FY 2019 - 2Q

(For the Year Ending March 31, 2019)

IR Presentation

Contents

MITSUBISHI ESTATE CO., LTD.

Summary of Financial Statements for FY 2019 - 2Q

2

Summary of Financial Statements for FY 2018
and Progress of Mid-Term Management Plan

11

Office Building Business

24

Lifestyle Property Business40

Residential Business

45

International Business

52

Others57

Investment / Financial Data

61

1

Summary of Financial Statements for
FY 2019 - 2Q

MITSUBISHI ESTATE CO., LTD.

2

Financial Highlights

1. Income Statement Results for FY2019-2Q
Resulted in overall increase from capital gains, building rental profits, and condominium profits.
Millions of yen (rounded down)

Revenue from Operations
Office Building Business
Lifestyle Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Office Building Business
Lifestyle Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue
Non-Operating Expense
Income before Taxes and Special
Items
Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

EBITDA
Interest-bearing debt

FY2019-2Q
577,289274,266
51,626
182,005
27,778
11,09043,398△ 12,878
106,891
76,778
14,694
13,442
10,7602,336△ 63△ 11,057
5,835
18,719FY2018-2Q
485,838
226,054
50,242
131,628
38,963
11,70338,993△ 11,749
84,27867,962
14,373△ 1,760
10,6493,056
1,146△ 11,149
5,694
16,011

94,00773,961

20,045

3,118
61,812

2,134
41,729983
20,082

Change91,451
48,211
1,384
50,376△ 11,184
△ 612
4,404
△ 1,128
22,6128,815
320
15,202110△ 719△ 1,209
92
141
2,708

Millions of yen (rounded off
to the nearest billion)

FY2018-2Q
12,000
1,000
2,000
1,000
6,000
1,000
1,000
-

Change9,000
8,000△ 1,000
4,000△ 1,0000△ 1,000-

Major Factors for Changes in
Operating Income by Business

OfficeBuilding
8,815

Lifestyle
Property
320

International Others
110△ 1,836
Residential
15,202

106,891
Increase in condominium profits and capital gains

84,278Millions of yen (rounded down)

FY2019FY2018-2Q-2Q
151,179
128,586
2,482,276 2,474,831

Increase in rental profits and capital gains

Change22,593
7,445*Hotel・Airport Business, Architectural Design & Engineering, Real Estate Services, OtherMITSUBISHI ESTATE CO., LTD.

Capital Gains included in Operating Income
FY2019-2Q
Total
21,000
Office Building Business
9,000
Lifestyle Property Business
1,000
Residential Business
5,000International Business
5,000
Investment Management Business
1,000
Hotel & Airport Business
Other
Eliminations or corporate-

FY2018-2Q

OfficeBuilding

Lifestyle
Property

Residential International

Others

FY2019-2Q

3

Financial Highlights

2. IncomeStatement Estimates for FY2019* There is no change in the FY2019 earnings estimates announced on May 14, 2018.
Increase in income gains and stable capital gains contributes to achieving the highest profits inconsecutive three fiscal years.
Millions of yen (rounded off
Millions of yen (rounded down)※New Segment
Revenue from Operations
Office Building Business
Lifestyle Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Office Building Business
Lifestyle Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue
Non-Operating Expense
Income before Taxes and Special
Items
Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

EBITDA
Interest-bearing debt

FY2019FY2018Estimates
Results
1,290,000 1,194,049
545,000
506,161
113,000
97,920440,000
410,598
74,00086,92545,00022,66599,00096,773△ 26,000 △ 26,996
215,000
213,047
148,000
147,243
31,00028,07923,00023,86025,00024,147
5,000
4,596
5,500
8,162
△ 22,500 △ 23,043
10,00010,44734,00032,988Change95,951
38,83915,08029,402△ 12,925
22,335
2,227
996
1,953
757
2,921
△ 860
853
404
△ 2,662
543
△ 447
1,012

191,000

190,506

494

9,000
4,000
123,000

14,71913,768120,443△ 5,719△ 9,768
2,557

Millions of yen (rounded down)

FY2019FY2018Estimates
Results
303,000
302,424
2,640,000 2,481,675

576
158,325

to the nearest billion)

FY2018Results
39,00016,0002,000
1,000
15,000
1,000
3,000
1,000
-

Change0△ 4,000

4,000

Major Factors for Changes in
Operating Income by BusinessContribution of profits from Hybrid
Investment Model

OfficeBuilding
757

International
853
Lifestyle Residential
Others△860
Property△ 1,715
2,921
Decrease in condominium profits

213,047

Change*Hotel・Airport Business, Architectural Design & Engineering, Real Estate Services, OtherMITSUBISHI ESTATE CO., LTD.

Capital Gains included in Operating Income
FY2019Estimates
39,000Total
12,000
Office Building Business
Lifestyle Property BusinessResidential Business
International Business
27,000Investment Management Business
Hotel & Airport Business
Other
Eliminations or corporate

215,000

Increase in capital gains
Increase in rental profits

FY2018ResultOfficeBuilding

Lifestyle
Property

Residential International

Others

FY2019Estimates
4

Financial Highlights

3. Balance Sheet
Millions of yen (rounded down)

Current assets
Cash
Notes and accounts receivable-trade
Property for sale
Property for sale in progress
Property for development
Equity investments
Other
Fixed assets
Tangible assets
Intangible assets

Investment securities
Other

Total assets

At September
30, 2018
1,152,292
257,51145,63071,958324,405
1,282
357,838
93,666
4,697,207
4,062,713
95,090292,083

At March 31,
2018
1,217,690
287,153
44,67095,391
327,213
1,267
365,933
96,0594,583,759
3,981,871
94,241
272,779

247,318
5,849,500

234,864
5,801,450

Change△ 65,397△ 29,641
959△ 23,433△ 2,80814△ 8,095△ 2,394
113,447
80,841848
19,304
12,45248,050* From FY2019/3-1Q onward, the amendment to Standard for Tax Effect Accounting
announced on February 16th, 2018 has been applied. Thus figures on the Consolidated
Balance Sheets as of the end of March, 2018, are also modified based on the application of
the amendment.

Total Assets(as of September, 2018)

International
Business
679,013
Residential
Business
644,102

Other
505,851CP
42,000Lifestyle
Property
502,176

MITSUBISHI ESTATE CO., LTD.

Building
Business
3,518,353

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term debt
Commercial paper
Bonds due within one year
Other
Long-term liabilities
Bonds
Long-term debt
Other
Net assets
Shareholders’ equity

Other accumulated comprehensive income

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

Change622△ 22,341△ 5,629△ 20,500
15,32642,000△ 21,162△ 32,375
22,964△ 25,000
10,01737,94447,427
41,4771,970
3,979
48,050Consolidated interest-bearing debt Consolidated interest-bearing debt Consolidated interest-bearing debt
(as of September, 2018)
Fixed / Floating rate ratio
Long-term / Short-term ratio
Lease obligations
4,710(as of September, 2018)

2,482,276
Loans
1,627,905(as of September, 2018)
Short-term
7.3%

Floating
27.0%

Bonds
807,6615,849,500

Millions of yen (rounded down)
At September At March 31,
30, 2018
2018
3,922,984
3,922,362
642,749
665,091
55,54061,169138,589
159,090
163,065
147,739
42,00045,00066,162
198,554
230,929
3,280,235
3,257,270
762,661
787,661
1,326,249
1,316,232
1,191,319
1,153,372
1,926,515
1,879,088
1,103,178
1,061,700
638,618
636,648326
326
184,392
180,412
5,849,500
5,801,450

2,482,276
Fixed
73.0%

2,482,276

Long-term
92.7%
5

Financial Highlights

4. Office Building Business / Leasing Status of New Buildings
Due to the significant opportunities that the demands for office relocation has created, the leasing
status of our pipeline buildings has been consistent.
■Leasing status of our pipeline buildings
Pipeline

Leasing Status

Demands for Office Relocation

Buildings to be completed in 2018

Fully leased

Buildings to be completed in 2019

Fully leased

Buildings to be completed in 2020

Over 60% has already been leased

Location and/or facility
upgradeTalent attraction

Office consolidation

Work-style Reform■Office Buildings Market Trends
Estimated New Supply of Large-Scale Office Buildings(23 Wards of Tokyo)（Millions of ㎡）

2.00
1.50

1.46

Average Supply Volume:
Approximately 1.01 Million ㎡ per year
1.68
0.99

1.00
0.50
0.00

2018

2019

2020

0.52

0.42

2021

2022

 Office supply in the 23 wards of Tokyo will increase in 2018and 2020, though in the next 5 years, average supply is
predicted to be almost the same as the past.
 Leasing of the Company’s portfolio, including buildings to becompleted of constructions in 2020, progressed extremely
steadily, reflecting the motivation of companies for relocation,such as consolidation and improvement of location.
(According to our own research, other companies also seem tobe doing well in their leasing.)※Research subject buildings: Buildings with total office floor area exceeding 10,000㎡
Source: Mori Building
MITSUBISHI ESTATE CO., LTD.

6

Financial Highlights

5. Office Building Business / Existing Buildings
Reflecting the high demand for office spaces, Cash Flow from existing buildings has been
improving and the leasing of secondary vacancies has been progressing steadily.
■Yearly change in rent revenue from moving in/out of tenants and rent revisions at lease renewal.
Yearly change in rent revenue from moving in/out of tenants and rent revisions at lease renewal
Accumulated amount (from FY2015)(Billions of Yen)

25
20

16.0

15

11.3

10
5
0

20.9

19.7

2.4 2.4
FY20154.9

7.3

FY20164.0

4.7

FY2017FY20183.7

FY2019-2Q

4.9

The company achieved a sales increaseof around 20 billion yen in the past fourand a half years by “moving in/out oftenants” such as new leases andexpansion of floor space within thefacility, and “rent revision at leaserenewal” of existing tenants.

FY2019(E)■Status of secondary vacancy
 Secondary vacancies arising from existing buildings in Marunouchi are mostly filled by existing clients expanding floor space andnew clients outside the area desiring to upgrade office locations.
 Hibiya Kokusai Building and Sunshine 60 Building have made visible leasing progress of secondary vacancies.

MITSUBISHI ESTATE CO., LTD.

7

Financial Highlights

6. Lifestyle Property Business / Outlet Mall Business Overview
Favorable retailer sales have continued mainly due to inbound customers. Outlet mall businesswill continue to grow through expansion of floor space and new site development.
■Business condition in the first half of the FY2019■Continued expansion / opening 3 facilities, Gotemba, Sano, and Tosu
⇒Reached a new record high retailer sales in the first half of theyear Increase of inbound visitors⇒Around 110% from corresponding previous period Phase 3 expansion of Shisui was completed on September
28 (Store floor area +6,300㎡)→Total store floor area of all 9 properties is 314,800㎡■High investment efficiency in outlet mall business(actual achievement)
Mitsubishi Estate ・ Simon Co., Ltd.：Change in ROA
20.0%
18.0%
16.0%

16.7%

17.1%

17.9%

15.5%

[Planned expansion / New opening]◆Expansion (Planned)
Already publishedTosu (Phase 4) Fall 2019 (Store floor area +3,600㎡)
Gotemba（Phase 4）Spring 2020 (Store floor area
+16,000㎡)
Hereafter, expansion of floor space within
other properties will continue in sequence◆New opening（Planned）
Hanazono（Saitama Prefecture） After FY2021
Joyo（Kyoto Prefecture） After FY2023

14.0%
12.0%
10.0%

FY2015

MITSUBISHI ESTATE CO., LTD.

FY2016FY2017FY20188

Financial Highlights

7. International Business / Large-scale Renovation of Flagship Building
Our flagship office building in New York “1271 Avenue of the Americas”: Renovation works andleasing have been in progress. Over 70% of the leasable area has already been leased.
■Progress of renovation
2016/6
Renovation start date2017/122018/7

2019/12
Scheduled date ofoverall completion

Tenants begin moving in while eachtenant space is being completed

Starting full-scale renovation
after all tenants leaving

MLB begins moving in■Leasing Situation
 Contract ratio: Over 70% has been leased (As of October 31, 2018)
 Major League Baseball begins moving in(in the process of office design installation)
 Agreement already signed with leading companies in various industries
・Latham & Watkins (Law firm)
・Mizuho Americas (Financial institution)
Leasable area: 195,000㎡

・Bessemer Trust (Financial institution)

Floors: 48 above ground/3 below ground・Blank Rome (Law firm)

MITSUBISHI ESTATE CO., LTD.

9

Financial Highlights

8. Capital Gains
Stable increase in capital gains by utilizing our domestic value chain model and contributions fromoverseas subsidiaries.
FY2019-2Q Capital Gains Breakdown[Domestic strategy and strength]

Total: 21 billion yen

 Proprietary exit strategy byutilizing group funds (Public REITs,
private funds)

Overseas(6 billion yen)

 Over 80% of domestic capitalgain comes from the exits togroup fund in second quarter of
FY2019 Abundant pipelines which enable
the company to secure stable
capital gains in every period※including Investment
Management BusinessCondominiums(5 billion yen)Domestic
Approximately
70%

Logistics facilities(1 billion yen)
Office buildings(9 billion yen)[Overseas strategy and strength]
Overseas
Approximately
30%

 Well-established operatingcompanies represented byRockefeller Group in the US
 Sourcing and developmental
ability of various assets (office,commerce, housing, logistics)
across the United States Abundant pipelines which enable
the company to secure stable
capital gains in every period

Policy to realize capital gains in the current midterm management plan
Securing stable capital gains throughour proprietary group value chain(contribution to ROA in each term)

MITSUBISHI ESTATE CO., LTD.

Seeking unrealized gains by
capturing on favorable market
environments

Improving future ROA by securingasset management contract at timeof exit10

Summary of Financial Statements for FY 2018
and Progress of Mid-Term Management Plan

MITSUBISHI ESTATE CO., LTD.

11

Financial Highlights

1. Income Statement Results for FY2018
Resulted in overall increase mainly from building rental profits etc. while decreased in capital gains.
Broke the highest record in profits.
Millions of yen (rounded off
Millions of yen (rounded down)

Revenue from Operations
Office Building Business
Lifestyle Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Office Building Business
Lifestyle Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue
Non-Operating Expense
Income before Taxes and Special
Items
Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

EBITDA
Interest-bearing debt

FY2018FY2017
Results
Results
1,194,049 1,125,405
506,161484,238
105,81788,955
410,598
407,850
86,92566,556
22,66521,32388,87681,301△ 26,996 △ 24,820
213,047
192,495
147,243
133,570
31,18425,80723,86019,25324,14726,313
4,596
4,520
5,056
4,823
△ 23,043 △ 21,793
10,4479,380
32,98832,024

68,64421,923
16,862
2,747
20,3681,342
7,574△ 2,175
20,551
13,672
5,377
4,607△ 2,16675
233△ 1,249
1,066
964

190,506

169,851

20,654

14,71913,768120,443

16,48423,455
102,681△ 1,765△ 9,686
17,762Millions of yen (rounded down)

FY2018FY2017
Results
Results
302,424
279,718
2,481,675 2,396,994*Architectural Design & Engineering, Hotel Business, Real Estate Services, OtherMITSUBISHI ESTATE CO., LTD.

ChangeCapital Gains included in Operating Income
FY2018Results
Total
39,000
Office Building Business
16,000Lifestyle Property Business
5,000
Residential Business
1,000International Business
15,000Investment Management Business
1,000
Other
1,000
Eliminations or corporate-

24,000Change△ 3,000△ 2,000△ 1,000

Major Factors for Changes in
Operating Income by Business
Lifestyle
Property
5,377
OfficeBuilding
13,672

International
Residential
Others△ 2,166
4,607
△ 941

Decrease in one-time-only
profits in capital gains
Increase in condominiums profits

213,047

Increase in capital gains

192,495

Increase in rental profits

Change22,706
84,681to the nearest billion)

FY2017
Results
42,00018,000FY2017
Results

OfficeBuilding

Lifestyle
Property

Residential International

Others

FY2018Results

12

Financial Highlights

2. Elements of Mid-Term Management Plan (FY2018-FY2020)
Two Major Points① Realization of profit as a result of reinforced income streams during previous Mid-Term Management Plan
② Initiate business model innovation by capturing the momentum of changes in businessenvironment as new opportunities in order to achieve further growth in 2020’s

Previous Mid-Term
Management Plan
(FY2015－FY2017)

Reinforcement of
Income Stream

MITSUBISHI ESTATE CO., LTD.

Current Mid-Term
Management Plan
(FY2018－FY2020)

2020’sPromotion of Business
Model Innovation

Further Growth

Realization of Profits

13

Financial Highlights

3. Results for FY2018① ～Realization of profit as a result of reinforced
income stream during previous Mid-Term Management Plan-1～
A. Completion of landmark projects (mainly in Marunouchi area) &its contribution to operating income
 Progress in leasing beyond expectation
・The value on Marunouchi matches with the needs of positive
moving among companies
・Buildings completed in FY2019 expected to be under full occupancy
・Strong demands for secondary vacancy
 Upward trend in rent
・Smooth increase in rent for existing buildings
・Continuous growth of rent price for new buildings⇒FY2018 income gains results in Office Building Business:
Estimate (as of May 10, 2017) ＋ 4.2 billion yen

FY2018 Operating Income
from Building Business(Billions of Yen)

147.2
140.0
16.0
13.0

127.0

131.2

Estimate for FY2018 Results for FY2018(announced May 10, 2017)

Income Gain

MITSUBISHI ESTATE CO., LTD.

Capital Gain etc.

14

Financial Highlights

4. Results for FY2018② ～Realization of profit as a result of reinforced
income stream during previous Mid-Term Management Plan-2～
B. Expansion and advancement of international business(Implementation of the hybrid investment model)
Hybrid investment model:
Achieve diversification and scale expansion of investment by combining own and third party equity while earning
management fee from the investors concurrently
The conversion to Open-ended fund enables Mitsubishi Estate Group to expand stably and continuously its
Management Business
Area

Group Company

Progress on Hybrid Investment Model (as of the end of FY2018)

North
America Built Separate Account Portfolio (approx. JPY 250BN) comprising of Core
Real Estates, diversified into multiple sectors (Industrial, Residential,
Office, and Retail) and across key major cities within the U.S.
 Converted Separate Account Portfolio into an US Core Open Ended Fundin March, 2018 and the Fund attracted 20 new, domestic andinternational investor commitments totaling over USD525M at the firstoffering The fund continues to expand the portfolio

Europe Acquiring properties in Europe Area for potential Open Ended Fund conversion

Asia
MITSUBISHI ESTATE CO., LTD.

 Acquiring properties in Asia/Oceania Area for potential Open Ended Fundconversion
15

Financial Highlights

5. Results for FY2018③ ～Realization of profit as a result of reinforced
income stream during previous Mid-Term Management Plan-3～
C. Accelerate fee business model through capital recycling Build an effective value chain model for logistics facility (Group logistics REIT went on public in September 2017)
 Stable increase in capital gains (Providing asset pipeline to group funds etc.)

Major Property Sales for Group Fund
(profits contributed to FY2018)
Properties
Tamachi Front Building

Asset Type

Selling Price

Office Building

About 6.2 billion

Logicross Fukuoka Hisayama Logistics Facility

About 5.7 billion

Shiba Front Building

Office Building

About 5.4 billion

Shinjuku East Side Square

Office Building

About 44.4 billion

Capital Gains
For Current Mid-Term Management Plan Period(Billions of Yen)

120
100
80
60
40
20
0

MITSUBISHI ESTATE CO., LTD.

118.0

39.0

39.0

40.0

FY2018（Results）

FY2019（Estimates）

FY2020（Estimates）

Mid-term（Accumulation）

16

Financial Highlights

6. Results for FY2018④ ～Realization of profit as a result of reinforced
income stream during previous Mid-Term Management Plan-4～
D. Increase in unrealized gain of income generating assets
 Unrealized gain has increased by about 460 billion yen by comparing with FY 2017.
 Unrealized gain has increased as a result of increased cash flow by our own efforts
as well as an a decrease in cap rate.

Change in Unrealized Gain

Breakdown of Unrealized Gain

(Billions of Yen)

4,000

Others(overseas)
12%
Others(domestic)
15%

3,500
3,000
2,500
2,000
1,500
1,000

2096.52180.7FY2014FY20152569.12963.53422.8
Marunouchi
Existing Building
27%

500
0

MITSUBISHI ESTATE CO., LTD.

FY2016FY2017

Marunouchi
Redeveloped
Building*
47%

FY2018*Properties completed redevelopment after Marunouchi Building

17

Financial Highlights

7. Results for FY2018⑤ ～Promote business model innovation to achieve
further growth in 2020’s ～A. Initiatives to promote business model innovation
New services with technologies
Efficiency of Maintenance Progressing consideration in both existing and new
fields Use of about 30% of business model innovation
investment budget has been determined

New approach to meetthe needs for “food”

Introduce new functions to existing buildings
Utilize new materials (cutting costs / Environmental contribution)
The launch of Airport and Resort Business

Existing

Assets and Services

New

B. System to create new business
Platform for Creating New Business in Mitsubishi Estate Group
Venture Co-creation Platform
VC Funding

VentureBusiness
Funding

Corporate Accelerator
Program

Co-creative Projects with
大企業との共創LeadingCompanies(Collaboration outside of the Company) Open Innovation

MITSUBISHI ESTATE CO., LTD.

プロジェクトNew Business Proposal system(individual)

Business Start-Up Meeting(Department)Internal Policy

18

Financial Highlights

8. Changes in EPS and Dividends◆Continue to maintain the maximum level of payout ratio in our target (25~30%)◆EPS around 1.9 times and dividend per share around 2.2 times more compared with FY 2014
100

31%

30%

80

74.00

30.0%

70

29.3%
29%

60.13

60
50

88.61

86.78

90

52.85
46.34

28%

40

20
10
0

26.6%

26.5%

30

25.9%

12.00

FY201414.00

FY2015FY2016EPS

MITSUBISHI ESTATE CO., LTD.

16.00

Dividends per Share

27.0%

26.00

26.00

27%

20.00
26%

FY2017FY2018

Payout ratio (right axis)

FY2019(Estimates)

25%

19

Financial Highlights

9. Mid-Term Management Plan FY2020 Estimates①【Operating Income by Segment】(Billions of Yen)FY2020Operating Income by Segment

Changes in Operating Income
Target(2017.5.11)

Changes in Capital Gains etc.

Estimates

ChangeOffice Building Business

138

150

＋12

Lifestyle Property Business

37

35

△2

Residential Business

20

20

0

International Business

29

32

＋3

Investment Management Business

6

3

△3

Other*

5

7＋2

Eliminations or Corporate

△15

△17

△2

Total

220

230

＋10

TargetEstimates

Change

8

13

＋5

30

27

38

40

(2017.5.11)

Increase inincome gain
＋8 billion

 Improvement on cash flows anddecrease in cap rate led to the increasein property sales price Rent for new buildings outperformed
expectations and increase in rent forexisting buildings
 Positive performance in outlet business Profits from Hybrid Investment Model

TargetEstimates

Change

130

137

＋7

△3

52

53

＋1

＋2

182

190

＋8

(2017.5.11)

Operating Income

Factors for Outperformance in Operating Income
Increase incapital gains＋2 billion

Changes in Income Gain

Income Gain

192.4

Capital Gains

230.0

213.0

215.0

39.0

39.0

174.0

176.0

190.0

FY2018Results

FY2019Estimates

FY2020Estimates

40.0

42.0
150.4
FY2017
Results*Hotel・Airport Business, Architectural Design & Engineering Business, Real Estate Service Business
MITSUBISHI ESTATE CO., LTD.

20

Financial Highlights

10. Mid-Term Management Plan FY2020 Estimates②【Estimates of Indicators】
Target(17.5.11)

Growth Potential Operating Income
Performance

Stability

Estimates¥220 billion¥230 billion

Operating Income /Total Assets(ROA)

Around 3.5%

3.8%

Net Debt / EBITDA

Around 8.5
times

Around 8 times(Hybrid finance reflected)(around 8 times)(around 7.5 times)

Aim to achieve 4% in ROA throughfurther effort on the Company’s end
and profit contributions from assets inand after the next Mid-Term
Management Plan
Restrain interest-bearing debt
through increase in return＜Approaches to ROA improvement＞
 Disposition of low-profiting properties and strategic-holding stocks
 Continuous effort to reduce costs
 Expand and enhance fee business trough property sales for group fund＜For future consideration on profit contributions (including matters in and after
the next Mid-Term Management Plan)＞ Make progress on projects under construction (Redevelopment of Yotsuya
Station area, 1271 Avenue of the Americas, Tokiwabashi Building A etc.)
 Expand and develop new outlet malls Redevelopment projects in Residential Business, profit contribution fromresidential projects in Southeast Asia
 Expand areas for the Hybrid Investment Model
MITSUBISHI ESTATE CO., LTD.

21

Financial Highlights

11. Mid-term Management Plan(FY2018-2020): Quantitative Target ③
Investment-Return Target FY2018-2020※No change from the time of the plan announcement(Billions of Yen)

Investment

ReturnNet

Building Business

500

200

300

Lifestyle Property Business

200

50

150

Residential Business

850

750

100

<Domestic condominium>

<700>

<600>

<100>

International Business

400

150

250

Group-wide business model
Innovation budget

100
1,150

900

2,050

Total

<Domestic condominium>

<700>

<600>

<100>

Investment (Exclude domestic condominium)
Specific Investment *(about 75％)
Progress in FY2018(about 35％)
MITSUBISHI ESTATE CO., LTD.

Non-Specific(about 25％)

* Ratio of investment limited in its portfolio company and use within investment budget

22

Detailed Business Units' Review

MITSUBISHI ESTATE CO., LTD.

23

Office Building Business

MITSUBISHI ESTATE CO., LTD.

24

Office Building Business

1. Marunouchi Area Map

MITSUBISHI ESTATE CO., LTD.

25

Office Building Business

2. Pipeline

Marunouchi Area

GRAND CUBE

Otemachi Park
Building

Total Floor Area: 193,600㎡ Total Floor Area: 151,700㎡
Completion: Apr. 2016
Completion: Jan. 2017

FY2018FY2019Marunouchi 1-3
Project

Tokyo Tokiwabashi Project

Total Floor Area: 173,000㎡ Total Floor Area: 181,000㎡
Completion: Oct. 2018
Completion: Sep. 2020

FY2020

FY2021

Total Floor Area: 686,000㎡(Total buildings)
Building A Completion: Apr. 2021
Building B Completion: FY2028

FY2022

msb Tamachi(musubu Tamachi)

Shinjuku Station South
Project

Yotsuya Station Area
Redevelopment Project

Kita Aoyama 2-chome
Project

Total Floor Area: 149,300㎡*
Partial Completion: May 2018*

Total Floor Area: 44,100㎡
Completion: Aug. 2019

Total Floor Area: 139,700㎡
Completion: Jan. 2020

Total Floor Area: 22,900㎡
Completion: Apr. 2020

FY2028Tokyo(Outside of Marunouchi)

FY2017

Marunouchi Nijubashi
Building*Tower S and Hotel facility
MITSUBISHI ESTATE CO., LTD.

26

Office Building Business

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

5,722

3,769

3,500
3,000
2,500
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

489

489

06/3

07/3

743

743

08/3

09/3

Total (Domestic)

2,565

2,565

1,022

1,022

10/3

11/3

Marunouchi

2,687

1,174

12/3

2,758

2,755

2,583

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

19/3(E)

Marunouchi Redeveloped Buildings*Excluding floor space in Lifestyle Property Business from 16/3

MITSUBISHI ESTATE CO., LTD.

27

Office Building Business

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

28,000Vacancy rate(Marunouchi offices)27,000Vacancy rate(All uses in Japan)

26,000

Average rent(All uses in Japan)

25,00024,00023,00022,00019,00022,817
6.06%

22,213

21,902 21,711 21,733

23,974 23,850 23,861

26,193 26,389

5.64%

8%

23,587

7%

22,602

6%

4.82%

5%

4.36%

3.59%

3.40%

2.77%

17,0002.86%
1.68% 2.06%

16,00015,000

2.42%

3.98%
3.58% 3.58%
4.32%
3.66%

2.26%

2.77%

14,00013,000

MITSUBISHI ESTATE CO., LTD.

05/3

2.80%

2.93%

2.22%

1.87%
2.42%

1.82%
0.55%

04/3

4%

2.42%

1.74%

03/3

10%
9%

5.29%

18,00012,00024,42323,56021,00020,00024,86425,23425,84226,800

06/3

07/3

0.19%
08/3

1.37%

1.09%
09/3

1.65%

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

2.17%

2.5%

3%
2%

2.06%

1%

18/9 19/3(E)0%28Office Building Business

5. Earnings Related Data: Office Building Business Revenue Breakdown(Unconsolidated)(Billions of Yen)FY2018-2Q(Results)

FY2018(Results)

FY2019-2Q(Results)

FY2019(Estimates)

Revenue from Office Building Business(Unconsolidated)

184.0

421.0

230.1

457.5

Changes from Previous Period+ 1.5+ 55.9+ 46.0+ 36.5

Rent revenue from new buildings

+ 4.4

+ 9.8

+ 7.5

+ 17.2Rent revenue from existing buildings

+ 2.0

+ 5.4

+ 3.7

+ 4.9

Termination of master lease,closure of building for redevelopment

+ 0.2

+ 0.7

+ 0.0

+ 0.0

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

+ 1.8

+ 4.7

+ 3.7

+ 4.9

Supplementary Revenue, includingcommon area charge

△ 1.5

△ 6.9

+ 0.8

+ 7.2

Sales of properties, etc.

△ 3.4

+ 47.5+ 33.9+ 7.0

MITSUBISHI ESTATE CO., LTD.

29

Office Building Business

6. Earnings Related Data: Rent Revenue Transition (Unconsolidated)
Increase / decrease of rent revenue (from the previous year)(Billions of Yen)

30
25

Existing buildings (Moving in/out of tenants, Rent revisions at lease renewal)
New buildings
Existing Buildings (Termination of master lease, closure of building for redevelopment)

+0.0

20
15

+15.3

10
+13.0

5
0
-5

+4.3
-3.9
-2.5

-10.7

-1.1
-5.9

-5.4

+7.3
+1.9

+27.2

+23.9
+12.5

+6.0
-1.5

+7.3
-1.5

-10.5

-4.0
-2.5

-4.6
-5.6

+9.5

-5.2

+6.6
-3.4

-6.0

-8.3

-0.7

+22.6
+18.5 +13.2

+2.4

+4.9

-7.5

-9.0

-10.5

+0.7

+17.2

+9.8

+4.0

+0.0
+7.5

+4.7

+4.9

+3.7

-8.1

-5.0

-15

Total

+8.7
-4.9

-10

-20

+15.3

+14.7

03/3

04/3

05/3

06/3

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3(E) 19/3-2Q

-2.1

-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

+22.1

MITSUBISHI ESTATE CO., LTD.

+11.2

30

Office Building Business

7. Earnings Related Data: Rental Revenue / NOI (Unconsolidated)
Rental Revenue(Regional Breakdown / Growth Rate)

100%

40%
14.5%

22.6%

62.9%

12.7%

25.8%

61.5%

13.8%

13.7%

-0.6%

-3.2%
FY2015

1.7%

24.9%

61.4%

7.1%

25.0%

61.3%

35%

25%

2.4%

9.6%

8.9%

14.2%

15.2%

76.2%

75.9%

FY2018

18.0%

73.2%

71.6%

4.2%

5%

9.3%
-0.7%

0%

-10%

35%
30%
25%

15%
8.5%

6.3%

-1.1%
0%

FY2015FY2016

Tokyo excluding Marunouchi

Nationwide excluding Tokyo

Growth rate(Total) [right axis]

Nationwide excluding Tokyo

10%
5%
0%
-5%

-4.7%

Marunouchi

MITSUBISHI ESTATE CO., LTD.

15.3%

13.4%

15%

Marunouchi

Growth rate(Marunouchi) [right axis]

10.4%

40%

20%

-5%
FY2017

11.6%

20%

10%

2.3%

-0.5%

FY2016

100%

30%

7.3%

0%

NOI
(Regional Breakdown / Growth Rate)

FY2017FY2018

Tokyo excluding Marunouchi
Growth rate(Total) [right axis]-10%Growth rate(Marunouchi) [right axis]

31Office Building Business8. Office Building Market Data: New Supply of Large-Scale Office Buildings(23 Wards of Tokyo)(Millions of ㎡)

2.5
2.16
2
1.75

1.68

1.54

1.46

1.5
1.25

1

0.99

1.19

1.17

0.91
0.72

0.5

1.21

0.36

0.77

1.09
0.87

0.86 0.85
0.65

0.58

0.99

0.97
0.69

0.52

0.42

0
*Estimate※Research subject buildings: Buildings with total office floor area exceeding 10,000㎡
Source: Mori Building
MITSUBISHI ESTATE CO., LTD.

32

Office Building Business9. Office Building Market Data: Average Rents / Vacancy Rates(5 Central Wards of Tokyo)(yen / tsubo-month)

30,00012%
Average Rent

28,00026,0008.75%

20,000

10%
8.56%

7.98%

24,00022,0009.19% 9.04%

Vacancy Rate

6.70%

21,295
5.51%

19,17517,758 17,593

18,0008%

22,5748.18%
20,064

6.05%
18,26418,0955.30%
17,495

16,716 16,504

16,325

17,195

3.41%

17,973

4.34%

16,00014,00019,69920,4386%

18,730

3.60%

4%
2.33%

2.72% 2.89%

2.80%

2%

12,00010,000

03/3

04/3

05/3

06/3

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

18/9

0%

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

33

Office Building Business

10. Competitive Edge of Marunouchi: Vacancy Rates
5 Central Wards of Tokyo(Market) vs. Marunouchi(Unconsolidated)
10%
9%

8.75%
8.18%

9.19% 9.04%

8.56%

7.98%

8%
7%

6.70%
6.06%
6.05%

6%
5.51%
5%
4%

4.32%
4.36%

3.66%
3.41%

3%

2.72%

2.77%

1.74%

0%

0.55%
03/3

04/3

05/3

06/3

07/3

4.34%

2.42%
2.89%

2%
1%

5.30%

0.19%
08/3

2.42%
2.26% 2.42%

1.82%

1.09%
09/3

3.60%

10/3

5 Central Wards of Tokyo(Market)

11/3

12/3

13/3

14/3

15/3

2.80%

2.33%
2.17%

1.65%

1.37%
16/3

17/3

18/3

18/9

Marunouchi(Unconsolidated)

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

34

Office Building Business

11. Competitive Edge of Marunouchi: Area / number of railway lines

Marunouchi

Nihonbashi

ShinagawaShibuya

Toranomon

2,400m
1,500m

Area:

123ha

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.

35

Office Building Business12. Competitive Edge of Marunouchi: Number of headquarters and offices(as of March, 2018)① Fortune Global 500 company headquarters③ Top 100 law firm headquarters and offices

29

MARUNOUCHI

16

MARUNOUCHI2SHINAGAWA

0NIHONBASHI

0SHIBUYA0NIHONBASHI0SHINAGAWA

0SHIBUYA0TORANOMON② Top 50 company headquarters in terms ofmarket capitalization

7

TORANOMON④ Foreign financial company offices

71

MARUNOUCHI

13

MARUNOUCHI

2

1

1

NIHONBASHITORANOMONSHINAGAWA

0SHIBUYANIHONBASHI

11SHIBUYA

3

SHINAGAWA

MITSUBISHI ESTATE CO., LTD.

25

TORANOMON

036

Office Building Business13. Marunouchi Data: Marunouchi Tenant Mix (Unconsolidated)
March 2000

Type of Business

Area ratio

March 2018

Type of Business

Area ratio

1

Manufacturing

42.5%

1

Manufacturing

22.5%

2

Finance22.2%

2

Finance21.7%

3

Trading

10.4%

3

Professional Firm

18.0%

4

Information

6.3%

4

Trading

10.0%

5Professional Firm

4.4%

5

Information

3.8%

Others

14.2%

Others24.0%

Professional Firm
4.4%

Information
6.3%
Trading
10.4%

Manufacturing
42.5%

Manufacturing
22.5%

Information
3.8%
Trading
10.0%

Finance
22.2%

MITSUBISHI ESTATE CO., LTD.

Others24.0%

Others
14.2%

Finance
21.7%

Professional Firm
18.0%

37

Office Building Business

14. Marunouchi Data: Retail Property in Marunouchi:
Number of Stores / Store Floor Area(Unconsolidated)(Thousand ㎡)

140

Store Floor Area

Shin-Marunouchi
Bldg.

Number of Stores

120

Tokyo Bldg.
“TOKIA”

100
OAZO
Marunouchi Bldg.

80

60

40

Before opening of
Marunouchi
Building

280

430

480

590

740
103

Marunouchi
Park Bldg.

790
110

Marunouchi
Eiraku Bldg.
“iiyo!!”

820
113

OTEMACHIFINANCIAL CITY
GRAND CUBE

850
116

Otemon Tower・
JX Building,Otemachi Park
Building“HOTORIA”

Marunouchi
Nijyubashi Bldg.
“Nijyubashi
Square”

1,000
870

116

890
119

900
800
700
600

87

500

73

400

59

300

40

200

20

0

(Store)100

beforeSep. 2002

MITSUBISHI ESTATE CO., LTD.

Sep. 2002

Sep. 2004

Nov. 2005

Apr. 2007

Sep. 2009

Mar. 2012

May 2016

Feb. 2017

Nov. 2018

038

Office Building Business

15. Marunouchi Data: Approaches for Marunouchi Area Development
Improvement of floor-area-ratio
Improving floor-area-ratio in Marunouchi area by reviewing theuse area

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

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

Relaxation of floor-area ratio regulation:
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 exception of urban planning
Example: International business bases (Global Business Hub Tokyo etc.)
Development of fine urban environment (improvement on water quality ofditch around the Imperial Palace etc.)
BCP function(self-reliant of electric power and 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: Consolidation between offices and hotels

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

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

Hotels39

Lifestyle Property Business

MITSUBISHI ESTATE CO., LTD.

40

Lifestyle Property Business1. PREMIUM OUTLET®

KYOTO JOYO
Tosu

Kobe-Sanda
Rinku

GOTEMBA PREMIUM OUTLETS®
Name

Location

RINKU PREMIUM OUTLETS®
Site Area

Total Floor Area

Store Floor Area

Number of Stores

Sendai-Izumi

HANAZONO Sano
Toki

Ami
Gotemba Shisui

Schedule

422,300㎡*

69,200㎡*

60,000㎡*

300*

Open: Jul. 2000, Phase2 expansion: Jul. 2003, Phase3 expansion: Mar. 2008,
Phase4 expansion: land development and Construction begins in Sep. 2016,
Phase4 expansion: Spring 2020

86,500㎡

49,900㎡

39,400㎡

210

Open: Nov. 2000, Phase2 expansion: Mar. 2002,
Phase3 expansion: Dec. 2004, Phase4 expansion: Jul. 2012

Sano, Tochigi

174,600㎡

39,900㎡

37,300㎡

170

Open: Mar. 2003, Phase2 expansion: Jul. 2004, Phase3 expansion: Mar. 2006,
Phase4 expansion: Jul. 2008

TOSU PREMIUM OUTLETS®

Tosu, Saga

134,200㎡

36,800㎡*

31,800㎡*

165*

Open: Mar. 2004, Phase2 expansion: Dec. 2007, Phase3 expansion: Jul. 2011,
Phase4 expansion: Fall 2019

TOKI PREMIUM OUTLETS®

Toki, Gifu

284,600㎡

41,300㎡

35,200㎡

180

Open: Mar. 2005, Phase2 expansion: Oct. 2006, Phase3 expansion: Jul. 2010,
Phase4 expansion: Nov. 2014

KOBE-SANDA PREMIUM OUTLETS®

Kobe, Hyogo

316,800㎡

49,600㎡

42,200㎡

210

Open: Jul. 2007, Phase2 expansion: Dec. 2009, Phase3 expansion: Dec. 2012

SENDAI-IZUMI PREMIUM OUTLETS®

Sendai, Miyagi

43,700㎡

20,300㎡

15,300㎡

80

Open: Oct. 2008

AMI PREMIUM OUTLETS®

Inashiki, Ibaragi

211,100㎡

34,800㎡

30,700㎡

150

Open: Jul. 2009, Phase2 expansion in Dec. 2011

SHISUI PREMIUM OUTLETS®

Inba, Chiba

421,000㎡

47,300㎡

41,900㎡

210

Open: Apr. 2013, Phase2 expansion: Apr. 2015,
Phase3 expansion: Construction begins in Oct. 2017, Phase3 expansion: Sep. 2018

HANAZONO PREMIUM OUTLETS® Project

Fukaya, Saitama

170,000㎡

-

-

-

-

KYOTO JOYO PREMIUM OUTLETS® Project

Joyo, Kyoto

270,000㎡

-

-

-

-

GOTEMBA PREMIUM OUTLETS®

Gotemba, Shizuoka

RINKU PREMIUM OUTLETS®

Izumisano, Osaka

SANO PREMIUM OUTLETS®

*Planned figure after expansion

MITSUBISHI ESTATE CO., LTD.

41

Lifestyle Property Business2. Mitsubishi Estate・Simon Co., Ltd.
Business Activities : Management and operation of PREMIUM OUTLET®
Shareholders : Mitsubishi Estate 60%, Simon Property Group, Inc. 40%
Change in Business Results :FY2015FY2016FY2017

Millions of yen (rounded down)

FY2018FY2019(E)Revenue fromOperations

39,95443,946

43,642

45,46245,780Operating Income

14,292

16,301

17,35918,94018,472

Income before
Taxes and Special
Items

14,464

16,521

17,593

19,211

18,594Net Income

8,828

10,69912,084

13,143

12,507

Total assets

93,350101,802

101,767

109,485

116,868

Shareholders’ equity

30,36434,576

38,642

42,72445,844

Average of all facilities
Sales-linked & fixed ratio(Rent revenue basis)◇Changes in store area(㎡)and number of stores
Store area(㎡)Number of Stores(Millions of yen)

Revenue from Operations
45,00040,00035,00030,00025,000

MITSUBISHI ESTATE CO., LTD.

FY2015FY2016FY2017FY2018294,700

308,500

308,500

308,500

314,800

1,490

1,527

1,529

1,540

1,580

(Millions of yen)
19,00014,0009,000
4,000

Operating Income

50%
Sales-Linked
Rent
Fixed Rent

50%

FY2019(E)FY2018(Millions of yen)
120,000

Total Assets

110,000
100,000
90,00080,00070,00042Lifestyle Property Business

3. Pipeline
Corowa Koshien

MARK IS Fukuoka Momochi

Retail Property

M’s CROSS Omotesando

Logistics Facility

Number of Stores:2
Open: Sep. 2017

Number of Stores:60
Open: Apr. 2018

Number of Stores:163
Open: Nov. 2018

FY2018FY2019FY2020LOGIPORT Osaka Taisho

Logicross Nagoya Kasadera

LOGIPORT Kawasaki Bay

Total Floor Area: 122,000㎡
Completion: Mar. 2018

Total Floor Area: 80,600㎡
Completion: Jan. 2019

Total Floor Area: 296,800㎡
Completion: May 2019

Logicross Narashino

Osaka Nishi-Yodogawa
Logistics Center

Logicross Yokohama
Kohoku Project

Total Floor Area: 39,100㎡
Completion: Mar. 2018

Total Floor Area: 38,300㎡
Completion: Sep. 2018

Total Floor Area: 16,000㎡ Total Floor Area: 34,700㎡
Completion: FY2020
Completion: FY2020

MITSUBISHI ESTATE CO., LTD.

Logicross AtsugiⅡ
Project

43

Lifestyle Property Business

4. Logistics Facility Business

Logicross Atsugi

Tokyo Ryutsu Center Distribution B Building

Name

Location

Logicross Atsugi

Atsugi, Kanagawa

Tokyo Ryutsu Center Distribution B Building

Ota, Tokyo

Logicross Kobe Sanda

Kobe, Hyogo

Logicross Narashino

Narashino, Chiba

LOGIPORT Osaka Taisho

Logicross Kobe Sanda
Site Area

Total Floor Area

Logicross Narashino
Construction Start Date

Completion Date

14,800㎡

29,900㎡-

Mar. 2017-

171,300㎡-

Jun. 2017

20,000㎡

14,400㎡-

Jun. 2017

19,300㎡

39,100㎡-

Mar. 2018

Osaka, Osaka

55,500㎡

122,000㎡-

Mar. 2018

Osaka Nishi-Yodogawa Logistics Center

Osaka, Osaka

18,100㎡

38,300㎡

Jul. 2017

Sep. 2018

Logicross Nagoya Kasadera

Nagoya, Aichi

33,200㎡

80,600㎡

Sep. 2017

Jan. 2019

LOGIPORT Kawasaki Bay

Kawasaki, Kanagawa

134,800㎡

296,800㎡

Dec. 2017

May 2019

Logicross AtsugiⅡ Project

Atsugi, Kanagawa

17,300㎡

34,700㎡

FY2019FY2020

Logicross Yokohama Kohoku Project

Atsugi, Kanagawa

8,000㎡

16,000㎡

FY2019FY2020

Saito Moegi Logistics Facility Project B District

Ibaraki, Osaka

15,800㎡

31,700㎡

FY2020

FY2021

Saito Moegi Logistics Facility Project A District

Ibaraki, Osaka

51,000㎡

125,300㎡

FY2020

FY2022

MITSUBISHI ESTATE CO., LTD.

44

Residential Business

MITSUBISHI ESTATE CO., LTD.

45

Residential Business1. Condominium Business Data

Condominiums
Sold(millions of yen)
Condominiums
Sold(units)Gross margin

Inventory (units)
New Supply of
Condominiums(units)MITSUBISHI ESTATE CO., LTD.

FY2018-2Q(Results)

FY2018(Results)

FY2019-2Q
FY2019(Results) (Estimates)

56,082

254,140

102,564

253,000

799

3,938

1,539

4,200

16.5%

19.7%

19.7%

16.5%

271

460

371

-

1,715

3,615

1,631

3,600

Land Bank
Breakdown in reporting term(as of September, 2018)

5,400
11,4004,000

Total: 20,800 units
FY2019 - FY2021
FY2022 - FY2024
FY2025 -46

Residential Business

2. Condominium Business Data②
Quarterly Distribution of Sales by Agreement Date
(Millions of yen)

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

254,140

239,422
96.2%
89.8%
76.5%

223,266

215,762

77.9%

79.4%

140,000
120,000

57.3%

80.7%

88.7%

89.3%

96.5%
89.3%

94.8%

95.8%

66.1%

80.0%
69.1%
55.9%

63.0%

60.6%

253,000 (E)100,000
80,00060,00040,00020,000
0

15/3

16/3

Full-year sales

MITSUBISHI ESTATE CO., LTD.

17/3

End of 3Q

End of 2Q

18/3

End of 1Q

19/3

Beginning of FY

47

Residential Business3. Condominium Market Data
Number of New Supply / Average Prices (the Greater Tokyo Area)(Unit)(Average price / Millions of yen)

120,000

60

100,000

50

80,00040

60,00030

40,00020

20,00010

01998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Number of new supply

0

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

MITSUBISHI ESTATE CO., LTD.

48

Residential Business

4. Rental Apartment

Parkhabio Akasaka Tower

Name

Location

Site Area

Total Units

Construction Start Date

Completion Date

Parkhabio Ebisu

Shibuya, Tokyo

700㎡

109

-

Oct. 2013

Parkhabio Azabu Mamianacho

Minato, Tokyo

1,600㎡

81-

Feb. 2014

Parkhabio Monzen Nakacho

Koto, Tokyo

900㎡

129

-

Mar. 2014

Parkhabio Akihabara

Taito, Tokyo

500㎡

73

-

Jun. 2014

Parkhabio Shibaura

Minato, Tokyo

700㎡

84

-

Dec. 2014

Parkhabio Iidabashi

Chiyoda, Tokyo

500㎡

113

-

Feb. 2015

Parkhabio Akasaka Tower

Minato, Tokyo

1,100㎡

212-

Mar. 2015

Parkhabio Akihabara Est

Taito, Tokyo

400㎡

54

-

Mar. 2015

The Parkhabio Ueno Residence

Taito, Tokyo

900㎡

125

-

Nov. 2015

The Parkhabio Ueno

Taito, Tokyo

500㎡

84

-

Jun. 2016

The Parkhabio Ueno Okachimachi

Taito, Tokyo

500㎡

72

-

Aug. 2016

The Parkhabio Shinagawa Togoshi

Shinagawa, Tokyo

300㎡

36

-

Nov. 2016

The Parkhabio Meguro

Meguro, Tokyo

700㎡

104

-

May 2017

The Parkhabio Negishi 3-chome

Taito, Tokyo

500㎡

45

-

Jul. 2017

The Parkhabio Yokohama Kannai

Yokohama, Kanagawa

500㎡

85

-

Oct. 2017

The Parkhabio Sangen-jaya Terrace

Setagaya, Tokyo

900㎡

56

-

Nov. 2017

The Parkhabio Nihonbashi Kodenmacho

Chuo, Tokyo

200㎡

44

-

Nov. 2017

The Parkhabio Asakusa Komagata

Taito, Tokyo

300㎡

41

-

Dec. 2017

The Parkhabio Shinjuku

Shinjuku, Tokyo

2,200㎡

219-

Feb. 2018

The Parkhabio Nihonbashi Hakozakicho

Chuo, Tokyo

400㎡

50

-

Feb. 2018

The Parkhabio Waseda

Shinjuku, Tokyo

900㎡

99

-

Mar. 2018

The Parkhabio Yokohama Kannai
MITSUBISHI ESTATE CO., LTD.

49

Residential Business

5. Redevelopment Project・Condominium Reconstruction Project
Redevelopment Project

Condominium Reconstruction Project

Scheduled
Delivery

Location

FY2018

Shinjuku, Tokyo

The Parkhouse Nishi Shinjuku Tower 60

954

FY2021

Minato, Tokyo

Maison Mita Reconstruction

FY2019Chiba, Chiba

Makuhari Bay-Park Cross Tower & Residence

497

FY2020

Shibuya, Tokyo

Ebisu Sun Heights Reconstruction

100

FY2020Mitaka, Tokyo

Gracia Tower Mitaka

184

FY2021

Shinjuku, Tokyo

Maison d’or Waseda Reconstruction

120

FY2021

Shinagawa, Tokyo

Crevia Tower Oimachi THE RESIDENCE

136

FY2021

Fukuoka, Fukuoka

Fujisaki Jutaku Reconstruction

FY2021

Narashino, Chiba

Tsudanuma The Tower

759

Tokyo

-

Total 1,100*

FY2021Adachi, Tokyo

Senju 1-chome District Redevelopment

180

Chiba

-

Total 700*

FY2021

Atsugi, Kanagawa

Hon Atsugi Station South Exit District
Redevelopment

160

FY2022

Bunkyo, Tokyo

Kasuga・Korakuen Station District Redevelopment

580

FY2023Chuo, Tokyo

Harumi 5-chome District Redevelopment

FY2021

Kagoshima, Kagoshima

Kagoshima city Chuo-cho 19・20 Redevelopment

Tokyo

-

Total 1,500*

Kanagawa-

Total 700*

Saitama-

Total 400*

FY2023 -Project Name

Total Units

Scheduled
Delivery

FY2023 -Location

Project Name

Total Units
110

230

2,600
210

Tsudanuma The Tower*Total of several planned projects

MITSUBISHI ESTATE CO., LTD.

50

Residential Business6. Overseas Residence
Name

Location

Site Area

Total Units

Completion Date

China
Wei Fong・Dong Yue

Changchun

130,000㎡

574

Dec. 2015

Gangzha, Nantong City

Jiangsu

98,000㎡

1,100

2020

aspire Sathorn-Thapra

Bangkok

8,500㎡

1,218

Nov. 2016

RHYTHM Rangnam

Bangkok

3,200㎡

385

Nov. 2017

Life Pinklao

Bangkok

8,000㎡

803

Nov. 2017

Life Asoke

Bangkok

10,700㎡

1,642

Apr. 2018

RHYTHM Ekkamai

Bangkok

3,000㎡

326

Sep. 2018

Life Sukhumvit 62

Bangkok

4,300㎡

438

Jan. 2020

Life one WirelessBangkok

7,000㎡

1,344

Feb. 2020

Life Ladprao

Bangkok

11,000㎡

1,615Mar. 2020

Life Asoke-Rama9

Bangkok

14,000㎡

2,248

Oct. 2020

Stonor 3

Kuala Lumpur

5,900㎡

400

2019

The Gems

Selangor

40,000㎡

676

TBA

ThailandWei Fong・Dong Yue

Life Asoke-Rama9

Malaysia

The Gems
MITSUBISHI ESTATE CO., LTD.

51

International Business

MITSUBISHI ESTATE CO., LTD.

52

International Business1. International Business Overview①Total assets by area
Total Assets of Major Overseas Subsidiaries
Main Location

At Jun 30, 2018 *1,2,3

Currency Exchange Rate

Rockefeller Group, Inc.

USA

461,646 millions of yen￥ / $(BS)110.54

Mitsubishi Estate London Limited.

UK

142,779 millions of yen￥ / ￡(BS)144.59Mitsubishi Estate Asia Pte. Ltd. *4

Asia135,397 millions of yen￥ / S$ (BS)80.79

*1 Before consolidation adjustments.
*2 Due to overseas subsidiaries closing
accounts in Dec., figures from
3 months previous are used.
*3 The Total Assets of Major Overseas
Subsidiaries includes those in theInternational Business and the Investment
Management Business.
*4 Including the equity investments directly
made by Mitsubishi Estate.

②Strategy
・We analyze each market, and screen the “suitable place” where we can earn appropriate profits.
・We will continue to expand our international business with strategies of “suitable place, suitable resources” while developing diverse approaches according to
the characteristics of the targeted markets and the necessary management resources.

The United States

EuropeAsia

Strengths andCompetitiveness・Sourcing ability, market accessibility,
development capability based on longterm
business achievements
・Asset management service by TA Realty

・Sourcing ability based on long-term businessachievements
Utilizing development know-how based on・Development Team composition /domestic business experiencemanagement ability
・Asset management service by Europa Capital

Approach・Hands-on development led by Rockefeller
Group・Hybrid model investment using TA Realty's
resources

・Development focusing on asset manager
model-type development

MITSUBISHI ESTATE CO., LTD.

・Expands mainly on partnership-type realestate development investments

53

International Business2. North America
Name

Location

Main Use

Site Area(㎡) Leasable Area(㎡) Floors*1 / Units Completion Date

1271 Avenue of the Americas

New York, NewYork

Office・Retail

8,950

195,000

48/3

1959
Renovation
completion in 20191221 Avenue of the Americas

New York, NewYork

Office・Retail10,000240,700

51/5

1972

New York, New
York

13/1

2016

Flushing Commons(Phase 1)

6,300

44,10028 State Street

Boston,Massachusetts

Office・RetailRockefeller Group Logistics
Center(6 Bldg.)

Piscataway, New
JerseyLogistics

Office for sale
Residence
Retail

148
17/1

3,100

53,200930,000

200,000*2

40/3-

NORTH AMERICA
Rockefeller Group International, Inc.
Mitsubishi Estate New York Inc.
New York

Aug. 2017
1968

Los Angeles

BostonWashington, D.C.

Dec. 2020

Boro Tower

Tysons, Virginia

Office・Retail

16,70041,00020/4

Oct. 2018

North Valley

Phoenix, Arizona

Rental Apartment

100,000

32,000385

Nov. 2017

Goodyear

Goodyear,Arizona

Rental Apartment

97,00027,000326

Sep. 2018

The Ice House

Beverly Hills,
California

Office

3,400

4,200

4

1925

UTA Plaza

Beverly Hills,
California

Office・Retail

10,40017,700

3/1

1985

Tri City Industrial Complex

San Bernardino,
California

Logistics

76,00039,500*2

1

Jun. 2018

Optimus Logistics Center(2 Bldg.)

Perris, California

Logistics

280,000

134,000*2-

Aug. 2018

Mitsubishi Estate Group office
and its project locations
Major Project Locations*1 Floors(above ground / below ground)*2 Total Floor Area

Flushing Commons
MITSUBISHI ESTATE CO., LTD.

Boro Tower

Optimus Logistics Center

1221 Avenue of the Americas

1271 Avenue of the Americas
54

International Business

3. Europe
Name

Location

Main Use

Clive House

London, UK

OfficeSite Area(㎡) Leasable Area(㎡) Floors*1

145 Leadenhall Street

London, UK

Office・Retail

1 Victoria Street

London, UK

Office150 Leadenhall Street

London, UK

Office1,000

8,600*2

8/2

1977

6-8 Bishopsgate

London, UK

Office1,700

21,100*2

23/2

1979

Warwick Court

London, UK

Office・Retail

3,300

18,300

8/2

2003

Central Saint Giles

London, UK

Office・Retail

7,900

38,80011/2

2010

EUROPE

Completion Date

8,000

8/1

1930’s

-

1,500

9/1

1950

7,900

31,200

9/3

1960’s1,800

8 Finsbury Circus

London, UK

Office・Retail

2,200

15,9009/2

2016

245 Hammersmith Road

London, UK

Office・Retail

5,000

24,000

12/1

Spring 201946 Rue La Boétie

Paris, France

Office

580

2,400

9

1964

Feringastrasse 10-12

Munich, Germany Office

12,00022,000

5/2

2003

Mitsubishi Estate London Limited

London*1 Floors(above ground / below ground)*2 Total Floor Area

Paris

MunichMitsubishi Estate Group office
and its project locations
Major Project Locations

Warwick Court
MITSUBISHI ESTATE CO., LTD.

Central Saint Giles

8 Finsbury Circus

46 Rue La Boétie

Feringastrasse 10-1255

International Business

4. Asia / Oceania
Name

Location

Main Use

Site Area(㎡) Leasable Area(㎡) Floors / Units

Completion Date

Mix-use Development in Suzhou Suzhou City, China

Residence

27,000-300

May 2016

Residential Development Project
Shanghai City, China
in Shanghai

Residence・Retail85,000-1,400

Dec. 2017

Logistics Development Project inBeijing City, China
Beijing(5 Bldg.)

Logistics

107,200

-

-

2018

Township Development Projectin Chengdu

Chengdu City, China

Residence・Retail75,000

-

3,400

2019

Taiwan Nangang Development
Project(4 Bldg.)

Taipei City, Taiwan

Office・Hotel ・Retail

67,000200,000*-

Grand Open in
Dec. 2015

Taiwan Yucheng Development
Project

Taipei City, Taiwan

Office・Residence

5,200

-

-

-

Taiwan Banqiao Residential
Project

New Taipei City,
TaiwanResidence

5,700

-

-

-

Yoma Central(4 Bldg.)

Yangon, Myanmar

Office・Residence・
Hotel・Serviced
Apartment・Retail40,000--2021

Le Meridien

Ho Chi Minh, Vietnam Office

Capita Spring

Singapore

DaswinASIA･OCEANIA

SuzhouMitsubishi Estate(Shanghai) Ltd.
ShanghaiChengduTaipei

Mitsubishi Estate Taiwan Ltd.

Yangon

3,200

9,900

25

Dec. 2014

Office・Serviced
Apartment・Retail

6,100

93,400*51

2021

Jakarta, Indonesia

Office16,00075,00041

2021

Melbourne Quarter East Tower

Melbourne, Australia

Residence

4,400

-

719

2020

Circular Quay Tower

Sydney, Australia

Office・Retail

4,600

-

-

2021

Ho Chi Minh City

Singapore

Mitsubishi Estate Asia Pte. Ltd.

Jakarta* Total Floor Area

SydneyMelbourne

Mitsubishi Estate Group office
and its project locations
Taiwan Nangang Development Project
MITSUBISHI ESTATE CO., LTD.

DaswinYoma Central

Circular Quay Tower

Major Project Locations
56

Others

MITSUBISHI ESTATE CO., LTD.

57

Others

1. Investment Management Business: Global Platform
Globally, we have combined assets under management of approximately JPY 3 trillion.

AuM Area Breakdown(Billions of Yen)

Asia & Oceania
40.0Europe350.0

JREA
1,010.0

Carry out marketing and research and establish funds worldwide
Overseas

Provide global opportunities to worldwide investors
Japan Real Estate AssetManagement Co., Ltd.

Group-wide
Synergy

Total:
approximately
JPY 3 trillion.

United States
1,000.0

Domestic

MJIA
650.0

Mitsubishi Jisho
Investment Advisors, Inc.
(End of FY2019-2Q)

Mitsubishi Estate Group’s network
for investment & development and management & services
MITSUBISHI ESTATE CO., LTD.

58

Others

2. Segment Change to Hotel & Airport Business Group
Existing Segment

From FY2019

Office Building Business

Office Building Business

Lifestyle Property
Business
Residential Business
International Business
Investment
Management BusinessArchitectural Design &Engineering Business

Hotel Development Businesse.g.
・MJ Hotel Osaka Higashi Shinsaibashi
・Nishi Asakusa 3-chome Hotel Project

Hotel Operation Businesse.g.
・Yokohama Royal Park Hotel・The Royal Park Hotel Kyoto Sanjo

Hotel Business
Real Estate Services
Business
Other BusinessAirport Operation Businesse.g.
・Takamatsu Airport
・Shimojishima Airport

Lifestyle Property
Business

Consolidation of 4 businesses
with increasing inbound demand

Residential Business
International Business

Hotel & Airport Business Group

Investment
Management Business

Hotel Development Business

Hotel & Airport Business

Hotel Operation BusinessArchitectural Design &Engineering BusinessAirport Operation Business

Real Estate Services
Business

Development BusinessResort Hotel

Other BusinessResort Hotel
Development Business

MITSUBISHI ESTATE CO., LTD.

59

Others

3. GovernanceOutside Director
・7 out of 15 are outside directors“Company with Nominating Committee, etc.”
・It consists of a nominating committee, audit committee, andremuneration committee.
・Each committee has a majority of outside directors.
・All outside directors in remuneration committee

Executive Compensation Plans to Share Values with Shareholders●Eligibility
 Corporate Executive Officers, Executive Officers, Group Executive Officers● Restricted Stock Plan and New Long-term Performance-based Incentive Plan (Phantom Stock)Combination
 Restricted Stock Plan
・Incentive: stocks
・Lock-up Period: 3 years New Long-term Performance-based Incentive Plan (Phantom Stock)・Incentive: cash
・Performance Evaluation Period: 3 years
・Calculation [Executive Officer’s Base amount×(ⅰ)×(ⅱ)](ⅰ)Percentage of net fluctuation in common stock price(ⅱ)Percentage based on the relative ranking of the Company’s total shareholder return among 5 (five) peer companies*
in the same industry (between 0% - 100%)*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.

60

Investment / Financial Data

MITSUBISHI ESTATE CO., LTD.

61

Investment / Financial Data

1. Management Indicator / Dividend Policy

FY2017(Results)

FY2018(Results)

FY2019(Estimates)(Reference)
Mid-term
Management Plan

FY2020(Estimates)

Operating income(Growth potential) (Billions of yen)

192.4

213.0

215.0

230.0

220.0

Operating income / Total assets (ROA)(Performance)

3.6%

3.8%

3.6%

3.8%

Around 3.5%

Net interest-bearing debt / EBITDA(Stability) (times)

7.7

7.3

7.9

Around 8

Around 8.5

Net interest-bearing debt / EBITDA(after hybrid-debt deduction) (times)

7.1

6.7

7.3

Around 7.5

Around 8

Annual dividends per share (yen)

20

26

26

-

-

27.0%

30.0%

29.3%

-

-

Dividend payout ratio

MITSUBISHI ESTATE CO., LTD.

62

Investment / Financial Data

2. Capital Investment
Capital Investment / EBITDA

Major Breakdown of Capital Investment(Billions of Yen)

(Billions of Yen)

400.0

17.0

350.0

18.0

300.0

275.3

250.0
200.0
150.0
100.0
50.0
0.0

400.0

375.0

51.6

177.3
17.2

6.2

30.9
26.4

33.6

40.1

20.4
15.3
20.6

12.1

64.0
FY2015104.9

FY2016

2.8

275.3
27.6
25.1
58.6

17.2
6.5 15.2

7.1

2.7
93.4
22.1
36.0

6.5

FY201796.3

FY2018

279.7

300.0
116.0

250.0
200.0

27.0

15.9
126.1

350.0

8.0

289.5
2.4 11.8

375.0

72.0
13.0
22.0
82.0

139.4
8.7
38.5

8.1

FY2019(E) FY2019-2Q

Office Building(MEC: Refurbishment)

Office Building(Subsidiaries)

Lifestyle Property

Residential

International

Hotel & Airport

Special Purpose Vehicle

177.3

151.1
139.4

5.3 150.0

21.1 8.1
2.7
5.1
41.5

Office Building(MEC: New/Redevelopment)

239.9

275.3
275.3
252.0

303.0

302.4
289.5

100.0
50.0
0.0

FY2015FY2016FY2017

Capital Investment

FY2018FY2019(E) FY2019-2Q

EBITDA

Other(including consolidated eliminations)

MITSUBISHI ESTATE CO., LTD.

63

Investment / Financial Data

3. Special Purpose Vehicles: Investment Balance (Unconsolidated / Domestic)
Breakdown: Investment Balance (as of September, 2018)(Billions of Yen)

Interest bearing debt
111.8

Office Building
Business
314.6

Consolidated S.P.V.
130.9

Equity investment byother companies
86.7

S.P.V. Total Scale*1*2
405.2

Interest bearing debt
111.6
Office Building
Business
207.6
Equity investment byother companies
86.7

Equity investment by
Mitsubishi Estate
206.6
Lifestyle Property
Business
90.6

Lifestyle Property
Business
66.6

Unconsolidated
S.P.V. Scale
274.3

Equity investment by
Mitsubishi Estate75.9*1 S.P.V. in which our stake is 20% or above*2 Please refer to FACTBOOK for the breakdown by segment

MITSUBISHI ESTATE CO., LTD.

64

Investment / Financial Data

4. Net Interest-bearing debt／EBITDA Ratio(Billions of Yen)

10.0

2,500.0(Times)9.0
2,000.0

7.2

7.7

7.5

7.1

7.0

1,500.0

1,000.0
1,730.8

1,878.6
1,753.6

2,153.6
1,978.6

7.9
7.3
7.3
6.7

2,194.8
2,019.8

8.0
7.0
6.0

2,380.0
2,205.0

5.0
4.0
3.0
2.0

500.0

1.0
0.0

FY2015FY2016Net Interest-bearing debt
Debt/EBITDA Ratio (right axis)

MITSUBISHI ESTATE CO., LTD.

FY2017FY2018FY2019(E)0.0

Net Interest-bearing debt
*after hybrid debt deductions
Debt/EBITDA Ratio (right axis)*after hybrid debt deductions
65

Investment / Financial Data

5. Interest-Bearing Debt Breakdown(Billions of Yen)

3,000.0

95.0%

95.0%

96.1%

93.7%

2,500.0

6.8

10.2

2,000.0

7.2

8.3

1,500.0

1,000.0

35.0

61.8%

61.7%

53.1%
1,292.9

1,065.4

96.4%

95.1%

93.4%

7.2

9.5
54.0%

1,261.9

1,072.3

28.0
60.1%

64.1%

1,381.2

566.3

0.0

Total

636.2

747.2

701.5

5.6

69.7%
1,428.5

4.7
100.0

73.2%

1,523.0

685.2

653.0

250.0

250.0

612.7

603.8

FY2013

FY2014FY2015FY2016FY2017FY2018

1,693.0

1,716.8

2,085.4

1,973.0

1,929.3

2,291.0

2,396.9

2,481.6

MITSUBISHI ESTATE CO., LTD.

Bank Loan

Subordinated loan

70%

50%

30%

FY2012

Subordinated bond

80%

40%

FY2011

Straight Bond

90%

60%

1,208.8

250.0

500.0

100.0

100%

93.6%

CP

Lease liability

Fixed ratio

20%
10%
0%

Long-term ratio

66

Investment / Financial Data

6. Interest-bearing debt:
Procurement Interest rates / Duration of Bonds (Unconsolidated)(Year)

10
9
8

9.47
8.38

8.23

1.92%

1.94%

2.5%
9.04

8.22
1.93%

7.71
1.90%

7
6

1.65%

1.25%

4
3

1.66%

1.52%

5

8.89

1.33%

1.88%

7.52

1.88%

6.31

1.72%
1.58%

1.54%
1.42%

1.55%

1.05%

1.05%

1.01%

0.72%

0.96%

0.70%

1

FY2007

FY2008Duration of Bonds

MITSUBISHI ESTATE CO., LTD.

FY2009

1.41%

1.38%

0.96%

0.95%

FY2010FY2011

Bonds/Average interest

FY2012FY2013

1.32%

1.5%

1.07%

0.87%

FY2006

6.19

1.27%

2

0

5.94

2.0%

1.52%

1.40%

1.29%

0.99%

7.20

6.82

FY20140.62%

FY2015

Bank Loans/Average interest

0.61%

FY2016

0.66%

FY2017

0.97%

1.0%

0.75%

FY20180.5%

Total/Average interest

67

Contact Information
Investor Relations Office,Corporate Communications Department
Mitsubishi Estate Co., LTD.
+81-3-3287-5200
http://www.mec.co.jp/<Disclaimer>
Regarding information on the properties of this material, it is based on judgment obtained 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.