May 9, 2024
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Sumitomo Realty & Development Co., Ltd.
Kojun Nishima,
Representative Director and President
8830 (TSE Prime Market)
Tetsuya Mogi,
Executive Officer and General Manager ofCorporate Administration Department

Proactive Revision of “Management Strategy for Sustainable Growth”
In May last year, Sumitomo Realty & Development Co., Ltd. announced the “Basic Management Strategy andMedium- to Long-term Outlook for Sustainable Growth” in response to the recovery from the COVID-19 pandemic
and the normalization of the economy. A year has passed, and amidst significant changes in the businessenvironment, including social and economic conditions, our mainstay businesses have steadily recovered andimproved. The financial results for fiscal 2023 have met our initial targets, and we now expect to surpass 300
billion yen in ordinary profit in the next medium-term management plan.
As such, the foundation for advancing our business has been solidifying and shifting from a defensive to an
offensive stance. In addition, one of the largest development projects in Japan, which will be a key project for
our future sustainable growth, has made significant progress through the approval by the Tokyo Metropolitan
Government. We have also managed to acquire a large-scale mixed-use development site in the heart of
Mumbai, India, which is a significant preparatory step for further growth and development in the future. We willcontinue to actively invest in such specific projects that contribute to our growth, viewing 300 billion yen in
ordinary profit in the next medium-term management plan as a checkpoint, and will strive to expand our businesswith the aim of reaching an even higher milestone of 400 billion yen in ordinary profit.
Incorporating these elements, we have proactively revised our management strategy as follows.

- 1 -1. Mainstay businesses on the path to recovery with expectation for achieving an ordinary
profit of 300 billion yen in the next Tenth Management Plan ending in fiscal 2027
(1) Office building leasing businessFor existing buildings, the trend of returning to office had already begun during the COVID-19 pandemic in
2022, with contracts starting to exceed cancellations. This trend has been growing stronger in 2023 and 2024.
Furthermore, with price pass-through due to increased operating costs starting to be accepted, the realizationof substantial rent increases is also becoming more realistic under ongoing inflation.
Moreover, with the full contribution of newly completed buildings during the Ninth Management Plan, suchas “Sumitomo Fudosan Tokyo Mita Garden Tower,” “Sumitomo Fudosan Nakano Ekimae Building,” and“Sumitomo Fudosan Shinjuku Minamiguchi Building,” we expect an increase in revenue and profit in the officebuilding leasing business. These have given us the prospects for growth in the office building leasing businessin the Tenth Management Plan and beyond. In addition, businesses that were directly impacted by the COVID19 pandemic, such as hotel and multipurpose hall businesses, have turned to a recovery trajectory, with someproperties beginning to generate revenues surpassing those before the pandemic.

(2) Condominium sales businessAs a result of the increased interest in housing due to the COVID-19 pandemic, which has driven up
demand, the market has adapted to the rising prices, and we have maintained strong sales.
While there are matters that require careful consideration, such as the difficulty of acquiring land, the surge
in construction costs, and whether the market will continue to accept the increased prices, we believe that ourunique strength lies in the flexibility to respond to market conditions, having secured land for the next six
years, and having already fixed construction costs for properties scheduled to be delivered by the end of theTenth Management Plan.

- 2 -2. Proactive revision of management strategy, aimed at achieving an ordinary profit of 300
billion yen(1) Doubling the dividend two years ahead of the previous schedule
We will accelerate the pace of the annual dividend increase from 7 yen to 10 yen per share, achieving thetarget set forth last year of “doubling the dividend within 7 years to 100 yen per share” two years earlier.
* The dividend for fiscal 2023 will be 60 yen, with an annual increase of 10 yen thereafter, reaching 100 yen
for fiscal 2027.
We position stable income from building leasing at the core of our revenue and do not rely on gains fromselling assets, which are susceptible to market fluctuations. As previously stated, the recovery andimprovement trends in our leasing business are evident, putting us on the clear path to surpassing 300 billion
yen in ordinary profit. In light of this situation, we intend to further boost shareholder returns and accelerate
the pace of sustainable dividend increase.
Even after surpassing 300 billion yen, we will continue to pursue appropriate and strong shareholder returns,
taking into account our profit growth.

- 3 -(2) Making progress in reducing strategic shareholdings, aiming to achieve the reduction
target of 10% or less, three years ahead of the original schedule
We aim to achieve our target of reducing the ratio of strategic shareholdings to 10% or less three years
ahead of the original schedule, by the end of fiscal 2027.
* The ratio of the book value of strategic shareholdings to shareholders’ equity has been steadily decreasing:
18.4% at the end of fiscal 2021, 16.6% at the end of fiscal 2022, and 14.2% at the end of fiscal 2023.
Regarding strategic shareholdings, we will maintain those that contribute to the strengthening of “goodpartnerships*” and are expected to positively impact our business in the long term while we sell shares withdiminished significance for holding, in a planned manner. The gains from the sale of shares, including thoseclassified as pure investments at the end of the previous fiscal year, will be utilized to support our sustainablegrowth. This includes allocation for covering demolition and disposal losses that commonly occur in theproperty development, loss on liquidation of business efficiency, investments in digital transformation (DX)
aimed at improving employee productivity, and investments in green transformation (GX) for environmental
consideration.
*Good partnerships
In advancing our office building leasing and condominium sales businesses, we regard general contractors
and subcontractors as partners, not as mere suppliers, in promoting business together.
We have fostered long-standing and strong relationship with general contractors and subcontractors
through continuous orders, backed by strategic shareholdings. It serves as a motivation for them to confidently
secure construction materials and personnel over the long term. From our standpoint, we are reaping thebenefits of mitigating business risks associated with the ongoing issues of rising construction costs andprolonged project durations, enabling us to stabilize our business through steady and stable progress ofprojects for construction until completion.

- 4 -(3) Not renewing advance warning takeover defense measures
The Group has been pursuing sustainable and stable growth with the building leasing business at its core,by continuing development of office building over the medium to long term. In the course of our growth, wehave needed to protect shareholder interests from so-called “Killing the goose that lays the golden eggs,” ormalicious takeover actions aimed at temporary gains by selling those assets with a short-term perspective.
For this reason, we have introduced and continued with defense measures.
Last year, there was progress in reviewing the approach to corporate acquisitions at the Ministry of
Economy, Trade and Industry, and the Financial Services Agency. In addition, as outlined earlier in the outlook
for the Tenth Management Plan and beyond, the scale of our business and profitability directly linked tocorporate value have expanded and stabilized. Consequently, we have decided not to renew the defense
measures at the next update due in June 2025.

(4) Continuing active investment in human capital
For the Group’s sustainable growth, the proactive engagement of our employees is essential. Therefore,
we are aiming for “employee-first management” to return the fruits of growth to employees first, as well as“integrated group management.”
As fair, efficient investment in human capital is key to realizing those, mass hiring of new graduates andseniority-based personnel system cannot fully address this need.
As such, we have, as a whole group, adopted year-round mid-career hiring and switched to a salary systemthat is similar to a role-based system, where annual salaries are determined based on the responsibilities andachievements of employees across a wide variety of jobs. We have positioned this personnel system, whichcenters on career hires, at the core and have actively promoted it. As a result, currently, 90% of our employees
and 60% of the managerial personnel are individuals who were hired through mid-career hiring, with highmotivation fostered by this system. This approach has enabled us to achieve a highly diverse workforce,
regardless of gender or whether they were hired as new graduates or as midcareer workers, which is a driving
force for the growth of the Group.
Going forward, in addition to this evaluation system based on ability and achievement of individual
employees, we will continue to actively invest in human capital, including investments in digital transformation(DX) and education, to enhance productivity.

(5) Doubling the amount of funds for Green Financing from a total of 1 trillion yen to 2 trillionyen
As of March 31, 2024, 76 of our buildings with a total gross floor area of over 1.1 million tsubo (*1 tsubo =3.3 square meters) acquired the “DBJ Green Building Certification,” which is awarded to properties that
demonstrate high environmental performance and meet significant societal demands. In the NinthManagement Plan, we established a green finance quota to raise a total of 1 trillion yen. However, due to its
popularity and the rapid approach to the quota, we have doubled the financing quota to 2 trillion yen. We willcontinue to develop superior properties with environmental considerations and strive to maintain and enhancetheir performance.

- 5 -3. Viewing the surpassing of 300 billion yen as a checkpoint, and aiming at reaching an evenhigher milestone of 400 billion yen
We leverage large-scale redevelopment projects in central Tokyo as the primary engine for our growth. We
have numerous projects underway in locations such as Roppongi 5-chome, Yaesu, Tsukiji (Ginza East),
Roppongi 3-chome, Ikebukuro, and Iidabashi, and plan to invest 2 trillion yen, including the amount alreadyinvested, in properties with a total gross floor area of 2 million square meters that we plan to own.
As the second growth engine, we will invest 700 billion yen, including the amount already invested, in theheart of Mumbai, India. In Mumbai, the rapid progress in the development of transportation infrastructurestrongly shows us its potential for evolving into a business area comparable to central Tokyo in the future. Inthat area, we have started projects with a planned gross floor area of over 1.3 million square meters.
We believe that a path to achieving an ordinary profit of 400 billion yen is becoming visible through thesegrowth and development projects with a total investment of 2.7 trillion yen for a total gross floor area of over
3.3 million square meters across Tokyo and Mumbai.

Topic 1: One of the largest urban redevelopment in Japan, “Roppongi 5-chome West Project”
has been approved
The urban redevelopment “Roppongi 5-chome West Project”* has been approved by the Tokyo Metropolitan
Government, in March 2024. Thereby, one of Japan’s largest redevelopment projects has started moving
forward, with a total gross floor area of 1.08 million square meters and an overall project cost of around 800
billion yen. The project features a core office-focused tower of 66 floors above ground and a height of 327
meters with a gross floor area of 800,000 square meters, as well as approximately 1,000 residential units,
hotels, and retail facilities. The synergistic effects with the surrounding developments are expected to drive
the transformation of this area into a central urban core comparable to Otemachi, Marunouchi, and Yurakucho
area near Tokyo Station.
*Urban redevelopment project jointly undertaken with Mori Building Co., Ltd.

Source: Tokyo Metropolitan Government documents.

- 6 -Topic 2: Acquired a large-scale mixed-use development site in the heart of Mumbai, India
In addition to two properties that we have acquired by 2022 in BKC (Bandra Kurla Complex, Mumbai, India),
we acquired a large-scale mixed-use development site in Worli, the heart of Mumbai, in October 2023. In
BKC, the total gross floor area of the two properties is 260,000 square meters: the first project has commenced
construction, and construction for the second project is scheduled to commence within this year. In Worli, thesite we acquired has a developable gross floor area of over 1 million square meters.
Consequently, rather than just acting as a leasing building owner, we have been able to build a significant
foothold in establishing our position as a comprehensive developer continuously engaged in integrated mixeduse development of areas.
Given its location in the heart of the Worli, the center of Mumbai city, the project has received expressionsof active support from the Maharashtra state and Mumbai city authorities, who are intensively working on thedevelopment of subways and elevated roads. In order to contribute to the development of Mumbai and India,
we will work together with the state and city to advance this large-scale development into an iconic projectwith a total gross floor area of well over 1 million square meters.

Project site

Source: Google Maps

Project 1 in BKC
Exterior rendering“Indian Shinkansen”(high-speed railway)

Connecting Mumbai and Ahmedabad in about 2 hours, covering approximately 500 km distance

Mumbai Trans
Harbour Link

Connecting the center of Mumbai to the new airport under construction in Navi Mumbai acrossthe eastern shore, with a total extension of about 22 km (opened in January 2024)

Sea Bridge Bypass“Coastal Road”

A sea bridge bypass where extension work is progressing on the western coast of the peninsula
to avoid traffic congestion in the city (partially opened in March 2024)

Metro Line 3

Connecting major business areas from the current airport area to Nariman Point via BKC and Worli(scheduled to open in 2024)- 7 -Topic 3: Reborn Shinjuku Sumitomo Building
Shinjuku Sumitomo Building, completed in 1974, is celebrating its 50th anniversary this year. We chose torenovate this building, the oldest within our portfolio, instead of rebuilding. A gigantic roof was installed at thefoot of the building, enabling it to hold large-scale events without being affected by the weather. In addition,
restaurants on the top four floors were relocated to the 1st and 2nd floors and the previous restaurant areas
were transformed into office areas. The building facilities have been completely updated, and seismic
resistance has been enhanced to withstand long-period ground motion earthquakes.
Over the past 50 years, the cumulative cash flow (operating income before depreciation) from the building
has exceeded 400 billion yen. During that time, the Japanese economy experienced numerous
transformations, through the high-interest era of the 1980s, the bursting of Japan’s bubble economy, theGlobal Financial Crisis, and the economic boom under Abenomics policies. Although 50 years have passed
since its completion, this building is still one of our flagship buildings, generating cash flows from leasing
exceeding 10 billion yen annually.
< Before >< After >Shinjuku Sumitomo Building(52 floors above / 4 below ground)
Completion: March 1974
Renovation completion: June 2020
Site area: 14,446.46 square meters
Gross floor area: 180,195.16 square meters
Sankaku Hiroba (triangular plaza): approx. 3,250 square meters An all-weather atrium (Ceiling height: approx. 25 meters)
 Capable of temporarily accommodating approx. 2,800
stranded commuters in the event of disaster- 8 -APPENDIX
The office building leasing business in central Tokyo has generated stable profits over the long term,
and retaining those properties is also advantageous in terms of investment efficiency.

I.

Tokyo has an efficient and intricate network of public infrastructure including the railway network such as
JR lines and subways, as well as roads, allowing easy access to the city center. In addition, especially incity centers where convenience is higher, there is supply of large-scale redevelopment buildings with thelatest specifications, through a “scrap and build” process, where old buildings are demolished to makeway for new constructions. This has made the city center unwavering and ensured its value remain
steadfast.

II.

Companies from a diverse range of industries and sizes are concentrated and clustered in Tokyo; not onlyin finance and IT but also material and semiconductor manufacturers, as well as services such as staffing,retail, and entertainment, from major corporations to startups.
Despite the economic fluctuations within individual sectors, constant regeneration brings various new
demands for office space. As we manage over 200 buildings in various sizes throughout Tokyo, ourleasing portfolio is ideal to accommodate such diverse needs, and has been the source of stable profits
over the long term.

III. While not ruling out the option of selling leasing assets and reinvesting the funds into further development,
at present, investments in the office buildings in Tokyo stand as a business that ensures sufficientprofitability without relying on gains from selling assets. For instance, Shinjuku Sumitomo Building as
explained above, even after 50 years since its completion, is generating cash flows from leasing
exceeding 10 billion yen annually. It is indeed a “goose that lays the golden eggs,” and hastily selling it
would equate to killing such goose.
Additionally, it is simply difficult to “sell for a profit and then buy back at a lower price.” As
redevelopment takes place primarily in city centers with greater convenience, and since business districts
are not shifting to the suburbs, the potential locations suitable for business are naturally limited. Therefore,
securing opportunities to develop properties with strong business prospects is not easy.
IV. The advantages of the Tokyo office market are outlined as follows.

- 9 -APPENDIX
The Advantage of the Tokyo Office Market
1. Tokyo is the world’s largest office market(1) Largest market in the world; larger than New York and London
Tokyo boasts the world’s largest office stock in terms of floor area, with potential for growth in bothsupply and demand, making it largely different market from major cities in Europe and the United States.

SourcesTokyo: Tokyo Metropolitan Government “Tokyo no Tochi (Land of Tokyo)” *Converted at aneffective rate of 60%
N.Y. and London: Cushman & Wakefield “MARKETBEAT”(2) 20% of existing stock do not meet the current seismic standards, and net annual supply increase
is approx. 1% due to redevelopment through rebuilding being the primary approach
In Japan, seismic standards have been determined by law and regulations to address earthquake
risks. However, 20% of the stock do not meet the current seismic standards (only satisfying the previous
ones as they were completed in the early 1980s before the current standards were implemented), andrequire functional updates through rebuilding or redevelopment. In addition, incentives, such as
permission to exceed the general regulatory limits on the floor area ratio, are offered to enhance urban
disaster prevention and advance the social infrastructure. Hence, redevelopment through rebuilding is
progressing in Tokyo, in prime locations of the city center.
Moreover, because rebuilding is the primary approach for redevelopment, the net supply, after
deducting the floor area of buildings demolished, remains limited. Over the 20 years since 2000, there
has been an increase of 18%, or about 1% per year, suggesting the balanced supply-demand dynamic
from a long-term perspective.

Source: Mori Building Co., Ltd. “Large office building supply trend in Tokyo’s 23 corecities”

Source: Tokyo Metropolitan Government “Tokyo no Tochi (Land of Tokyo)”, as ofJanuary 1, 2022

- 10 -

APPENDIX
2. Structural factors of demand growth(1) A market unparalleled in the world, where large corporations concentrate, encompassing allindustries
80% of Japan’s large corporations (the top 100 in terms of market capitalization) are headquartered inTokyo, and it’s typical for companies with their primary headquarters in other regions to also maintainsecondary headquarters in Tokyo. In contrast, the ratio is just over 10% in New York, and 50% in
London. In addition, looking at it by industry, all sectors, including manufacturing, services, IT, andfinance, are represented in Tokyo. This is in substantial contrast to other countries where industry
clusters are dispersed across various cities, such as finance in New York. For this reason, it has a stablestructure with extensive office needs. Despite the presence of economic fluctuations within individual
sectors, the floor spaces of declining industries are taken by growing industries, hence maintaining thebalanced supply-demand dynamic.

(2) Concentration of start-up companies
Not only large corporations but also 70% of start-up companies and venture capital firms areconcentrated in Tokyo, where human resources, capital, and Business to Business markets are readily
available.

* Created independently by Sumitomo Realty based on data from the startup information platform“INITIAL”.
* Start-up companies = 6,100 companies raising over 100 million yen, venture investors = 1,440
investor, venture capital, and finance companies- 11 -

APPENDIX(3) Unwavering city center with extensive urban transportation infrastructure
In the heart of Tokyo, the circular Yamanote Line serves as the core transportation means, with 42
railway lines connecting to it from all directions. Using this safe and punctual railway network,commuters from various areas of the Greater Tokyo travel to city center. (More than 80% of office
workers in the Greater Tokyo Area commute using public transportation.)Thanks to this efficient transportation infrastructure, there is no substantial advantage in moving
offices out of Tokyo, thus establishing it as the unwavering city center.

Sources: The Ministry of Land, Infrastructure, Transport and Tourism, The Metropolitan
Transportation Authority (New York), and Office of Rail and Road (London), 2019.

(4) Structural and continuous population influx
The population of the Greater Tokyo Area, within commuting distance to Tokyo, has been
experiencing a net inflow for a long time, driven by the younger generation around the age of 20. As
universities are highly concentrated in Tokyo, a significant number of students from across Japan gatherin Tokyo. A long-standing trend shows that they continue to stay in the city after graduation to become
employees of companies in Tokyo. This has created a positive cycle where the concentration ofuniversities and companies attracts people, and the concentration of people, in turn, attracts even morecompanies.

Source: Statistics Bureau, the Ministry of Internal Affairs and Communications

In addition to the above, social infrastructure such as hotels, commercial facilities, and hospitals are
efficiently located in city centers of Tokyo.

- 12 -

APPENDIX
3. The advantages of the Tokyo offices have become even more pronounced after the COVID-19
pandemic(1) During the pandemic, the vacancy rate rose to 6% primarily due to cost containment, but supply
and demand balanced out within six months
Before the pandemic, during the economic boom driven by Abenomics policies, even buildings withlower competitiveness were able to secure tenants, leading to an unprecedented low vacancy rate of
1%, reflecting the tight supply amid high demand.
In 2020, in response to the COVID-19 pandemic, companies reduced office attendance to ensure thesafety of their employees and cut costs by reducing office space, resulting in a vacancy rate increase to
6% within six months.
On the other hand, many companies decided not to reduce their floor space so that they can maintainsocial distancing in seating arrangements. There were also growing concerns that a lack ofcommunication due to teleworking could lead to stagnation in growth. This led to an increase in cases
where companies re-lease the space that had been given up, or repurpose idle office spaces into
communication spaces. As a result, the supply-demand balance improved in a short period of time.
(2) Contrasts between the U.S. and Japan in the trend of returning to the office after the pandemic
When comparing the return to office rates internationally against pre-COVID levels, New York is at
about 40%, while Tokyo is at about 80%, showing a significant difference. This is considered to be
influenced by differences in working environments.
The difference is also clear when looking at the trends in labor force participation rates. In the UnitedStates, the initial response to the pandemic involved laying off employees, with policies primarily focusedon providing unemployment benefits to those who became unemployed. In contrast, Japan adopted
policies aimed at maintaining employment by providing subsidies to companies to protect theiremployees’ jobs. This approach is believed to have contributed to the quicker rebound in the rate of
returning to the office.
Currently, as companies aim to return to a growth trajectory, they are moving to secure talented
individuals by increasing recruitment. In addition, there is a trend towards creating attractive officeenvironments that employees want to work in by adding more communal spaces such as lounges. This
has led to a rising demand for relocation and consolidation of offices and for increasing floor space, andthe market conditions in Tokyo are on a recovery trend.

Source: Compiled by Sumitomo Realty, based on JLL “Global Research May 2023, The Future of the Central Business District, Creating dynamic urban centers” (Left)
OECD “Labor force participation rate” (Right)

Source: Miki Shoji Co., Ltd.

- 13 -