Financial Results for the First Six Months Ended May 31, 2019
Tosei
Corporation
トーセイ式会社
東京証券取引所第一部
証券コード：8923
Tokyo
Stock Exchange, First
Section Code : 8923
シンガポール証券取引所
証券コード：S2D
Singapore Exchange, Mainboard
Code : S2DJuly 5th 2019

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

2

IndexII. Business Development in FY2019

I. Overview of Results for the First Six Months of FY2019
FY2019 First Six Months / Full Year Forecasts - Highlights-…P5

Summery of FY2019…P24

Overview of Consolidated Financial Results…P6

Forecast for FY2019 and Result of First Half

…P25,26

Mid-term Plan "Seamless Growth 2020"…P27

Recognition of the Current Business Environment…P28

Business Results By Segment
Revitalization Business…P7

Development Business…P8

Business Strategies for the Second Half of FY2019

Acquisitions in Revitalization and Development Businesses

…P9

…P29

Rental Business…P10

Revitalization Business
Development Business
Acquisition…P32

Fund and Consulting Business…P33

Future Development of Hotel Business…P34

Shareholder Returns Policy…P35,36

Fund and Consulting Business…P11

Property Management Business…P12

Hotel Business…P13

Summary of Balance Sheet
Assets

…P14

Liabilities/Equity…P15

Inventories…P16,17

Investment Properties and PPE…P18

Borrowings from Financial Institutions…P19

Overview of Segment Results…P20,21

Summary of Cash Flow Statements…P22…P30,31lll. Reference Materials for the first time visitors to Tosei …P37～

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

3

I. Overview of Results for the First Six Months of FY2019

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

4

FY2019 First Six Months / Full Year Forecasts - Highlights◆◆*1 The revenue and profit of the Rental business has been partiallytransferred in consideration of the establishment of a new hotelbusiness in FY2019. For comparison, segment information for FY2018
is presented based on the revised classification in this material.

Revenue ¥34.4 billion (up 5.9% yr/yr), Profit before tax ¥7.6 billion (up 17.2%), Profit for the period ¥5.2 billion (up 17.7% yr/yr)
In the second quarter, sold a large size property (compartmentalized ownership) at a high profit margin in Revitalization business, which
drove the Company’s sales performance. As a result, achieved 68% of the full year profit forecast.

Revenue
4Q
3Q
2Q
1Q

(¥million)（百万円）

70,00060,000(¥million)（百万円）

71,510 (forecast)

15,77640,00012,787

Progress
Rate
34,45248.2%

15,61830,00014,21017,39318,31017,05911,230 (forecast)
10,171517

10,000(4,087)

753

7,964

3,470

8,000

2,839

Progress
Rate
66.1%

9,049
527

8,000

327

(3,595)

3,331

7,634

2,361

4,647

2,664

Progress
Rate
68.0%

6,000

6,000

2,413

2,545

4,839

2,198
4,000

4,000

11,68220,00010,0000(37,057)(¥million)（百万円）

10,875

9,833

10,000

16,234

Profit Before Tax

12,052 (forecast)

12,00061,54357,75450,000Operating Profit

14,677FY2017'17/11期

FY2018'18/11期

0

FY2019（百万円）(¥million)

60,00050,00040,00057,754
4,637
2,802
6,237
5,197

61,543
557
5,232
3,038
5,979

13,261'17/11期

40,26834,793

10,00017,0750

1,318-1,388-1,319-618'17/11期'18/11期'19/11期 2Q

0

FY2019'19/11期

4,000
2,000

-2,0003,658
FY2017'17/11期

4,150

FY2018'18/11期

2,987
FY2019'19/11期

Profit for the Period
（百万円）

9,833
278
1,273
2,581

10,875453 36
1,616

8,000

14.0%

14.0% (forecast)

7,708 (forecast)

ROE

7,964

1,487

690
1,182

6,155

131
289

1,541

7,845

14.1%

6,852

2,453

6,000

0

(internaltransaction)(internaltransaction)(internaltransaction)（内部取引）（内部取引）（内部取引）-10,000
FY2017FY2018FY2019 2Q

FY2018'18/11期

2,000

3,125

(¥million)

8,000

10,226

4,341

Segment Operating Profit*1

Hotel
ホテル事業
Property Management
不動産管理事業（百万円）(¥million)
Fund and Consulting
ﾌｧﾝﾄﾞ・ｺﾝｻﾙﾃｨﾝｸﾞ事業
Rental
不動産賃貸事業
12,000Development
不動産開発事業
10,000
Revitalization
不動産流動化事業
34,452 591

2,900
2,956

30,00020,000FY2017'19/11期

Segment Revenue*1
70,000

3,828

2,000

6,770
5,027

-408 (Development)(internal-74 (Others)-1,661 (internal -1,942 transaction) -897 (internal transaction)transaction)
FY2017FY2018FY2019 2Q'17/11期'18/11期'19/11期
2Q

6,000

399

12%

207

(2,468)

2,192

5,239

1,604

3,204

1,823
4,000

1,431

Progress
Rate
68.0%
7%

2,000

2,500

2,847

FY2017FY2018

2,035

0

2%

FY2019'17/11期'18/11期'19/11期*ROE=
Profit for the yearof end of previous fiscal year÷((total equity as
Copyright © 2019+TOSEICORPORATION,
RightsReserved.
total equity
as of end of resentAll
fiscalyear)÷2)

5

FY2019 First Six Months - Overview (¥million)

FY2018 2Q%

Revenue

FY2019 2Q%

yr/yr change%

32,520100.0%

34,452100.0%

1,931

5.9%

21,74966.9%22,487

65.3%

738

3.4%

10,771

33.1%

11,964

34.7%

1,193

11.1%

3,922

12.1%

4,049

11.8%

126

3.2%

Selling Expenses Pertaining to Property Trading

1,028

3.2%

908

2.6%

-119

-11.7%

Expenses Excluding Selling Expenses Pertaining to Property Trading

2,893

8.9%

3,140

9.1%

246

8.5%

Other Income

123

0.4%

56

0.2%

-66

-54.1%

Other Expenses

85

0.3%

7

0.0%

-77

-90.7%

6,887

21.2%

7,964

23.1%

1,077

15.6%

Finance Income

40

0.1%

41

0.1%

0

-1.1%

Financial Costs

415

1.3%

370

1.1%

-44

-10.8%

Profit Before Tax

6,511

20.0%

7,634

22.2%

1,122

17.2%

2,059

-

2,394

-

335

-

Profit For the Period

4,452

13.7%

5,239

15.2%

787

17.7%

Comprehensive Income for the Period

4,486

13.8%

5,322

15.4%

836

18.6%

EPS(¥)

91.97

16.82

18.3%

Cost of Revenue
Gross Profit
Selling, General and Administrative Expenses

Operating Profit

Income Tax Expense

108.79Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

6

Revitalization Business - First Six Months of FY2019 Component Ratio◆ Revenue ¥17.0 billion (down 2.9% yr/yr), Gross Profit ¥5.7 billion (up 12.9% yr/yr)
Sales proceeded smoothly and sold 28 properties (up 4 properties yr/yr) .
◆ In the second quarter, large sized income generating building (compartmentalized ownership) acquired with completely vacant
was sold after increasing the value by major renovation work and by leasing to full occupancy, resulted in a high profit margin.

Revenue Gross Profit ◆49.6% 47.9%

Revenue / Gross Profit Margin
Whole Building to Tosei REIT
1棟販売(トーセイリート向け)
Gross Profit Margin
売上総利益率Restyling
Restyling
Whole Building to General Customers
1棟販売(一般向け)(¥million)（百万円）

14,00012,00010,000
8,000
6,000
4,000
2,000
0

114
30.1%

FY2019 2Q(first six months)
Gross Profit Margin
33.5% 37.6%

44.1%

14,425FY2018(whole financial year)
Gross Profit Margin
23.6%

23.2%
14,310

10,481
157

6,727
57

3,159
432
2,726

6,669

2Q

3Q

Major Properties Sold

27.1%

21 30%
1,021

6,623
8,889

40%

10,451

Koto-ku
Income-generating Apartment

Kawasaki-shi
Income-generating Apartment

Fujimi-shi
Income-generating Apartment

Kawasaki-shi
Empty Apartment

20%

104
9,407
6,519

10%

1,433 1.7%
0%FY2018FY2018FY2018FY2018FY2019FY2019'18/11期 '18/11期 '18/11期 '18/11期 '19/11期 '19/11期
1Q

4Q
FY2018(¥million)

Revenue
Gross Profit
Operating Profit
No. of Sales (Restyling)
No. of Sales (Whole Building, Others)

Six
Full Year
Months
17,58534,793
5,071
8,215
4,227
6,770
15
22
24
44

1Q

2Q

FY2019Six
Full Year(Forecast)Months
17,075
41,795
5,726
9,672
5,027
7,857
5
12
28
65

*The gross profit is net of Cost of Revenues including the following write-down amounts under
LCM: FY2018:¥-456 million, FY2019:-¥2 million

Tama-shi Income-generating Building
Yokohama-shi© 2019 TOSEI CORPORATION,
All Rights
Reserved.
(compartmentalized Copyrightownership)
Commercial
Facility7

Development Business - First Six Months of FY2019 Component Ratio
Revenue

Gross Profit

29.7% 20.1%◆ Revenue ¥10.2 billion (up 18.7% yr/yr), Gross Profit ¥2.4 billion (up 7.5% yr/yr)◆ Sold 137 units of condominium “THE Palms Chofu Manor Garden”◆ Sold 1 commercial facility “T’s BRIGHTIA Chiba-chuo” and 1 whole rental apartment “THE Palms Yokohama-hiranuma”

Revenue / Gross Profit Margin
Office Building, Apartments, Commercial Facility
1棟オフィスビル・マンション・商業施設
Detached House, Land Lot,
戸建・宅地・請負
Housing Construction

7,847(¥million)
（百万円）

8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

Condominium
分譲マンション
Gross Profit Margin
売上総利益率

26.8%
17.3%

FY2018(whole financial year)
Gross Profit Margin
22.9%

17.0%

766

1,287

7,045

27.1%

830
21.9%

2,725

766

FY2019 2Q(first six months)
Gross Profit Margin
23.5%
35%

17.5%

6,559

892
179
1,653

Major Properties Sold

5,179

3,181

1,035

1,200
777
1,203

1,922
90
1,832

FY2019FY2018 '18/11期
FY2018 '18/11期
FY2018 '18/11期
FY2018 '19/11期
FY2019 '19/11期'18/11期
1Q
2Q
3Q
4Q
1Q
2Q

(¥million)

Revenue
Gross Profit
Operating Profit
No. of Sales (Detached House, etc.)
No. of Sales (Condominiums)
No. of Sales (Whole Buildings)

FY2018Six
Full Year
Months8,613
13,261
2,238
3,038
1,408
1,487
45
114
85
88
1

FY2019Six
Full Year(Forecast)Months
10,22615,025
2,406
3,153
1,541
1,484
43
143
138
163
2
2

30%
25%
20%
15%
10%
5%
0%
-5%
-10%

THE Palms Chofu Manor Garden(Condominium)

T’s BRIGHTIA Chiba-chuo(Commercial Facility)

THE Palms Court Kunitachi-nishi(Detached Houses)

THE Palms Court Mitsuikekoen II(Detached Houses)

Comodo Casa Oonodai 7-chome
The Palms(Detached house
Yokohama-hiranumabashi(Rentalapartment)by Tosei
Urban
Home Corporation)
Copyrightsold© 2019TOSEICORPORATION,
All Rights
Reserved.

THE Palms Court Funabashihoten(Detached Houses)8Acquisitions in Revitalization and Development Businesses -Acquisition Amount and Inventories◆ The total acquisition amount (expected disposition values) approximately ¥36.1 billion (up 3.0% yr/yr) on delivery basis mainly office and hotels.
◆ Total acquisition amount progressed to more than ¥46.3 billion (down 13.4% yr/yr) on contract basis, which achieved nearly 60% of the ¥80.0
billion full year target.
*For more details for inventory expected disposition value please look P16~P17

Trends in Annual Acquisition Amounts

Major Properties Acquired(delivery basis and expected revenues)

Detached House, Land (Development)
戸建・土地（開）
Logistics (D)
物流施設（開）
Land, etc., (Revitalization)
土地等（流）
オフィス（流）Office (R)(¥million)（百万円）

70,00066,842

Rental Apartment (D)賃貸マンション（開）
Hotel (D)
ホテル（開）
Apt Building (R)マンション（流）Contract Basis
Progress

6,956

58,556

Acquisition
Target¥36.1 billion
for FY2019
契約済 ¥80.0 billion(delivery basis)

2,873

6,631

4,816
2,541

49,809

2,808
1,765

2,496

880

7,544
40,000Acquisition Progress¥46.3 billion

60,00050,000Condo (D)
分譲マンション（開）
Office, Commercial Facility (D)オフィス・商業施設（開）
Hotel (R)
ホテル（流）

21,321

5,114

46,368

8,653
2,085

36,1291,433 865 8,710

30,0001,552
16,47220,00028,88025,808マンション（流）Apt Building (R)
1,545
1,545
Offices (R)
オフィス（流）12,61012,61010,00015,005FY2016'16/11期

FY2017'17/11期

Contract has
been completed
未引渡し
but ownership has not yet
10,238been transferred
10,238
戸建・土地（開）
Detached
Houses, Land
(Development)
2,975
2,975
物流施設（開）
Logistics (D)
4,958
4,958
Development
ホテル（開）
Hotel (D)¥21.7 billion
12,611
12,611(up 64.5% yr/yr)
Office,オフィス・商業施設（開）
Commercial Facilities (D)
1,165
1,165
Land, etc.
土地等（流）(Revitalization)
263
263

FY2018FY2019 2Q(cumulative)'18/11期 '19/11期
2Q*Revitalization includes properties acquired as non-current assets

Shibuya-ku
Income-generating Apartment

Atsugi-shi
Income-generating Building

Kashiwa-shi
Commercial Facility

Arakawa-ku
Empty Building

Revitalization¥14.4 billion(down 34.1%
yr/yr)Breakdown of Acquisition (FY2019 six months)
OfficeBL

Apartment

Hotel

Logistics

Detached
House,
Land Lot

Total

Revitalization

14

4

-

-

2

20

Development

1 Copyright-© 2019 TOSEI
3 CORPORATION,
1
4 Reserved.
9
All Rights

9*1 The revenue and profit of the Rental business has been partiallytransferred in consideration of the establishment of a new hotelbusiness in FY2019. For comparison, segment information for FY2018
is presented based on the revised classification in this material.

Rental Business - First Six Months of FY2019 Component Ratio
Revenue

Gross Profit

8.6% 10.7%◆ Revenue ¥2.9 billion (up 4.9% yr/yr), Gross Profit ¥1.2 billion (down 0.7% yr/yr)◆ Although there were asset replacement due to acquisition and sales, secured stable revenue by working on
improvement of occupancy rate of newly acquired buildings.

*） 1
Revenue / Gross Profit Margin（＊1

Current Assets
Restyling
Restyling
流動資産
Restyling
流動資産
FY2018FY2019 2Q
Non-current
AssetsGrossProfit Margin
固定資産
売上総利益率(whole financial year)(first six months)
固定資産 Gross Profit Margin
売上総利益率Gross Profit Margin（百万円） 46.7%
47.8%
45.0%
44.2% 43.3%
42.4%
45.2%
41.6%
(¥million)
2,000（百万円） 46.7%
45.0% 47.8% 41.6% 44.2% 42.4% 40%
2,000
1,800
100
1,554 1,605 1,481 1,475
40%
1,457
1,800
1,605
20%
1,600
1,554
1,361
1,481 1,475 20%
1,457
1,600
1,400
80
1,361
0%
1,400
1,200
0%
872
814
718
-20%
837
846
1,200 638
60
1,000
872
814
718
-20%
837
846
638
1,000
-40%
800
18
21
17
21
-40% 40
800
16
15
600
18
21
17
-60%
21
16
15
600
400
-60%
721
717
715
702
627
613
-80%
400
20
200
721
717
715
702
627
613
-80%
200
-100%
0
-100% 0
0 '18/11期 '18/11期 '18/11期 '18/11期 '19/11期 '19/11期
FY2018FY2018FY2018FY2018FY2019FY2019'18/11期'18/11期'18/11期'18/11期'19/11期'19/11期
1Q
2Q
3Q
4Q
1Q
2Q
1Q
2Q
3Q
4Q
1Q
2Q

FY2018(¥million)

Revenue
Gross Profit
Operating Profit

Six
Months
2,818
1,290
1,199

Full Year

*The revenue includes internal transactions

5,979
2,701
2,453

FY2019Six
Full Year
Months(Forecast)
2,956
6,465
1,281
3,139
1,182
2,932

Breakdown of Properties*2 Held by Tosei*2 Only includes income-generating properties
Current Assets
流動資産
Restyling
Restyling
Non-current Assets
固定資産

Office, Commercial Facilities : 37
Apartment : 38
Other : 1

89

83
52

55

85*

57

57

6

5

1

76 Buildings
48

26
8

7

18

21

'15/11'16/11

5

26

*1

23

23

'17/11'18/11'19/5

Increase and Decrease of Properties*2 (FY2019 six months)(Buildings)
（物件）

85

80

0
60

+3

+10
Newly
Acquired'18/11’18/11

Lease
Start

-21
Sold

76
-1
Lease
End

'19/5
Copyright © 2019 TOSEI CORPORATION, All Rights
Reserved.
'19/2

10

Fund and Consulting Business - First Six Months of FY2019 Component Ratio
Revenue

Gross Profit

3.8% 10.5%◆◆

Revenue ¥1.3 billion (down 2.0% yr/yr), Gross Profit ¥1.2 billion (down 1.5% yr/yr)
Private fund’s asset under management (AUM) remain stable. Properties were sold (¥28.1 billion) in some existing
funds, and the acquisition of properties (¥27.8 billion) advanced in newly formed funds.
◆ Incentive fees were gained by supporting sales of CRE property under management in the fist three months.

Revenue / Gross Profit Margin
Brokerage
Fee / Other
仲介手数料･その他

Balance of Assets Under Management

ディスポジションフィー
Disposition Fee
AMフィー
AM FeeAcquisitionFee
アクイジションフィー

(¥million)
（百万円）

Gross
Profit Margin
売上総利益率(¥million)
（百万円）
1,400
95.3%

1,200
1,000
800

687

600

104
217

400
200

93.4%

95.3%

89.9%

1,100

FY2018(whole financial year)
Gross Profit Margin
93.8%

659

365

597

592

213
37 17

113
39 51

92

391

388

384

25

94.4%

95.3%

FY2019 2Q(first six months)
Gross Profit Margin
94.9%

607

711
161
36
97

179
2
30（Disposition
Fee）

395

415

0

FY2018 '18/11期
FY2018 '18/11期
FY2018 '18/11期
FY2018 '19/11期
FY2019 '19/11期
FY2019'18/11期
1Q
2Q
3Q
4Q
1Q
2Q
FY2018(¥million)

Revenue
Gross Profit
Operating Profit

Six
Months
1,346
1,270
707

Full Year
3,038
2,850
1,616

FY2019Six
Full Year
Months(Forecast)
1,318
2,886
1,251
2,746
690
1,470

*1 The light blue portion indicates the assets under consulting agreements＊1 グラフの水色部分は、ＣＲＥの残高を表示しています。
of CRE. CRE is methods of investing in and managing corporate real estate
当社においてＣＲＥ受託は、「企業価値最大化を目指して長期的・全efficiently to maximize long-term enterprise value. By undertaking CRE,
社的な経営戦略の視点に立ち、企業不動産を最適かつ効率的に運
conducts comprehensive consulting services from the views of realPrivate Funds AM Tosei
用する方針・技術」に関して、不動産のプロフェッショナルの観点で総estate professional.
合的なコンサルティングを行うことと定義しています。
Tosei REIT AM *2 ¥45 billion was transferred from private funds AM to CRE at the end of＊2 受託内容の見直しを行ったことから、2016年11月末に私募ファンド
November,
2016 after reviewing the management details
AMからCREへ450億円分の振替を行っております。

CRE
CRE*1※1

120%
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
-120%
-140%
-160%
-180%
-200%

800,000

私募ファンドトーセイ・リート

700,000

552,208

600,000

500,000
400,000

421,792

448,186

91,789124,084

650,619

108,316

94,922

499,184

498,818

114,097*2

300,000

200,000

663,359*2

392,114300,643

287,924

29,35836,17745,99755,85856,878'15/11'16/11'17/11'18/11'19/5

100,000
0

Increase and Decrease of AUM (FY2019 six months)(¥million)

CRE
Private Funds
Tosei REIT
Total

Increase(A)+27,822+1,020+28,842

Decrease
Net Increase(B)(A)-(B)-13,393-13,393-28,188-365+1,020-41,582-12,739*The revenue includes internal transactions

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

11

Property Management Business - First Six Months of FY2019 Component Ratio
Revenue

Gross Profit

8.4% 7.4%◆

Revenue ¥2.9 billion (up 17.2% yr/yr), Gross Profit ¥0.88 billion (up 16.3% yr/yr)◆ The number of properties under management increased to 632 properties (up 10 properties from the end of theprevious fiscal year). Property management fee and building management fee continued to increase.
◆

Construction orders was favorable and “Repair Works, Commission and Fee” increased.

Revenue / Gross Profit Margin（百万円）(¥million)

The Number of Properties Under Management

PM/ BM Fee
Repair Works, Commission and Fee
スポット工事・手数料など
PM・BM報酬など
スポット工事・手数料など
PM・BM報酬など
FY2019 2Q (first six months)
Gross Profit Margin
売上総利益率Gross Profit Margin 30.7%(Buildings)（棟数）
売上総利益率
31.0% 32.5% 32.0% 31.2%
30.8%
30.2%
40%
32.5%
32.0% 31.2% 30.2% 30%
30.8% 31.0%

（百万円）
1,800
1,559
1,800
1,600 FY2018 (whole financial year)1,441
1,559
1,600
Gross Profit Margin 31.6% 1,441
1,341
1,315
1,400
1,230 1,244
1,315 1,341
1,400
584
1,230 1,244
1,200
517
584
409
398
1,200
328
517
373
409
1,000
398
328
373
1,000
800
800
600
600
974
931
924
917
915
857
400
974
931
924
917
915
857
400
200
200
0
0
'18/11期
FY2018 '18/11期
FY2018 '18/11期
FY2018 '18/11期
FY2018 '19/11期
FY2019 '19/11期
FY2019'18/11期'18/11期'18/11期'18/11期'19/11期
1Q
2Q
3Q
4Q
1Q '19/11期
2Q
1Q
2Q
3Q
4Q
1Q
2Q

(¥million)

Revenue
Gross Profit
Operating Profit

FY2018Six
Full Year
Months
2,475
5,232
764
1,653
204
453

20%
40%
10%
30%
0%
20%
-10%
10%
-20%
0%
600
-30%
-10%
-40%
-20%
-50%
-30%
-60%
-40%
-70%
-50%
-80%
-60%
-90%
-70%
-100%
-80%
-110%
-90%
-120%
-100%
400
-130%
-110%
-140%
-120%
-150%
-130%
-160%
-140%
-170%
-150%
-180%
-160%
-190%
-170%
-200%
-180%
-210%
-190%
-220%
-200%
200
-230%
-210%
-240%
-220%
-250%
-230%
-260%
-240%
-270%
-250%
-280%
-260%
-290%
-270%
-300%
-280%
-290%
-300% 0Condo/
Apt
マンション

ビル等
OfficeBuilding, Others

547
196

665

622

632

270

232

233

594
219

351

375

395

390

399

'15/11'16/11'17/11'18/11'19/5

Example of Properties Under Management

FY2019Six
Full Year(Forecast)Months
2,900
5,656
889
1,650
289
359

商業施設

School*The revenue includes internal transactions
OfficeCondominium

Commercial Facility

Hotel

Nursery School

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

12

*1 The revenue and profit of the Rental business has been partiallytransferred in consideration of the establishment of a new hotelbusiness in FY2019. For comparison, segment information for FY2018
is presented based on the revised classification in this material.

Hotel Business - First Six Months of FY2019 Component Ratio
Revenue◆◆◆

Gross Profit

1.7% 4.3%

Revenue ¥0.59 billion (up 2.3 times yr/yr), Gross Profit ¥0.51 billion (up 2.5 times yr/yr)“Tosei Hotel Cocone Ueno”, second own management hotel opened in Dec. 2018.
Acquired the business of “Tosei Hotel & Seminar Makuhari”, a training facility with accommodation in end of Feb.
2019. The hotel closed temporary for renovation purpose from June and will reopen in May 2020.

Revenue / Gross Profit Margin*1
Hotel(¥million)

（百万円）

81.1%

78.0%

250

200

118

24

253
52

144

145

150

51

51

51

100

45

50

73

93

93

98

FY2018FY2018FY2018FY2018313
201

FY2019FY2019(¥million)

Revenue
Gross Profit
Hotel’s GOP
Operating Profit

Own
Management

Hotel
Lease

(A)

(B)
166
162
86
53

Total

(A)+(B)
262
209
86
46
99
96
46

-

Full Year

FY2019Six Months

Full Year

*The revenue includes internal transactions

Total

557
432
185
36

Own
Management

Hotel
Lease

(A)

(B)
515
493
259
111

Total

(A)+(B)
591
531
259
20
131
76
19

-

90%
80%
1
Tosei Hotel Cocone Kanda
70%
60%
2
Tosei Hotel Cocone Ueno
50%
40%
3 Tosei Hotel & Seminar Makuhari
30%
20%
4
Tosei Hotel Cocone Asakusa*2
10%
Tosei Hotel Cocone
0%5Ueno-Okachimachi*2
-10%
-20%
6 Tosei Hotel Cocone Kamakura*2-30%

Own Management Operated by
No. of (Operating Income)third party
Rooms(RentalPlan / Under
Open
Income)Construction

111

〇

-

126

〇

-

137

May 2020-

133

May 2020-

171

Jul. 2020-

63

After 2021-

7

Tosei Hotel Cocone
Chiba-minato Ekimae*2

224

After 2021-

8

Tosei Hotel Cocone Asakusa II*2

80

After 2021

-

Total

9

Tosei Hotel Cocone Tsukiji*2

201

After 2021

-

1,076
859
420
189

10 Tama-shi Income-generating Hotel

138

-

〇

Total

1,384

9 Hotels

1 Hotel'18/11期'18/11期'18/11期'18/11期'19/11期'19/11期
1Q
2Q
3Q
4Q
1Q
2Q
1Q
2Q
3Q
4Q
1Q
2Q
FY2018Six Months

Name

89.9%

338

FY2018(whole financial year)
Gross Profit Margin
77.5%

300

0

82.6%

79.9%

71.2%

350

150

2Q FY2019(first six months)
Gross Profit Margin
86.8%

Own
Gross Profit Margin
運営
Management 売上総利益率

賃貸
Lease

Hotels Held by Tosei*2 They are plans at this stage, name and number of rooms, opening date are subject to change in the
future.

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

13

Summary of Balance Sheet I (Consolidated) - Assets ◆ Total asset ¥145.8 billion (up 5.1% from end of Nov. 2018).
◆ Investment Properties/PPE ¥42.1 billion (down 1.0% from end of Nov. 2018), which accounts for some 30% of total assets.
(¥million)'18/11

Decrease Increase'19/2

Decrease Increase'19/5

Six Months Total
Decrease Increase

Total Assets

138,768+4,266

143,035+2,822

145,858+7,089Cash and Cash
Equivalents

26,520-2,61623,904+5,19629,100+2,580Inventories (Properties)

62,457

Investment
Properties/PPE+5,878-10,333 +16,212-289
42,538-318+29

Other Assets

7,251+1,293

68,33642,2498,545-1,129-8,835+7,705
-132
-209
+77
-1,111

A
67,206
42,117
7,433+4,748-19,169 +23,917
-421
-528
+107
+182

A：Change in Inventories (Properties)
Inventories(properties) increased ¥4.7 billion from the end of the previous fiscal year.
The increase was attributed to new properties purchase and construction cost, etc., which exceeded decreases due to properties sold.
(¥million)

Acquisition
Increase
Construction Cost/Value-added, etc.,
FactorTransfer from Investment Properties/PPE
Decrease Disposal by Sale
Factor Others
Total

1Q

2Q
+14,294+1,807+109-10,333-10,333 +16,212+5,714+1,991-8,810-24-8,835+7,705Six Months Total+20,008+3,798+109-19,144-24-19,169 +23,917

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

14

Summary of Balance Sheet II (Consolidated) - Liabilities/Equity ◆ Maintained financial soundness by keeping an equity ratio of 37.6% and Net D/E Ratio 0.93 times.
'18/11

Decrease Increase'19/2

Decrease Increase'19/5

Six Months Total
Decrease Increase

Total Liabilities/Equity

138,768+4,266

143,035+2,822

145,858+7,089Total Liabilities

86,746+3,822

90,569+399

90,969Borrowings

75,025Current Borrowings

7,308

Non-current Borrowings

67,716

Other Liabilties

11,721-2,004

9,717+1,03010,747

Equity52,021+444

52,466+2,42254,889Equity Ratio (%)

37.5

-0.8

36.7

+0.9

37.6

Net D/E Ratio (times)

0.93

+0.15

1.09

-0.15

0.93

(¥million)+5,826-14,407 +20,233+24-2,972+2,997+5,802-11,434 +17,236

80,851
7,332
73,518-630-10,991 +10,361+1,037-3,475+4,513-1,668-7,516+5,847

A： Change in borrowings•

A

80,221
8,370
71,850+4,222+5,196-25,399 +30,595+1,062-6,448+7,510+4,133-18,950 +23,084

B
C

-973
+2,867+0.1
0.00

B： Change in Equity

The debt balance increased by ¥5.1 billion from the end of the previous fiscal year. The increase was attributed to
new borrowings for property purchase and new development costs, which exceeded decreases due to properties
sold and scheduled payment, etc.
1Q(¥million)

2Q

Increase
Long-term borrowing which due became less than one year
FactorCurrent
Other (Refinance, etc.)
Decrease Repayment upon Disposition
Factor Other (Refinance, Scheduled Payment, etc.)
Increase New Borrowing upon Acquisition
Factor Other (Refinance, etc.)
NonRepayments upon Disposition
Current Decrease
Other (Refinance, Scheduled Payment, etc.)
FactorLong-term borrowing which due became less than one year

Total

+2,996+0-335-2,636Six Months Total+1,800+2,713+0

New Borrowing upon Acquisition•-1,130-2,344+1,800+5,709+1-1,466-4,981

Total equity increased ¥2.8 billion from the end of
the previous year, reflecting an increase of ¥5.2
billion in profits, the payment of ¥1.4 billion of cash
dividend and ¥0.99 billion purchase of treasury
shares.

C: Financial Soundness+14,957+2,279+4,147+1,700+19,105+3,979-8,382-55-2,996-14,407 +20,233-4,753-49-2,713-10,991 +10,361-13,136-104-5,709-25,399 +30,595••

Equity ratio is 37.6% ( up 0.1 points from the end of
the previous year).
Net D/E ratio is 0.93 times (no change from the endof the previous year).

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

15

Inventories I - Breakdown ◆ Balance of inventories ¥67.2 billion, Total expected disposition value ¥118.1 billion (Tosei’s estimation).
(¥million)

Balance of Inventories
As of Aug. 31, 2017

71,625
67,206

Total Book Value As of End of May 2019(110
properties)(121properties)

TotalExpected
Expected
Total
Disposition
Disposition
Value
Value

107,679
118,127

Breakdown of Inventories

Breakdown of Inventories

BookInventories
Value
PropertyProperty
Type type Revitalization
No. ofNo. ofDevelopment
Revitalization
Development No.
No.ofof(A) (A) Properties(B)
Properties
properties
properties(B)
3(3)
Office, Commercial
Facility
2,666
Office, Commercial
Buildings 24,24324,491 34 (30)2,447Condo/AptCondo/Apt
Building Buildings

13,77220,339

Hotel

-

Logistic Facility
Logistics Facility
Detached House
Detached House

Other
*
*
*

Hotel

(\million)

Expected
DispositionValues
Value Total expected
Expected Disposition（百万円）
Total Expected
disposition
Revitalization
Revitalization Development
Development Disposition Value

Total
Total
(A)+(B)(A)+(B)value

26,91026,93930,55831,661

3,440
2,914

33,99834,57539 (54)

5,184
8,713

3(5)

18,956
29,053

17,076
24,965

14,43820,36531,51545,331

3,062 -

(1)

4,328
11,2256(2)7,39011,225- 4,539

9,015
27,302

13,55527,302----

2,123710

2(1)

710
2,123

-

-

2,540
9,318

2,5409,318

-

--

-

6,109
5,500

(16)
13

6,109
5,500

-

-

9,901
9,504

9,9019,504

-

1,421
2,490

1,774
6,489

-

-

1,7746,489

(27)
27

71,625
67,206

62,942
54,12444,73764,003

107,679
118,127

Other

2,490 1,421

10

Total TOTAL

40,50549,316

83 (94)(9)--22,30926,700-The expected disposition values above are based on Tosei’s estimate of revenue corresponding to the properties currently in the inventories.
Actual amounts may be vary significantly from the estimates, due to various factors.
The inventories above represent carrying amount and may increase due to such factors as value-added investments and construction costs.
The condominium buildings and detached houses are counted as each project being one property.

*Expected Disposition Values Base
Others5%
Office,Detached
Commercial
houses
Logistics 8%
Buildings
Facilities
29%
8%
PropertyType
Hotel
Condo/Apt
23%
Buildings
27%

Saitama
11%
Chiba
14%

The 23 wardsof Tokyo
39%
Area

Kanagawa Tokyo (except
the Tokyo's
27%
23 wards)
9%

Less than
¥100M
22%

More than ¥2B
49% Property Between ¥100
& ¥500M
Size
10%
Between Between¥1 & ¥2B ¥0.5 & ¥1B
6%
13%
2019 TOSEI CORPORATION,
Rights*Detached Copyrighthouses and©condominiums
are classified byAll
one
unit’sReserved.
price.

16

Inventories II - Expected Disposition Values -

円）
00

00

00

00

00

00

0

◆ Holds inventories to approximately revenue for 2 years (Revitalization Business & Development Business).
(¥million)（百万円）
120,000

118,774

118,127
8%
105,357
8% Detached House
105,357
99,428 100,076
99,428 100,0768%
20%12% Condo
100,000
11%
Office, Commercial Facility (D)
11% 14%
オフィス・商業（開）
5%
8% Logistics
5%
6%
76,487
6%
74,36576,48780,0001
4% 2%
74,3656%22%
4%23% Hotel
15%
15%
60,55760,557
23% 6% 19%
17%54,82554,825
60,000
Office,53,620 53,620
4%50,127 50,127
3% Commercial Facility
4%
25%
25%
46,581 46,581
5% Others
33% 44,588
46% 44,588
8%
8%
7%
14%
10%
40,00022%23% 20%
14% Apt Building
26%
7%
31%
22%
5%
22%
15%
4%
20,00026%
27%26% Office,46%
31%
Commercial Facility
27%
26%
35%
26%
33%
35%
18%
18%
0
15%
10%
3%
4%
3%
系列11
戸建（開）
Hotel (Revitalization)
ホテル（流）
物流施設（開）
Others(R)
その他（流）
オフィス・商業（開）
Apt Building (R)マンション（流）マンション（流）Office, Commercial Facility (R)オフィス・商業（流）オフィス・商業（流）Detached House (Development)
戸建（開）

マンション（開）
Hotel (D)
ホテル（開）
ホテル（開）
Logistics (D)
物流施設（開）
その他（流）
Condo (D)マンション（開）
ホテル（流）Development

Revitalization

2008/11 2009/11 2010/11 2011/11 2012/11 2013/11 2014/11 2015/11 2016/11 2017/11 2018/11 2019/05
2008/11 2009/11 2010/11 2011/11 2012/11 2013/11 2014/11 2015/11 2016/11 2017/11 2018/11 2019/02
Growing Up
2008

Charge Up
2011

Next Stage2014

Advancing Together
2017

Seamless Growth2020

Balance between Inventories and Sales Volume(Beginning-of-year) Inventories*1'17/11'18/11(¥million)'19/11(forecast)(A)

99,428100,076

105,357*2(B)

45,46548,05556,821 *1 Expected disposition values*2(B)÷(A)

46%

48%

Revenue

Revenue ÷(beginning-of-year) Inventories

54%*2 Sales from the trading business(Revitalization and Development business)

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

17

*1 The revenue and profit of the Rental business has been partiallytransferred in consideration of the establishment of a new hotelbusiness in FY2019. For comparison, segment information for FY2018
is presented based on the revised classification in this material.

Investment Properties and PPE - Breakdown ◆ Book values of the properties included in non-current assets is ¥41.9 billion andunrealized gains (after tax) is ¥15.3 billion (estimation).

(¥million)

Total Book Valueas of end of May 2019

41,950 (29 properties)

Fair Value

64,808

Breakdown of Investment Properties and PPE
Property TypeBook Value(A)Office, Commercial Facility*2
Apt Building
Hotel
Logistics Facility
Total

No. ofProperties

30,297
4,135
6,572
945
41,9505
3
1
29

Total Equity (A)¥54,889M¥1,154.59

Unrealized Gains (after tax) (B)¥15,314M¥322.14

Total (A)+(B)¥70,204M¥1,476.74

Total

Income Tax Expense*3
Unrealized Gains (After Tax)

Total Equity including unrealized gains (after tax) in above

Per Share

46,662
5,770
10,9051,469
64,80820*2 Includes one property which is partially is a hotel*3 Calculated by corporation tax rate 33%* 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.

As of end of May 2019

Unrealized
Gains (B)-(A)Fair Value(B)16,365
1,635
4,332
523
22,858 A-7,543 B
15,314 C (A+B)

Changes in Investment Properties and PPE (Book Value)(¥million)（百万円）

50,000

（18）

22物件

（21）

25物件

（23）*130物件（23 properties）

29物件
properties 53,900
30物件

42,37040,00030,000（26）

30物件

41,95020物件

33,55522,00410物件

25,172

物件

20,000- 10物件

10,000- 20物件0- 30物件'15/11'16/11'17/11'18/11'19/5(Forecast)'19/11（予想）*( ) are the number of properties
which©have
rentalincomeCopyright
2019
TOSEI
CORPORATION, All Rights Reserved.

18

Borrowings from Financial Institutions◆◆◆

Interest rate 1.05% (down 0.02% from end of Nov. 2018), low interest rate continues.
Generally borrow funds based on the assumption of mid- to long-term ownership of properties.
The average borrowing period of non-current assets is 16.0 years, current assets, etc. is 6.7 years.

Changes in Borrowing Rate*1 / Period*2(year)（年）

Changes in Borrowing*3 Balance

Average Interest Rate
平均借入金利Average Borrowing Period (Non-current Assets)
平均借入期間（固定資産）
Average Borrowing Period (Current Assets, etc.)
平均借入期間（棚卸資産等）
1.52%

Borrowing for Non-current Assets, etc.
固定資産
Borrowing for Current Assets
棚卸資産等(¥million)（百万円）
80,00080,21775,01970,124

1.30%
1.16%

20

1.07%
16.0年

years
16.0年

6.1年

6.7年
years

19,524

26,86527,48848,655

0

16.4年

13,57660,0001.05%

67,11340,00011,049

13.1年
10

10.5年
4.4年

5.3年

56,54720,0004.5年

00'15/11'16/11'17/11'18/11'19/5

47,58847,530'17/11'18/1153,35137,6050'15/11'16/11'19/5*1 The weighted-average rate of borrowing balance of end of each fiscal year
*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

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

19

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

Revenue
Total

FY2018 2Q

FY2019 2Q%

yr/yr Change%%

32,520100.0%

34,452100.0%

1,931

5.9%

Revitalization

17,58554.1%

17,075

49.6%

-509

-2.9%

Development

8,613

26.5%

10,226

29.7%

1,613

18.7%

2,818

8.7%

2,956

8.6%

137

4.9%

Fund and Consulting

1,346

4.1%

1,318

3.8%

-27

-2.0%

Property Management

2,475

7.6%

2,900

8.4%

425

17.2%

262

0.8%

591

1.7%

329

125.4%-37

6.4%

Rental*Hotel*（＊）（＊）

Internal Transaction

Cost of Revenue
Total

-580

-

-618

FY2018 2Q-

FY2019 2Q%

yr/yr Change%%

21,74966.9%22,487

65.3%

738

3.4%

Revitalization

12,513

71.2%

11,34966.5%-1,163-9.3%

Development

6,374

74.0%

7,820

76.5%

1,445

22.7%

Rental*

1,528

54.2%

1,675

56.7%

146

9.6%

Fund and Consulting

75

5.6%

67

5.1%

-7

-10.5%

Property Management

1,710

69.1%

2,011

69.3%

300

17.6%

53

20.3%

78

13.2%

25

47.1%

-

-8

1.6%

Hotel*
Internal Transaction

-506

-

-514

*The revenue and profit of the Rental business has been partially transferred in consideration of the establishment of a new hotel business in FY2019.
For comparison, segment information for FY2018 is presented based on the revised classification in this material.

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

20

Overview of Segment Results (Consolidated)II -Gross Profit and Operating Profit(¥million)

Gross Profit
Total

FY2018 2Q

FY2019 2Q%

yr/yr Change%%

10,771

33.1%

11,964

34.7%

1,193

11.1%

Revitalization

5,071

28.8%

5,726

33.5%

654

12.9%

Development

2,238

26.0%

2,406

23.5%

167

7.5%

1,290

45.8%

1,281

43.3%

-9

-0.7%

Fund and Consulting

1,270

94.4%

1,251

94.9%

-19

-1.5%

Property Management

764

30.9%

889

30.7%

124

16.3%

Hotel*

209

79.7%

513

86.8%

304

145.3%

-74

-

-103

-

-29

39.3%

Rental*（＊）（＊）

Internal Transaction

Operating Profit
Total

FY2018 2Q

FY2019 2Q%

yr/yr Change
%

%

6,887

21.2%

7,964

23.1%

1,077

15.6%

Revitalization

4,227

24.0%

5,027

29.4%

799

18.9%

Development

1,408

16.3%

1,541

15.1%

133

9.5%

Rental*

1,199

42.6%

1,182

40.0%

-17

-1.5%

Fund and Consulting （＊）

707

52.6%

690

52.3%

-17

-2.5%

Property Management

204

8.3%

289

10.0%

84

41.4%

Hotel*

99

38.1%

131

22.3%

31

32.0%

-

-897

-

63

-6.6%

Corporate（＊）
Expenses, etc.

-960

*The revenue and profit of the Rental business has been partially transferred in consideration of the establishment of a new hotel business in FY2019.
For comparison, segment information for FY2018 is presented based on the revised classification in this material.

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

21

Summary of Cash Flow Statements (Consolidated)(¥million)

FY20182Q (A)Cash flows from / used in operating activities

FY20192Q (B)

yr/yr Change(B)-(A)

-400

554

955

6,511

7,634

1,122

292

435

143

Increase / Decrease in inventories-7,344-4,584

2,759

Income taxes paid

-1,037-2,831-1,793

Other, net

1,177

-99

-1,276-1,723

-209

1,513

Increase / Decrease in PPE

-29

-33

-4

Increase / Decrease in investment properties

-205

-37

167

-1,487

-137

1,350

Cash flows from/used in financing activities

4,201

2,235

-1,965

Increase / Decrease in borrowings

5,714

5,197

-516

Cash dividends paid

-1,205-1,454-248

Interest expenses paid

-498

-508

-9

0

-999

-999

190

0

-190

Net Increase / Decrease in cash and cash equivalents

2,077

2,581

503

Cash and cash equivalents at beginning of period

23,75026,520

2,770

-0

-0

-0

25,827

29,1003,273

Profit before tax
Depreciation expense

Cash flows from/used in investing activities

Other, net

Purchase of treasury shares
Other, net

Effect of exchange rate change on cash and cash equivalents

Cash and cash equivalents at end of period

Cash Flows fromOperating Activities¥ 0.5 billion increased
Mainly due to ;・¥7.6 billion of profit before tax
・¥4.5 billion increase in inventories
・¥2.8 billion of income taxes paid

Cash Flows from
Financing Activities¥2.2 billion Increase
Mainly due to;・¥5.1 billion net increase in borrowings
・¥1.4 billion decrease of cash dividends paid
・¥0.5 billion decrease of interest expenses paid
・¥0.99 billion purchase of treasury shares

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

22II. Business Development in FY2019

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

23

Summery of FY2019
Performance for the First Half

Our business remains strong in the first half of the year,
achieved nearly 70% of the full-year profit before tax target

Positive Factor

Negative Factor

Office market in central Tokyo area

Property price remains high

The market is seeing
bipolarization interms of asset class,but demand forthe investment market
remains strong.

Low vacancy rate continues.
Companies’ needs for expanding officespace is strong.

Low interest rate
The relative attractiveness of real estate in Tokyo is
increasing, and investors’ motivation forinvestment is robust.

The competitive environment for purchases
intensifies.

Condominium market
The popularity of properties in the suburbs andaway from stations is declining.

Income-generating apartment market
Prices entered an adjustment period due to a trendof stricter loan conditions for end-users.

Performance for the Second Half

Maintain growth and aim to achieve 9 period-straight higher profit

Trading Business
Revitalization Business••Continue careful acquisition of properties(Strengthen acquisition of property inTokyo central area and empty buildings)(effective use of real estate M&A)
Expanding sales channels(crowd funding business research )Stable Business
Rental Business•

Strengthening tenant-leasing activities•

Accumulated the balance of noncurrent assets

Property Management BusinessContinue to handle diversified asset classes•

Aim to increase AUM balances(accumulate Tosei Reit’s assets)(develop new private fund investors)

Hotel Business•

Accumulated properties undermanagement•

Aim to further enhance earnings ofhotels•Enhance spot construction sales•

Prepare for the 3 hotel’s opening
scheduled next year

Development Business•

Fund and Consulting Business

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

24Forecast for FY2019 and Result of First Half - Revenue / Profit Summary / Dividends Gross Profit

Revenue(¥million)

80,00070,00060,00050,00049,818

2,802

341
4,005

6,237

40,000安定事業比率*Total of Gross Profit of Stable Business ÷(Gross Profit - Property Sales Expenses)
25,000

44%

43%

40%

2,475
1,346
2,818

30,00041,79540,26820,0008,613

Property Sales
Expenses-60%

0

FY2018

（予想）

2Ｑ

2Ｑ

FY2016 '17/11期
FY2017 '18/11期
FY2018 '19/11期
FY2019 FY2018 '19/11期
FY2019'16/11期(Forecast)'18/11期
2Q
2Q
（予想）
2Ｑ
2Ｑ

Profit for the Year

Dividends(¥million)

ROE

8,000

7,708
6,852

6,000

FY2019 2Q 20%
Progress Rate 68.0%
18%Year on Year +17.7%

5,239
14.1%

4,000
25,809

14.0%

14.0%

4,452

14%

200

10%

120

50

¥158.79*¥114.89¥127.4840¥141.36
¥37

30

¥30
80

6%
4%

Dividends (¥)

EPS
配当金
Dividends

160

12%

8%

2,000

EPS (¥)

16%

5,547
14.4%

17,075

2,000

-80%

FY2017(Forecast)

17,5854,000

FY2019 FY2018 FY2019'16/11期 '17/11期 '18/11期 (Forecast)'19/11期 '18/11期'19/11期
2Q
2Q

34,793

10,000

6,511

-20%

-40%

6,155
10,226

7,634

6,000

11,964

0

591

9,049

0%

Trading Business

34,452262 2,900
1,318
2,956

8,450

FY2019 2Q
Progress Rate 68.0%
Year on Year +17.2%

8,000
Stable Business

FY2016

11,23010,171
10,00010,000FY2019 2Q
Progress Rate 48.2%
Year on Year +5.9%

13,13835%
20%

10,771

Trading Business

32,52012,00016,81615,00015,025

13,26136%

18,723
16,349Growth Rate
10.4%

40%

43%

20,95620,000

5,000

5,979

5,197

Ratio of Stable Business*

3,038

2,329

5,324

14,000(¥million)(¥million)◼ Other◼ Hotel◼ その他事業
Property Management◼ ホテル事業
Fund and Consulting◼ 不動産管理事業
Rental◼ 不動産ﾌｧﾝﾄﾞ・ｺﾝｻﾙﾃｨﾝｸﾞ事業
Development
71,510◼ Revitalization
不動産賃貸事業
1,076◼ Internal Transaction
不動産開発事業5,656
不動産流動化事業
内部取引
2,886 Stable Business
61,543557
57,754
6,465
5,232
4,637

Profit before Tax

40

¥22

¥25

20

10

2%

0

0
0
-1,3190%-1,395-580
0-618
FY2016FY2017FY2018FY2016FY2017 '18/11期
FY2018 FY2019
FY2018 '19/11期
FY2019'16/11期 '17/11期'19/11期 '18/11期'16/11期'17/11期'18/11期 FY2019'19/11期
FY2018FY2019FY2018FY2019(Forecast)(Forecast)
2Q
2Q'18/11期 (Forecast)'19/11期 '18/11期'19/11期
（予想）
2Ｑ
2Ｑ
2Q
2Q
（予想）
（予想）
2Ｑ
2Ｑ
*FY2019 EPS is calculated by using the number of stocks as of end of FY2018*The revenue of the Rental business has been partially transferred in consideration of the establishment of a new Hotel Business. For comparison, segment information
for FY2018©is 2019presented
based
on the revised classification
this material.
Copyright
TOSEI
CORPORATION,
All Rights in
Reserved.
-10,000-1,131-1,388FY2016'16/11期 FY2017'17/11期

25

Forecast for FY2019 and Result of First Half - Segment Overview FY2019 Full Year
(Forecast)(¥ million)

FY2019 2Q%(Result)%

Progress Rate

Revenue

71,510100.0%

34,452100.0%

48.2%

Revitalization

41,795

58.4%

17,075

49.6%

40.9%

Development

15,02521.0%

10,226

29.7%

68.1%

Rental

6,465

9.0%

2,956

8.6%

45.7%

Fund and Consulting

2,886

4.0%

1,318

3.8%

45.7%

Property Management

5,656

7.9%

2,900

8.4%

51.3%

Hotel

1,076

1.5%

591

1.7%

54.9%

Internal Transactions-1,395

-

-618

-

-

Gross profit

20,95629.3%

11,964

34.7%

57.1%

Revitalization

9,672

23.1%

5,726

33.5%

59.2%

Development

3,153

21.0%

2,406

23.5%

76.3%

Rental

3,139

48.6%

1,281

43.3%

40.8%

Fund and Consulting

2,746

95.1%

1,251

94.9%

45.6%

Property Management

1,650

29.2%

889

30.7%

53.9%

859

79.8%

513

86.8%

59.7%

Hotel
Internal Transactions

-264

-

-103

-

-

Operating profit

12,052

16.9%

7,964

23.1%

66.1%

Revitalization

7,857

18.8%

5,027

29.4%

64.0%

Development

1,484

9.9%

1,541

15.1%

103.8%

Rental

2,932

45.4%

1,182

40.0%

40.3%

Fund and Consulting

1,470

50.9%

690

52.3%

46.9%

Property Management

359

6.4%

289

10.0%

80.4%

Hotel

189

17.6%

131

22.3%

69.3%

Corporate expenses, etc.
Finance income/costs(net)-2,240

-

-897

-

-

-822

-

-329

-

-

Profit before tax

11,230

Income tax expenses

3,521

Profit for the year

7,708

15.7%
-

7,634
2,394

10.8%

5,239

22.2%
-

68.0%
-

15.2%

68.0%

*The orange portion shows
gross profit margin andoperating profit margin

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

26

Mid-term Plan "Seamless Growth 2020"
Fundamental Policy
Growth Strategy

Strengthen the Business Base

Achieve further growth in
the existing businesses

Improve financial conditions
to support the expansion ofbusiness scale

Strengthen optimum
corporate governance

Establish new
profit-making businesses

Improve employee satisfaction
Strengthen organizational capabilities
Improve productivity

Enhance Tosei‘s brand value
with a keen awareness of ESG

Performance Indicator Guidance
FY2017FY2018(Result)(Result)

FY2019Forecast
2Q Result

FY2020(Forecast)

Revenue (¥million)

57,75461,54371,51034,452100,000

Profit Before Tax (¥million)

9,049

10,171

11,230

7,634

12,000

ROE

14.1%

14.0%

14.0%

-

Average of the 3 years 12% or more

Average Profit Growth Rate

10.9%

11.3%

12.5%

-

Average of the 3 years 10% or more

Ratio of Stable Businesses*

43%

44%

43%

35%

50%

Equity ratio

37.7%

37.5%

35.4%

37.6%

Around 35%*Ratio of Stable Business is calculated as the following. Total of Gross Profit of Stable Business ÷(Gross Profit –Direct expenses related
to sellingof properties)
Copyright© 2019TOSEI CORPORATION, All Rights Reserved.

27

Recognition of the Current Business Environment◆◆

Real estate transactions are decreasing due to an end to large-scale trades cycle and shortage of prime properties. However, the real estate
investment market remains favorable, supported by rental demand against the backdrop of low interest rates and strong corporate demand.
The future risks are deceleration of global economy caused by trade frictions between the United States and China and aggravation of thesituation in North Korea and the Middle East, etc.
Policy, Industry Conditions, Demand and Supply Trends etc.

Common Factors•••

A number of measures are expected to alleviate an economic downturn that may be caused by an increase in the consumption tax scheduled for Oct. 2019.
Steady growth will continue because the impact of a decline in construction demand is expected to be immaterial after the 2020 Tokyo Olympics.
FRB suggested that they will move to cut interest rates this year, global monetary easing trend will continue.

Office••The vacancy rate decrease to 1.64%, the lowest in history. As of May 2019, the rent is rising gradually in 65 consecutive months.
Although a vast supply of large-scale office buildings (1,720 thousand m2) is expected in 2020, vacancy rate is expected to rise slightly compare to those of Dec. 2018.

••

Although the price remain high and the contract rate for the first month of sale continued to fall below the 70% threshold from which market conditions are viewed asfavorable, major developers with corporate strength are not in a hurry to sell them.
New supply in the Greater Tokyo Area is expected to increase 0.8% from the previous year to 37 thousand units according to the 2019 forecast of a private research institution.

Used Condos••

Compared to New Condos, Used Condos are relatively undervalued, but prices of Used Condos keep rising and the number of contracts is sluggish.
The number of sales 2018 was 37,000 units.

Detached
Houses••Firm demand continues
The number of construction in the Greater Tokyo area during 2018 was 62,000 houses.

Income-generating
Apartment•

Leveraged effect decreased due to tightened credit standards over lending to individual investors. The market price is moving into an adjusted phase.

••

Although there is concern over an oversupply due to hotel construction rush towards 2020, logging demand expansion is expected by increase of foreign tourists andcultivation of new domestic logging demand.
The numbers of hotel rooms and inns in Tokyo are 169,000 hotel rooms (as of Mar 2018).

••

Rent growth is sluggish due to effects of aging society with low birthrate and expansion of EC market will retard the real store sales .
The retail sales during FY2018 was ¥145 trillion, a 1.6% increase from previous year.

••

The central area and bay area in the Greater Tokyo area have strong demand. However, the vacancy rate remained high in the inland area where new logistics facilities
are increasing.
Rental logistics facility stock in Greater Tokyo Area is 5,210 thousand tsubo as end of Apr. 2019.

PrivatePlacement••

Investors investing demand remained brisk against a backdrop of high yield gap
As of end of Dec. 2018, the market for private placement funds grew to ¥17.7 trillion.

J-REIT•••

Real estate price increases will be seen as an opportunity. Efforts to property replacement will be stepped up.
Real estate transactions decreased due to shortage of prime properties in the market.
The J-REIT market expanded to ¥18.5 trillion as of end of May 2019.

••

As of end of Mar. 2019, bank loans for the real estate industry reached ¥101 trillion to hit a record high, which is 15.8% of the total amount of bank loans (¥639 trillion).
A trend of stricter screening by banks for loans for real estate for investments continues, and the leverage of companies to which the Company sells properties is also
declining.
Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

New Condos

Housing

Hotel
Commercial
Facility
Logistics

Funds

Loan
Environment28

0Business Strategies for the Second Half of FY2019 - Revitalization Business Revitalization Based on our strengths of a wide range of product composition/solution capabilities, expand our business on two tracks:“small-scale properties with high liquidity” and “large-scale properties that drive up profitability with high profit margins.”

Sales are favorable → In the second half, focus on acquisition and added-value renovation to achieve business growth
Sales Plan and Progress in 2Q
Revenue(¥million)

33.5%

0

60,000040,26850,000
1,528

0

8,526
40,000015,88230,0000

20,00014,3300

10,000'17/11期
0

Exit 1
Sell the empty building to own use
customer
Exit2
Sell to investor as a incomegenerating building after leasing up

1棟20億円以上
Building
over ¥2 B

Building
over ¥1
B
Restyling
Restyling
1棟10億円以上
30.0%
Building
under¥1
B
Acquire empty building or
1棟10億円未満
1棟20億円以上
1棟20億円以上
Carry out added-value
33.5%
33.5%
a building with a low
Restyling
renovation and/or change
60,000Gross
Profit Margin
20.0%
売上総利益率
1棟10億円以上
1棟10億円以上
occupancy rateuse of the building
30.0% 33.5%
30.0%
23.6% 22.8%
23.1% 23.6%
23.1%
22.8%
1棟20億円以上
41,795
1棟10億円未満
1棟10億円未満
Abletoacquire
at
a
cheap
Empty
building make it
Customer who purchase the
60,00010.0%329
1棟10億円以上
50,000
price,
few
competitors
possibletodooverallbuilding
for own use tend to
20.0%
20.0%
売上総利益率
売上総利益率
30.0%
23.6%
23.1%
34,79322.8%
renovationbuy
ina higher price
1棟10億円未満
Sales
Plan
41,795
41,7950.0%
762
40,268 50,000
15,042 40,268
10.0%
10.0%
329
20.0%
(Large Size)329
売上総利益率•Able to acquire at a cheap price due to
1,528 40,000•
Customer who purchase the building for
Building over ¥2 Billion
34,793 1,528
34,793-10.0%
41,795its low occupancy or no rental income
5
BLs(average
price¥3,008M)
40,2680.0%
0.0%
their own use doesn’t fix the price based
10.0%
8,526
762
8,526
18,966
15,042 762
3,966
15,042
329•
Fund investors don’t purchase(3) 40,000
on CAP rates (the building which meets
1,528(MiddleSize)-20.0%
30,00017,075 34,793
unprofitable buildings-10.0%
Building over ¥1 -10.0%
Billionthe customer’s need (location, size,
0.0%
8,526108762(average price
15,042•
Small to mid size company can’t takeBLs
¥1,322M)
18,966etc.)has high rarity value.)
3,966 318,966
3,966
4,716
-30.0%
3,797
15,882 30,000
inventory risks(4)15,882-20.0% 17,075-20.0%
22,4572,142
17,075-10.0%
20,000(10)(Small Size)(Large &108under126-40.0%
18,966
3,966
Building¥1 Billion
11,266
4,716
10,109Mid-Size)
15,882-30.0%-30.0% Sales Strategy : Product Portfolio
6,857-20.0%
3,797
3,797
57
BLs (average price ¥393M) 17,075
20,0003BLs
22,4572,142
22,457
Adjusting the inventory composition in accordance with the market needs
10,000 (3)-50.0%
126
Size)-40.0% 4,716 (Small
14,330 '19/11期 14,330-40.0%(Increase handling volume of office in urban area where there is a strong demand,'18/11期'19/11期2Q-30.0%
11,266
11,266
3,797
10,10910,092
25BLs(45)10,000
22,457
2,142 (average pricecontinue to handle properties in a wide range of price)(37)-50.0%
0-50.0%-40.0%FY2017FY2018 14,330
FY2019 11,266
FY2019 ¥404M)
10,091'17/11期'18/11期'17/11期'19/11期'18/11期'19/11期2Q'19/11期 '19/11期2Q

23.6%

22.8%

Sales Strategy : Utilization of Empty Buildings

Restyling
Restyling

23.1%

0

(¥ million)

Revenue
Gross profit
Operating profit
No. of sales (Restyling)
No. of sales (whole buildings)(Forecast)2Q-50.0%FY2019 2Q'17/11期'18/11期'19/11期'19/11期2Q
Revenue
Progress Rate
40.9% (yr/yr-2.9%)
Operating Profit Progress Rate 64.0% (yr/yr +18.9%)

FY2017Full Year
40,2689,186
7,845
45 units
58 PJs

FY2018Full Year
34,7938,215
6,770
22 units
44 PJs

FY2019Forecast
41,795
9,672
7,857
12 units
65 PJs

FY2019Six Months
17,0755,726
5,027
5 units
28 PJs

FY2018 2Q

FY2019 2Q (expected disposition value)
Total 83PJs Approx.¥54.1 Billion

OthersHotel 8%
7%
Office,Commercial
Facility
Condominium
42%
42%

Others12%Less than 0.1 billion 3%

less than 0.5 billion
Office, 20 billion～
21%
Commercial
40%
Condominium
FacilityLess than32%
less than 1billion
56%¥2 billion
29%
6%
Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

29

Business Strategies for the Second Half of FY2019 -Development BusinessDevelopment Create development opportunities by flexibly considering every land/product andoffer products that guarantee high levels of customer satisfaction as Tosei brandDelay in detached houses sales. Making steady progress in land lots acquisition and condominium sales→In the second half, focus on detached house １棟物件
and condominium sales
１棟物件
An examples of properties on sale in FY2019
Sales Plan and Progress
in 2Q
分譲マンション
分譲マンション
１棟物件
戸建・宅地・請負
１棟物件
戸建・宅地・請負
分譲マンション
Whole building
Detached
House, Land,
Contract
売上総利益率
分譲マンション
売上総利益率Condominium
Gross
Profit Margin
戸建・宅地・請負
20,000 (¥million)
40.0%
22.9%
21.0%
18.8% 20,000
戸建・宅地・請負
売上総利益率40.0%
20,00022.9%
40.0%23.5%
21.0%20.0%
18.8% 21.0%
22.9%
18.8%
17.3%
売上総利益率40.0%
15,025
20.0%
22.9%
21.0%
20.0%
0.0%
15,000Sales
Plan
15,025
13,261
15,025
1,302
20.0%
0.0%
0.0%
15,000-20.0%
15,00013,261
15,025 89213,261
1,302
2 Commercial
Facility
1,302
0.0%
(1)
-20.0%-20.0%
892
13,261-40.0%
892
1,302
7,040
10,000
10,226-20.0%-40.0%
892-40.0%
6,830
1 Condominium
7,040-60.0%
10,000
7,040
10,000-40.0%
2,030
(162
units
+
1
units)
6,830-60.0%
6,830-60.0%
7,040-80.0%
5,197(88 units)-60.0%
6,830
5,000
-80.0%-80.0%
5,197
5,197-100.0%
5,956
6,683
5,000
5,000 5,197-80.0%
5,539-100.0%-100.0%Detached Houses,etc.
-120.0%6,683
6,683(143 houses)-100.0%
5,539
5,539
5,197
5,197
-120.0%-120.0%766
0-140.0%
6,683(114 units)
5,539
2,239
2017 (121units)
2018
2019
2020
-120.0%766
0-140.0%0-140.0%FY2017FY2018FY2019FY2019'17/11期 '18/11期'19/11期'18/11期1Q'17/11期(Forecast)'18/11期'19/11期 '19/11期2Q
2Q-140.0%
2018
2019
2020

Revenue

THE Palms Chofu Manor Garden total 162 units (137 units sold)An example of property scheduled for delivery in FY2020
THE Palms Sagamihara Park Brightia
A condominium with adjoining supermarket (Aeon group) and 5
mins walk from Sagamihara station
Total 243 units (143 units contracted, 59% progress)

FY2019 2Q
Revenue Progress Rate 68.1% (yr/yr +18.7%)
Operating Profit Progress Rate 103.8% (yr/yr +9.5%)(¥million)

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

FY2017Full Year
5,197
976
-408
121 units-

FY2018Full Year
13,261
3,038
1,487
114 units
88 units
1 PJs

FY2019Forecast
15,025
3,153
1,484
143 units
163 units
2 PJs

FY2019Six Months
10,2262,406
1,541
43 units
138 units
2PJs*Photos are conceptualCopyrightimages andchange.
©may
2019subject
TOSEItoCORPORATION,
All Rights Reserved.

30

Business Strategies for Second Half of FY2019 ‐Development Business- Future Development Schedule
Development Project Schedule (Holding / Scheduled to be completed)2017
Commercial Facility T‘S BRIGHTIA Minami Aoyama II (holding)

2018

Commercial Facility T’S BRIGHTIA Fujimidai (holding)

Condominium

THE Palms Chofu Manor Garden (162 units on sale)

Condominium

THE Palms Sagamihara Park Brightia (243 units, on sale)

Type
No. Expected Disposition Value (¥million)
Condominium
3
15,425
Rental Apartment
1
Logistics
2
9,318
Commercial Facility
3
3,440
Hotel
6 27,302
Total
15 55,486

2019
2020
Logistics

Sagamihara-shi Logistics Project

Hotel

Tosei Hotel Cocone Asakusa

Hotel

Tosei Hotel Cocone Ueno-Okachimachi

T‘S BRIGHTIA Minamiaoyama II

T’S BRIGHTIA FujimidaiCommercial Facility Kichijoji 2-chome Commercial Facility Project

After
2021

Hotel

Tosei Hotel Cocone Kamakura

Logistics

Hasuda-shi Logistics Project

Condominium

Toda-shi Condominium Project

Hotel

Tosei Hotel Cocone Chibaminato Ekimae

HotelTosei Hotel Cocone Asakusa II

Hotel

Tosei Hotel Cocone Tsukiji

Rental Apartment Kashiwa-shi Rental Apartment Project (acquired Jun. 2019)
Constructed and holding

Under construction or in planning stage

Tosei Hotel Cocone
Asakusa

Tosei Hotel Cocone
Ueno-Okachimachi

Hasuda-shi Logistics Project

Tosei Hotel Cocone
Kamakura

Sagamihara-shi Logistics Project*Photos
areTOSEI
conceptual
images andAll
may
subject
to change. 31
Copyright© 2019CORPORATION,
RightsReserved.

Business Strategies for the Second Half of FY2019 -AcquisitionEnhance acquisition of attractive properties through real estate M&A and companies that have a synergistic effect that
leads to further growth.
Track record of real estate M&A
Acquired some 30 properties worth more than ¥17.0 billion* through the M&A of 5 real estate companies after 2016.
⚫ Mar. 2016 Company K
Acquired 7 properties, including 5 income-generating properties
on the west side of Ikebukuro Station.
⚫ July 2016 Company F
Acquired 6 properties on the south side of Nakano Station.
⚫ Mar. 2017 Company K
Acquired 7 properties located mainly in Tokyo⚫ Dec. 2017 Company M
Acquired 9 properties in the Tokyo Metropolitan area.
⚫ Mar. 2018 Company S
Acquired 4 properties in the Tokyo Metropolitan area.

*expected deposition value base

Real estate M&A
Real Estate Owner
Company• Headquarters
building• Leased assets• Idle assets

M&A
Tosei Group
M&A Group Strategy Dpt.
・Legal DD• “Value up”
・Financial DD(renovation, leasing)・Tax DD• Redevelopment
・Stock transfer procedure
Sales Dpt.
・Considering
revitalization plans
・Consideringdevelopment plans

Selling assets
individually

Corporate Planning Dpt.
・Raising capital for
acquisitions

Track record of operating companies M&A⚫ Dec. 2015 2 Detached house maker companies
Acquired 2 companies that operate detached house development,
custom home construction and real estate brokerage to expand
acquisition and sales network(Current : Tosei Urban Home Company)⚫ Feb. 2019 Training facility with accommodation
Acquired an operation business of a seminar training facility withaccommodation from Company H to expand hotel business(Schedule to open as “Tosei Hotel & Seminar Makuhari” after
renovation )Tosei Urban Home Corporation

Tosei Hotel & Seminar Makuhari

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

32

Business Strategies for the Second Half of FY2019 -Fund and Consulting BusinessAsset under management (AUM) increased to ¥650.0 billion, aim increase asset management from foreign investors
Tosei is first in Japan ranked by total AUM (Balance of discretionary and advisory contract assets under FIEA)
Tosei Group’s Asset Under Management (AUM)

Tosei REIT Investment Corporation

Steadily built experience of high quality asset management.
Entrusted with asset management from various customers.

Continuing its growth since listing on TSE, AUM increased to ¥56.8 billion

トーセイ・リート◼ CRE
私募ファ ンド◼ Private Funds AM
CRE◼ Tosei REIT AM(¥1 Billion)

421

448

2015 2016

552

2017

Japanese
663

2018

650

725

(¥1 Billion)

Tosei REIT
9%55.8

780 Investment Fund,

Portfolio Composition
By Investors

2019 2019 2020
2Q
2Q (Forecast)(Forecast)
計画 計画

First in Japan ranked by total AUM(Balance of discretionary and advisory contract assets under FIEA)
Tosei
ToseiAsset
AssetAdvisors
Advisors
356

Sumitomo
Trust RealInvestment
Estate Investment
Management
omo Mitsui
TrustMitsui
Real EstateManagement
PGIM
Real
Estate
Japan
PGIM
Real
EstateJaqpanGoodmanJapan
JapanLimited
LimitedGoodman
KOWA
REAL
ESTATEINVESTMENTADVISORS
KOWA
REAL
ESTATEINVESTMENTADVISORS
DBJAsset
AssetManagement
Management
DBJ
SPCAsset
AssetManagement
Management
SPC
MitsuiFudosan
FudosanInvestment
InvestmentAdvisors,INC.
Advisors, INC.
Mitsui
PAGInvestment
InvestmentManagement
Management
PAG
ORIXReal
RealEstate
EstateInvestment
InvestmentAdvisors
Advisors
ORIX
IDERACAPITALCAPITALMANAGEMENTMANAGEMENTIDERA
PrometheusInvestment
InvestmentAdvisors,Inc.
Advisors, Inc.
Prometheus
MitsubishiJisho
JishoInvestment
InvestmentAdvisors,
Advisors,Inc.
Inc.
Mitsubishi
Goldman
SachsAsset
AssetManagement
Management
Goldman
SachesEGW Asset
Management
EGW Asset
Management
Inc.

352
225
(¥1 Billion)
189
183
171
171
164
138
130
127
116
98
78
(as of Dec. 2018)77

Source: “Status of contract asset” Japan Investment Advisers Association

0

100

200

300

400

56.8

45.9

Business Companies
15%

ForeignInvestment
Fund
Foreign Investment(Asia)
Fund (US)50%
26%

Diversified REIT which mainly invests inproperties located in the Greater Tokyo area

Residential 21
Commercial 4
Office 12

36.1

29.3
17.4

12

17

23

31

36

37properties

2014 2015 2016 2017 2018 2019.5

Examples of Portfolio

ListedInitiative for Accumulation of Assets Under Management
With the high expertise and services,
aim to be the preferred partner from investors.
Capture investment demand from investors in Japan and abroad.
•
•
•
•
•

Expand Tosei Reit
Enhance the value of existing customers’ assets
Attract inbound investments from overseas investors
Establish a direct route with major institutional investors
Expand areas and types of assets under management

Provide an end-to-end service based on the Group’s
comprehensive capabilities

Tosei Group
Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

33

Future Development of Hotel Business
Plan for Own Hotel Management
Second Conversion Hotel

Hotel Map
Open

Ikebukuro

TopicsScheduled to reopen
after renovating May 2020

MAKUHARI
Tosei Hotel & Seminar

Ueno Okachimachi Asakusa Kuramae

Shinjuku

Akihabara

Shibuya

Tokyo

Kanda

Tosei
Hotel & Seminar
Open

Maihama

Shinagawa
Tsukiji
Kamakura

Shin-narashino
Chibaminato

Just 35 mins from Tokyo station, 2 mins walk from the closest Station

TOSEI Hotel & Seminar MAKUHARI
In addition to 2 hotels, scheduled to open 7 hotels in Asakusa and other places.
Consider partial sales as a income-generating hotel with operations by Tosei
after ensuring that the brand becomes well known.

••

Differentiation Strategy

Acquired an operation business of a training facility with accommodation from a
operating company through M&A. (The hotel building it’s self was already owned by
Tosei and it was rented to the operation company.)
After extensive renovations, the Company operates it as the Tosei hotel brand.

TOSEI HOTEL COCONE (A modern Japanese concept hotel series)••

Growing diversification of customer needs
Domestic and foreign visitors are increasing↓
Capturing a wide variety of customers beyond businesspeople

TOSEI Hotel & Seminar (Hotels with a seminar facility function )••Renovation Menu•
Increase guest rooms (79 to 137 rooms)•
Installation of bath and toilet to all rooms•
Renovation of meeting rooms and banquet rooms•
Expand and improve communal baths

Expansion of corporate needs for fostering personnel against the
backdrop of work style reform
Needs for external seminar facilities (About half of major companies
have their own seminar facilities, while 80% of SMEs do not. )↓Capture needs for using seminar facilities

Before renovation

2 mins walk from Keiyō Line Shin-Narashino Station
Location : (next to Chiba international general swimming center)
Facility :137 guest rooms (12m2~33m2), 12 meeting rooms (~490m2),
Communal baths, etc.

Service :Training tour for companies, large group seminar, group lodging, individual
lodging, meeting, banquet party, social gathering, etc.
Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

34

Shareholder Returns Policy
Trends in Dividends◆◆

For FY2019, we expect to pay a dividend of ¥37 per share, or a payout ratio of 23.3%
Considering increasing the payout ratio gradually
FY2015FY2016FY2017FY2018FY2019(Forecast)

Earnings Per Share (EPS)(¥)

85.66

114.89127.48141.36158.79Annual Dividends Per Share(¥)

16.00

22.00

25.00

30.00

37.00

Payout Ratio(%)

18.7

19.1

19.6

21.2

23.3

ROE(%)

12.0

14.4

14.1

14.0

14.0

Repurchase of the Company's Shares
◆
◼

7.00

Repurchased The Company's Shares up to 1.0 billion yen (announced on Feb. 5th 2019 )

◼

35.0%
Total
Amount of stock repurchased)÷Net Income)Reason for stock repurchase
Stock will be repurchased to improve capital
5.00aefficiency and enable the Company to adopt
timely and flexible capital policy in responseto changes in the operating environment.
Total number of shares repurchased
1,008,700 shares(2.1% of issued shares)
Total value of shares repurchased
1.0 billion yen

30.0%

23.3%

18.7%

19.1%

19.6%

21.2%

Payout Ratio

25.0%(AnnualDividends Per Share ÷
Net Income per Share)
20.0%¥2.79 Billion

3.00

15.0%
¥1.00 Billion

2.00

1.00
◼

36.3% ((Total Amount of Dividend +

6.00

4.00

◼

40.0%

Total return ratio

Period for repurchase
From February 7, 2019 to April 23, 2019
0.00
(Repurchase completed)¥0.77 Billion¥0.77 Billion¥1.06 Billion¥1.20 Billion¥1.06 Billion¥1.20 Billion¥1.45 Billion¥1.45 Billion

Stock Repurchase
10.0%¥1.79 Billion

Total
Amount of Dividends
5.0%(Forecast as of 10 Jan. 2019)

0.0%

FY2015FY2016FY2017FY2018FY2019 (Forecast)

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

35

Shareholder Returns Policy
Current Share PriceMarket Capitalization

Profit for the Year (Forecast)

Net Book Value

Unrealized Gain (After Tax)

Net Asset Value*(As of 1 Jul. 2019)(As of 10 Jan. 2019)(As of end of May 2019)(As of end of May 2019)(As of end of May 2019)¥48.1 billion¥7.7 billion¥54.8 billion¥15.3 billion¥70.2billion

Stock Price(A)

Net Income per ShareBook Value per Share(C)

Unrealized Gain per Share

Net Asset Value per Share*(B)¥992.00¥158.79¥1,154.59¥322.14

PER (A) ÷(B)PBR (A) ÷(C)Price/NAV Ratio*

6.25times

0.86times

0.67times(D)¥1,476.74(A) ÷ (D)* 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”.
* Corporate tax is calculated at 33%

Current Share Price

ROE

ROA

ROIC

(Result for end of FY2018)(Result of end of FY2018)(Result of end of FY2018)

14.0 %

7.8 %

6.1 %

Cost of Shareholder’s Equity

WACC(Data from Reuters as of Jul. 2019)(Data from Reuters as of Jul. 2019)

6.43%

2.63%

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

36

lll. Reference Materials for the first time visitors to Tosei
Group Overview…P38

History of Tosei Corporation…P39

The Tosei Group's Mission…P40

Business Strategy

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

I. Flexible Portfolio Management through 6 Businesses…P41

II. Wide Range of Business…P42lll. Mid-term Management Plan (FY2018 - FY2020)…P43

lV. Tosei’s Real Estate Revitalization Business…P44,45

The Tosei Group ESG…P46-49(Data) Summary of Properties Sold

…P50,51(Data) Inventory Breakdown

…P52

37

Group Overview As of May 31, 2019
Company Name
AddressTOSEI CORPORATION

February 2, 1950

Paid-in Capital¥6,556,175 thousand

Representative

Seiichiro Yamaguchi, President and CEO

Fiscal Year-end

November 30◼

Audit & Supervisory Board
Constituted by 4 members(2 full time, 2 part time auditors. All fromoutside the Company and independent
audit & supervisory )◼

Organizational form
Company with Audit & Supervisory Board
Members◼

Nominating and Compensation Advisory
Committee

Corporate
Governance
System

Employees

191 (Non-consolidated) 458 (Consolidated)

Stock Listing

Tokyo Stock Exchange, First Section (8923)
Singapore Exchange, Mainboard (S2D)◼ Total outstanding shares(As of May 31, 2019)

Board of Directors
constituted by 7 directors(including 2 Independent directors)

4-2-3 Toranomon, Minato-ku, Tokyo

Date Established

Share Status◼

48,548,800 shares◼ Number of shareholders
4,820◼ Shareholder composition
Individuals/Other
Foreign companies
Other companies
Financial institutions
Securities companies
Treasury Stock36.71% (17,824,503 )36.37% (17,656,126 )12.43% (6,033,910 )10.05% (4,877,500 )
2.36% (1,147,956 )
2.08% (1,008,805 )Main AffiliatedCompanies

Investment TrustManagement
Company

Tosei Community Co., Ltd.
Tosei Asset Advisors, Inc.
Tosei Revival Investment Co., Ltd.
Tosei Singapore Pte. Ltd.
Tosei Urban Home Corporation
Tosei Hotel Management Co., Ltd.
Tosei Hotel Service Co., Ltd.
Tosei Reit Investment Corporation (3451)**The investment corporation, whose assets are managed by
Tosei Asset Advisors, Inc., a wholly-owned subsidiary of Tosei
Corporation

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

38

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

Revenues(¥ (Billion)
100 million)

800

Registered for
Financial Instruments Business
Registration; Type II Investment
Management Business; Investment
Advisor and Agency BusinessNotes:
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.
6. Tosei Urban Home Corporation(Name changed from Urban Home Corporation in Feb. 2019)

Tosei Reit Investment
Corporation Listing

Relocated its head office
to Toranomon

Began developing office andCommercial Facilitys

500

Set up private
placement fund

400

100

Acquired 100%
ownership ofUrban Home.*6

Changed its name to current“Tosei Corporation”

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

600

200

Introduced Commercial Facility
Brand T’s BRIGHTIA

Listed on Singapore
Exchange

Started developmentof Logistics

Started Own
Hotel Management

Listed on Tokyo Stock
Exchange Second Section

700

300

EstablishingTosei HotelManagement*5

Launched
Revitalization businessConducted
real estate M&A
through LBO

Changed its name toRegistered for Real Estate
Investment Consulting“Tosei Fudosan”
Begandeveloping
condominiums

EstablishedTosei Singapore*4
Listed on
Tokyo Stock
Exchange,
First Section
Launched
Restyling business

Listed on
JASDAQ

Began developing
detached houses

0'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19(Forecast)

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

39

The Tosei Group's Mission

The Tosei Group's Mission
Create new value and inspiration*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 ofreal estate*4 New value andinspiration

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 overyears.
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•••

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 addedvalue 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 © 2019 TOSEI CORPORATION, All Rights Reserved.

40

Business Strategy I. Flexible Portfolio Management through 6 Businesses

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

Real Estate Transaction Businesses

Stable Businesses● Revitalization BusinessIn our Revitalization Business, Tosei acquires existing officebuildings and condominiums, and resells them as revitalized
real estate after improving their equipment and designs,
installing eco-friendly facilities and undertaking otherrenovation work.
Project period: a half year to a year and a half

● Rental BusinessIn our Rental Business, Tosei generates steady income by leasing office buildings, condominiums, andother properties owned by the Group, mainly in Tokyo. Tosei holds 76 income-generating properties.

● Development BusinessIn our Development Business, Tosei acquires land fordevelopment, and develops and sells new office buildings,
condominiums, residential houses, Commercial Facilitys,
hotels and other buildings, taking into account the needs andcharacteristics of the area. Tosei also has an in-house, firstclass architect office eager for quality planning and design
skills and fully making most of these in "manufacturing.“
Project period: one to two years● 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 ofinvestors, and offering advisory services to companies.
The balance of assets under management totaled around ¥650 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. The number of properties
managed by the Company was 632. (Office ,Hotel, School and Others: 399, Residential ：233.)● Hotel BusinessBusiness for managing or leasing hotels owned by the Company. There are 10 Company’s own brandhotels, “Tosei Cocone Hotel”, 2 hotels are open and the others are under construction.
Copyright © 2019 TOSEI CORPORATION,(asAll Rights
of endReserved.
of May 2019) 41

Business Strategy II. 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

RentalHotel Management

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

Maximizing Profit / Management• Development

•
•
•
•

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

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

42

Business Strategy lll. Mid-term Management Plan (FY2018 - FY2020)
Seamless
Growth 2020◆◆

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)
FY2017FY2018 (A)Revenue

Revenue, Gross profit

57,754

16,81629.1%

61,54318,72330.4%

71,51020,95629.3% 100,000

23,737

23.7%

Revitalization
Development

40,268
5,197

9,186
976

22.8%
18.8%

34,793
13,261

8,215
3,038

23.6%
22.9%

41,79515,025

9,672
3,153

23.1%
21.0%

60,882
21,432

9,516
4,025

15.6%
18.8%

45,465

10,162

22.4%

48,055

11,25423.4%

56,821

12,825

22.6%

82,314

13,541

16.5%

6,237
2,802
4,637
0
0

2,864
2,538
1,356
0
0

45.9%
90.6%
29.3%
-

5,979
3,038
5,232
557
0

2,701
2,850
1,653
432
0

45.2%
93.8%
31.6%
77.5%
-

6,465
2,886
5,656
1,076
0

3,139
2,746
1,650
859
0

48.6%
95.1%
29.2%
79.8%
-

9,461
2,999
6,295

5,375
2,861
1,709

56.8%
95.4%
27.1%

962

914

95.0%

13,677

6,759

49.4%

14,807

7,638

51.6%

16,084

8,396

52.2%

19,717

10,85955.1%

Trading
Business

RentalFund and Consulting
Stable Property Management
Business Hotel
Other

Gross
ProfitProfitRevenue
MarginFY2020 Forecast (C)GrossProfit(¥ million)

ProfitRevenue
MarginFY2019 Forecast (B)
GrossProfitProfitRevenue
MarginGrossProfitProfitMarginGross Profit
Achieve 50/50 weight balance
between Trading businessand Stable business2017.11
Trading
Business

57 : 43
160
140
120

Internal Transactions-1,388-106--1,319-169--1,395-264--2,031-663

Growthrate(C÷A)

Selling expenses
pertaining to property
trading

1,457

2.5%

1,603

2.6%

1,934

2.7%

3,109

3.1%

Other expenses

5,525

9.6%

6,243

10.1%

6,969

9.7%

7,235

7.2%

Operating profit

9,833

17.0%

10,875

17.7%

12,052

16.9%

13,39313.4%

136.2%

Profit before tax

9,049

15.7%

10,171

16.5%

11,23015.7%

12,23112.2%

135.2%

Profit for the year

6,155

10.7%

6,852

11.1%

7,708

10.8%

8,194

8.2%

133.1%

Profit per share (¥)

127.48Selling, generalandadministrative
expenses., etc.

141.36158.79*Calculated based on the number of shares as of November 30, 2017 for FY2020 and thereafter.
*The revenue of the Rental business has been partially transferred in consideration of the establishment of a new hotel business in FY2019.
For comparison, segment information for FY2018 is presented based on the revised classification in this material.

169.72

StableBusiness¥10.1B¥3.1B(internal transaction)¥10.4B¥10.1B

Trading1
Business

Stable2
Business

100
80
60
40

133.1%¥13.5B20
050 : 50*Excluding the property sales expenses of ¥3.1
billion that are included in the gross profit.

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

43

Business Strategy lV. Tosei’s Real Estate Revitalization Business◆Our real estate solutions create added value not seen in repair or resale alone.
Regenerating value,
using Tosei’s expertise Revitalized building

Advantages of revitalizing used properties

Improving-functions of facilities-safety performance-energy saving performance

Comparison between the use of existingused properties and new properties

Aging building

Construction costs (especially SRC cost) continuing to rise, revitalized
used-properties have become more affordable and attractive-profitability throughleasing activities
Competitiveness is lost, andthe occupancy rate andrents have fallen.

Profitability has improved.
The value of the real estate
has increased.

Investment Office
Newly Built Building ¥4.0 billion

Strength of Real Estate Revitalization
A business structure that enables us to do business without depending on market
price increases.
Market Price
Acquire aged/deteriorated
property inacquisition comparatively cheap priceProfit 10%+

Regenerate value by
Revitalizing
Profit 10%

For revitalized used properties, the investment
amount can3,500
be limited to a low level.
Therefore, a high yield will be realized.

Acquisition Cost

Tosei’s Profit

220
160

building Priceand renovation
1,500 cost

460

Acquisition2,000/ Sales Cost•

Acquire in comparatively cheap price (10%) + Added Value (10%) =20% Profit

Up Cycle••

20% + α(Market Price Rise) = More than 20%
Adjust the amount of property acquisition to fit the demand.

••
Down Cycle•

Able to handle price decreases smaller than 20%.
No need to sell properties quickly because they are used ones. Possible toreceive rent revenue from leasing by holding such properties.
Mainstay products can be changed to product groups for different customer
groups or those with different price cycles according to demand trends.

110

Acquisition / Sales
計 Cost2,000

30(¥million)

Land Price

1,430

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

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

1,000

Strategy

Flat

Acquisition Cost
Tosei’s Profit+買主取得コスト

Over 25 years Buildings¥2.32,300
billion2,500

market price doesn’t increase• Implementation of sales strategies in response to cyclical changes in the realestate market.

4,000
60
400

3,000

A business model that has＝ 20% profit margin even

• Quickly respond to demand trends in the market by offering a variety of
products, exit options and revitalization expertise.

Real Estate Price Cycle

4,000

1,430

Land Price

500
0

Rent
NOI
CAP

¥11,400 1/ tsubo

2 / tsubo¥13,650(1.2 times of used building)¥140 million / year ¥170 million / year
6.2%
4.2%

building
Copyright © 2019Revitalized
TOSEI CORPORATION,
All Rights Reserved.

44

Business Strategy IV. Tosei’s Real Estate Revitalization Business◆

Improve existing building’s functionality and profitability by using two value-added approach
Revitalization(hardware)
X
Revitalization(utilization)

Design, Energy saving performance, Security and Functions of facilities, etc.
Increase the appeal of buildings through the repairmen and restoration of exteriors,
facilities and etc. to heighten property characteristics.

Change purpose of uses, Attract good tenants, Reduce costs
Propose the new ways of using property and provide solutions to improving 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, and sustainability & eco-friendliness.
Safety and security
Value improvement for security, disaster prevention, community revitalization,and conservation

Our “In-house Value Up Lab” fornew design research and product planning

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

Refinement and comfort<Renovation of apartments for rent>- Company house=>Lifestyle-oriented condominiums=>Apartment with soundproof equipment
capable of supporting musicians=> Convert into a shared house

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
and wooden deckconstruction, 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 certificationof the Comprehensive Assessment System
for Built Environment Efficiency (CASBEE)
for existing buildings.

T-Rhythmic Soka Apartment

ARDEN Fujigaoka Apartment

A company dormitory renovated into a lifestyle-oriented
Converted a company dormitory into
condominium tailored to the taste of a music loving resident in whicha shared house.
musical instruments can be played freely thanks to soundproofing.

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

45

The Tosei Group ESG Policy◆

Formulated “The Tosei Group ESG Policy” on Jan. 2019 to promote and development ESG related activities.
ESG Policy

The Tosei Group has a mission of creating new value and inspiration in all aspects of real estate as a global-minded groupof seasoned professionals. It regards its commitment to the Environment, Society and Governance as a priority
management challenge. It will seriously address the social issues associated with real estate to contribute to society andachieve its own continuous growth.
Action Guidelines
1.

Carry out business activities that achieve sound growth2.

Comply with laws and regulations

3.

Take actions that increase the value of real estate

ESG Framework
Board of Directors
Report

ESG Promotion Meeting
The chairman of the committee : Director & CFO

4.
5.

Carry out business activities with environmental considerations
Contribute to tenants, locals and communities through real estate
owned

6.

Increase customer satisfaction

7.

Increase employee satisfaction

8.

Disclose ESG information

Decision Making /Instruction / Confirmation

Proposal / Do/ Report

ESG Project
Instruction

ReportRelevant
Departments

Relevant
Departments

Relevant
Departments

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

46

ESG Activities - Environmental Initiatives The Tosei Eco Declaration has been established and Eco-Missions consisting of three action policies govern the business activities.
The Group has been striving to reduce the burden on the global environment by promoting human and eco-friendly corporate activities.

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

Eco-Mission(Action Policy)

Mission 1
Promote environmental practice throughbusiness activities

Mission 2
Comply with environmental laws, regulations
and raising of environmental awarenessWe strive to minimize environmental burdens byintroducing measures to contribute to energy
conservation and resource saving in the real-estate
revitalization.

complying with environmental laws and regulations.
We will also conduct various measures aiming toincrease Tosei group employees environmental
conservation awareness.

Mission 3
Inform our activities to stakeholder
Starting with the announcement of “EcoDeclaration” and “Eco Mission”, we will promote
open communication with the society whileproviding information on our progress and results.

Reduction of the burden on the environment through business◼ Eco-friendly revitalization of real estate
Rooftop and Wall Greening
Greened a cumulative total of 76 buildings
with an area of approx. 3,673m2 have been
as of Nov. 30, 2017.

◼ Introduction of eco-friendly products

In the revitalization and development of office buildings and residential houses, ecofriendly products are introduced according to the characteristics of each property,
considering energy saving, conservation of resources and other factors from the list of suchproducts, which includes more than 40 items.

Eco-friendly condominium
THE Palms Tukishima
Introducing solar power generating system androoftop gardening
Development of Net-Zero Energy House “ZEH”

Utilization of unused company house
Converted unused employee dormitories
to concept condos• Musician-friendly condo withsoundproof single-room units.
• Condos with common areas◼ Environmental Certification

Three office buildings developed by Tosei have obtained the A rank
certification of the Comprehensive Assessment System for Built Environment
Efficiency (CASBEE).
・ Heiwajima Tosei Building・ Kamata Tosei Building
・ Toranomon Tosei Building
Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

47

ESG Activities - Social Initiatives Changes in the social environment have created issues such as a declining birthrate and aging population, diversifying lifestyles, andnatural disasters. The Tosei Group addresses those issues through a wide range of activities including creation of comfortable
residences, creation of comfortable working environments, and support for disaster-stricken areas.

Costumers

Employees

Creation of Safe, Secure and Comfortable Residences and Environment

Cultivation of Employees◼ Product Planning by Women - "Irodorie“ Project -To develop a global-minded group of seasoned professionals
as set forth in the Tosei Group's corporate
philosophy, the Tosei Group has
provided human resource training
and adopted a personal
development support system.

The Group proposes homes that are comfortable for all family members
by focusing on the ideas of women, who support family life throughhousehold tasks, childcare and other activities. In product development,
employees from many generations are asked to provide opinions aboutproblems with housework and childcare, the ideal floor plan and storage
spaces. Those opinions are reflected in the products.

Support Work Life Balance◼ Barrier-free House
The Tosei Group provides barrier-free houses, “Withstyle”, by applying a unique design code consistingof 10 items, which is based on the concept of a permanent residence. Partition walls that can be
flexibly changed according to the lifestyle and kitchens for wheelchair users, among other similar
products, are introduced. Tosei creates house designs suitable for any situation in a long life.
子育てファミリー

子供独立後世代

車椅子生活◼ Creation of a Community Space

Support for Disaster-Stricken Areas

Painting rusted playgroundequipment at nursery center

Lounge◼ Quality Control - For Our Customer's Safety and Security Implementation of pile and structure audit by a third party
Quality control in accordance with ISO9001 rules
Provide questionnaires to our customers

Communities
Continuing voluntary activities
to support areas affected by theGreat East Japan Earthquake
since 2011.

Tosei carries out construction work to improvethe value of existing real estate and creates
spaces for exchange in offices and houses. It
seeks to create a working/housing environment
where people can work/live comfortably withspiritual wealth.

•••

The Group takes steps to maintain the sound physical andmental health of its employees by providing a stable officeenvironment and mental health care, among other actions.

Kids Room

Environmental Awareness-raising Activities
Promote in-house ecology
activities and conduct
volunteer activities out side
the company.
Participation in cleaning activities

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

48

ESG Activities - Governance Initiatives We will maintain sound business activities to achieve sound growth by responding promptly and accurately to changes in
the operating environment.

Corporate Governance
The Tosei Group aspires to become a group of companies that make a meaningful contribution to theirshareholders, employees, business partners, and other stakeholders by promptly and accurately responding tochanges in the management environment and continually carrying out business activities that enable the Groupto achieve sound growth.
The Group is determined to make efforts in a unified manner, from the top management down to each employeeof the Group companies, led by the Board of Directors, to set up a system which is credible to all stakeholders.

Three Important Items in Corporate GovernanceCompliance
We place compliance at the top of our agenda
and raise awareness of it from top management
to all employees of the Group companies■ Compliance Education

Risk Management

Information Disclosure

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

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

■Information Disclosure■ Risk Management Cycle
1 Company
1 wide risk
evaluation

2

Risk Analysis
Preventive Measures
Problem Clarification

2

3 Draw Up Individual
3 Preventive Measures
Follow the Manual••••Training for insider trading prevention, Training
on action against anti-social forces
Mental health Seminar
Compliance slogans posters
Mail magazine to enhancing awareness ofcompliance•••

Establish and operate “Risk Compliance
Committee”
Monitor risk management on an ongoing basis
Set up a Business Continuity Plan (BCP)•••

Hold financial results briefings
Timely financial and corporate status reportingin Japanese and English
Expand the IR information available on our
website (evaluated by external assessment )Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

49

Breakdown of Properties Sold - Property Size / Revenue (¥million)(百万)Over ¥3 billion
30億円以上50,000

10億円以上30億円未満
Between ¥1 and ¥3 billion

47,90645,308

1億円以上10億円未満
Between ¥100 and ¥1,000 million
45,000Less than ¥100 million
1億円未満

43,064

3,637

40,85440,00038,5093,373

35,00033,091

32,591
24,61430,00027,44526,517

10,102

16,313

11,016
20,771

4,088
16,8626,450

27,30225,00019,49320,00015,00010,0008,525

14,867

2,119

0

6,218

6,251

6,294

11,805

1,221
FY2005

FY2006

1,076

1,718

4,693

5,422

12,669

1,895

1,594

2,818

FY2007

FY2008FY2009FY2010FY2005

FY2006

14,0658,877

FY2011

9,510

13,356

13,27412,086

9,456

10,85011,785

3,160

7,264

8,213
2,571

17,297 16,965

12,237

2,418
12,166

8,407
5,000

3,530
4,388

8,513

7,351

8,401

19,831

10,998

7,949

7,388

7,131

6,832

FY2013

FY2014FY2015FY2016FY2017FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018

0
4
9
18
31

0
1
6
23
30

2
1
9
31
43

1
10
23
26
60

1
7
19
25
52

2
6
24
42
74

1
12
39
48
100

3
4
34
47
88

FY2012FY2018 FY2019 2Q

Number of projects
FY2007

FY2008FY2009FY2010Over than ¥3 billion
0
0
1
2
2
Between ¥1 and ¥3 billion
5
6
6
4
2
Between ¥100 and ¥1,000 million
16
22
16
28
23
Less than ¥100 million
2
3
3
6
4
Total
23
31
26
40
31
* The condominiums, detached houses and Restyling are counted as each project being one property* The condominiums and detached houses are classified by one unit’s price.

1
4
15
7
27

FY2019
2Q
1
3
22
32
58

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

50

Breakdown of Properties Sold – Property Type –
Other
その他
DetachedHouse
戸建
Condominium
マンション
Office/Commercial
オフィス・商業・ホテル(件数)(Properties)

100

90

100
9

88
9

80

74
35

70

19

60

37

60

50

43

40
40

31
2

23
20

1

3

4

8

31

26
3

6

14

31
27

1

3

30
3

15
21

FY200788FY2008FY2009FY2010FY2011

24

34

14
28

14
4

6

FY2012FY2013* The condominiums, detached houses and Restyling are counted as each project being one property.

FY201415FY2015FY2016

Residential
66%

14

22

17

Others
7%

30

19

20

18
9

4

21

13

18

9
FY2006

10

1
7

19

0
FY2005

11

7

14
22

10

15

52

7

4

30

7

58

12
FY2017FY2018

16

Office28%

FY20192Q

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

51

Breakdown of Inventory - Property Location -(Properties)
(件数)

120

千葉・埼玉ほか
Chiba, Saitama, Others
神奈川
Kanagawa

116

東京都下Tokyo (except the 23 wards of Tokyo)

110

東京23区
The 23 wards of Tokyo

102

102

23

100

21

91
22
8

5

80

65

61
60

3
2

72
6
1
3

55
3
1 2

40

54
41

78
56

8

5
2 1

43
2
4
4

55

49

38

2
5
2

2
5
2

6
4

20

33

33

FY2009FY2010

31

68

68

5

7

9

12

19

19
16

19

9

54

34

17
23

6

45

24

Tokyo
50%

48

44

40

36

29

43

39

0
FY2005

FY2006

FY2007

FY2008FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY20192Q* The condominiums, detached houses and Restyling are counted as each project being one property.

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

52

Please visit our website.

For Contact
Accounting and IR Department
Tel：+81 3-3435-2865
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.

53

Copyright © 2019 TOSEI CORPORATION, All Rights Reserved.

53