,744

1,829

1,000
Increase/
Decrease

+4.8%

800

50%
38.9%

677
26.1%
478

600

25%

400
Segment Profit

677

478

-29.5%

Profit Margin

38.9%

26.1%

-12.7%pt

20000%FY ended March 2020
Apr. to Sep.

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6

FY ended March 2021
Apr. to Sep.

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

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

End of Sep. 2018
End of Sep. 2019
End of Sep. 2020

378 buildings
381 buildings
403 buildings

2,000
1,800

[Occupancy Rate]

97.2%
98.9%
96.8%

1,400
1,200

1,715

1,707

-0.5%

200

Segment Profit

1,105

1,141

+3.3%

0

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64.4%
1,105

66.8%
1,141

60%

40%

600

Net Sales

66.8%

80%

800

FY endingMarch 2021
Apr. to Sep.

64.4%

1,707

1,715

1,000

FY ended
March 2020
Apr. to Sep.

Profit Margin

100%

1,600

<Brokerage and Leasing>◼ Sales and profits increased significantly due to a steady accumulation ofproject contracts in cooperation with other departments. Although rental
brokerage contributed to the commercialization of RP properties, sales andprofits decreased due to a decrease in contracts for external properties
under the COVID-19 outbreak.

(Unit: 1 million yen)

Net Sales
Segment Profit
Profit Margin(1 million yen)

[Number of PM Managing Buildings and Occupancy Rate][Number of Managing Buildings](Property Management/ Building
Maintenance/ Brokerage/ Leasing)

Increase/
Decrease

400

20%

0%
FY ended March 2020
Apr. to Sep.

+2.4%pt

7

FY ended March 2021
Apr. to Sep.

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Operation Business （Hotel Operation and Conference Room Rental Business）<Hotel Operation Business>◼ 7 hotels were temporarily closed in 1Q. In 2Q, the performances of “Tabino
Hotel Sado” and “Sado Resort Hotel Azuma,” and hotels in local areas such as(1 million yen)Kashima and Mizushima were recovered. Large cities hotels such as Osaka and （百万円）
3,000
Ginza continue to struggle to recover. Despite an increase in advance bookingsand signs of recovery, we posted a large decline in revenue and a loss for theperiod.
2,500<Conference Room Rental Business>◼ There were signs of recovery from June onwards. Demand has changed after
the COVID-19 outbreak, and a series of new services were introduced based on
2,000
research of client feedback. We also took measures to prevent infectious
diseases, deployed online facilities, and secured a profit.

Net Sales
Segment Profit
Profit Margin

40%

2,715
30%

20%
FY endingMarch 2021
Apr. to Sept.

2,715

1,378

-49.2%

2,065

751-63.6%

Conference Room Rental Business

650

627

-3.5%

Segment Profit

207

-621

-

Hotel Operation Business

77

-735

-

(Unit: 1 million yen)

Net Sales
Hotel Operation Business

Increase/
Decrease

130113-12.6%

7.6%--

Hotel Operation Business

3.7%

-

-

Conference Room Rental Business

20.0%

18.1%

-1.9%pt

Conference Room Rental BusinessProfit Margin

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8

1,378

1,500

FY ended
March 2020
Apr. to Sept.

1,000

10%

7.6%

500
0%

207
0

-10%
-500
-621
-1,000

-20%
FY
2020
FYendedended March
March 2021
Apr.
to
Sept.
April to September

FYendedendingMarch
March 2021
FY
2021
Apr.
to
Sept.
April to September

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Others (Rent Guarantee, Construction and Overseas Business, etc.)<Rent Guarantee Business>◼ The number of consultations from building owners has increased due toincreased vacancies, concerns about tenant credit, and switching frompersonal guarantees. Although the number of guarantees remained
strong, profits decreased slightly due to an increase in reserves for
performance of guarantees.

(1 million yen)

4,000<Construction Business>◼ Although sales of SF engineering contributed, sales and profits
decreased due to a decrease in large-scale construction orders from theprevious year.

(Unit: 1 million yen)

FY endingMarch 2021
Apr. to Sep.

3,000

75%

2,500
2,000
1,500

Increase/
Decrease

50%
30.3%

1,141

3,498

+206.5%

Segment Profit

346

964

+178.7%

Profit Margin

30.3%

27.6%

-2.8%pt

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

27.6%

1,141
964

1,000

Net Sales

100%
3,498

3,500

<Overseas Business>◼ Delivery of the condominium "HIYORI Garden Tower" in Da Nangcompleted. The delivery between January and June has contributed tothe business performance in the current period. Sales and profits
increased significantly.

FY ended
March 2020
Apr. to Sep.

Net Sales
Segment Profit
Profit Margin

9

500

25%

346

0

0%

FY ended March 2020
Apr. to Sep.

FY ended March 2021
Apr. to Sep.

Sun Frontier Fudousan Co., Ltd.

Trends in Key Management Indicator■ Changes in Ordinary Profit Margin(1 million yen)

■ Changes in Equity Ratio(Pursuing High-Value-Added Management)

80,000(1 million yen)

30%

売上高
Profit(Building a Stable Financial Base)

70,000

経常利益
Ordinary Profit
経常利益率
Recurring Profit Margin

24.0%

22.9%

22.0%

22.7%
22.0%

60,00070%

full-year forecast

70,00080%

Net Assets
純資産
Equity Ratio
自己資本比率60,000

25%

55.7%

56.0%

50.3%

50,000

20%

60%

53.2%

50.4%
50%

50,00016.7%

40,00049.6%

15%40,00010%

30,00040%

30%

30,000full-year forecast

20,00010,000020%
5%20,00010%

0%2016/32017/3

2018/3

2019/3Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2020/3

10,0002021/32020/９0%
2016/310

2017/3

2018/3

2019/32020/32021/32020/９Sun Frontier Fudousan Co., Ltd.

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

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11

Sun Frontier Fudousan Co., Ltd.

Impact on Main Business and Recent Movements
Business

Impacts➢ The occupancy rate at buildings managed by the Company was 96.8% at the end of September, down about 1%
from 97.8% at the end of June, mainly due to cost reductions and the downsizing of offices through theintroduction of remote work. Requests for rent reductions have stabilized, but while the number of cancellations,which were mainly for retail spaces between April and May, is settling down, the number of cancellations foroffice spaces increased between July and September.
➢ Office rents did not experience an extreme decline but were on a downward trend with the increase in vacancies.
➢ Difference in the occupancy rate of each building has emerged, and an increase in vacancies is noticeable in large
buildings and buildings whose competitiveness declined due to aging.

• Office Building Business➢ While lease contracts at RP properties have been steady, main reasons for relocating offices are new
establishments and floor space expansions even during the COVID-19 outbreak and fewer are relocations due todownsizing and cost cutting.
➢ The interest in small and medium-sized buildings increased due to the move to set-up offices and the trend of
dispersing offices to multiple buildings, which allows for relocation with lower initial costs without compromising
the grade of the building.
➢ In Rent Guarantee Business, the number of delinquent payments, which had increased due to the COVID-19
outbreak, is on a downward trend. However, for businesses in the central part of Tokyo, cash flow has not yet
reached the point of turning around, and depending on the industry and business type, a prolonged period ofsevere conditions is expected, which will need to be closely watched.

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12

Sun Frontier Fudousan Co., Ltd.

Impact on Main Business and Recent Movements
Business

Impacts➢ The turbulent period of repeated cancellations and bookings is over.
➢ Client needs have changed. There is an increasing need for facilities to support online delivery.
➢ Even when the COVID-19 outbreak is under control in the future, the overall volume is not• Conference Room
Rental Businessexpected to return to the previous level. On the other hand, the demand for flexible space

appears to be growing, and the Company will flexibly change to meet customer needs andintroduce new services one after another.
➢ Over-supply caused successive disappearances or withdrawals of rental conference room andshared office providers.
➢ The performance of hotels in local areas such as Sado (Tabino Hotel Sado and Sado Resort Hotel
Azuma), Kashima (Tabino Hotel Kashima) and Mizushima (Tabino Hotel Kurashiki Mizushima)
recovered. In particular, Tabino Hotel Sado recorded full occupancy 15 times in October. The• Hotel Operation
Business

occupancy rate was 87%, exceeding the previous year’s figure, due partly to the lack of return of
tourism demand around the usually busy Obon festival season.
➢ Due to the late addition of Tokyo to the GoTo Travel campaign, hotels in major cities (Osaka,
Ginza, etc.) struggled. There are signs of recovery in advance bookings, as policy effects are
beginning to emerge.

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13

Sun Frontier Fudousan Co., Ltd.

Business Environment Awareness
1.

The Japanese economy has been severely affected by the spread of COVID-19 infection, and it will take some time
to recover.
◆ Uncertainty remains as we must remain vigilant for a third wave of infection. The economic stagnation appears likely tobe prolonged.
◆ Until a safe vaccine is produced, economic activities will continue to be unstable under the new lifestyle with COVID-19.
◆ Foreign visitors to Japan have virtually disappeared, with only 13,700 visitors recorded in September (decreased by
99.4% from the same month in the previous year). The aviation and tourism industries are facing a predicament.
◆ The travel to and from Tokyo added to the GoTo Travel campaign has created a movement of people and is revitalizing
society.

2.

The world economy is decelerating rapidly. Each country was severely affected by the spread of COVID-19 infection
and is facing a serious recession.
◆ The IMF expects the global economy to remain in a slower decline than previously expected, and raised its growth rate
forecast to -4.4% (previous estimate: -5.2%).
◆ The COVID-19 outbreak has further accelerated compressed changes in the digitalization of society.
◆ Due to the second wave of infection in Europe, partial lockdown have been reimposed. In the U.S., additional economic
measures have been delayed and there are concerns about the future.

3.

The office building market in central Tokyo was booming for a long time, but it has peaked out due to COVID-19
infection and is in a gradual downward phase.
◆ Vacancy rates have risen due to business downsizing and job losses caused by the recession, and rent levels are
declining.
◆ Office demand is declining due in part to the downsizing of offices due to the penetration of remote work.

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14

Sun Frontier Fudousan Co., Ltd.

Immediate Management Policy

Three
Policies①

Thorough to Prevent the Spread of
COVID-19 Infection and Continue
Business②

Keep the Financial stability③

Concentrate Resources on our Main
Business “Regeneration and Utilizationof Real Estate"

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15

Sun Frontier Fudousan Co., Ltd.

3) Specific Initiatives in Growth Strategies～ 4 growth strategies ～1. Expansion of Main Business
2. Hotel Business3.Overseas Development
4. M&A

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16

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Business Model of Office Building Business -We create added value in a business chain
and maximize the attractiveness of buildings
Our strength lies in the internalization of purchasing, development, promotion of occupancy, sales, andsupport, grasping client's intentions in detail, and utilizing them for the improvement of new products.

Funding Advice

Asset Consulting

Rent Guarantee

Construction Planning

Property Management

Leasing

Brokerage

Property
purchase②
Real Estate
Revitalization
Building
development ofvalue chain① Real Estate Utilization
To be a partner to solve difficulties from our clients’point of view

Clients (Building owners, Asset holders and Wealthy individuals)① 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 reflect the knowledge and needs of asset value improvement in
the revitalized buildings to increase the value and sell them.
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17

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Leasing Business -Our strengths are the ability to propose the value of utilizing
offices and to promote occupancy from users' perspective
1. We specialize in small and medium-sized officebuildings in central Tokyo.
We have a branch network in the center of the citywith close connections to local communities.
Our strength is to propose the optimal utilization
value of small and medium-sized offices, which is
our specialty, and to guide and mediate tenants.
2. We extend to our clients unfailing courtesy andbecome “a real estate company closest to clients.”
We are their trustworthy point of contact to consult
and solve any of their problems.

Ueno
Akihabara

Ikebukuro
Kudan

Kodenma-cho

Kanda

Nihonbashi

ShinjukuTokyo

Kojimachi
Shibuya

AkasakaHibiyaHead Office

Ginza

AoyamaToranomon

Shimbashi

Ebisu

3. We actively utilize digital marketing to strengthen
our ability to appeal to a wide range of users.
We propose the value of offices to a wide range ofusers by utilizing furnished offices and online
viewing.

MeguroGotandaShinagawaare locations of the core branches.

4. As a source of added value creation in the Real
Estate Revitalization Business, we will grasp theneeds of tenants, constantly change our Company byrelying on the voices of tenants, and create offices
where tenants can grow and move in easily.

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

Hamamatsu-cho

Yokohama

18

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Example of Replanning Business -Setup office where corporate growth will be accelerated
Even during the recession due to the COVID-19 outbreak, setup offices, which reduce relocation costs,
improve employee motivation, and accelerate corporate growth, have demonstrated their strengths.
6 values creates by a setup office

BeforeBefore

After

After

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

After

Office space

Refresh room

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

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

Reception space & meeting room

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

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

19

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business – Sonomanma Office! -We aggressively develop the vacant office market
and strengthen our ability to promote tenant occupancy
Actively developing business as a pioneer in the vacant office market.
Creating a secondary market for setup offices and refining our strength of"tenant occupancy promotion."
Offices where corporate growth will be accelerated

Sonomanma Office!

Offices where corporate growth will be accelerated

Sonomanma Office!

Relocation is completed 3 days
after selecting the property!
Expected to improve theworkability of employees andpromote recruitment

Properties

What is a set-up office?
Explanation of the advantages anddisadvantages of a set-up officeand key points of choosing aproperty[Office relocation schedule]
Thorough explanation of efficient
office relocation methods[Property No.1-1708] Akihabara First Square
A maisonette type office like a cafe

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

FEE FREE
Brokerage fee
Manyunnecessary
Properties

Conventional
OfficeSonomanma
Office!

Sonomanma
Office!

https://www.so-office.jp/

20

Sun Frontier Fudousan Co., Ltd.

1.

Expansion of Main Business - Rent Guarantee Business -To be a dependable and chosen rent guarantee company
in the rental guarantee market in the COVID-19 Outbreak
New signings recovered to pre-Corona levels at the highest level in about a year and five months. The reasons forthe increase of the number of consultations are: (1) fear of tenants’ creditworthiness, (2) reluctance of othercompanies to accept guarantees for business use, and (3) the growing need for institutional guarantees due to thecomplexity of personal guarantees. In addition, with the increase in delinquent payments due to the COVID-19
outbreak, other companies are experiencing an increase in disputes over the content of their warranties, while weuse our extensive track record and high credit decision- making ability to reassure landlords, which has contributed
to our ability to promote tenant occupancy.
Change in Number of Newly Contracts (cumulative)

A Pioneer in Rent Guarantee Business for Offices and Shops

Lease Agreement

Steadily built-up stableearnings as a stock business

LenderEnd of Mar. ‘20

End of Mar. ‘19

End of Mar. ‘18

End of Mar. ‘17

End of Mar. ‘16

End of Mar. ‘15

End of Mar. ‘14

End of Mar. ‘13

End of Mar. ‘12

End of Mar. ’11

End of Mar. ‘10

End of Mar. ‘09

End of Mar. ‘08

End of Mar. ‘07

End of Mar. ‘06

Guarantee Warranty

SF Building Support[Guarantee Business Results]◆ Total gurantee warranties◆ Incident rate of building vacating litigation(Compulsory execution rate)

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

5,346 cases
2.8%(0.6%)

Guarantee

Borrower
Guarantee Consignment
Contract

Casualty Insurance
Contract

Established: July 2005 (16 years)
Representative: Izumi Nakamura
https://www.sfbs.co.jp/

21

General Insurance
Company

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Offices and Ways of Working in the COVID-19 Outbreak -Creating a richer way of working and a new way of ideal offices
We pursue flexible and creative office utilization that is not bound by old customs andcommon sense, and propose it to society.

◆ Day Offices~ A New Idea of “Rent by the Day” Shared Office Design ~https://week-office.com/◆ Art X Office~ Creative Art Office to Choose a Room with Art (Mural) ~https://a.yotsuya-office.jp/
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

22

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Property Management Business -With the experience and organizational strength we have cultivated,
we will respond to the COVID-19 outbreak and expand contracts
100%

98%

900,000

96.8%

Entrustedfloor area (Right Axis)
管理受託面積（右軸）Occupancy
rate of entrusted assets (Left Axis)
管理受託物件の稼働率（左軸）Occupancy
rate in 23 wards of Tokyo (Left Axis)
東京２３区の稼働率（左軸）(㎡)(As of the end of Sep. 2020)

800,000

Operating rate of our PM
entrusted properties*Note1

700,000

96%

96.9％

94%

600,000(As of Oct. 1, 2020)

500,000

92%

Average occupancy rate of medium-sizedbuildings in 23 wards in Tokyo *Note 2

90%<PM Client Rankings>*Note3
Top Companies in Terms of Number ofContracted Owners*
1 Vortex

88%

86%

84%

400,000

Our strength is the ability to maintain tenant occupancy rates
above the market average even during the recession, as seen
during the period of 2011-2014 when the market occupancy
rate deteriorated.

2018

2019

690

778

2 Xymax

495

510

3 Sun Frontier Fudousan

271

264

－

214

－

208

SHIMIZU COMPREHENSIVEDEVELOMENT
5 RIO HOLDINGS

4

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q …
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q…2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q …

March 2009 March 2010 March 2011 March 2012 March 2013 March 2014 March 2015 March 2016 March 2017 March 2018
*Note1: Operating rate: (Total operating area)/(Total lent available area).
*Note2: Our research based on “Monthly Office Market Research Report” by Sanko Estate Co., Ltd.,*Note3: Our research based on the November 2019 issue, “Monthly Property Management.”
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

23

300,000

200,000

100,000

0March 2019 March 2020 March 2021

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Example of Replanning Business -~one profit building in Ikebukuro~

Real estate revitalization business that mobilizes all thestrengths of our office businessThis building had an inconvenient traffic line with a parking lot on the basement 1st and 1st floor, and an entrance on
the 2nd floor. Furthermore, the building had many problems, such as an illegal expansion on the top floor and others.
We have fully renovated the entire building by utilizing our knowledge accumulated through 400 revitalization projects.
Ensuring legal compliance by calculating the surplus of the floor area ratio, verifying the relocation, and carefully
verifying compliance with various laws and regulations associated with the relocation of the entrance to the first floor
and the removal of stairs. In addition, we created a setup office on each floor to attract tenants, and achieved fulloccupancy of vacant rooms on 9 floors in only 4 months, improving the product value and making the property safe,
stable, and hassle-free.
BeforeAfter▲Entrance▼Office Space

After

Renovated into a stately entrance with granite stone

After

Created an open space with a view of the city center and natural light
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

24

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Replanning Property Sales Strategies -We sell real estate revitalization products in small lots
We sell high-quality, highly profitable buildings that have been renovated in RP Business as
small-lot products under the Real Estate Specified Joint Enterprises Act (No. 2 project, Jimbocho
Center Building). We sell safe, hassle-free physical real estate assets in the form of small-lot
products with a unit price of ¥1 million per unit to develop a new market.
Voluntary Union

Building Appearance

RentalIncomeInvestment
Dividend

Executive
Committee
Members

Coownership
CapitalContribution

Building owners, property owners, and wealthy people

We sell through a network of 130 tax accountants nationwide, which we have developed since the start ofnon-specialized business.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

25

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Replanning Property Sales Strategies -We also sell to overseas investors based on trust even in the COVID-19 outbreakIn spite of the continuing restrictions on travel to Japan, new sales have beenachieved through referrals and repeat business from overseas investors, mainly in
Taiwan, based on the trust that has been built up over a long period of time tosupport building management after purchase.
Real Estate Investment Businessin Japan~ Collaboration and Linkage with the Office Business in Japan ~We work with the office business department to

Office Business
Department

maximize the value of its assets, including leasing andBMmanagement, and this leads to repeat customers andTaiwanese wealthy andaffluent people

東京陽光不動産
Introduce investment
real estate/Solve client’sbuilding management
problems/Subsequent
proposals for asset
replacement

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

Manage-ment

RPreferrals.

26

Broker-age

Leasing

BS
Construction

Work to increase
the value of assets
by revitalizing andutilizing realestate.

Real Estatein Japan

Sun Frontier Fudousan Co., Ltd.

1. Expansion of Main Business - Business Model -Focusing on the central Tokyo area and small and medium-sized
office buildings,we thoroughly differentiate our strengths
We specialize in business areas where we can exert our influence, continue to pursue and refine theexpertise of existing businesses based on client feedback, and maximize real estate value.
Expand, strengthen, and differentiate high-profit businesses through cross-business collaboration andchain initiatives.
Securitiza

Early stage ofestablishment

RentalSecuritiza Replanning-tion ofReal
EstateBrokerage

OfficeRentalBuilding
Building Business inCentral Tokyo-tion ofReal
EstateRentalBuilding
PM

Construction

OfficeBuilding
Business inCentral Tokyo

Brokerage

Sub
Leasing

Brokerage

PM
Sub

Construc-tion

RentalConference
Room

OfficeBuilding
Business inCentral Tokyo

Drone

AssetsConsulting

Rent
Guarantee

Real Estate
Retail
Products

BM

Leasing
Leasing

PM

Flexible
OfficeRent
Guarantee

Leasing

Business…

Leasing

Building

Day Offices
Replanning⇒ We will expand our existing business further and will challenge new fields of business by utilizing
M&A, the IT. We will expand our business area of small and medium sized office buildings in central
Tokyo.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

Sun Frontier Fudousan Co., Ltd.

2. Hotel Business - List of hotels under operation and development -We focus on improving profitability
at hotels under operation
We have steadily built a muscular organization through our cost reduction efforts.
Many hotels secured operating surpluses in October due to the effects of the Go To
Travel campaign. Recovery is clear at local hotels. Large city hotels (Tokyo, Osaka)continue to struggle to recover.
Improvement of profitability of 20 hotels including those under construction and an
addition of new development projects are postponed.

Hotel Name Location

StatusNo. ofRooms

In operation

SSH Nagoya Tokoname

194

In operation

Hiyori Hotel Maihama

80

In operation

Hiyori Hotel Osaka Namba Station

224

In operation

Hiyori Hotel Tokyo Ginza EAST

135

In operation

Tabino Hotel Hida Takayama

80

Running or Leasing

In operating

15 hotels

Under construction

5 hotels

In operation

Tabino Hotel Sado

111

Total number of rooms 3,129 rooms

In operation

Tabino Hotel Kurashiki Mizushima

155

In operation

Tabino Hotel Kashima

194

In operation

Sky Heart Hotel Kawasaki

200

In operation

Sky Heart Hotel Koiwa

105

MatsumotoIn operation

Sky Heart Hotel Narita

100

Kashima

In operation

Sky Heart Hotel Hakata

159

In operation

Sky Heart Hotel Shimonoseki

105

In operation

Courtyard by Marriott Osaka Honmachi

193

In operation

Sado Resort Hotel Azuma

57

Toyama210

Under construction

Onna, Okinawa

203

Under construction

Kyoto Nijo Kawaramachi

203

Under construction

Miyako-Island

111

Under construction

Kyoto Shijo Kawaramachi

134

Under construction

Matsumoto

176

Under construction or Planning*As of November 11, 2020

Sado (Chigusa)
Sado (Azuma)
ToyamaTakayama

Onna, Okinawa

Kyoto Nijo

Maihama

Kyoto Shijo
MiyakoIslandNaritaRenting

Koiwa

Shimonoseki

Ginza

Tokoname
HakataOsaka Honmachi

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

28

Sun Frontier Fudousan Co., Ltd.

2. Hotel Business - Onna, Okinawa -“HIYORI OCEAN RESORT OKINAWA” inprogress for opening in February.

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

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

Hotel Appearance

First to fifth sales
135 plots sold out（all 203 plots）

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

View from the living room

29

Sun Frontier Fudousan Co., Ltd.

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

3. Overseas Business - Da Nang, Vietnam -We concentrate on the condominium business in Da Nang
High-rise condominium“HIYORI Garden Tower”<Philosophy of Overseas Business:“Providing comfort to the people of Asia, together with our partners.” >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

Condominium
Business
Development/Sales
A View overlooking the city

Operational
management
Brokerage business
Owner agency
management
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Sun Frontier Fudousan Co., Ltd.

4. M&A

Expansion of Existing Businesses and Start-up Investments～
We will welcome human resources, technologies, and platforms in our businessto the Group to expand and optimize services in response to the changing
environment and accelerate the growth of peripheral businesses.
<Achievements of M&A and Capital Alliances>
Year

Business Overview

Company Name and Business Name

1

2010

Sonomanma Office!

Website Specializing in Set-up
Offices2

2012

Yubi (Currently SF Building Maintenance)

Building MaintenanceVision Center and Vision OfficeRental Conference Rooms andRental Offices

3
4
5

6
7
8

9
10
11

2016

2018

2019

Hotel AU Tokoname(Currently Spring Sunny Hotel Nagoya Tokoname Station)

Hotel

Sky Court Hotel(Currently Sky Heart Hotel)

Hotel

Sado Resort Hotel Azuma

Japanese-style Inn with a long
History (Sado Island)

VIP Nangoku(Currently Sky Heart Hotel Shimonoseki)

Hotel

Okesa Kanko Taxi

Taxi and Tourist Bus (Sado Island)

Kouwa Corporation(Currently SF Engineering)Interior Finishing Work for
Offices, etc.

Sado Biyori

Sado Island Information Website

SKY ESTATE

Drone Business

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

31

Sun Frontier Fudousan Co., Ltd.

4. M&A -To Expand Existing Businesses and Invest in Start-up Business-

We create new added value in the industry by utilizing drones
SKY ESTATE which has cutting-edge drone piloting technology cooperates with the Company
which manages more than 400 buildings and has a wide client network (building owners, realestate management companies, hotel operators and others) in the real estate industry to
promote exterior wall surveys with a drone. We create new added value in the industry thatdiffer from the conventional building management by introducing new technologies andinnovative services for building management.
SKY ESTATE has the market-leading trackrecord in the industry
・Exterior wall survey of 209 buildings with a drone.

Advantages of Exterior Wall Survey with a
Drone
1. With no scaffolding, gondola or rope inspection
required, operation can be done faster with lower
cost.(costs can be reduced to about 1/3.)
2. High-rise buildings can be surveyed without
scaffolding.
3. Operation can be conducted from the ground, thus
ensuring excellent safety.
4. Applicable to periodic reporting for specified
buildings that require regular exterior wall surveys.

Specialized drones for exterior walland infrastructure surveys

Infrared rays can identify floating tiles[Outline of the Investee]◼ Name: SKY ESTATE Inc.
◼ Major Services: Drone school management, exterior wall survey◼ Established: September 28, 2016
Numberof◼ Shares Acquired ： 33.5% of Issued shares◼ URL： https://sky-estate.com/

The collaboration with SKY ESTATE will lead to accurate understanding of aging deterioration andoptimal repair work required, creating synergies with the office business department, andstrengthening proposal and maintenance capabilities.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

Sun Frontier Fudousan Co., Ltd.

ESG Initiatives

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

33

Sun Frontier Fudousan Co., Ltd.

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

34

Sun Frontier Fudousan Co., Ltd.

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

Environment

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

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

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

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

35

Sun Frontier Fudousan Co., Ltd.

Estimation of Environmental Contribution

ESG Initiatives

Real Estate Revitalization Business that conserves limited resources, reduces
waste generation, and coexists with the environment without demolishing aging
buildings [E]●Comparison of resource inputs over 50 year
Renovation Plan

2,104

Rebuilding Plan

2,030
0

500

156

40.9% reduction

97
1,725

1,000

1,500

2,000

2,500

150

3,000

162

50

Rebuilding Plan

84

New Building
新築

100
Rebuilding
建替

49.3% reduction

110
89

53

600

700

246

323
0

200

300

Repair
修繕

400

Renovation
改修

500
Demolition
解体

Standard*

893

480

1,711
0

New
Building
New Building
新築

1,000

修繕

Repair

703

458

463

249

2,000

改修

Renovation*Architectural Institute of Japan, “LCA Tool for
Buildings Ver.5.0 - Assessment Tool for Measuresagainst Global Warming, Resource Consumption andWaste” (Japanese only)

89800

19.1% reduction

2,592

47
412

3,000

維持管理

Maintenance

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

3,520

48
4,000

廃棄

Abandonment

Rebuilding: If the building is to be rebuilt every 35
years
Renovation: Revitalization of aging buildings without
demolishing them (long life buildings)
Standard: Assuming a 30-year-old unrenovatedbuilding

Estimated with the help of ERC, Inc.

kg/㎡

●Comparison of CO₂ emissions over 50 years
Renovation Plan

4,000
kg/㎡

●Comparison of waste generation over 50 year
Renovation Plan

3,500

85

＜Prerequisites and Basis＞
Assuming a 30-year-old, approximately 3,000 square
meter office building. Estimating environmental
contribution over 50 years (the service life of an SRC
building) based on the Architectural Institute of Japan
LCA tool (*).

5,000

6,000

エネルギー

Energy36

7,000Compared to the proposedreconstruction and standard building◼Resource input:◼Amount of waste
generated:

1,182t reduction◼CO₂ emissions:3,660t-CO₂ reduction

4,899t reduction

kg-CO2/㎡

Sun Frontier Fudousan Co., Ltd.

At last

Our human resources base that survived the 2008
global financial crisis is the cornerstone of growth(1 million yen)

70,00060,000Bothdifficulties
Net Sales
and Ordinary
Incomeremainedstrong.and more
We overcame
immediately
after listing,and havegrown stronger(number of people)
pliantThe
thannumber
before theof
crisis,while increasing
the numberof colleagues.
employees
is steadily
increasing.
73,218700
70,000

売上高
Profit612

Ordinary Profit
経常利益53,291

Employees
従業員数48,15050,00047,46340,39440,00035,254
26,87030,00020,00010,000030,62527,741 276

2 681 1,771
84 96
70
52
8,289 6,346
24
7,760
1
5,003
3,588
1,437 3,474
0 140 377 501 791(10,000)(20,000)
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

199

600

500

400

300

223

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

206

329

381

522

632

(3,776)(17,794)

37

181

(100)

(200)

Sun Frontier Fudousan Co., Ltd.

Crisis is an opportunity for growth!
We have grown our business through the experience ofthe 2008 global financial crisis.
Based on our philosophy and with the strength of ourtightly bonded partners, we will use this crisis as aspringboard for the next stage of development andfurther growth in the future.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38

Sun Frontier Fudousan Co., Ltd.

4) Company Information and Reference Materials

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

39

Sun Frontier Fudousan Co., Ltd.

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

Clients

Building owners, asset holders, wealthy individualsCore Business

PolicyStrategy

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

OfficeStrength

TenantEffective operation
mediation

Real estate
revitalization

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

40

Sun Frontier Fudousan Co., Ltd.

Medium-term Management Plan

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

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

Net Sales
Ordinary Profit
ProfitEquity Ratio
Ratio of Ordinary
Profit

100 billion yen
20 billion yen(Unit: 1 million yen)

100,000
80,00040,00050% or more

20,000

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

Net
売上高

100,000

Ordinary
経常利益

Sales

Profit73,21870,00053,29160,000

14 billion yen

20% or more

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

40,39427,741
10,5802,039

30,625

17,772
4,341

47,463

5,593

7,024

2015/3

2016/38,894

10,755

12,8132017/3

2018/3

2019/36,500

0
2013/3

2014/341

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

Sun Frontier Fudousan Co., Ltd.

ESG Initiatives

Contribute to the Revitalization of the Community
and Society [Ｓ]We promote revitalization for optimal applications that meet the needs of society.
Lend buildings to companies that support all stages of life. Revitalize buildings to meet the needs of the community.
BeforeAfter

Originally designed for an officeNursery school from B1 to the 4th floors, children’s facility for elementary school students on the 5th
floor, and a cancer patient support facility on the 6th floor

Industry, government, and academia work together to create a waterside space for local people to gather and relax.
BeforeAfter

The ground floor parking lot was converted to restaurants and connected to the canal side
promenade. Creating an attractive waterfront and canal view.
Copyright © 2020 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

42

Sun Frontier Fudousan Co., Ltd.

ESG Initiatives

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

Sun Frontier Sado Inc.
Hotel
Business

Transportation
Infrastructure Project

Hotel AZUMA

Okesa Kanko Taxi

Highlight Finding
Project
Anaguchi-tei(Café & Restaurant)

Tourism and Travel
Business
New

Happy Sado
TravelWeb Advertising
Business
Sado Biyori

New
DONDEN
Highland Lodge

Tabino Hotel Sado

Kigaruni Rent a Car

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

43

Sun Frontier Fudousan Co., Ltd.

ESG initiatives

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

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

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

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

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Sun Frontier Fudousan Co., Ltd.

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

(yen)
Average rent (yen/tsubo)

Average vacancy rate (%)

The average rent
in September 2020

22,733 yen(-89 yen from the previous month)

Peak of the vacancy
rate
9.43%
June 2012

Peak ofthe average rent
22,901 yen
August 2008

The average vacancy ratein September 2020
3.43%（+0.36%pt fromthe previous month)

Peakof the vacancy
空室率のピークrate
2003年8月
8.57%
August 8.57％
2003
空室率

Bottom of theaverage rent
17,526 yen
October 2004

Bottom of theaverage rent
16,207 yen
December 2013

Bottom of thevacancy rate
2.49%
November 2007
*Subjects are office buildings with a standard floor space of 100 tsubo or more in
the 5 wards in the Central Tokyo.

Source: Prepared by our Company based on Miki Shoji’s “Office Reports.”

Bottom of thevacancy rate
1.49％
February 2020

*Source: Prepared by our Company based on Miki Shoji’s “Office Reports.” Subjects are office buildings with a standard floor space of 100 tsubo or more in the 5 wards in the Central Tokyo.

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

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 ※Representative

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

Number of Consolidated
632 full-time employees (1,034 including part-timers and temporary workers)
Employees ※Average Age of
Employees※

34.5 years old
Real estate revitalization

Business Profile:

Real estate services

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

Hotel development and management
Accounting Month
Listed Market

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

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

46

President Saito

Chairman Horiguchi

Sun Frontier Fudousan Co., Ltd.

We will appreciate yourfurther supports.

Sun Frontier Fudousan Co., Ltd.

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

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