Financial Results For the Fiscal Year Ended November 30, 2017
Tosei Corporation
Tokyo Stock Exchange, First Section Code：8923
Singapore Exchange, Mainboard Code：S2D

Ⅰ. Overview of Results for the Fiscal Year
Ended November 30, 2017

－ P. 2

Ⅱ. New Med-term Management Plan
“Seamless Growth 2020”－P.20

Ⅲ. Business Plan in FY2018－P.25

2018/1/10

Ⅳ. Reference Materials for the first time visitors to Tosei －P.40＜Appendix＞

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

Real Estate Market Conditions

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

1

Ⅰ. Overview of Results for the Fiscal Year Ended November 30, 2017

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

2

Operating Performance of FY Ended November 30, 2017 - Highlights◆Revenue ¥57.7 billion (up 15.9% yr/yr), profit for the period ¥6.1 billion (up 11.0% yr/yr), revenue andprofit for the period reached a record-high.
【 Revenue 】【Operating profit】【Profit before Tax】(¥ million）

1Q

2Q

3Q

（¥ million）

4Q

10,00049,81850,00043,0068,000

40,000
8,484

6,000

5,284
20,00011,682

14,677FY2015FY2016FY2017

4,127

43,00640,26825,809FY2015FY2017

13,138

2,802

2,329

2,444
694（Other）

4,005

341（Other）

4,637

-559

-1,131-1,388FY2015FY2016FY2017ROE

FY2016FY2017

6,891
6,000

4,001

4,135
4,000
1,087

4,174

2,000

534

2,000

1,464

0
-2,000

146

1,273

951
178 （Other）

141-17 （Other）-1,404-1,860FY2015FY2016278
0-74（Other）-1,661 -408（Development）

12%

1,823
8%
1,431
4%

1,263

2,581

2,389

399

2,132

395

3,674

16%
14.1%

6,155
5,547
168
636

7,845

1,797

14.4%

12.0%

10,000

4,000

6,237

5,324

4,262

3,658

【Profit for the period】

6,000

Fund and Consulting

5,197

6,605

3,914

9,833

9,279

Other

20,0003,574（¥ million）

12,000Property Management 8,000

25,9862,198

0FY2016

8,000

Rental

3,326

2,190

*

Development

527
2,664

572

2,000

3,828

＜ Segment Operating Profit＞ (¥ million）
Revitalization

9,049

1,980

FY2015Internal Transactions-10,000

4,000

57,75440,000

0

1,298

2,413

2,365

＜ Segment Revenue＞*
49,81810,000

6,000

3,548

0

60,00030,000

1,570

2,000
13,527050,000

2,839

6,891

247
963

8,000

2,185

10,00011,525

8,450

4,000

10,81770,000

456
1,148

771
17,12810,000753

6,040

15,61830,000（¥ million）

9,833

9,279

15,776

10,67915,380(¥ million）

57,75460,000

2,611

2,500

FY2016FY20171,390
0%FY2015FY2017fiscal©
year(FY2015)
recalculated in All
accordancewith the new※ We have abolished the Alternative Investment Business segment from the fiscal year ended November 30, 2016. For comparison, segment information for the previous
Copyright
2018
TOSEI are
CORPORATION,
Rights Reserved.
reportable segment classifications.

3Overview of Consolidated Financial Results for FY ended November 30, 2017（¥ million）

FY2016FY2017yr/yr change

【 A】

【 B】

【 B】 -【 A】

57,754

％
100.0

7,936

％
15.9

67.2

40,937

70.9

7,469

22.3

16,34932.8

16,816

29.1

466

2.9

7,021

14.1

7,153

12.4

132

1.9

1,806

3.6

1,457

2.5

-349

-19.4

5,214

10.5

5,696

9.9

481

9.2

Other income

222

0.4

215

0.4

-6

-2.9

Other expenses

270

0.5

44

0.1

-225

-83.5

9,279

18.6

9,833

17.0

553

6.0

-829

-

-784

-

45

8,450

17.0

9,049

15.7

599

2,902

-

2,894

-

Profit for the period

5,547

11.1

6,155

10.7

607

11.0

Comprehensive income for the period

5,509

11.1

6,165

10.7

656

11.9

EPS（ \）

114.89127.48

12.59

11.0

ROE（％）

14.36

14.12

-0.24P

ROA（％）

7.88

7.42-0.46P

Revenue
Cost of revenue
Gross profit
Selling, general and administrative expenses
Expenses related to property marketing activities
Selling, general and administrative expenses(net of expenses related to property marketing activities)

Operating profit
Finance income/costs (net)Profit before tax
Income tax expense

49,818％100.0

33,468-8

7.1-※ ROE=Profit for the year ÷（（Total equity at preceding year end + Total equity at current year end）÷2）※ ROA=Profit before tax ÷（（Total assets at preceding year end + Total assets at current year end）÷2）
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

4

Revitalization Business◆Whole buildings ： Sold 58 buildings including office buildings and condominiums, etc. (26 properties up yr/yr)(Breakdown of sold properties : property sales over ¥1 billion : 13 properties (6 properties up yr/yr)
property sales under ¥1 billion : 45 properties (20 properties up yr/yr)◆Restyling：Sold 45 units in 7 properties including “Hilltop Yokohama Negishi” , “Hilltop Yokohama Higashiterao” etc.
(12 units down yr/yr)

Revenue / Gross Profit Margin

Major Properties Sold

Restyling
Revenue (Whole buildings to general customers)（¥ million）

Revenue (Whole buildings to REIT)

40,26840,000Gross profit margin

1,528

20.0%

20.2%

1Ｑ

2Ｑ

Nakano-ku,
Income-generating apt building

Urayasu-shi,
Income-generating apt building

3Ｑ

4Ｑ

25%

22.8%
20%

30,00025,98625,809

2,161

1,725

15%

28,911

20,00013,32910%

17,25410,0005%
10,494

9,827

6,829
0

0%

FY2015FY2016(￥million)

FY2017FY2015FY2016FY2017Full year

Full year

Full year

Revenue

25,98625,80940,268Gross profit

5,192

5,214

9,186

Operating profit

4,174

4,001

7,845

No.of sales (Restyling)

68

57

45

No.of sales (whole buildings, others)

24

32

58

Koto-ku,
Empty building*The gross profit is net of Cost of Revenues including the following write-down amounts
under LCM: FY2015: -27millions, FY2016: -25millions, FY2017: -5millions

Nerima-ku
Income-generating apt building

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5

Development Business◆Sold 121 detached houses and land lots in projects such as THE Palms Court Koshigaya Lake Town and THE Palms
Court Kashiwa Hatsuishi.
◆Operating profit decreased, affected by anticipatory expenses related to property marketing activities were posted in thecurrent fiscal year such as three newly built condominiums which are scheduled for sale on next fiscal year and beyond
and others.

Revenue / Gross Profit Margin

Major Properties Sold

Income-generating Condominiums

Offices / Commercial facilities（¥ million）

15,000Detached houses / Land lots / Housing Construction
Gross profit margin45%

13,13840.4%

10,00030%
7,488(Reference)
Profit margin for
Detached houses
and others

6,605
20.7%

5,197

5,000
6,014

5,649

5,197

FY2015FY2016FY2017

THEパームスコート鎌倉城廻

THE Palms Court Aoba Eda

Comodo Casa Shiromeguri(Urban Home Corporation)

THE Palms Court Nishi-Hachiouji

Comodo Casa Ookura(Urban Home Corporation)

18.8%

17.8％

591

THEパームスコート国立

15%

0

0%

(￥million)

FY2015FY2016FY2017Full year

Full year

Full year

Revenue

6,605

13,1385,197

Gross profit

1,364

5,302

976

Operating profit

534

3,674

-408

No.of sales (sale in lots)

105

119

121

1

2

No.of sales (whole buildings)-*The gross profit is net of Cost of Revenues including the following write-down amounts
under LCM: FY2015: -43 millions FY2016: -66 millions FY2017: -28 millions

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6

Acquisitions in Revitalization and Development Businesses -Acquisition Amount and Inventories◆Total acquisition amount was ¥49.8 billion * on a delivery basis (expected disposition values, including 2 fixed assets(about ¥1.4 billion)
Revitalization Business：61 Properties* - 16 office properties, 36 apartments, 9 land lots Development Business：7 Properties - 1 newly-built condominium, 3 detached house/ land projects, , 1 newlybuilt hotel, 1 commercial facility and 1 rental apartment ◆ As of the end of November 2017, total acquisition amount progressed to about ¥66.5 billion on a contract basis.

Trends in Annual Acquisition Amounts（delivery basis and expected revenues）

Breakdown of Inventories

Detached houses・Land（Developpment）
Rental Apartments（Developpment）
Condos（Developpment）
Offices・Hotelｓ・Commercial facilities（Developpment）
Land etc. (Revitalization）（¥ million）

70,000

Income-generating Apt buildings(Revitalization）
Offices(Revitalization）

66,842

66,509Contract basis
progress¥66.5 billion.
(End of Nov. 2017)

6,956
60,000

6,631
50,0006,966

40,00030,000

2,808
1,765

49,05445,168
2,033

3,723

4,970

4,424

2,202

9,093

(16,700)

2,496
880
7,544

21,321

Yokohama-shi
Income-generating apt building

Yokohama-shi
Income-generating building

Funabashi-shi
Income-generating apt building

Higashikurume-shi
Income-generating apt building

Acquisition progress(delivery basis,
expected disposition
values) was¥49.8 billion.

5,979
1,433

9,576

16,47220,00024,84826,38727,36010,00015,005*For more details for inventory expected disposition value please look P13～P14

FY2014FY2015FY2016FY2017

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7

Rental Business
Revenue from the rental business expanded, reflecting an increase in the number of properties owned by
Tosei to 89 (an increase of 6 properties from the end of the previous year).
Rental revenue from non-current assets increased to about 40%.
Revenue / Gross Profit Margin（¥ million）

Revenue (Current assets)
Revenue (Restyling)
Revenue (Non-current assets)
Gross profit margin

Breakdown of Properties Held by Tosei

100

6,237

6,000

89
83

80

46.8%

45.9%
50.2%

4,262

60

3,639

4,000

3,000

*
Current assets
Restyling **Non-current assets

60%

5,324
5,000

Office and commercial buildings : 35
Apartments : 51
Other : 3(No. of buildings）

40%

3,056
2,663

40

105
145

2,000
199

0

20

0%

FY2016(￥million)

FY2017FY2015FY2016FY2017Full year

Full year

Full year

Revenue

4,262

5,324

6,237

Gross profit

1,995

2,670

2,864

Operating profit

1,797

2,389

2,581

*The revenue includes internal transactions.

52

25

26

12

10

8

15

16

18

21

11/'13

11/'14

11/'15

11/'16

55

33
6

1,399

FY2015

57

51

20%
2,493

2,122

1,000

60

7
26

0
11/'17*Properties which have rental income＜ Increase and decrease since the end of the previous year ＞
New acquisition+41
Decrease by sale
-37
Others (initiated leasing) +2
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8

Fund and Consulting Business The balance of AUM increased to ¥552.2 billion.( ¥104.0 billion increase yr/yr)
 Revenue from asset management fees rose steadily, reflecting an increase in the balance of AUM.
Revenue from acquisition fees, brokerage charges, and others also increased.
Revenue / Gross Profit Margin（¥ million）

3,000

AM fee *Acquisition fee
Disposition fee
Brokerage fee / Other *Dividends
Gross profit margin96.3%（¥ million）

600,000

2,802

94.2%

Increase / decrease from previous fiscal
・REIT AM：+¥9.8 billion（¥9.8 billion up)

・Private Fund AM：+¥104.1 billion（¥121.2 billion up, ¥17.0 billion down）（¥12.8 billion up ¥22.8 billion down）

500,000

421,792

80%
1,255

729

400,000
91,789

814

60%

239
289

398

246

40%

1,067

983

20%

0%

FY2015FY2016(￥million)

FY2017FY2015FY2016FY2017Full year

Full year

Full year

Revenue

2,444

2,329

2,802

Gross profit

2,353

2,193

2,538

Operating profit

1,464

951

1,273

*Sales include intra-group sales

124,084※1

392,114200,000

98,679170,114300,643

287,924※1

17,43429,35836,17745,997

11/'14

11/'15

11/'16

11/'17100,000
149,3490

114,097

248,028170

828

448,186

300,607300,00080

426

552,208

・CRE：¥-9.9 billion

2,329
46

1,000

REIT AM
Private Funds AM
CRE ＊2

100%

90.6%

2,444

2,000

Balance of Assets Under Management0

11/'13113,057*1 ¥45 billion was transferred from private funds AM to CRE at the end of November, 2016
after reviewing the management details. For comparison, revenue for the previous fiscal
year (FY2016) are recalculated.

*2 The purple portion indicates the assets under consulting agreements of CRE.
CRE is methods of investing in and managing corporate real estate efficiently to maximize
long-term enterprise value. By undertaking CRE, Tosei conducts comprehensive consulting
services from the views of real estate professional.
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

9

Property Management Business The total number of properties under management was 665 as of November 30, 2017. (71 properties increase yr/yr)
 As a result of increase in the number of properties under management, stable PM and BM fee increased.

The Number of Properties Under Management

Revenue / Gross Profit Margin

Condo/Apt management（No. of buildings）

Repair works, commissions and fees（¥ million）

PM・BM fees

5,000

Gross profit margin

Office building management (Office, Commercial
facility, School, Hotel, Nursery, etc.)

700

4,637

594

50%

600

546

547

544

4,005
4,000

1,399

3,574

40%

3,000

907

30%

27.4%

270

500

1,098

665

219
203

193

196

343

351

351

375

395

11/'13

11/'14

11/'15

11/'16

11/'17

400

29.3%

27.2%

300

2,000

20%
2,906

2,667

200

3,237

1,000

10%

0

0%

FY2015FY2016(￥million)

FY2017FY2015FY2016FY2017Full year

Full year

Full year

Revenue

3,574

4,005

4,637

Gross profit

980

1,090

1,356

Operating profit

146

141

278

100
0
【Example of Properties Under Management 】

Condominium Commercial facility Hotel*The revenue includes internal transactions.

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OfficeSchoolNursery school10Summary of Balance Sheet (Consolidated)I. –Assets（¥ million）

11/'16
Total Assets
Cash and cash
equivalents
Inventories(properties)
Investment properties/ PPE
Other assets

Decrease Increase

05/'17

Decrease Increase

11/'17yr/yr change
Decrease

Increase

121,276+2,089123,366-815

122,550+1,27321,640+1,29322,934+815

23,750+2,109A
67,298-14,124+15,439

68,613-28,560+19,666

59,71825,324-200+202

25,327-212+8,55033,665-42,685+35,105-412+8,753

B
7,012

-521

6,491

A：Change in inventory
Inventories decreased ¥7.5 billion from the end of the previous year. The
decrease was attributable to properties sold, which exceeded increases due to
new properties purchased and construction, etc.
（\ million）

FY2017
Increase Acquisitions+28,070+7,035
Factor Construction / Value-added etc.
Decrease Dispositions-35,194-7,491
Factor Transfer,others
Total-42,685 +35,105-1,074

5,416-1,596

B：Investment properties &property, plant and equipment
An increase of ¥8.3 billion yen from the endof the previous year due to the acquisition of
new investment properties and transfers frominventories.

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11Summary of Balance Sheet (Consolidated). -Liabilities/Equity（¥ million）

11/'16

Decrease Increase

05/'17

Decrease Increase

11/'17yr/yr change
Decrease

Increase

Total Liabilities /Equity

121,276+2,089123,366-815

122,550+1,273

Total Liabilities

80,266-808

79,457-3,06676,391-3,874

Borrowings

70,159-20,670+20,41269,901-32,708+29,930

67,123Current borrowings

9,387-7,714+5,971

7,644-6,967+5,772

6,449-14,681 +11,743

Non-current borrowings

60,772-12,956+14,441

62,257-25,741+24,158

60,674-38,697 +38,600-838

Other Liabilities

10,106

-550

9,556

-288

9,268

Equity41,010+2,89843,908+2,25046,158Equity Ratio (%)

33.8

+1.8

35.6

+2.1

37.7

Net D/E Ratio

1.18

-0.11

1.07

-0.13

0.94

A： Change in borrowings•They resulted indecrease of debt
balance by ¥3.0
billion from the endof the previous fiscal
year.

B
C

-53,379 +50,343+5,148+3.9-0.24

B： Change in Equity

・¥25.6 billion of new borrowings incurred to finance acquisition of 68 properties* (book value¥29.2 billion).(including 2 fixed assets)•The repayment ofborrowings by sales
was ¥27.1 billion.

A（\ million）

Increase New Borrowings
Factor Non‐Current → Current Portion
Current
Decrease Repayments upon Disposition
Factor Others repayments （refin / maturity, etc.)
Increase New Borrowings
Factor Others（refinace,etc.)
Non‐
Repayments upon Disposition
Current Decrease
Others repayments （refin / maturity, etc.)
FactorNon‐Current→Current Portion
Total

FY2017+1,776+9,967-6,768-7,912+23,923+14,676-20,346-8,383-9,967-53,379 +50,343

Total equity increased ¥5.1 billion yen fromthe end of the previous year, reflecting an
increase of ¥6.1billion yen in profits as well as
the payment of ¥1.0 billion yen for dividends.

C: Financial Soundness
・Equity ratio is 37.7% (up 3.9 points).
・Net D/E Ratio decreased to 0.94 times due toincrease in equity capital and decrease in debt
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

12

Inventories (Breakdown)
Balance of Inventories
As of Nov. 30, 2017\59,718 million (102 properties)

Total Expected
Disposition Value\100,076 million

Breakdown of Inventories（¥ million）

Inventories
Property type

Total
【A】+【B】

Revitalization
No. ofDevelopment
No. ofproperties
properties【A】【B】

Expected disposition values
Revitalization Development

Total expected
disposition value

Office, Commercial buildings

18,492

19

2,215

4

20,70825,961

3,779

29,740

Hotel

2,775

1

2,222

1

4,998

4,539

5,583

10,123

Condo/Apt buildings

17,672

51

7,682

4

25,35422,74722,002

44,749

-

-

6,329

14

6,329

-

11,138

11,138

Other

2,327

8

-

-

2,327

4,324

-

4,324

TOTAL

41,26979

18,44923

59,71857,57342,503100,076

Detached houses•••

The expected disposition values above are based on Tosei’s estimate of revenue corresponding to the properties currently in the inventories. These are calculated using information
available as of Nov. 30, 2017. Actual amounts may be vary significantly from the estimates, due to various factors.
The inventories above represent carrying amount as of Nov. 30, 2017 and may increase due to such factors as value-up investments and construction costs.
The condominium buildings and detached houses are counted as each project being one property .
Area(Expected Disposition Value)
PropertySize(Expected Disposition Value)
Property type(Expected Disposition Value)
物件タイプ（売上想定金額ベース）
エリア分布（売上想定金額ベース）
物件規模（売上想定金額ベース）
Note: Detached houses and condominiums are classified by one unit’s price.

Others
Office,Other
Detached
Detached
4%4% Commercial
houseshouses
Office, Commercial
buildings
14%
buildings
11%30%
Condo/Aptbuildings
buildings
Condo/Apt
40%
45%

38%
Hotel
Hotel
4%10%

Chiba Saitama
4%
8% Saitama
Chiba 7%The 23 wards ofKanagawa
10%
The Tokyo
23wards of21%
Kanagawa
Tokyo
14%
47%
49%
Tokyo
(except
Tokyo(except theTokyo's
23 wards)
theTokyo's
23
20%
wards)
20%

More than ¥2More thanbillion¥2 billion
33%
30%

Less
than
¥100
Less
than
¥100
millionmillion31%
34%
Between ¥1
Between ¥100 and
Between¥1and ¥2 billion Between¥500 million
Between¥100
and ¥2 ｂillion Between ¥0.5
10%
5%
and
and
¥1 ¥1
ｂillion18% ¥0.5
and ¥500 million
billion
11%
11%

16%

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13

Inventories (Expected Disposition Values)◆Inventories (expected disposition values) totaled ¥100.0 billion as of November 30, 2017
◆Hotel and Condo/Apt buildings ratio have increased significantly(¥ million)

11/'08

11/'09

11/'10

11/'11

11/'12

11/'13

11/'14

11/'15

11/'16

11/'1760,48731,264

22,251

15,206

18,595

18,497

27,18534,99837,82029,740

―

―

―

―

―

―

―

2,336

4,151

10,123

14,327

12,84430,58926,62723,47622,70913,881

23,497

39,57344,749

―

―

558

3,727

7,701

13,225

15,247

11,184

13,673

11,138

Other

1,672

479

220

1,021

354

393

4,243

2,348

4,208

4,324

Total

76,48744,58853,62046,581

50,12754,82560,55774,36599,428100,076

Office, Commercial
Buildings
Hotel
Condo / Apt
Buildings
Detached Houses

Balance between inventories and sales volume –There are enough inventories for this fiscal year（\ million）

FY2015FY2016FY2017FY2018(Forecast)*1（beginning-of-period）Inventories
Inventories (beginning-of-period)【A】

60,55774,36599,428100,076

Revenue *2【B】

32,592

38,94845,46554,255

54%

52%

46%

54%

Revenue*2÷ （beginning-of-period）Inventories 【B】÷【A】*1 Converted by sales assumption*2 Sales from buy and sell business (Revitalization and Development business )Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

14

Investment properties and PPE(Breakdown) Unrealized profits (after tax) from investment properties and property, plant and equipment stood at ¥14.3 billion.
 Efforts are being made to gradually increase the number of assets owned by Tosei and expand profit stably throughthe acquisition of good assets.
Balance of book value
As of Nov. 30, 2017\33,555 million\21,366 million

Unrealized gains(\ million）

Balance of No. ofbook value① properties

Unrealized
gains②-①

22,47518

fair values②
34,285

Condo/Apt buildings

4,320

6

6,802

2,482

Land lots, etc.

1,563
28,3593
27

4,831
45,9193,267
17,560

Office, Commercial buildings

3,423

2

4,776

1,353

Hotel

1,772
5,195
33,555

4,224
3
9,001
30
54,921
Total
Income tax expense
Unrealized gains（After tax）

Property type
Office, Commercial buildings*1

Investment properties

Property, plant and equipment
Total* Fair values in above is based on the real estate appraisal by Tosei* PPE book value doesn’t include book value of structures attached to the buildings.
*1 Includes one property which is partially is a hotel*2 Calculated by corporation tax rate 33%（¥ million）

40,000・Decide to include
assets based on theconditions,profitability, future
value and loan terms
of properties, among
other factors.

11,8101

Total Capital including unrealized gains (after tax)in above

Holding Policy

2,452
3,805
21,366-7,05014,315

・Considerreplacement withinventories byreassessing theportfolios at least
once a year.
①② *2③（=①+②）

Changes in Investment Properties and41,000
PPE (book value)
33,555

As of November 30, 2017

No. ofproperties
40

30,00025,172Per Share

22,00420,000Total Capital 【A】¥46,158 million¥955.99

Unrealized Gains (after tax)【B】¥14,315 million¥296.48

10,000Total（【A】+【B】）¥60,474 million¥1,252.47

0

35
30

17,097
19
（16）

30

22

25

20

（26）

（21）
（18）

10

0

11/'14

11/'15

11/'16

11/'17

11/'18
Copyright © 2018 TOSEI CORPORATION, All Rights（Forecast）
Reserved.
*( ) are the number of properties which have rental income

15

Borrowings from Financial Institutions
 Average annual interest rates on borrowings fell to 1.16% (down 0.14% from the end of the previous year).
 There was a large-scale refinance of non-current assets, and the average loan term increased to 16.42 years(up 5.93 years from the end of the previous year).

Changes in Borrowing Rate / Period（Year）

Average interest rate *1
Average debt term （Non-current assets） *2
Average debt term （Current assets, etc.） *2

Changes in Borrowing Balance
Current borrowings *3
Non-current borrowings *3
70,124（¥ million）

16.42 years

67,113
9,378
15

6,445

10％

60,74560,66890％

11/'16

11/'1714.25 years
60,00013.60 years
13.06 years

48,65510

40,042

10.49 years

9,487

40,00034,407

5,230

7,315

5.28 years
5

4.38 years

4.47 years

4.36 years

20,0003.76 years
1.95%

1.73%

27,092

1.52%

1.30%

1.16%

0

0
11/'13

11/'14

39,167
34,812

11/'15

11/'16

11/'170

11/'13

11/'14

11/'15*1 The weighted-average rate of borrowing balance of end of each finical year
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.
*2 Borrowing period are calculated using the weighted average of period from the date of borrowing until due date of borrowing depending on the borrowing balance. *3 lease debts are not included

16

Summary of Cash Flow Statements (Consolidated)（¥ million）
FY2016【 A】

Cash flows from / used in operating activities

FY2017【 B】

7,089

14,561

8,450

9,049

599

333

393

59

Increase / Decrease in inventories-15,971353

16,324

Income taxes paid

-2,297-4,027-1,730

Other, net

2,012

1,320

-692

-8,193

-18

8,175

-54

-30

23

Increase / Decrease in investment properties-1,743-1,282460

Other, net-6,396

1,294

7,690

-4,962-23,484

20,228-3,010-23,239

Cash dividends paid

-771

-1,061-289

Interest expenses paid

-926

-886

40

-7

-3

4

Increase / Decrease in cash and cash equivalents

2,856

2,108

-748

Cash and cash equivalent at beginning of period

18,791

21,640

2,849

-6

1

7

21,64023,7502,109Profit before tax
Depreciation expense

Cash flows from/used in investing activities
Increase / Decrease in PPECash flows from/used in financing activities
Increase / Decrease in borrowings

Other, net

Effect of exchange rate change on cash and cash equivalents
Cash and cash equivalent at end of period-7,472yr/yr Change【 B】 -【 A】

18,522*1*2

Cash Flows from Operating
Activities *1
Cash flow from operating
activities was ¥7.0 billion increase,due mainly to ¥9.0 billion of profit
before tax, and ¥4.0 billion
decrease due to income taxes paid.

Cash Flows used in Financing
Activities*2
Cash flow from financing activitieswas ¥4.9 billion decrease, due
primarily to ¥3.0 billion net
decrease in borrowings, ¥1.0
billion decrease of cash dividends
paid.

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

17

Overview of Segment Results (Consolidated) I. Revenue and Cost of Revenue（¥ million）

Revenue
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions

Cost of revenue
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions

FY2016【 A】

FY2017【B】

yr/yr change【 B】 -【 A】

％

％

％

49,81825,80913,138
5,324
2,329
4,005
341
-1,131

100.0
51.8
26.4
10.7
4.7
8.0
0.7
-

57,75440,268
5,197
6,237
2,802
4,637
0
-1,388

100.0
69.7
9.0
10.8
4.9
8.0
-

7,936
14,458-7,941
913
472
631
-341
-257

15.9
56.0
-60.4
17.2
20.3
15.8
-100.0-FY2016【 A】

FY2017【B】

yr/yr change【 B】 -【 A】

％

％

％

33,46820,595
7,836
2,653
136
2,915
327
-995

67.2
79.8
59.6
49.8
5.8
72.8
95.7
-

40,93731,081
4,221
3,373
263
3,280
-0
-1,282

70.9
77.2
81.2
54.1
9.4
70.7
-

7,469
10,486-3,615
720
127
365
-327
-287

22.3
50.9
-46.1
27.2
93.8
12.5
-100.2-

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

18

Overview of Segment Results (Consolidated) II.

Gross Profit and Operating Profit（¥ million）

Gross profit
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Internal Transactions

Operating profit
TOTAL
Revitalization
Development
RentalFund and Consulting
Property Management
Other
Corporate expenses, etc.

FY2016【 A】

FY2017【B】

yr/yr change【 B】 -【 A】

％

％

％

16,349
5,214
5,302
2,670
2,193
1,090
14
-136

32.8
20.2
40.4
50.2
94.2
27.2
4.3
-

16,816
9,186
976
2,864
2,538
1,356
0
-106

29.1
22.8
18.8
45.9
90.6
29.3
-

466
3,971
-4,326
193
344
266
-13
30

2.9
76.2
-81.6
7.2
15.7
24.4
-95.7
-

FY2016【 A】

FY2017【B】

yr/yr change【 B】 -【 A】

％

％

％

9,279
4,001
3,674
2,389
951
141
-17
-1,860

18.6
15.5
28.0
44.9
40.8
3.5
-5.2
-

9,833
7,845
-408
2,581
1,273
278
-74
-1,661

17.0
19.5
-7.9
41.4
45.4
6.0
-

553
3,843
-4,083
192
322
136
-57
199

6.0
96.1
-111.1
8.0
33.9
96.9
318.5
-

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

19

Ⅱ. New Medium-term Management Plan "Seamless Growth 2020"

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

20

Recognition of the Current Business Environment➢ Despite concerns regarding the overheating and peaking of the investment market, overall real estate transactions remain
active and the current condition of the market is strong.
➢ Meanwhile, Tosei does not assume that the increase in real estate prices and the decline in cap rates will occur.
Therefore it expects that prices will remain high.

Policy, Industry Conditions, Demand and Supply Trends etc.
• The GDP will continue to increase moderately, measures for monetary easing will continue to be implemented, and land prices
will remain on an upward trend.
• Construction costs will remain high.

CommonFactors• The population of Tokyo will rise until 2025 due to population inflow.
• Demand from companies for offices is strong and the office vacancy rate remains low. Rents continue to rise slowly.
• The future large supply of large offices in Tokyo’s 23 wards is expected to remain at the past average level (1.03 million ㎡/ year).

Offices• New condos: The contracts rate fell due to a steep rise in price and decrease of new supplies. Polarization between well-performing

Housingurban areas and low-performing suburbs continues.
The number of units sold is expected to increase 4.4% from the previous year to 38,000 according to the 2018 forecast ofa private research institution.

• Used condos: The number of sales is at a record high due to consumers’ price consciousness.
• Detached houses: Strong demand continues• The numbers of hotel rooms and the number of inns available in Tokyo is 154,000 hotel rooms and 1,939 inns respectively, as ofMarch 2017. Based on current plans, 23,000 hotel rooms and 168 inns are expected to be added in 2017 and thereafter.
• The government passed the Residential Accommodation Business Bill. scheduled for enforcement in June 2018.

HotelsFunds

CommonFactors••

PrivatePlacement• The market for private placement funds grew to ¥14.8 trillion.
(Private Placement Fund ： ¥12.6 trillion, Private Placement REITs : ¥2.2 trillion)

J-REIT• The Tokyo Stock Exchange REIT Index is weak, remaining at 1600 point.
• (global concern over interest rate increase, concern over oversupply of offices,•
outflow of funds from investment trust with monthly dividends).
• Property acquisitions were lower than the same period of the previous year ( From Jan. to Nov. ¥13 trillion, 17% down yr/yLoan
Environment

The yield gap remains high.
Against a backdrop of good financing environment investors desire to acquire property remains strong.

• Bank loans for the real estate industry exceeded ¥73 trillion to hit a record high.
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

21

Mid-term Management Plan "Seamless Growth 2020“ -target performanceSeamless
Growth 2020

To continue growth as a whole Group to build a firm position as a uniquecomprehensive real estate company.

Performance Indicator Guidance【Profit Growth (consolidated)】• Revenue for the final fiscal year:• Profit before tax for the final fiscal year:• Average profit growth rate of the three years:• Average ROE of the three years:¥100 billion¥12 billion
10% or more
12% or more【Financial Soundness】• Expansion of the ratio of stable businesses（Gross Profit Margin : achieve 50/50 weight balance between Trading Business and Stable Business*）•

Aim to keep an equity ratio of around 35% in consideration of financial soundness.

*Of the five existing business segments, the Revitalization Business and the Development Business are defined as the “trading business” and the Rental Business,
the Fund and Consulting Business and the Property Management Business are defined as the “stable business.” Under this plan, gross profit of the tradingbusiness excludes sales expenses pertaining to property trading.

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

22

Mid-term Management Plan "Seamless Growth 2020“ -P/L simulation [Basic policy]◆Expand businesses in all segments.
◆Increase the ratio of stable businesses in the revenue and profit structure(fifty-fifty for trading businesses to stable businesses)
FY2017 (A)(¥ million)
Revenue

FY2018 Forecast (B)Gross profit profit margin

Revenue

FY2020 Forecast (C)Gross profit profit margin

Revenue

57,754

16,81629.1%

67,83019,81129.2%

100,000

23,73723.7%

40,2685,197
45,465
6,237
2,802
4,637
0
13,677-1,3889,186
976
10,162
2,864
2,538
1,356
0
6,759
-106

22.8%
18.8%
22.4%
45.9%
90.6%
29.3%
49.4%
7.6%

39,375
14,88054,255
6,709
2,715
5,201
345
14,971-1,396

9,023
3,328
12,351
3,304
2,589
1,483
333
7,710
-250

22.9%
22.4%
22.8%
49.2%
95.4%
28.5%
96.6%
51.5%
18.0%

60,882
21,43282,314
9,461
2,999
6,295
962
19,717-2,031

9,516
4,025
13,541
5,375
2,861
1,709
914
10,859-663

Expenses related to property
marketing activities

1,457

2.5%

2,207

3.3%

3,109

15.6% 1.
18.8% 2.
16.5%
56.8% 3.
95.4% 4.
27.1% 5.
95.0% 6.
55.1%
32.6%
Growth
3.1% rate

Other expenses

5,525

9.6%

6,657

9.8%

7,235

7.2%

Operating profit

9,833

17.0%

10,94616.1%

13,393

13.4% 136.2%

Profit before tax

9,049

15.7%

10,03814.8%

12,231

12.2% 135.2%

Profit for the year

6,155

10.7%

6,699

9.9%

8,194

8.2% 133.1%

Profit per share (\)¥127.48¥169.72133.1%

Revenue, Gross profit
Real estate Revitalizationtransaction Development
business

RentalStablebusiness

Fund and Consulting
Property Management
Other

Internal Transactions

Selling, general andadministrative
expenses,etc¥138.75

Gross Profit Margin
Achieve 50/50 weight balance
between Trading business andStable business

Gross profit profit margin

14,000¥13.5 B

12,000

3.1¥10.8B

10.4

10.8

Tradingbusiness
売買系事業

Stablebusiness

10,000（C÷A）

1.Revitalization Business•Make the handling rate of large and midsize properties and small
properties 50-50.
•Increase acquisition amounts through M&A of real estate.
•Strengthen the value-creating business model including conversion.
•Estimate profitability conservatively based on the assumption ofproperty prices remaining high.

2. Development Business

6,000
4,000
2,000

0

*Calculated based on the number of shares as of November 30, 2017 for FY2018 and thereafter.

Approach

8,000

安定収益事業

その他経費

50 : 売買系販売費
50

粗利*Excluding the property sales expenses of¥3.1 billion that are included in the grossprofit margin.

3. Rental Business•Increase property, plant and equipment (30 buildings with the bookvalue of ¥33.5 billion) to a little more than 50 buildings with the bookvalue of ¥70.0 billion.
•Increase profitability by improving the occupancy rate of inventories.

Acquisition Plan
On contract baseexceed to ¥66.5 B↓

4. Fund & Consulting Business•Increase the balance of AUM from ¥552.2 billion to a little greaterthan ¥780.0 billion.
(Private fund and CRE: ¥506.1 billion ⇒ ¥680.0 billion)(Tosei Reit: ¥45.9 billion ⇒ ¥100.0 billion)•Cover the temporary brokerage fee of ¥500 million for FY2017 by the
AM fee.

Target

66.8

49.8

80

(¥ Billion)

TargetTarget 100

90•Supply one or two office buildings or commercial properties every year.
2016 2017 2018 2019 2020
•Supply a little more than 200 units of condominiums every year.
•Small and midsize properties → Increase sales personnel(Assume profitability conservatively)•Large properties•Supply 150 detached houses mainly priced at approximately 50 million→ Collaborate with core investors, funds and major brokerage
5.
Property
Management
Businessyen every year
companies, conversion into hotels, and investment in warehouses•665 buildings of properties under management ⇒ 947 buildings (1.4 times) •Acquisition-oriented areas(Strengthen sales in Chiba and Saitama in addition to Tokyo and6. OtherKanagawa)
ExpandintoCORPORATION,
areas deeply aroundas Yokohama.
Copyright ©→2018
TOSEI
All Tokyo
Rightssuch
Reserved.
23•Increase the number hotels operated by Tosei (from 0 to 4 buildings)•Strengthen acquisition means through the M&A of real estate.

億

.1

.1

.0

Mid-term Management Plan "Seamless Growth 2020“ -B/S simulation Seamless
Growth 2020

As of end of FY2020

Aim to keep an equity ratio of 35% in consideration of financial
soundness.

1,902億1,902億*In this simulation, calculations have been made based on the assumption that the corporate tax is 33% and capital is not increased.
The simulation is based on the information available Financial hurdles.
The actual amount may vary significantly due to various factors.

10.7

1,570億23.9
As of end of FY2018
億1,570¥157.0billion

11.0
28.5
As of end of FY2017(result)
1,225billion
億
1,225
1,212億億
1,212¥122.5
9.2
9.2
10.1
10.1
23.7
21.6
23.7
21.6
94.4
808億
81.6
67.1
67.1
7.7
70.1
70.1
16.1
59.7
59.7 ¥117.0 billion
67.2
67.2

23.9

Revenue ¥100 million

10.7

Cash and cash
equivalents

1,570億
11.0

11.0
28.5

28.5

1,225億87.9 115.0
9.2
23.7

87.9 115.0
Inventories¥138.8 94.4
billion(disposition value)
81.6

67.1

*Expected based on the averagefor the most recent three years(1.58 times book value)

59.7

87.9 115.0 Borrowings(properties)

94.4
81.6

1,902億¥190.2 billion
10.7 Other Liabilities
23.9(disposition value)¥100.0 billion

40.4(disposition value)

41.5

72.8

33.6 46.1
41.0
25.3 32.7
17.1

41.3 51.7
46.1
33.6
25.3 41.0

41.3
33.6

5.4
7.0
6.0

5.6
7.0
5.4

5.6
5.4
5.6

2017.1137.7%
2016.112014.110.94

2018.112017.112016.11

72.8
64.6
51.7
46.1

2020.112017.1132.9%
2018.11
1.28

41.3
5.6

Investment
properties/PPE

64.6

64.6
51.7
Other assets

2018.112020.11Equity

72.8

5.6

34.
0%
Capital Equity Ratio
2020.11Net
Copyright © 2018 TOSEI1.41
CORPORATION,
All D/E
RightsRatio
Reserved.
24

Ⅲ. Business Development in FY2018

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

25

Forecast for FY2018 - Revenue/Profit Summary Revenue

Operating Profit(¥ million)(¥ million)(¥ million)

80,00012,000
不動産開発事業
Development

67,830Rental
不動産賃貸事業

10,000

9,279

8,000

10,0009,049

57,754

8,000

6,891

不動産管理事業
Property Management

Other
その他

10,038

9,833
8,450

不動産ﾌｧﾝﾄﾞ・ｺﾝｻﾙﾃｨﾝｸﾞ事業
Fund and Consulting

60,000Growth Rate10.9％

12,00010,946

不動産流動化事業
Revitalization

70,000

Profit before Tax

6,040

6,000

6,000

4,000

4,000

2,000

2,000

Internal Transactions
内部取引49,81850,00039,37543,006040,00025,8090
FY20152015.11 FY2016
2016.1140,268FY20172017.11

FY20182018.11(Forecast（予想）)

FY20152015.11

Profit for the year
30,000

EPS
(¥ )

ROE
6,000

13,138

6,699
6,155

5,547

5,197
6,605

-10,000

FY20182018.11(Forecast )（予想）

Dividends(¥ million)

20,0000FY20172017.1125,986

14,88010,000FY20162016.11

4,262

4,135
5,324

6,237

6,709

14.1%

13.7%

12.0%

2,444

2,329

3,574

4,005

4,637

5,201

694
-559

341
-1,1310-1,388345-1,396FY20152015.11

FY20162016.11

FY20172017.11

FY20182018.11(Forecast
)
（予想）

20%

160

16%

140

14%

120

12%

100

8%
6%

2,000

※

18%

10%

2,715

2,802

Advancing Together 2017

4,000

14.4%

Dividends(¥ )Earnings per share
EPS
Annual Dividends
配当金¥127.48
Per Share

40
35¥114.8930¥30¥85.66¥25

80
60¥138.75

25
20

¥22

15

¥16

40

10

20

5

4%

2018.11
1Q累計

Seamless Growth 2020

2%

0

0%

FY20152015.11

FY20162016.11

FY20172017.11

FY20182018.11(Forecast（予想）)

0

FY20152015.11

FY20162016.11

FY2017FY20182017.11 (Forecast
2018.11)
Copyright © 2018 TOSEI CORPORATION, All Rights（予想）Reserved.

0* FY2018 EPS is calculated by using the number of stocks as of end of FY201726

Earnings Forecasts for FY2018 - Segment Overview (¥ million / %)FY2016FY2017 [A]％

Revenue
Revitalization
Development
RentalFund and Consulting
Property Management
OthersInternal Transactions
Gross profit
Revitalization
Development
RentalFund and Consulting
Property Management
OthersInternal Transactions
Selling, general and administrative expenses,etc
Expenses related to property marketing activities
Selling, general and administrative expenses(net of expenses related to property marketing

Other income
Other expenses
Operating profit
Revitalization
Development
RentalFund and Consulting
Property Management
OthersCorporate expenses, etc.
Finace income/costs(net)Profit before tax
Income tax expenses
Profit for the year

FY2018 [B]％yr/yr change [B]－ [A]％％49,818100.0

57,754100.0

67,830100.0

10,07617.4

25,80951.8

40,26869.7

39,375

58.0

-893

-2.2

13,138

26.4

5,197

9.0

14,880

21.9

9,683

186.3

5,324

10.7

6,237

10.8

6,709

9.9

471

7.6

2,329

4.7

2,802

4.9

2,715

4.0

-87

-3.1

4,005

8.0

4,637

8.0

5,201

7.7

563

12.2
-

341

0.7

0

0.0

345

0.5

345

-1,131--1,388--1,396--7-

16,34932.8

16,81629.1

19,811

29.2

2,994

17.8

5,214

20.2

9,186

22.8

9,023

22.9

-163

-1.8

5,302

40.4

976

18.8

3,328

22.4

2,352

241.0

2,670

50.2

2,864

45.9

3,304

49.2

440

15.4

2,193

94.2

2,538

90.6

2,589

95.4

51

2.0

1,090

27.2

1,356

29.3

1,483

28.5

126

9.3

14

4.3

333

96.6

333

-

0-

-136

-

-106

-

-250

-

-144

-

7,021

14.1

7,153

12.4

8,881

13.1

1,727

24.2

1,806

3.6

1,457

2.5

2,207

3.3

750

52

5,214

10.5

5,696

9.9

6,674

9.8

977

17

222

0.4

215

0.4

20

0.0

-194

-90

270

0.5

44

0.1

4

0.0

-40

-91

9,279

18.6

9,833

17.0

10,946

16.1

1,112

11.3

4,001

15.5

7,845

19.5

7,067

18.0

-777

-9.9

3,674

28.0

-408

-7.9

1,657

11.1

2,066

-505.6

2,389

44.9

2,581

41.4

3,009

44.9

427

16.6

951

40.8

1,273

45.4

1,187

43.7

-85

-6.7

141

3.5

278

6.0

283

5.4

4

1.7

-17

-5.2

-74 -

-7

9.6
-

-82 -

-1,860--1,661--2,177

-

-516

-829

-

-784

-

-907

-

-123

-

8,450

17.0

9,049

15.7

10,038

14.8

989

10.9

2,902

-

2,894

-

3,339

-

445

-

5,547

11.1

6,155

10.7

6,699

543

8.8

※The orange portion shows gross profit margin and operating profit margin

9.9

 FY2018◆
Revitalization Business・Sales are forecast to be at the samelevel as the previous year.
・The gross profit margin is projected to
be 22.9%, the same level as the previous
year.

Development Business・1 Condominium (89 units)
・2 Commercial Facilities
・Detached Houses (138 houses)
・The gross profit margin is expected to
be 22.4%, reflecting the contribution
from the sale of condominium.
Others・The Tosei Hotel Cocone Kanda,
Tosei’s first hotel, opened andcommenced operation under Tosei’s
management, in December 2017.

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

27

Business Strategies in FY2018 – Revitalization Business Revitalization
Business

FY2018 on a good note. Sales of 8 buildings including large properties (exceeding ¥12 billion in
total) were posted as of the end of December.

Sales plan and Increase sales of small properties with high liquidity, which are worth less than ¥1.0 billion.
Aim for quantitative and qualitative expansions withmeasuresFundamental policy
a focus on improvements in efficiency.

Revenue

60,000

22.9%

22.8%

(¥ million)

1棟10億円未満
Building under ¥1 B

25.0%

1棟10億円以上
Building over ¥1 B

20.2%



Facilitate the creation of added value through the revitalization of usedproperties, which is one of Tosei’s strengths.
Diversify sales routes and sales methods.
• Directly approach wealthy customers (Tosei Masters Club).
• Create IT-based opportunities for individual investors to make investments inreal estate.

Building 1棟10億円未満
over ¥2 B
1棟20億円以上

22.9%20.0% 25.0%
22.8%
Restyling
1棟10億円以上
40,26839,37520.2%
Gross Profit
Margin
売上総粗利率40,000
1棟20億円以上
50,00015.0% 20.0%
8,527
Restyling
40,268 11,71139,375
30,00025,810
売上総粗利率 Some of the properties sold in the current period＜FY2018 Plan＞
40,000
10.0% 15.0%
Building over ¥2 B (Large-scale)
15,8838,526 7,661
20,00011,711 2 buildings ＠5,855M
8,804
3
Large size
25,80930,00050,00060,000

6,160

10,00020,000 9,0478,804
0

5.0%

19,326 7,661
14,32315,882 103

10.0%
Building
over ¥1 B (Mid-scale)
6 buildings ＠1,277M

SOLD

0.0%
5.0%
6,159 420172018 19,326 Building
under ¥1 B (Small-scale)
14,330 45
51
buildings
＠379M
9,120 25

10,000 2016
0

0.0%

2016

2017

2018 (Forecast)Itabashi-ku Nishidai Bulding
sold after (made an empty building to fulloccupied building after refurbishing)(number of buildings)(￥ million)

Revenue
Gross profit
Operating profit
No. of sales（Restyling)
No. of sales（whole buildings）

FY2016
Full Year
25,8095,214
4,001

FY2017Full Year
40,2689,186
7,845

FY2018
forecast
39,3759,023
7,067

57 units
32 projects

45 units
58 projects

26 units
59 projects

Mid-size

Small size

Small size

SOLD

SOLD

On SALE

Musashino-shiKichijyoji Building

Soka-shiIncome Generating Building
Narashino-shiIncome-generating apt building
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.
(Company dormitory conversion project) (Company dormitory conversion project)28

Revitalization business - a business model of value-added creation for sustainable growth Restoring the value of real estate

Advantages of revitalizing used properties

Our real estate solutions create added value not seen in
repair or resale alone.

With construction costs (especially SRC cost) continuing
to rise, revitalized used-properties have become more
affordable and attractive than newly built properties.
Income-generating Office Buildings

Tosei’s framework for added-value creation
Aging building

Comparison between the use of existingused properties and new properties

Revitalized building

Newly Built Building ¥4.0 billion
4,000

Regenerating value,
using Tosei’s expertiseCompetitiveness is lost,
and the occupancy rate
and rents have fallen.

Improving the functionsof facilities, safety
performance, energy
saving performance, andimproving profitability
through leasing activities

3,500

4,000
60
400

Acquisition Cost
Tosei’s Profit

110

Acquisition / Sales
計 Cost+買主取得コスト

3,000

Profitability has improved.
The value of the realestate has increased.

Over 25 years Buildings¥2.3 billion
2,500
Acquisition Cost
Tosei’s Profit

220
160

building Priceand renovation
1,500 cost

460

Acquisition2,000/ Sales Cost

➢ Create value using the items in our original VALUE UP 32 survey➢ Constantly place emphasis on the balance between cost effectivenessand design(excessive investment is not necessary for revitalization.)

2,300

2,000

30

・10 story office buildingnear Kinshi-cho station
建物代・改修費・basicfloor About 500㎡
・Floor space About 4,700㎡
土地代（土地原価）
・Lending
area About3,900㎡

1,000Land Price

1,430

当社利益
Construction Cost
当社取得・再生・販売コ
スト[Example]

1,430

Land Price

500
0

Rent
NOI
CAP

1 / tsubo2¥11,400¥13,650/ tsubo (1.2 times of used building)¥0.14 billion / year ¥0.17 billion / year

6.2％

4.2％

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

29

FY2018 Business Strategy & Approach -Revitalization Business Our “In-house Value Up Lab” fornew design research and product planning

Revitalization(hardware)

Design, Energy saving performance, Security andFunctions of facilities, etc.

X
Revitalization(utilization)

Change purpose of uses, Attract good tenants, Reduce costs

Increase the appeal of buildings through the repairment and restorationof exteriors, facilities and etc. to heighten property characteristics.

Propose the new ways of using property and provide solutions toimproving profitability through measures such as reducing expenses
and recovering the occupancy rate .

Revitalization (hardware) To create the best value for our customers, Tosei provides
safety & security, sophistication & comfort, andsustainability & eco-friendliness.
Safety and security

Revitalization (utilization)
 Renovation of floors in accordance with needs of tenants(change of the purpose of uses and floor plans)<Renovation of commercial facilities/offices>- Office=> Hotel
Examples - Cram school => Office- Store=> SOHO specifications

Value improvement for security, disaster prevention, community revitalization,and conservation<Renovation of apartments for rent>- Company house =>Lifestyle-oriented condominiums=>Apartment with soundproof equipment capableof supporting musicians=> Convert into a shared house

Refinement and comfort
Value improvement for scenic views, nice exterior appearance, amenities,
and enhanced convenience

Sustainability and environmental friendliness
Value improvement for sustainable energy conservation, cost cuts,and resource saving
Grovesnor Square
Commercial Property Built in 1990

Toyo-cho Tosei building(Build in 1993 as a office)Introduction of wall greening system, LED
light and EV disaster prevention cabinet andwooden deck construction, etc..

The open space in the center has a wood deck, wherevisitors can make themselves at home.

Toranomon Tosei building(Build in 2006 as a office)Tosei has obtained the A rank certification of
the Comprehensive Assessment System for
Built Environment Efficiency (CASBEE) for
existing buildings.

T-Rhythmic Soka apartment

A company dormitory renovated into a lifestyleoriented condominium tailored to the taste of amusic loving resident in which musicalinstruments can be played freely thanks tosoundproofing.

ARDEN Fujigaoka apartment
Converted a company dormitory into ashared house.

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

30

Ⅰ. Business Strategies in FY2018 – Development Business Development
Business

Sales are strong for a condominium that will be delivered in March. Against the total
number of 89 units, contracts rate have been exceeded to 85%.

Sales Plan &Measures

Sales plan for FY2018 : 1 Condominium, 2 Commercial Facilities and 138 Detached houses
Fundamental policy

Detached house
分譲戸建

40.4%

(¥ million)
18.8%
13,13920,000
7,488
15,00010,000
5,649

40.4%

13,138
5,197
7,488
5,197

22.4%
14,881

5,000

2017

5,649

Whole building
１棟物件

20.0%

Gross Profit Margin
分譲戸建
売上総粗利率

0.0%22.4%
14,880

40.0%

1,127
18.8%
6,946

1,127
-20.0%

分譲MS

Aim to expand development opportunities and enhance the value of properties toincrease customer spending per unit by offering a broad range of products andimproving product planning capabilities.
Examples of properties on sale in FY2018

１棟物件＜FY2018 Forecast＞
20.0%
Commercial Facilities売上総粗利率(2 buildings)

6,946-40.0%

4,810
5,197

2016

分譲MS
Condominium

40.0%

Revenue

2018
5,197

0

0.0%
Condominium (89 units)-20.0%-60.0%
6,806-40.0%

Detached houses andothers (138 houses)-60.0%

2016(￥ million)

Revenue
Gross profit
Operating profit
No. of sales（detached houses)
No. of sales（condos)
No. of sales（whole buildings）

2017

2018 (Forecast)

FY2016
Full Year13,1385,302
3,674
119 units
0 unit2 projects

FY2017Full Year
5,197
976
-408
121 units
0 unit0 project

THE Palms Setagaya Yutenji Master Place

THE Palms Court Aoba-Eda

T’S BRIGHTIA Chiba-Cyuo (provisional name)T’S BRIGHTIA Fujimidai (provisional name)

FY2018
forecast
14,8803,328
1,657
138 units
89 units
2 projects

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.
photos are conceptual images and may subject to change.

31Business Strategies/Measures in FY2018 – Development Business Development Project Schedule
2017
Hotel
Commercial Facility

Tosei Hotel Cocone Kanda
T‘S BRIGHTIA Minami Aoyama II

T‘S BRIGHTIA Minami Aoyama II

2018
Condominium

THE Palms Setagaya Yutenji Master Place (89 units, on sale)Commercial Facility T’S BRIGHTIA Chiba-Cyuo (provisional name)Commercial Facility T’S BRIGHTIA Fujimidai (provisional name)Commercial Facility Nishikasai Commercial Facility
Condominium

THE Palms Chofu Manor Garden (162unitsm on sale)

THE Palms Manor Amano Garden

2019
Rental Apartment
Hotel

Yokohama-shi Hiranumabashi Condominium Project
Asakusa Hotel Project

2020 and after
Condominium
Hotel

Sagamihara Condominium Project (234 units)

Ueno 3-chome Hotel Project
T’S BRIGHTIA Chiba-Cyuo
Yokohama-shi Hiranumabashi(provisional name)Condominium Project
Copyright© 2018TOSEItoCORPORATION,
All Rights Reserved.
*Photos are conceptual images
and maysubjectchange.

32

Business Strategies/Measures in FY2018 – Acquisition TargetAcquisition plan &PolicyContinue to make selected investments and aim to increase acquisitions by enhancing
human resources and organizations.

【Acquisition Amount (delivery base) 】*numbers are expected disposition value

TargetTargetTarget Result←Exceeded to ¥66.5 billion
on contract base80.0

70.0 66.8(¥1 billion)

80.0

Result49.8

FY2016FY2017FY2018 (plan)■Acquisition Flow

Approach for FY2018＜Results of 2016＞ ＜Results of 2017＞
・Number of Information 13,736 → 19,625
・Number of Acquisition
416 → 589
・Number of Contract
60 →72Gathered more information,and continued selected
investment by passing on
overpriced properties.

Assess properties flexibly• ・Continue selected investments.
• Examine the possibility of acquisition by checking factors
such as the features and sizes of properties with a focus
on revitalization capabilities■ Price per Tsubo, Area
Properties’ area slightly increased.
・Area
・Average Price ¥1,036 million → ¥749 million However, the average unit pricedeclined due to an increase in thenumber of properties whose
values were not significant.

■strengthening our sales personnel
・Number of Sales Personnel 80 → 84
(as of end of the fiscal year)

An increase in the number ofstaff members was marginal.

Concentrated effort focusing on the Tokyo
metropolitan area
• Seek to expand acquisition routes in the area.
• Increase sales prices by improving revitalization plans anddevelopment plans and enhancing brand awareness.
Strengthen teams and organizations• Increase the number of staff members.
• Increase the number of sales teams (9 to 11 teams)• Introduction of a new department to promote M&As
(GroupStrategy
Copyright© 2018Department)
TOSEI CORPORATION, All Rights Reserved.

33

Business Strategies/Measures in FY2018 – Acquisition through M&AEstablished the Group Strategy Department to facilitate the acquisition of good properties through M&A.
◆ Record of acquisitions through M&A.
Feb. 2001 Three steel companies
Acquired three properties, including Takanawa Tosei Building.
Dec. 2006 Company G
Acquired land for detached houses in Ebisu.
Sep. 2007 Company T
Acquired three income-generating buildings and other buildings.
June 2014 Company K
Took over business at two gyms.
Dec. 2015 Two detached house sales companies(URBAN HOME, Urban Next)
Acquired two companies that are involved in detached housesales, construction, and agent businesses, and expanded thepurchase and sales network.

Real estate M&A
M&A
Real estate ownercompany✓Headquarters
building✓Leased assets✓Idle assets

Tosei Group

Group Strategy
Department*Established in・Legal DD
Dec. 2017
・Financial DD
・Tax DD
・Stock transfer procedure

Sales Department
・Considering
revitalization plans
・Consideringdevelopment plans✓ “Value up”(renovation, leasing)✓ Redevelopment
Selling assets
individually

Corporate
PlanningDepartment
・Raising capital for
acquisitions

Acquired about 30 properties worth more than ¥16.0 billion* through the M&A of four real estate companies after 2016.
*expected disposition value

Mar. 2016 Company K
Acquired seven properties, including five income-generating
properties on the west side of Ikebukuro Station.
July 2016 Company F
Acquired six properties on the south side of Nakano Station.
Mar. 2017 Company K
Acquired seven properties located mainly in Tokyo
Dec. 2017 Company M
Acquired nine properties in the Tokyo Metropolitan area.
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

34

Business Strategies in FY2018 – Fund & Consulting Business Fund & Consulting Aim to enhance the balance of AUM to more than ¥650 billion by increasing the number
Businessof new contracts for the management of properties.
AUM plan andmeasures

Acquired “Kawada-cho Confo‐Garden”, a large residence property worth ¥43 billion and concluded an
AM contract for it in December through a fund in which Tosei has equity.

AMフィー

Fundamental
AMフィー
AM feeAcquisition / Disposal feeアクイジ・ディスポジ報酬policy
アクイジ・ディスポジ報酬
Brokerage fee / Other 仲介手数料その他
仲介手数料その他
Gross Profit Margin
売上総粗利率
売上総粗利率

Revenue(¥ million)

3,500

3,000

2,500

2,000

1,500

1,000
500

0

3,500 90.6%94.2%

95.4%

2,802

2,715

94.2%

3,000
2,330

2,500

1,2552,329

814
485

1,000

1,067

485

2,715

1,255
40.0%

1,500

983

80.0%
2,802

60.0%

860

480

95.4%

100.0%

80.0%

735
508

2,000

100.0%

90.6%

1,463

743
507

0.0%

Acquisition / Disposal
fee

500,000

40.0%

私募ファンドAM■ Private Funds
REIT
AM Reit■ Tosei
CRE■

Target : 648,000¥650,000

CRE

552,208

421,791

1,463

20.0%

300,607300,000

2017

2018

FY2016
Full Year
2,329
2,193
951

FY2017Full Year
2,802
2,538
1,273

200,000

114,097

91,789124,084

29,35836,177300,643

287,924

15.4Q

16.4Q

248,028
98,679170,115(Forecast)

FY2018
forecast
2,715
2,589
1,187

448,186

45,997AM fee0.0%

Revenue
Gross profit
Operating profit

700,000

600,0000(￥ million)(¥（百万円）million)

400,000

1,067
2016 500 2017 983 20182016

The Balance of Assets Under Management

Brokerage fee /Other60.0%

479
20.0%

Aim to enhance the balance of AUM by responding toinvestors’ strong investment demand.

392,114

17,434

100,000
149,349

113,057

0
13.4Q

14.4Q

17.4Q

18.4Q
18.4Q Forecast

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

35

Business Strategies in FY2018 – Rental and Property Management Business the number of assets owned by
Rental Business Increase
Tosei and improve profitability byenhancing occupancy rates.

Property Management Aim to conclude new AUM contracts bybroadening the types of properties for
Businessmanagement.

Fundamental Raise revenue and profit stably by increasing
policythe number of non-current assets. 固定資産

Fundamental Improve profitability by increasing the number ofpolicyAUM contracts and improvingPM・BM報酬など
operational efficiency.

流動資産
Restyling
Revenue
Revenue(Non Current assets)
固定資産
売上総粗利率(¥ million)
Revenue
Revenue(Current assets)
流動資産(¥ million)
100.0%
Revenue
Restyling(restyling)
6,709
7,000
7,000
Gross Profit Margin
売上総粗利率
6,237
7,000
27.2%
6,000
6,000
5,324
100.0% 80.0%
27.2%
6,000
6,709
Revenue from,000
3,235 Current assets
6,238
5,000
5,000
5,000
60.0%
4,005
3,639
80.0%
4,006
,000 4,0005,324 3,056
4,000
4,000
1,098
1,098
3,235
,000 3,000
50.2%
49.2%
40.0%
3,000
3,000
45.9%
60.0%
Revenue from Non
3,639,000 2,0003,056
Current assets
2,000
2,000
3,390
20.0%
2,906
2,906
50.2%
40.0%
,000 1,000
2,122 45.9% 2,49349.2%
1,000
1,000

,000

,000

0

0
2,122 2016 2,493 2017

3,390

FY2016
Full Year
2016
2017
2018
Revenue
5,324
Gross profit
2,670
Operating profit
2,389(￥ million)

Current assets *1(occupancy rates)*2
Non Current assets *1(occupancy rates)*2

20.0%

2018

0.0%

(Forecast)

FY20170.0%
Full Year
6,237
2,864
2,581

End of Nov. End of Nov.
FY2016FY201762 projects
63 projects
78%
84%
21 projects
26 projects
95%
99%

FY2018
forecast
6,709
3,304
3,009

*2 Occupancy rate is room base*1 the number of building includes Current and Non Current assets which have rent income00

スポット工事・手数料報酬など
PM・BM報酬など
PM・BM
fee, etc.
Repairworks,
commissions and fees
スポット工事・手数料報酬など
売上総粗利率Grossprofit margin
売上総粗利率

29.3%
29.3%

28.5%
28.5%

4,637

4,637

1,399
1,399

3,237
3,237

5,201

5,201

20.0%
20.0%
1,494 Repair works
1,494

3,707 3,707

PM・BM fee, etc.

0.0%

2016

2016

2017

2017

(￥ million)

Revenue
Gross profit
Operating profit

No. of property undermanagement

2018

0.0%

2018

FY2016
Full Year
4,005
1,090
141

FY2017Full Year
4,637
1,356
278

FY2018
forecast
5,201
1,483
283

End of Nov.
FY2016End of Nov.
FY2017

End of Nov.
FY2018594 projects

665 projects

771 projects

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

36

TOPICS: Hotel Business Expansion
Hotel Business

Purchase/
Development

Operation

Purchase hotels, making the best of
the Company’s information andexperience as a real estate company

Sale
Exit: Funds, hotel operating companies
and others

Earn high profits under the mostsuitable plans (direct operation, leasing,outsourcing of operation)

Overview of hotel business expansion
Purchase/ Development
Purchase hotels primarily in the Tokyo area•••

Develop new hotels
Purchase existing hotels and enhance their value
Convert existing office buildings to hotels

Operation

Sale

Direct management or lease by the Company

Sales to business operators orinvestors in hotels• Manage the Company's own hotels(ownership and direct management)• Consider managing hotels held byother companies (undertaking of management)• Enjoy rent revenue from lease of hotels not
managed by the Company

Continue Ownership
Continue direect operation andrentalThe first property of the Company’s own brand opened in December 2017.
Own Hotel Brand
Future Plans
Conversion

Ueno Tosei Building II project (scheduled to open in 2018)

Development

Ueno 3-chome project(scheduled to open in 2020)

Development

Asakusa Hotel project(scheduled to open in 2020)

Property Under Lease

Hotel dedicated to accommodations with modern Japanese concepts(Located in Tokyo, 1 property)

Tosei Hotel Cocone Kanda (managed by the Company)
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

37

TOPICS: Research on Related Business
Real Estate
Use the Act on Specified Joint Real Estate VenturesTech
×TOSEI Crowdfunding business (under research)
Scheme overview
Online provision of opportunities for real estate investment forindividual investors all over Japan.
✓ Create funds by utilizing the revised Act on Specified Joint Real
Estate Ventures and invitation of investors (a wide range ofindividual investors) using the Internet.
✓ Start to research on the Crowdfunding business for synergy
business of Revitalization and Funding & Consulting businessesof Tosei. Preparing for launching the first project.

*This scheme is subject to change.

Seller(Tosei)
Bridge function

Outsource Type 4 Business license andType II enterprise andsolicitation

Special enterprise(SPC)
Ownership/renovation/revitalization/lease/saleAcquisitionof property

crowdfunding service
provider(Tosei)

Investment
Dividend

Real estate(actual property)

Lease

Rent

Tenants/occupants

Sale

Sale
proceeds

Real estatemarketSolicitation

Individual
investors(investors)

Outsource real estate transaction
and related businessType 3 Business license(Tosei)Asset Management*From July 2016, the group company Tosei Asset Advisers,Inc is a Real Estate Specified Joint
Enterprise licensed company. (Type 3・4 Business Operator Licenses)

Real Estate To be a company chosen by customers
Owners×
TOSEI MASTERS CLUB (launched)TOSEI
Expand B to C business by acquiring new customers
such as wealthy individual investors✓ Built a system to facilitate a match making with customers
through collaborations with financial institutions located mainlyin the Tokyo metropolitan area.
✓ Plan to hold the first seminar on real estate for customers inJanuary 2018.
✓ Aim to acquire more than 500 direct customers in three years.

Recommendation/sale of real estatefor investment
Brokerage
management

Consulting

Advice on
replacement ofassetsBuilding
management

Tenant leasing

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

38

Trends in Dividends
We will increase earnings per share for the period through sustained growth in profit.
By doing so, we seek to pay dividends consistently and increase dividends.

Trends in Dividends
FY2013

FY2014FY2015FY2017(Forecast)

FY2016FY2018(Forecast)

Annual Dividends
Per Share(¥)

8.00

12.00

16.00

22.00

25.00

30.00

Payout ratio(%)

18.6

20.2

18.7

19.1

19.6

21.62

Current Share PriceMarket Capitalization

Net Book Value

Unrealized gains (After tax)

Net Asset Value *(As of Jan. 5, 2018)(As of Nov. 30, 2017)(As of Nov. 30, 2017)(As of Nov. 30, 2017)¥54.1billion¥46.1billion¥14.3billion¥60.4billion

Stock Price (a)Book Value Per Share (b)Unrealized gains Per Share

Net Asset Value Per Share * (c)¥1,122.00¥955.99¥296.48¥1,252.47

PER

PBR (a÷b)

8.09

1.17

(Same as above)

P/NAV* (a÷c)

0.90*Net Asset Value = Net Asset Value + Unrealized gains (after tax)
*Fair value of fixed assets are has been calculated by the Company based “Real Estate Appraisal Standards”. For details, please see page 15.
*Corporate tax is calculated at 33%

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

39

Ⅳ．Reference Materials for the first time visitors to Tosei

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

➢

Group Overview

ｰ P.41➢

History of Tosei Corporation

ｰ P.42➢The Tosei Group’s Mission

ｰ P.43➢Business Overview

ｰ P.44➢

Summary of Properties Sold

ｰ P.46➢Inventory Breakdown

ｰ P.48➢ESG Activites

ｰ P.4940

Group Overview As of Nov.30, 2017
Company name
AddressTOSEI CORPORATION Board of Directors

4-2-3 Toranomon, Minato-ku, Tokyo Audit & Supervisory Board

constituted by 5 directors(including 2 Independent directors)

Corporate
governancesystemconstituted by 4 members(2 full time, 2 part time auditors.
All from outside the Company
and independent audit & supervisory )Date establishedFebruary 2, 1950

Paid-in capital¥6,421,392 thousand Organizational form

Representative

Seiichiro Yamaguchi, President and CEO

 Nominating and

Fiscal year-end

November 30

Tosei Community Co., Ltd.
Tosei Asset Advisors, Inc.
Tosei Revival Investment Co., Ltd.
Tosei Singapore Pte. Ltd.
Urban Home Corporation
Tosei Hotel Management Co., Ltd.

Company with Audit &Supervisory Board Members

Employees

159 (Non-consolidated) 386 (Consolidated)

Stock listing

Tokyo Stock Exchange, First Section (8923)
Singapore Exchange, Mainboard (S2D)

Compensation Advisory Committee

Mainaffiliatedcompanies

Total outstanding shares

48,284,000 shares
Number of shareholders

Share status（ As of May 31, 2017 ）5,829
Shareholder composition
・Individuals/Other
・Foreign companies
・Other companies
・Financial institutions
・Securities companies

40.83%
33.24%
14.26%
9.73%
1.93%（19,715,841）（16,051,964）（6,885,200）（4,698,100）（932,895）

Investment
Trust
Management
Company

Tosei Reit Investment Corporation(3451)**The investment corporation, whose assets aremanaged by Tosei Asset Advisors, Inc. ,a wholly-owned subsidiary of Tosei Corporation

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

41

History of Tosei Corporation
1950: Established as Yukari Kogyo Co., Ltd, the predecessor of Tosei Corporation
1983: Tosei Building Co., Ltd.
1994: Mr. Seiichiro Yamaguchi assumed the role of President and CEO.

EstablishingTosei HotelManagement※5

Registered for
Financial Instruments Business Registration;
Type II Investment Management Business;
Investment Advisor and Agency Business

Revenues(¥ 80
billion)

75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0

Changed its name to current
Introduced commercial building“Tosei Corporation”
Brand T’s BRIGHTIA
Relocated its head office
to Toranomon

Launched

Launched
Revitalization businessChanged its name to

Conducted
real estate M&A
through LBO

Registered for Real Estate
Investment Consulting“Tosei Fudosan”
Begandeveloping
condominiums

Began developing office andcommercial buildings

Began developing
detached houses

Tosei Reit Investment
Corporation Listing

67.8

Listed on Singapore
Exchange

Listed on Tokyo Stock
Exchange SecondSection

Established TRI.*1
Acquired 100% ownership of TC.*2
Established TAA*3

Acquired 100%
ownership ofUrban Home.*6

Restylingbusiness

57.7
Established
Tosei
Singapore*4

Listed on
Tokyo Stock
Exchange,
First Section

49.8
43.0

Listed on
JASDAQ

Set up private
placement fund'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18（Forecast）

Notes:
1. TRI: Tosei Revival Investment Co., Ltd.
2. TC: Tosei Community Co., Ltd.
3. TAA: Tosei Asset Advisors, Inc. (Name changed from Tosei REIT Advisors, Inc. in April 2008）

4. Tosei Singapore: Tosei Singapore Pte. Ltd.
5．Tosei Hotel Management Co., Ltd.
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.
6. Urban Home Corporation

42

The Tosei Group's Mission

The Tosei Group's Mission
Create new value andinspiration*4 in all aspects of real estate*3
as a global-minded*1 group of
seasoned professionals*2.

*1 Global-minded✓✓*2 Professional

✓

✓
✓
✓

*3 All aspects of real estate✓✓✓*4 New value and inspiration✓✓✓

Dually listed on the Singapore Stock Exchange. Efforts are being to attract inbound investments for Japan and promote outboundinvestments.
Adopted the International Financial Reporting Standards (IFRS). Disclosure documents are disclosed in both Japanese and English.
Have comprehensive knowledge of transactions conducted in the greater Tokyo area with our business focused on the area. Have agood grasp of area characteristics, rental needs, investor needs, investors’ trading trends, and expected yields, among other matters.
Offer optimal plans for revitalization and development for clients by leveraging skills and expertise that we have cultivated over years.
Have an internal organization that functions as a first-class architect office.
Investment Management Business, Investment Advising and Agency, consultant function based on Type II Financial Instruments
Business (Director-General of Kanto Local Finance Bureau (Financial Instruments) Registration No. 363)
Broad product range (office buildings, commercial facilities, hotels, condominiums, detached houses, logistics)
Broad customer base (real estate funds, REITs, general business corporations, wealthy individuals, end users)）
Diverse means of acquisitions (trust beneficiary rights, real estate M&A, real-estate collateralized loans)
Improve profitability through the revitalization of aged properties from both tangible and intangible perspectives. Create added-value
in existing real estate.
Provide residential and office environments that are eco-friendly, secure, safe, and sophisticated.
Contribute to the creation of a sustainable society through business (reginal vitalization, community development, measures to deal
with an aging and diversifying society)
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

43

Business Overview
 Tosei operates its business mainly in grater Tokyo area as a comprehensive real estate company.
 The mutually complemented relations through the five businesses enable flexible portfolio management tocope with changes in the market.

5 Businesses
Real estate transaction business● Revitalization BusinessIn our Revitalization Business, Tosei acquires existing office buildings
and condominiums, and resells them as revitalized real estate after
improving their equipment and designs, installing eco-friendly facilities
and undertaking other renovation work.
Project period: a half year to a year
● Development BusinessIn our Development Business, Tosei acquires land for development, anddevelops and sells new office buildings, condominiums, residential
houses, commercial buildings, hotels and other buildings, taking into
account the needs and characteristics of the area.
Tosei also has an in-house, first-class architect office eager for quality
planning and design skills and fully making most of these in"manufacturing.“
Project period: one to two years

Stable business● Rental BusinessIn our Rental Business, Tosei generates steady income by leasing officebuildings, condominiums, and other properties owned by the Group, mainly inTokyo. As of Nov. 30, 2017, Tosei holds 89 income-generating properties.
● Fund and Consulting BusinessIn our Fund Business, Tosei is engaged in the asset management of properties
owned by real estate funds and Tosei Reit, as well as acquiring and selling
properties to meet the needs of a wide variety of investors, and offering
advisory services to companies.
As of Nov. 30, 2017, the balance of assets under management totaled
around ¥552 billion● Property Management BusinessIn our Property Management Business, Tosei undertakes general property
management operations, such as management, cleaning and renovation work
including fire protection inspection on condominiums and office buildings
through Tosei Community Co., Ltd. As of Nov 30, 2017, the number ofproperties managed by the Company was 665. (Office ,Hotel, School andOthers: 395, Residential ：270.)
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.
44

Flexible Portfolio Management - Expansion of a Wide Range of Business Offer a broad range of services in all aspects of real estate.
Aim for business expansion and increase in business areas by maximizing synergy of the related business.
Fund Management(AM)
Revitalization

Real Estate Management（PM/BM）

Development

Consulting

M&A/ Acquisition of realestate collateralized loans

Brokerage

Hotel Management

RentalOne-stop solutions for investors from purchase to sale of real estate.
Acquisition• Consulting• Brokerage

Maximizing Revenue / Management• Development

•
•
•
•

DisposalValue Up (value-added) • Asset Management
Lease Up
• Property Management
Improve Profitability• Building Maintenance
Cost Control

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

45

Summary of Properties Sold – Property Size / Revenue (¥ million）

Less than \100 million

Between \100 and \1,000 million

Between \1 and \ 3 billion

Over than \3 billion

50,00045,30843,06445,0003,637

40,85440,00038,5093,373

33,09135,00032,591
24,61430,00027,44526,517

10,102

11,016
20,771

4,088
16,86225,0008,401

19,49320,0008,525

14,867
15,00010,00010,998

0

6,218

6,251

7,351

6,294
1,221
FY2005

FY2006

12,166

FY2007

10,850

5,422

8,877

9,510

7,949

7,388

7,131

6,832

FY2014FY2015FY2016FY2017

1,076
4,693

3,160

12,6692,418

11,805

7,264
9,456

8,213
2,571

17,297 16,965
1,718

2,119

8,407
5,000

3,530

4,388

8,513

12,237

19,831

1,895

1,594

2,818

FY2008FY2009FY2010FY2011

12,086FY2012

14,065

13,274FY2013

No. of projects
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Over than \3 billion
0
0
1
2
2
1
0
0
2
1
1
2
1
Between \1 and \3 billion
5
6
6
4
2
4
4
1
1
10
7
6
12
Between \100 and \1,000 million
16
22
16
28
23
15
9
6
9
23
19
24
39
Less than \100 million
2
3
3
6
4
7
18
23
31
26
25
42
48
Total
23
31
26
40
31
27
31
30
43
60
52
74
100
* The condominiums, detached houses and Restyling are counted as each project being one property
46
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.
* The condominiums and detached houses are classified by one unit’s price.

Summary of Properties Sold – Property Type/Sales base –(properties)
100

Other

100

Detached house

9

Others (lands etc.)
9 properties,9％Condominium

90

Office/Commercial
80

74
35

70

19

60

Residential Properties(Condominium &detached house)69 properties, 69％

60
50

43

40
40

30

2

23
20

1

31
3

4

8

26

6

3

31
27

1

3
15

14

14

30
3

8

21

21

FY2007

FY2008

34

14

10

28
13

19

20

18
18

9
FY2006

1
7

19

9

8

FY2010FY20110
FY2005

11

7

22

10

15

52

7

4

31

7

FY20094

6FY2012FY2013

22

14

17

15

FY2014FY2015FY2016

Office / Commercial
22 properties, 22％

FY2017* The condominiums, detached houses and Restyling are counted as each project being one property.
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

47

Inventory Breakdown –Properties in Inventories as of Nov. 30, 2017(properties)

Chiba, Saitama & Others
Kanagawa
Tokyo (except the Tokyo's 23 wards)

100

102

102

22

24

Tokyo 23 wards

91
90
8

5

80

72
70

65
61

60

3
2

8

6
1
3

55

6

54

3
1 2

50

41
40
30

78

56

5
2 1

2
5
2

43
2
4
4

55

4

68

68

5

7

17
23

9
12
6

19
19

9

38
2
5
2

Tokyo 54%

54

49

48

45

20
33

33

FY2009FY2010

40

44
36

29

10
0

FY2005

FY2006

FY2007

FY2008FY2011FY2012FY2013

FY2014FY2015FY2016FY2017* The condominiums, detached houses and Restyling are counted as each project being one property.
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

48

ESG Activities
Based on its corporate philosophy, Tosei strives to respond to the expectations of society by strengthening its business foundations tomaintain a sound growth, taking initiatives to reduce the environmental burdens, and carrying out all other necessary corporate
activities. By continually taking these actions, Tosei will fulfill its corporate social responsibility, aspiring to become a company thatis even more trusted by society.
Main activities for reinforcement of the
management base to maintain sound business➢Corporate Governance System
Our company by responding promptly and accurately to changes
in the operating environment to maintain sound business activities
for all other stakeholders to achieve sound growth.
Three Important Items in Corporate Governance.
Compliance

We place compliance at the top of our agenda andraise awareness of it from top management to all
employees of the Group companies

Risk
Management

Assuming every possible risk, we prepare andpractice responses for daily risk and emergency
conditions.

Information
Disclosure

We practice disclosure appropriately and on a timely
basis to all stakeholders including shareholders.

Contribution to the local communities➢Initiatives Through Business Activities
Changes in the social environment have created issues such as adeclining birthrate and aging population, diversifying lifestyles, andnatural disasters. The Tosei Group addresses those issues through
Revitalization business and Real estate development business.
・ Creation of Comfortable Residences
・ Development of Secure Towns
・ Creation of Comfortable Work Environment➢Support for Disaster-Stricken Areas
Continuing voluntary activities to support areas
affected by the Great East Japan Earthquake .

Painting rusted playgroundequipment at nursery center

Eco-Friendly Activities by Employees➢Environmental awareness-raising activities
The project team, which consists of members selected from eachdepartment, plays the leading role in internal eco-friendly activities.

Compliance training

Expand the IR information available
on our website (disclosure)

Rooftop gardening

room- temperatureParticipation in cleaning

Copyright ©managing
2018 TOSEI CORPORATION, All activities
Rights Reserved.

49

ESG Activities
Since 2009, the Tosei Group has been striving to reduce the burden on the global environment bypromoting human and eco friendly corporate activities under the Tosei Eco Declaration.
Eco-friendly building Revitalization and Development

Tosei Group Eco Declaration

Eco Declaration
In order to achieve our slogan "Heart into the City", the Tosei
Group declares its intention to promote corporate activities that arefriendly to people and the environment and to work to reduceburdens on the environment, while keeping true to our philosophy"To create new value and inspiration in all aspects of real estate."

Eco-Mission (Action Policy)
In accordance with "Tosei Group Eco Declaration", we promote
activities related to the three missions.
Mission 1 We will enhance the system to promote environmental practiceMission 2 We will comply with environmental laws and regulations andprovide environmental training
Mission 3 We will inform our activities to stakeholders

Promoting Greening
Since 2006, Tosei Group has been proactive in promoting greeningof the properties it owns. A cumulative total of 74 buildings with anarea of approx. 3,670m2 have been greened to date (as of November
30, 2017). We not only green newly built buildings but also actively
green pre-owned offices and condominiums as well.

Wall greening

Rooftop greening

When planning new properties (new development and value-up), in
accordance with the characteristics of the properties, the Tosei Groupexamines which products from more than 40 items of its uniqueenvironmental product list (LED, energy-saving glasses) are to be
adopted, and selects environmental products from the perspective ofenergy and resources saving, and many other viewpoints.
greening rooftops, rooftop gardening, garden terrace
Energy saving glasses, sashes➢ Energy-saving gas-fired water heater➢ Use recycled materials➢ Renting bicycles, car sharing➢ Water-saving toilets➢➢

Three office buildings developed by
Tosei have obtained the A rank
certification of the Comprehensive
Assessment System for Built
Environment Efficiency (CASBEE).
➢ CASBEE certified buildings
・ Heiwajima Tosei Building・ Kamata Tosei Building
・ Toranomon Tosei Building

Heiwajima Tosei Building

Eco-friendly condominium
THE Palms Tukishima
Introducing solar power generating
system and rooftop gardening
Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.

50

Please visit our website.

For Contact:

Accounting
Department
経営企画部
TEL：03-3435-2864
Tel：+813-3435-2865
FAX：03-3435-2866
URL : http://www.toseicorp.co.jp
Fax：+81 3-3435-2866
URL : https://www.toseicorp.co.jp/english/

DISCLAIMER
Except for historical facts, all plans, forecasts, strategies and other information contained herein are forward-looking statements. Forward-looking statements
include but are not limited to descriptions of future events and performance containing words such as or similar to “believe,” “expect,” “plan,” “strategy,”“anticipate,” “forecast,” and “estimate,” and are based on judgments derived from the information available to the Company at the time of publication. Various
factors could cause results to differ materially from any projections presented herein. The Company reserves the right to maintain or change its projections
regardless of any new information, conditions or changes in performance. These materials are for informational purposes only, and should not be construed as arecommendation to invest in the Company.

51

Copyright © 2018 TOSEI CORPORATION, All Rights Reserved.