May 14, 2019
Earnings Highlights for FY2019(The Fiscal Year Ended March 31, 2019)
Mitsubishi Estate Co., Ltd.
●Earnings for FY 2019 (Consolidated)
Millions of yen (rounded down)
FY2019Results
Office Building Business

FY2018Results

529,695

506,161

Change(%)

Change23,533

FY2019 Estimates（Announced on May 14, 2018)

4.6%

545,000

Lifestyle Property Business

106,182

97,920

8,261

8.4%

113,000

Residential Business

420,405

410,598

9,807

2.4%

440,000

International Business

81,84486,925(5,080)(5.8)%

74,000

Revenue from Operations

1,263,283

1,194,049

69,2335.8%

1,290,000

Office Building Business

147,691

147,243448

0.3%

148,000

Lifestyle Property Business

32,56028,079

4,480

16.0%

31,000Residential Business

30,42823,860

6,567

27.5%

23,000International Business

26,927

24,147

2,779

11.5%

25,000Operating Income

229,178

213,047

16,131

7.6%

215,000

Income Before Taxes and Special Items

206,587

190,506

16,081

8.4%

191,000

Profit Attributable to Owners of Parent

134,608

120,443

14,165

11.8%

123,000

EBITDA

320,641

302,424

18,2176.0%

303,000＜Summary＞【Overview】
There is an increase in income and profits compared with FY2018. Main factors include an increase inrental income and profits in the Office Building Business; an increase in sales income and profits fromrental apartments in the Residential Business; and an increase in property sales income and profits in theInvestment Management Business. Factors affecting individual segments compared with FY2018 aredetailed below.
【Office Building Business】
Despite a decrease in property sales income and profits, an increase in rental income and profits from both
new and existing buildings resulted in an overall increase.
(Vacancy Rate)
The vacancy rate had been temporarily increased due to vacancies in existing buildings as a resultof tenant relocations to new buildings in Marunouchi. However, with leasing is well underway, thevacancy rate is expected to be improved by the end of FY 2020.
(Average Rents)
The average rents increased as a result of rents from new buildings coming into effect as well as anincrease in rents from existing buildings.

(yen/tsubo.month)

Vacancy rates

2018/3Results

2018/12Results

2019/3Results

Japan (all uses)

1.87%

1.56%

1.80%

Marunouchi (offices)

1.65%

1.27%

2.19%

¥26,193¥26,664¥26,702Average rents (Japan, all uses)

【Lifestyle Property Business】
An increase in property sales profits, an increase in rental income and profits fromTokyo Ryutsu Center
Distribution B Building completed in June 2017, and a favorable performance in outlet mall businessresulted in an overall increase.
【Residential Business】
Despite a decrease in property sales income and profits from domestic condominiums, an increase in sales
income and profits from rental apartments led to an overall increase.
【International Business】
A decrease both in property sales income and in rental income from buildings currently under renewal
constructions in U.S. resulted in a decrease in income. However, factors, such as an increase in income andprofits related to Hybrid Investment Business Model* as well as an increase in profits in condominiums inChina, led to an overall increase in profits.
*Hybrid Investment Business Model: Funds structured by the Group companies that combine Mitsubishi
Estate’s and third-party equity. They support portfolio diversification and increased investment scale while
concurrently earning management fees from investors for providing services to them.

●Earnings Estimates for FY2020 (Consolidated)

Millions of yen (rounded down)
FY2020Estimates

FY2019Results

ChangeChange(%)

Office Building Business

590,000

529,695

60,305

11.4%

Lifestyle Property Business

120,000

106,182

13,81813.0%

Residential Business

402,000

420,405(18,405)(4.4)%

International Business

137,000

81,84455,156

67.4%

Revenue from Operations

1,360,000

1,263,283

96,717

7.7%

Office Building Business

153,000

147,691

5,309

3.6%

Lifestyle Property Business

35,00032,560

2,440

7.5%

Residential Business

20,00030,428(10,428)(34.3)%

International Business

37,00026,927

10,073

37.4%

Operating Income

230,000229,178

8220.4%

Income Before Taxes and Special Items

207,000

206,587413

0.2%

Profit Attributable to Owners of Parent

137,000

134,608

2,392

1.8%

EBITDA

324,000

320,641

3,359

1.0%

＜Summary＞【Overview】
While a decrease in property sales and profits from domestic condominiums in Residential Business and adecrease in property sales accounted in the previous period in Investment Management Business isexpected, an overall increase is also expected in income and profits. Main factors include an increase inrental income and profits in the Office Building Business and an increase in property sales income andprofits mainly in the Office building Business and the International Business. Factors affecting individual
segments compared with FY2019 are detailed below.

【Office Building Business】
An overall increase in income and profits is expected as a result of an increase in rental income from both
new and existing buildings as well as an increase in property sales income and profits.
(Vacancy Rate）
The vacancy rate for the end of March 2020 (Japan, all purpose) is expected to be 1.5%.
(Average Rents)
The average rents for the end of March 2020 (Japan, all purpose) is expected to reach
26,900yen/tsubo.month due to the effect of operations of new buildings and the rent increase for existingbuildings.
【Lifestyle Property Business】
An increase in income and profits is expected as a result of an increase in property sales income and profits.
【Residential Business】
A decrease in income and profits is expected as a result of a decrease in income and profits fromcondominiums both in Japan and overseas as well as a decrease in property sales profits.
【International Business】
An increase in income and profits is expected as a result of rents from a building currently under Renewal
constructions in U.S. as well as an increase in property sales income and profits.
●Dividends
Although the Company recognizes capital requirements for future business developments such as theredevelopment of Marunouchi, it focuses on the provision of an appropriate return to all shareholders as akey point of the basic policy on dividends by considering overall performance levels and businessenvironment in real estate market etc. In terms of dividends for both FY2019 and FY2020, the Company has
decided to aim for consolidated payment ratio of 30%.
Interim dividends for FY2019 are ¥13 yen per share. Upon balancing the accounts, profit attributable toowners of parent had considerably increased compared with the most recent full-year financial forecasts.
Therefore, the year-end dividend is scheduled to be increased by ¥ 4, up to ¥ 17 per share (annual dividend
payout is ¥ 30 per share).
For FY 2020, along with future prospects as well as dividend policy stated in above and also after taking into
consideration on a decrease in the certain number of shares to be distributed (meaning the number of sharesobtained by deducting the number of treasury stocks from the total number of outstanding shares) as a resultof repurchasing own shares planned in FY2020, the interim dividend will be set at ¥15 and the year-end
dividend will be set at ¥16 and annual dividend payout will be ¥31 per share for FY 2020. By aiming forconsolidated payment ratio of around 30%, the Company will decide dividends per share based on the numberof shares to be distributed.
●Repurchase of own shares
As a part of flexible capital policy dependent on the real estate market conditions, the Company has decided
to repurchase own shares worth 100 billion Japanese yen at the Board of Directors of the Company meetingon May 14, 2019 for further improvement of capital performance and shareholders’ return.

●Estimates for Quantitative Targets in FY2020(in Medium-Term Management Plan announced on May 11, 2017)

GrowthPotential
Performance
Stability

Quantitative Target

Previous Estimates

Current Estimates(announced on May 11, 2017)(as of May 14, 2018)(as of May 14, 2019)

Operating Income¥220 billion¥230 billion¥230 billion

Operating Income／ Total Assets(ROA)

Around 3.5%

3.8%3.9%

Around 8.5 times（Around 8 times）

Around 8times(Around 7.5times)

7.4times(6.9times)

Net Debt／EBITDA(Hybrid Finance reflected)＜Summary＞【Overview】
In regards to quantitative targets for each indicator stated in Medium-Term Management Plan announced on
May 11 th , 2017, each indicator is expected to exceed the target as a result of maintaining a good businessenvironment particularly in Office Building Business.
【Growth Potential】
With exceeding the target over 10 billion, operating income of ¥230 billion is expected mainly due to anincrease in rental profits as well as property sales profits in Office Building Business.
【Performance】
In addition to an increase in operating income, ROA is expected to be 3.9 % with 0.4 % above the target as aresult of a decrease in debt by improving cash flow and a reduction of total assets by repurchase of own
shares.
【Stability】
In addition to an increase in operating income, a decrease in debt by improving cash flow is expected; thus
leads to an improvement in stability.
Disclaimer
The forecasts contained in this report, the Summary of Consolidated Financial Statements, and FACT BOOK
are based on information available to the Company at the time of disclosure. Therefore, actual performance
may differ from such forecasts due to various factors.
The summary of Financial Statements and Fact Book can be found on the homepage.
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