Sun Frontier Fudousan Co., Ltd.

Revision of the Medium-termManagement Plan

May 12, 2021

Securities Code :8934

Table of Contents

1. Review and Revision of the Current
Medium-term Management Plan

2. Basic Policy and Growth Strategy
3. Strategies for Each Business

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Sun Frontier Fudousan Co., Ltd.

1. Review and Revision of the Current Mediumterm Management Plan

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2

Sun Frontier Fudousan Co., Ltd.

Review of the Current Medium-term Plan(FY ended March 2019 - FY ending March 2023)■ Fiscal year ended March 2020:
Net sales of 73.2 billion yen and Ordinary profitof 16.1 billion yen, on track to achieve our targets

Final Year of the Current Medium-term Plan
Targets for Fiscal Year ending March 31, 2023
Net Sales

Ordinary Profit

Net Income

Results■ Fiscal year ended March 2021:
Secured Net sales of 59.6 billion and Ordinary profit of
7.5 billion yen■ Targets for fiscal year ending March 2023:
Slow progress toward Net sales of 100 billion yen and
Ordinary profit of 20 billion yen
'19/3

'20/3

■ Net sales of stock and the ratio slightly decreased in
the fiscal year ended March 2021

'21/3

'22/3

■ New development plans were
postponed in the Hotel Business
27.0％

ストック
Stock

73.0％

79.9％

20.1％

'19/3

Number of Hotels Number ofin Operation Occupied Rooms

Flow
フロー

Flow
42.6
billion yen
Stock
10.7
billion yen

77.9％

Flow
57.0
billion yen
80.1％

22.1％

'20/3

Stock
16.1
billion yen

19.9％

Flow
73.0
billion yen

Flow
47.7
billion yen
27.0％

Stock
11.9
billion yen'21/3

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

'23/3

'22/3

Stock
27.0
billion yen

FY ended March 2019

10 Hotels

1,191 rooms

FY ended March 2020

14 Hotels

1,898 rooms

FY ended March 2021

16 Hotels

2,295 rooms

Hotels underDevelopment

4 Hotels

624 rooms

Total

20 Hotels

2,919 rooms

'23/3

3

Sun Frontier Fudousan Co., Ltd.

Insight for Business Environment
Change, Challenge, Create!
Assuming the Post COVID-19 for Each Business that Has Gone through COVID-19 Pandemic
Offices
Office Rental Market

Office Trading Market

Hotel Market

Overseas (Vietnam) Market

Before the
Spread of
COVID-19■ Both occupancy rate and■ Low transaction yield due to low■ Boomed tourism demand,■ Increased demand for highaverage asking rent were highinterest rate environment, and low
increased inbound (visitors to Japan) value- added real estate (housing)■ Strong needs for floor expansion transaction volume due to difficulties of year by year, and hotels operations at in line with economic growth inand relocation
operationhigh capacity
emerging countries■ High revenue due to high occupancy ■ Increased hotel construction due
rate and high rent with high addedto many market entries
value properties

After theSpread of
COVID-19■ Both occupancy rate andaverage asking rent fell.
■ Telecommuting and online
services spread.
■ Changes in needs for officerelocation, downsizing, expansion,concentration, decentralization,and offices■ Demand for offices will resume
as people start to pay attention tocoming to the office again.
After theConvergence of ■ Telecommuting has taken holdto a certain extent and tenants’
COVID-19
needs will be diversified.
■Constant demand for highadded- value offices in central
Tokyo■ Disappeared demand for overseas■ Stagnated economic activity, low■ With the success of infection
tourism, limited domestic demand, and control, economic activities
interest rate environment, and low
a series of closurestransaction yield continued.
resumed, but we are not able to■ There are property transactions due ■ Limited effect of the Go To
predict it.
Campaign■ Despite the impact on theto business restructuring, etc.
■ Demand from overseas investors due ■ Despite the efforts of cost reduction, economy, we are hoping for a postto relative stability compared to other the prolonged period of self-restraint coronavirus convergence.
led to bankruptcies and closures.
countries■ Low transaction yields due to■ Business demand will graduallycontinued low interest rates and strong recover from micro-tourism anddemand mainly from overseas investors worcation will gradually expand.
■ Corporate business restructuring and ■ Travel demand will return as soon
work-style reforms will increase cases
as restrictions on overseas travel arefor sale, resulting in increased buyer
lifted.
demand and market activation■ Resumption of economic
activities, recovery of the original
economic growth rate, andrevitalization of the real estatemarket■ Growth in housing(condominium) demand due tourban development⇒ Through 1. vaccination, 2. large-scale fiscal stimulus in various countries , and 3. monetary easing by central banks,
we assume that the global economy has bottomed out and is expected to recover toward next year and beyond. We
will grow by evolving our businesses in response to changes in each field.
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4

Sun Frontier Fudousan Co., Ltd.

Change of the Final FY of Current Medium-term Plan
The final fiscal year was extended by two years to the fiscal year ending March 2025
without changing the target figures.
Net Sales

100 million yen

Ordinary Income

Net Income

1,200

800

600

1,000

1,000

1,000

732
596

Two year
extension

532

400

200

128

140

140

106

87

200

200

161

75

42

0

'19/3

'20/3

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

'21/3

5

・・・
･･･

'23/3

･･･

'25/3

Sun Frontier Fudousan Co., Ltd.

Quantitative Target after the Change in the
Final Year of the Mid-term Plan
Results for the period

Fiscal year ended March 2021
[Profit Plan]

Targets before change

Targets after change

Targets for FY ending
March 2023

Targets for FY ending
March 2025

[Profit Plan][Profit Plan]

Net Sales

59.6 billion yen

100 billion yen

100 billion yen

Ordinary Income

7.5 billion yen

20 billion yen

20 billion yen

Net Income

4.2 billion yen

14 billion yen

14 billion yen[Management
Indicator]
Ordinary Income
Margin[Management
Indicator][Management
Indicator]

12.6%

20%

20% or more

Equity Ratio

52.3%

50%

50% level

ROE

6.5%

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10% or more

6

Sun Frontier Fudousan Co., Ltd.

Approach to ROE
Maintain high ROE while maintaining financial soundness with a focus on profit marginand business period
ROE=

Current Net
IncomeNet Sales
Profit Margin of
Net Sales

Net Sales

X

Total Assets
Total Assets
Turnover

Changes in ROE

Total Assets
20.0%

X

EquityFinancial
Leverage

17.2%

17.6%

16.8%

17.7%

15.0%

10.0%
6.5%
Increase Ordinary
Income Ratio throughhigh added-value andhigh profitability
businesses

Focus on businessperiods, enhanceplanning, andcontribute to efficiency

Emphasize financial
soundness andcontrol Equity Ratio

5.0%

0.0%

'17/3

'18/3

'19/3

'20/3

'21/3

By continuing to change and take on challenges, we will achieve high efficiency (turnover rate) by creatinghigh value-added and high profitable businesses in clients' point of view, enhancing Ordinary Income Ratio,
and developing well-planned businesses. At the same time, we will maintain our Equity Ratio of 50% levelas a company with a sound financial structure that can withstand unpredictable environmental and market
conditions.
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7

Sun Frontier Fudousan Co., Ltd.

Composition of Net Sales■ Achieve Targets by Drawing Growth for Each Business
Net Sales
100 billion yen
Offices
Offices
772億円
77.2 billion
yen77.2%
77.2%

Net Sales
59.6 billion yen Offices
Offices
43.6
billion yen
73.2%
436億円
73.2%

HotelsHotels19.7 197億円
billion yen19.7%
19.7%

HotelsHotels
134億円
22.4%
13.4
billion yen
22.4%

'21/3

Overseas
Overseas
3.1 billion
yen3.1%
3.1%
31億円

Overseas
Overseas4.4%4.4%
2.626億円
billion yen

Overseas

Hotels

Offices'25/3■ Establish a Well-balanced Business Structure between Flow and Stock'25/3（Plan）
Net Sales 100 billion yen'21/3（Result）
Net Sales 59.6 billion yen
Real Estate Services
4.8 billion yen

Flow47.7 billion
yen

Stock
11.9 billion
yen
19.9%

Rental conference rooms
1.1 billion yen

Rent guarantee
1.3 billion yen

Rent guarantee
0.7 billion yen

Flow
72 billion yen
72.0％

Stock
11.9 billion yen

Hotel operations
2 billion yen

Stock
28 billion
yen
28.0％

Rentalconference
rooms
4.5 billion yen

Real estateservices
6.5 billion yen

Rental buildings
3.1 billion yen

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2.4 Times Net Sales in Stock Business8

Hotel operations
12.5 billion yen
Stock28.0 billion yen

Rental buildings
3.2 billion yen

Sun Frontier Fudousan Co., Ltd.

Investment Plan (FY 2022/3 - FY 2025/3)
Systematically invest in each business, digitalization and M&A, recovering through growth
Overseas Business

Hotel Business

Office Business
Balance at the End of
March 2021

72.8 billion yen

Balance at the End of
March 2021

21.8 billion yen

Balance at the End of
March 2021

0.6 billion yen

Investment amount

200 billion yen

Investment amount

7 billion yen

Investment amount

8 billion yen

Amount collected

182.8 billion yen

Amount collected

5.8 billion yen

Amount collected

2.5 billion yen

Balance at the End of
March 2025

23 billionyen

Balance at the End of
March 2025

6.1 billion yen

Balance at the end of
March 2025

90 billion yen

Aim for business growth while collecting investment at
a constant turnover rate through systematic
procurement and development

Complete the hotels under construction and aim toachieve profitability operating the existing hotels
and the opening hotels on schedule. At the sametime, recover from the sale of the existing hotels
and operate them effectively

Continuously and systematically invest in
condominium development projects for the
future3 billion yen for Digitalization
Actively invest in digitization for operational efficiency and business support and expansion

5 billion yen for M&A
Systematically invest in peripheral businesses and growing fields to expand existing businesses

Generate free cash flow
Ensure positive free cash flow through systematic investment and recovery
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9

Sun Frontier Fudousan Co., Ltd.

Returns to Shareholders
Long-term and stable profit returns to shareholders while making necessary
investments for business growth
Basic Policy for the Profit Returns to to Shareholders
1. Strive for providing long-term and stable profit returns to shareholders
2. Secure investment funds to aggressively take on the challenge for future growth
3. Maintain the stability of financial baseTrends in Dividends per Share

Stable Profit
Returns toShareholders

25.0

38.5
30.0 33.5

42.0
42.0 42.0 （Forecast）'16/3 '17/3 '18/3 '19/3 '20/3 '21/3 '22/3 '23/3 '24/3 '25/3

Trends in Current Net Income per Share'16/3

Investment
For Future
GrowthSound
FinancialBase

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'17/3

'18/3

'19/3

'20/3

'21/3

190.78 150.92 167.62 180.35 219.03 87.77

We will strive to maintain a sound financial baseand provide stable profit returns to shareholders,
while making systematic and flexible investments
for growth in line with market conditions andraising appropriate funds.

10

Sun Frontier Fudousan Co., Ltd.

2. Basic Policy and Growth Strategy

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11

Sun Frontier Fudousan Co., Ltd.

Basic Policy
Providing "places where people gather and communicate with each other, and createsocial development and happiness for people"

Office Business■ Contribute to carbon neutrality by helping to reduce the waste from non-renewable resources through“Revitalization”■ Focus on "Central Tokyo," "Small and Medium size," and "Office Building," and capture diversifying needs
in a clients' point of view that is on-site consistent■ Contribute to creating prosperous towns for the future by utilizing new fields including digital technology

Hotel Business■ Provide safe and soothing time and space, creating the best smiles and making people's minds
healthy and richOverseas Business■ Provide comfort to the people in Asia, together with our partners■ Improve the quality of housing for local residents and contribute to the urban development byspecializing in development, sales, management and mediation of housing (condominiums)
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12

Sun Frontier Fudousan Co., Ltd.

Growth Strategy
Deepen and Expand the Office Building Business■ With a focus on central Tokyo, small and medium-sized offices, revitalization, and Replanning Business with a project
period of one year, we are committed to high added-value utilization of real estate. We will also work on medium-to
long-term ownership, low-rise store development, and new buildings.

Office■ By utilizing not only our planning and proposal capabilities from the clients’ point of view, architectural technology,
design capabilities, and space utilization technology, which have been refined through consistent on-site problem
solving, but also our ability to attract tenants as our strength, we increase the added value of office buildings.
■ Provide “offices that accelerate tenant growth” that anticipate changing and diversifying needs by utilizing new fields
such as digital technology, clean energy and art, strengthening office peripheral businesses.

Hotel

Service that Goes beyond Satisfaction and Excitementwith a Sharp Concept■To be the hotel of choice through warm-hearted hotel management■Create enthusiastic fans through clients-oriented services that go beyond satisfaction and excitement

Expand Housing-related Business in Vietnam
Overseas

M&A■ Growth rooted in the local community through integrated development, sales, management and mediation of
condominiums

Invest in peripheral businesses to expand the current business and in start-ups
in growth fields

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13

Sun Frontier Fudousan Co., Ltd.

Key Points
Points to be Strengthened to Capture the Changing Times and Upgrade Business andManagement

ESG

Based on our corporate philosophy of “contributing to the lasting prosperity ofhumankind, plants and animals on the earth, by reducing the waste of non-renewable resources,” we willtake into account the perspectives that contribute to the resolution of social and environmental issues morethan ever before in our business development and conduct corporate governance to become a modelcompany for society.

Digital

In addition to the Information Systems Department, which is
responsible for enhancing operational efficiency, reducing costs, and strengthening
internal controls, the Digitization Promotion Office has been established to utilize newtechnologies and rapidly respond to changes, focusing on business model transformation.

Cash Flow

One of our policies is to maintain financial stability even in theevent of COVID-19 pandemic. We manage our business with a focus on cash and deposits,
increase cash generation through systematic collection of funds, and effectively invest
funds in our business.

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14

Sun Frontier Fudousan Co., Ltd.

ESG
Enhance Corporate value by strengthening ESG perspectives and implementing
corporate philosophy
Corporate
Philosophy

Through our work, we will improve our knowledge, skills, and personality with overflowing enthusiasm. By concentrating on the utilization anddistribution of real estate stocks, we will suppress the use of non-reproducible resources and contribute to the lasting prosperity of humankind andplants and animals on the earth.

Environment
Reduction of CO2 emissions
Reduce CO2 emissions throughthe revitalization business ofenvironmentally friendly buildings
Reduce waste of resources with setup
offices that do not require restoration
work

Carbon neutral
Promote the Introduction of
Renewable Energy (RE100) and
Carbon Neutral (Mori no Denki) in
Electric Power Procurement for 0
CarbonStart business utilizing J credit system
certified by CO2 absorption amountSocialGovernance

Meet the needs of society

Compliance

Meet social needs through thedevelopment of buildings suitable foroccupancy by nursery schools andmedical facilities (rehabilitation
facilities)

Create safe and secure buildings
by correcting construction defects,
and ensure legal compliancethrough building restoration

Local revitalization
Promote local tourism and job creation
under the slogan "Cheer up Japan!"

Promoting sociallyappropriate management
Focus on human resource
development and promote systems
and management that enable
diverse human resources to play
active roles

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15

Strengthening GovernanceRatio of outside officers : 41.7%
Percentage of outside directors : 33.3%
Ensure sound management of theBoard of Directors through a wide
range of knowledge, experience anddiversity. Improve the driving force ofmanagement through participation in
management meetings and otheractivities besides the Board of Directors
meetings.
Convene and operate the Nomination
and Compensation Committee
appropriately for sound management.
Sun Frontier Fudousan Co., Ltd.

Digitalization
In April 2021, the Digitalization Promotion Office has been established to promote innovation
through digitalization.
We will examine the workflow of each business and actively systemize those that can be digitalized to improve efficiency and strengthen internal
controls. We will enhance productivity through efficiency improvements, create useful opportunities, and create new businesses that canstrengthen solutions of problems.

IT Control, Risk Management / Company-wide Business Improvement / Division Productivity Improvement, Business Creation
Promote operational efficiency andstrengthen internal controls(strengthen IT infrastructure)
Variety of information in different
systems

Boost productivity
Build a data-driven management environment

Implement Data-driven
management
Deepen relationships of property,
tenant and owner information
and utilize for proposals

Sun Frontier Fudousan data base

Property
information

Quick retrieval for inquiries
and responses

To the formof
informationthat youwant toknow

Contract
History
Coordinated
Cooperation

Opportunity
History[External Information]
Map information / Corporate information /Property information /Route price / Space travel statistics, etc.

Tenantinformation

Owner Information

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16

Preparation of review
information and proposalmaterials with a variety of data
Proposal of long-term
vision measures
including future
projections
Creation of new services andbusinesses, and Developmentof unique markets
Rational information forplanning management
and key strategies

Sun Frontier Fudousan Co., Ltd.

Cash Flow
Focusing on cash flow and realizing capital allocation to enhance corporate value
Generate cash for the future along with growth in Ordinary profit
Turn free cash flow positive■ Focus on cash flow in addition to thegrowth in Ordinary profit

Maintain positive
numbers0■ Maintain positive free cash flow
'19/3

'20/3

'21/3

'22/3

■ Advance high added-value businesses
and generate stable operating cash flow

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'24/3

'25/3

Stable returns toshareholders■ By controlling investment cash flow
and generate positive free cash flow
■ Invest in future growth together withstable shareholder returns and soundfinancial base

'23/3

Investment in future
growthSound financial base
= = Free CF
Operating CF- – Investment CF

17

Sun Frontier Fudousan Co., Ltd.

Changes from the Past and Present Location
Grow by changing, challenging and creating new values with the Sun Frontier spiritLong-Term Performance

Net Sales (million yen)
売上（百万）

120,000
100,000

18.5%

80,000

24.4%

13.2%

14.0%

47,46440,39527,741 30,626

26,871
16,731
681

1,771

3,588

22.0%
76,00011.5%

53,292

15.1%

12.6%

17,772

14,469

7,761

4,290

6,924

10,58130.0%

Current

24.0%

59,63235,25540,0005,004

22.0% 22.7%

20.2%

19.3%

12.6%

48,15020,00022.9%

73,21815.8%

60,000

Achieved sustained high profits
持続的に高収益を実現

GlobalFinancial
Crisis

23.5%
20.8%

20.6% 21.3%

COVID-19
CrisisOrdinary Income Ratio
経常利益率

25.0%

l
o
c
a
t
i
o
n

20.0%

15.0%
10.0%
5.0%

⇓

0

0.0%
‘01/3 ‘02/3 ‘03/3 ‘04/3 ‘05/3 ‘06/3 ‘07/3 ‘08/3 ‘09/3 ‘10/3 ‘11/3 ‘12/3 ‘13/3 ‘14/3 ‘15/3 ‘16/3 ‘17/3 ‘18/3 ‘19/3 ‘20/3 ‘21/3 ‘22/3‘25/3

2001 to 20092010 to 20202021 ~

Basic construction of Replanning Business

Evolution and expansion of Replanning Business

Deepening and diversifying of
Replanning Business

Replanning businessOver the years, our business has grown in depth.
Each time we overcame a recession, we have seized theopportunity to grow through new challenges.
We will continue to aim high with the Sun Frontier Spirit.

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Set-up office
Hotel
Rental space
Overseas18

Sun Frontier Fudousan Co., Ltd.

Office Building Business utilizing our strengths
Each of our business divisions uses their strength and teamwork based on our Company
philosophy to solve real estate utilization problems and work on revitalization.
Funding Advice

Asset Consulting

Rent Guarantee

ConstructionPlanning

PropertyManagement

Leasing

Brokerage
Property
purchase

Real Estate
Revitalization
Building
development ofvalue chain

Real Estate Utilization
To be a partner to solve difficulties from our clients’ point of view

Property
sales

Clients (Building owners, Asset holders and Wealthy individuals)

Our strength
In-house production of brokerage, leasing, property management, construction planning, rent guarantee, assets consulting and fund-raising consulting→ Use internal resources to solve problems of clients through teamwork→ Create new services such as OMS (Order Made Space) business in Conference Room Rental Business→ Not only revitalize used properties, but also gain the trust of clients through teamwork and new services→ Clients can purchase Replanning property and this can lead to property purchase for the Company too

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19

Sun Frontier Fudousan Co., Ltd.

Added value in Office Building BusinessContribute to the development of the city by refining and heightening the sources ofadded value based on our philosophy.
Building
Owner

Relative

Purchase

Revitalize

Commercialization

Sell

Building
Owner

ManageFlow

Stock
Management fee

Concentrated in
5 wards ofcentral Tokyo
specialized insmall andmedium offices

Sources of added
value

StrategyContribution
to the city

Real estate market
Added value throughreplanningManaged property

Sell property
Direct sales ratio

> 50%

397
Entrustedbuildings

Year :
23 Buildings

Purchased property

sold(fiscal year
ended March 31,
2021)

Office space suited to location and age
Regenerate and enhance added value
Construction period 2-3 months(end of
March 2021)

Cumulative
number ofbuildings soldOver
420 buildings

Average trading turnover days about one year

Company-wide in-house support from procurement to sales and management

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20

Sun Frontier Fudousan Co., Ltd.

3. Strategies for Each Business

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21

Sun Frontier Fudousan Co., Ltd.

Business Strategy Office Business (1) -1 Replanning Business
Pursuing added value creation through office building revitalization.
Revitalization business in Sun Frontier Fudousan Co., Ltd.

"The Replanning ® Business" means:

Replanning ® is a registered trademark of Sun Frontier Fudousan Co., Ltd.

Sun Frontier Fudousan Co., Ltd.
has done Replanning ® of officebuildings for over 420 buildings!

Acquiring office buildings requiring large-scale repairs due to a decline in occupancy rate and going through renovation (setup interior)that focuses on the “clients' point of view“. It’s a business that attract tenants, transform property into a high added value real estatethat society demands and is provided to wealthy individual and business corporations.
It’s a sustainable ESG project that contribute to the prosperity of human beings, animals and plants on the earth by reducing waste of resources.

BeforeAfter

Before

After

After

After

"Set-up office" is an office that can be installed in an office building that Sun Frontier Fudousan Co., Ltd. has relaunched.
Offices where some equipment and fixtures are installed in advance and leased and unlike ordinary rental office interiors, the reception
and reception room's set up, and office area is decorated with highly designed interior construction.

Improving added value
Occupancy rate
UP ↗
Rent income
UP ↗
Waste of resource Down ↘
Year 2013 Sun Frontier Fudousan Co., Ltd.
has started providing set-up offices!
Over 700 rooms!

Advantages 1. Reduce the burden on management

Advantages 2. Immediate availability after relocation

Management burden in significantly reduced because there is no need to comeup with ideas on how to design office interiors or selecting interior decorators

Usable period is increased due to the elimination of work other than wiring andmoving, significant shortening of relocation period, and shortening of construction
period for interior finishing and restoration.

Advantages 3. Reduce financial burden
Significantly reduced costs for office interiors, etc.
No interior assets for tenants

Advantages 4. Employment, motivation and productivity improvement
Focusing on design, functionality, and a wide range of applications, the office interior has
been designed with a high degree of design. This has resulted in improved employment,
employee motivation, and office productivity.

Set-up office = "Office for accelerating growth" for tenants
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22

Sun Frontier Fudousan Co., Ltd.

Business Strategy Office Business (1) -2

Replanning Business

Deepening and diversifying Replanning Business.
Office building revitalization businessNew building development business■ Replanning ® Business■ New office building development business
A business that contributes to high profits by creating offices that meet the needs of a
new and ever-present style regardless of the layout or use of existing buildings, and byacquiring rent revenue as a flagship building or selling them as a high added valuebuilding.

Focusing on "central Tokyo", “small and medium-sizedbuildings”, and “offices“, aiming to complete a businessproject within “1 year of business period" through early,
high-utilization and high added value “revitalization“.

■ Medium - to long-term Replanning ® business and challenge project business
A business that realizes initiatives, high added value, and high profitability through large-scale
development or new trials than usual by owning a building for a few years (2-3 years) and obtaining
rent revenue during the period of ownership.

▼ Building offices that incorporate new needs
and evolve“+ SHIFT" series HP+SHIFT NOGIZAKA■ Low-rise store development business
A business that focuses on areas with higher
store needs than offices and develops and sells
new properties while maintaining a shortbusiness period (one year).

Anti-virus "Designing the Air" office

Art office "A YOTSUYA"

Proposing diverse office utilization methods■ Day-of-the-week office "WEEK"■ Gathering office "LIT"

Available on the day offices that
stimulate creativity

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Balancing a creative work styleand open communication

23

Continue to create new added value
through change and challenge

Sun Frontier Fudousan Co., Ltd.

Business Strategy Office Business (2) Construction work

SF Engineering, Communication Development

Creating high added value, securing compliance with laws and regulations, providing safety
and security, and contributing to carbon neutrality.
Sun Frontier Fudousan Co., Ltd.
Construction is ESG

E

With Replanning ®, we avoid scrap-and-build, reduce wasting resource, and contribute toachieving carbon neutrality.

S

We have implemented the Replanning ® construction to old and declining occupancy rate
properties that focuses on of clients' point of view and meets their needs and revitalized thetown with the high added value properties.

G

To secure safe and secure buildings by correcting uses and structures not conforming to the
Building Standards Law and by securing compliance with laws and regulations.

E
S

CO2

Use of 100% recycled materials and environmentally friendly adhesives for interior
construction work. Initiatives for reducing waste and thorough separation of waste to recycle(SF Engineering Co., Ltd.).
Construction of 5G communications infrastructure essential for the realization of a digitalizedsociety. Providing a foundation to support social and economic activities in a new normal(Communication Development Co., Ltd.).

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

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Sun Frontier Fudousan Co., Ltd.

Business Strategy Office Business (3)Leasing

Focusing on central Tokyo small and medium-sized office buildings, working close tobuilding owners, and becoming trusted by solving problems.
Solving problems

Approach

Vacant→Leasing, sub-leases

Fiduciary
relation

Sale
Repair and rebuilding
InheritanceWarranty

Sun Frontier Fudousan Co., Ltd.
group solving problems
through teamworketc.

In addition to providing solutions for vacancy problems through our leasing capabilities, we also received a wide range ofconsultations and work as a team (cooperation across divisions). We build a relationship of trust by resolving problems.
Lanchester strategy
Focus on central Tokyo 5 Wards +Shinagawa Ward

In the Replanning property
realize high-capacity sales

Increase ability to solve
problems by digitalization
360 ° camera for online navigation

2. Increase added
value with
Replanning

1. Acquire lowoccupancy building

Improvement of business flow throughsystem renovation
3. Build highoccupancy buildings
with leasing
capabilities

4. Sell at high capacityand gain a high levelof profitability
Use of accumulated rental data

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

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Sun Frontier Fudousan Co., Ltd.

Business Strategy Office Business (4) Brokerage

Small-lot real estate products

Work close with building owners, solve problems, and be consulted out of trust and reliance becoming to confidence.

Resolve
ProblemsofCentral Tokyo
Real estate

Approaching andworking with client

by

・・・

Real estatetransaction
Assetmanagement
InheritancemeasureProvideUnderstanding
clients' point of view

Japan
To

&

TaiwanBuilding owners
Asset holders and wealthy
individuals

Using expertise* The Group's Tokyo Yoko Real Estate is operating in Taiwan.

Focusing on sales of small-lot real estate products under the Real Estate Specified Joint Enterprise Act ** Real estate specified joint enterprise: A business in which investors invest in real estate and businesses that meet certain licensing requirements conduct real estatetransactions and distribute profits to investors. Only businesses that meet the requirements can organize and sell small-lot real estate products.

Appeal 1. Sun Frontier Fudousan Co., Ltd. selects properties suitable for small-lot ownership
2. Can invest in real estate from a small amount and obtain profits (dividends)
3. Expected to reduce the amount of inherited property
1. Acquisition of realestateAs a product that can be used as a measure against inheritance, we
recommend products to clients through tax accountants andfinancial institutions, so we will promote the development of sales
networks of tax accountants and financial institutions nationwide.
By expanding our sales network (tax accountants and financial institutions)develop products that meet diverse Client needs

Voluntary partnership2. Co-ownership interest
Investment

3. Leasing
RevenueManaging Partner

4. Investment
Investor
Dividend
Building owners

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Certified Public Tax Accountants Network: Increased from
more than 130 companies to 200 companies

26

Sun Frontier Fudousan Co., Ltd.

Business Strategy Office Business (5) Property Management
Stable and profitable building management for building owners, high-quality services fortenants, and revitalization of the city through distribution and utilization of real estate.
Tenant management

Leasing planning

ESG

Monthly visits /tracking clientneeds /rent revision / compliancewith detailed regulations, etc.

Rent setting / strategy planning /recognizing competition/ renewal
construction, etc.

Acquisition support of BELS and DBJ Green Building
Certification / renewal of facilities, use of energy-saving
and eco-friendly materials for renewal construction/
distribution of Sustainability Initiatives, ESG Education, etc.

Building management

Accounting management

Speed response to failures /repair planning / equipment
renewal, etc.

Arrearage correction / creating
reports /checking the balance ofreceivables and payables, etc.

+ Digital

Data aggregation within the system, service
Coordination/ business flow reform, reduction of burden /improvement of tenant relations, visualization and sharing
response history/creation of new services, etc.

⇒

Be the most loved,chosen and trusted
PM in Tokyo

Human Resources development Philosophy training / practical training / system training + proficiency check
Establishment of frameworks Leveling of operations/ formulation of rules/preparation of manuals

Property
受託面積Management

Occupancy
稼働率rate

End of March 2025
Number of entrusted

PM entrusted area and Occupancy ratebuildings: 500 buildings
Entrusted area: 1 million ㎡

1,000,000

100.0%

800,000

90.0%

Maintain highoperating rates

600,000

80.0%

400,000

70.0%

200,000

60.0%

0

Aim to be
entrusted with
1000 buildings

50.0%'09/3 '10/3 '11/3 '12/3 '13/3 '14/3 '15/3 '16/3 '17/3 '18/3 '19/3 '20/3 '21/3 '22/3 '23/3 '24/3 '25/3

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

Sun Frontier Fudousan Co., Ltd.

conference room
Business Strategy Office Business (6) Rental
Sun Frontier Space Management Co., Ltd.

Maximizing the value of space and time in central Tokyo's real estate tocontribute to the development the city.
Business“select" and "focus"

Focusing on Vision Center and Order Made Space

Service NameBusiness
Selection and
Focus

X

FeatureStrategy

Available as a BCP support space for office and campus
dispersion and telework, web conferences and online
seminars.
In addition to thorough infection control measures, we
also provide free anti-infection goods and support for
online devices and web tools.

Aiming to be the No. 1 company in "central
Tokyo" and "Middle Spec" as a space
infrastructure indispensable for corporate
management.
Focus on opening large buildings in terminal
stations with a floor space of 300 tsubo or
more.

Not limited to "office" and "conference room", it can beused for all purposes as a custom-made product and canbe used from a week.
A flexible proposal that can be used on the same day
without an initial cost to meet the need for a meetingroom that does not require a regular lease contract andfor cases that would be costly to borrow a meeting roomthat is rented by the hour.

Promoting the use of idle space as amultipurpose space that can be rented monthly
or weekly by joint operation with building
owners who is troubled by the increase invacancies.
Collaboration with the Leasing Division todevelop Partner Owners for joint operations.

Data utilization

DigitalCorporate
customer2000 companies

Customization service
Dynamic pricing

X

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

28

X

Human resource
development

Business growth

IT digitalStrengthening
human resources

Contributing to
the City

Sun Frontier Fudousan Co., Ltd.

guarantee
Business Strategy Office Business (7) Rent
SF Building Support Inc.

Fair and equitable leasing market by eliminating "defects" of building owners
and tenants through institutional guarantee.
Building owners benefits

Guarantee system

Before use

We specialize in the Tokyo, Kanagawa, Chiba and
10
Saitama areas, we offer full support from rent
monthsguarantees, litigation costs, and up to
withdrawals.

1. Promote occupancy by reducing initial costs
2. Peace of mind by institutional guarantee
3. Elimination of burden when responding to arrears

After use
Pass on risks to
SF Building
Support Inc.

Lease
Guarantee
depositKeep lease andguarantee deposits

Tenant benefits
4-6 months

1. Reduce the burden on tenants
2. Careful response without intermediary
3. Flexibility regardless of corporate size or industry

minimalChanges in number of entrusted cases (total)

Pioneer of offices and stores rent guarantee

Lease

End of March 2025
total of 10,000
cases

We will grow our business by becoming
LenderEstablished: July 2005 (16th year)

Warranty

Contract ofguarantee

Tenanta guarantee company chosen by clientsby solving their problem.

Guarantee
consignment
contract
Non-life insurance
policyIzumi Nakamura,
Representative Director

Non-life insurance company

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

Sun Frontier Fudousan Co., Ltd.

Business Strategy Office Business (8)Building maintenance
SF Building Maintenance Inc.
Nippon System Service Co., Ltd.

Contributing to the creation of a clean and secure urban environment with thetechnologies we have cultivated and high speed responding at the clients' point of view.
Comprehensive building maintenance contracted for
entrusted management

Entrusted with cleaning glass windows and floors
Number of buildings entrusted with for cleaning: 600 buildings (as of March 2021)
Promoting orders for cleaning services mainly in central Tokyo by bringing Japan
System Service Inc. into the Group through M&A

Increase the number of entrusted buildings and achieve steady growth bystrengthening systems, developing human resources, and improving businessflow through digitization.

Total number of entrusted buildings
managed by building maintenance
Cleaning management
Hygiene control
Facility management
Security management
Maintenancemanagement
Condominium
managementetc.

End of March2025 entrustedwith 300
buildings

Glass cleaning backed bytechnology and experience

End of March 2021
entrusted with 180
buildings→

Creating a hygienic environment by
reviving the building through→careful cleaning work

Early detection of areas needing repair through water leakage surveys
and reinforcement of waterproofing business
Expansion of business activities is also promoted. We found dirt accumulated due to aging degradation and corrosion due to waterleakage in an invisible place, and the construction work made the building last longer.

SF Building Maintenance Inc.

ESG
Use of environmentally friendly detergent andthorough control of wastewater discharge
methods after cleaning↓

Cleans the inside of the piping and lasts longer
due to lining processing

Using infrared and ultraviolet rays to identify
internal leaks

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Checking for external
Leaks also

Maintaining clean water and contributing
to environmental conservation

Sun Frontier Fudousan Co., Ltd.

Frontier Hotel Management Inc.
Business Strategy Hotel Business (1) Sun
Sky Heart Co., Ltd.

Pursuing a warm-hearted hotel thinking in the clients' point of view and providing
services that transcend satisfaction and excitement.
Thanks to you, we received many awards. We will continue to strive on improving our services.

List of awards
Year 2021■ Hotels. comTM Loved by Guests Award Popular Inn Award Selected by Clients 2021
“HIYORI HOTEL OSAKA NAMBA STATION" and “TABINO HOTEL Hida Takayama"

Year 2020■ Jalan net Ranking Award for Best Accommodation for Staying Overnight“HIYORI HOTEL MAIHAMA"■ OZmall AWARDS 2021 won 2 awards“Hiyori Hotel Tokyo Ginza EAST”■ Tripadvisor (R) Travelers' Choice Awards 2020
“HIYORI HOTEL MAIHAMA"■ Rakuten Travel reviews "Maihama / Urayasu / Funabashi / Makuhari area No. 1"“HIYORI HOTEL MAIHAMA"■ OZ Mall Awards: Annual Ranking of Japan's Word-of-mouth ranking No. 1 for 2 consecutive years“HIYORI HOTEL MAIHAMA"■ Booking. com Traveler Review Awards 2020
“HIYORI HOTEL OSAKA NAMBA STATION"

Year 2019■ Hotels. com Popular Inn Award Selected by Clients 2019
“HIYORI HOTEL MAIHAMA"■ OZmall Awards 2019 Word-of-mouth ranking No. 1“HIYORI HOTEL MAIHAMA"

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

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Sun Frontier Fudousan Co., Ltd.

Business Strategy Hotel Business (2)Sun Frontier Hotel Management Inc.
Sky Heart Co., Ltd.

Stopped development and concentrated management resources on developing
highly profitable operations.
The theme is creating enthusiastic fans in the clients' point of view.
We create enthusiastic fans at the operating hotels and will
engage in increasing fans after hotels under construction
will open on schedule.

* As of May 12, 2021
In operating

17 hotels

Under construction

4 hotels

Total number of rooms 2,993 rooms

Sado (Chigusa)
Sado (Azuma)

KashimaBased on the premise that the COVID-19 outbreak will settle
as vaccinations become wide-spread, we will strive toimprove services and operations to contribute to thedevelopment of our tourism business and earn profits.

Takayama
Kyoto Nijo

Maihama

Kyoto Shijo

MiyakoIslandNaritaKoiwa

Shimonoseki
HakataTokoname
Kurashiki
Mizushima

June 18, 2021
HIYORI CHAPTER KYOTO
Tribute Portfolio Hotel opened.

0
Vaccine restores tourism demand andreturns hotel operation to profitability

'21/3

'22/3

'23/3

'24/3

'25/3

Matsumoto

Sado (Oosado)

Onna, Okinawa

Hotel Management Gross Profit

Running or Leasing
Under construction or Planning

July 2021
TABINO HOTEL Lit MIYAKOJIMA opens.

Ginza

Osaka Honmachi
Osaka Namba

Kawasaki

HIYORICHAPTER KYOTO →← TABINO HOTEL Lit MIYAKOJIMA

July 2021
TABINO HOTEL Lit MATSUMOTO opens.
TABINO HOTEL Lit MATSUMOTO →Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

Sun Frontier Fudousan Co., Ltd.

Hotel development

Business Strategy Hotel Business (3) Sun Frontier Hotel Management Inc.
Creating a healing space where people gather, operating a warm-hearted hotel full ofsmiles, and enriching people's minds.
By operating the developed hotel, selling it, signing a leaseagreement and paying the rent, it will be useful for the owner's
asset formation as a profitable real estate.

We have sold our first hotel, “HIYORI HOTEL MAIHAMA",
and we will continue to manage the hotel.
HIYORI HOTEL MAIHAMA

Land

Land
Management
Management

Sale and purchase

Owner

Company
Sun Frontier
Hotel Management

Development andconstruction

Sale and purchase

Company

Company

Sun Frontier
Hotel Management

Sun Frontier
Hotel Management

Owner

Lease
Contract

Company
Sun Frontier
Hotel Management* In addition to acquiring and developing land, we will select the most appropriate development methods depending on the situation, such as leasing the land and building.

Considering the impact of the COVID-19 outbreak, we will carefully consider the start of new hotel development.
We will firmly manage the hotels in operation and hotels which have already started development and are underconstruction as a warm-hearted hotel for the right time to sell them.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Sun Frontier Fudousan Co., Ltd.

Business Strategy Overseas Business

Vietnam Housing and Condominium
Development

Contributing to the development of local communities by creating client's joy andhappiness through the creation of new businesses.
Contributing to the improvement of the quality of housing for local people and the development of the city by
specializing in housing (condominium) development, sales, management and brokerage in the Vietnamese Da Nang.
A total business that includes acquisition of land, development and construction, delivery after completion, and management and mediation.

Acquireland

Development
Construction

Completion
Delivery

Urban
Development

ManageChina

Contribute to future performance through systematic andcontinuous development efforts

Hanoi
Laos

Hai PhongHueLand
acquisition

ThailandDevelopment

Land
acquisition

Completiondelivery
Development

Land
acquisition

CambodiaCompletiondelivery
Development

Da Nang City
Hoi AnVietnamHo Chi Minh

Completiondelivery

Rooted in the local community in Vietnam, we work together with local partners to ensure high construction quality,a safe, organized, and beautiful construction site.

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Sun Frontier Fudousan Co., Ltd.

Business Strategy New Business M&A
Creating a new added value through pioneering, M&A, and investment in new businesses.
Achieved 100% carbon neutral by introducing "RE100"and "Mori no Denki" and launched new J-credit business

Exterior drone inspection
Creating new markets and expanding businesswith accumulated data

Promoting the introduction of "RE100"and "Mori no Denki"
JAPAN
ENERGY &ECOLOGY,
Inc.

"RE100" "Mori no Denki""RE100" "Mori no Denki"

1. Purchaseelectric
power andJ - Credit

2. Introduce
electric
power andJ - Credit

Sun
Frontier

Sun Frontier’s
revitalizedbuilding

3. 100% carbon
neutral building* J-Credits are issued under a system in which the government certifies the amount of CO2
emission reduction and absorption by initiatives, such as renewable energies and forest
management, as "credits."

Making Replanning ® Building in Sun Frontier 100% Carbon Neutral

Started the J-Credit business■ Without setting up a scaffold, can investigate theexterior walls of the building with a drone■ Drone camera finds places needing repair■ Expert drone pilots conduct safety surveys at highaltitudes■ Firmly repair the parts found that need repair■ Contributing to the prosperity of the city through safe
and secure building management

1. Working with local forest cooperatives to convert CO ₂absorption amount to J-credit

ForestUnion

J
Forest nurturing
and thinning

Credit

2. Purchase
J-Credit

4. By carbon offset become
100% carbon neutral buildings

3. Sales to theCompany’s revitalizedbuilding managing
properties* Carbon offset refers to the concept of compensating for CO ₂ emissions byinvesting in CO ₂ reduction activities in line with CO ₂ emissions.

With central Tokyo Office Building Business at the core, we will diversify our business and expand our added value chain
business. We will actively and systematically invest in new businesses and M&As to improve our ability to solve problems andcontribute to the city.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

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Sun Frontier Fudousan Co., Ltd.

Management Principle, Corporate Philosophy
and Vision
Even if plans and strategies changes due to the COVID-19 outbreak,Management Principle, Corporate Philosophy, Vision and Major Policy stays unchanged.
Management Principle:
To protect all employees and pursue physical and mental well-being, while the same time contributing to theprosperity of mankind and society with a spirit of symbiosis.

Corporate Philosophy:
We will improve our knowledge, skills, and personality through our work, and by concentrating on theutilization and distribution of real estate stocks, and then reduce the waste of non-renewable resources, andcontribute to the everlasting prosperity of human beings, plants and animals on the earth.

Vision:We aim to become the company loved and chosen by customers the most in the world as real estate
professionals!

Major Policy:“Not for profit, but for trust”.
Change ourselves, solve problems in clients' point of view, and exceed expectations!
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

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Sun Frontier Fudousan Co., Ltd.

Sun Frontier Fudousan Co., Ltd.

We will appreciate your further supports.
◆ The purpose of this document is to provide information that can be used as a reference, not for soliciting or promoting you

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

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