FY2022 – 3Q

(For the Year Ending March 31, 2022)

IR Presentation

For details of the "Long-Term Management Plan 2030", which began from April 2020, please refer to the following link.
https://www.mec.co.jp/e/investor/plan/pdf/plan200124_e.pdf

Contents
Financial Overview

3

Summary of FY2022-3Q Results

4

Summary of FY2022 Forecasts

7

Progress of Long-Term Management Plan

14

Financial Supplemental Data20

ESG Initiatives (Sustainability Initiatives)

28

Business Overview

37

Commercial Property Business
Office Building

40

Outlet Malls, Retail Properties, Logistics Facilities, Hotels, and Airports

55

Residential Business

60

International Business

66

Investment Management Business70

Investment/Financial Data, etc.

75

Overview of the "Long-Term Management Plan 2030"

80

MITSUBISHI ESTATE CO., LTD.

2

Financial Overview

Financial Overview＜FY2022-3Q Financial Results＞• Operating income increased significantly YoY due to the following factors.
【Main factors】 Capital gain increase, Tokiwabashi Tower operation, decrease in COVID-19 impact on retails and hotels, and fee
revenue* increase in IM business• Profit attributable to owners of parent decreased slightly YoY due the the following factors.
【Main factors】 Increase in minority interest distribution due to IM business fee revenue* increase and income taxes increase*See page 73 for details.

＜FY2022 Forecasts（Revision to Earnings Forecasts） ＞• Upward revision due to increase in capital gains and IM business profit; operating profit up ¥35.0 bn,
profit attributable to owners of parent up ¥13.0 bn• Upward revision in dividend per share from ¥33 to ¥36＜ Recent Highlights ＞• Started construction of Tokyo Ryutsu Center Distribution A Building (December 2021)• Announced "Mitsubishi Estate Residence GHG Emission Reduction Strategy" (January 2022)• All electricity for all office buildings and commercial properties owned in Tokyo and Yokohama to beconverted to renewable electricity（January 2022）• Entered "5G Infrastructure Sharing Business" (January 2022)
MITSUBISHI ESTATE CO., LTD.

3

Summary of FY2022-3Q Results

MITSUBISHI ESTATE CO., LTD.

4

Summary of FY2022-3Q Results

1. Income Statement Results for FY2022-3Q
Significant increase in operating profit due to higher capital gains and other factors<New Segment>
Operating revenue
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating profit
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-operating income(Share of profit of entities accounted forusing equity method)
Non-operating expenses
Ordinary profit
Extraordinary income
Extraordinary losses
Total income taxes
Profit attributable to non-controlling interests
Profit attributable to owners of parent

Millions of yen (rounded down)

FY2022-3Q FY2021-3Q
904,570
777,883
566,929
481,831
214,133
206,086
73,95853,281
23,973
14,53745,033
41,484△ 19,459△ 19,338
172,340
139,477
143,590131,355
8,218
6,972
28,96920,214
11,0992,642△ 2,324△ 4,318△ 17,212△ 17,388
12,91723,782

Change126,686
85,098
8,046
20,676
9,436
3,549
△ 121
32,862
12,234
1,245
8,754
8,457
1,992
176
△ 10,865

354

274

79

34,496
150,760
9,609
14,06044,454
14,71287,142

23,794
139,465
15,61024,48534,391
7,417
88,782

10,702
11,294△ 6,001△ 10,424
10,063
7,294△ 1,639

Total

Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other
Eliminations or corporate

FY2022-3Q FY2021-3Q
172,694
249,580
2,747,100

139,752
222,604
2,739,639-

International
Commercial Residential
8,754
1,245
Property
12,234-

Change19,00010,000△ 1,000
10,000-139,477

Others
10,625

Increase in capital gains
Profit contoribution fromnew buildings

172,340

Increase in capital gains
Increase in fee income from theInvestment Management BusinessChange32,942
26,976
7,461

FY2022-3Q FY2021-3Q
44,00025,00027,00017,000
5,000
6,000
12,0002,000

Major Factors for Changes in
Operating Profit by BusinessMillions of yen (rounded down)

Business profits
EBITDA
Interest-bearing debt

Millions of yen (rounded off
to the nearest billion)

Capital Gains included in Operating Profit

FY2021-3Q

Commercial

Results

Property

Residential

International

Others

FY2022-3Q
Results*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

5

Summary of FY2022-3Q Results

2. Changes in Revenue from Operations by Asset Type (Japan)
For retail properties and hotels, business environment improved in 3Q after SOE lifted
Office buildings*1

Retail properties, outlet malls, hotels, etc.

(Billions of yen)(Billions of yen)

80
70

69.2
62.5 62.5 61.9 62.1
60.7 60.1 60.4 62.2 61.1

64.2

14
12

Closure of retail properties andhotels under SOEs

11.6

11.3

60
10
37.0 37.4 37.3
35.1 36.1 35.5
33.5 33.6
32.7
30.9 31.6

30
20

11.4

8

10.8 10.9

11.3

6.4

7.2

15.6 16.0 16.1 16.8 14.3 15.1 15.3 14.6 14.8 15.1 15.0

20/3
2Q

20/3
3Q

Marunouchi

20/3
4Q

21/3
1Q

21/3
2Q

21/3
3Q

Tokyo (excl. Marunouchi)

21/3
4Q

22/3
1Q

22/3
2Q

22/3
3Q

Outside Tokyo

No
4th

12.5

11.9
10.9

10.3
7.2

9.1

5.7

4.2

10.6
9.3

8.7

6.2

9.1

6
4

2.3
2

20/3
1Q

3rd

9.4

8.9

4.2

10
0

1st

10.1

50
40

12.0

Yes*2

No
2nd

Yes

0

8.9

4.8
2.7

2.3

3.3

0.8

20/3
1Q

20/3
2Q

20/3
3Q

20/3
4Q

21/3
1Q

21/3
2Q

21/3
3Q

Outlet malls
Others (stand-alone SC, logistics facilities, etc.)

21/3
4Q

22/3
1Q

22/3
2Q

22/3
3Q

SOE declaration period(Areas and requests
differ each time)

Royal Park Hotels and Resorts*1Incl. revenue from office complexes and retail properties

MITSUBISHI ESTATE CO., LTD.

*2 Some outlet malls and retail properties only.

6

Summary of FY2022 Forecasts(Revision of Earnings Forecasts)

MITSUBISHI ESTATE CO., LTD.

7

Summary of FY2022 Forecasts

1. Income Statement Forecasts for FY2022 （vs Previous Forecasts）
Upward revision in full-year forecast due to increase in capital gains and IM business profit
Millions of yen (rounded down)<New Segment>
Operating revenue
Commercial Property BusinessResidential Business
International Business
Investment Management Business*OtherElimination
Operating profit
Commercial Property BusinessResidential Business
International Business
Investment Management Business*OtherEliminations or corporate
Non-operating income(Share of profit of entities accounted forusing equity method)
Non-operating expenses
Ordinary profit
Extraordinary income
Extraordinary losses
Total income taxes
Profit attributable to non-controlling interests
Profit attributable to owners of parent

Business profits
EBITDA
Interest-bearing debt

FY2022
Revised
Forecasts
1,361,000
767,000
384,000
117,000
48,00071,000△ 26,000
280,000
189,000
30,00055,00028,0003,000△ 25,000
14,000

FY2022Previous
Forecasts
1,326,000
787,000
373,000
96,00023,00072,000△ 25,000
245,000
194,000
24,00042,0007,000
2,000△ 24,000
11,000

300

300

0

40,000254,000
18,00017,00077,00036,000220,000
15,00017,00065,0004,000
34,0003,000
012,00023,000155,000

11,000142,000

12,00013,000

FY2022
Revised
Forecasts
280,300
380,000
2,780,000

FY2022Previous
Forecasts
245,300
344,000
2,680,000

Total
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other
Eliminations or corporate

Commercial
Property△5,000245,000

11,000△ 2,000
0
13,000-Residential
6,000International
13,000

Others
21,000

Increase in profits fromthe Investment
Management Business(P73)

Increase in capital gains

280,000

Increase in profits from condominiums for sale
Decrease in capital gains
Increase in office rental profits
Decrease in profits from commercial
properties and hotels due to COVID-19

Change35,00036,000100,000

ChangeMajor Factors for Changes in
Operating Profit by BusinessMillions of yen (rounded down)*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

FY2022
FY2022
RevisedPrevious
Forecasts Forecasts
75,00064,00041,00043,0005,000
5,000
29,00016,000-Change35,000△ 20,000
11,00021,00025,000△ 1,000△ 1,000
35,000△ 5,000
6,000
13,00021,0001,000△ 1,000
3,000

Millions of yen (rounded off
to the nearest billion)

Capital Gains included in Operating Profit

FY2022Previous
forecasts

Commercial
Property

Residential

International

Others

FY2022
Revisedforecasts

8

Summary of FY2022 Forecasts

2. Income Statement Forecasts for FY2022 （vs FY2021 Results）
Record high profits due to new building completion and capital gain increase
Millions of yen (rounded down)<New Segment>
Operating revenue
Commercial Property BusinessResidential Business
International Business
Investment Management Business*OtherElimination
Operating profit
Commercial Property BusinessResidential Business
International Business
Investment Management Business*OtherEliminations or corporate
Non-operating income(Share of profit of entities accounted forusing equity method)
Non-operating expenses
Ordinary profit
Extraordinary income
Extraordinary losses
Total income taxes
Profit attributable to non-controlling interests
Profit attributable to owners of parent

FY2022
Forecasts
1,361,000
767,000
384,000
117,000
48,00071,000△ 26,000
280,000
189,000
30,00055,00028,0003,000△ 25,000
14,000

FY2021Results
1,207,594
672,441
362,755
114,457
22,19965,119△ 29,378
224,394
180,775
24,06837,9325,966△ 130△ 24,219
26,292

300

307

△7

40,000254,000
18,00017,00077,00039,720210,965
16,603
26,30454,195280
43,035
1,397△ 9,304
22,80523,000155,000

11,414
135,655

Capital Gains included in Operating Profit

Change153,406
94,55921,2452,543
25,801
5,881
3,378
55,606
8,225
5,932
17,06822,0343,130△ 781△ 12,292

11,586
19,345

Total
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other
Eliminations or corporate

Business profits
EBITDA
Interest-bearing debt

FY2021Results

280,300
224,701
380,000
331,8212,780,000 2,526,142

Commercial
Property
8,225*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

Change24,0009,000△ 2,000
17,000-Residential
5,932International
17,068Others24,383

Increase in profits fromthe Investment
Management Business(P73)

280,000

Increase in capital gains

224,394

Increase in profits fromcondominium
Increase in capital gains
Profit contribution from new buildings

Change55,59948,179253,858

FY2021Results
51,00032,000
7,000
12,000-Major Factors for Changes in
Operating Profit by BusinessMillions of yen (rounded down)

FY2022
Forecasts

FY2022
Forecasts
75,00041,0005,000
29,000-Millions of yen (rounded off
to the nearest billion)

FY2021

Commercial

Results

Property

Residential

International

Others

FY2022
Forecasts

9Summary of FY2022 Forecasts

３. Revision to Income Statement Forecasts for FY2022(Main Factors of Change in Business Profits)
Significant increase in business profits due to capital gain increase and IM business profit
Investment
Management
Business

Business profits

Domestic
condominiums,
etc.

Incomegains

64.0International

Condominiums

+13.0

＋5.0

▲2.0

▲8.0

Hotel, Retail
Office：＋7.0
Others ：▲1.0＋Favorable sales＋Profit margin
improvement

26.0▲Delayed sales ofa property＋Increase in sales price▲Prolonged SOE＋Increase in sales price(US, Asia)＋Accumlation forproperties for sale（US）

160.3
Income gains ＋19.0

Previous forecasts

Domestic
condominiums,
etc. +5.0

179.3

Capital gains +11.0

Change■Income gains

MITSUBISHI ESTATE CO., LTD.

280.3
75.0

Commercial

See P73

21.0

Business profits

+6.0

＋21.0

245.3

Capitalgains

Office &Others(Billions of yen)

Revised forecasts■Domestic condominiums, etc.*■Capital gains* Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income

10Summary of FY2022 Forecasts

4. Changes in ROA/ROE/EPS
ROE recovers the 8% level. EPS reach record high.
10%

10.0%

200

9.0%
7.8%

8.0%

7.6%

7.3%

7.0%

7.6％(Previous forecasts)

150

6.6%

5.2%

5.6%

108.6496.97

5.0%

116.32101.34

86.78
74.00

4.0%
52.85
3.0%

200

8.5%

8.0%

6.0%

(yen)

60.13

3.3%

3.3%

FY2015FY20163.8%

106.70(Previous forecasts)
5%

100

4.5%
4.1%

4.0%

3.8%

4.0％(Previous forecasts)

3.6%

50

2.0%
1.0%

FY2017FY2018FY2019FY2020EPS(right axis)
MITSUBISHI ESTATE CO., LTD.

FY2021*ROA

ROE

FY2022(F)2030 Target* ROA = Business0

Profit / Total assets (average)11Summary of FY2022 Forecasts

5. Capital Policy #1: Cashflow of FY2022 (Forecasts)
Capturing investment opportunities for the goals of LT management plan 2030
Cash in(Initial assumption)(750～800)

Current
forecasts

Cash out(Initial assumption)

810

Financing arrangements（Increase in liabilities)(130～180)

180

Strategic returns*4
20(750～800)

Strategic
allocation(100～150)

Current
forecasts(Billions of yen)810

Growthinvestments
150

Capturing investment opportunities for the goals of LT management
plan 2030(See table below for the breakdown.)

Share buybacks

（30）

30

【Major investments in FY2022 (current forecasts includes growthinvestments)】
Current
forecasts

Returns*1
(400)

380

PlannedInvestments*2
(580)

580

Initialassumption

ChangeMarunouchi

60

60

0

OUtlet Mall, etc.

20

30

▲10

Domestic condominium

240

160

＋80

Domestic capital recycling and others

220

190

＋30

Overseas

190

140

+50

Total

730

580

+150

Cash flows fromoperating activities*3(220)

Dividens

230
(40)

50

Payout ratio: Approx. 30%
Dividend per share: 36 yen (Change from initial assumption：+¥3）*1 Collection amount of book values from sale proceeds of properties *2 Investment amount for approved investment projects (partly incl. expected approvals)*3 Operating chashflows, excl. Change in inventories and change in equity investments *4 Sale of low-performing assets to improve capital efficiency
MITSUBISHI ESTATE CO., LTD.

12

Summary of FY2022 Forecasts

6. Capital Policy #2: Shareholders Returns
Dividend per share forecast increases by ¥3 from ¥33 to ¥36 and reaches record high exceeding FY2020
(Yen)

40

36.00

35

33.00
30.00

30

31.00

33.00

39.0%

25

15

14.00

0

25.9%
FY2014

35.0%

16.00
30.0%

10
5

37.0%

20.00

12.00

26.5%

26.6%

FY2015FY2016

30.9%

30.4%

30.6%

30.9%

30.9%

33.0%
31.0%
29.0%

27.0%

27.0%
FY2017FY2018Amount of
Share
Buyback

FY2019FY2020

FY2021¥ 100 billion
Dividends per share

MITSUBISHI ESTATE CO., LTD.

43.0%
41.0%

26.00

20

45.0%

FY2022(Previous
forecast)

FY2022(Revised
forecast)

25.0%¥ 30 billion

Payout ratio (right axis)
13

Progress of the Long-Term Management Plan

For details of the "Long-Term Management Plan 2030", please refer to the following link.
https://www.mec.co.jp/e/investor/plan/pdf/plan200124_e.pdf
MITSUBISHI ESTATE CO., LTD.

14

Progress of the Long-Term Management Plan

1. Actions for BS Management ①
Promoting various measures for BS management steadily＜BS Management＞①Capital recycling business optimized
for market conditionsIn seller's market: expedite asset sales



Investment in promising PJs to enhance corporate value①

Steady capital investment in core business enables stable,
cycle-proof rental cashflowTimely asset sales judged by expected yields and external
environment

80

60
40
20

②

③Sale of underperforming properties andstrategic-holding stocks


Disposal of underperforming assets, including core asset



Ongoing disposal of strategic-holding stocks

・Book value of domestic assets in capital recycling
business increased to approx. ¥1.2 trillion■Changes of Capital Gains②Long-term development and asset holdings(core focus: Marunouchi redevelopment)・Expedited asset sales by capturing the active market

0

39
15
24
FY18

48

28

14

29

34

33

39

FY19

FY20

FY21

FY22(F)

International¥1.2 tn at the end FY2021
Office8.9%

Commercial

8.5%

12
46

Domestic

2.1%

75

51

in capital recycling business

2.3%(Billions of yen)61

■ Book value of domestic assets*

RentalLogistics

10.3%
67.8%

HotelsOthers*Total income-generating assets x-Marunouchi, Outlet malls,
and assets of particular consolidated subsidiaries

・See page 17 for major pipelines.
③④Expansion of Non-asset Business・Selling interests in Otemachi Park Building and Grand Front Osaka, underperforming assets andbusinesses (villa business in Atagawa), and continuing to reduce strategic-holdings to achieve KPIs.
■Changes in the Number of Stocks Held (Total of Listed and Unlisted Companies)
Number of stocks held decreased by approx. 20% over the past 6 years(excluding new business stocks)

④

160
140
120
100
80

0

2

166

164

2015/3

4

8

16

22

30

152

148

138

134

133

2016/32017/3
2018/3
2019/32020/3
Excl. new business stocks
New business stocks

2021/3・Investment management business: AUM grew to ¥4 tn (Increase of ¥0.9 tn from ¥3.1 tn at theannouncement of the Long-Term Management Plan)・Implemented a variety of initiatives in new fields, including those described on page 18.
MITSUBISHI ESTATE CO., LTD.

15

Progress of the Long-Term Management Plan

2. Actions for BS Management ②
Increased shareholder returns in an active market while maintaining investment capacity to capture expanding opportunities＜Shareholder’s equity and Liability
Management＞①Maintaining Financial Stability




①

Financial reserves for seizing buyer's market
opportunities
High credit rating enables long-term and low-costfinancing
In sellers' market, use asset sale proceeds forshareholder returns and to maintain financial stability②Capital Efficiency Improvement
Targets: ROA 5%, ROE 10%, EPS ¥200



Increase numerator (net income) and decrease
denominator (shareholders’ equity)

Choose measures to manage shareholders’ equity
according to market conditions②

・Maintain the credit rating level at the announcement of the Long-Term Management Plan
・Maintain investment capacity to capture expanding opportunities(FY2021 Net debt/EBITDA: 7.1x)
・Lengthen the average duration of debt and lower the average interest rate in thecurrent interest rate environment (interest rate on bonds issued in June 2021: 0.610% for 20year bonds and 0.260% for 10-year bonds)
・Signed sustainability linked loans as part of ESG initiatives (¥11.5 bn, May 2020)・Announced a share buyback of ¥30 bn in April 2021
・Expect shareholder returns of approx. ¥260 bn for FY20-FY22 in an active market(Actual results for the previous 3 years: ¥105.4 bn)■ Change in Shareholder Returns(Billions of yen)

160
140
120
100
80
60
40
20
0

120%

144.6
＜FY17-FY19＞
3 year accumulated：¥105.4 bn(Total payout ratio：29.5％)
27.0%

30.0%

30.9%

27.7

36.0

41.6

FY17

FY18

FY19

Dividends

MITSUBISHI ESTATE CO., LTD.

＜FY20-FY22（F)＞3 year accumulated：¥263.9 bn（Total payout ratio：60.1％）

100%

97.4%
100

73.8
50.3%

30.6%

30

44.6

41.4

47.8

FY20

FY21

FY22(F)

Buyback

80%
60%
40%
20%
0%

Total Payout Ratio

16

Progress of the Long-Term Management Plan
*Repost of IR Presentation for FY2022-2Q (as of Nov. 10, 2021)

3. Progress of Domestic & International Asset Business (Major Future Pipelines)
Focused on overseas and regional properties in early 2020s, and on large-scale redevelopment projects such as Marunouchi
in the late 2020s. Total NOI at stable occupancy is ¥85-90 bn (40% of which will be at stable occupancy by the mid-2020s)
Property Name(including tentative name)*1

Category

Marunouchi

Total Floor
Area*2

Tokiwabashi Tower (Bldg. A)

146,000㎡

Uchikanda 1-chome Project

84,500㎡

Yurakucho Building, Shin-Yurakucho Building Reconstruction Project*3★

67,000㎡★

Domestic

Outlet Mall

*3

Umekita Second Zone Development Project (Rental Property)

378,450㎡

Former Hotel Grand Palace site redevelopment project*3

Kokusai Shin-Akasaka Building and others Redevelopment Project

*3

Asia
International
EuropeUS●★

●

Under consideration★

★

34,500㎡★

Under consideration

245,000㎡
173,000㎡★

●

183,900㎡★

●

173,000㎡★

●

ALPHA PARK（China）

233,600㎡●

93,400㎡●

Yoma Central（Myanmar）

212,700㎡

65,900㎡

Oasis Central Sudirman（Indonesia）

307,000㎡

Warwick Court（London, Renovation）

29,000㎡

8 Bishopsgate

85,000㎡*5

Cristóbal de Moura 121-125（Spain）*560-72 Upper Ground*3*6

Virginia Data Center（Buiiding2）

●
●
★

●
★

●

MITSUBISHI ESTATE CO., LTD.

*2 Total floor area unless otherwise noted.

Approx.
¥1.3 tn

●
●

★

●
★

●

★・・・Start Construction*1 Includes properties expected to be sold by 2030

Approx.
¥85-90 bn●★

10,400㎡… Project announced after the Long-Term Management Plan

Approx.
¥300 bn●

7,800㎡

51,000㎡

Approx.
¥25 bn●11,000㎡

Fyrkanten 11（Sweden, Renovation）
Virginia Data Center（Buiiding1）

Under consideration

60,000㎡

116,000㎡●●

CapitaSpring（Singapore）

Parkline Place（Australia）

●

●

*3

One City Centre（Thailand）

Approx.
¥1 tn

Under consideration

6,600㎡*4*5

Approx.
¥60-65 bn

Gradual completion and opening

Tokyo Ryutsu Center Distribution A Building

180 George Street（Australia）●

14,200㎡

143,200㎡

Estimated NOI
Estimated(StableInvestment
operation)●

4,600㎡

Trinity Tower（Indonesia）

2030

●

KYOTO JOYO PREMIUM OUTLETS

Large-scale
Logistics
Logicross Zama
(100,000m2+)
Sagamihara-shi Chuo-ku Fuchinobe Project～★

19,500㎡

IMS Reconstruction Project

FY2026

Under consideration

14,700㎡

FUKAYA HANAZONO PREMIUM OUTLETS

FY2025★

Minami-Aoyama 3-chome project*3

FY2024

10,700㎡

544,000㎡

Toyosu 4-2 development project

FY2023●

Torch Tower（Bldg. B）
Osaka Mitsubishi Building reconstruction project
Mixed Use・
OfficeFY2022

Total●・・・Completion*3 Site area

*4 Total floor area before reconstruction*5 Leasable area

*6 Total of the 2 bldgs.

17

Progress of the Long-Term Management Plan
*Repost of IR Presentation for FY2022-2Q (as of Nov. 10, 2021)

4. Non-asset (Fee-based) Business
Steady Growth in Existing Businesses■AUM *1 Trends and Target in the Investment Management Business(Trillions of Yen）

5
4
3
2
1
0

3.1
1.4

＋0.9

Domestic
4.0

International

5

2.0

Focus
Area

2.0

At theannouncement of
the Long-Term
Management Plan
(January 2020)

FY2022 2Q end

Target AUMs
(Mid-2020s)•

Aiming to improve investment efficiency through fee-based business•

Received approx. ¥5 bn in development-related fees after the announcement of
the Long-Term Management Plan (total of Japan and overseas)＜Joint Project Concept＞
Joint Project：Investment by MEC：

Investment by 3rd party

Investment

Investment
ReturnReturnReturnInvestee

New Business

Agriculture

Renewableenergy■Acquire fee-based business via promotion of joint projects

Investment

 Aiming to develop new business opportunities by investing indomestic and overseas start-up companies, venture capital, etc.
(Actual investment: approx. ¥20 bn*3)
 Set up 7 focus areas and aims to secure new revenue streams
through collaboration with investees and new businesses of thecompany

1.7

Independent
Project

Initiatives to Create New Businesses

Infrastructure/P
PP/PFI
Real estate
related services
Contents/
Entertainment/S
ports
Tourism/
Inboud/Regional
development
Healthcare/Food

MEC Group

MEC Group*1 AuM＝Assets

Under Management

MITSUBISHI ESTATE CO., LTD.

Fees

3rd party investor*2 Including commitments

18

Progress of the Long-Term Management Plan
*Repost of IR Presentation for FY2022-2Q (as of Nov. 10, 2021)

5. Efforts to Improve Social Value

Renewable electricity rate is on track to meet the 2030 target well ahead of schedule, and GHG
emissions reduction measures are being promoted
Reduction of GHG Emissions

Increase in the Renewable Electricity Rate
◆ Accelerating the transition to renewable electricity in large-scalebuildings, mainly in Marunouchi◆ Expect to exceed the 2030 target of 25% in FY22 and to reach morethan half of the overall electricity consumption in FY23*1◆New interim target is being considered for the end of FY22

80%
60%

2030 target：25％

4,000

0

FY20

FY22 (F)interim 2050
FY23 (F) New…
targetTarget（TBD）*1 Current forecast based on FY2021 results, and may change in the future

MITSUBISHI ESTATE CO., LTD.

(＋６％)

35％
Reduction

87％
Reduction

FY18 (Ref)

FY212030 Target

2050 Target

Scope1：Direct emissions by companies themselves【Emissions】 Use of gas（Approx. 96.6％）【Measures】 Expectations for new energy and new technologies(e.g., Carbon neutral gas)

【Emissions】 Use of electricity (Approx. 96.5%)【Measures】 Switch to renewable electricity

3.1%
FY21

3,533

Scope2：Indirect emissions from the use of electricity,heat, and steam supplied by other companies

Approx.
30％

82.9%
1.1%

3,336

*3 (Scope３）

1,000

3.3%
13.8%

20%
0%

(Thousands t-CO2）Increase in capital investment■Breakdown of GHG emissions and major reduction policies (FY21 Actual）

20 buildings mainly in
Marunouchi to switch
to renewable electricity

40%developed by SBTi

2,000
100%

Accelerating the shift
including areas other than
Marunouchi◆ Reviewing targets toward the end of FY22 in line with the net-zero standard being

3,000

Renewable Electricity Rate100%

■ GHG emission reduction targets*2 and actual results (Scope 1+2+3). *2 Approved by SBTi in April 2019

Scope3：Indirect emissions other than Scope 1 and 2【Emissions】①Future emissions by asset sales*3（48.5％, Category 11）②Emissions by capital investment（43.3％, Category 2）【Measures】 ①Reduction through reduction of Scope2②Identification of emissions during the production of
construction materials, and reduction through the use of
low-carbon materials*3 Calculation: Floor space sold x Emissions per m2 in the previous year (Scope 1+2) X 50 years

19Financial Supplemental Data

MITSUBISHI ESTATE CO., LTD.

20

Financial Supplemental Data

1. Management Indicators

Previous Management
Plan Period

Current Management
Plan Period

FY2018FY2019FY2020

FY2021

FY2022(Forecasts)

2030
Target¥ 213.4 bn¥ 229.4 bn¥ 240.9 bn¥ 224.7 bn¥ 280.3 bn¥ 350-400
bn

*2ROA

3.8%

4.0%

4.1%

3.8%

4.5%

5％

ROE

7.3%

7.8%

8.5%

7.6%

8.0%

10％

EPS

¥ 86.78¥ 96.97¥ 108.64¥ 101.34¥ 116.32¥ 200*1BusinessProfits*1 BusinessProfit = Operating Income + Equity in Net Earnings/Loss (for unconsolidated subsidiaries and affiliates)
Profit / Total Asset (average of opening / closing balances)*2 ROA = Business

MITSUBISHI ESTATE CO., LTD.

21

Financial Supplemental Data

2. Balance Sheet As of December 31, 2021
Current assets
Cash and deposits
Trade notes and accounts
receivable, and contract assets
Real estate for sale
Real estate for sale in progress
Real estate for development
Equity investments
Other
Non-current assets
Total property, plant and equipment
Total intangible assets

Investment securities
Other

Total assets

Millions of yen (rounded down)
As of December As of March 31,
Change2021
31, 2021

1,322,377
243,036

1,164,037
170,040

158,339
72,996

43,68252,031△ 8,348

54,504
302,534
724
569,290108,601
5,048,398
4,278,491
110,247
280,812378,843
6,370,776

88,116
267,563975
496,182
89,126
4,908,481
4,179,893
101,095
281,996
345,494
6,072,519△ 33,611
34,970△ 250
73,10819,474
139,917
98,5989,152△ 1,184
33,349298,257

Liabilities
Current liabilities
Trade notes and accounts payable
Short-term borrowings
Current portion of long-termborrowings
Commercial Papers
Current portion of bonds payable
Other
Non-current liabilities
Bonds payable
Long-term borrowings
Other
Net assets
Shareholders’ equity

Accumulated other comprehensive income

Share acquisition rights
Non-controlling interests
Total liabilities and net assets

Total Assets

Consolidated Interest-Bearing Debt

Other
374,353

Commercial Papers
113,000(as of Dec. 2021)

International
Business
1,069,281
Residential
Business
689,621(as of Sep. 2021)

Lease obligations
1,991

Commercial
Property Business
4,237,521

MITSUBISHI ESTATE CO., LTD.

(as of Sep. 2021)

2,753,754
Loans
1,792,650

4,244,252
707,341
38,815174,079

4,011,071
662,437
60,507
141,785

233,180
44,904△ 21,691
32,293

106,471

127,643△ 21,171

64,000100,000
223,974
3,536,910
736,180
1,564,389
1,236,336
2,126,523
1,276,778
630,456
231
219,056
6,370,776

50,00065,000217,500
3,348,634
745,759
1,393,858
1,209,011
2,061,447
1,259,887
592,011231
209,316
6,072,519

14,00035,0006,474
188,276△ 9,579
170,530
27,32465,076
16,89038,445
9,740
298,257

Consolidated Interest-Bearing Debt
Long-term/Short-term Ratio(as of Sep. 2021)

Short-term
11.2%

Floating
18.4%

Bonds
846,1136,370,776

Consolidated Interest-Bearing Debt
Fixed/Floating Rate Ratio

Millions of yen (rounded down)
As of December As of March 31,
Change2021
31, 2021

2,753,754

Fixed
81.6%

2,753,754

Long-term
88.8%

22

Financial Supplemental Data

3. Asset Compositions(End of December 2021)

Inventories

Equity Investments

29%

¥

6%

10%

20%

2%

Property, plant andequipment

366.4 billion

10%
12%

¥

569.2 billion

3%
3%
2%
3%

¥

4,278.4 billion

11%
78%

Domestic Condominiums
US
Others73%
38%

Domestic (office buildings)
Domestic (others)
US
EuropeAsia

Office Buildings
Logistics Facilities
Rental Apartments
OthersOutlet Malls*Retail Properties
Overseas* Excluding outlet malls

MITSUBISHI ESTATE CO., LTD.

23

Financial Supplemental Data

4. Consolidated Cash FlowMillions of yen (rounded down)①FY20213Q
Results②FY20223Q
Results

Change（②－①）③FY2021
Results④FY2022
Forecasts

Change（④－③）

98,049174,848

76,798207,414173,000△ 34,414

Depreciation

66,372

67,933

1,561

89,10790,000893

Decrease (increase) ininventories

23,63071,40947,77956,44315,000△ 41,443

Decrease (Increase) in equity
investments

13,574△ 15,858△ 29,432△ 21,048△ 73,000△ 51,952△ 207,570 △ 223,410△ 15,839△ 297,303 △ 346,000△ 48,697

Cash Flows From
Operating Activities

Cash Flows From
Investing Activities
Proceeds from sales ofinvestment securities

12,813

8,398△ 4,414

14,186

11,000△ 3,186△ 231,284△ 217,833

13,450△ 319,841△ 352,000△ 32,159

Cash Flows From
Financing Activities

273,629

118,105 △ 155,524

50,425167,000

116,575

Cash and Cash Equivalents
at End of Period

373,948245,875 △ 128,072

172,307

163,000△ 9,307△ 48,561△ 89,889 △ 173,000△ 83,111

Purchase of property, plantand equipment

Free Cash Flow
MITSUBISHI ESTATE CO., LTD.

△ 109,520

60,95824

Financial Supplemental Data

5. Investment Data
Major Breakdown of Purchase of Property,
Plant and Equipment

Major Breakdown of Equity Investments(Billions of yen)(Billions of yen)

400.0

331.8

350.0
300.0

289.5
11.8

7.1

285.0
13.0

250.0
200.0
150.0
100.0
50.0
0.0

6.5
9.0

10.7
12.3

400.0

352.0
319.8
8.1
25.2

4.3

2.0

4.0

103.0

47.4

113.8

74.7

22.1

38.4

39.9

36.9

47.8

16.8
21.3

15.6
23.9

19.2

14.0

68.4

63.5

72.4

77.0

FY2019FY2020

FY2021*

FY2022(F)

6.5

15.9
96.3

FY2018

300.0
250.0

93.4

36.0

350.0

70.6

74.0

76.9

78.0

200.0

128.0

150.0

99.4

100.0
50.0
0.0

FY2018FY2019

93.7

2.3

2.1

85.0

75.1

49.0

8.8
13.2

42.6

41.0

FY2020

FY2021*

FY2022(F)2.0*Classifications have been changed below from FY2021<Legend for FY2018 - FY2020>
Office Building(MEC: New/Redevelopment)

Office Building(MEC: Refurbishment)

Office Building(Subsidiaries)

Lifestyle Property

Residential

International

Hotel & Airport

Special Purpose Vehicle

Other(including consolidated eliminations)

New Investments

MITSUBISHI ESTATE CO., LTD.

<Legend for FY2021 - >Office(MEC: New / Redevelopment)

Office(MEC: Refurbishment)

Commercial Property(excluding MEC office)

Residential

International

Special Purpose Vehicle

Others(including consolidated eliminations)

New Investments

25

Financial Supplemental Data

6. Income Generating Assets Unrealized Gains: Current Status #1
Steady cap rate and a slight increase in unrealized gains. Decrease in average number of shares and increase in
BPS and adjusted BPS due to an increase in net worth.
Income Generating Assets Unrealized Gain
Book value(Billions of yen)
9,000

7,941.1

8,000

6,079.0

5,000
4,000

8,270.8

8,361.2

2,180.7

2,569.0

2,963.5

3,422.8

3,898.4

4,222.5

4,250.2

3,606

3,241
2,950
2,643

2,800

2,300

2,178

1,800
3,318.1

3,509.9

3,828.4

FY2015FY2016FY20173,960.5

4,042.7

4,048.3

4,110.9
1,300

1,000
0

3,432

2,384

3,000
2,000

Adjusted BPS

3,800

3,300

6,791.9
5,498.9

BPS

(Yen)

7,383.4

7,000
6,000

Unrealized gain

*BPS and Adjusted BPS

FY2018FY2019FY2020

FY2021

800

1,078

1,088

FY2015FY2016

1,148

FY2017

1,224

1,276

1,269

FY2018FY2019FY20201,383

FY2021＊ BPS including unrealized gains (after tax)

MITSUBISHI ESTATE CO., LTD.

26

Financial Supplemental Data

7. Income Generating Assets Unrealized Gains: Current Status #2

Unrealized Gain Breakdown

Rental Profits(Billions of yen)
190

International
10%

180

174.8

Marunouchi
Existing Building
29%

FY2020

FY2021160.7

160*Marunouchi
New Building
44%

180.2

168.3

170

Domestic(Outside of Marunouchi)
17%

180.5

150
140

131.7

136.2

130
120
110
100

FY2015FY2016FY2017FY2018FY2019*Redeveloped properties after the completion of Marunouchi Building
FY2021 Results

MITSUBISHI ESTATE CO., LTD.

27

ESG Initiatives (Sustainability Initiatives)

For details of ESG initiatives in the "Long-term Management Plan 2030“, please refer to the following link.
https://www.mec.co.jp/e/investor/plan/pdf/plan200124_e.pdf
MITSUBISHI ESTATE CO., LTD.

28

ESG Initiatives (Sustainability Initiatives)

1. Materialities / Material Issues for Sustainability Management
Mitsubishi Estate Group
Sustainability Vision 2050

Be the Ecosystem Engineers
We aspire to be a corporate group (=engineers) that provides spaces andinfrastructure (=ecosystems) where all actors (individual, corporations, andmore) are able to coexist sustainably and thrive together economically,
environmentally, and socially.

Mitsubishi Estate Group 2030 Goals for SDGs

‘Materialities’

Globality
Community
Diversity
Declining Birthrate/
Aging Population
Leveraging Existing
Population

Digital Innovation

MITSUBISHI ESTATE CO., LTD.

Formulation of key themes and KPIs based on our materiality

Environment

Backcasting

Sustainable urban development that proactively addresses climatechange and environmental issues①

Environment

•

•
•
•

②

Diversity&
Inclusion③

Innovation④

Resilience

Reduce GHG emissions (Scope 1 + Scope 2 + Scope 3) by 35% by 2030
(compared with FY2018) (87% reduction by 2050 approved by SBTi in April 2019)
Renewable electricity rate: 25% (100% by 2050) (joined RE100 in January 2020)
Waste recycling rate: 90%, Waste disposal: 20% reduction (compared withFY2020, per m2)
Promote sustainable timber use

Urban development that responds to lifestyle and human resource
trends and facilitates active participation for all••

Strengthen hospitality and realize stress-free cities
Respect different lifestyles, local customs, religions, and sexual orientation
Establish traceability of timber to be used in business activities

Innovative urban development that continuously renews society••

Innovate business models and maximize performance
Support the creation of new ideas and businesses from the perspective of
urban development and contribute to the growth of cities and industries

Dynamic, flexible urban development that builds disaster-resilient
communities and prioritizes safety and security••

Enhance disaster preparedness to minimize functional stagnation during disasters
Enhance BCP function through hardware measures and strengthen neighborhood
communication

29

ESG Initiatives (Sustainability Initiatives)

2. 2030 KPIs and Progress (The “E” & “S” in ESG)

1

Environment
Benchmarks

GHG emissions
Renewable electricity rate
per m2
Waste disposal
Waste recycling rate

32030 KPIs

FY2021 Actual

vs. FY2018
35%
reduction

3,533 thousand t(Reference value:
3,336 thousand t)

25%

3.1%

vs. FY2020
20%
reduction

5.0kg(Reference value:
7.1kg)

90%

60.5%

Innovation

Benchmarks

Initiatives• Maximize performance by innovating
business models• Support the creation of new ideas andbusinesses from the perspective of urban
development and contribute to thegrowth of cities and industries
See page 15 and 33 for details.

2

Diversity & Inclusion
Benchmarks

2030 KPIs

FY2021 Actual

Percentage of female
managers

Over 10%

7.1%

Percentage of female newgraduate hires

30% every
year

37.8%

Rate of use of male
employees taking childcare
leave of absence

100%

42.4%

Benchmarks

2030 KPIs

FY2021 Actual

Percentage of employeeswith first aid provider
qualification

100%

63.0%

Percentage of buildingsthat are to take instranded commuters *

ー

92.3%

4

Resilience*Large properties completed in 2002 or later are eligible
MITSUBISHI ESTATE CO., LTD.

30

ESG Initiatives (Sustainability Initiatives)*Repost of IR Presentation for FY2022-2Q (as of Nov. 10, 2021)

3. Recent Highlights (The “E” in ESG)

1

Environment

GRESB Real Estate Assessment Awarded highest “5-Star” rating
and named as a sector leader for the first time

 Received a “5 Star rating*1” in the “GRESB Standing Investments Benchmark,” anevaluation of the existing property portfolio (for the second consecutive year).

 Obtained a “5 Star rating*1” in the “GRESB Development Benchmark,” anevaluation of the new development and major renovation portfolio for the firsttime. In addition, the company was selected as a “Sector Leader” for the first timein the Asia region and office buildings.

*1 The highest rating given to the top 20% of the global ranking of the overall score.

*2 The title given to the participant with the highest overall score (and the participant whose score

Obtained ZEB Ready certification
for several logistics facilities completed this fiscal year
Logicross Kasukabe and Logita・Logicross Ibaraki
Saito B Building, completed in May 2021,
obtained a 5 Star rating and ZEB Readycertification under BELS, a third-party
certification system in accordance with the“Guidelines concerning the labeling of building
energy consumption performance” (Logista・
Logicross Ibaraki Saito A Building received 5Star rating).

difference is within one point) in each region and property use.

▲Logicross KasukabeStarted development of ZEH condominiums
with virtually zero CO2 emissions from electricity“The Parkhabio Bunkyo Edogawabashi” is the firstrental condominium to adopt ZEH-M (High-rise
ZEH-M Oriented).

GRESB

An organization that provides and operates annual benchmark assessments tomeasure the ESG considerations of real estate companies and funds. It is the only
ESG survey that specializes in the real estate sector, and is also unique in that it
conducts ESG assessments on a company/fund basis, rather than certifying
individual properties.

MITSUBISHI ESTATE CO., LTD.

Improved thermal insulation to drastically reduce
primary energy consumption.
Also, by using solar power generation and nonfossil certified electricity, annual CO2 emissions
are reduced by approximately 63% compared tothe conventional The Parkhabio.
▲“The Parkhabio Bunkyo
Edogawabashi” (Image)31

ESG Initiatives (Sustainability Initiatives)*Repost of IR Presentation for FY2022-2Q (as of Nov. 10, 2021)

4. Recent Highlights (The “E” & “S” in ESG)

2

Diversity ＆ Inclusion

Changes in targets and numbers for improvements in female
participation rate.
Female new graduate hires (%) *2

Female employees at
assistant manager level (%) *2

Female managers (%) *1(Ref) Female employees
in all employees (%) *2

37.8%

40.0%
31.4%
30.0%
20.0%

22.9%

24.3%

19.7%

21.2%

5.9%

5.8%

FY2019FY2020

37.8%
27.3%

7.1%

In new condominiums for sale, Mitsubishi Estate
Residence uses concrete form panels that meet thesustainable sourcing code for procuring timber inconsideration of sustainability, and ensure
traceability (to trace where and how the timber was
produced).

FY2021

Percentage of female managers*1: Over 10% by FY2031② Ratio of female employees at the assistant manager level (candidates
for management positions)*2: 30% by FY2026③ Ratio of female new graduate hires*2: 30% annually■Initiatives••

Enhancing personnel systems to create a better working environment for womenStrengthening mid-career recruitment of female employees at the assistant manager
level and candidates for assistant manager level
Increasing the dissemination of information on the activities of female employees andtheir working environment
Holding in-house roundtable discussions with female employees and having employees
speak at seminars for women*1 Average of Mitsubishi Estate, Mitsubishi Jisho Property Management, Mitsubishi Estate Residence,
Mitsubishi Jisho Sekkei, Mitsubishi Real Estate Service*2 Mitsubishi Estate
MITSUBISHI ESTATE CO., LTD.

Most of the "concrete form panels" used in construction in Japan are
made from South Seas lumber, and the human rights violations(child labor, taking of Indigenous peoples’ land, etc.) in the lumber
production process has been pointed out. To address this issue, wehave set a target of achieving a 100% use rate of lumber thatcomplies with the “Sustainable Sourcing Code*1” (Certified Wood andDomestically Produced Wood) for concrete form panels by FY2031.

■Initiatives

KPI ①

•
•

KPI

24.5%

10.0%
0.0%

Addressing human rights and supply chain issues“The Parkhouse Takanawa Matsugaoka,” FSC*2
certified materials are used for concrete form
panels. This is the world's first attempt*3 to acquire
project certification based on FSC criteria for
concrete form panels.

▲”The Parkhouse Takanawa
Matsugaoka” (Image)*1 Criteria and operational methods for sustainability-oriented procurement,with reference to international agreements and codes of conduct in various fields
related to sustainability.
*2 FSC (Forest Stewardship Council®) An independent NPO that aims to promoteresponsible forest management worldwide and operates an international forest
certification system. (Source: Website of FSC)
*3 According to our research

32

ESG Initiatives (Sustainability Initiatives)*Repost of IR Presentation for FY2022-2Q (as of Nov. 10, 2021)

5. Recent Highlights (The “E” and “G” in ESG)

3

Innovation

Implementing SDGs-related projects that go beyond
corporate boundaries
OMY SDGs ACT5 is a project based in the Otemachi, Marunouchi, andYurakucho areas through which various activities for contributing to theaccomplishment of the SDGs. These activities are based on the five SDG
themes (Acts) of sustainable food, climate change and resource recycling,
well-being, diversity and inclusion, and communication.
••

In FY2021, the number of participating companies were 45 and theaggregate number of participants in the events and seminars surpassed
8,000.
In FY2022 an app that allows users to accrue “ACT5 member points” bytaking action to contribute to the accomplishment of the SDGs waslaunched. Through this project, Mitsubishi Estate looks to encouragechanges in the behavior of individuals to create a framework which leads
to future SDG-based action.

*See page 15 for initiatives in other new businesses.

Event example:”SUSTABLE" learning about the social
issues behind food*“ACT5 member points” app

4

Resilience

Conducting disaster prevention drills and demonstration tests■Emergency drills through public and private sector cooperation
Conducted every year and all Mitsubishi Estate executives and employees, Group
companies, and relevant external entities participate. In FY2021 and FY2022,
consideration was given to avoidance of the infection risk of COVID-19. Initial
response, collecting and communicating information using tools such as thesafety confirmation system and web conferencing, in line with the actual
conditions of the work system with limited personnel under infectious disease
countermeasures were conducted.
■Disaster drills using advanced communication technologies
A verification test of our Disaster Dashboard 4.0 platform was performed with
Chiyoda Ward, Tokyo, railroad operators, bus companies, and building operators
over the period from January to February 2021. The dashboard platform enables
sharing information between disaster response institutions and the provides
information to individuals unable to return home.

Disaster response drills (FY2020)
Conducting drills to simulate the use of
security robots in the event of anearthquake

Disaster Dashboard 4.0 digital signage*Combined offline and online events with countermeasures against COVID-19
MITSUBISHI ESTATE CO., LTD.

33

ESG Initiatives (Sustainability Initiatives)

6. Corporate Governance (The “G" in ESG) #1
Establish effective governance that ensures long-term enhancement of corporate values.
（as of Mar. 2021）

Corporate Structure• Transitioned to a “Company with Nominating Committee, etc.” in June 2016
• In 2020, an independent evaluation of the effectiveness of the Board was undertaken
Structure of the Board of Directors

Committee Members• 15 directors: 8 company directors and 7 independent outside
directors (10 of which are non-executive directors)• Chairpersons of all committees are independent outside directors• 6 of 7 independent outside directors are male and 1 is female

Board Structure

Composition of Male/Female
1

5

7
3

Company Director (Executive)
Company Director (Non-executive)
Independent/Outside Director (Non-executive)

MITSUBISHI ESTATE CO., LTD.

• Remuneration and Nominating Committees comprised ofindependent outside directors only
• With regards to the Audit Committee, two non-executive internal
directors, who are familiar with the company's business, wereappointed to ensure the effectiveness of audits
Audit
Committee

Nominating
Committee

Remuneration
Committee

Chairperson is an
outside director

Exclusively
outside directors

Exclusively
outside directors

14
Male

Female: Outside Director: Company Director(Non-executive): Chairperson

34

ESG Initiatives (Sustainability Initiatives)

7. Corporate Governance (The “G" in ESG) #2
Strategic-Holding Stock Policies• Sold 20 *entities with a total value of approx. ¥20.7 bn in thepast three years (FY2019-FY2021)• As of March 2021, hold approx. ¥228.5 bn of stock value.
Routinely review strategic objectives and dispose of stocks asnecessary• Expect to sell approx. ¥10 bn in FY2022* Stocks of listed companies only. Including partial sale

170
160
150
140
130
120
110
100

Holdings of Shares Held Strategic Purposes(Total for Listed and Non-Listed Companies)
2

0
166

164

4

8

152

148

16

22

30

138

134

133

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Non-new business-related holdings

New business-related holdings

The Executive Compensation Plan Aims to Align Shareholders and Executives’ Interests
Composition of Compensation
Base Salary50％
Fixed Component

Short-term Incentive

Medium- to
Long-term Incentive

Single-year
PS
RS
Performance-based
Incentive Incentive
Incentive

25％

12.5％

12.5％

Variable Component<Single-Year Performance-Based Incentives>
 Form: Cash Calculation: "KPIs" : Operating profit, ROE, etc., of previous year (quantitative evaluation) as wellas levels of contribution to medium- to long-term business results, efforts in ESGs, and otherelements (qualitative evaluation)<Phantom Stock Incentives>
 Form: Cash Performance evaluation period: About 3 years
 Calculation: Based on stock price and total shareholder return (TSR) relative to *peer companies<Restricted Stock Incentives>
 Form: stock Lock-up period: About 3 years* Nomura Real Estate Holdings, Inc., Tokyu Fudosan Holdings Corporation, Mitsui Fudosan Co., Ltd., Tokyo Tatemono Co., Ltd., and Sumitomo Realty & Development Co., Ltd

MITSUBISHI ESTATE CO., LTD.

35

ESG Initiatives

8. External Evaluations
As of February 10, 2022
Category― Not selected
Benchmarks

2019

2020

2021

Remarks

ESG in General

FTSE4Good Global Index

●

●

●

20 years in a row

ESG in General

FTSE Blossom Japan Index (Adopted by GPIF)

●

●

●

5 years in a row

ESG in General

MSCI Japan ESG Select Leaders Index (Adopted by GPIF)

●

●

●

5 years in a row

ESG in General

Dow Jones Sustainability Asia Pacific Index

―

●

●

2 years in a row

ESG in General

Member of the "S&P Global Sustainability Yearbook"

―

●

●

2 years in a row

ESG in General

SOMPO Sustainability Index

●

●

●

10 years in a row

ESG in General

GRESB Public Disclosure

A

A

A

ESG in General

GRESB Standing Investment Benchmark

3 Star *1

5 Star

5 Star

ESG in General

GRESB Development Benchmark_*2

4 Star

5 StarE (Environment)

S&P/JPX Carbon Efficient Index (Adopted by GPIF)

●

●

●

E (Environment)

CDP Climate Change

A-

A

A-

E (Environment)

CDP Water Security

―

―

A-

S (Society)

MSCI Japan Empowering Women Select Index (Adopted by
GPIF)

●

●

●

4 years in a row

4 years in a row

For GRESB, the evaluation system differs between before 2019 and after 2020.
*1 Evaluation results in the Real Estate Assessment*2 Started assigning ratings from 2020

MITSUBISHI ESTATE CO., LTD.

36

Business Overview

MITSUBISHI ESTATE CO., LTD.

37

Business Overview

1. Mitsubishi Estate Group’s Business Segments
Commercial Property Business＜Office Buildings＞
Engages in the development,
leasing, and operation
management of office buildings,
mainly in the Marunouchi area andother major Japanese cities.

＜Retail Properties＞
Develops retail properties andoutlet malls nationwide, mainly inthe major metropolitan areas.

＜Logistics Facilities＞
Development, leasing, andmanagement of the “Logicross”
series as a foundation of logistics
facilities.

＜Hotels/Airports＞
Undertakes hotel management
nationwide as the Royal Park Hotels
group. Began private airport
management business.

Residential Business

International Business

Investment Management
Business

Architectural Design &Engineering and Real Estate
Service Business＜Domestic Residential＞
Operate residential condominium
business under "The
Parkhouse" brand and rental
apartments business under "The
Parkhabio" brand.

Undertakes office building
development andleasing businesses in the UnitedStates and the United Kingdom, as
well as projects in Asia

Provides a wide range of services
regarding real estate investment
for investors.

＜Architectural Design &Engineering Business＞
Mitsubishi Jisho Sekkei Inc.
provides architectural design andengineering services of construction
and civil engineering.
＜Real Estate Services Business＞
Mitsubishi Real Estate Services Co.,
Ltd. offers real estate brokerage,parking lot management support,
and other services.

MITSUBISHI ESTATE CO., LTD.

38

Business Overview

2. Business Scale

Investment
Management
Business2%

Other*
6%

Investment
Management
Business
2%

International
Business
15%

International
Business
9%
Revenue fromOperations

Residential
Business
10%

Approx.

Residential
Business
29%¥1,207.5
billion

Other*
0%Commercial
Property
Business
54%*Other2%

Investment
Management
Business
1%
International
Business
16%

Operating Income

Approx.

Residential
Business
11%¥224.3billionTotal Assets

Commercial
Property
Business
73%

Approx.

¥6,072.5
billionCommercial
Property
Business
70%*Architectural Design & Engineering Business and Real Estate Services Business, Other Business(FY2021 Results)

MITSUBISHI ESTATE CO., LTD.

39

Commercial Property Business
Office Buildings

MITSUBISHI ESTATE CO., LTD.

40

Commercial Property Business (Office Buildings)

1. Marunouchi Area Map

MITSUBISHI ESTATE CO., LTD.

41

Commercial Property Business (Office Buildings)

Marunouchi Area

2. Pipeline
Tokiwabashi Tower
Bldg. A

Uchikanda 1-chome
Project

Torch Tower Bldg. B

Total Floor Area: 180,900㎡
Completion: Sep. 2020

Total Floor Area: 146,000㎡
Completion: Jun. 2021

Total Floor Area: 84,500㎡
Completion: 2025

Total Floor Area: 544,000㎡
Completion: FY2028

FY2020

FY2021

Link Square Shinjuku

FY2022

CO･MO･RE YOTSUYAFY2023

FY2024

Yurakucho
Redevelopment(TBD)

FY2028the ARGYLE aoyama(Tentative name)Toyosu 4-2 Project

Kokusai Shin-Akasaka
Building and others
Redevelopment Project

Total Floor Area: 23,100㎡
Completion: Jun. 2020

Total Floor Area: TBD
Completion: Spring 2025

Total Floor Area：TBD
Completion：FY2029

Tokyo(Outside of Marunouchi)(Tentative name)

Mizuho Marunouchi Tower,
Ginko Kaikan,
Marunouchi Terrace

撮影：SS

Total Floor Area: 43,800㎡
Completion: Aug. 2019

MITSUBISHI ESTATE CO., LTD.

Total Floor Area: 139,600㎡
Completion: Jan. 202042

Commercial Property Business (Office Buildings)

3. Earnings Related Data: Total Operating Floor Space (Unconsolidated)
Total (Domestic)/Marunouchi/Marunouchi Redevelopment Buildings(Thousand ㎡)

6,500
6,000

5,444

5,500
5,000
4,500
4,000

3,684 3,696

3,825 3,907

4,175

4,347

4,660

4,896

5,580 5,670
5,174

5,038

5,385

5,570

5,745

3,000

2,000

1,677

1,798

1,946 2,024 1,897

2,195 2,258

1,500
1,000
500
0

256

256

355

03/3

04/3

05/3

5,991 6,016

3,769

3,500

2,500

5,869

489

489

06/3

07/3

743

743

08/3

09/3

Total (Domestic)

2,565 2,565

2,687 2,758 2,755 2,583

1,022 1,022

10/3

11/3

Marunouchi

1,174

12/3

2,531

1,383 1,365 1,360 1,345

13/3

14/3

15/3

16/3

2,727 2,784

1,705 1,705

17/3

18/3

2,915 2,915 2,952

1,836 1,836 1,872

19/3

20/3

21/3 22/3(F)Marunouchi Redeveloped Buildings*Excluding floor space in Lifestyle Property Business from 16/3

MITSUBISHI ESTATE CO., LTD.

43

Commercial Property Business (Office Buildings)

4. Earnings Related Data: Vacancy Rates and Average Rents (Unconsolidated)
Vacancy Rates (Marunouchi Offices/All uses in Japan) and
Average Rents (All uses in Japan)(yen / tsubo-month)10%

30,00029,000Vacancy rate (Marunouchi offices)

28,000Vacancy rate (All uses in Japan)
Average rent (All uses in Japan)

27,00026,00024,86425,00023,56024,00023,00022,00021,00022,213

21,733
21,902
21,711
4.82%

20,00017,00013,000

0.55%
04/3

05/3

MITSUBISHI ESTATE CO., LTD.

06/3

07/3

6%

3.66%

2.42% 2.26%

0.19%
08/3

3.85%
4.32%

2.80%

2.93%

2.22%

2.42%

2.06%

1.74%

7%

23,587

3.98%
3.58% 3.58%

2.86%
1.68%

14,00012,000

3.40%

2.77%

23,8615%

4.36%

15,00023,850

9%
8%

5.29%

2.77%

16,00023,97425,842

26,702

28,34128,500

22,602

3.59%

19,00018,00024,42325,234

26,193

27,177

27,793

1.82%

1.09%

2.50% 3.54%

2.19%
1.87%
2.42%

3.5%

1.07%

2.35%

1.65% 1.80%

1.37%

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

3%
2%
1%

0.69%
09/3

4%

20/3

21/3 21/12 22/3
(F)

0%

44

Commercial Property Business (Office Buildings)

5. Earnings Related Data: Office Building Business, Revenue Breakdown*1(Unconsolidated)(Billions of yen)

FY2021-3Q(Results)

FY2021（Previous
Results）

FY2022

FY2022(Results)(Previous
forecast)

FY2022-3Q(Revised
forecast)

Rent revenue from *1office buildings

313.8

418.0

329.5

428.3

434.4

Changes from the previous period+ 12.1+ 11.3+ 15.7+ 10.2+ 16.4

Rent revenue from new buildings+ 8.4+ 12.2+ 12.6+ 15.8+ 16.0Rent revenue from existing buildings

+ 7.6

+ 7.2

△ 4.8

△ 3.3

△ 6.5

Termination of master lease,closure of building for redevelopment

△ 0.3

△ 0.7

△ 2.8

△ 6.5

△ 3.5

Moving in/out of tenants,
Rent revisions at lease renewal

+ 8.0

+ 8.0

△ 2.0

＋ 3.2

△ 3.0

-

△ 0.5

retail

△ 4.0

△ 5.0

Supplementary revenue, incl. common area
charge

+ 0.1

△ 2.4

+ 7.9

△ 2.2

+ 7.0

Impact of COVID-19

Offices*2Mixed-use*1 Office buildings,

incl. those with retail areas, etc.

*2 Retail properties in office buildings

MITSUBISHI ESTATE CO., LTD.

45

Commercial Property Business (Office Buildings)

6. Earnings Related Data: Trends in Rent Revenue From Office Buildings*1(Unconsolidated)
Increase/Decrease of Rent Revenue from Office Buildings*1(From the Previous Fiscal Year)(Billions of yen)

30
25
20

■New buildings■Existing buildings (moving in/out of tenants, rent revisions at lease renewal)■Existing buildings (termination of master lease, closure of building for redevelopment)■Impact of COVID-19(office buildings, *2mixed-use retails)

+0.3

15

+15.3

10
5

+13.0

0
-5

-20
Total

+15.3
+8.7
-4.9

-10.7

-10
-15

+0.3

-1.1
-5.9

-5.4

+7.3
+1.9

+14.7

+27.2

+23.9

+6.0

+7.3

-1.5

-1.5

-10.5

+12.5

-4.0
-2.5

-4.6
-5.6

+9.5

-5.2
-6.0

+6.6
-3.4

-0.7
-7.5

+22.6 +0.7 +17.9+18.5 +13.2

+2.4
-9.0

-8.3

+4.9

-10.5

+10.8

+9.8

+4.0

+4.7

+12.2
+16.0

+5.9

+6.5

+8.0
-0.7
-5.5

-8.1

+12.6

-3.0
-3.5

-2.0
-2.8

-5.0
*1 Office buildings,

incl. those with retail areas, etc.

*2 Retail properties in office buildings

04/3

05/3

06/3

07/3

08/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

21/3

22/3

22/3-3Q

-2.7

-1.6

+8.3

-1.3

+19.8 +20.5 +17.4

+2.3

-1.7

-5.1

+19.0 +11.9+7.6+18.5 +15.2 +24.1 +17.6 +14.0

+9.5

+7.8

MITSUBISHI ESTATE CO., LTD.

09/3

18/3

19/3

20/3

（Revised forecast)46

Commercial Property Business (Office Buildings)

7. Office Building Market Data: New Supply of Large-Scale Office Buildings(23 Wards of Tokyo)(Millions of ㎡)

2.5
2.16
2

1.79

1.75
1.54
1.5
1.25

1.19

0.72

0.77

1.09
0.87

0.86 0.85
0.65

1.45

1.41

1.17

0.91

1

0.5

1.21

Historical average supply
Approx. 1.07 million ㎡/year(1999-2020)

Projected average supply
over the next 5 years
0.94 million ㎡/year

0.58

1.2
0.97

0.93

0.85
0.69

0.61

0.49

0.36

0

*Forecast*Research subject buildings: Buildings with a total office floor area exceeding 10,000㎡
Source: Mori Building (as of May 2021)
MITSUBISHI ESTATE CO., LTD.

47

Commercial Property Business (Office Buildings)

8. Office Building Market Data: Average Rents/Vacancy Rates(5 Central Wards of Tokyo)(yen / tsubo-month)12%

30,000
Average Rent

28,00026,00024,000

8.75%

10%
8.56%

7.98%
22,5745.51%

20,00020,064

6.70%

6.05%

16,0003.41%

2.72% 2.89%

6.33%

05/3

06/3

07/3

08/3

4%

2.80%

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

6%

5.42%

2%
1.78%

04/3

20,596

19,6995.30%

12,00010,00021,541

21,134

18,73018,264
17,973
17,495
17,195
16,71616,504
16,325
3.60%
4.34%

18,09517,75817,593

14,0008%

22,594

21,29522,00018,0009.19% 9.04%

Vacancy Rate

18/3

19/3

1.50%
20/3

21/3

21/12

0%

Source: Miki Shoji Co., Ltd.
MITSUBISHI ESTATE CO., LTD.

48

Commercial Property Business (Office Buildings)

9. Competitive Edge of Marunouchi: Vacancy Rates
5 Central Wards of Tokyo (Market) vs. Marunouchi(Unconsolidated)

10%

8.75%

9%

9.19% 9.04%

8.56%

7.98%
8%
6.70%

7%

6.33%
6.05%

6%

5.42%

5.51%
5%

4.36%

4.32%
3.66%

4%
3.41%

3%

2.72%

2.77%

1.74%

1%

0.55%
04/3

05/3

06/3

07/3

4.34%

2.42%
2.89%

2%

0%

5.30%

0.19%
08/3

2.42%

2.80%

2.50%

2.19%
1.50%

2.26% 2.42%

1.82%

1.09%
09/3

3.85%

3.60%

1.65% 1.78%

1.37%

0.69%
10/3

11/3

12/3

5 Central Wards of Tokyo (Market)

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

21/12

Marunouchi (Unconsolidated)
Source: Miki Shoji Co., Ltd.

MITSUBISHI ESTATE CO., LTD.

49

Commercial Property Business (Office Buildings)

10. Competitive Edge of Marunouchi: Area/Number of Railway Lines

Marunouchi

Nihonbashi

ShinagawaShibuya

Toranomon

2,400m
1,500m

Area:

120ha

Area:

76ha

Area:

49ha

Area:

86ha

Area:

58ha

Railway lines:

28 lines

Railway lines:

5 lines

Railway lines:

9 lines

Railway lines:

8 lines

Railway lines:

2 lines©Open Street Map

MITSUBISHI ESTATE CO., LTD.

50

Commercial Property Business (Office Buildings)

11. Competitive Edge of Marunouchi: Number of Headquarters and Offices(as of March 2021)① Fortune Global 500 company headquarters

21

3

2

0

③ Top 100 law firm headquarters and offices0

MARUNOUCHI33

NIHONBASHI

8
6

TORANOMONMARUNOUCHINIHONBASHISHINAGAWA

SHIBUYATORANOMONSHINAGAWA② Top 50 company headquarters in terms ofmarket capitalization

2

SHIBUYA

0④ Foreign financial company offices

67

MARUNOUCHI

13

MARUNOUCHI6NIHONBASHI

1SHINAGAWA

1TORANOMON0SHIBUYA13

TORANOMON5SHIBUYASHINAGAWA

MITSUBISHI ESTATE CO., LTD.

16

NIHONBASHI

051

Commercial Property Business (Office Buildings)

12. Marunouchi Data: Marunouchi Tenant Mix (Unconsolidated)
March 2000

Type of Business

Area ratio

March 2021

Type of Business

Area ratio

1

Manufacturing

42.5%

1

Finance22.9%

2

Finance22.2%

2

Manufacturing

20.0%

3

Trading

10.4%

3

Professional Firm

19.2%

4

Information

6.3%

4

Trading

10.4%

5Professional Firm

4.4%

5

Information

6.2%

Others

14.2%

Others21.3%

Professional Firm
4.4%
Others14.2%
Information
6.3%
Trading
10.4%

Manufacturing
42.5%

Finance22.9%

Information
6.2%
Trading
10.4%

Finance
22.2%

MITSUBISHI ESTATE CO., LTD.

Others21.3%

Manufacturing
20.0%

Professional Firm
19.2%

52

Commercial Property Business (Office Buildings)

13. Marunouchi Data: Approaches for Marunouchi Area Development
Improvement of floor-area-ratio
Improving plot ratio in Marunouchi area by reviewing the use
area

1,000% → 1,300% (June 2004)*1,200% for limited areas

Transfer of plot ratio:
Exceptional plot ratio district system
Possible to transfer floor area among several areas meeting acertain conditions"Exceptional floor-arearatio district" area

Relaxation of plot ratio regulations: Special
Urban Renaissance Districts
Possible to be permitted for relaxation of floor-area ratio
regulation depending on levels of contribution to city
regeneration as an exemption of urban planning
Example: International business bases (Global Business Hub Tokyo etc.)
Development of fine urban environment (improvement of water quality of ditch
around the Imperial Palace, etc.)
BCP functions (self-reliant electric power, water supply, etc.)

Change of building uses:
Consolidation of non-office use
Possible to consolidate and allocate mandated non-officeuse floor-areas when running several projects
simultaneously◆Example: Consolidate office and hotel usages

Non-office ─◆Example: Transfer unused floor-area at Tokyo station to other buildings
around the station

Office ─Consolidate non-office use in
offices into hotels to expand
office areas in office buildings
Offices
MITSUBISHI ESTATE CO., LTD.

Hotels53

Commercial Property Business (Office Buildings)

14. Initiatives Looking Ahead to Post-COVID-19
Enhancing value in the office by sophisticating the core functions of the central office andadapting to diversified workstyles.
Previous workstyles

Sophistication of the Central OfficeTOKYO TORCH (Tokiwabashi PJ)• 2ha outdoor space• Communal space for workers• Implementation of contactlesssecurities• Large hall (2,000 seats)• World-class hotel (100 rooms)• Eco-friendly city development (e.g.
green bonds)

Work at a predeterminedplace and time.

New workstyles
Central office as the core hub of acompany in order to maintain asense of belonging and trust
among employees with diversified
values.

FINOLAB (renewal)• Financial support for startups(investing in FINOLAB FUND)• Renewal and expansion• Support services for businessexpansion

Approaches to diversified workstyles
WORK × ation Site
(Workation)

Telecubes• Increase
installment
numbers• Expandinstallation spots
to condominiums
etc.

• Establishment of a
new hub

NINJA SPACE
・To locate
workspaces

MITSUBISHI ESTATE CO., LTD.

CIRCLES（Compact office）•

Aim is to develop 30
buildings by 2024

54

Commercial Property Business
Outlet Malls, Retail Properties, Logistics
Facilities, Hotels, and Airports

MITSUBISHI ESTATE CO., LTD.

55

Commercial Property Business (Outlet Malls)

1. Outlet Mall BusinessChange in Store Area, Revenue fromOperations, and Operating Income(Millions of yen)

Average of all Facilities Sales-Linked &Fixed Ratio (Rent Revenue Basis)(㎡)

50,000400,000

45,000

FY2021Results

62%

350,000

Fixed rent

38%
Sales-linked rent

40,000300,000

35,00030,000250,000

200,000

Tosu

Kobe-Sanda
Rinku

20,000

16/3

17/3

18/3

19/3

20/3

21/3

Store area

308,500 308,500 308,500 314,600 315,300 345,500

Revenue fromOperations

43,946

43,642

45,462

46,65946,39340,030Operating Income 16,301

17,35918,94019,673

18,963

14,619MITSUBISHI ESTATE CO., LTD.

HANAZONO Sano
Toki

Ami
Gotemba Shisui

GOTEMBA PREMIUM OUTLETS®

150,000

15,00010,000Sendai-Izumi

KYOTO JOYO

25,000100,000

Name

Open

Gotemba (Phase 4)

Jun. 2020

Before expansion: Approx. 44,600㎡
Currently: Approx. 61,000㎡ (+37%)

Rinku (Phase 5)

Aug. 2020

Before expansion: Approx. 39,400㎡
Currently: Approx. 50,100㎡ (+27%)

Fukaya Hanazono (New)Fall, 2022

Approx. 27,000㎡

Kyoto Joyo (New)Store Floor Area

Scheduled at the same time as the opening of theneighboring roads.

56

Commercial Property Business (Logistics Facilities)

2. Logistics Facility Business
Trends in Gain on Sales

Approx. ¥(Billions of yen)
8.0

8.0

2.0
0.0

Assets in Operation
32%(4 buildings)

4.0

Assets under Development
68%(11 buildings)

2.0
18/3

19/3

20/3

Tokyo Ryutsu Center Distribution Building B
MITSUBISHI ESTATE CO., LTD.

61.0 billion

Operational Logistics Facilities
Total number of developed facilities:

15

8.0

6.0
4.0

Total Assets

21/3(End of March 2021)*Ratio by value*Excl. Tokyo Ryutsu Center

Logicross Hasuda

Number of facilities in operation:4

Total floor area of facilities in operation:

192,000㎡(End of March 2021)*Excl. Tokyo Ryutsu Center(Tentative name) Sagamihara-shi Chuo-ku Fuchinobe project57

Commercial Property Business (Retail Properties/Logistics Facilities)

3. Outlet Malls and Logistics Facility Pipelines
FUKAYA HANAZONOPREMIUM OUTLETS®

(Tentative name) KYOTO JOYOPREMIUM OUTLETS®

Store floor area: 27,000㎡
Open: Fall 2022

Open： Scheduled at the same timeas the opening of theneighboring roads.

Outlet Malls

GOTEMBA PREMIUM
RINKU PREMIUM OUTLETS®
OUTLETS® Expansion Phase 4
Expansion Phase 5

Logistics Facilities

Floor Area Expanded: +16,400㎡
Open: Jun. 2020

Floor Area Expanded: +10,700㎡
Open: Aug. 2020

FY2021

FY2022

FY2023

Logicross Hasuda

Logista・LogicrossIbaraki Saito

Logicross Zama

(Tentative name)(Tentative name) Sagamihara-shi

Toal Floor Area: 147,200㎡ (2 Blocks)
Block A Completion: May 2021
Block B Completion: May 2021

Total Floor Area: 183,900㎡
Completion: Jun. 2023

Total Floor Area: 173,000㎡
Completion: 2023

Total Floor Area: 78,600㎡
Completion: Mar. 2021

FY2024Chuo-ku Fuchinobe project

Logicross Yokohama
KohokuLogicross AtsugiⅡ

Logicross Ebina

Logicross Kasukabe

Logicross Funabashi

Total Floor Area: 16,400㎡
Completion: Jun. 2019

Total Floor Area: 35,100㎡
Completion: Jul. 2019

Total Floor Area: 61,900㎡
Completion: Nov. 2020

Total Floor Area: 39,300㎡
Completion: May 2021

Total Floor Area: 23,700㎡
Completion: Dec. 2021

MITSUBISHI ESTATE CO., LTD.

58

Commercial Property Business (Hotels)

4. Hotel (Development/Operations) Business
Hotel Management Business
Name

Number of Rooms

Open

Chuo, Tokyo

419

Jun. 1989

Yokohama, Kanagawa

603

Sep. 1993

Sendai, Miyagi

110

Apr. 1995

The Royal Park Hotel Iconic Tokyo Shiodome

Minato, Tokyo

490

Jul. 2003

Marunouchi Hotel
The Royal Park Hotel Fukuoka

Chiyoda, Tokyo205

Oct.2004

The Royal Park Hotel Kyoto Sanjo

Fukuoka, Fukuoka

174

Jul. 2011

Royal Park Hotel
Yokohama Royal Park Hotel
Sendai Royal Park Hotel

Kyoto, Kyoto

172

Oct. 2011

The Royal Park Canvas Nagoya
The Royal Park Hotel Tokyo Haneda

Nagoya, Aichi

153

Nov. 2013

The Royal Park Hotel Kyoto Shijo

Ota, Tokyo

313

Sep. 2014

Kyoto, Kyoto

127

Apr. 2018

Hiroshima, Hiroshima

127

Chuo, Tokyo

121

Oct. 2018
Mar. 2019

The Royal Park Hotel Hiroshima Riverside
The Royal Park Canvas Ginza 8
The Royal Park Canvas Osaka Kitahama

The Royal Park Canvas Sapporo Odori Park

Location

Osaka, Osaka

238

Jun. 2019

The Royal Park Hotel Iconic Osaka Midosuji

Osaka, Osaka

352

Mar. 2020

The Royal Park Canvas Kobe Sannomiya

Kobe, Hyogo

170

Jan. 2021

The Royal Park Hotel Kyoto Umekoji

Kyoto, Kyoto

246

Mar. 2021

The Royal Park Canvas Kyoto Nijo

Kyoto, Kyoto

180Jun. 2021

The Royal Park Canvas Sapporo Odori Park

Sapporo, Hokkaido

134

Oct. 2021

The Royal Park Hotel Iconic Kyoto

Kyoto, Kyoto

130

Apr. 2022

Ginza 6-chome Hotel ProjectChuo, Tokyo

160

Fall 2022

Nagoya Sakae Hotel Project

Nagoya, Aichi

250

FY2025

Hotel Development Business
Name

Hilton Okinawa Miyakojima Resort

MITSUBISHI ESTATE CO., LTD.

Number of Rooms

Construction Begins

Open

The Royal Park Hotel Kyoto Shijo

Kyoto, Kyoto

Location

127

Jul. 2016

Apr. 2018

MJ HOTEL Asakusa

Taito, Tokyo

166

Mar. 2017

To be determined

The Royal Park Canvas Kobe Sannomiya

Kobe, Hyogo

170

Sep. 2019

Jan. 2021

The Royal Park Hotel Kyoto Umekoji

Kyoto, Kyoto

246

Jun. 2019

Mar. 2021

MJ Hotel Asakusa Kaminarimon

Taito, Tokyo

51

Dec. 2019

Apr. 2021

The Royal Park Canvas Sapporo Odori Park

Sapporo, Hokkaido

134

Mar. 2020

Oct. 2021

MJ HOTEL Kyoto Okazaki

Kyoto, Kyoto

60

Feb. 2020

Jan. 2022(Tentative name) Naha-shi Nishi 1-chome project

Naha, Okinawa

143

Sep. 2020

Spring 2022

(Tentative name)
Sendai-shi Aoba-ku Chuo 4-chome Hotel project

Sendai, Miyagi

224

Oct. 2020

Summer 2022

Hilton Okinawa Miyakojima Resort

Miyakojima, Okinawa

329

Feb. 2021

FY202459

Residential Business

MITSUBISHI ESTATE CO., LTD.

60

Residential Business1. Condominium Business Data #1
In FY2022, sales will be flat YoY, and deliveries will be scheduled in the 2nd half.
Gross margin improved and inventories are on a downtrend.
FY2021-3Q(Results)

FY2021(Results)

FY2022-3Q(Results)

FY2022(Forecasts)

Condominiums
Sold(millions of yen)

95,822

203,513

93,524

212,000

Condominiums
Sold(units)

1,624

3,476

1,353

3,000

Gross Margin

19.2%

Inventory (units)
New Supply of
Condominiums(units)Land Bank
Breakdown in ReportingTerm(As of December 31, 2021)

6,800

6,300

240
1,655

18.7%
213
2,350

19.2%
62
1,475

21.0%
1,820

4,200

Total: 17,300 units
FY2022 - FY2024
FY2025 - FY2027
FY2028 -MITSUBISHI ESTATE CO., LTD.

61

Residential Business

2. Residential Condominium Business #2
Scheduled for delivery in FY2022
Name (project name)

The Parkhouse Mita Garden Residence & Tower

The Parkhouse Takanawa Tower

Location

Site area

Total units

Scheduleddelivery

The Parkhouse Mita Tower

Minato, Tokyo

1,900㎡

111

May 2021

The Parkhouse Ichikawa 2-chome

Ichikawa, Chiba

2,000㎡

57

Nov. 2021

The Parkhouse Ichigaya Kagacho Residence

Shinjuku, Tokyo

5,800㎡

228

Nov. 2021

The Parkhouse Mita Garden Residence & Tower

Minato, Tokyo

5,200㎡

266

Dec. 2021

The Parkhouse Shin-Urayasu Marine Villa(Stage 1)

Urayasu, Chiba

47,100㎡*

234

Jan. 2022

The Parkhouse Takanawa Tower

Minato, Tokyo

2,000㎡

164

Jan. 2022

The Parkhouse Musashino KyonanchoMusashino, Tokyo

2,700㎡

82

Jan. 2022

The Parkhouse Nagoya(Stage 1)

Nishi, Nagoya

18,100㎡*

314

Jan. 2022

The Parkhouse Asakadai Residence

Asaka, Saitama

2,300㎡

64

Feb. 2022

The Parkhouse Komazawa Residence

Setagaya, Tokyo

2,700㎡

69

Feb. 2022

The Parkhouse Kamakura

Kamakura, Kanagawa

1,100㎡

23

Feb. 2022

The Parkhouse Kyodo Residence

Setagaya, Tokyo

3,200㎡

91

Feb. 2022

The Parkhouse Tokorozawa Place

Tokorozawa, Saitama

2,400㎡

104

Feb. 2022

The Parkhouse Yokohama Shin Koyasu Front

Yokohama, Kanagawa

7,400㎡

180Mar. 2022

The Parkhouse Miyazakidai

Kawasaki, Kanagawa

4,500㎡

123

Mar. 2022

The Parkhouse Saitama Shin-Toshin

Chuo-ku, Saitama

1,500㎡

109

Mar. 2022*Total occupying area

MITSUBISHI ESTATE CO., LTD.

62

Residential Business3. Condominium Business Data #3
Quarterly Distribution of Sales by Agreement Date
(Millions of yen)

260,000
240,000
220,000
200,000
180,000
160,000

254,140
238,924
96.5%
89.3%

93.0%

80.7%

84.7%

66.1%

140,000
120,000

203,513202,876
94.8%

73.1%

85.0%

59.2%

70.7%

92.6%

99.6%
92.7%
86.2%

81.2%
69.9%
64.0%

100,000

212,000(F)

65.8%

51.4%

80,00060,00040,00020,000
0

18/3

19/3

Full-year sales

MITSUBISHI ESTATE CO., LTD.

20/3

End of 3Q

End of 2Q

21/3

End of 1Q

22/3

Beginning of FY

63

Residential Business4. Condominium Market Data
Number of New Supplies/Average Prices (the Greater Tokyo Area)(Unit)(Average price/Millions of yen)

120,000

60.8

60

100,000

50

80,00040

60,00030

40,00032,00027,22820

20,00010

001999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(F)
Number of new supplies

Average priceSource: Real Estate Economic Institute Co., Ltd.

MITSUBISHI ESTATE CO., LTD.

64

Residential Business

5. Redevelopment Projects andLarge-scale Development Projects

6. Rental Apartment Business

Redevelopment Projects and Large-scale Development Projects

Trends in Gain on Sale

*Only major projects are listed
Scheduled
Delivery

Location

Project Name

Total Units(Billions of yen)

Atsugi, Kanagawa

The Parkhouse Hon-Atsugi Tower

163

FY2021

Chiba, Chiba

Makuhari Bay Park Sky Grand Tower

826

FY2023

Yokohama, Kanagawa

Land Readjustment Project (H block) in West
District around Kawawa-cho Station

183

FY2023Kita, Tokyo

Maintenance project of Kami-Jujo 1-chome 4banchi Disaster prevention zone

43

4.0

Shinagawa, Tokyo

Togoshi 5-chome, 19 District Redevelopment
Project

Approx. 240

2.0

Yokosuka, Kanagawa

In Front of Oihama Station Type 1 Urban Zone
Redevelopment Project

Approx. 300

Minato, Tokyo

Mita Koyama-cho Nishi area Type 1n Urban
Zone Redevelopment Project

Approx. 1,200

Chuo, Tokyo

Toyomi area Type 1 Urban Zone
Redevelopment Project

Approx. 1,700

Chiyoda, Tokyo

Kanda-Ogawamachi 3-chome West-side South
area Type 1 Urban Zone redevelopment
Project

Approx. 110

Total

Approx. 23,300

After FY2025

The Parkhouse Hon-Atsugi Tower
MITSUBISHI ESTATE CO., LTD.

Approx. ¥12.0

FY2021

10.0

11.0

8.0

7.0

46%
(39 buildings)
Assets in Operation
54%(28 buildings)

1.0
18/3

117 billion

Assets under Development

10.0

6.0

0.0

Total Assets

19/3

20/3

21/3

*Trends in capital gains for Residential Business

The Parkhabio Kiba

(End of March 2021)*Ratio by value

Parkhabio Akasaka Tower

65

International Business

MITSUBISHI ESTATE CO., LTD.

66

International Business1. International Business Strategy
FY2021
29%

Asia2030 Target

US

Towards 2030 Target

16% Expand Asia development businessBusiness Profit:¥37.9 bn13%

 Annual investment: Approx. ¥200–250

bn

Total Asset:¥929.8 bn
21%

Europe71%

 1st half of 2020s: Profit increase with50%

asset accumulation

Business Profit:
Approx. ¥90 bn

35%

40%
45%
45% Total Asset:
Approx. ¥1.5 tn(2030 target)(2030 forecast) 2nd half of 2020s:

15%
20%

Balance investment and return

ROA：Approx. 6%

ROA：Approx. 4.2%
Strategies①Asia②Europe Increase investments, build capital
recycling portfolio
 Two approaches:①Development with major stakes②Joint businesses with local partners＜Expected Return from Investment＞
IRR

Developed countries
Developing countries

MITSUBISHI ESTATE CO., LTD.

8-10%
10+%

③US

 Investment and return to optimize profit
stability and capital efficiency
 Advance mainly large-scale**8 Bishopsgate, 60-72 Upper Ground＜Expected Return from Investment＞
IRR

8-10%

 Strengthen capital recycling business andcapitalize on RGII* know-how
 Promote joint ventures with local partners*Rockefeller Group International, Inc.

＜Expected Return from Investment＞
IRR

8-10%

67

International Business2. International Assets/Ongoing Projects
Many ongoing developments (rentals and for-sale housing) are expected to make early profit
contributions.
International Assets

Major Ongoing Projects(at the end FY2021)

Property Name*Book Value:¥764 bn
Asia

17%

31%

30%
22%
US (Manhattan)

US (Other)

EuropeAsia

EuropeUS(Tentative name)
8 Bishopsgate project
MITSUBISHI ESTATE CO., LTD.

Singapore

Indonesia (Jakarta)
The Philippines (Manila)
Myanmar (Yangon)
Australia (Sydney)

One City Centre

Thailand (Bangkok)

China (Hangzhou)

Warwick Court (Large-scale redevelopment) UK (London)(Tentative name) 8 Bishopsgate
UK (London)*Inventories + Equity Investments + Tangible Fixed Assets

1271 Avenue of the Americas

Location

CapitaSpring
ALPHA PARK
（Previous PJ name：Singapore-Hangzhou
Science & Technology Park 3rd）
Trinity Tower
Savya Financial Center North Tower
Yoma Central (4 buildings total)
180 George Street

CapitaSpring

Trinity Tower

Use

Completion

Area / Units*1

2021*293,400㎡

Office2021

172,300㎡

Multi-use
OfficeMulti-use
Office2021
2022

Multi-use

2022

75,000㎡*324,600㎡*2212,700㎡
60,000㎡

Office2022

61,000㎡

Office2022

19,000㎡

Office2022

53,000㎡

2022

196 units

TBD

The Fold

UK (London)

Rental apartment

60-72 Upper Ground (ITV The London
Television Centre)

UK (London)

Multi-useMiddlesex

US (New Jersey)

Logistics facilities

2021

37,200㎡

Stateline 77

US (South Carolina)

Logistics facilities

2022

93,500㎡

Hanover

US（Pennsylvania）

Logistics facilities

2022

42,100㎡

55 Paradise

US（New York）

Logistics facilities

2023

16,000㎡

Virginia Data Center (Bldg.1 & Bldg.2)

US (Virginia)

Data center

Liv Crossroads

US (Arizona)2020s 2nd half

TBD

2023, 2024

51,000㎡

Rental apartment

2022

356 units
360 units

Liv Laveen

US（Arizona）

Rental apartment

2023

200 East 83rd Street

US（New York）

Condominium

2023

86 Units

1158 Delaware Street

US（Colorado）

Rental apartment2024

250 units1072 West Peachtree

US（Georgia）

Multi-use

2024

600 Fifth Street

US（Washington, D.C.）

Office2025*1Leasable area or # of units *2Total floor area*2*2

46,900㎡
36,700㎡*3Area for sale

* # of units MEC owns

68

International Business3. International Assets/Ongoing Projects
In Asia, the land bank has been built up and deliveries are strong in the for-salehousing market.
Property Name
Location
Total units
MEC's share Completion
Land Bank of For-Sale Housing in Asia
350

300

400

*Based on MEC's shares

50

550
1,250

5,800

2,000

ThailandChina

Indonesia

VietnamPhilippines

Malaysia

Australia

OthersTotal: 10,700 units
Number of Housing Units for Sale by Completion Year
Units

5,000

4,300

4,000

*Based on MEC's shares

4,100

3,000

1,900

2,000
1,000
0

FY2022-2023

ThailandChina

FY2024-2025
Indonesia

Australia

Southeast Asia
Life Asoke Hype

Thailand (Bangkok)

1,253

49%

2021

Life Ladprao Valley

Thailand (Bangkok)

1,140

49%

2021

RHYTHM Ekkamai Estate

Thailand (Bangkok)

303

49%

2022

Life Sathorn Sierra

Thailand (Bangkok)

1,971

49%

2022

RHYTHM Charoenkrung Pavillion

Thailand (Bangkok)

421

49%

2022

The Address Siam-Ratchathewi

Thailand (Bangkok)

880

49%

2023

Life Rama 4

Thailand (Bangkok)

1,237

49%

2024

GEMS

Malaysia (Selangor)

676

45％

2023

Sora gardensⅡ

Vietnam (Binh Duong Province)

560

45%

2021

Oasia(Previously:L34)

Vietnam (Dong Nai Province)

502

49%

2023

DAISAN

Indonasia (Kota Tngerang)

1,767

49%

2024

Kizuna Heights

Philippines (Manila)

1,036

40%

2026

East Asia
Vanke・Nantong

Nantong, Jiangsu

1,170

25%

2021

Vanke・Wuxi

Wuxi, Jiangsu

1,556

25%

2021

Zhongnan/County Garden
Cullinan

Haimen, Jiangsu

1,424

25%

2021

Hainan・Amoy

Xiamen, Fujian

311

25%

2021

Taiwan・Ruentex feng hui

New Taipei City, Taiwan

220

30%

2021

Vanke・Metropolis Seasons

Changzhou, Jiangsu

1,408

20%

2022

Zhongnan・Southern Shore
MansionHuainan, Anhui

1,665

30%

2023

Taiwan・De you xiu chuan

Taoyuan, Taiwan

124

30%

2024

Weifeng・Elegant Residence

Changchun, Jilin

1,016

14%

2024

Weifeng・Sunrise Building

Changchu, Jilin

1,782

13%

2024

Australia (Sydney)

R1 : 315
R2 : 322

R1 : 25%
R2 : 25%

2024

FY2026-

Oceania

OthersOne Sydney Harbour R1/R2

All data are as of March 31, 2021
MITSUBISHI ESTATE CO., LTD.

69

Investment Management Business

MITSUBISHI ESTATE CO., LTD.

70

Investment Management Business1. Investment Management Business：Global Platform
Japan Real Estate Asset Management Co., Ltd.

EuropeUnited States

TA Realty

Europe Capital

Asia-Pacific
MEC Global
Partners Asia

CLSA Real Estate

Carry out marketing and research and establish funds worldwide

Provide global opportunities to worldwide investors

Japan
Groupwide
Synergy

Japan Real Estate AssetManagement Co., Ltd.
Mitsubishi Jisho
Investment Advisors, Inc.

Established in 2000. Entrusted with asset management of"Japan Real Estate Investment Corporation," the first J-REIT
listed in Japan in September 2001. Mainly invests in office bldgs.

Mitsubishi Jisho Investment Advisors, Inc.
Established in 2001. Provides a wide range of real estate
investment products to institutional investors in Japan andoverseas based on the know-how and resources accumulatedby the Mitsubishi Estate Group. Manages listed REITs, private
REITs, and private funds.

TA Realty (North America)
Established in 1982. A leading real estate investment
management company in the U.S. with funds that invest in adiverse range of real estate, including office, logistics,
residential and retail properties in major cities across the U.S.
Acquired in 2015 and became a subsidiary.

Europa Capital (Europe)
Established in 1995. Based in the U.K., manages funds thatinvest in office, residential, commercial and logistics properties
throughout Europe. Acquired a stake in the company in 2010,
making it a subsidiary.

MEC Global Partners Asia (Asia, Oceania)
Established in 2017 (name changed in 2021). Based in
Singapore, manages core-plus private funds that invest in panAsia.

Mitsubishi Estate Group's network
for investment & development and management & services

MITSUBISHI ESTATE CO., LTD.

CLSA Real Estate (Asia, Oceania)
Managed pan-Asian value-add private funds since 2004;
acquired and became a subsidiary in 2019.

71

Investment Management Business2. Investment Management Business：Increase in Assets under Management (AUM)
Stable increase in AUM
Total AUM in Japan and overseas grew to ¥4 tn (as of end of Sep. 2021)(Increase of ¥0.9 tn from the announcement of the Long-Term Management Plan)At the time of the announcementof the Long-Term Management Plan

Mid-2020s

As of end of Q2 FY2022
Domestic: As of end of Sep. 2021, Overseas: As of end of June 2021

(Billions of yen)

Asia & Oceania
130
Asia & Oceania
Europe
490

JRE
1,070

Europe
JRE

Overseas

Total:US ¥Approx. 3.1 tn

OverseasJapan

Total:¥Approx. 4 tn
US
1,400

OverseasJapan

Targeting ¥5 tn
by the mid-2020s

Japan

MJIA
920

MJIA

MITSUBISHI ESTATE CO., LTD.

72

Investment Management Business3. Investment Management Business：Breakdown of Operating Revenue by Area
Factors affecting profit growth in FY2022 related to the revision of forecasts
Significant increase of ¥21 bn from the previous forecast. The main factor was the recording of future fees* associated with an increase in the market
value of real estate in value-added funds in the U.S. and other countries.

Investment Management Business – Business Profit【*Recognition of future fees associated with increased market
value of real estate in funds in the U.S. and other countries】

350• For some funds, incentive fees are established in which the management company
receives a portion of the excess over expected returns.

¥28.0 bn300

EuropeAsia

250• Although it will contribute fully to operating revenue and operating profit, its
contribution to profit attributable to owners of parent will be limited (no cash outflow at
this time) because a portion will be posted as profit attributable to non-controllinginterests in the form of contingency fees to the officers and employees of the asset
management company.

200

US
150

50

MJIA

JRE

JRE

Other

Other

Previous forecasts

Revised forecasts

Asia

(50)

MITSUBISHI ESTATE CO., LTD.

*This is a general description and may differ from the designof our funds.

ExcessExpected returns

EuropeUS
MJIA【Accounting procedures】
Returns calculatedusing market valuations¥7.0 bn

1000• Such fees are received near the end of the fund as returns are determined, but inaccounting, the company updates returns as needed using market valuations of realestate and records the fees it expects to earn as operating revenue each period (nocash inflows at this time).

Dividends to investors

Excess dividend toinvestors

Revenues received byasset managementcompany
Recorded in operating revenue as
future fees associated withincreased market valuation(vs. Previous forecasts: +￥18.8 bn)

73

Investment Management Business4. Investment Management Business：（Reference）Classification of Funds
Classification by Asset Liquidity
Open-end

Closed-end

A type of REIT or fund that allows investors to withdraw their investment in REIT units or funds upon request.
Examples： Private REITs

A type of REIT or fund that does not allows investors to withdraw their investment in REIT units or funds uponrequest.
Examples： Listed REITs… Secure liquidity by trading in the market

Private funds … Acquire and manage real estate with a set investment and management period of several years,
and eventually sell it to distribute returns to investors

Classification by Fund Strategy (Source: Website of the Association for Real Estate Securitization)Core

The fund aims to generate a target return mainly from rental income returns by income-producing property
investments.

Core-plus

Same as Core Fund, the fund aims to generate a target return mainly from rental income returns, but somefrom capital returns.

Value-added*Capital return is not considered as a main target return, but the fund takes a low to medium market risk.

The fund aims to generate a target return mainly from rental income returns as well as capital returns byincreasing the yield and value of undervalued properties.
*Generally, the value-added strategy has a higher risk than the Core and Core-plus strategy because the fund often invests
in low yield properties with some physical obsolescence.

Opportunistic

MITSUBISHI ESTATE CO., LTD.

The fund aims to generate a target return mainly from capital returns by trading properties based on themarket forecast.
*This is a higher risk strategy including adaptive reuse, bulk trade and M&As.

74

Investment/Financial Data, etc.

MITSUBISHI ESTATE CO., LTD.

75

Investment/Financial Data, etc.

1. Net Interest-Bearing Debt/EBITDA Ratio(Billions of yen)

11.0

2,500.0(Times)10.0
9.0

2,000.0

7.3
6.7

1,500.0

1,000.0

6.6

6.7

2,194.8
2,019.8

6.1

6.1

2,140.2
1,965.2

2,216.8
2,041.8

7.1

6.6
2,353.8

6.9

6.5
2,620.0
2,462.5

8.0
7.0
6.0
5.0
4.0

2,196.3

3.0
500.0

2.0
1.0

0.0

FY2018FY2019Net interest-bearing debt
Debt/EBITDA ratio (right axis)

MITSUBISHI ESTATE CO., LTD.

FY2020

FY2021

FY2022(F)0.0

Net interest-bearing debt
*after hybrid debt deductions
Debt/EBITDA ratio (right axis)*after hybrid debt deductions76

Investment/Financial Data, etc.

2. Breakdown of Interest-Bearing Debt
(Billions of yen)

3,000

95.0%

96.1%

93.7%

96.4%

95.1%

93.4%

2,500

6.8

5.6
100.0

2,000

61.8%

28.0

10.2
8.3

1,500

100.0

9.5

35.0

53.1%
1,292.9

54.0%

1,261.9

1,072.3

7.2

60.1%

95.4%

93.6%

73.2%

69.7%

4.7

93.2%

4.5
100.0
76.2%

50.0

92.4%
50.0
1.9

100.0

2.0

100.0
83.2%

76.4%

1,523.0

1,428.5

1,406.0

1,450.7

1,563.2

1,208.8

0

Total

30%
250.0

250.0

250.0

250.0

215.0

747.2

701.5

685.2

653.0

612.7

603.8

558.9

577.1

595.7

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

1,716.8

2,085.4

1,973.0

1,929.3

2,291.0

2,396.9

2,481.6

2,319.5

2,429.8

2,526.1

Straight bond

MITSUBISHI ESTATE CO., LTD.

Subordinated bondBank Loan

50%
40%

250.0

636.2

80%

60%

1,000

500

90%

70%

64.1%
1,381.2

100%

Subordinated loan

CP

Lease liability

Fixed ratio

20%
10%
0%

Long-term ratio

77

Investment/Financial Data, etc.

3. Interest-Bearing Debt: Procurement Interest Rates/
Average Duration of Interest-Bearing Debt (Unconsolidated)(Year)

10

2.5%

9

8.16

8
7
6
5

1.88%
5.91
1.42%

1.88%
1.72%
5.45
1.40%
1.27%

4
3

5.55

1.05%

5.58

5.45

1.54%

1.55%

0.72%

1
0

FY2010FY2011FY2012FY2013
Average duration of interest-bearing debt

MITSUBISHI ESTATE CO., LTD.

1.38%

1.52%

1.32%

7.23

0.96%
0.70%

0.62%

0.96%

1.5%
1.24%
1.14%

0.61%

FY2014FY2015FY2016
Bonds/Average interest

0.95%

0.66%

0.97%
0.75%

2.0%

6.69

1.07%

0.87%

2

6.18

1.41%
1.05%

1.01%

5.71

6.36

6.79

0.92%
0.71%

FY2017FY2018FY2019Bank loans/Average interest

0.84%
0.68%

1.09%
1.0%
0.78%
0.63%
0.5%

FY2020
FY2021
Total/Average interest

78

Investment/Financial Data, etc.

4. Segmentation Changes from April 1, 2020
Current Segments
Office Building Business
Lifestyle Property
Business
Residential Business
International Business
Investment Management
Business
Hotel & Airport BusinessArchitectural Design &Engineering Business①:Integration of
three businesses②:Integration of international
residential business into
International Business③:Integration of disclosure
segments

From FY2021
Commercial Property
Business
Residential Business
International Business
Investment Management
Business
Architectural Design &Engineering Business andReal Estate Services
Business
Other Businesses

Commercial Property
Business Group
Office Building Business
Outlet Mall Business
Retail Facility Business
Logistics Facility Business
Hotel Development Business
Hotel Operation BusinessAirport Operation Business

International
Business Group

Real Estate Services
Business

International Commercial Property

Other Businesses

International Residential BusinessBusiness<Purpose of Changes>① The Office Building, Lifestyle Property, and Hotel & Airport business units will be merged to strengthen capabilities for increasing cross-segment
projects.
② International Residential business will move from the Residential Business segment to the International Business segment to consolidate
international project expertise.
③ Architectural Design & Engineering Business, and Real Estate Services Business are integrated as Other Businesses for simplified disclosure.

MITSUBISHI ESTATE CO., LTD.

79

Overview of the "Long-Term Management
Plan 2030"

MITSUBISHI ESTATE CO., LTD.

80

Overview of the "Long-Term Management Plan 2030"

1. New Management Plan: Objectives*Repost from the "Long-Term Management Plan 2030"

Mitsubishi Estate Group’s Mission:
Creation of a truly meaningful society through urban development
2030 Target
Address Four key themes*
to realize a sustainable
society*「Environment」「Diversity & Inclusion」「Innovation」「Resilience」

Fundamental Approach

Increasing
SocialValue

Increasing
Shareholder
Value

Create value for every
stakeholder including visitorsand employees

2030 Target

A pair of driving wheels

Synergy

ROA

ROE

5%

10%

EPS
¥

200

Fundamental Approach
Transformational
improvements to thebusiness portfolio's efficiency
and market resilience

Realize our mission and sustainable growthby increasing both social value and shareholder value
MITSUBISHI ESTATE CO., LTD.

81

Overview of the "Long-Term Management Plan 2030"

2. Quantitative Target - 2030 Target*Repost from the "Long-Term Management Plan 2030"

2030 Target
ROA*1

ROE

EPS

5％

10％

¥200

*1 ROA ＝ Business Profits*2 / Total Asset (average of opening/closing balances)

Key Assumptions
Profit Growth

Shareholders Returns

Financial Stability

Current framework*

Maintain

Business Profit*2• Payout ratio:
Approx. 30%¥350–400 bn• Share buybacks+(when determined to be an
optimal use of funds)

current level ofcredit ratings【Reference】
R＆I：AAS＆P：A＋
Moody‘s：A2* Will adjust to business conditions*2 Business Profit= Operating Income + Equity in earnings (loss) unconsolidated subsidiaries and affiliates

MITSUBISHI ESTATE CO., LTD.

82

Overview of the "Long-Term Management Plan 2030"

3. 2030 Targets: Realization Plan (ROA・ROE・EPS)
Current (FY20)*Repost from the "Long-Term
Management Plan 2030"

2030 Target

Business Profits

Increase of ¥120–170 bn¥350-400 bn¥230.5 bn

Approx. ¥50bn growth from each of: domestic
asset, international asset, non-asset business(EPS: ¥200)<Assumption of total asset changes>(EPS: ¥100.2)

Total Assets【 Flexible capital policy 】

Business Profits

Total Assets¥5.9 tn

Approx. ¥7-8 tn

Optimize investments, assets sales, shareholder
return and financing according to market
conditions

Expected net increase: ¥1-2 tn＝

ROA: 3.9%

ROA: 5%
With current leverage

ROE: 7.8％
MITSUBISHI ESTATE CO., LTD.

Increase Net investment: Approx. ¥2–3 tn
Decrease Depreciation: Approx. ¥1 tn

ROE: 10％83

Overview of the "Long-Term Management Plan 2030"

4. Capital Policy - Responsive to Market Conditions*Repost from the "Long-Term
Management Plan 2030"

Flexible capital policy - Responsive to market conditions(Value creation through BS management)
Optimize mix of investment, asset sales, shareholders returns,
and financing in response to the market
Sellers' market
Asset Sales:

Profits:

Shareholder return:Buyers' market
Active acquisition/investment

To maximize mid-to-long value, we combine:
1. stable CF from long-term development PJs and asset holdings Capital gain
2. capital recycling business in response to the market.

::

Shareholders return:

MITSUBISHI ESTATE CO., LTD.

84

Overview of the "Long-Term Management Plan 2030"

5. Value creation through BS management*Repost from the "Long-Term Management Plan 2030"

Flexible Capital Policy - Responsive to market conditions(Value creation through BS management)
Asset

Shareholders’ Equity and Liability

Capital recycling business optimized
for market conditions

Maintaining Financial Stability

 In seller's market: expedite asset sales Financial reserves for seizing buyer's market opportunities

 Invest in promising PJs to enhance corporate value

 High credit rating enables long-term and low-cost financing

Long-term development and asset holdings(core focus: Marunouchi redevelopment)

 Steady capital investment in core business enables stable,
cycle-proof rental cashflow
 Timely asset sales judged by expected yields and external
environment

Sale of underperforming properties andstrategic-holding stocks
 Disposal of underperforming assets, including core asset
 Ongoing disposal of strategic-holding stocks

Expansion of Non-asset Business

MITSUBISHI ESTATE CO., LTD.

 In sellers' market, use asset sale proceeds for shareholder
returns and to maintain financial stability

Capital Efficiency Improvement
 Targets: ROA 5%, ROE 10%, EPS ¥200
 Increase numerator (net income) and decrease denominator(shareholders’ equity) Choose measures to manage shareholders’ equity according
to market conditions

85

Overview of the "Long-Term Management Plan 2030"

6. Capital Allocation Policy
Cash inFinancialcapacity*Repost from the "Long-Term Management Plan 2030"

Cash out
Strategic
Allocation
investments/
shareholder
return/suppression ofdebt

Strategic allocation to improve medium- to longterm capital efficiency
 Allocate capitals based on market conditions
 Select projects which help to increase shareholder value

Capital recycling business expected returns (pre-tax IRR)

Domestic: 6-8％
International (developed countries) : 8-10％
International (developing countries) : 10+％
*Expected return from total investment in each business

Cash flowfromoperatingactivities

Plannedinvestment &return* Including undetermined projects. See p. 40 for the next three-year forecastBaseshareholders
returnMITSUBISHI ESTATE CO., LTD.

Planned projects – return through asset sales (book value)

Payout ratio: Approx. 30％* Shareholder return method and scale will be adjustedwith real estate and financial market conditions, stock price, and ROE/EPS

86

Overview of the "Long-Term Management Plan 2030"

7. Profit Growth Strategy - 2030 Vision
Profit changes vs FY2020*① Domestic AssetBusiness

Approx. +¥50 bn(FY20E*: Approx. ¥ 201.0 bn)② International AssetBusiness

Approx. +¥50 bn(FY20E*: Approx. ¥ 36 bn)③ Non-asset BusinessApprox. +¥50 bn(FY20E*: Approx. ¥ 16 bn)④ Fluctuation Factors
Approx. ±¥20–30 bn* Composition of FY20 Business(round number)

MITSUBISHI ESTATE CO., LTD.

*Repost from the "Long-Term Management Plan 2030"

Growth Strategy① Advance “Marunouchi NEXT Stage” project② Increase NOI with development projects③ Optimize capital recycling business to market conditions④ Optimize residential business profit structure① Expand development business in Asia
② Enhance development business and revenue base in Europe③ Enhance and diversify US capital recycling business① Steady profit growth in existing businesses② Utilization of technology③ Provision of service contents focusing on B2C/B2B2C・Asset sales control in response to market conditions
・Capital gain and rental profit fluctuation due to investment opportunities

Profits = ① Domestic Asset + ② International Asset + ③ Non-asset Business + Eliminations or corporate(¥ 201.0 bn)(¥ 36 bn)(¥ 16 bn)(▲ ¥ 23 bn)

87

Overview of the "Long-Term Management Plan 2030"

8. Roadmap for Profit Growth
Early stage

Domestic
Asset
Business

International
Asset
Business

Non-asset
Business

MITSUBISHI ESTATE CO., LTD.

*Repost from the "Long-Term Management Plan 2030"

Middle stage

Advanceredevelopment projects

Late stage

Redevelopment Projects’ Contribution• Complete Tokiwabashi A Bldg.
• Open & expand outlet mall
• Asset sales and reconstruction of existing buildings (willlower rental profits)• Temporary decline in the condominium units sold

• Long-term developments, e.g. Tokiwabashi B Bldg.
• Residential redevelopments

Profits scale with asset accumulation

Stabilize profits via capital recycling• 1271 Ave. of the Americas renewal, 8 Bishopsgate
completion• Stabilize Asia condominium business• Expand assets in Asia capital recycling business

Promoting commercialization in new domains• Stable growth in existing businesses• Promoting commercialization in new domains• Shift from asset expansion to recycling• Stabilize capital recycling business in Asia

Accelerate profits in new domains• Stable growth in existing businesses• Accelerate profits in new domains

88Overview of the "Long-Term Management Plan 2030"

9. Three Year Investment Return Plan (FY2021-FY2023)*Repost from the "Long-Term
Management Plan 2030"(Billions of yen)

3-Year Total

Composition
Planned Investments and Return
Domestic Asset

International Asset

Strategic Allocation
600(investments/shareholders return/suppression of debt)
Investment

Outlet mall,
Capital Recycling asset,
And Others

Plannedinvestments

Condominium

1,500

Marunouchi
area

150
0

ReturnMITSUBISHI ESTATE CO., LTD.

150

Vary investment allocation
for medium- to long-term
capital efficiency

600

Europe and
US
Asia

100

200
Aim for international profit
growth

500
300

Net
Investment

Disposeunderperforming assets
for capital efficiency

550

Asset sales plan assumes
market conditions of previous
three years

100～200

Strategic
Allocation

500

Return1,100Strategic Return

Strategic
Return

0

250

100

0

200

100～200

0-100～-200

～600

89

Contact Information
Investor Relations Office,Corporate Communications Department
Mitsubishi Estate Co., LTD.
+81-3-3287-5200
https://www.mec.co.jp/<Disclaimer>
Information on the properties of this material is based on the judgments made from information available at thepresentation date of this material.
Please be aware that actual information can result in different results depending on various factors.

MITSUBISHI ESTATE CO., LTD.