FY 2021 – 2Q
(For the Year Ending March 31, 2021)

IR Presentation

For details of “Long-Term Management Plan 2030”, which began from April 2020, please refer to the following link.
https://www.mec.co.jp/j/investor/plan/pdf/plan200124.pdf

Contents
Summary of FY 2021-2Q Results3

Summary of FY 2021 Estimates

17

Financial Supplemental Data

23

Overview of “Long-Term Management Plan 2030”

31

Business Overview

41

Commercial Property Business

MITSUBISHI ESTATE CO., LTD.

Office Building

44

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

58

Residential Business

63International Business

68

Other business

71

Investment / Financial Data etc.

73

ESG Initiatives

78
2

Summary of FY 2021-2Q Results

MITSUBISHI ESTATE CO., LTD.

3

Summary of FY 2021-2Q Results

1. Summary of Financial Statements＜FY 2021-2Q Financial Results＞•

Revenue decreased but profit increased on a year-on-year basis.

•

Profits increased mainly due to an increase in rental profits from office building and an increase in capital gains despite
the hotel and retail property business being heavily impacted by the spread of COVID-19.

•

Revenue decrease is mainly due to a decrease in revenues from the hotel and retail property business.

＜FY 2021 Estimates＞•

Extraordinary loss items (COVID-19 related, etc.) are reflected to the original estimate and operating income improved
by approximately 6 bn yen.

•

Profit attributable to owners of parent remains the same.

＜Major Topics＞(Current quarter (July to Sep 2020)•

Rinku Premium Outlet (Expansion Phase 5) evolved to the largest outlet center in western Japan* (store floor area of
about 50,100㎡) and opened in August 2020.

•

Official name of the Tokyo Tokiwabashi Project was determined to be "TOKYO TORCH" (September 2020)•

Mizuho Marunouchi Tower, Ginkokaikan, Marunouchi Terrace (Marunouchi 1-3 Project) were completed(September 2020)*based on store floor area according to a survey by MEC.
MITSUBISHI ESTATE CO., LTD.

4

Summary of FY 2021-2Q Results

2. Income Statement Results for FY2021-2Q
YoY profits have increased due to an increase in building rental profits and capital gains, despite
the impact of COVID-19.
Millions of yen (rounded off
Millions of yen (rounded down)<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

FY2021-2Q
527,312
325,885
142,741
34,478
10,10626,987△ 12,886
98,072
92,656
6,571
12,0332,140△ 3,478△ 11,851
10,218198
16,671
91,6189,307
50,939FY2020-2Q
535,226
331,055
149,168
30,278
8,757
28,429△ 12,463
92,27690,0193,436
10,487
1,271△ 1,922△ 11,015
6,738
163
17,931
81,08348,078Change△ 7,914△ 5,170△ 6,427
4,199
1,349△ 1,442
△ 423
5,795
2,637
3,135
1,546
869
△ 1,557
△ 835
3,479
34
△ 1,259
10,5359,307
2,860

Capital Gains included in Operating Income
FY2021-2Q
Total
23,000Commercial Property Business
17,000Residential Business
6,000International Business
0
Investment Management Business
Other
Eliminations or corporate-

Business profits
EBITDA
Interest-bearing debt

Commercial
Property
2,637*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

Residential
3,135International
1,546

11,00011,0003,000△ 3,000-

Others△ 1,523

Increase in rental profits
Decrease in capital gains

Increase in capital gain
and condominium profits

92,276

Change
5,830
5,534
2,621

ChangeMajor Factors for Changes in
Operating Income by BusinessMillions of yen (rounded down)

FY2021
FY2020-2Q-2Q
98,27092,439145,354
139,820
2,591,971 2,589,350

to the nearest billion)

FY2020-2Q
12,000
6,000
3,000
3,000
-

FY2020-2Q

98,072

Increase in office rental profits
Increase in capital gain
Decrease in profit in retail properties andhotels due to impact of COVID-19

Commercial
Property

Residential

International

Others

FY2021-2Q

5

Summary of FY 2021-2Q Results

3. Income Statement Estimates for FY2021 (vs Previous Estimates)
Extraordinary loss items (COVID-19 related, etc.) are reflected to the original estimate.
Profit attributable to owners of parent remains the same.
Millions of yen (rounded off
Millions of yen (rounded down)

Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

FY2021
FY2021
Current
Previous
Estimates Estimates
1,142,000 1,142,000
674,000
674,000
320,000
320,000
88,00088,00020,00020,00066,00066,000△ 26,000 △ 26,000
191,000
185,000
169,000
163,000
12,00012,00029,00029,000
4,000
4,000
1,000
1,000
△ 24,000 △ 24,000
18,00018,000300
300
34,00034,000175,000
169,000
15,00015,00031,00022,000110,000
110,000

Business profits
EBITDA
Interest-bearing debt

FY2021
FY2021
Current
Previous
Estimates Estimate
191,300
185,300
293,800
289,800
2,610,000 2,610,000<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

Change
0
0
0
0
0
0
0
6,000
6,000
0
0
0
0
0
0
0
0
6,000
0
9,000
0

Capital Gains included in Operating Income
to the nearest billion)
FY2021
FY2021
Current
Previous
ChangeEstimates Estimates
Total
31,00031,0000Commercial Property Business
22,00022,0000
Residential Business
6,000
6,000
0
International Business
3,000
3,000
0
Investment Management Business
Other
Eliminations or corporate-

Major Factors for Changes in
Operating Income by Business
Commercial
Property
6,000

MITSUBISHI ESTATE CO., LTD.

191,000
operating income increased due to thereclassification of extraordinary losses arisingfrom COVID-19 that were initially treated as
operating expenses

Change*Architectural Design & Engineering / Real Estate Service Business and Other businesses

Others0

185,000

Millions of yen (rounded down)

6,000
4,000
0

Residential International
00FY2021
Current
Estimates

Commercial
Property

Residential

International

Others

FY2021
Estimates

6

Summary of FY 2021-2Q Results

4. Income Statement Estimates for FY2021 (vs Previous FY Results)
Estimated decrease in revenue and profits considering the impact of the COVID-19. An increase indomestic and overseas office rental profits is estimated.
Millions of yen (rounded off
Millions of yen (rounded down)

Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

FY2021
FY2020Current
ChangeResults
Estimates
1,142,000 1,302,196 △ 160,196
674,000
723,712 △ 49,712
320,000
385,538 △ 65,538
88,000134,175 △ 46,175
20,00021,316△ 1,316
66,00065,871129△ 26,000 △ 28,418
2,418
191,000
240,768 △ 49,768
169,000
187,855 △ 18,855
12,00024,320 △ 12,320
29,00046,156 △ 17,156
4,000
4,467
△ 467
1,000
389
611
△ 24,000 △ 22,420△ 1,580
18,00012,377
5,623
300
229
71
34,00033,574426
175,000
219,572 △ 44,572
15,00026,251 △ 11,251
31,00021,8749,126
110,000
148,451 △ 38,451

Business profits
EBITDA
Interest-bearing debt

FY2021
FY2020Current
Results
Estimates
191,300
240,998
293,800
336,784
2,610,000 2,429,883<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

Capital Gains included in Operating Income
FY2021
Current
Estimates
Total
31,000Commercial Property Business
22,000Residential Business
6,000International Business
3,000
Investment Management Business
Other
Eliminations or corporate-

Commercial
Property△ 18,855

240,768

MITSUBISHI ESTATE CO., LTD.

61,00023,00010,00028,000-Change△ 30,000△ 1,000△ 4,000△ 25,000-

Increase in rental profits
Decrease in capital gains

Residential△ 12,320 International△ 17,156

Decrease in capital gains fromrental apartments
Decrease in condominium profits
from impact of COVID-19

Others△ 1,436

191,000

Increase in office rental profits;decrease in profits from retail properties andhotels due to the impact of COVID-19

Change*Architectural Design & Engineering / Real Estate Service Business and Other businesses

FY2020Results

Major Factors for Changes in
Operating Income by BusinessMillions of yen (rounded down)△ 49,698△ 42,984
180,117to the nearest billion)

FY2020Results

Commercial
Property

Residential

International

Others

FY2021
Current
Estimates

7

Summary of FY 2021-2Q Results

5. Impacts of COVID-19 (major impacts on 2Q)
The impact is basically in line compared with estimated impact (Full-year).
Estimated
impact(Full-year )Categories

Capital Gains

Operating profits

Impact on
2Q(Total)---*3

Domestic
Condominiums, etc.*1▲JPY 5.0B

Retailproperty▲JPY 16.0B▲JPY 11.8B

Hotels▲JPY 15.0B▲JPY 9.9B

Offices▲JPY 0.5B-

IncomeGain

Major situation and impact

Extraordinary
loss*2-*3▲JPY 8.5B▲JPY 3.3B▲JPY 7.5B▲JPY 2.4B▲JPY 4.5B

Others▲JPY 8.5B▲JPY 4.5B-

Subtotal

Total

MITSUBISHI ESTATE CO., LTD.

▲JPY 40.0B▲JPY 45.0B▲JPY 26.2B▲JPY 26.2B• 74% of full-year forecast has been recorded by 2Q• See P14 for details• Model units visitors on 2Q recovered to numbers seen last year
• Despite carry-over of certain sales, the risk of delay in delivery due toconstruction delay or other reasons is reduced.
• See P12 for details• Overall, sales remain the same level as those in June despite the fluctuations
due to the spread of COVID-19 and weather.
• See P13 for details• Occupancy rate has continued to recover gradually after June
• No impact• Impact on the brokerage business due to stagnation of the real estate market• Impact on certain businesses of consolidated subsidiaries (exhibition, parking
lot, golf course, etc. )• See P15 for details of the state of overseas businesses▲JPY 20.5B▲JPY 5.7B*1 Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income▲JPY 20.5B*2 Some costs incurred by retail properties and hotels that were closed during this period are▲JPY 5.7B*3 Although there was a delay from the initial condominium sales schedule, the impact of thisrecorded in extraordinary loss for COVID-19 (e.g. depreciation cost or rent)
delay is not reflected in current financial estimate as there is no finalized delay in delivery
for the coming fiscal year.

8State of businesses

6. State of Businesses(i): Offices (overview of 2Q result)
Change in vacancy rate and average rent, and key summary of 2Q results
Change in vacancy rate and average rent
2020/3
Vacancy rate
(All uses in Japan)

Vacancy rate
(Marunouchi Offices)

Average rent
(All uses in Japan)• No impact from COVID-19 on 2Q results• Vacancy rate remains low for all uses in Japan and Marunouchi
offices• Average rent continues to rise
• Since many companies are currently reluctant to extend floor space,
expand or relocate offices, there is an expectation that more time will
be required than usual to fill the vacancies• Change of vacancy rate is generally in line with the original estimate
which includes higher vacancy rate at the end of the FY due totenant relocations to newly completed buildings

2021/32020/9(estimates)

1.07％

1.12%

2.0%

0.69％

0.63％

-

¥ 27,177¥ 27,724¥ 28,000

Rent increases in Existing Buildings
As of the 2Q results, revenue from existing buildings continues to grow, which mainly came from tenants whose contracts were closed
before the COVID-19 outbreak (increase of JPY 6.7 billion in 2Q)(Billions of Yen)

40.0
35.0
30.0

28.4

Accumulated amount (from FY2015)

21.9

25.0
20.0

16.0

15.0

11.3

10.0
5.0
0.0

35.9

35.1

Rent revenue increase from moving in/out tenants, rent revisions

2.4

2.4

15/3

MITSUBISHI ESTATE CO., LTD.

4.9

7.3

16/3

4.0
17/3

4.7

18/3

5.9

19/3

6.5

20/3

6.7

7.5

21/3-2Q

21/3(E)

9

State of businesses

7. State of businesses (ii): Offices (initiatives looking ahead to post-COVID-19)
Enhancing offices' ability to create value through sophisticating the core function of the center
office and keeping pace with diversified workstyles.
Previous workstyles
Common to work at thesame place/time, both ofwhich are predetermined.

New workstyles
Center office should be the coreand hub of a company to maintaina sense of belonging and trust
among employees in thediversification of values.

Sophistication of the center officeTOKYO TORCH(Tokiwabashi PJ）• 2ha outdoor space• Communal space for workers• Flexible office use by multiple
tenants• Implementation of contactlesssecurity• Large hall (2,000 seats)• World-class hotel (100 rooms)• Eco-friendly city development (e.g.
green bonds)

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

Approaches to diversified workstyle
WORK × ation Site (Workation)• Establishment of a new hub(second hub)
• Reinforcing cooperation with local
governments

Telecubes• Increasing installment• Establishing a Web meeting center(Demonstration trial)

MITSUBISHI ESTATE CO., LTD.

10

State of businesses

8. State of businesses (iii)：Offices（safety and security measures)
For the safety of workers and visitors, various measures for infection control are implemented.
Competitive edge of our buildings includes attentiveness in property management.
Installation of thermal
cameras and monitors

Installation ofphysical distance posters

Installation ofreminder posters in elevators

PHYSICAL DISTANCE
新型コロナウイルス感染症の拡大防止のため間隔をあけてご利用ください。
Please keep distance between yourself and others
to prevent the spread of COVID-19.

２m

できれば

least 6 feet

間隔をあけてご着席をお願いいたします。
Please be seated by respecting a social

三菱地所プロパティマネジメント株式会社

Installation of sanitizers and posters of prevention measures

MITSUBISHI ESTATE CO., LTD.

Installation of paper towels

11State of businesses

9. State of businesses (iv): Retail properties and outlet malls
Status of retail properties and outlet malls operations(from Jul-Sep 2020)• Maintaining the sales level in June despite fluctuations in customer volume and store
sales due to COVID-19 and weather• "Outlet malls" and "Stand-alone shopping center" remain steadily recovering• "Urban, mixed-use buildings Commercial zone" are slow to recover due to a decrease in
the number of workers who commute to offices

Outlet malls (GOTEMBA PREMIUM OUTLETS)• In all types of facilities, restaurants are recovering at a slower pace than retail stores.
However, restaurants are currently on a recovery trend as well

Sales trends in retail properties and outlet malls
Type of facilities(year-on-year comparison)

Sales level from July to September(year-on-year comparison)

Outlet malls

Approx. 80%

Approx. 80-90%

Stand-alone shopping center

Approx. 90%

Approx. 80-90%

Urban, mixed-use buildings
Commercial zone

Approx. 50%

Approx. 50-60%

Type of facility

MITSUBISHI ESTATE CO., LTD.

Stand-alone shopping center(MARK IS Minatomirai)

Urban, mixed-use buildings Commercial zone
(Marunouchi Bldg.)

12

State of businesses

10. State of businesses (v): Hotels
Status of hotel operations (Jul-Sep 2020)• Occupancy rate has been recovering since June
• Occupancy rate temporarily increased in the second half of July as a result of economic
stimulus measures such as GoTo Travel, but recovery is slow due to further spread of
COVID-19• Hotels popular among Japanese consumers and resort-type hotels are relatively steadily

Sendai Royal Park Hotelrecovering. (Occupancy rates of Sendai RPH and Yokohama RPH for Aug.-Sep.: More than50%)
• Meanwhile, hotels in Tokyo and Osaka areas have been struggling(Occupancy rate: 10-20%)

Royal Park Hotels/Trend in occupancy rate (Jan-Sep 2020)
80%

74.1%
57.6%

60%
40%

22.2%
20%

4.5%

10.4%

15.9%

22.3%

29.1%

1.4%

0%
Jan.

MITSUBISHI ESTATE CO., LTD.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Yokohama Royal Park Hotel(Yokohama Landmark Tower)

13

State of businesses

11. State of businesses (vi): Domestic condominiums
After declaration of a state of
emergency was lifted

Highlights of 2Q results• Sales and number of domestic condominiums sold were almost
the same as those of the previous year

mostly to the level of the previous year

• Gross margin improved due to sales of highly profitable large-scale
high-rise condominiums (year-on-year increase by 2.5 points)• Steady decrease in finished inventory (-217 YoY, -75 vs thedemandinterest due to spread of WFH• Overall, no decrease in demand for condominiums is seen

■Data on domestic condominiums• Decline in risks of delayed delivery due to delays in construction,

FY2020-2Q

FY2021-2Q

72.5 billion yen

68.3 billion yen

Condominiums
Sold (units)

1,213

1,178

Gross margin

17.0％

19.5％

515

298

Inventory (units)• Residences with high convenience in urban areas remain in high• Large residences in suburban areas are drawing a great deal of

beginning of FY2021)

Revenue• Model units visitors between July and September recovered

etc., which were initially estimated

Urban Project: The Residence Yotsuya(to be delivered in Q3 of FY2021)

Tsudanuma The Tower(delivery started in 2Q of FY2021)

MITSUBISHI ESTATE CO., LTD.

Suburban Project: The Parkhouse Shin-Urayasu Marine Villa(to be delivered in FY2022)

14

State of businesses

12. State of businesses (vii): International businessOverall state of each area and major topics in the first half
<U.S. and Europe>• COVID-19 Impact on office business is minor• Some office tenants delayed their move-in, and rent for certain retailtenants has been reduced or exempted<Asia>• Condominiums sales and new office leasing overall tends to require moretime while the recovery depends on cities (Housing market in China
recovered quickly)<Capital recycling business and capital gain>• The sale of mainly logistics facilities, rental houses and offices has become
possible in a movement towards normalization of markets

Morello (rental housing in the U.K.)<Topic>• Decided to enter into a condominium business in the U.K. and Australia• A U.S. hybrid model investment fund* is adopted as a constituent of"NCREIF Real Estate Investment Index (NFI-ODCE)“（Investment Management Business）
One Sydney Harbour Residences One (Condominiums in Australia)* "TA Realty Core Property Fund” which became an open-end fund in 2018

MITSUBISHI ESTATE CO., LTD.

15

State of businesses

13. Promotion of DX (Digital Transformation)
Selected for DX Stocks 2020 and expansion to urban development■Selected for DX Stocks 2020 (By Ministry of Economy,
Trade and Industry, and Tokyo Stock Exchange)【Major Evaluation Points】• Streamlining and sophistication of facility
management services by utilizing
robotics and drones• Creation of new business models,
including the elevator media business,through open innovation with startups

Streamlining and sophistication of facility management by utilizing robotics and drones

Elevator media business through cooperation with startups

MITSUBISHI ESTATE CO., LTD.

■Transforming Marunouchi into a smart city through DX

Established the area management model which utilizes data totransform the Marunouchi area into a smart city

Digital Transformation (DX) model of area management in Marunouchi

Tests for optimization of waste collection routes byutilizing AI and quantum computers(approx. 57% of CO2 is to be reduced)

Pilot program of electric scooterson public roads (First in japan)

16

Summary of FY 2021 Estimates

MITSUBISHI ESTATE CO., LTD.

17

Summary of FY 2021 Estimates

1. Impact of COVID-19 (i) (impact on FY 2021 estimates)
Breakdown of business profits vs FY2020 and estimated impact of COVID-19
Approx. ￥45 billion reduction (including extraordinary losses) is estimated against income gain and domestic
condominiums, etc.
(Billions of Yen)FY2020 results

FY2021 estimates

Business Profits：240.9

Business Profits：191.3
Incorporating①delivered, ②contracted③and highly-saleable properties
into FY2021 estimates

61.0

Capital Gains

＋20.0
14.7
Domestic
Condominiums＋
Income Gain

165.2

FY2020 results▲1.0【Major Factors】
・Increase in building rental profits：＋¥ 7 billion
・Increase in overseas income gain：＋¥ 5 billion
・Increase in Asia condominium business profits：＋¥ 3 billion
・Others：＋¥ 5 billion

Fluctuation before factoringin the impact of COVID-19

▲5.0
▲40.0

31.0

Further details
on P198.7
Loss due to COVID-19:-6 billion yen(extraordinary loss)

Estimated impact of
COVID-19

151.6

FY2021 estimates■Income Gain ■Domestic Condominiums* ■Capital Gains* Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income
MITSUBISHI ESTATE CO., LTD.

18

Summary of FY 2021 Estimates

2. Impact of COVID-19 (ii) (basis of preliminary calculations of FY 2021 estimates)
Categories

Capital Gains

Estimated Impact(amount of
extraordinary loss*2)-

Domestic Condominiums,
etc.*1▲￥5 billion

RetailProperty▲￥16 billion

HotelsIncome Gain

Offices

OthersSubtotal
Total

MITSUBISHI ESTATE CO., LTD.

(▲￥3.3 billion)▲￥15 billion(▲￥2.4 billion)

Key assumptions for FY2021 estimates and COVID-19 impact• Budgeted from delivered, contracted, and highly-saleable properties(60%+ of the planned properties for this fiscal year have already been delivered)• Approximately 60% of the condominiums estimated to be sold before including the impact of COVID19 have been contracted• No new contracts assumed during the state of emergency (assuming it lasts until the end of May)
• A decline in new contracts after June is expected considering the anti-COVID-19 measures that limit
visitor numbers• Incorporating the risk of delivery delays for some of the residential units due to construction delay etc.
• Incorporating the general closure of most facility/stores, with some exceptions, during the state of
emergency (assuming it lasts until the end of May)
• Business environment recovery is assumed for the end of the first half of FY2021• The impact on the hotel management business is assumed to continue until the end of the fiscal year▲￥0.5 billion• A set vacancy period for all vacant floors is incorporated (no contracting tenant; including futurevacancies)▲￥8.5 billion• Partial revision of residential sales schedule for international business• Incorporating the risk of market stagnation in the investment management and real estate service
businesses• Slowdown in project orders received in architectural design & engineering businesses▲ ¥ 40 billion(▲￥5.7 billion)▲ ¥ 45 billion(▲￥5.7 billion)*1 Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income*2 Some costs incurred by retail properties and hotels that were closed during this period arerecorded in extraordinary loss for COVID-19 (e.g. depreciation cost or rent)

19Summary of FY 2021 Estimates

3. Changes in ROA / ROE / EPS
Continued efficiency improvements resulted in ROA: 4.1%, ROE: 8.5%, EPS: ¥ 108
All indicators are forecast to fall in FY2021 due to the impact of COVID-19.
10%

10.0%

(Yen)

200

200

9.0%

8.5%
7.8%

8.0%

7.3%

7.0%

150

6.6%
6.2%

6.0%

5.6%

108.64

5.2%

96.97

5.0%

86.78
74.00

4.0%

3.3%

3.3%

FY2015FY2016

100

82.18
4.1%

4.0%

3.8%

60.13

52.85
3.0%

5%

3.2%
3.6%

50

2.0%

1.0%

0
FY2017FY2018FY2019EPS(right axis)

FY2020ROA

FY2021(E)2030 Target

ROE* ROA=Business Profit / Total assets (average)

MITSUBISHI ESTATE CO., LTD.

20

Summary of FY 2021 Estimates

4. Cashflow forecast for FY2021*No change from estimates announced on May 14, 2020

Decrease in profits due to COVID-19 and decrease in cash-in due to selection of timing of asset sales.
Cash-out will tend to increase due to steady acquisition of new investment opportunities.
Cash-in
730.0～780.0

Soundness level for new investments(Considering possibility to expand investment
opportunities)

Decrease in collected amount compared tothe previous year due to the impact of
COVID-19

Decrease in profit due to the impact of
COVID-19

Cash-out
730.0～780.0

Financing arrangement(Increase in liabilities)
190.0～240.0

Return*1
370.0

Operatingcashflow*2
170.0*1 Collected amount (in book value) from asset sales

MITSUBISHI ESTATE CO., LTD.

Strategic
allocation
100.0～150.0

Plannedinvestments
600.0

Dividends
30.0(Billions of Yen)

Continue plans of seeking strategic
investment opportunities, mainly overseas(especially in Asia) (Considering possibility to
expand investment opportunities)

Recently, investment opportunities weresteadily obtained【Breakdown】
Marunouchi

60.0

Outlet Mall, etc.

50.0

Domestic condominium

170.0

Domestic capital recycling and others

200.0

Overseas

120.0

Payout ratio: Approx. 30％*² Cash flows from operating activities, excluding change in inventories and change in equity investment

21

Summary of FY 2021 Estimates

5. Shareholder returns*No change from estimates announced on May 14, 2020

Policy for increasing dividends continues with support of a strong real estate market. ¥ 100 billion sharebuyback was executed during FY2020. Dividends are planned based on a payout ratio of approx. 30% during
FY2021. Preparation for financial risks and expansion of investment opportunities.
(Yen)

40

45.0%

35

43.0%

33.00

41.0%

30.00

30
26.00

25.00

25

37.0%

20.00

20

35.0%

16.00
15

39.0%

33.0%

14.00
12.00

30.0%

30.9%

30.4%

30.4%

31.0%

10
5

25.9%

26.5%

26.6%

FY2015FY2016

29.0%

27.0%

27.0%

0

25.0%
FY2014FY2017FY2018FY2019Amount of
Share
Buyback

FY2021(E)¥ 100 billion
Dividends per share

MITSUBISHI ESTATE CO., LTD.

FY2020

Payout ratio (right axis)
22

Financial Supplemental Data

MITSUBISHI ESTATE CO., LTD.

23

Financial Supplemental Data

1. Management Indicator

Previous management
plan period
FY2018FY2019Current management
plan period

FY2020

FY2021(Estimate)2030 Target¥ 213.4
billion¥ 229.4
billion¥ 240.9billion¥ 191.3
billion¥ 350-400
billion

ROA*2

3.8%

4.0%

4.1%

3.2%

5％

ROE

7.3%

7.8%

8.5%

6.2%

10％

EPS

¥ 86.78¥ 96.97¥ 108.64¥ 82.18¥ 200

Business Profit*1*1 Business Profit = Operating Income + Equity in earnings (loss), unconsolidated subsidiaries and affiliates*2 ROA = Business Profit / Total Asset (average of opening / closing balances)

MITSUBISHI ESTATE CO., LTD.

24

Financial Supplemental Data

2. 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, 2020
1,133,873
267,956
47,42452,183244,690975
429,331
91,3104,861,498
4,183,152
97,765
255,246

At March 31,
2020
1,115,634
207,896
50,34072,256247,677975
450,52085,966
4,742,602
4,107,252
96,767
236,969

325,334
5,995,372

301,6115,858,236

Millions of yen (rounded down)

Change18,23860,059△ 2,916△ 20,073△ 2,987△0△ 21,189
5,345
118,896
75,899998
18,27623,721
137,135

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term debt
Commercial Papers
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

Total Assets(as of September, 2020)

International
Business
898,873
Residential
Business
601,044

Other
326,713

Commercial
Property Business
4,168,742

MITSUBISHI ESTATE CO., LTD.

Change119,40747,585△ 28,539
28,644
17,27736,00013,450△ 19,246
71,821
30,00036,684
5,138
17,72827,311△ 7,650△ 19△ 1,913137,135

Consolidated interest-bearing debt Consolidated interest-bearing debt Consolidated interest-bearing debt
(as of September, 2020)
Fixed / Floating rate ratio
Long-term / Short-term ratio
Commercial Papers
86,000

Lease obligations
2,017(as of September, 2020)

2,591,971

2,591,971
Loans
1,633,370(as of September, 2020)
Short-term
8.9%

Floating
22.4%

Bonds
870,584
5,995,372

At September At March 31,
30, 2020
2020
4,036,437
3,917,030
711,586
664,001
37,82866,368143,951
115,306
174,055
156,778
86,00050,00065,00051,550204,750
223,998
3,324,850
3,253,028
805,584775,584
1,315,363
1,278,678
1,203,900
1,198,762
1,958,934
1,941,206
1,191,057
1,163,746
563,065
570,716269
288
204,541
206,454
5,995,372
5,858,236

Fixed
77.6%

2,591,971

Long-term
91.1%

25

Financial Supplemental Data

3. Asset composition(End of September 2020)

Inventory

Equity investment309.2 billion

¥

7%
84%

Others9%7%33%

Domestic Condominiums

5%

13%

16%

¥

Tangible fixed asset

429.3 billion

2%
3%
2%
4%

¥

4,183.1 billion
75%

40%

Domestic (office buildings)
Domestic (others)
US
EuropeAsia

Office Buildings

Outlet Malls

Logistics Facilities

Retail Properties*

Rental Apartments

Overseas

Others* Excluding outlet malls

MITSUBISHI ESTATE CO., LTD.

26

Financial Supplemental Data

4. Consolidated Cash FlowMillions of yen (rounded down)①FY2020-2Q ②FY2021-2Q
Results
Results
Cash flows fromoperating activities

Change(②－①)③FY2020
Results④FY2021
Estimates

Change(④－③)

69,11360,101△ 9,011

341,766

Depreciation and amortization

41,59043,231

1,640

84,94187,0002,059

Change in Inventories

23,311

23,663351

148,161

18,000△ 130,161△ 13,511

17,48030,991△ 43,217△ 146,000△ 102,783△ 165,814△ 142,146

23,668△ 277,440 △ 299,000△ 21,560

604

10,079

9,475

5,275

12,0006,725

Capital Investment△ 153,394△ 133,967

19,426△ 331,857△ 350,000△ 18,143

Cash flow fromfinancing activities

215,145

142,703 △ 72,442△ 28,886

194,000

222,886

Cash and cash equivalents
at end of year

297,486

271,598 △ 25,888

213,008

147,000△ 66,008

Free cash flow

△ 96,701△ 82,044

64,326 △ 257,000 △ 321,326

Change in Equity Investment

Cash flows frominvesting activities
Proceeds from sales ofinvestment securities

MITSUBISHI ESTATE CO., LTD.

14,65642,000 △ 299,766

27

Financial Supplemental Data

5. Investment Data
Major Breakdown of Capital Investment
350.0(Billions of Yen)

331.8

350.0

300.0

275.3

250.0

27.6

289.5
2.4

285.0

11.8
7.1

2.7

25.1
200.0

93.4

13.0

10.7
12.3

6.5

17.2
15.2

126.1

50.0

4.3

9.0

350.0

8.0
300.0
250.0

113.8

40.0

74.7

200.0
22.1
36.0

39.9

38.4
6.5

15.9

100.0

14.0

(Billions of Yen)

87.0

58.6

150.0

Major Breakdown of Equity Investments

96.3

36.9

47.8

16.8
21.3

15.6
23.9

68.4

63.5

91.0

150.0

20.0

100.0

168.0

99.4

90.0

FY2017FY2018FY2019FY2020

FY2021(E)*

2.3
167.0

75.1

50.0

8.8
13.2

0.0

0.0

1.0

FY2017FY2018FY2019FY2020

FY2021(E)**Classifications have been changed below from FY2021<Legend for FY2021><Legend for FY2017 - FY2020>
Office Building(MEC: New/Redevelopment)

Office Building(MEC: Refurbishment)

Office Building(Subsidiaries)

Office(MEC: New / Redevelopment)

Office(MEC: Refurbishment)

Lifestyle Property

Commercial Property(excluding MEC office)

Residential

Residential

International

International

Special Purpose Vehicle

Hotel & Airport

Special Purpose Vehicle

Others(including consolidated eliminations)

Other(including consolidated eliminations)

MITSUBISHI ESTATE CO., LTD.

28

Financial Supplemental Data

6. Income Generating Assets Unrealized Gain : Current Status ①
Unrealized gain rose approx. ¥300 billion (y-y), supported by declines in cap rates andcash flow improvement.
Income Generating Assets Unrealized Gain
Book value(Billions of Yen)
9,000

Unrealized gain

6,791.9

5,395.6

5,498.9
2,963.5

5,000
4,000

2,096.4

2,180.7

3,800
3,432
3,241
2,950

3,422.8

3,898.4

4,222.5

2,643

2,800
2,384

2,569.0

2,300

3,000
2,000

Adjusted BPS

3,300

6,079.0
6,000

8,270.8

7,383.4

7,000

BPS

(Yen)
7,941.1

8,000

BPS and Adjusted BPS*

2,178
2,015

1,800

3,299.2

3,318.1

3,509.9

3,828.4

3,960.5

4,042.7

4,048.3
1,300

1,000

958

0
FY2014FY2015FY2016FY2017FY2018FY2019FY2020

1,078

1,088

FY2015FY2016

1,148

1,224

1,276

1,269

FY2018FY2019FY2020800

FY2014FY2017＊ BPS including unrealized gain (after tax)

MITSUBISHI ESTATE CO., LTD.

29

Financial Supplemental Data

7. Income Generating Assets Unrealized Gain : Current Status ②

Unrealized Gain Breakdown

Rental Profits(Billions of Yen)
190

International
9%

180.5

180

174.8
168.3

170

Domestic(Outside of Marunouchi)
17%

160.7

160

Marunouchi
New Building*
44%

150
140

131.7

136.2

130

Marunouchi
Existing Building
30%

120

116.9

110
100
FY2014FY2015FY2016FY2017FY2018FY2019FY2020*Redeveloped properties after the completion of Marunouchi Building
FY2020 Results

MITSUBISHI ESTATE CO., LTD.

30

Overview of“Long-Term Management Plan 2030”

MITSUBISHI ESTATE CO., LTD.

31

Overview of Long-Term Management Plan

1. New Management Plan: Objective*Repost from “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.

32

Overview of Long-Term Management Plan

2. Quantitative Target – 2030 Target*Repost from “Long-Term Management Plan 2030”

2030 Target
ROA*1

ROE

EPS

5％

10％

¥200

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

Key Assumptions

Profit Growth

Shareholders Return

Financial Stability

Current framework *Maintain

Business Profit*2• Payout ratio:
Approx. 30%

current level ofcredit ratings¥350–400 bn+• Share buybacks【Reference】
R＆I：AAS＆P：A＋
Moody‘s：A2(when determined to be
optimal use of funds)* Will adjust to business conditions*2 Business Profit= Operating Income + Equity in earnings (loss) unconsolidated subsidiaries and affiliates

MITSUBISHI ESTATE CO., LTD.

33

Overview of Long-Term Management Plan

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

2030 Target

Business Profit

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)【 Flexible capital policy 】

Total Asset

Optimize investments, assets sales, shareholder

Business Profit

Total Asset

return and financing according to market¥5.9 tn

conditions

Approx. ¥7-8 tn
Expected net increase: ¥1-2tn＝

Increase Net investment: Approx. ¥2–3 tn

ROA : 3.9%

ROA : 5%
With current leverage

ROE : 7.8％
MITSUBISHI ESTATE CO., LTD.

Decrease Depreciation: Approx. ¥1 tn

ROE : 10％34

Overview of Long-Term Management Plan

4. Capital Policy – Responsive to market conditions*Repost from “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

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

MITSUBISHI ESTATE CO., LTD.

Active acquisition/investment:

Capital gain:

Shareholders return :35

Overview of Long-Term Management Plan

5. Value creation through BS management*Repost from “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◆ Investment 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)◆ In sellers' market, use asset sale proceeds for shareholder
returns and to maintain financial stability◆ 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.

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

36

Overview of Long-Term Management Plan

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

Cash out
Strategic
Allocation
investment/
shareholders
return/suppression ofdebt

Strategic allocation to improve medium- to longterm capital efficiency⚫ Allocate capitals based on market conditions⚫ Select projects which help to increase the 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 sale (book value)

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

37

Overview of Long-Term Management Plan

7. Profit Growth Strategy - 2030 Vision

Growth Strategy

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*Repost from “Long-Term Management Plan 2030”① 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* Composition of FY20 Business Profit= ① Domestic Asset + ② International Asset + ③ Non-asset Business + Eliminations or corporate(Round number)
MITSUBISHI ESTATE CO., LTD.

(¥ 201.0 bn)(¥ 36 bn)(¥ 16 bn)(▲ ¥ 23 bn)

38

Overview of Long-Term Management Plan

8. Roadmap for Profit Growth
Early stage

Domestic
Asset
Business*Repost from “Long-Term Management Plan 2030”

Middle stage

Advance
Redevelopment projects• Complete Tokiwabashi A Bldg.
• Open & expand outlet mall
• Asset sales and reconstruction of existing buildings (willlower rental profit)• Temporary decline in the condominium units soldProfits scale with asset accumulation

International
Asset
Business• 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

Non-asset
Business

MITSUBISHI ESTATE CO., LTD.

• Stable growth in existing businesses• Promoting commercialization in new domains

Late stage

Redevelopment Projects' Contribution• Long-term developments, e.g. Tokiwabashi B Bldg.
• Residential redevelopments

Stabilize profit via capital recycling• 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

39Overview of Long-Term Management Plan

9. Three Year Investment Return Plan (FY2021-FY2023)*Repost from “Long-Term
Management Plan 2030”(Billions of Yen)

3-year Total

Composition
Planned Investments and Return
Domestic Asset

International Asset

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

Outlet mall,
Capital Recycling asset,
And Others

150
0

600

Europe and
US
Asia

100

200
Aim for international profit
growth

500
300
100

Asset sales plan assumes
market conditions of previous
three years

MITSUBISHI ESTATE CO., LTD.

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

500

Return1,100

100～200

Disposeunderperforming assets
for capital efficiency

Condominium
Marunouchi
area

Strategic Return

Strategic
Allocation

550

Plannedinvestments

1,500

ReturnStrategic
ReturnNet
Invest
ment

150

0

250

0

200

100～200

0-100～-200

～600

40

Business Overview

MITSUBISHI ESTATE CO., LTD.

41

Business Overview

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

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

Residential Business

International Business＜Domestic Residential＞
Operating residential condominium
business under “The Parkhouse”
brand and rental apartments
business under “The Parkhabio”
brand.

Undertaking office building
development and leasing
businesses in the United States andthe United Kingdom, as well as
projects in Asia.

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

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

Investment Management
Business

Architectural Design &Engineering and Real Estate
Service Business

Providing 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.

42

Business Overview

2. Business Scale

Other*
5%

Investment
Management
Business
2%

Revenue fromOperations

Operating Income

Approx.

Residential
Business
9%¥1,302.1
billionCommercial
Property
Business
54%

Other*
2%

Investment
Management
Business
1%
International
Business
15%

International
Business
18%

International
Business
10%

Residential
Business
29%

Other*
0%Investment
Management
Business
2%

Approx.

¥240.7billionTotal Assets
Residential
Business
10%

Commercial
Property
Business
71%

Approx.

¥5,858.2
billionCommercial
Property
Business
72%*Hotel / Airport Business, Architectural Design & Engineering, Real Estate Services, Other Business(FY2020 Results)

MITSUBISHI ESTATE CO., LTD.

43

Commercial Property Business
Office Buildings

MITSUBISHI ESTATE CO., LTD.

44

Commercial Property Business (Office Buildings)

1. Marunouchi Area Map

MITSUBISHI ESTATE CO., LTD.

45

Commercial Property Business (Office Buildings)

2. Pipeline
Mizuho Marunouchi Tower,
Ginko Kaikan,Marunouchi
Terrace(Marunouchi 1-3 Project)

Tokiwabashi
Tower(Bldg.A)

Uchikanda 1-chome
Project

Torch
Tower(Bldg.B)

Total Floor Area: 174,100㎡
Completion: Oct. 2018

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

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

Total Floor Area: 84,500㎡
Completion: Around 2025

Total Floor Area: 544,000㎡
Completion: FY2028

Yurakucho
Redevelopment(TBD)

Marunouchi Area

Marunouchi
Nijubashi Building

FY2019FY2020Tokyo(Outside of Marunouchi)

msb Tamachi(musubu Tamachi)

Total Floor Area: 138,300㎡*
Partial Completion: May 2018*

FY2021

FY2022

FY2023

FY2024

Link Square Shinjuku

CO･MO･RE YOTSUYA

the ARGYLE aoyama

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

Total Floor Area: 139,600㎡
Completion: Jan. 2020

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

FY2028*Tower S
MITSUBISHI ESTATE CO., LTD.

46

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

4,660

4,500
4,000

3,825 3,907 3,769
3,684 3,696

4,175

4,896

5,580 5,670
5,174

5,038

5,385

5,570

5,745

5,869

6,031

4,347

3,500
2,727 2,784
2,687 2,758 2,755 2,583
2,565 2,565
2,531

3,000
2,500
2,000

1,677

1,946 2,024 1,897
1,798

2,195 2,258
1,705 1,705

1,500

1,022 1,022

1,000
500

256

256

355

03/3

04/3

05/3

489

489

06/3

07/3

2,915 2,915

743

743

08/3

09/3

1,174

1,836 1,836

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

0

Total (Domestic)

10/3

11/3

Marunouchi

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3 21/3(E)Marunouchi Redeveloped Buildings*Excluding floor space in Lifestyle Property Business from 16/3

MITSUBISHI ESTATE CO., LTD.

47

Commercial Property Business (Office Buildings)

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)

29,00028,000Vacancy rate(Marunouchi offices)27,000Vacancy rate(All uses in Japan)
25,842Average rent(All uses in Japan)

26,00024,86425,00024,00023,00022,817
6.06% 22,213

22,00021,00020,00019,0005.64%

26,193

26,702

27,177

27,72428,0009%25,234
24,42323,56023,97423,85023,861

8%

23,587

7%

22,602
21,902

21,711

21,733

6%

5.29%

4.82%

5%

4.36%

18,000

3.59%

3.40%

2.77%

3.98%
3.58% 3.58%

2.42%
1.68%2.06%

16,000

2.26%

2.77%

15,000

4%

4.32%
3.66%

2.86%

17,00014,00013,000

2.80%

2.93%

2.22%
2.42%

1.87%

1.82%
0.55%

0.19%

1.09%

2.0%

2%
1.65%

1.37%

3%

2.19%

2.42%

1.74%

1.80%

1.07% 1.12%

1%0.69% 0.63%

12,00003/3

04/3

MITSUBISHI ESTATE CO., LTD.

10%

05/3

06/3

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

20/9

0%
21/3
(E)

48

Commercial Property Business (Office Buildings)

5. Earnings Related Data: Office Building*¹ Business, Revenue Breakdown(Unconsolidated)(Billions of Yen)FY2020-2Q(Results)

FY2020(Results)

FY2021-2Q(Results)

FY2021(Estimates)

Rent revenue from office building*¹

200.2

406.6

208.1

418.6

Changes from Previous Period+ 8.9+ 17.9+ 7.8+ 11.9Rent revenue from new buildings+ 7.0+ 10.8+ 4.7+ 11.9Rent revenue from existing buildings

+ 2.4

+ 6.8

+ 6.5

+ 6.1

Termination of master lease,closure of building for redevelopment

+ 0.2

+ 0.3

△ 0.1

△ 1.3

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

+ 2.2

+ 6.5

+ 6.7

+ 7.5

Impact of
COVID-19

Offices-△ 0.5

Mixed-use
retail*2

△ 3.3

△ 5.0

+ 0.0

△ 0.0

△ 0.6

Supplementary Revenue, including common
area charge△ 0.6*1 Office buildings, including those with retail areas, etc.
*2 Retail properties in office buildings

MITSUBISHI ESTATE CO., LTD.

49

Commercial Property Business (Office Buildings)

6. Earnings Related Data: Trends in rent revenue from office building*1(Unconsolidated)
Increase / decrease of rent revenue from office building*1(from the previous fiscal year)(Billions of Yen)

30
25

■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 building, Mixed-use retail*2)

+0.3

20

+0.3

15

+15.3

+14.7
+23.9

10
5
0

+4.3

-2.5

-4.9
-10.7

+12.5

+7.3

+8.7
-3.9

-5

+15.3

+13.0

-1.1
-5.9

+1.9

+27.2

+6.0

+7.3

-1.5

-1.5

-10.5

-4.0

-4.6
-5.6

-10

-3.4

-6.0

-0.7
-7.5

+2.4
-9.0

+4.9

-10.5

+11.9

+9.8

+4.0

+4.7

+4.7
+5.9

+6.5

-8.1

+7.5

+6.7

-1.3

-0.1
-3.3

-5.5

-8.3

-5.0

-15

Total

-5.2

+10.8

+18.5 +13.2

+6.6

-2.5

-5.4

-20

+9.5

+22.6 +0.7 +17.9*1 Office buildings, including those with retail areas, etc.
*2 Retail properties in office buildings

03/3

04/3

05/3

06/3

07/3

-2.1

-2.7

-1.6

+8.3

-1.3

MITSUBISHI ESTATE CO., LTD.

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3(E)

21/3-2Q+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 +12.6

+8.0

50

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

1.87
1.75
1.54

1.5

1.25

1

0.99

1.19

1.17

Average estimate supply
for next 5 years
1.03 million ㎡/year

1.09
0.97

0.91
0.72

0.5

1.21

1.43

1.41

Past average supply
approx. 1.04 million ㎡/year(1998～2019)

0.87

0.86 0.85

0.77
0.65

0.85

0.77

0.69
0.58

0.54 0.54

0.36

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

51

Commercial Property Business (Office Buildings)

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

30,00012%
Average Rent

Vacancy Rate

28,00026,0008.75%

20,000

10%
8.56%

7.98%

24,00022,0009.19% 9.04%

22,733
8%
22,594

22,574
8.18%

5.51%

19,175

21,13420,064
6.05%

19,6995.30%

6%18,73018,264
17,973
17,495
17,195
16,71616,504
16,325
3.60%
4.34%

18,09517,75817,593

18,0006.70%

21,29516,000

3.43%

4%

3.41%

14,0002.72% 2.89%

2.80%

12,000

2%
1.78%

1.50%

10,000

0%
03/3

04/3

05/3

06/3

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

20/9

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

52

Commercial Property Business (Office Buildings)

9. 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%
6.70%

7%
6.06%
6.05%

6%
5.51%

5.30%

5%
4%

4.32%
4.36%

3.66%

4.34%
3.41%

3%

3.60%

3.43%
2.80%

2.72%

2.42%

2.77%

2.42%

2.19%

2.89%

2%

1.50%

2.26% 2.42%
1.82%

1.74%

1%

0.19%

0.55%

1.65% 1.78%

1.37%

1.09%

0.69% 0.63%

0%
03/3

04/3

05/3

06/3

07/3

08/3

09/3

10/3

11/3

5 Central Wards of Tokyo(Market)

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

20/9

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

MITSUBISHI ESTATE CO., LTD.

53

Commercial Property Business (Office Buildings)

10. 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.

54

Commercial Property Business (Office Buildings)

11. Competitive Edge of Marunouchi: Number of headquarters and offices(as of March, 2020)① Fortune Global 500 company headquarters③ Top 100 law firm headquarters and offices

32

MARUNOUCHI18

MARUNOUCHI3SHINAGAWA

1NIHONBASHI

0SHIBUYA

05

TORANOMONNIHONBASHI

1SHIBUYA1TORANOMONSHINAGAWA② Top 50 company headquarters in terms ofmarket capitalization

0④ Foreign financial company offices

71

MARUNOUCHI14

MARUNOUCHI

32NIHONBASHISHINAGAWA

1TORANOMON0SHIBUYANIHONBASHI12SHIBUYA

4SHINAGAWA

MITSUBISHI ESTATE CO., LTD.

17

TORANOMON

055

Commercial Property Business (Office Buildings)

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

Type of Business

Area ratio

March 2020

Type of Business

Area ratio

1

Manufacturing

42.5%

1

Finance22.4%

2

Finance22.2%

2

Manufacturing

20.1%

3

Trading

10.4%

3

Professional Firm

19.5%

4

Information

6.3%

4

Trading

10.7%

5

Professional Firm

4.4%

5

Information

6.4%

Others

14.2%

Others

20.9%

Professional Firm
4.4%

Others14.2%

Information
6.3%
Trading
10.4%

Manufacturing
42.5%

Manufacturing
20.1%

Information
6.4%

Trading
10.7%
Finance
22.2%

MITSUBISHI ESTATE CO., LTD.

Others
20.9%

Finance
22.4%

Professional Firm
19.5%

56

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 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.

Hotels57

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

MITSUBISHI ESTATE CO., LTD.

58

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)(㎡)

50,000320,000

45,000

FY2020Results

53%

47%

315,000
Fixed rent

40,000310,000

35,000305,000

30,000300,000

25,000295,000
Tosu

Sendai-Izumi
KYOTO JOYOHANAZONO Sano
Kobe-Sanda
Rinku

20,000290,000

15,000285,000

Sales-linked rent

Ami

Toki

Gotemba Shisui

GOTEMBA PREMIUM OUTLETS®

10,000

15/3

16/3

17/3

18/3

19/3

20/3

280,000

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%)
Approx. 25,000㎡

Store area

294,700 308,500 308,500 308,500 314,600 315,300

Revenue fromOperation

39,95443,946

43,642

45,462

46,65946,393

Fukaya Hanazono (New)Fall, 2022

Operating Income 14,292

16,301

17,35918,94019,673

18,963

Kyoto Joyo (New)

Spring, 2024

MITSUBISHI ESTATE CO., LTD.

Store Floor Area

59

Commercial Property Business (Logistics Facilities)

2. Logistics Facility Business
Trends in gain on sale

Total assets
Approx. ¥(Billions of Yen)

Operational logistics facilities

27 billion

Total number of developed facilities

assets in operation
36%

Number of facilities in operation

13

8.0

8.0
6.0

(2 buildings)
4.0

4.0

assets under development
64%

2.0

0.0

0.0
17/3

18/3

19/3

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

Total floor area of facilities in operation

51,000㎡(8 buildings)

2.0
20/3

(End of March 2020)*Ratio by value*Excluding Tokyo Ryutsu Center

Logicross Yokohama Kohoku

2

Logicross AtsugiⅡ(End of March 2020)*Excluding Tokyo Ryutsu Center

Logista・Logicross Ibaraki Saito

60

Commercial Property Business (Retail Properties / Logistics Facilities)

3. Outlet Malls and Logistics Facility Pipelines
RINKU PREMIUM
OUTLETS® Expansion
Phase 5FUKAYA HANAZONOPREMIUM OUTLETS®

KYOTO JOYOPREMIUM OUTLETS®

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

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

Store floor area: 25,000㎡
Open: Fall 2022

Open: Spring 2024

Outlet Malls

GOTEMBA PREMIUM
OUTLETS® Expansion Phase 4

Logistics Facility

FY2020

FY2021

FY2022LOGIPORT Kawasaki Bay

Logicross Hasuda

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

Total Floor Area: 79,100㎡
Completion: Mar. 2021

FY2023
Logista・LogicrossIbaraki Saito

Total Floor Area: 157,000㎡ (2 Blocks)
Block B Completion: Apr. 2021
Block A Completion: May 2021

FY2024
Logicross Zama

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

Logicross
Yokohama Kohoku

Logicross 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: 62,200㎡
Completion: Nov. 2020

Total Floor Area: 38,000㎡
Completion: May. 2021

Total Floor Area: 23,600㎡
Completion: Nov. 2021

MITSUBISHI ESTATE CO., LTD.

61

Commercial Property Business (Hotels)

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

The Royal Park Hotel Iconic Osaka Midosuji

Number of Rooms

Open

Royal Park HotelChuo, Tokyo

Location

419

Jun. 1989

Yokohama Royal Park Hotel

Yokohama, Kanagawa

603

Sep. 1993

Sendai Royal Park Hotel

Sendai, Miyagi

110

Apr. 1995

The Royal Park Hotel Tokyo Shiodome

Minato, Tokyo

490

Jul. 2003

Marunouchi Hotel

Chiyoda, Tokyo205

Oct.2004

The Royal Park Hotel Kyoto Sanjo

Kyoto, Kyoto

172

Jul. 2011

The Royal Park Hotel Fukuoka

Fukuoka, Fukuoka

174

Oct. 2011

The Royal Park Canvas Nagoya

Nagoya, Aichi

153

Nov. 2013

The Royal Park Hotel Tokyo Haneda

Ota, Tokyo

313

Sep. 2014

The Royal Park Hotel Kyoto Shijo

Kyoto, Kyoto

127

Apr. 2018

The Royal Park Hotel Hiroshima Riverside

Hiroshima, Hiroshima

127

Oct. 2018

The Royal Park Canvas Ginza 8

Chuo, Tokyo

121

Mar. 2019

The Royal Park Canvas Osaka Kitahama

Osaka, Osaka

238

Jun. 2019

The Royal Park Hotel Osaka Iconic 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

180

Spring 2021

Odori Nishi 1-chome Project

Sapporo, Hokkaido

130

Fall 2021

The Royal Park Hotel Kyoto Karasumaoike

Kyoto, Kyoto

200

Spring 2022

Ginza 6-chome Hotel ProjectChuo, Tokyo

160

Fall 2022

Nagoya Sakae Hotel Project

Nagoya, Aichi

250

FY2024

Hotel Development Business
Number of Rooms

Construction Begins

Open

The Royal Park Hotel Kyoto Shijo

Name

Kyoto, Kyoto

Location

127-

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

Asakusa Kaminarimon 2-chome Hotel Project

Taito, Tokyo

51

Dec. 2019

Spring 2021

Kyoto Okazaki Hotel Project

Kyoto, Kyoto

60

Feb. 2020

Fall 2021

Odori Nishi 1-chome Project

Sapporo, Hokkaido

130Mar. 2020

Fall 2021

Hilton Okinawa Miyakojima Resort

Miyakojima, Okinawa

329-

FY2024

Odori Nishi 1-chome Project

MITSUBISHI ESTATE CO., LTD.

62

Residential Business

MITSUBISHI ESTATE CO., LTD.

63

Residential Business1. Condominium Business Data

FY2020-2Q(Results)

FY2020(Results)

FY2021-2Q
FY2021(Results) (Estimates)

Condominiums Sold(millions of yen)

72,572

202,876

68,307

191,000

Condominiums Sold
(units)

1,213

3,214

1,178

3,300

Gross margin

17.0%

17.8%

19.5%

17.5%

Land Bank
Breakdown in reporting term(as of September 2020)

5,700
8,100

4,000
Inventory (units)

515

373

298

-

Total: 17,800 units
New Supply of
Condominiums(units)MITSUBISHI ESTATE CO., LTD.

1,814

2,924

619

1,800

FY2021 - FY2023
FY2024 - FY2026

FY2027 -64

Residential Business

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

254,140

260,000
240,000

238,924
223,266

220,000
200,000
180,000
160,000

94.8%
88.7%

77.9%

96.5%
89.3%

93.0%

80.7%

84.7%

202,876
94.8%

73.1%

66.1%

85.0%

140,000
120,000

70.7%

59.2%

63.0%

191,000 (E)

86.5%
74.5%
68.2%

100,000

51.4%

80,00060,00040,00020,000
0
17/3

18/3

Full-year sales

MITSUBISHI ESTATE CO., LTD.

19/3

End of 3Q

End of 2Q

20/3

End of 1Q

21/3

Beginning of FY

65

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

120,000

60
59.8

100,000

50

80,00040

60,00030

32,00031,23840,00020,000

20

10

0

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(E)
Number of new supply

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

MITSUBISHI ESTATE CO., LTD.

66

Residential Business

4. Redevelopment Projects andLarge-scale Development Projects

5. Rental Apartment Business

Redevelopment Projects and Large-scale Development Projects

Trends in gain on sale

Scheduled
Delivery

Location

Project Name

Total Units(Billions of Yen)FY2021

Narashino, Chiba

Tsudanuma The Tower

759

FY2021Adachi,Tokyo

Senju The Tower

184

FY2021

Atsugi, Kanagawa

The Parkhouse Hon-Atsugi Tower

163

10.0

FY2021

Kawaguchi,
Saitama

The Parkhouse Kawaguchi Honcho

162

8.0

FY2021

Chiba, Chiba

Makuhari Bay Park Sky Grand Tower

826

Kagoshima,
Kagoshima

6.0

FY2021The Parkhouse Kagoshima Chuo Tower

210

4.0

FY2021

Shinjuku, Tokyo

The Residence Yotsuya Avenue/Garden

60

FY2021

Shinagawa, Tokyo

Crevia Tower Oimachi THE RESIDENCE

136

FY2022

Bunkyo, Tokyo

Park Court Bunkyo Koishikawa The Tower

571

FY2022

Koto, Tokyo

Proud Tower Kameido Cross

934

FY2023

Nagasaki, Nagasaki

Shin-daikumachi District Redevelopment Project

240

FY2023

Yokohama,
Kanagawa

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

183

FY2024

Shinagawa, Tokyo

Togoshi 5-chome, 19 District Redevelopment Project

241

The Greater Tokyo
From FY2025
Area
Outside of theGreater Tokyo Area

Hamamatsucho 2-chome District Redevelopment
Project, etc.*¹

Total 18,550*2

Minatomachi 3-chome C Block District Area
Redevelopment Project, etc.*¹

Total 3,380*2

Approx. ¥

12.0

11.0
9.0

10.0

88 billion

assets under development
33%(25 buildings)
assets in operation

2.0
0.0

Total assets

67%(28 buildings)

1.0
17/3

18/3

19/3

20/3

(End of March 2020)*Ratio by value*1 There are approx. 25 ongoing projects scheduled

for delivery in FY2024 onward*2 Total of several planned projects

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

The Parkhabio Kiba

Parkhabio Akasaka Tower

67

International Business

MITSUBISHI ESTATE CO., LTD.

68

International Business1. International Business Strategy
FY2020

Asia

7%

30%

Total Asset:¥887.1 bn

2030 Target

US

Towards 2030 Target

Business Profit:¥46.1 bn49%
44%

Europe48%

22%◆ Expand Asia development business◆ Annual investment: approx. ¥200–250

bn◆ 1st half of 2020s : Profit increase withasset 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. 5%

ROA：Approx. 6%
Strategy①Asia②Europe◆ Increase investment, build capital recycling
portfolio◆ Two approaches:①Development with major stake②Joint businesses with local partners＜Expected Return from Investment＞
IRR

Developed countries 8～10%
Developing countries
10+%

MITSUBISHI ESTATE CO., LTD.

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,making the most of RGII* know-how◆ Joint venture with local partners* Rockefeller Group International, Inc.

＜Expected Return from Investment＞
IRR

8～10%

69

International Business2. International Asset/Ongoing Projects
Many ongoing developments (rentals and condos) are expected to make early profit contribution.
International Asset

Major Ongoing Projects(Mar. 2020)

Book Value*:¥750 bn

Property Name
Mixed Use Development in Hangzhou

18%

32%

Location

Asia

28%
22%

CapitaSpring
Phase 3 of Singapore-Hangzhou
Science & Technology Park
Daswin Project
Yoma Central (4 buildings total)
Savya Financial Center North Tower
180 George Street
One City Centre
8 Bishopsgate

US (Manhattan)

US (Other)

EuropeAsia

Europe*Inventories + Equity Investments + Tangible Fixed Assets

US

Nine Elms Park

China (Hangzhou)
Singapore

Use
OfficeMulti-use

China (Hangzhou)

OfficeIndonesia (Jakarta)
Myanmar (Yangon)
The Philippines (Manila)
Australia (Sydney)
Thailand (Bangkok)

OfficeUK (London)

Rentalapartment

UK (London)

1271 Avenue of the Americas
Edison
Lehigh Valley (4 buildings total)

US (Pennsylvania)

2021

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

Completion Area / Units*1
2020
69,800㎡
2021 93,400㎡*2
172,300㎡

2021
75,000㎡
2021 212,700㎡*2
2021 24,600㎡*3
2022
55,000㎡
2022
66,000㎡
2022

53,000㎡

2022

196 units

TBD

2020s 2nd
half

TBD

US (Manhattan)

OfficeDec. 2019

195,000㎡

US (New Jersey)

Logistics
facilities
Logistics
facilities

2020

87,200㎡

2021*1 Leasable area or # of units *2 Total floor area

325,200㎡*3 Area for saleLand Bank in Asia
1271 Avenue of the Americas(Condominiums)

Daswin Project

200

100

400

Total: 10,900 units

400
500

1,900

7,400
8 Bishopsgate project

Yoma Central

Thailand

China

Australia

Malaysia

Philippines

VietnamIndonesia(as of March, 2020)* # of unit MEC owns

MITSUBISHI ESTATE CO., LTD.

70

Other business

MITSUBISHI ESTATE CO., LTD.

71

Other business1. Investment Management Business: Global Platform
Globally, we have combined assets under management of approximately ¥ 3.6 trillion.

AuM Area Breakdown(Billions of Yen)

Asia & Oceania
120

Europe450

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

Mitsubishi Jisho
Investment Advisors, Inc.

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

JREA
1,050

Total:
approximately¥ 3.6 trillion.

United States
1,200

Domestic

MJIA
840(end of March 2020)

Goal: reach ¥ 5 trillion in
the mid-2020s
72

Investment / Financial Data etc.

MITSUBISHI ESTATE CO., LTD.

73

Investment / Financial Data etc.

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

(Times)2,500.0

10.0
8.4

2,000.0

7.7

9.0
8.0

7.3
6.7

6.6

6.1

6.1

7.8

7.0

7.1
6.7

1,500.0

1,000.0

2,153.6
1,978.6

2,194.8
2,019.8

6.0

2,140.2
1,965.2

2,216.8
2,041.8

2,460.0
2,285.0

5.0
4.0
3.0

500.0

2.0
1.0

0.0

0.0
FY2017FY2018Net Interest-bearing debt
Debt/EBITDA Ratio (right axis)

MITSUBISHI ESTATE CO., LTD.

FY2019FY2020

FY2021(E)Net Interest-bearing debt
*after hybrid debt deductions
Debt/EBITDA Ratio (right axis)*after hybrid debt deductions
74

Investment / Financial Data etc.

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

3,000

95.0%

95.0%

96.1%

93.7%

96.4%

95.1%

93.4%

95.4%

93.6%

93.2%

100%
90%

2,500
6.8

10.2

2,000

35.0

53.1%

1,500

1,292.9
1,065.4

28.0
60.1%

1,261.9

69.7%

5.6

100.0

73.2%

100.0
76.2%

1.9
100.0

76.4%

1,381.2

1,428.5

1,523.0

1,406.0

1,450.7

1,208.8

70%

50%
40%

1,072.3

30%
250.0

250.0

250.0

250.0

250.0

558.9

577.1

500
566.3

636.2

747.2

701.5

685.2

653.0

612.7

603.8

0

Total

80%

60%

64.1%

54.0%

8.3

100.0

7.2

9.5

61.8%

61.7%
7.2

1,000

50.0
4.5

4.7

20%
10%
0%

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY20201,693.0

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

Straight BondMITSUBISHI ESTATE CO., LTD.

Subordinated bondBank Loan

Subordinated loan

CP

Lease liability

Fixed ratio

Long-term ratio

75

Investment / Financial Data etc.

3. Interest-bearing debt: Procurement Interest rates /Average Duration of Interest-bearing debt (Unconsolidated)(Year)

10

2.5%

9
8
1.90%
7
6

6.20
1.58%

1.88%

5

5.45

5.55

5.58

5.45

1.54%

1.55%

1.05%

1.07%

1.01%

0.70%

1

2.0%

1.32%

1.5%
1.24%
1.14%

0.96%
0.72%

1.38%

1.52%

0.96%

0.87%

2

6.36

6.69

5.71
1.41%

1.27%

4
1.05%

6.18

1.40%

1.29%

3

6.79
1.72%

5.91
1.42%

7.23

1.88%

0.95%

0.97%
0.75%

0.62%

0.61%

FY2015FY2016

0.66%

0.92%

0.84%

0.71%

0.68%

FY2019FY2020

0

1.0%

0.5%
FY2009FY2010FY2011FY2012Average Duration of Interest-bearing debt

MITSUBISHI ESTATE CO., LTD.

FY2013

FY2014

Bonds/Average interest

FY2017FY2018Bank Loans/Average interest

Total/Average interest76

Investment / Financial Data etc.

4. Segmentation Change from April 1, 2020
Current Segments①:Integration of
three businesses

Office Building Business
Lifestyle Property
Business②:Integration of international
residential business into
International BusinessResidential Business

Hotel & Airport BusinessArchitectural Design &Engineering Business

Commercial Property
Business
Residential Business③:Integration of disclosure
segments

Commercial Property
Business Group
Office Building Business

Outlet Mall Business
Retail Facility Business

International Business

International Business
Investment Management
Business

From FY2021

Investment Management
Business
Architectural Design &Engineering Business andReal Estate Services
Business
Other Businesses

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 Change>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.

77

ESG Initiatives

For details of ESG initiatives in "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.

78

ESG Initiatives

1. Materialities (Important Issues for Sustainable Management)
Identifying 7 Materialities’ Opportunities and Risks
Materialities

Opportunities
Increasing need for acquisition and leasing ofreal estate with low environmental impact

Expanding demand for facilities and services

Rising countermeasure expenses due tostrengthening of environmental regulations
and stricter renovation standards

that address the needs of international visitors

Increased country, compliance, and supply
chain risks

Heightening need for acquisition and leasing of

Falling asset value and rising expenses forreal estate highly resilient to disasters such as
Earthquakes

Maintenance and countermeasures due todisasters such as earthquakes

Rising demand for facilities and services

Declining demand for facilities and services

tailored to diverse living and working styles

where the promotion of diversity is insufficient

Increasing demand for facilities and services
tailored to new needs due to demographic
Changes

Contracting demand for facilities and services

Reduction in waste as a result of lengthening

Decreasing need for expensive, newly built

the time span of demolition and rebuilding
work by making effective use of existing stock

real estate in comparison with pre-owned andolder properties

Improvements in the efficiency andconvenience of facility operations byleveraging IT and robots

MITSUBISHI ESTATE CO., LTD.

Risks

due to demographic changes (including
decrease in working population)

Declining demand for facilities and services due

to late response to IT and digital innovation

79

ESG Initiatives

2. Initiatives to Protect Environment (ESG's "E")Key KPIs and Targets■ CO₂ emissions ■ Waste disposal ■ Renewable energy rate ■ Waste recycle rate
■ Water recycle rate ■ # of renovated buildings and condos ■ Domestic lumber usage rate

CO₂ Emissions⁃ Increase electricity storage facilities⁃ Optimize thermal circulation⁃ Employ demand response system

2030 Target

35％ reduction (vs. FY2018)

2050 Target

Waste Recycle Ratetenants, visitors, and guests⁃ System/measures to facilitate waste
separation【Actual: 4,038,thousand t (FY2020)】⚫

⚫

2030 Target

87％ reduction (vs. FY2018)*These targets were approved by
SBT Initiative in April 2019

CO2 Reduction
Case Study⁃ Raise awareness and distribute information for

90％⚫

Use of a fuel cell system manufactured by
Mitsubishi Hitachi Power Systems

Installed in the Marunouchi Building
Mar. 2019
CO2 emission reduced by 50% vs grid
power【Actual : 55.2％ (FY2020)】

Reference value: 3,336 thousand t (FY2018)

Renewable Energy Rate
2030 Target
2050 Target

25％
100％

【Actual : 1.1％ (FY2020)】

MITSUBISHI ESTATE CO., LTD.

Waste Disposal
2030 Target

20％ reduction(vs. FY2020)【Actual value (reference value):
7.1kg/sq m. (FY2020)】

Marunouchi Bldg.

Fuel Cell System installed

80

ESG Initiatives

3. Initiatives to Human Resources and Resilience (ESG's “S”)
＜Human Resource＞Key KPIs and Targets＜Resilience＞Key KPIs and Targets■ PTO utilization■ Rate of buildings that are to take in stranded commuters■ Paternity leave utilization■ Rate of people with first aid training course qualifications■ Retention post-parental-leave

PTO Utilization

Rate of Buildings That are
to Take in Stranded Commuters

FY2021 Goal

Actual (FY2020)

5％ increase

Rate of such facilities*3(Reference value: 66.0%(FY2018)）

92.3％【Actual*1：68.0％ (FY2020)】

Paternity Leave Utilization
FY2030 Goal

Rate of People with First Aid
Training Course Qqualifications

FY2030 Goal

100％

【 Actual*2：17.1％ (FY2020)】

100％【Actual*4 ：61.0％ (FY2020)】

Retention Post-parental-Leave
FY2030 Goal

100％

*2 Average of 5 companies (Mitsubishi Estate, Mitsubishi Estate Residence,

Mitsubishi Jisho Property Management, Mitsubishi Jisho Sekkei, Mitsubishi Real Estate Services)
MITSUBISHI ESTATE CO., LTD.

1.5×of a standard skyscraper(=withstand a level 7 earthquake)

Emergency Generator for BCP in
New Buildings (Marunouchi Area)

72 hr【Actual*2：93.8％ (FY2020)】*1 Mitsubishi Estate only

Seismic Performance of New
Building (Marunouchi Area)*5*3 Covering large-scale properties completed in or after 2002
*4 Average of 3 companies (Mitsubishi Estate, Mitsubishi Jisho Property Management, Mitsubishi Jisho Retail Property

Management)*5 There are certain exceptions81

ESG Initiatives

4. Corporate Governance (ESG’s “G”) -1
Establish effective governance that ensures long-term enhancement of corporate value.
(as of Sep. 2020)

Corporate Structure• Transitioned to a “Company with Nominating Committee, etc.” in June 2016

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 regard 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
outside director

Exclusively
outside directors

Exclusively
outside directors

14
Male

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

82

ESG Initiatives

5. Corporate Governance (ESG’s “G”) -2
Non-Renewal of Anti-takeover Measure• In 2019, the Company did not renew its anti-takeover measure (the Board of Directors adopted a resolution not torenew the measure due to talks with its shareholders and investors, as well as other factors).

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

Medium- to
Long-term Incentive

Short-term Incentive

Singe-year
Performance-based
Incentive

25％

RS
Incentive

PS
Incentive

12.5％

12.5％

Variable Component<Single-year Performance-based Incentive>
・Form : cash
・Calculation: "KPIs" : Operating Profit, ROE etc. of previous year (quantitative evaluation) as wellas levels of contributions to medium- to long-term business results, efforts on ESG and otherelements (qualitative evaluation)<New Long-term Performance-based Incentive Plan (PS Incentive) >・Form : cash
・Performance evaluation period: 3 years
・Calculation: Based on stock price and total shareholder returns(TSR)relative to peer companies*<Restricted Stock Plan (RS Incentive) >・Form : stock
・Lock-up period: 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

Strategic-holding Stock Policies• Sold 30 entities* with total value of approx. ￥35.7 bn in the past five years (FY16–20).

• Current market value of the holdings is approx. ￥184.6 bn; routinely review strategic objectives and dispose of stocks asnecessary as of March 2020.
* Stocks of listed companies only. Including partial sale

MITSUBISHI ESTATE CO., LTD.

83

ESG Initiatives

6. External Evaluation
As of November 2020, reputations or ratings below have been given.
• FTSE4Good Global Index (19 years in a row)
• FTSE Blossom Japan Index (Adopted by GPIF)(4 years in a row)
• MSCI Japan ESG Select Leaders Index (Adopted by GPIF) (4 years in a row)
• MSCI Japan Empowering Women Select Index (Adopted by GPIF) (3 years in a row)
• S&P/JPX Carbon Efficient Index (Adopted by GPIF) (3 years in a row)
• SOMPO Sustainability Index (9 years in a row)
• GRESB Public Disclosure (3 years in a row)
• GRESB Real Estate 2019: Three Stars/Green Star
• CDP Climate Change 2019 Questionnaire: A- rating

MITSUBISHI ESTATE CO., LTD.

84

Contact Information
Investor Relations Office,Corporate Communications Department
Mitsubishi Estate Co., LTD.

+81-3-3287-5200
https://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.