Small Meeting Material

February 14, 2020

Sumitomo Realty & Development Co., Ltd.

Eighth Management Plan (Apr 2019 – Mar 2022)

Performance targets for the Eighth Management Plan
Achieve consecutive record results for the three-year period covered, withcumulative ordinary profit of ¥700 billion.
Achieve record results for the ninth consecutive fiscal year under the three management plans since the Sixth
Management Plan by maintaining the pace of growth attained under the Seventh Management Plan withwhich substantial profit increase was achieved.

Three-year cumulative earnings targets+ 7 % )*Revenue from Operations¥ 3,100 billion ( + ¥ 214.2 billion,Operating Income¥740 billion ( + ¥ 126.8 billion, + 21 % )*Ordinary Profit¥

700 billion ( + ¥ 142.2 billion, + 25 % )**Compared with results for the Seventh Management Plan

≪Reference≫ Comparison of Management Plan results (Years ended/ending March 31) （Billions of yen）
Three-year
Cumulative totals
Revenue from Operations

5th Plan

6th Plan

7th Plan

8th Plan

2011-20132014-20162017-20192020-2022

2,170

2,442

2,886

3,100

Operating Income

437

501613740

Ordinary Profit

329

418

558

700

Financial results for March 2019 fiscal year and the 7th plan have been adjusted retroactively, reflecting theadoption of Accounting Standard for Revenue Recognition in Sumitomo Real Estate Sales effective from thebeginning of March 2020 fiscal year.

Sumitomo Realty & Development Co., Ltd.

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Eighth Management Plan (Apr 2019 – Mar 2022)

Leasing asset investment plan
(Non-current asset investment excluding sales assets, such as condominiums for sale)

Further investment in leasing office assets in central Tokyo, strengthening ourearnings base.
Funding will be covered by expanding cash flows from the leasing business*1. (No increase in interest-bearing
debt expected.)*2

1 tsubo = 3.3㎡

Billions of yen
4,000

3,000

Thousands of tsubo*2

Interest-bearing Debt and Gross Floor Area
5th Plan

6th Plan

7th Plan

8th PlanCapital Investment

(268)

(422)

(664)

(600)

Cash Flows from theLeasing Business

364

410

535

680

Interest-bearing Debt

2,651

3,159

3,343

3,300

*1

2,000
Cash Flows from the Leasing Business:
Operating Income from the Leasing Business+ Depreciation and Amortization

1,500

Gross Floor Area(right scale)
2,000

1,000

Interest-bearing Debt

1,000

500

Deposits from Partnership Investors

00
2001
2004
2007
(Years ended/ending March 31)

2010

2013

2016

2019

2022(F)

Sumitomo Realty & Development Co., Ltd.

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History of Financial Stage
Stage 1

Stage 2

Stage 3

New Stage

1st - 2nd Plan(1998-2004)

3rd - 5th Plan(2005-2013)

6th - 7th Plan
(2014-2019)

8th Plan (2020-)

Shareholders'Equity

Shareholders' equity did
not increase due totreatment of unrealizedloss

Adopted impairment
accounting and shifted toincrease in shareholders'equity

Sixth consecutive year ofrecord high profit
Shareholders' equity
doubledNew record high profit
ND/E ratio on par withpeer companies

Interest-bearing
debt

Reduced borrowings byutilizing off-balance-sheet
financing and SURF*

Increase in investment
and on-balance-sheet
treatments caused asurge in borrowings

Cash flows from theleasing business ＜Investment
Continued increase inborrowings

Cash flows from theleasing business ≧Investment

Medium-termManagementPlan(Years ended/ending
March 31)(Billions of yen,thousands of tsubo)

Beforeplans

1997
actual2004 actual2013 actual2019 actual

Borrowings level out

Revenue fromoperations

339.0

573.9

736.7

1,012.2

Increase revenue

Ordinary profit

2.8

66.0

114.9

203.2

Increase profit

627.0

1,202.1

Increase

1,048.6

2,650.7

3,342.8

Remain at the same level

BB+, BBB

A-, A

A, A+

Possible further upgrade

870

1,254

1,524

Approx. 2,300 (＋800)

Shareholders'equity
Interestbearing debt

249.8

303.9 (231.9 before
capital increase)

1,633.4

Rating (R&I, JCR)
Gross floor area
(Thousands of tsubo)
Major events* Fiscal years ended March are
shown in parenthesis･ Recovery of ordinary profit at arecord high level as the bubble
economy period (2001)･ Loss making years (1998, 2001)･ SURF* (1999-)･ Securitization (2000-)･ Capital increase (2004, 71.9 billionyen)* SURF : Sumitomo Realty & Development Fund･ Profit increase for seven of nineterms･ Perpetual subordinated loan(2008)･ Lehman Crisis (2009)→Profit decline for two
consecutive years (2009-2010)･ Great East Japan Earthquake(2011)

NextStage･ Abenomics･ Monetary easing (2014-)･ Increased condominium prices(2014-)･ Increased office rents (2015-)･ Sumitomo Real Estate Sales Co., Ltd.
delisted as it became a wholly owned
subsidiary (2018)

Next StageWider selection ofmanagement options→ Spent three fiscal-year periods
to recover record high profit･ Consolidation of SPCs (2012)

Sumitomo Realty & Development Co., Ltd.

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Eighth Management Plan (Apr 2019 – Mar 2022)

Leasing asset investment plan
(Non-current asset investment excluding sales assets, such as condominiums for sale)

Further investment in leasing office assets in central Tokyo, strengthening ourearnings base.
1. Concrete development plan for over 800 thousand tsubo* of gross floor area, mainly comprisingredevelopment projects. (Equivalent to over 50% of 1,520 thousand tsubo of gross floor area for leasing asof the end of the Seventh Management Plan)
The total investment will amount to ¥2,000 billion, expected to generate profits within six to seven years.
2. During the Eighth Management Plan, approximately 30%, or 230 thousand tsubo, of total gross floor area ofthe investment pipeline will be completed and brought to market.
Pace of Gross Floor Area Development

Thousands of tsubo
3,000*(Thousands of tsubo)
2,500

GrossFloor
Area

5th Plan

6th Plan

7th Plan

8th Plan

150

110

210

230

2,000

1 tsubo = 3.3㎡

More than＋800
thousands of tsubo

＋230
1,524
thousandsof tsubo

thousandsof tsubo

1,500

1,000

50002001
2004
2007(Years ended/ending March 31)

2010

2013

2016

2019

2022

2025-

Sumitomo Realty & Development Co., Ltd.

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Consolidated Operating Income and Gross Floor Area
Billions of yen

Thousand of tsubo *1

300

3,000
Operating Income
Gross Floor Area（（from Leasing BusinessTotal,＋￥100 billion）（compared with forecasts
for FY 2020）

Owned by the Company）★2,500250★
200

2,000＋800

LehmanCrisisthousand tsubo（compared with resultsfor FY 2019）150

1,500Total GFA(right scale)

100

1,000
Economic
BubbleBurst

Operating Incomefrom Leasing Business

50500

GFA Owned by the Company
0(right scale)19781982

1986

1990

1994

1998

2002

2006

2010

(Years ended/ending March 31)
*1*2

2014

2018

2022
(F)

0

1 tsubo = 3.3㎡
Segment information has been disclosed since the March 1991 fiscal year

Financial results for March 2019 fiscal year have been adjusted retroactively, reflecting the adoption of
Accounting Standard for Revenue Recognition in Sumitomo Real Estate Sales effective from the beginning ofMarch 2020 fiscal year.

Sumitomo Realty & Development Co., Ltd.

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Cash Dividends per Share and Net Income
Net Income(Billions of yen)
150

Cash Dividends per Share (Yen)Dividend Payout Ratio(％)
45

35

100

Cash Dividendsper ShareDividend
Payout Ratio

1820
22
21

1450

9030
27
24
15

10

6
Loss
makingyear

30

Net IncomeLossmakingyear

1998
2000
2002
2004
(Years ended/ending March 31)

Stage 1

20062008

2010

Stage ２

2012

2014

2016

2018

Stage ３2020(F)0New Stage

Sumitomo Realty & Development Co., Ltd.

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Sumitomo Realty & Development Co., Ltd.
Investor Relations, Corporate Planning Department

Disclaimer
The purpose of this material is to provide information, and not to solicit investments, etc.
This material includes statements regarding future performance. These statements are based on
certain assumptions deemed rational by the Company as of the date of publication. They include
risks and uncertainties and do not guarantee the achievement of targets and forecasts, or futureperformance. Please understand that the actual results of the Company' s performance may differ
due to various factors such as changes in the economic situation, market trends, and themanagement environment.
The Company has carefully prepared the information provided in this material, but does notguarantee the accuracy and completeness of the information. Moreover, please understand that thiscontent may be changed or eliminated without notice.

Copyright © Sumitomo Realty & Development Co., Ltd. All Rights Reserved.

Sumitomo Realty & Development Co., Ltd.

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