TOKYO TATEMONO GROUP

Integrated Report

Integrated Report

2022

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CONTENTS

Introduction

Corporate
Philosophy

TOKYO TATEMONO GROUPINTEGRATED REPORT 2022

Introduction“Trust beyond the era.”
We aim to grow the Company and to create a prosperous society,taking pride in the trust placed in us that extends over a century.
Corporate
StanceWe support affluent and dream-filled living.

01

Corporate Philosophy

02

Contents

03

At a Glance

05

A History of Value Creation

Value Creation and Goals of the Tokyo Tatemono Group08

Message from the CEO

13

Value Creation Process

15

The Tokyo Tatemono Group Approach to Materiality and Value Creation

17

Review of Past Medium-Term Business Plans; Long-Term Vision and Medium-Term Business Plan

19

Medium-Term Business Plan (FY2020-2024)

Value Creation Initiatives

We aim to create comfortable urban environments.
We create worthwhile spaces offering peace of mind.

21

Financial Strategy: Message from the CEO

25

Business Strategy

25   Commercial Properties Business
33  Residential Business39   Asset Service Business“The Customer Always Comes First” Spirit
Established in 1896 by Zenjiro Yasuda, the founder of theformer Yasuda conglomerate, Tokyo Tatemono is Japan’s
oldest comprehensive real estate company. From the outset,
Yasuda’s principle of always putting the customer first, alongwith an enterprising spirit that has anticipated changes in thetimes, have been the ground of the Company’s activities. From
this foundation, Tokyo Tatemono has helped to enhance theattractiveness and value of various regions and expanded intoa range of real estate development businesses, including thedevelopment of new assets that have responded to the needsof society over time.
Even now, more than a century after the Company’s founding,this mindset continues to inform and guide the Tokyo TatemonoGroup. Taking pride in the trust we have accumulated over theyears, Tokyo Tatemono will continue to grow as a company as
we contribute to the creation of a prosperous society.

41   Property Sales to Investors
42  Other Businesses
45

Environmental Strategy

Foundation for Value Creation

Zenjiro Yasuda

Company headquarters at its
establishment in 1896

51

Human Resources Strategy

55

Corporate Governance

59

External Directors Roundtable

63

Management Structure

67

Risk Management

68

Compliance

Data Section
69

Key Financial and Non-Financial Data

71

Financial Statements

76

Corporate Data

ForewordThank you for taking the time to review the Tokyo Tatemono Group Integrated Report 2022.
We have been publishing integrated reports since 2019, and this is our fourth. I speak regularly with our shareholders,investors and a wide range our stakeholders. Each year I keep those interactions in mind as we work to improve thecontent of this report. I hope it can serve as a tool to help people understand our company more deeply and to enrich
our conversations.
We will continue working to enhance and improve the content of our disclosure and the transparency of information sothat we can clearly communicate our management vision and goals. I hope that you will read this integrated report in fulland share frankly any thoughts or impressions you may have. We appreciate your continued support.
July 2022
Director, Senior Managing Executive Officer

Editorial Policy
Integrated Report 2022 was prepared with the goals of enhancing
communication with stakeholders and fostering understanding regarding
the intention of the Tokyo Tatemono Group to create value over the
medium to long term through the provision of financial and non-financial
information. For future reports, we intend to incorporate feedback fromreaders to improve the contents.
Reporting Period
This report primarily covers the fiscal year ended December 31, 2021.
However, some information on activities before or after this period andforward-looking forecasts are also included.
Scope of Reporting
The scope of this report includes Tokyo Tatemono Co., Ltd. and Tokyo
Tatemono Group companies.

Referenced Frameworks
In preparing this report, we referenced the Guidancefor Integrated Corporate Disclosure and Company
Investor Dialogues for Collaborative Value Creation:
ESG Integration, Non-Financial Information Disclosure,and Intangible Assets into Investment released by the Ministry of Economy,
Trade and Industry and the Value Reporting Foundation’s International
Integrated Reporting Framework. Non-financial information has been
disclosed with reference to the standards of the Global Reporting Initiative.
Disclaimer Regarding Forward-Looking Statements
Data and information regarding future outlooks provided in this integrated report are forward-looking statements based on the Company’s
judgments in light of currently available information. Actual results may
differ materially from those projected as a result of economic conditions,market trends, demand fluctuations, foreign exchange rate movements,and other factors.
The following icons in the text indicate that links are available
when the report is viewed in PDF format.
Link to this Integrated Report or Sustainability Report
Link to web page

02

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TOKYO TATEMONO GROUP

Introduction

INTEGRATED REPORT 2022

At a GlanceTokyo Tatemono Group in Numbers
Operating revenue

Business profit(Billion yen)(Billion yen)
400

323.0

334.9

60

340.4

200

0

22.5

30

FY2017FY2018FY2019FY20200

FY2021

Operating revenue per segment (FY2021)

FY201751.6

27.2

FY2018

49.8

29.7

200

47.9
31.7

FY2019FY2020

FY2021

21.5

4.3

-9.1

340.4
billion yen

17.0

47.9

Commercial
Properties

billion yen*

Residential 35%* After elimination and corporate

ROE

Total assets / ROA
Total assets(Billion yen)
3,000

3.4

1,441.003.3

1,450.0

3.4

1,564.0

3.1
1,624.6

(%)

(%)

4

10

7.9

2.9

8.2

8.3

FY2017FY2018FY2019FY2020

4,000

2,951

3,333

3,539

30

0

FY2017

FY202020

FY2021

1,539

1,676

1,709

1,186

1,590

1,606

1,794

1,862

1,996

FY2017FY2018FY2019FY2020

FY20212,000

0*1 Adjusted BPS = BPS + (Unrealized gains [net of tax]) / Number of shares outstanding at end of period (net of treasury stock).
*2 Unrealized gains (net of tax) = Unrealized gains x (1 - statutory effective tax rate [statutory
effective tax rate used for each fiscal year is the rate that was in effect that year]).

5

FY201819/12

FY2020

FY202100Debt-equity ratio

FY2017FY2018FY2019FY2020

FY2021Interest-bearing debt/EBITDA multiple(Times)(Times)

2.5

2.5

2.5

2.3

20

12.5

1.5

12.7

12.6

13.4

13.3

10

Unit

2017

2018

2019

2020

2021

t-CO2

—

—

1,100,693

1,288,946

943,489

Potable water consumption (unit load)

Thousand m3

—

—

—

—

567

Waste emissions (unit load)t/Thousand m2

—

—

—

—

5.3

Recycling rate

%

—

—

—

—

65.7

Ratio of management positions held by women

%

3.2

4.6

5.0

6.0

7.2

Ratio of Director positions held by women

%

0

0

0

0

8.3

Ratio of employees who underwent a health check-up

%

100

100

100

100

100

Average annual paid leave utilization rate

%

—

—

57.7

51.2

57.5

Percentage of childcare leave taken (men)

%

3.6

41.2

28.6

18.2

30.4

Proportion of external directors

%

27

33

33

33

33

* For detailed information and notes for each item, please refer to the Data section of the Sustainability Report.

(Sustainability Report) Data p.97
FY2017FY2019FY2018FY2019FY2020

FY20210

FY2017FY2018FY2019FY2020

FY2021

40

51

Non-Financial Data

1,650.7* ROA = Business profit ÷ total assets (average at start and end of fiscal year)

0

FY2018

46

30.5

3,706

1,345

Category*

2.4

FY2021

41

35

30.2

BPS

CO2 Emissions

3.0

29.0

8.7

6.8

2

FY2017

27.8

ROA

1,500

0

28.8

50

Unrealized profit*2 (net of tax)
(Yen/share)

44.8

120.5

100

104.17

2,776

155.6

167.35BPS and adjusted BPS*1
Other

Residential

152.12100

Business profit per segment (FY2021)

Commercial
Properties 46%

141.59125.7934.9

Asset Service

42.6

Annual dividend per share
Payout ratio(Yen)(%)(Yen)

Other 6%

Asset Service 13%

Annual dividend per share / Payout ratio

Profit attributable to owners of parent

47.1

46.4

273.3

266.9

Earnings per share (EPS)Business profit / Profit attributable to owners of parent

0

04

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TOKYO TATEMONO GROUP

Introduction

A History of Value Creation

INTEGRATED REPORT 2022

Operating revenue (FY2021)

340.4 billion yen

Since our foundation, Tokyo Tatemono, a pioneer of modern real estate, has been engaged in industryshaping initiatives under the philosophy of the customer always comes first and the enterprising spirit
inherited from our founder, Zenjiro Yasuda, who was also the founder of the Yasuda conglomerate.
Our track record of doing business for 125 years is the basis for our current strengths.

1896-1945

1946-1996

1997-2011

2012-

Tokyo Tatemono was founded by Zenjiro Yasuda, thefounder of the Yasuda conglomerate, as a real estatecompany with specialized financial functions for landand building properties, in order to lay the groundworkfor real estate transactions in Japan. After the
Sino-Japanese War, the company was the first to
establish a business in China to manage and operate residences and buildings, going on to establish
a track record in this area.

As the Japanese economy developed, the company
actively expanded its office building business to meetgrowing demand for office space. The company
started the condominium business to cope with the
housing shortage during Japan’s period of rapid economic growth. To meet demand for land transactions
associated with these businesses, the company also
reinforced its brokerage business, evolving to becomea truly comprehensive real estate company.

To further expand the business, the company hastaken on the challenge of advanced initiatives such aslarge-scale redevelopment projects that draw on its
integrated strengths as a comprehensive real estatecompany, and the development of Japan’s first realestate securitized products. The company diversified
the business into new areas, such as a retail facility
business, fund business, and parking business.

Using its accumulated expertise, the company has
undertaken a series of large-scale redevelopment
projects, continuing to complete projects that showcase the capabilities of the Tokyo Tatemono Group.
With the aim of achieving a sustainable society,the company has engaged with local communities,
society, and the natural environment in its pursuit ofurban development that takes into consideration
generations to come.

1896

1960

1998

2012

Yasuda founded the company at the height of the Meiji era, a time when
Japan was booming, because he perceived that specialized financial
functions for land and buildings were needed both to improve individual
people’s lives and to further develop Tokyo as a whole. The first to grasp
the needs of his day, Yasuda introduced a monthly installment plan for realestate transactions that became the prototype for residential loans in Japan.

Established four business pillars, clarifying its direction as a comprehensive
real estate company: real estate sales, real estate leasing, real estate
brokerage and appraisal, and residential land development.

With its serviced apartments for foreign residents in the Takanawa district,the company was the first in Japan to package a real estate securitized
product under the Special Purpose Company Act (now the Act on
Securitization of Assets).

Completed Nakano Central Park, a large-scale office building project that
not only incorporates highly earthquake-resistant buildings but a range ofdisaster prevention features throughout the area, and that is conducive to
new working styles.

2003

2013

Unified condominiums under the Brillia brand. In 2004, formulated internal
guidelines to ensure the consistency and quality of condominiums.
Under the guidelines, started the industry’s first construction site tours forcondominium buyers.

Began sales of Brillia Tower Ikebukuro, Japan’s first high-rise condominium
complex integrating local government offices with residential space.
Completed in 2015.

Birth of Japan’s Oldest
Comprehensive Real Estate Company

Business Expansion in Response toSocial Needs

Rapid Expansion as a Comprehensive
Real Estate Developer

1965
Set up a specialized real estate appraisal department even before a legal
framework was established in Japan, setting its own standards andconducting appraisals, which provided a source of profit even during thepostwar recession. Registered as a real estate appraisal company in 1965.

1903
Quickly branched out into overseas markets. Starting with an office in
Tianjin, the company soon expanded into six cities in China, engaging in
the management and operation of residences and buildings.

1969

2006

Entered the for-sale condominiums business in response to the pressing
housing shortage during Japan’s period of rapid economic growth. Leading
the condominium boom, launched sales of condominiums in Fujisawa cityin 1968 and of Hiroo Heights condominiums in 1969.

1907
Listed on the Tokyo Stock Exchange

Completed Olinas, Tokyo’s first complex redevelopment project in whichurban planning was carried out in tandem with district planning andzoning changes.

Urban Development for Cities of
the Future

2013
Completed Tokyo Square Garden, one of Japan’s most environmentallyfriendly office buildings.

2014

1979

2007

Completed Otemachi Tower, which seeks to conserve biodiversity, andencompasses the 3,600 m2 Otemachi Forest.

With rising demand for office space amid Tokyo’s economic development,
began development of new office buildings, completing the landmark
Shinjuku Center Building at the heart of the Tokyo subcenter of Shinjuku.

Completed Kasumigaseki Common Gate, a public-private, large-scale
redevelopment project using a private finance initiative (PFI) structure.

2016

2007

Drawing on its extensive redevelopment expertise, participated in numerous urban redevelopment projects, such as Hareza Ikebukuro, on the siteof the former Toshima ward office.

1987

Selected as a project partner for the Suwa 2-Chome Housing
reconstruction project, one of the largest reconstruction projects in Japan.
Completed as Brillia Tama New Town in 2013

Launched To-Be, a comprehensive system supporting customers with realestate holdings, ranging from proposals for effective site use and basicplanning, to business and financial planning, recruitment of tenants, andmanagement and operation after completion.

2017

2011

Pursued health and productivity management, certified as a Health &Productivity Management Outstanding Organization.

Acquired a stake in Nihon Parking,which engages in the parking
business nationwide.

2020
Received an award in the Bond category at the Ministry of theEnvironment’s ESG Finance Awards Japan.

2021
Set Medium- to Long-Term Targets for Reducing Greenhouse Gas Emissions

Zenjiro Yasuda

1896 1900

Tokyo Tatemono Building(former Tokyo Tatemono Headquarters Building)

1910

1920

1930

1940

1950

1960

Shinjuku Center Building

Hiroo Heights

1970

Kasumigaseki Common Gate

1980

1990

2000

Otemachi Tower

2010

2020

06

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CEO Message

Introduction

A History of Value Creation
Strengths developed through 125 years of business

1

Strength

Ingenuity and Problem-solving Ability to Meet the Needs of Customers and Society
Tackling community and customer problems to bring new value of place

At Tokyo Tatemono, we listen to the needs of our customers andsociety, working to address their problems. We use our ingenuity andproblem-solving ability to bring added value to the places we develop.
Brillia Tama New Town, completed in 2013, is one of Japan’s largest
apartment complex reconstruction projects. The project applied the
Act on Facilitating Reconstruction of Condominiums to rebuild a640-unit complex into 1,249 units. The reconstruction increased
the number of households,
which boosted the younger
demographic in the community.
Local residents welcomed ourefforts to foster interaction
between different generations
and to revitalize the local
community.

Nakano Central Park, completed in 2012, is an integrated development adjacent to Nakano Four Seasons Forest Park (disaster prevention park) in the area of the former site of the National Police
Academy. It offers an efficient office layout with a mega plate, or
uninterrupted single floor, of around 1,500 tsubo (nearly 5,000 m2)—
one of the largest of its kind in Japan. The property offers a new styleof working, in an open, green environment. In our area management,
we focus on adding value not
only during development but
also long after construction iscompleted. We partner withthe local community in various
ways, including planning andholding events, to help makethe area more vibrant.

Brillia Tama New Town

2

Nakano Central Park

Strength

Accumulated Trust, Track Record of Accomplishments, and Expertise
Winning trust, building a track record, and gaining expertise for the future

We have carried out many redevelopment and reconstruction projects over the years,
benefiting from the cooperation and support of local residents and governments. As weearned trust and built up a track record, we have also gained valuable expertise.
Kasumigaseki Common Gate, completed in 2007, was a PFI project in the urban development field. It was a complex project, unprecedented in its scale at the time, and a forerunner
for the broader application of PFI in Japan. Tokyo Tatemono played a leading role in the realestate business of this project. We mainly handled the business operation of the private
income-generating facility, the overall maintenance and management of the facility, and theacquisition of reserved floor space.
Brillia Tower Ikebukuro, completed in 2015, is Japan’s first high-rise condominium projectthat integrates the main building of a municipal office. The property features a low-rise sectionthat serves as the main Toshima Ward office building, along with commercial facilities andoffices. The high-rise tower section houses 432 residential units.
Through these efforts, we have built up extensive experience in public-private projects,
which we are now applying to our ongoing large-scale redevelopment projects. We continue
to work with the Tokyo Metropolitan Government and administrative districts as we carry out
integrated, high-value-added urban development.

3

Hitoshi Nomura
Representative Director,
President and CEO
Tokyo Tatemono Co., Ltd.
Kasumigaseki Common
Gate

Brillia Tower Ikebukuro

Strength

Corporate Culture Able to Read the Times and Take on New Challenges
Actively promoting advanced environmental initiatives

One guiding principle for our business is to maintain an enterprising spirit that stays
ahead of the times. With this in mind, we have in recent years been actively promoting
environmental initiatives.
In a partial evaluation covering its office space, Hareza Tower in Ikebukuro became thefirst project to obtain ZEB Ready*1 certification for a high-rise mixed-use building in Japan.
In addition, following an open submission, Brillia Tower Seiseki Sakuragaoka Blooming
Residence was chosen by the Ministry of Economy, Trade and Industry for the fiscal 2019
Super High-Rise ZEH-M Demonstration Project.*2 It was the first and only Tokyo metropolitan
area property to be included in the project .
In 2021, we set medium- to long-term targets for reducing greenhouse gas emissions andwe continue working to help bring about a sustainable society.
*1 ZEB (Net Zero Energy Building) refers to a building designed to target an annual primary energy consumption
balance of zero. Features for enabling this include energy conservation solutions and the use of renewable energy.
The ZEB Ready certification is awarded to buildings equipped with facilities that use energy conservation solutions
to reduce annual primary energy consumption by 50% or more.
*2 A demonstration project that was necessary to establish design guidelines for promoting ZEH certification forapartment complexes. The Ministry of Economy, Trade and Industry (METI), which leads this program, subsidizes
part of the cost of upgrading the design specifications and energy performance information so that an apartmentcomplex can obtain ZEH certification. ZEH (Net Zero Energy House) refers to a house designed to target anannual primary energy consumption balance of zero. Features for enabling this include energy conservation
solutions and the use of renewable energy.

We will enhance the personal strengththat gives us our advantage
Brillia Tower Seiseki Sakuragaoka
BLOOMING RESIDENCE

Hareza Tower

as we pursue our long-term vision.

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TOKYO TATEMONO GROUP

Value Creation and Goals of the Tokyo Tatemono GroupINTEGRATED REPORT 2022

Message from the CEO

1

The Tokyo Tatemono Groupadvantage:
The personal strengths ofeach employee

The Group has a long-term vision for 2030 of
becoming a next-generation developer. We aim toachieve an overarching balance between solvingsocial issues and growing as a company. I believethat the key to realizing this long-term vision is the
personal strength of each employee—the innermotivation to achieve ambitious targets.
I hold to the view that this personal strength iswhat gives our company its strength. I would liketo share an anecdote with you to illustrate thispoint. One time back when I was the generalmanager of a business division, I was in the processof tenant leasing for a large newly constructed
property. A potential main tenant came to view theproperty. The viewing of another property had run
over time, which meant that we had to make this
proposal at night. That made it difficult for us toconvey certain selling points of the property likethe surrounding environment and the view. I myself
saw little chance of us being able to advance thediscussion. But our key person for the project, who
was in her twenties at the time, made an enthusiastic presentation to the customer in the form ofstory told with handmade pictures. It illustrated
how well the property matched the concept of theworking style the client was aiming for. Our client
counterparts sat up in their seats as they watchedthis presentation, which was backed by in-depth
research conducted in advance about the client’s
corporate culture and way of thinking. A situationthat had looked hopeless was turned around completely, and as a result, the client moved into ouroffice building. That episode that still stands out tome as something that exemplifies our corporate
culture. The fundamental premise for our businessas a developer is that we deliver quality in ourphysical output. But we also want to be a company that goes further, embracing the challengeof difficult projects and competing on the basis of
personal strength.
Our long-term vision includes the statement,“We aim to be a good company for all stakeholders.”
I believe that our employees are the starting point

for all our stakeholders. When employees use theirindividual strengths and teamwork, that enables
us to provide value to all stakeholders. We will
work to improve the Tokyo Tatemono community
by proactively addressing the internal communication issues that emerged during the COVID-19
pandemic. I strongly believe that doing so will
nurture the personal strength that gives us ouradvantage, strengthening our competitiveness.

2

A developer that creates
not only real estate, but alsoa sense of place

Another important point in realizing our long-term
vision “Becoming a Next-Generation Developer” isthe concept of creating a sense of place.
Throughout its more than 125-year history, theGroup has cultivated this concept, which includes
not only the physical aspect of developing realestate, but also the intangible elements such asproviding services.
We have positioned the Yaesu-NihonbashiKyobashi area of central Tokyo as a priority area.
We are pursuing various initiatives alongside promoting large-scale redevelopment projects suchas the Yaesu Project and Gofukubashi Project.
This area has many redevelopment projects
planned over the next 10 years, including those byother companies, which will bring about a major
renewal at a functional level. It also has a history ofgrowth as a traditional merchant district and islined with long-established stores that have beenin the area for generations. This gives the area a
distinctive atmosphere that cannot be found elsewhere. We value the history of the city as well as
our relationships with the people who live andwork there. We are involved in a wide range ofarea management activities, including participationin the Sanno Festival, which has been held since
the Edo period, the organization of other events,
and disaster prevention activities. In addition,an ecosystem that can autonomously produce
innovation is vital for a city to have new vibrancy
and to achieve sustainable development. Our

materiality also includes value co-creation andinnovation. We actively promote interactions
between existing industries and startups in thearea as we work to support their growth.
The word “develop” has two layers of meaning
to it. In the hard sense, it means developing land andbuildings. In the soft sense, it means promoting
growth and advancement. Our long-term vision,“Becoming a Next-Generation Developer,” incorporates our desire to work as a Group to provide
place value and customer experience value, rather
than simply building buildings. We aim to enhance
the attractiveness of our communities and portfolio
value from a long-term, multifaceted perspective.

3

Anticipating the needs ofcustomers and society ina time of uncertainty

In FY2021, the second year of the medium-termbusiness plan, some of the Group’s businesses,
including the Parking business and Resort business, continued to be affected by the impact of
the COVID-19 pandemic. However, we achieved
solid performance in our mainstay Commercial
Properties Business and Residential Business.
In our overseas businesses, we suspended
operations at some projects in Indonesia due tothe spread of coronavirus and other factors. In
Myanmar, we recorded equity in losses of entities
accounted for using the equity method as a resultof the total suspension of operations following thedeclaration of a state of emergency. Ultimately,
however, operating revenue reached a record highfor the fifth consecutive fiscal year, and profit
attributable to owners of the parent increased forthe sixth consecutive fiscal year. In this way, wewere able demonstrate that even in a difficult
business environment our company maintains its
financial strength.
The environment for acquiring new projects isharsh, however, and securing projects consistently
remains difficult. Although we have secured asufficient stock of projects that will contribute forthe duration of the medium-term business plan,

we still face the task of securing projects that willcontribute to growth over the next 10 to 20 years.
If we purchase a site at a high price, the successor failure of that project is to some extent alreadydetermined, regardless of how hard we work after
acquisition. Our policy therefore is to avoid pricecompetition such as through bidding, instead
maintaining strict discipline as we select targets
for investment. We will continue to work moreaggressively on redevelopment and reconstruction
projects as well as projects that require expertisein areas such as rights adjustment and consensus
building. In this way, we will secure projects thatcan be expected to be highly profitable.
Regarding the outlook for the market environment for offices, in last year’s Integrated Report,
I stated that face-to-face meetings between people
would remain important. That was my response to
the argument that offices have been rendered
unnecessary. Many companies are as yet unable
to decide fully on their future work styles and officestrategies. But we have heard that many of ourtenants are in fact planning to return their officeattendance arrangements to a condition similar tothat before the pandemic, once COVID-19 is undercontrol. On the other hand, the COVID-19 pandemic
has also led to widespread recognition of theimportance of work flexibility. We believe that it isessential to properly serve the changing needs ofthe times. We can do this by offering options suchas satellite offices and shared offices that support
efficient and diverse work styles, in addition toa central office that encourages team building.

10

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TOKYO TATEMONO GROUP

Value Creation and Goals of the Tokyo Tatemono GroupINTEGRATED REPORT 2022

Message from the CEO

As for the Residential Business, the increasing
proportion of dual-income households has combined with low interest rates to provide a tailwind
for increased purchasing power. Sales progress is
steady and sales prices are at a very high level.
Our reputation has grown precisely because weare able to provide high-quality products thatmeet the needs of our customers. At the sametime, I feel that prices are approaching their upper
limits. In preparation for the risk of changes in theexternal environment in the future, we will continue
to make selective investments with a discerningeye, while also promoting the planning of highvalue-added products.

4

Environmental and humanrights awareness—essential
to sustainable growth

Last year, the Group moved to clarify its stance asa business on addressing the urgent social issueof climate change. This involved setting mediumand long-term goals and KPIs, including for the
reduction of greenhouse gas emissions, obtaining
SBT (Science Based Targets) certification, andparticipating in various initiatives. Specifically, weare promoting initiatives such as power generationand self-consignment using solar panels in the
T-LOGI series of logistics properties, developmentof ZEB*1 and ZEH,*2 and development of condominiums using the wooden CLT (Cross LaminatedTimber) panel construction method. Disasters andabnormal weather events have occurred withincreasing frequency, conveying the immediacy ofthe climate crisis. With a sense of urgency being
felt around the world, it is only natural that we tooshould do our utmost to respond to this crisis.
The idea that we could continue business as
usual when the very survival of the planet is atstake is nonsense.

I must confess that when discussions ofenvironmental targets first began, I sometimes
wondered what a single company could do, andwhether such targets were even feasible. But
through discussions with board members andemployees, I came to see the value of setting
deliberately ambitious goals and then continuing
to work hard on tackling the challenges to achieve
them. Although the power of each individual is small,
if we all work hard in the same direction, I believethat we can change the world. Sales of ZEH condominiums are in fact progressing extremely well.
We see this as a good example of how our efforts
match the trend of the market. In addition, in the
Parking Business, we are also promoting advanced
initiatives, such as our ZEP (Net Zero Energy
Parking) project. For this, we are conducting ademonstration test of a parking lot fitted with solarroad surface power generation panels designed
to reduce the annual primary energy consumption
balance to zero. By accelerating these efforts,
we will make progress toward achieving ourenvironmental goals.
In addition, on the social front, we have formulated a human rights policy and sustainableprocurement standards. We must address risks
related to human rights and political situations,
including overseas. We must never take the attitude
that if we are making a profit that is good enough.
A company that operates globally cannot afford to

be unaffected by human rights issues around theworld. I believe that it is the responsibility of amodern company always to be aware of thiswhile developing its business. In terms of humanresources, we will further promote KPIs and targets
such as skills development and the promotion ofhealth management. These are essential for
cultivating employees who have the kind of innermotivation to work that I referred to earlier.
*1 Zero Energy Building (ZEB) is a building that aims to achieve an annual
primary energy consumption balance of zero by maximizing energy
independence through the use of advanced technologies that enablesignificant energy savings and the introduction of renewable energy. ZEB
consists of Nearly ZEB (energy savings of at least 75%), ZEB Ready(energy savings of at least 50%) and ZEB Oriented (energy savings of at least
40% in office buildings and 30% in hotels with a floor space of 10,000 m2
or more), each of which will be included in the Group’s initiatives.
*2 Zero Energy Houses (ZEH) reduces total energy consumption throughmeasures such as heat insulation and energy savings as well as generatingenergy through power generation to balance out the annual primaryenergy consumption to zero. ZEH-M, the zero energy housing standard
for condominiums, consists of Nearly ZEH-M (energy savings of at least75%), ZEH-M Ready (energy savings of at least 50%) and ZEH-M
Oriented (energy savings of at least 20%), each of which will be includedin the Group’s initiatives.

5

Enhancing the effectivenessof governance by buildinga system that goes beyond
procedural formalities

The Group’s board of directors engages in very
candid and active discussions. Its members,
including those from outside the Company,
expresses frank opinions on business initiatives
regardless of their areas of expertise or their positions. This is true not only of board of directors
meetings, but also of other discussions such as
those at management meetings, where employees
express their candid opinions to the directors. I
would like to see this trend continue throughout
the company.
In this context, I believe that the qualities
required of a CEO are not so much expertise or
skills per se, but rather a sense of humanity andof balance based on an accurate view of theCompany as a whole. A CEO also needs to beable to make appropriate decisions regarding
individual investments and other matters.

I focus on having a balanced sense of judgment
while appropriately updating my knowledge invarious fields, instead of being constrained by
my experience or preconceptions. In this sense,
I believe that the most appropriate way to select a
successor will be to cultivate someone within thecompany who has a deep understanding of ourcorporate culture as well as excellent humanqualities. That individual can then be selected
provided they are acceptable to all members oforganizational bodies such as the Nomination andRemuneration Advisory Committee.

6Continuing to provide value
to society requires
an earning mindset

I sometimes tell our employees that for us tocontinue to provide value to society, we must be
a company that has an earning mindset and continues to grow profitably. We must be able torespond to the demands of the times and social
issues. We must earn the trust of our customers
and encourage them to reach out to us. We must
create a cycle in which such customer expectations
are firmly translated into profits. Without that kindof mindset, the business of our Group cannot
succeed. Although we maintain balance as aso-called zebra company that values sustainability,
at the same time we must not forget our appetite
for profitable growth, which is like the horn of aunicorn. This mindset is becoming firmly establishedthroughout our organization. I believe that is one
reason why the Group’s business has remained
strong in the COVID-19 pandemic and why we aremaking steady progress toward the goals of our
medium-term business plan. We will continue ourefforts so that we can earn recognition from ourstakeholders as a corporate group that will continue to show steady growth while at the sametime being of service to the world. I would like to
ask all of you for your continued understanding
and support of our Group.

12

13

TOKYO TATEMONO GROUP

Value Creation and Goals of the Tokyo Tatemono GroupINTEGRATED REPORT 2022

Value Creation Process
The value creation process of the Tokyo Tatemono Group is a cycle based on the corporate philosophy
of “Trust beyond the era.” As input, we use various types of capital. Our output (real estate andservices) comes from business activities enabled by the Group’s strengths. The outcome (results andvalue) further strengthens our capital.

Corporate Philosophy “Trust beyond the era.”
Input
Financial Capital

Business activities

Message from the CFO p.21

A sound financial foundation supporting
business activities
Total assetsbillion yen

1,650.7

Debt-equity ratio
Interest-bearing debt/EBITDA multiple
Business Capital

2.3x
13.3x

Output / outcome

As a comprehensive real estate developer, we operate a wide range of businessareas. Through initiatives both in physical products and in services, we maximize

Medium-Term Business Plan

place value and customer experience value.

(2020-2024)

Consolidated business profit of 75 billion yen
Promoting the Five Key Strategies and an Evolved
Approach to ESG Management

Maximizing place value andexperience value

Business Strategy p.25

Long-term assets generating stable income
Property and Equipment/
intangible assetsbillion yen

Long-Term Vision and Current Medium-Term Business Plan p.18

944.1

Short-term turnover assets withhigh capital efficiency
Balance of real estate for sale
Social and Relationship Capital

Value Creation Milestones fromFY2020 to FY2024

Business Strategy p.25

Material issues

A wealth of information sourcesxIntellectual Capital

Business Strategy p.25

Management and operation drawing on theGroup’s integrated strengths

Evaluation bystakeholders

Expertise in identifying profit opportunities

Property sales to investors

Leasing

Identifying needs

5,648* Number of certification holders as of March 31, 2022

Addressing the diverse needs ofcustomers and society

Ingenuity and problem-solving ability to meet theneeds of customers and society

Corporate culture able to read the times and take on
new challenges
Strengths developed through 125 years of business p.7

Shared values with society reating value of place andCvalue of experience

Value co-creationand innovation
Social implementation oftechnology

Promoting a recycling-oriented
society

Value creation
platform

723
22
99

Wellbeing

Promoting a decarbonizedsociety

Accumulated trust, track record of accomplishments,and expertise

Long-Term Vision p.16

Revitalizing and utilizing realestate stock

Providing solutions

Human Resources Strategy p.51

Securing and developing highly specialized
human resources
Number of certification holders

First-Class ArchitectOverseas business
120 billion yen
Contribute to the SDGs

Community building andrevitalization

140 billion yen

Promoting diversity in our workforce
Number of group employees

Real Estate Broker

Fund Business

Environmental Strategy p.45

Sustainability FinanceGreen Bonds and Sustainability
Bonds OutstandingReal Estate Appraiser

Sales of condominiums

Building Development and Leasing

Environment-related third-party evaluation
Acquisition of Green Building Certification

Human Capital

Real estate distribution and parking
lot businessConsolidated business profit ofContributing to a safe andsecure society

Leisure and Child Care BusinessWell-known product and service brandNatural Capital

Property sales
Social value creation

Expertise in large-scale redevelopment projects
and residential reconstruction

Services

Becoming a NextGeneration Developer

Strengthening Tokyo’s
competitiveness as aninternational city

Business Strategy p.25

Relationships with a broad range of customers and tenantsLong-Term Vision

Materiality

Initiatives inphysical products
and in services

344.2 billion yen

Target for around 2030

 oexistence with the earthCand the environment

Improve employee growth andjob satisfaction
Value-creating talent
Diversity & Inclusion
Advancement of governance
Strengthen risk management
framework ealizing sustainabilityRmanagement* As of December 31, 2021

Materiality of the Tokyo Tatemono Group p.15

14

15

TOKYO TATEMONO GROUP

Value Creation and Goals of the Tokyo Tatemono GroupThe Tokyo Tatemono Group Approach
to Materiality and Value Creation
Approach to Value Creation by Addressing Materiality
We undertook a method of backcasting to reassess thepriority issues we should address, with an awareness ofthe shared value with society we realize through our business. As a result of this process, we identified 14 material
issues from the perspective of both creating social value
and the infrastructure needed to create such value.
The Group will seek to develop solutions to thesepriority issues through our business to maximize ourpositive impact on society while minimizing our negative
impact. In this way, we will help bring about a sustainable
society while pursuing growth as a company.

Background of materiality assessment
2018
Reviewed the SDGs and other social issues, aiming to take in awide range of social issues connected to our business. Identified
35 social issues that the Tokyo Tatemono Group should consider.
2019
Assessed the importance of 35 social issues in terms of themagnitude of social needs and alignment with our business.
Identified material issues.
2021
Conducted studies for revising material issues based on recentsocial trends as well as knowledge gained through advice fromexternal experts, participation in various initiatives, and communication with stakeholders.
Approved material issues after validation and discussion by
the Sustainability Committee and directors.

INTEGRATED REPORT 2022

Long-Term
VisionBecoming a Next-Generation Developer
We live in a time of profound change. We are experiencing shifting demographics, growing diversity among personal values,
ever-accelerating technological development, and more. Amidst these uncertainties, a broad range of challenges to achievingsocial sustainability have emerged. The Tokyo Tatemono Group understands that the role of developers must also change infundamental ways. We are committed to using our business to offer better solutions to society’s problems and bring our own
growth as an enterprise to a higher level. By doing so, we aim to be a good company for all our stakeholders.

Fundamental policy for our long-term vision

Steady Profit GrowthTarget for 2030:
Consolidated business profit* ofSolve a Variety of Social Issues

120 billion yen

Contribute to the SDGs

* Consolidated business profit = consolidated operating profit + share of profit (loss) ofentities accounted for using equity method

Basic Profit Growth Policy
Steadily expand stable leasing profit, making it the core of our profit composition
Target a well-balanced profit structure, mindful of capital efficiency

Material issue KPIs and targets
Material issues

Materiality of the Tokyo Tatemono Group
Material issues

Shared values with society

Contribution to SDGs

Promoting adecarbonized society

Strengthening Tokyo’s competitiveness as an international
city
Contributing to a safe and secure society

Social value creation

Creating value of place andvalue of experience

Addressing the diverse needs of customers and society
Value co-creation and innovation

Promoting a recycling-oriented society

Coexistence with the earth
and the environment

Value creation
platform

Value-creating talent
Diversity & Inclusion

Strengthen risk management framework* Please refer to the next page for KPIs and targets corresponding to each material issue.

Rate of ZEB development in newly developed properties
Rate of ZEH development in newly developed properties

Acquisition of Green Building Certification

Rate of acquisition of Green Building Certification in newly developed properties

Reduction of waste emissions

Reduction rate of waste emissions per unit

Waste recycling promotion

Waste recycling rate
Reduction rate of water consumption per unit

Promotion of use of recycled water

Percentage of newly developed properties with gray water treatment facilities

Promotion of use of wood materials

Percentage of newly developed properties in which domestic timber and certified timberis used for common-area interiors and furniture
Adoption of CLT for their core structural parts in newly developed properties
Percentage of tenants with whom we communicate about sustainability at least 4 times
a yearPlan and implement sustainability measures through communication with residents
Average training time per employee
Career training participation rate

Improve employee
growth and job
satisfaction

Improve employee growth and job satisfaction

Advancement of governance

Rate of shift to renewable energy for electricity consumed in our business activities

Promotion of development of ZEB
and ZEH

Promotion of skills development

Revitalizing and utilizing real estate stock
Promoting a decarbonized society

Shift to renewable energy

Promoting adecarbonized society / Collaboration and co-creation
Promoting a recycling- with customers
oriented society

Social implementation of technology

KPIs and Targets
Reduction in CO2 emissions

Promoting a recycling- Reduction of water consumption
oriented society

Community building and revitalization
Wellbeing

Item
Reduction in greenhouse gas
emissions

Diversity & Inclusion

Promotion of health management

Health checkup rate
Health check reexamination rate
Smoking rate

Respect for human rights

Dissemination of the Human Rights Policy

Work-life balance

Average annual paid leave utilization rate
Ratio of male employees taking parental leave

Promotion of diversity in our workforce

Ratio of women in management positions
Employment rate of persons with disabilities

Realizing sustainability
management* Please refer to Environmental Strategy (p. 45) and Human Resources Strategy (p. 51) for details of the scope and numerical targets of each KPI.

16

17

TOKYO TATEMONO GROUP

Value Creation and Goals of the Tokyo Tatemono Group

Review of Past Medium-Term Business Plans;Long-Term Vision and Medium-Term Business Plan
Trajectory of Past Business Plans
2012–2014 Medium-Term Business Plan
Quantitative Targets

Results

35.0 billion yen
3x30.5 billion yen
2.6x

Operating profit
Debt-equity ratio

2015–2019 Medium-Term Business Plan

In light of our desired future direction for theGroup, this medium-term business plan was
positioned as a stage for reinforcing the businessfoundation. The plan called for the company’stransformation centered on strategically focusedstructural realignment and optimization of thevalue chain. Our aim was to thoroughly
strengthen earnings power and the Group’s
financial position.
We implemented various measures, including
selling some business units and reorganizing thespecial purpose company structure for large-scale
projects. In addition, by keeping interest-bearing
debt down and expanding the equity base, we
reinforced the financial position beyond theplan’s initial targets.

Targets
Achieved

Quantitative Targets

Results

50.0 billion yen

52.4 billion yen

Targets for Financial
Indicators

Results

Debt-equity ratio

3x

2.5x

Interest-bearing
debt/EBITDA multiple

13x

12.6x

Consolidated
operating profit

Targets
Achieved

Although we built a sound financial base, we
failed to achieve target profit levels, and the plan
concluded with profitability as an ongoing issue.
We recognized the need to boost profitability
by building a business portfolio with high growthpotential, which would enable us to achievesustainable growth over the longer term. We
incorporated this recognition into the next
medium-term plan.

IssuesRemaining

IssuesRemaining

The objective of this medium-term business plan
was to strengthen earnings power and build abusiness portfolio with high growth potential.
To achieve this, the plan called for us to provide
a range of high-quality services to enhancecustomer satisfaction, strategically focus onfields and business domains where we could
take full advantage of the Group’s unique expertise and competitive strengths, strengthen thevalue chain, and deliver value through organic
collaboration between a variety of business units.
We achieved profit growth in excess of theinitial target and practiced a more disciplined
financial management approach. At the sametime, in addition to pursuing consistent growth ineach business, we took various initiatives for
future growth, such as investing in hotels andlogistics facilities and other new asset types andexpanding the stock of quality real estate.
We were successful in strengthening earnings
power and maintaining a sound financial position.
However, the need for actions that would ensuresustainable growth became more apparent as we
faced shifts in the business environment, including mounting competition between international
cities, increasingly diverse lifestyles, and rapid
advances in digital technology, coupled with thepressing issue of sound ESG management.

Debt-equity ratio (times)

ROE

FY2012-2014(Billion yen)70

FY2015-2019

33.2%
5.3%

5.6%

4.4%

7.9%

6.8%

6.4%

46.7

44.7
35

30.8

2.6x

2.3x

8.2%

8.3%

Positioning of the Current Medium-Term Business Plan (FY2020-2024)
In February 2020, to accomplish the Group’s long-term vision looking ahead to 2030, we formulated a medium-term business plan covering the five years from fiscal 2020 to 2024. The plan targets a milestone of 75 billion yen in consolidated
business profit in its last year.
Medium-Term Business Plan and Consolidated Business Profit
Long-Term Vision Looking Ahead to the Period around 2030

2015-2019
Medium-Term Business Plan

2020-2024 Medium-Term Business Plan

52.4

49.6

58.7

2.3x

2.3x

2.4x

2.5x

2.5x

2.5x

2.3x

1.7x
0

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Consolidated business profit*

Consolidated business profit*

75 billion yen
35.2

2015

46.4

47.1

2017

2018

51.6

49.8

47.9

2019

2020

2021

120 billion yen

38.2

2016

2024

around 2030

* Consolidated business profit = consolidated operating profit + share of profit (loss) of entities accounted for using equity method

Road map 2030

around 2030

Realizing our long-term vision

Becoming a next-generation developer
Long-term vision p.16

Growth as
a company

Solvingsocial Issues

Achieving targets of
medium-term business plan

2024

1

We aim to collaborate with leading local
partners, primarily in China and other
Asian countries, to acquire new business
opportunities centered mostly on for-salecondominiums with quick turnover.

Promotion oflarge-scale
redevelopment

5

Growth in overseas
business

8.7%

36.3

34.4

30.5

29.3

FY2020-2024

18

Long-Term Vision and Current Medium-Term Business Plan (FY2020-2024)

Operating Profit, Debt-equity Ratio, ROE
Operating profit

INTEGRATED REPORT 2022

We will strengthen our brokerage and parking
businesses with a focus on building up thereal estate portfolio and meeting needs forthe effective use of real estate. We will
strengthen the fund business by expanding
property sales to investors; for instance, to
REITs sponsored by the company.

We engage in the pursuit of large-scale
redevelopment projects and take initiatives toenhance the appeal of the areas aroundthese projects, aiming to increase the valueof our entire office building portfolio andexpand the flow of stable leasing profit.

2

Implementing
our key strategies

4

Strengthening of
brokerage, fund, andparking businesses

Redevelopment and rebuilding will be ourFurther strengthening tools enabling the ongoing acquisition ofof for-sale condominium opportunities to develop highly-competitive
condominiums, providing quality housing inbusiness

3

Expansion of property
sales toinvestors

Evolution of ESG Management(Sustainability Report) ESG Management p.6

response to social changes.

Through proactive investment in a broad poolof asset types, including logistics facilities
and for-rent condominiums we will continue
to seize development opportunities and sellproperties expeditiously to generate profits.

19

TOKYO TATEMONO GROUP

Value Creation and Goals of the Tokyo Tatemono Group

Medium-Term Business Plan
(FY2020-2024)

Capital Allocation
Investment plans and results

Capital Efficiency

Financial Indicators
Debt-equity
ratio*1

Consolidated
business profit

ROE

75 billion yen

8-10%

Approx.

Interest-bearing debt /EBITDA multiple*2

2.4 times Approx. 12 times*1 Debt-equity ratio = consolidated interest-bearing debt/consolidated owners’ equity*2 Interest-bearing debt/EBITDA multiple = interest-bearing debt / (operating profit + interest and dividend income + share of profit (loss) of entities accounted for using equity method +depreciation + amortization of goodwill)

1,400

318.0

Investment in large-scale
redevelopment

230

13.8

Investment in for-sale condominium
projects

430

110.5

Investment in properties for saleto investors

550

121.5

Investment in the overseas business

70

5.0

Other*

120

67.2

Recovered

900

241.9

Net investment

500

76.1

Business characteristics
As well as managing our business portfolio using business segments focused on the value chain, we use three categoriesaligned to earnings characteristics—leasing, property sales, and services. We aim to achieve steady growth by building
a business structure that balances profitability, efficiency, and stability in each of these areas, and by promoting our five
key strategies.
Earnings category* Includes outgoings for capital expenditure, etc., and provisions for the acquisition ofseed land buildings and income-producing real estate for large-scale redevelopment.

Highly stable earnings
Involves a large investment

Property sales

Development income earned from the sale of property holdings

Highly volatile earnings
High capital efficiency

Services

Fee income from the operation and management of facilities
and the provision of services

Highly stable earnings
Does not involve a large investment(1) Promotion of large-scale redevelopment

Property sales(2) Further strengthening of for-sale condominium business51.6 billion yen
3%10%

Key strategies and main corresponding profits

120.0 billion yen

Key strategies

Corresponding earnings

20%(1) Promotion of large-scale redevelopment

Leasing30%20%(2) Further strengthening of for-salecondominium business

Property sales

40%(3) Expansion of property sales to investors

Property sales(4) Strengthening of brokerage, fund, andparking businesses

Services

50%

60%

40%

FY2019FY2024 (Expected)

Around 2030 (Expected)* Percentages in the graphs indicate approximate composition ratios.

Interestbearing
debt
956.8
billion yen
Owners’equity417.0
billion yen

FY2021

Assets1,900
billion yen
Debt-equity
ratio 2.3x

Owners’equity500
billion yen

Debt-equity
ratio
Approx. 2.4x

End of FY2024 (Expected)

Commercial Properties Business p.25

(5) Growth in overseas businessResidential Business p.33

Maintained strong profit margins in 2021 on continued firm demand. As well as favorable locations in highly convenient urban centers, properties in suburban
areas also performed well, resulting in lower inventories of completed properties.
Made steady progress in contracts for properties scheduled to be posted in 2022. The supply of highly profitable properties is expected to continue.
The profit margin is therefore expected to remain at a high level during the medium-term business plan period.
Succeeded in securing enough projects while carefully selecting investments. We thus expect to secure stable profits by continuing to work on highly
competitive properties.

Services75.0 billion yen

Assets1,650.7
billion yen

Interestbearing
debt
1,200
billion yen

In October 2021, started construction of a new building in District B for the Yaesu Project. In February 2022, an urban redevelopment consortium wasapproved for establishment in District A. Made steady progress toward overall completion in 2025.
In November 2021, the establishment of an urban redevelopment consortium was approved for the Gofukubashi Project. Promoted consensus building
among all parties toward start of construction in 2024.
Decided city plan for the Shibuya 2-chome Project in March 2022. The goal is to create a community that brings new added value in the area.
In the priority area of Yaesu-Nihonbashi-Kyobashi, we are working to build an innovation ecosystem where industry players such as venture companies andlarge corporations can gather and connect. In this way, we aim to help foster cutting-edge industries and create a virtuous cycle of economic growth.

(3) Expansion of property sales to investors(4) Strengthening of brokerage, fund, and parking businesses

Leasing

Other
276.8
billion yen

Characteristics

Leasing income from offices, condominiums, etc.

Image of change in composition of business profit

Other
200
billion yen

Progress on Key Strategies

Building a Portfolio Based on Business Characteristics

Leasing

2020-2021
actualGross investment

FY2024 Figures

Image of balance sheet changes
Five-year
plan

Unit: Billion yen

Profit and Financial Plan

Profit Target

INTEGRATED REPORT 2022

Property sales

Property sales to investors p.41

Asset services p.39
In property sales to investors, which are a growth driver, we have steadily increased our stock by carefully
selecting investments, particularly in logistics properties, despite a challenging acquisition environment.
We expanded the Group’s assets under management by selling properties that had been transferred from
Real estate fund business p.42
non-current assets to real estate for sale to REITs and funds sponsored by Tokyo Tatemono. Sold offices andfor-rent condominiums in 2021.
In the brokerage business, the number of contracts for large-scale transactions increased as the Company focused on strengthening relationships withcustomers. We worked to secure repeat business from the Company’s existing development properties, against the backdrop of a favorable real estate trade
market.
In the parking business, we explored opportunities to expand our business. We also worked to strengthen profitability and competitiveness in anticipation ofa recovery in demand after the end of the COVID-19 pandemic.

(5) Growth in overseas business

Overseas businesses p.43

In Indonesia, we suspended certain projects due to the impact of the COVID-19 pandemic. In Myanmar, we suspended all projects due to the declaration ofa state of emergency. We recorded a share of loss of entities accounted for using the equity method, mainly due to a revision to the business plan for theseprojects because of the business situation in both countries.
In China and Singapore, sales of condominiums and office occupancy were firm.
In terms of our policy on overseas businesses initiatives, we are carefully selecting and investing in projects based on the current situation, while reviewing
our strategy.

20

21

TOKYO TATEMONO GROUP

Value Creation Initiatives

FINANCIAL STRATEGY
Message from the CFO
We aim to be a good company for all our
stakeholders, actively engaging withthem as we pursue a financial strategy
that balances financial health withgrowth investment.

Akira Izumi
Director
Senior Managing Executive Officer & CFO

Q1

Please share your assessmentof FY2021 business performanceand the second year of
the medium-term business plan.

In FY2021, we continued to face a challenging businessenvironment due to the prolonged global impact of the
COVID-19 pandemic, as well as political upheaval incountries where we have invested overseas. Despite this,however, we were able to achieve a record level of
performance, upgrading our long-term credit rating while
maintaining sound financial health.
Although some of our businesses continued to beaffected by the COVID-19 pandemic, the impact waslimited in terms of our overall performance. The Commercial
Properties Business remained robust, and sales of for-salecondominiums and of property sales to investors werefirm on strong demand. As a result, we achieved record
operating revenue and operating profit. Although overseas
businesses recorded a loss, the sale of strategic shareholdings and other factors resulted in a sixth consecutive
year of increased net income attributable to owners of theparent company, and an eighth consecutive year ofincreased dividends to shareholders.

of quality large-scale redevelopment projects with a view
to further expanding our stable earnings base. We also
see a need to address new business areas considering
the structural changes in the economy and society andchanges in demand, which will accelerate after the
COVID-19 pandemic.
Based on this recognition, the Group will continue totake an aggressive stance in acquiring new projects. We
will do this by using our broad information channels anddiverse relationships with customers, suppliers, and otherparties, while avoiding buying at high prices.
In addition, we will closely monitor future trends andtake appropriate measures as necessary to address therising construction costs that have emerged amid soaring
resource and energy prices and materials prices causedby the Ukraine situation, as well as disruptions in logistics.

Q3
The COVID-19 pandemic began immediately after thestart of our medium-term business plan two years ago.
We believe that during this period our business portfolio
has demonstrated its resilience to infectious disease risk.
In addition, we have strategically implemented property
sales to investors and acquired new investment opportunities with an eye to the future. This has enabled us tobuild a pipeline for future growth alongside achieving solid
business results. Based on the above, we assess that themedium-term business plan is on track to achieve ourfiscal 2024 business profit target of 75 billion yen.

Are you reviewing your policies on
your overseas businesses, following
the recent investment losses?

In our overseas businesses, we were forced to record
losses on certain projects due to political upheaval andimpact of the COVID-19 pandemic. However, at this time
we have completed the accounting treatment, which wedeem to be appropriate and sufficient. We will review our
medium- to long-term overseas business policy, including
the scale of investment in overseas businesses assumed
in the medium-term business plan (70 billion yen). We
must consider the lessons learned from this experience
as well as the recent international situation, including
the Ukraine situation, while giving due consideration tocountry risks, geopolitical risks, and other factors.

INTEGRATED REPORT 2022

In the long term, we intend to advance seven largescale redevelopment projects targeting completion
between 2025 and 2030. We aim to expand stableleasing profit, making it the core of our profit composition
for the 120 billion yen in business profit that we aim toachieve by around 2030. Alongside this, profits from theproperty sales segment, which has high profitability andasset turnover and contributes to improved capitalefficiency, will be expanded as a growth driver during the
medium-term business plan period. We will pursue further
growth beyond that, maintaining a balance with stableprofits from the leasing segment. In the services field,
which directly contributes to improved capital efficiency,
we will continue to strengthen our efforts to achieve
steady growth over the medium to long term.
By implementing the growth scenarios outlined above,
our aim for 2030 is to build a business portfolio with aprofit composition of approximately 50% in leasing, 30%
in property sales, and 20% in services. This will achieve
an aim of our long-term vision, a well-balanced profit
composition centered on leasing profit and mindful ofcapital efficiency. It will also enable us to achieve ourtarget of 120 billion yen in business profit.
In its more than 125-year history, the Group has
experienced several crises caused by drastic changes inthe environment. Each time, the source of the Group’s
survival as a business has been its leasing profits and theassets it held. Holding prime leasing assets of a certain
size can be expected to provide long-term stable income
and competitiveness. That wisdom comes from our longexperience as a developer in urban development, which
involves the high risk of large investments and timespansthat stretch over many years. It has also been an advantage that has aided us in the evaluation of our long-term
credit rating. The Group’s policy on building its businessportfolio also reflects this thinking.
Projected Shift in per-Area Profit over Time

Q2

What issues do you see inthe recent business environment?

Competition for land acquisition continues to be intense,and securing new projects is a challenge. To achievesustainable growth for the Group, in the short term, weneed to increase investments in sales of condominiums
and property sales to investors to achieve the mediumterm business plan and to target growth beyond that.
From a long-term perspective, we must secure a pipeline

Q4

Leasing

Property Sales

Services

120.0 billion yen
20%

What is your vision for and thinking
on the profit structure of yourbusiness portfolio going forward?

Our long-term vision and medium-term business plan
divide our businesses into three categories according toearnings characteristics—leasing, property sales, andservices. We aim to build a business portfolio that takes
into consideration the balance between stability,
profitability, and efficiency.

75.0 billion yen

30%

20%

51.6 billion yen
10%
30%

40%
50%

60%

40%

FY2019FY2024 (Expected)* Chart percentages are approximations

Around 2030 (Expected)

22

23

TOKYO TATEMONO GROUP

Value Creation Initiatives

INTEGRATED REPORT 2022

FINANCIAL STRATEGY

Q5What is your current assessmentof and approach to financial
soundness?

Even during the COVID-19 pandemic, the Group has
generated stable profits and continued and expanded
investments for growth, while properly managing its
balance sheet. This has resulted in a debt-to-equity ratioof 2.3 times and a debt-to-EBITDA ratio of 13.3 times(both as of December 31, 2021). These ratios are stable
and within the expected range for the fiscal 2024 key
financial indicators set forth in our medium-term businessplan. Our long-term issuer rating was upgraded to “A” inthe last fiscal year (from “A-” in the previous year), following
an evaluation of our strategy, business performance,and prospects.
The real estate business is characterized by the factthat non-current assets acquired as capital investments
are marketable and can be easily converted to cash.
We will continue to take advantage of this by selling
non-current assets, reviewing unprofitable businesses,
and reducing strategic shareholdings. We will continue to
implement balance sheet controls in a timely and appropriate manner, while aiming to maintain and improve ourfinancial soundness and profit growth.

Q6

What KPIs do you use to manage
improvements to profitability andcapital efficiency?

The Group employs multiple KPIs, including project returnand IRR, two indicators that refer to the return on invested
capital for each project. We set KPIs and hurdle rates asinvestment criteria for each of the various asset types,
as we work to maintain detailed risk control and ensureprofitability. In principle, we set numerical targets for specific initiatives that exceed the investment criteria for the
relevant asset type. We then work to improve profitability
and asset turnover as we advance our business, aiming
for an ROA of 4% for the business as a whole, as statedin the medium-term business plan. We will also pursue
appropriate leverage and balance sheet control while
maintaining financial discipline as we work to achieve ROEof 8-10%. This is the target we set in the medium-termbusiness plan as an indicator of capital efficiency.

Q7

What are your thoughts onshareholder returns?

During this medium-term business plan, we aim toincrease dividends continuously through sustainable profit
growth, based on a consolidated dividend payout ratio of
30% or more. We will consider whether to implement a
share buyback, considering the business environment andfinancial conditions. As mentioned earlier, there will be

Treasury stock acquisition: 10.0 billion yen

Per-Share Dividends(cancelled on January 31, 2020)

59.0 yen60

30.0 yen

35.0 yen

41.0 yen

46.0 yen

51.0 yen

30

Profit Growth Drives
Further Increase

0

FY2017FY2018FY2019FY2020

FY2021

FY2022(Forecast)

FY2024(Forecast)

Consolidated
payout ratio

28.8％

27.8％

29.0％

30.2％

30.5%

30.8%

30%
or moreProfit attributable toowners of parent

22.5
billion yen

27.2
billion yen

29.7
billion yen

31.7
billion yen

34.9
billion yen

40.0
billion yen

45.0
billion yen

EPS

104.17 yen

125.79 yen

141.59 yen

152.12 yen

167.35 yen

191.49 yen

215 yenample opportunities for growth investment going forward,
including the seven large-scale redevelopment projects
that we expect to complete after 2025. We believe thatprioritizing growth investment will basically help maximize
returns for shareholders over the medium to long term.

Q8What are your thoughts on thefinancial aspects of ESG?

We have been actively developing ESG finance. In
response to the strong demand for ESG investment,
we have diversified our funding procurement. We started
this with green hybrid bonds in 2019, followed by sustainability bonds in 2020, and sustainability hybrid bonds andsustainability bonds for retail investors in 2021. We intend
to continue actively promoting these initiatives, which we
feel are highly meaningful. Not only do they use sustainable funds, but they also deepen mutual understanding
and relationships through engagement with a wide rangeof stakeholders involved in ESG investment. The Groupwill also work to enhance its analysis and disclosure of thefinancial impact of climate change on its operations basedon the TCFD framework.

Q9

What are your thoughts on
investing in human resources?

We believe that human resources are the source ofcorporate value creation and sustainable growth, andan important foundation for management.
In real estate, no two properties can be treated thesame. We have to understand the individual characteristics
and issues of each property and draw up a concept thatmaximizes its value. And to realize that concept, we mustbuild trust with various stakeholders. We must be able tonavigate smoothly through proposals and adjustments,
reach agreements, and collaborate with others. In thisrespect, the Group has a competitive advantage. We havedeveloped many people who value trust and empathy andcan build good relationships with stakeholders. Human

resources play a critically important role in achieving value
creation and sustainable growth for the Group.
Our human resources strategy is therefore itself amanagement strategy. We believe that investment in humanresources is essentially investment in growth. We also
recognize that we must systematically hire and train thepeople we need, empowering them to succeed, because
failure to do so will create a bottleneck to growth.
During my five years as the director in charge of humanresources, we have focused on investing in humanresources through a range of measures guided by thisthinking. We have developed ICT infrastructure forenabling work flexibility and BCP support for all executives
and employees. We have ramped up our recruitment of
new graduates and mid-career hires, supported thecareer advancement of women and senior employees, andupgraded our training programs. We have used periodic
engagement surveys to identify and address issues.
We will continue to invest in human resources as a top
management priority, with the aim of steadily securing anddeveloping the next generation of leaders.

Q10

Finally, what is your message
to stakeholders?

The Tokyo Tatemono long-term vision of becoming
a next-generation developer aims for an overarchingbalance between solving social issues and growing as acompany. This is an extension of our stance since theestablishment of the business more than 125 years ago:
to make a profit while serving the world. We will actively
engage with our stakeholders to promote a deeper understanding and appreciation of the social and economic
value that the Group creates. As we do so, we will gaina firm grasp of their requests and expectations of theGroup, reflecting this feedback into our management. In
this way, we will work to enhanced trust and reputation
among various stakeholders, aiming to be recognized asa good company by all our stakeholders.

24

25

TOKYO TATEMONO GROUP

Value Creation Initiatives

BUSINESS STRATEGY roportion of leasable space byPstandard floor space
1,000 tsubo
or more19.2%
The Commercial Properties Business focuses mainly on theinternational city of Tokyo. Its business activities range from urban
development and office building development and operation to facility
management, building maintenance, and preservation and remodeling.
We are working together as a group to provide not only quality
properties and facilities, but also a range of services that give officebuilding users a sense of safety, security, and comfort.

20.1%

 roportion of leasable space byP
building age
30 years and older

31.8%

Under 10 years old

34.8%

Office buildings, large commercial facilities, etc.

Services

Building management and operation, construction, and cleaning

Property sales toinvestors*

Logistics properties, medium-scale office buildings,
compact commercial facilities, and urban hotels

496,001m

37.6%

17.2%

20–29 years old

5.6%

3 central wards ofTokyo (Chiyoda, Chuo,
and Minato wards)

40.4%

50% +

20 years

500–999 tsubo

Other

Five central wardsof Tokyo(Weighted averageby leasable space)

2

23.1%

Tokyo metropolitan
area (excluding 23
wards)

Average age of building

Leasable space

300–499 tsubo

 roportion of leasable spacePby location

2.6%

Main Business Categories
Long-term holdings
Development andOperation Business

10–19 years old

27.8%

23 wards (excluding 5
central wards of Tokyo)

23.8%

Shibuya andShinjuku wards

16.1%* As of the end of March 2022
* The above proportions are for office buildings owned by Tokyo Tatemono* Property sales to investors are shown on p. 41.

Operating revenue / Business profit
Operating revenue(Billion yen)

Average rent (left axis)
Occupancy rate (right axis)(Yen/tsubo)(%)

144.5

160

103.4

108.6

0

98.4

155.6

98.9

50,000120.9

29,88280

Urban Development Initiatives in the Yaesu-Nihonbashi-Kyobashi Area

Average rent / Occupancy rate

Business profit

32.3

33.8

37.5

40.8

44.8

FY2017FY2018FY2019FY2020

FY202130,583

97.7

96.8

30,83530,954100

90

25,0000FY2018FY2019FY2020

FY2021

Tokyo Tatemono is moving forward with several development projects that will contribute to the ongoingdevelopment of Tokyo as an international city. We will
supply highly competitive office buildings by drawing
on assets the Company has long held in the areaaround Tokyo Station. Through our reconstruction,

we aim to meet tenant expectations by providing urban
functions while also reducing environmental impact.
We are confident that this development will feed into
growth in leasing profit for the Group, while increasing theoverall value of the Yaesu-Nihonbashi-Kyobashi area byfurther enhancing its allure.

80

1

In fiscal 2021, despite the impact of the COVID-19 pandemic, which continued to affect the occupancy of some hotels,
revenue and profit increased. This was mainly due to higher property sales to investors and solid performance in the leasingof office and retail buildings. The average rents and occupancy rates of our owned office buildings have remained high evenduring the pandemic—a testament to our portfolio’s competitive strength in the market.

Otemachi Tower

1

Site area
11,037.84m2
Total floor
198,467.44m2
space
Number of 6 floors below ground, 38 floors
floorsabove ground
Completed 2014

Gofukubashi Project p.27

3

Opportunities

Risks

Tokyo Square Garden

2

Future Strategies
Operating Environment / Social Issues

Site area
8,131.39m2
Total floor
117,460.96m2
space
Number of 4 floors below ground, 24 floors
floorsabove ground
Completed 2013

Advantages

 iversification of working styles and office needs targetingD
productivity increases

 wealth of achievement and expertise inAlarge-scale redevelopmentIncreasingly sophisticated needs for offices to attract/retain talented
staff and provide business continuity

 rack record in urban development activities that increaseTthe value of an area and strong tenant leasing capabilities reater business opportunities for large-scale redevelopment
Gassociated with deregulation

 highly competitive portfolio comprising numerous officeAbuildings owned by the group in prime city-center
locations, particularly around Tokyo Station

Mounting competition between international cities and between areas

26

Overview of the Portfolio

299 tsubo or lessCommercial
Properties
Business

INTEGRATED REPORT 2022

Yaesu Project p.27

Tokyo Tatemono Nihonbashi Building

3

Site area
2,277.18m2
Total floor
23,235.56m2
space
Number of 2 floors below ground, 13 floors
floorsabove ground
Completed 2015

Rising construction costs due to higher costs of materials and labor
Key Strategies in the Medium-Term Business Plan roviding the office buildings that are the first choice of customers by developing new properties that address diversifying working styles andPenhancing auxiliary services
Carrying out urban development to heighten the allure of the Yaesu-Nihonbashi-Kyobashi area and other areas where the group owns
buildings, and further boost competitivenessPromoting large-scale redevelopment projects around Tokyo Station and other prime city-center locations to expand the revenue base2

Redevelopment with Tokyo Tatemono’s participation
Redevelopment with Tokyo Tatemono’s involvement
Buildings owned by Tokyo Tatemono* Labels on the map indicate innovation ecosystem initiatives at facilities owned by the Company (see p. 28).

27

TOKYO TATEMONO GROUP

Value Creation Initiatives

BUSINESS STRATEGY

Initiatives for Forming an Innovation Ecosystem
Our aim for the Yaesu-Nihonbashi-Kyobashi area is tocreate a virtuous cycle of cutting-edge industry development and economic growth. To this end, we are using theredevelopment to upgrade the area’s functions and further
concentrate major companies present there. At the sametime, we are creating a base for startups and venture
capital businesses. By encouraging interactions between
a variety of companies and people in Japan and overseas,
we will form an innovation ecosystem.
Using our properties in the area, we will advanceinitiatives that contribute to solving social issues and to
improving the area’s appeal. We will collaborate withMajor Development Projects
in Progress
Tokyo Tatemono is moving forward with several development projects in Tokyo’s Chuo, Minato, and Shibuya
wards. By around 2030, we aim to complete projects
representing approximately 320,000m2 in total leasable
space to be owned by Tokyo Tatemono. We expect thisto contribute to substantial growth in profit.
Related Material Issues
Strengthening
Tokyo’scompetitiveness as
an international city

Contributing to asafe and securesociety

Addressing thediverse needs ofcustomers andsocietyTimeline from start of construction to completion

Current Status

Project
Name

Rights transfer approval (District B)
Yaesu Project
Establishment of urban redevelopment consortium (District A)
Gofukubashi
Establishment of urban redevelopment consortium
Project
Establishment of Preparatory Organizing Committee,
Shibuya 2determination of city plan
Chome Project
Establishment of Preparatory Organizing Committee—
Establishment of Preparatory Organizing Committee—
Establishment of Preparatory Organizing Committee—
Under discussion—

Area

INTEGRATED REPORT 2022

2020

2024

2025

2030

Chuo Ward

Estimated leasable
space (owned by
Tokyo Tatemono)*

various partners in these efforts, which will focus onthemes such as management issues faced by all companies as well as regional characteristics.
We will encourage the spontaneous creation of innovation, contributing to the revitalization of the entire area andultimately to the economic growth of Tokyo and Japan. At
the same time, by improving the area’s competitivenesswe will further increase the value of our office portfolio.
Related Material Issues
Value co-creation and innovation

Total Approx.
120,000m2

Chuo Ward

Total leasable area

ShibuyaWard
Chuo Ward
Minato Ward
Minato Ward
Minato Ward

Formation of an innovation ecosystem in the Yaesu-Nihonbashi-Kyobashi area

Approx.
Total Approx.
200,000m2

320,000m

2

Multicategory

Category by Subject

General companies in
the area

Estimated investment

Estimated investment

Approx.

Approx.

230 billion yen

330 billion yen

Sustainability* Assumed leasable space includes leasable
space other than office space such asconference facilities and retail facilities

Manufacturing companies
in the area

Existing Industryx
Tech

Manufacturing

Food-related companies
in the area

Food

Creative talent
in the area

Art

Urban Redevelopment Project for Yaesu 1-Chome East Area in Front of Tokyo Station (Yaesu Project)
Common management issues

In the Yaesu area in front of Tokyo Station where ourheadquarters building is also located, we are aiming
to create a community that brings together advanced
urban functions suitable to an area that serves as agateway to the international city of Tokyo and bustling activities that pass on the history and traditionsof the Yaesu district to future generations.

Site area
Total floor
space
Number offloorsDistrict A: approx. 1,300m2 District B: approx. 10,600m2

Theme-based innovation centers

District A: approx. 12,000m2 District B: approx. 225,000m2

District A: 10 floors above ground, 2 floors below ground
District B: 51 above ground, 4 floors below ground
District A: Offices, stores, etc. District B: Offices, medical
Main uses
facilities, bus terminals, conference halls, etc.
PlannedFY2025completion

Urban Redevelopment Project for Yaesu 1-Chome North Area (Gofukubashi Project)This project is creating an advanced financial center
that helps to raise Tokyo’s international competitiveness and presents an urban landscape appropriate
for the gateway to the area along the historic Nihonbashi River, in a highly accessible location close to
the Nihonbashi entrance of Tokyo Station anddirectly connected to the Nihonbashi subway station.

Site area North Block: approx. 1,700m2 South Block: approx. 7,560m2
Total floor North Block: approx. 1,100m2
spaceSouth Block: approx. 178,000m2
Number of North Block: 2 floors above ground, 1 floor below groundfloorsSouth Block: 44 floors above ground, 3 floors below ground
Main uses Office, stores, accommodation facilities, parking lot, etc.
PlannedNorth Block: FY2032. South Block: FY2029
completion

Supporting the creation ofstartup communities
Provides shared office/studiospace for startups in their earlystages of development. Promotes
innovation by helping to form acommunity between startups andexisting industries.

Shibuya 2-chome West Area Redevelopment (Shibuya 2-chome Project)This project is situated in the highly
convenient east exit area of Shibuya
Station, along Aoyama-dori. Our aim
is to nurture a town that acts likefertile land, constantly nurturing the
growth of new value. The project will
strengthen the wide-area transportation function of Shibuya. It
will incorporate next-generation innovations designed to help
enhance the area’s international competitiveness.

Site area
Total floor
space

Regional characteristics (agglomeration)

Efforts to build a foodecosystem
Using the area slated for redevelopment in the Yaesu Project, we
held an event called “Beeat!!
Yaesu” for a limited time. The
event focused on the future sustainability of food, communicating
stories relating to this concept. It
was held in collaboration withfood sector companies, organizations and manufacturers, local
restaurants, cooks, universities,
and government agencies.

Promoting innovation tocreate sustainable cities
and societies
Serves as a platform for solving
urban issues through collaboration among diverse companies,
providing new knowledge, community building, and support forbusiness creation

Block A: approx. 1,700m2 Block B: approx. 12,800m2 Block C: approx. 4,300m2
Block A: approx. 4,200m2 Block B: approx. 255,000m2 Block C: approx. 63,000m2

Block A: 5 floors above ground, 1 floor below groundNumber of
Block B: 41 floors above ground, 4 floors below groundfloorsBlock C: 41 above ground, 2 basement levels
Block A: Stores, etc. Block B: Offices, stores, hotels, talent development centers, etc.
Main uses
Block C: Housing, living support facilities, etc.
PlannedFY2029completion* Blocks A and B are envisaged as Type 1 urban redevelopment projects. Block C is envisaged
as a voluntary joint rebuilding project.

xBridge-Tokyo

City Lab Tokyo

28

29

TOKYO TATEMONO GROUP

Value Creation Initiatives

BUSINESS STRATEGY

Area Management Initiatives

Management and Operations that Leverage the Collective Strengths of
the Group
Every year, we conduct a customer satisfaction survey of
our office building tenants. We have been gathering their
feedback from the perspective of safety, security, andcomfort as we work to make improvements based on
customer needs.
Since 2018, we have maintained high levels of overallsatisfaction, with tenants indicating their intention to continue occupancy. Our entire group is working to bringcustomer satisfaction levels to new heights.
Every year all group companies in the Commercial
Properties Business Division participate in an internal
event focused on building management and customer
service. The event introduces specific examples of outstanding performance, honoring notable achievementswith awards. This raises awareness of the importance ofimproving quality and customer satisfaction, creating avirtuous cycle of compelling product planning and assurance of high quality.
Trends in overall satisfaction and intention tocontinue occupancy
Overall satisfaction

Intention to continue occupancy

3.77 3.79

4.0 (max)

2.0

0

2014

2015

2016

2017

2018

2019

2020

2021

Tokyo Tatemono not only develops and operates buildings, but also provides area management services.
Hareza Ikebukuro has established the Hareza Ikebukuro Area Management Association, which works withthe local community to carry out activities that contributeto the vibrancy and appeal of Hareza Ikebukuro and its
surrounding area. The association plans and operates awide variety of events, including using its event spaces
to showcase culture rooted in Ikebukuro.
At Tokyo Square Garden, we installed woodenbenches in public spaces. Our aim is to increase footfall
and vibrancy in the area and foster a sense of community.
We also implemented various other initiatives throughout
the year. Among these, an event called “Meet with Flowers”
creates new scenery in the urban environment. Through theevent, surplus flowers that had been scheduled for disposal

are given a new lease of life in floral displays.
Continuing these initiatives helps build a lively community where people interact with each other. We believe that
this will in turn heighten the appeal of the entire area,
strengthening its competitiveness within the city.

Related Material Issues
Community building and revitalization* Based on the Company’s own monitoring indicators.

Related Material Issues
Contributing to a safe andsecure society

Wellbeing

Strategies for Commercial Properties Business
Large-scale Redevelopment — Several Projects Targeting Completion by Around 2030

Technology Demonstration Initiatives
Work styles are diversifying and businesses are adopting
digital transformation with the aim of improving productivity. This is driving demand for offices that incorporate awide range of IoT devices, electronic systems, along withvarious services.
In 2021, the Company entered into a capital and business alliance agreement with Bitkey Inc. to introduce“workhub,” a platform for office buildings.
From office environments to home environments,
workhub can connect a user ID to IoT devices and services from a wide range of manufacturers. Using the platform, the user can then access these devices andservices from their smartphone, bringing new levels of
convenience to their work life and to their personal life.
BitKey Inc. is located in Tokyo Square Garden, one of ourowned office buildings. A live showroom there offers
members of the public a chance to try out workhub.
We are also accelerating demonstration tests andinitiatives to implement various other technologies. We willcontinue to consider services that respond to changing
work styles and diversifying office needs.

INTEGRATED REPORT 2022

In the Commercial Properties Business, Tokyo Tatemono develops, operates, and manages offices and otherbuildings. We also promote community development in cooperation with tenants and local residents. Oneof the key strategies in our medium-term business plan is the promotion of large-scale redevelopment. We
are advancing several redevelopment projects targeting completion by around 2030. Through this urban
development, we will help address a range of social issues faced by the community. We will cultivate flourishing communities through the creation of centers of bustling activity, and develop properties with smaller
environmental footprints and reinforced disaster-response capabilities. In our planning we also aim toenhance the competitiveness not only of individual projects but also of the entire area and city. We aim
to increase the competitiveness of our office building portfolio, including properties in operation, andfurther expand stable leasing income. Regarding the current progress of the Yaesu Project, construction of a new building in District B began in October 2021. District A received approval to establish a
consortium in February 2022. In the Gofukubashi Project, we also received approval to establish a
consortium in November 2021, and are steadily advancing the project toward our long-term vision.

Property Sales to Investors — Strategic Expansion of Investments

Katsuhito
Ozawa

Property sales to investors form a growth driver of profits in our medium-term business plan. In this area, wehave strategically expanded our investment in development sites against the backdrop of strong real estate
investment needs. We will actively leverage development opportunities for various asset types such as midSenior Managing
Executive Officer and size offices, with a focus on logistics properties, for which demand is strong. By flexibly selling these after
stabilizing operations, we will achieve high asset efficiency. (See property sales to investors on p. 41.)
Director
Conceptual diagram for Bitkey ID

Related Material Issues
Social implementation of technology

Division Directorof Commercial
Properties Division

Office Strategies for the Future — Initiatives that Balance Continuity with Change
The COVID-19 pandemic has transformed the way we work. The needs of our clients are steadily changing
and diversifying, while there is renewed recognition of the importance of a workplace that encourages teambuilding and increases productivity. We believe that now is the time for us to be flexible and sustainable inresponding to changing needs. As we tackle the challenge of new initiatives, our mindset will be guided by
the age-old principle of ensuring continuity while embracing change. In our product planning, we will explore
new ways to satisfy the preferences of our customers in the post-pandemic era. Providing high-value-added
offices, we will pursue sustainable growth through urban development that solves the issues of our customers and society.

30

31

Tenant Interview

Value Creation Initiatives

Commercial Properties BusinessFeatureOffice Strategies for Work Flexibility
Related Material Issues
Strengthening Tokyo’s competitivenessas an international city

The variety of work lifestyles has increased in recent years. In addition, the shift toremote work during the COVID-19 pandemic has triggered marked changes in
attitudes to the workplace, both among companies and workers.
There is increased emphasis on enhancing productivity and creativity byaccommodating more diverse work styles—a departure from the stark choice
between coming to the office or working from home. A company’s office strategy
has become an important factor for attracting the talent it needs to support growth.
(See: Tenant interview Q2)

Companies are placing renewed emphasis on the importance of team building
and on the value of workplaces that generate creative ideas. The central officesthat serve as their main workplaces need to be situated in good locations where
employees with a variety of work styles can gather easily. There is also increasing
demand for facilities and product planning that support productive and active
interactions between employees while they are at the office.
(See: Tenant interview Q2 and Q3)

Tokyo Square Garden, one of the central
offices offered by Tokyo Tatemono

As well as enhancements to the central office, realizing efficient and diverse work
styles requires a wide range of workplace options for different types of work. This
includes the creation of flexible project rooms, the use of intervals of time while in transit, and the use of individual booths forwork requiring concentration.
Tokyo Tatemono is pursuing initiatives aimed at meeting the full range of office needs of companies. We offer high-spec
central offices that help enhance productivity and creativity. We also offer new workplaces that cater to a variety of work
styles, such as serviced offices, co-working spaces, and space-sharing services.

New workplaces offered by the Tokyo Tatemono Group

Mainly used as satellite
offices or project rooms.
Full security andequipment facilities.

Akinobu Inomata
Property Management (1) Department
Commercial Properties Division,
Tokyo Tatemono

Ms. Naoko
Takahashi
GeneralManager,
Corporate
StrategyGroup

Ms. Natsuki Imada
General Affairs
SectionGeneral Affairs
Department

Value co-creation and innovation

Contributing to Office Strategies that Support Business GrowthServiced offices

Mr. Daisuke Okumura
Manager,
General Affairs Section
General Affairs Department

SUN-WA TECHNOSCORPORATION
An independent technology
trading company founded in1949 that provides a wide
range of specialized services
centered on three divisions:Electronic Machinery,
Electronic Equipment, andGeneral Machinery. Since
2015, it has been located at
Tokyo Square Garden(Kyobashi, Chuo-ku, Tokyo).

32

Co-working spaces
Mainly used for intervalsof time and as personal
workspaces.
Flexible use on
an hourly basis.

Space-sharing services
A platform for enabling the useof a variety of locations,
including those not owned by
Tokyo Tatemono.
Currently, the number oflocations has surpassed
approximately 250, allowing fora variety of choices according
to area and purpose of use.

Sun-Wa Technos Corporation has its headquarters in Tokyo Square Garden, one of Tokyo Tatemono’s
flagship properties. A sales representative from Tokyo Tatemono spoke with representatives of Sun-Wa
Technos about the office and work styles required for the coming era.

1What were your impressions as you introduced
remote work during the COVID-19 pandemic?

Okumura As infections spread, we implemented remote
work based on working from home at a rate of around 30% to70%, while also following government policy. However, wefound that remote working involved certain communication
challenges. So we are now returning to a near 100% officeattendance rate.
Osaka
Remote work has various benefits. It reduces transit
time along with other advantages such as enabling reporting
items to be completed efficiently in chat rooms. However, wefound that with chat rooms and e-mails it was difficult to communicate the background of work and other supplementarydetails. It proved difficult to get in-depth answers that went
beyond the questions being asked.
Imada
I had only just joined the company when I started
working from home due to the pandemic. It was very difficult
for me to learn the business as I was familiar with neither thefaces nor the names of other employees. Sometimes I felt
like there was an obstacle to communicating with counterparts
I could not see. That was true even for minor queries. I noticed
the inefficiency in situations like that.
Takahashi Global training for employees was conducted online
at a number of domestic and international locations during
the pandemic. The lack of constraints in terms of location ortransit time was an advantage. But several participants in the
post-workshop survey said that they would have liked to havemet face-to-face to congratulate each other on their efforts or
to discuss work in more depth. Also, as a manager, I still feel itis necessary to come to the office and see my subordinates’
faces. This is how I check on their work and find out whether
they are having any problems.

2

How should office functions be adapted tochanges in work styles?

Okumura Some of our clients would like to have web conferencing, but in some cases there is not enough space available
for this. Changing the layout of an office is not easy, so it isimportant to have enough flexibility to accommodate a variety
of work styles. An office is a place where people gather. So wewant to make it a place to work with a sense of safety andsecurity, an environmentally friendly place. We want employees
to feel that their work is meaningful.
Takahashi I have used TIMEWORK to book outside meetingrooms and use them for meetings and workshops. If TIMEWORK
becomes more readily available with locations opening in evenmore convenient locations, there may be more opportunities touse it as a workplace in addition to our company’s own offices.
It would also be nice if people could choose a workplace
within the building according to the occasion—for example,
depending on whether they want to focus by themselves orcommunicate with their peers. I feel that to innovate we must
be flexible in alternating between work styles.

3

What is your evaluation of Tokyo Square Garden
as a central office?

Okumura Tokyo Square Garden has excellent seismic
resistance and other safety features, while also offering superb
accessibility. With cherry blossoms and fresh green foliage, its
abundant greenery gives a sense of the changes of the seasons.
For me, the long direct escalator ride to the office lobby every
morning helps me switch my mind over to work. You can see
the influence of Tokyo Tatemono’s training in the security
guards and cleaners. The pleasant way they greet you gives a
positive impression. There are also events and other activities
involving the local community. I was able to experience thehistory of the Kyobashi area, which made me feel a sense ofconnection to the place.
InomataIn the Commercial Properties Business, we haveestablished an internal concept of Human Building People are always in the middle. With the aim of making ourcustomers feel safe, secure, and comfortable, we havedeveloped a set of guiding principles that we implement inour daily operations.
Imada
There are also restaurants at the foot of the building.
We can feel the advantage of moving into a large building
complex now that we can have lunch at a restaurant evenduring our limited break time.
Osaka
Our basic policy has been to locate our offices inplaces where it is easy to get information, easy to take action,
and where many people gather. We feel that this building is avery good location in that it is near Tokyo Station. That makes
it easy for employees of our offices nationwide who use thebullet train to stop by our headquarters.
Takahashi The brand power of having an office at this location
is important to us too. Tokyo Station is after all the center ofJapan. I feel that the building design is also important for getting
people in the mood to work. Our company emphasizes focus
on the customer as one of our values (in our code of conduct).
I think that idea of always being close to our customers naturally leads us to come to the office. To achieve further growth
as a global company in the future, I believe it is essential for us
to come to work in an office where we are motivated to work,with the support of face-to-face relationships.

Mr. Shun Osaka
Corporate Strategy
Group

33

TOKYO TATEMONO GROUP

Value Creation Initiatives

BUSINESS STRATEGY

Initiatives to Strengthen the Brillia Brand

Tokyo Tatemono is engaged in the condominium and residential leasing
businesses, centered on the Brillia brand of refinement and comfort. We
offer high-quality housing based on a unique, comprehensive frameworkthat includes all the functions needed to support a more comfortable life
for our customers, ranging from planning and development tomanagement, after-sales services, repair, and brokerage.

Residential
Business

INTEGRATED REPORT 2022

Planning anddevelopment

Brillia is a comprehensive residential living brand that accompanies people
in their daily lives, based on a concept of refinement and comfort. Throughit, we provide not only buildings, but also the various services of the Tokyo
Tatemono Group, supporting our customers by enabling lifestyles of value.
Brillia’s concept of “NEW LUXURY RESIDENCE” is based on the ideathat true prosperity lies in the pursuit of space and time that reflect individual
personality—even as values continually evolve with the changing times.
By maximizing the value of the Brillia brand, we aim to build relationships
with ideal customers, improving the competitiveness of our properties.

Renovation

Sales

Brokerage

ManagementLifesupportAfter-sales
service
Interior

Main Business Categories
For-salecondominiums
business

For-sale condominiums

Services

Condominium management, remodeling, renovation work, leasing management

Property sales toinvestors*

Third-party evaluation
Tokyo Tatemono ranked second in brand awareness*1 inthe Tokyo metropolitan area. In a customer satisfaction survey,*2
we were ranked first in the tower condominium category and firstin the small-scale category for six consecutive years.

For-rent condominiums* Property sales to investors are shown on p. 41.

Operating revenue / Business profit
Operating revenue(Billion yen)

Number of condominium sales posted / Gross margin

Business profit

Number of condominium sales posted
Gross margin(units)(%)

131.2

140

101.1

120.5

33.3

1,315

29.8

971

70

0

1,500

99.1

97.7

1,196
24.6

988

14.1

15.8

FY2017FY2018FY20197.1
FY2020

0

22.4

24.4
20

FY2017FY2018FY2019FY2020Tokyo metropolitan area, Tokyo Tatemono ranked first in the tower condominium category(condominiums with 20 or more floors) and first in the small-scale category (condominiums withfewer than 100 units) for six consecutive years (2017 - 2022).

40

17.0
FY2021*2 In the 2022 Oricon Customer Satisfaction® Survey of newly built condominiums for sale in the

1,109

750

16.9

*1 Nikkei 2021 Condominium Brand Survey (responses of Tokyo metropolitan area (Tokyo, Kanagawa,Chiba, Saitama) residents were extracted).

FY20210

In fiscal 2021, the Company reported an increase in both revenue and gross profit, mainly due to higher sales and grossprofit from sales of condominiums and property sales to investors. As well as favorable locations in convenient urban centers,
properties in suburban areas also continue to perform well. We will continue to secure appropriate returns by carefully
selecting and investing in properties through which we can target high profitability.

Initiatives to enhance the value of Brillia
Combining functionality and design

Thorough quality control

Meticulous attention has been paid to every detail, from landscaping that considers the surrounding environment to thetimeless exterior and common areas down to the details of
the apartment interiors. Tokyo Tatemono has received strong
industry recognition, including 24 Good Design Awards related
to its Residential Business.

Quality control is conducted through three levels of checks:
in-house inspections, inspections by a third-party organization,and inspections by the customer. As part of this process,since 2004 we have conducted construction site tours,
in which customers enterbuildings under construction.
We have received positive
feedback about these tours
as a way to experience firsthand the comfort that theproperty offers.

Future Strategies
Brillia ist Shirokanedai, winner of the Good Design Award 2021
Operating Environment / Social Issues

Opportunities

Advantages

 iversifying lifestyles are engendering more sophisticated, moreD
diverse customer needs

 mong the highest brand recognition and customerA
satisfaction ratings in Japan rend toward prioritizing convenience amid an increase in dual-incomeTand single-person households

 trong track record and expertise in large-scaleS
redevelopment and rebuilding rowing need for environmental measures due to climate change andG
increasingly severe disasters

 ervice supply framework integrating production, sales,Sand management

 ising land prices due to mounting competition for acquiring land sites,R
and rising construction costs due to higher costs of material and labor
Risks

Contraction in the condominium market due to population decline
 rop in customer purchasing sentiment due to inflation and the risk ofDhigher interest rates
Key Strategies in the Medium-Term Business Plan

With a focus on profitability, invest in select locations offering convenience and other competitive advantages
From the standpoint of profitability, focus efforts on redevelopment and rebuilding business to secure highly competitive projects
Accelerate the development of for-rent condominiums in urban areas and sell them expeditiously to investors after starting operations

Support services for tenants after they move in

Commitment to culture and the arts

We provide hospitality training to our management staff todevelop personnel. We ensure that they are qualified tosupport the day-to-day lives of our customers, so that we
can support safe and comfortable living after customers moveinto a Brillia property. In addition, the Tokyo Tatemono Brillia
Owners Club offers its members
a number of exclusive services.
These include various events,
preferential treatment at ourresort facilities, and daily
lifestyle-related information.

We support culture and the arts in various ways. We hold art
exhibits in the common areas of condominiums and public art
exhibitions. We also offer naming rights for Tokyo Tatemono
Brillia HALL. In 2021, we opened the BAG Brillia Art Gallery,holding an exhibition on the theme of art in daily life.

Brillia Training Center

34

35

TOKYO TATEMONO GROUP

Value Creation Initiatives

BUSINESS STRATEGY

Major Properties Scheduled for Delivery
Land bank* by region

Pursuing Redevelopment
and Rebuilding
We are focusing on redevelopment and rebuilding projects
to meet the need for redevelopment in urban districts thatare densely packed with wooden houses and the growing
need for rebuilding due to the increase in aging condominiums. Our track record in redevelopment and rebuilding
includes Brillia Tower Ikebukuro, Brillia Towers Meguro, andBrillia Tama New Town. We are promoting development andsales of projects such as SHIROKANE The SKY (sold out)
and the rebuilding project Brillia City Shakujii Koen ATLAS.
Going forward, we will continue to seize project opportunities in highly convenient locations and engage inmixed-purpose development and other high-value-added
residential development projects. Reaching an agreementwith landowners and residents in these projects is moredifficult and time-consuming than with normal land

INTEGRATED REPORT 2022

Kansai regionand others

Tokyo
23 wards

27.9%

42.5%

Secure land for development through careful selection ofprime properties mainly in central Tokyo
Posted in 2022

Posted in 2022

To be posted in 2022

SHINTO CITY Districts II and III

Brillia City Nishiwaseda

Total units: 806(Tokyo Tatemono units: 202)

Total units: 454(Tokyo Tatemono units: 454)

Brillia Tower Seiseki Sakuragaoka
BLOOMING RESIDENCE

To be posted in 2023

To be posted in 2024

To be posted in 2024

SHIROKANE The SKY

Brillia Tower Hamarikyu

Brillia Tower Dojima

Total units: 1,247(Tokyo Tatemono units: 310)

Total units: 420(Tokyo Tatemono units: 144)

Total units: 463(Tokyo Tatemono units: 463)

Total units:

Approx.

8,300

Brillia Tower Ikebukuro Brillia Tama New Town

acquisition and development, the rights relations of which
are relatively straightforward. However, we will make useof our expertise and proven track record as a developer towin highly competitive projects.
Related Material Issues
Contributing to a safe andsecure society

Addressing the diverse needsof customers and society

Greater Tokyo
metropolitan areaother than at right23.0%

Total units: 520 (Tokyo Tatemono units: 312)

Tokyo,
other than
23 wards

6.7%(as of March 2022)(including 1,430 units scheduled for delivery in 2022)* Listed for the total number of dwelling units forthe acquired development site

Efforts to Cater to Changes in People’s Lifestyles
Demands continue to shift amid changing work styles andthe shift to working from home that was triggered by the
pandemic. We are responding to this by working toensure that our property common areas and apartment
interiors provide both a comfortable work environment
and a relaxing living environment. Our for-sale condominium
Brillia City Nishi-Waseda has a range of innovative features
for this purpose. The common area includes a co-working
space with management services. In the apartments, walldoors (operating partitions) are installed to provide privacy
for residents who need to work from home. In the Brillia ist
series of leasing condominiums, we are working to realize
efficient flow line planning and to secure a wide range ofliving spaces. Desk counters are installed in eachapartment for purposessuch as working from homeor hobbies, while lounge
space is provided in thecommon areas.

Strategies for Residential Business
Further Reinforcing the For-Sale Condominiums Business

Brillia City Nishiwaseda
Co-working Lounge

Related Material Issues
Addressing the diverse needs of customers and society

Using the Group’s Comprehensive Strengths to Ensure
High Customer Satisfaction
In a survey* assessing condominium residents’ satisfaction
with property management companies, Tokyo Tatemono
Amenity Support, the management and operation divisionof the Group, ranked third overall. For the fourth consecutive
year, it ranked first in the group of companies with less than
100,000 units under management. Its condominium management contract volume had risen to 78,773 as of March
2022. Tokyo Tatemono Amenity Support has branchedout from condominium management into a range of otherbusiness areas, including remodeling and renovation.
From 2022, we will begin offering a new service called“Ever Graceful.” This uses highly durable materials andconstruction methods to reduce the frequency of major

repair work and lower costs overthe long term. The service
reduces the burden on residents
while helping to maintain or
improve asset values.
These efforts have led tofurther raising the competitiveness of the Brillia brandand our properties.
* Source: “Property Management Company Satisfaction Ranking,” www.sumai-surfin.
com website of Style Act Co., Ltd.

Related Material Issues
Contributing to a safe and secure society

A core focus of the Residential Business is the condominium business, centered on the Brillia brand ofrefinement and comfort. We offer high-quality condominiums through an integrated framework spanning
production, sales, and management. Brillia’s trademark quality is backed by our attention to rigorous quality
control, our ongoing efforts to host events for residents after they move in, and a host of other initiatives
that have been well received by our customers. The medium-term business plan calls for us to further
reinforce the for-sale condominiums business. We are capitalizing on our redevelopment and rebuilding
techniques to seize development opportunities in highly convenient locations and bring added value toproperties, such as through mixed-purpose development. Furthermore, we will focus on providing
quality housing that responds to social changes. This will include emphasizing consideration for
nature and the environment as well as applying advanced technology.

Business Environment and Outlook
Sales of condominiums remain strong against the backdrop of several trends: a continuing low
interest rate environment, an increase in dual-earner households, and a shift toward more affluent
lifestyles. Although the land acquisition environment remains highly competitive, we have been
Hideshi Akita able to apply our expertise and track record to steadily building up our land bank. We expect to maintain aManaging Executive
high gross margin during the period of our medium-term management plan, with plans to book several
Officer and Director
high-profile properties. These include large-scale redevelopment projects in central Tokyo and large-scale
Division Director
tower condominiums in central areas of regional cities.
of Residential
We also focus on the For-Rent Condominiums Business as part of our menu of property sales toDevelopment Division investors, offering the “Brillia ist” series of properties, mainly in the central Tokyo area. Through an agile
approach to sales, against the backdrop of needs-oriented product planning and strong investment needs,
we have contributed to stable profit generation (see property sales to investors on p. 41).
By keeping our finger on the pulse of constant change in society and responding to emerging needs, wewill continue to offer the housing that is the first choice of customers, while striving to be rated number one
by customers across categories, from location and product planning to customer service and management.

36

37

TOKYO TATEMONO GROUP

Value Creation Initiatives

Residential BusinessFeatureINTEGRATED REPORT 2022

Community Contribution Initiatives and Sustainable Development Practices
We engaged with the local community as we worked
toward the early reopening of the commercial facility tohelp bring vibrancy to the local area. Our reconstruction
approach involved reducing the size of the old building
and reusing part of the existing frame. This allowed
people to continue using the station entrance and exit
throughout the development period.
Keeping the existing station entrances and exits open
during development meant people could continue visiting
the shopping area during construction. By reducing thesize of the old building, we were able to reopen theStrengthening communities throughurban development

Nishijin Reborn Project
Related Material Issues
Community building and revitalization
Revitalizing and utilizing real estate stockcommercial facilities around one year and eight months
ahead of the overall completion of construction.
We also reused part of the old building frame after
confirming its soundness. This enabled us to reduce thequantity of the new building frame by around 24%, which
helped curb the environmental impact of the development.
RepairExtension

Connecting walkway
Rooftop garden
Housing

Main staircase

Process for reusing old buildings in reduced construction and extension

Addressing the diverse needs of customers and society

New exterior
Above ground
Below Subway
ground station

Nishijin Reborn Project
In Nishijin, Sawara-ku, Fukuoka City, a center of retail and education, we have developed an integrated property with for-salecondominiums and a commercial facility. The development is on the former site of the Nishijin ELLEMALL PRALIVA which had
been beloved by the local community for many years. The commercial building PRALIVA improves the convenience of daily life
for local residents, while also offering a place to unwind. The residential building Brillia Tower Nishijin is Kyushu’s first seismicallyisolated tower residence to connect directly to a subway station. These properties made a significant contribution to ourearnings in 2021. In addition, we made various modifications throughout the development process, striving to reflect the wishesof the local community. The result is a development that brings vibrancy to the area while reducing environmental impact.
Overview

Third-party Evaluation

Address 4-1-1 Nishijin, Sawara-ku, Fukuoka City, Fukuoka
Site area Approx. 4,200m2
1 minute walk from Nishijin station on the Fukuoka City
AccessSubway line (directly connects to the station)
Residential: Reinforced concrete, partially steel framed;
40 floors above ground and 2 floors below ground
Scale
Commercial: Steel-framed reinforced concrete structure;
4 floors above ground and 2 floors below ground

Overview ofResidential Building

Overview ofCommercial Building

Property name Brillia Tower Nishijin
Total number
306 unitsof units
DeliveryMarch 25, 2021

Facility name PRALIVA
Tenants
40 tenants
Opening
April 22, 2021

Good Design Award 2021
Evaluation of Judges (partial summary):
A reduced construction
method was used to solve
environmental andtime-related issues. With theright planning and skillful design, the old building has been reborn asa new symbol with modern charm.
Fukuoka Prefecture Outdoor Advertising Landscape Award
Main judgement comments:
This was an important undertaking in the renewal of Nishijin. It was arare project, backed by strong awareness of the company within
the community.

STEP 1. Existing building• Less customers in the surrounding shopping area
due to closure of commercial facilities• Old buildings with more floor space than is needed
nowadays• Assessed the soundness of the existing frame
through seismic diagnosis, etc.

Parking lot

RetailSubwaystationSubwaystation

STEP 2. Reduced construction +commercial renovation• Reduced construction leaving portions to be reused+ commercial renovation• Early opening of commercial facilities in response tocommunity demand• Curbed CO2 emissions by reusing existing frame

Within the commercial facility, we planted greenery on therooftop, creating an open space available to the community. This provides a place for relaxation directly accessible
from the station.
With a new walkway lined by store fronts, the project
helps bring a sense of vibrancy, creating a flow of people
between the north and south sides of the station. By
encouraging footfall in the shopping district, it also brings
a lively atmosphere to the surrounding area.

Commercial

StoresBicycleparking
area

STEP 3. Residential extension• High-rise residential buildings with lower floors used
for retail and self-park parking lot• Rooftop garden open to everyone in the community• Main staircase and walkway connecting to the
shopping street

North-south walkway

Rooftop open space

The thinking behind the ProjectPre-development Issues
The predecessor to this project, Nishijin ELLEMALLPRALIVA, was closed in 2015—much to the lament of
the local community.
This was a very challenging project involving manysocial issues. Changes in the local economy and the shift
to online shopping had left the building with too manyretail floors and aging facilities. The floor inside the property
was on a different level to the outside. At the same time,
as part of the facility there was the entrance and exit to
the subway line, an important local traffic route. Closing
this access point would have a severe impact on the

Demolition area

Old building

community. A host of such issues had to be considered in
the development process.

Nobuhiro Oda
Senior Manager*
Tokyo Tatemono
Kyushu Branch* Position at the timeof the project

Steps at the edge of the property
and bicycle parking

Nishijin ELLEMALL PRALIVA

The chairman of the Nishijin Shopping District Association made a sincere request forthe commercial facility to open as soon as possible. There was also a strong wish fromthe community for a place to relax in the station area as well as a need for the existingstation route to stay open. The only solution that could simultaneously address theseneeds was an approach that combined reduced construction with a large-scale
extension. This project was for the first time for us to use such an approach.
The project involved securing local government approvals that were unprecedented in their scope. We reminded all the stakeholders of the benefits that the
project would bring to the community. We sought the help of designers and constructors as we explained thoroughly to the Company that additional costs could
be offset to ensure profitability of the project. In this way, we were able to build
consensus and move the project forward.
Our proposal was accepted. The project, a high-value-added residential development that was unprecedented in Fukuoka, resulted in a highly profitable residential business for us. The local shopping district greeted us with a banner ofcongratulations. We were able to realize a commercial facility business that maintained steady sales even during the COVID-19 pandemic.
Local companies also took notice of the development. This has led to joint
efforts in new development projects, which we hope will lead to further businessdevelopment opportunities in the Kyushu area.

38

39

TOKYO TATEMONO GROUP

Value Creation Initiatives

BUSINESS STRATEGY
Asset
ServiceBusiness
Main Business Categories
Brokerage, corporate real estate business, and property sales toinvestors (asset solutions)*

Real estatetransaction business

Parking lots

Parking business* Property sales to investors are shown on p. 41.

Operating revenue / Business profit
Operating revenue(Billion yen)

Operating Environment / Social Issues

Parking Business

Capitalizing on the range of services offered by the Tokyo TatemonoGroup for the effective use of property and land, we provide
comprehensive solutions through our real estate brokerage business,
asset solutions business, management service business, andparking business.

Brokerage transaction volume

Business profit

We have developed and are operating about 76,000 parking
spaces in 1,850 locations across Japan(as of the end of March 2022) under the
NPC24H brand. By taking into accountsurrounding conditions, the size of thesite, and other factors, we are able todesign and deliver the optimal parking lot.

Opportunities

Risks

42.8

40.2

144.5

42.6
116.0

30

0

173.5

200

46.6

44.1

133.8

3.8

5.8

FY2017FY2018FY20192.6

4.3

FY2020

FY20210 orsening of business conditions due to reducedWmovements of people as a result of the COVID-19 pandemic

 rack record and expertise in developing and operating large self-park
Tparking lotsInvestment and development capabilities for parking facilities andsystems leveraging scale as Japan’s third-largest pay-by-the-hourparking business operator
Key Strategies in the Medium-Term Business Plan fficiently scale the business through aggressive investment inElarge parking lots, a competitive strength of the company
 oost competitiveness by developing and rolling out systems thatB
contribute to improved operational efficiency and customer service

Related Material Issues

80,000 66,227

68,57869,401FY2018FY201976,17375,254FY2020

FY2021

Revitalizing and utilizing real estate stock

101.1

100

6.3

 ccelerated sale and repurposing of parking lots byA
landowners associated with rising land prices

Advantages

Aligning our parking business to market needs
We are working to expand the number of facilities underoperation by drawing on our sophisticated operational
expertise in large self-park parking lots and other areas.
By investing in digitalization, we will develop parking operations that use IT data. We will also actively work to makeour parking facility more convenient for users by providing
new added value such as cashless parking and linking toreservation systems.

(Individual spaces)60 rowing opportunities to operate large parking lots andGmunicipal and other public parking lots in conjunction
with large-scale redevelopment projects
Improved efficiency and service in parking lot operation
associated with the spread of IoTParking spaces under operation(Billion yen)

INTEGRATED REPORT 2022

40,000FY2017FY2018FY2019FY2020

FY2021

In fiscal 2021, transaction volume in the brokerage business increased and property sales to investors in the asset solution
business were also strong. Occupancy remained low in the parking business, however, due to the continued impact of the
COVID-19 pandemic. In fiscal 2022, we will continue to focus on expanding our brokerage and asset solutions businesses
while in our parking business we will work to improve profitability and increase the number of parking spaces.

0

FY2017

Strategies for Asset Service BusinessTachikawa Midoricho Parking No. 2

Creating a unique offering of products and services based on trust
Operating Environment / Social Issues

Real Estate Transaction Business
The brokerage business consists of a wholesale divisionthat supports the real estate needs of corporate customers and a retail division that helps individual customers
find a new home. In addition to brokerage, we are also
engaged in the asset solution business for increasing thevalue of acquired real estate for resale, and a management service that manages for-rent condominiums andoffice buildings on behalf of owners.
Brokerage and corporate real estate businessusing expertise in judging the value of real estate
We are strengthening the brokerage and corporate realestate business in an effort to expand opportunities togather real estate information. We are drawing on strong
relationships with customers and financial institutions
cultivated over many years. We are also targeting repeat
business by tapping into the relationships we build withnew customers of our development properties.

Opportunities

Risks

The world is changing rapidly, and the real estate environment is also constantly changing. Unlike most
mass-produced products, the real estate products we handle are unique and extremely expensive. The trustof our customers is therefore essential to closing transactions such as property sales and leasing. To earnthat trust, we must accurately understand the various real estate-related requests of our customers. We
must create products and services of the kind that only Tokyo Tatemono can provide.

Increased real estate transactions due to the shift toward
a society in which properties are used across generations
 rowth in real estate investment demand due to lowGinterest rates
 ower willingness to buy real estate due to risingL
property prices, recession, higher interest rates, etc.

Using the expertise of the Tokyo Tatemono Group to solve social issues and achievesustainable growth

Advantages
 elationships with customers and financial institutions and expertise inRjudging the value of real estate acquired over many years of experienceOffer one-stop solution services drawing on the resources of the Group sing synergies of the Tokyo Tatemono Group to build relationships withU
customers from existing developments
Key Strategies in the Medium-Term Business PlanIncrease the volume of transactions by capitalizing on information
sources to actively identify customer needs
 se expertise in judging the value of real estate to acquireU
properties with value-adding potential and sell properties quickly inresponse to market conditions

Related Material Issues
Revitalizing and utilizing realestate stock

Kengo Fukui
Representative
Director, Executive
Vice President andExecutive Officer
Division Director of
Asset Service
Business Division

The Asset Service Business derives optimal solutions from the wide range of business activities of
the Tokyo Tatemono Group. The integrated strengths of the Group are what make our comprehensive
consulting business possible. Through the Asset Service Business, we are aiming to achieve a highlevel balance between providing solutions to social issues and pursuing growth as a company byadding new value to real estate and meeting the needs of customers. For instance, in the brokerage
and asset solution businesses, we can contribute to the realization of a society in which properties
are used across generations by repurposing existing, unused properties into quality products with highmarket value. Or we can contribute to disaster prevention for residents and areas through earthquake-resistantand disaster-prevention work that yields renewed, highly disaster-resistant properties. In the parking business, the construction of parking lots equipped with EV power feeders and other equipment will contribute to
the spread of EVs and to the elimination of traffic congestion by promoting smooth use of parking lots
through the use of DX, including the construction of an advance reservation system for hourly parking spaces
and the use of smartphones to check for available parking spaces.
The medium-term business plan calls for us to work through these businesses to facilitate the distributionof properties and provide quality assets that meet the needs for the effective use of real estate and for investment.
By further growing the non-asset side of the business in conjunction with the expansion of assets the Groupis involved in, we are pursuing ongoing profit growth and the improvement of capital efficiency.

40

41

TOKYO TATEMONO GROUP

Value Creation Initiatives

INTEGRATED REPORT 2022

BUSINESS STRATEGY
Commercial Properties Business x Residential Business x
Asset Services BusinessTokyo Tatemono is pursuing a wide range of development opportunities
according to differing locations and area characteristics. In bustlingcity-center commercial districts and regional urban centers, we aredeveloping medium-size office buildings, hotels, and retail facilities. In
urban residential areas, we are developing for-rent condominiums. In
areas near major transportation arteries in cities and suburbs, we aredeveloping logistics facilities. After these projects start operations, wesell them to investors.

Property
Sales toInvestors
Balance of real estate for saleCommercial properties(Billion yen)

Asset service

Other

206.5

17.7

20

209.6

Risks

10

Operating Environment / Social Issues

Advantages

Growing needs for real estate investment

 ble to draw on the real estate expertise of Tokyo Tatemono to gainA
opportunities to acquire real estate and maximize asset valueExpanding asset types available for investment
Mounting competition to acquire real estateShifts in the financing environment

FY2018FY2019FY2020Key Strategies in the Medium-Term Business Plan

6.4
4.0

114.7

Support the growth of J-REITs, private REITs, and private funds by increasing property sales to investors

1.0
0

FY2021FY2017FY2018FY2019Operating Environment / Social Issues

FY2020

FY2021

Increase profit opportunities by expanding the Group’s assets under management

Advantages

 iversifying needs for real estate utilization associated with social shifts,Dsuch as growth in the e-commerce and inbound tourism markets

 wide array of information sources, such as financial
A
institutions and existing business partners, in addition
to the Group network

Expansion of real estate investment needs and assets for investment

 evelopment track record and expertise in variousDasset types, and strong tenant leasing capabilities

Mounting competition causing changes in conditions for acquiring sites
 sluggish investment market associated with changes in the real estateA
investment environment

Risks

Through Japan Prime Realty Investment Corporation (a listed J-REIT)
and Tokyo Tatemono Private REIT, Inc., as well as through private
funds, Tokyo Tatemono provides a variety of real estate investment
products to a broad range of investors, from institutional investors andpension funds to individual investors.

42.2

96.6

Opportunities

19.8

52.7

152.8

FY2017

Opportunities(Billion yen)

205.2

0

Fund
BusinessProperty sales to investors gross profit trends

For-rent condominiums

250

125

Other Businesses

Decline in the real estate investment market due to rising interest rates, etc.

Increase Profit Opportunities for the Group by Strengthening the J-REIT,
Private REIT, and Private Fund Businesses
We will strive to expand the asset portfolio by capitalizing on the Group’s expertise in judging the value of real estate toacquire promising properties while enhancing the quality of the portfolio through strategic asset replacement. At the sametime, we will help capture profit opportunities for the Group in asset and property management and other areas, increasing
the sales of properties to J-REITs, private REITs, and private funds to grow the Group’s assets under management.

Key Strategies in the Medium-Term Business PlanTake advantage of further development opportunities by drawing on information sources to win projects

Changes in Group AUM

Ally with a broad range of operators to develop a variety of asset types to match locations and area characteristics

Japan Prime Realty Investment Corporation(Billion yen)

Tokyo Tatemono Private REIT, Inc.

Approx.

After development, achieve profitability by monitoring the market environment and selling properties expeditiously

Related Material Issues

Stock of Properties Expected to be Sold

Logistics facilities /Urban hotels /Medium-size officebuildings / Urban
compact retailproperties

Revitalizing and utilizing real estate stock

stock shown on left

Total investment basis (decision basis)

Commercial
Properties Business

1,326.7

1,310.9

778.7

756.2

62.7

64.7

85.7

439.5

467.5

484.8

Assumed gain on sale generated from

Balance of real estate for sale1,500 billion yen

1,211.9

709.7

209.6 billion yen
Approx. 385 billion yen

Private fund, etc.

Approx.

90 billion yen* As of December 31, 2021

Residential
Business

Asset Services
Business

Expand property sales to investors
Consider forming new logistics REIT

Asset class
Office buildings

FY2019FY2020

FY2021

FY2024For-rent condominiums

T-LOGI
Yokohama-Aoba

T-PLUS Nihonbashi
Kodenmacho

For-rent
condominiums

Asset solutions

Retail stores, etc.

Brillia ist
Ryogoku

Value added

Total investment (decision basis)

Total investment (decision basis)

Balance of assets heldApprox.

Approx.

265 billion yen

65 billion yen

52.7 billion yen

Japan Prime Realty Investment Corporation

Tokyo Tatemono Private REIT, Inc.

Assets targeted for investment: office buildings, urban retail facilities, hotels

Assets targeted for investment: office buildings, residential leasing, and realestate for other purposes

42

43

TOKYO TATEMONO GROUP

Value Creation Initiatives

INTEGRATED REPORT 2022

BUSINESS STRATEGY
Other Businesses

Overseas
Businesses

Other Businesses

The Tokyo Tatemono Group has established overseas subsidiaries inShanghai and Singapore, and we are pursuing for-sale condominium
operations with leading Chinese developer China Vanke Co., Ltd., as wellas partnering with local companies to engage in development projects
in emerging ASEAN countries that offer substantial growth potential.

Operating Environment / Social Issues
 ise in middle-income and wealthy individuals due toRstrong economic growth in Asian countries
Opportunities

 rowing number of local companies seeking tie-ups
Gwith Japanese partners and increased local government
backup for attracting foreign capital

Advantages
 trong development track record (a total of about 25,000 units deliveredS
to date) and relationship built up over more than 15 years with major
Chinese developer China Vanke ealth of real estate development expertise and high-quality
W
condominium development experience gained in Japan hanges in economic and political conditions andCtightening of real estate regulations

Risks

Key Strategies in the Medium-Term Business PlanCollaborate with prominent local developers knowledgeable about business practices and markets in their countries
 xpand the business chiefly in China and other countries where we have an existing footprint. Dispatch employees to operational sites andE
implement rigorous risk management

Leisure and Child Care Business

Leisure BusinessAs lifestyles in Japan grow more diverse and consumers increasingly choose to spend money on experiences as opposed
to goods, our Leisure Business aims to offer authentic experiences and highly hospitable services that provide customers
with maximum relaxation and comfort. Targeting the recent boom in pet tourism, pet-friendly Regina Resort hotels featurefacilities and services on a par with luxury hotels while allowing guests to be accompanied by their dogs in all rooms andareas. Highly popular among wealthy dog owners, the number of Regina Resort with DOGS hotels has increased to eight.
We also operate Ofuro no Osama bathhouses, where customers can freely enjoy a dozen different baths and stone spas.
We have ten locations, mainly in the Kanto area, including the newly opened Wako branch, with offers a further upgrade infacilities. Many customers enjoy these bathhouses as places for communication and as places that support their mental andphysical wellbeing. The Group also operates 12 golf courses throughout Japan.

Invest in the for-sale condominium business, which features relatively short business cycles and little risk of change in the business environment

Capture Business Opportunities through Tie-ups with Leading Local Partners
Tokyo Tatemono has steadily expanded its Overseas Businesses through partnerships with leading local property developers and sent its employees to operational sites to ensure continuous risk control. We have been involved in the developmentof for-sale condominium operations in China with major local developer China Vanke for more than 15 years. We will continue to make selective investments targeting business opportunities in growth markets, while giving due consideration to
the market environments and risks of each country.
79 Robinson Road

Yangzhou-Chengxi Project, China

In Tanjong Pagar, Singapore’s
central business district, Tokyo
Tatemono was involved in developing a high-grade office building,a rarity in the district. It is due tobe directly connected to a nearby
subway station in the future, andhas already filled about 90% of
tenant applications.

The Yangzhou-Chengxi Project is
our fifth residential development
project in Yangzhou, a third-tiercity in China that demonstrates
solid actual demand. There arelarge-scale retail facilities andeducational facilities in the areaaround the project, which is in ahighly convenient location.

Total project cost:

Total project cost:Approx.

Approx.

75 billion yen

Ofuro no Osama Wako

Kawaguchiko Country ClubChild Care BusinessTokyo Tatemono entered the child care business in 2016 in view of mounting needs for child care accompanying the increased
participation of women in the workforce and the rise in dual-income households, as growing waiting lists for child care facilities
became a pressing social concern. We have steadily expanded our child care network, backed by firm demand as well as
government support. As of June 2022, we had opened 16 Ohayo (Good Morning) Child Care centers. We opened Sekimachi-Minami After-School, the first school-aged child care center of Group company Tokyo Tatemono Kids, in April 2020.

おはよう保育園

37 billion yen

Tokyo Tatemono share:

Tokyo Tatemono share:

Approx.

Approx.

15%

Regina Resort Kyu-Karuizawa

25%
Ohayo Child Care Nishi-Sugamo

Ohayo Child Care Oomorimachi

Ohayo Child Care Nonoaoyama

44

45

TOKYO TATEMONO GROUP

Value Creation Initiatives

ENVIRONMENTAL STRATEGY
We have identified the promotion of a decarbonized society and promotion of a recycling-oriented
society as our material environmental issues. By working to address these issues through our business,
we aim to realize coexistence with the environment, a shared value with society. Under the Tokyo
Tatemono Group Environmental Policy, which is shared by the entire Group, we are committed to
conducting our business activities in an environmentally friendly manner. In this way, we aim to help
bring about a sustainable society.

Environmental KPIs and Targets
Item
Reduction in greenhouse gas
emissions

KPIs and Targets
Reduction in CO2 emissions

Target year

Target value

Scope 1, 2*1

Scope1) 2030
2) 2050

1) 40% reduction
compared to FY20192) Net zero

Scope 3*2

1) 2030
2) 2050

1) 40% reduction
compared to FY20192) Net zero

Shift to renewable energy

Rate of shift to renewable energy for electricity
consumed in our business activities

1) Property owned inCommercial Properties
Business2) All business activities

1) 2030
2) 2050

1) 40%
2) 100%

Promotion of development of
ZEB and ZEH*3

Rate of ZEB development in newly developed
properties

Office buildings and logistics
facilities

2030

In principle, 100%Rate of ZEH development in newly developed
properties

Condominiums for sale2030

In principle, 100%

Acquisition of Green Building
Certification*4Rate of acquisition of Green Building
Certification in newly developed properties

Office buildings and logistics
facilities

2030

In principle, 100%

Reduction of waste emissions

Reduction rate of waste emissions per unit

Long-term buildings*5

2030

20% reduction
compared to FY2019

Waste recycling promotion

Waste recycling rateLong-term buildings*5

2030

90%

Reduction of water
consumption

Reduction rate of water consumption per unit

Long-term buildings*

Each
year

Reduction comparedwith previous fiscal year

Promotion of use ofrecycled water

Percentage of newly developed properties
with gray water*7 treatment facilities

Office buildings with total floorarea exceeding 30,000m2

2030

100%

Promotion of use ofwood materials

Percentage of newly developed properties inwhich domestic timber and certified timber isused for common-area interiors and furniture

Long-term buildings andcondominiums for sale or rent

2030

100%

Condominiums for sale or rent

2030

100%

Adoption of CLT for their core structural partsin newly developed properties

Condominiums for sale or rent

2023

—

Percentage of tenants with whom wecommunicate about sustainability at least
4 times a year

Long-term buildings*6

Each
year

100%

Plan and implement sustainability measuresthrough communication with residents

Condominiums for sale or rent

Each
year

—

Collaboration and co-creation
with customers

6*1 Scope 1: Direct emissions that occur from the use of fuel by the Group, Scope 2: Indirect emissions that occur from the use of electricity and heat purchased by the Group*2 Scope 3: Indirect emissions from other business activities. Scope of coverage is Category 11 (use of products sold).
*3 Zero Energy Building (ZEB) is a building that aims to achieve an annual primary energy consumption balance of zero by maximizing energy independence through the use of advanced
technologies that enable significant energy savings and the introduction of renewable energy.
Zero Energy House (ZEH) reduces total energy consumption through measures such as heat insulation and energy savings as well as generating energy through power generation tobalance out the annual primary energy consumption to zero.
*4 Refers to (but is not limited to) DBJ Green Building certification, CASBEE building and BELS (Building Energy Saving Performance Labeling System) certification.
*5 The scope is the main long-term buildings and commercial facilities for which we have substantial energy management rights and for which we have submitted plans for the reuse andreduction of waste materials.
*6 The scope is the main long-term buildings and commercial facilities for which we have substantial energy management rights.
*7 Recycled water is untreated water from rainwater and miscellaneous wastewater generated in buildings (e.g., wastewater from cooling towers and tenants’ kitchens). It is reused for
non-potable purposes such as toilet flushing and watering plants.

INTEGRATED REPORT 2022

Environmental Promotion System
The Tokyo Tatemono Group promotes environmental
measures across the entire Group under the Sustainability
Committee, chaired by our president, and the Sustainability
Promotion Committee, a subordinate organization of the
Sustainability Committee.
In the Commercial Properties Business and Residential
Business, we have established environmental management systems aligned to the characteristics of each ofthese businesses. In the Commercial Properties Business,these are carried out by permanent organizations, whichplan and oversee environmental measures, and theEnvironmental Committee, which provides support andguidance while monitoring progress. In the Residential
Business, the Environmental Measures Project Team plans
environmental measures, supporting their implementationand monitoring progress.
Other businesses and group companies conduct theirbusiness according to environmental guidelines establishedin line with the Group Environmental Policy.

ESG Management Framework
Board of Directors

Sustainability Committee
Committee Chair: President and CEO
Committee members:
Directors (excluding external directors), executive officers concurrently
serving as directors, general manager of the Corporate Planning
Department, general manager of the Sustainability Management
Department, general manager of the Corporate Communications
Department, general manager of the Personnel Department, generalmanager of the General Affairs and Compliance Department, generalmanager of the Building Engineering Department, and other persons
designated by the President
Secretariat: Sustainability Management Department
Assisted by: Corporate Planning Department

Sustainability Promotion Committee
Business Divisions

Environmental Management in the Commercial Properties BusinessIn our business activities, the Commercial Properties
Business is the largest consumer of energy, accounting
for 95.7%* of our electricity use. Using less energy in our
Commercial Properties Business results in a significant
reduction of Tokyo Tatemono’s total energy consumption.
With this in mind, when developing new buildings, we strive
to adopt environmental and energy-saving technologies
for environmentally friendly buildings that are well received
by society. For existing buildings, we promote energy
savings by strategically renovating buildings using energysaving equipment. From an operating standpoint, we alsocollaborate with our tenants to conserve energy andreduce environmental impact.
We have set a quantitative indicator in the form of
power consumption per floor area unit to reduce energy
consumption. Here, we target a 1% annual unit reduction
averaged over five years as a target in accordance with
the Energy Conservation Act.

Development of environmentally friendly officebuildings (ZEB)As a registered ZEB Leading Owner with the Strategic
open Innovation Initiative (SII), Tokyo Tatemono is aiming
to contribute to the promotion of ZEB.
We are also actively working to obtain environmental
certification for real estate we develop. In July 2019,
following a partial assessment of the office area of theproperty, Hareza Tower (Toshima-ku, Tokyo; completed in
May 2020) was certified as ZEB Ready. In December
2021, Shijo-Karasuma FT Square (Kyoto City, Kyoto
Prefecture; completed in October 1998) was certified as
ZEB Ready following its partial reconstruction.

* Estimates for facilities subject to the Law Concerning the Rational Use ofEnergy (FY2021).

Hareza Ikebukuro

46

47

TOKYO TATEMONO GROUP

Value Creation Initiatives

ENVIRONMENTAL STRATEGY

Promoting a Recycling-oriented Society

Environmental Management in the Residential BusinessIn the Residential Business, we have established the Brillia
Environmental Guidelines for the purpose of ensuring thatenvironmental initiatives under the Brillia brand are aligned
to changing social conditions and communicated clearly
to customers and society. Two concepts guide our creative
approach to the development of condominiums: creating
a lush green living environment; and creating residenceswith reduced environmental impact. The guidelines define
a set of environmental performance ratings with four levelsof environmental friendliness. In addition to the specifications required to meet each level, at each stage of the
project from planning stage to design, we also check

Brillia Tsurumaki

Brillia Tower Seiseki Sakuragaoka
BLOOMING RESIDENCE

details such as the environmental certification rankings(CASBEE, etc.) and CO2 emission reduction for each level.
We revise the Brillia Environmental Guidelines periodicallyin response to social changes and technological advancements, and in this way continue to increase the value ofthe Brillia brand.
Development of environmentally friendly
housing (ZEH)
Tokyo Tatemono applied to the ZEH Developer Registration
Program in the initial round of entries when it was established in May 2018. Since then, we have worked as a
ZEH Developer to aid the spread of ZEH-M apartments.
Both Brillia Tsurumaki (completed 2019) and Brillia
Tower Seiseki Sakuragaoka Blooming Residence(scheduled to be completed in 2022) have obtained
ZEH-M Oriented certification, the standard for high-riseapartments with six or more floors, due to their improvement in outer wall insulation performance, the adoption ofhigh-insulation doors, and the use of high-efficiency hotwater supply equipment, etc.

We identify and implement measures for preventing environmental pollution and optimizing our use of resources throughout
the entire life cycle of each building, from planning and design to construction, operation and management, and demolition.
To prevent environmental pollution, in the planning and design of buildings, we consider environmental assessments anddevelop environmentally friendly buildings. In operation and management, we work to prevent air and soil pollution throughdecreased generation and proper management of waste and hazardous substances. To use resources more efficiently, we
are introducing materials at the initial stage of a project that take into consideration later resource recovery, recycling, andwaste generation control. For projects under way, we thoroughly sort waste and are working to boost the recycling rate. In
these ways, we are helping to create a recycling-oriented society.
Generating electricity from organic waste
In 2021, we conducted a demonstration experiment at
the Shinjuku Center Building in collaboration with theco-owner. The experiment focused on converting organic
waste generated at the building into fuel. Through thecooperation with tenant companies, bio-coal, a solid fuel,is generated from organic waste through subcritical water
treatment using an ISOP system. In addition, the subcritical water treatment uses renewable energy electricity with
non-fossil certificates, an initiative that also helps promotea decarbonized society.

Trial Image
200°
C
20
atmospheres

Burnable
garbage

TOPICSO
Waste incinerated
so farDevelopment of ZEB Logistics:
Generation and Use ofRenewable Energy
In our T-LOGI series of logistics facilities,
large-capacity solar panels are installed on the roofof each facility for in-house consumption at eachfacility. Electricity generated using the panels is
consumed onsite and used by the tenants. Surplus
power generated is used efficiently at our own
facilities through a self-transmission system. Goingforward, as we develop the T-LOGI series, we aim
in principle to obtain ZEB status by promoting
energy conservation and using renewable energy.

Solar power (electricity generated)

Subcriticalwater
treatment
systemH

H

Water
molecules

Promoting the use of wood
Wood is a recyclable resource that can be reused as
construction material even after a building has been
demolished. It also has the function of absorbing andstoring (fixing) CO2. The Senzokuike Project (tentativename) is a for-rent condominium in which the cross laminated timber (CLT) panel construction method is being
used for the main structural components. The project is
expected to use approximately 700 m3 of wood, resulting
in carbon storage equivalent to around 450 tons of CO2.
The six-story wooden building was selected by the Ministryof Land, Infrastructure and Transport as a Leading Projectfor Sustainable Buildings (Wooden Construction Type) for
fiscal 2021, following an open submission. The selection
recognizes the project’s structural innovations, including
improved fire resistance and durability.

Cross section of CLT

Generation of lowmolecular weightorganic matter as fuelsource (raw material)

Senzokuike Project (tentative name)

Promoting Sustainability FinanceElectricity Surplus
consumed electricity
onsitePower transmission anddistribution network

Selfconsignment

T-LOGI (ZEB Logistics)
Transformer
substation
Commercial
power

Retail electricutility

INTEGRATED REPORT 2022

Property owned by
Tokyo Tatemono(SMARK ISESAKI, etc.)

Tokyo Tatemono has established the Sustainability
Finance Framework, which applies the requirements
defined in the Green Bond Principles and Social Bond
Principles referred to in the International Capital Markets
Association’s (ICMA) Sustainability Bond Guidelines. We
issue green bonds and sustainability bonds in accordancewith this framework.
In July 2020, in a first for a real estate sector company
in Japan, Tokyo Tatemono issued a sustainability bondworth a total of 40 billion yen. The sustainability bond issued
this time is not limited to a single building, but instead
involves a package of funds to cover the overall urban
development of the Yaesu-Nihonbashi-Kyobashi area ofcentral Tokyo. In an initiative that is groundbreaking evenby global standards, the proceeds will be allocated todeveloping this area as a seeding ground forcomprehensive solutions to social issues, from combatingclimate change, strengthening disaster prevention andmitigation, and medical cooperation, to addressing foodissues and building an innovation ecosystem. At theSecond ESG Finance Awards
Japan, Tokyo Tatemono
won the Gold Award in thefundraiser category, having
previously won the SilverAward at the First ESG
Finance Awards.
Balance of green bonds and sustainability
bonds issued

140 billion yen* As of December 31, 2021

(including 90 billion yen in hybrid corporate bonds)

48

49

TOKYO TATEMONO GROUP

Value Creation Initiatives

ENVIRONMENTAL STRATEGY

Disclosure Based on TCFD Recommendations

External Evaluation and Certification for Green Building
We have established the acquisition of green building certification for all newly developed office buildings and logistics facilities by fiscal 2030 in principle as a KPI and target. As of December 31, 2021, 14 of the office buildings, retail facilities, andother properties that we own and manage have received DBJ Green Building Certification*. Of these, 12 received 4- to
5-star ratings.
We also have a policy of acquiring environmental certification as far as possible for existing office buildings we retain overthe long term and for new and existing for-rent condominiums.
* DBJ Green Building Certification is a system established by the Development Bank of Japan to evaluate initiatives related to the environmental and social awareness of real estate.

(Sustainability Report) List of Certified Buildings and Houses p.35

Acquisition rate of green building certification (as of December 31, 2021)
 cquisition Rate of CertificationA
for All Properties Owned andManaged by Tokyo Tatemono

 cquisition Rate of CertificationA
for the Leasable Area of
Office Buildings

Certification
Acquired

Not Certified

43.6 %

 cquisition Rate ofA
Certifications per Leasable
Area of Residential Buildings

Certification
Acquired

56.4 %

Certification
Acquired63.1 %

Not Certified

22.2 %In June 2020, the Group announced its support for the
TCFD recommendations. Climate change is a social issue
that calls for global collaboration. As such, it is a prioritythat Tokyo Tatemono must also address. We recognize
the importance of disclosing climate change-related financial information, and will work to expand such disclosure
as recommended by the TCFD.
Governance
The Group’s Sustainability Committee discusses the formulation of policies for addressing risks and opportunities
linked to climate change as well as important matterssuch as our greenhouse gas emissions reduction efforts
and progress against our reduction targets. Chaired by thepresident, the Committee reports its findings to the Boardof Directors for discussion. In addition, the Committee
formulates and develops policies and strategies forimportant matters related to the promotion of sustainability.
The Sustainability Promotion Council, a subordinate
organization, reviews specific measures for carrying out
these policies and strategies.
Risk management
Climate change risk is recognized as one of the mostimportant risks that could have a significant impact on
the management of the Tokyo Tatemono Group, and ismanaged within a company-wide risk management
framework. The Sustainability Committee examines eachpolicy and strategy for minimizing risk and targeting
opportunities associated with climate change risks. These
are reported to the Board of Directors and included in its

Not Certified

36.9 %INTEGRATED REPORT 2022

77.8 %

agenda as necessary, providing a system supervised by
the Board of Directors, under the ultimate responsibility ofthe president, who is the representative director.
Strategy (scenario analysis)
Drawing from multiple scenarios published by the IPCC*1
and the IEA*2 , the Group based its analysis on two
scenarios: the current scenario (4°C scenario), in which
temperatures rise by 4°C or more compared to pre-industrial
levels by 2100, and the transition scenario (<2°C scenario),in which temperature rise is limited to less than 2°C. The
scope of the analysis was to identify the main risks andopportunities—primarily for the Group’s core businesses,
the Commercial Properties Business and Residential
Business—and to assess their materiality in terms of their
expected degree of impact on the Group’s finances.
The period of impact was categorized into short-term(1-5 years), medium-term (5-10 years), and long-term(>10 years), based on which the Group set its targets forrealizing a decarbonized society.
*1 IPCC (Intergovernmental Panel on Climate Change): an institution that provides clear
scientific opinions of the status of climate change and its socioeconomic impact*2 IEA (International Energy Agency): an independent body within the OECD thatfacilitates policy cooperation on energy security and energy

Indicators and targets
The Tokyo Tatemono Group conducts quantitative
monitoring of GHG emissions and announces the resultsof this monitoring. In May 2021, we also set mediumand long-term targets for reducing GHG emissions withthe aim of addressing climate change and realizing adecarbonized society.
(Sustainability Report) Disclosure Based on
TCFD Recommendations p.29

TOPICS
Identify Risks and Opportunities; Assess Materiality

Participation in ESG-related External Assessments and Key Initiatives
Field
ESG (Real
Estate)ClimatechangeEvaluation Organization and Initiatives

Evaluation,
etc.

Period of impact

Physical

Acute

Frequent and intense heavy rains
Development and sales:
Longer construction periods and higher construction costs for real estate under development
Operation and management:
Facility failure and suspension of lifeline functions due to flooding at owned properties

Physical

Chronic

Temperature rise
Operation and management:
Failure of machinery and equipment at owned properties due to solar radiation and high heat

Short-term

Short-term

5 StarGRESB Development Benchmark

5 Star

CDP

B

RE100

Participation

SBT

Certification

TCFD

Approval

Transition

Policiesandregulations

Carbon pricing
Development and sales: Increase in procurement prices of materials such as steel and cement
Operation and management: Increase in energy costs including electricity

Medium-term

Selection

Transition

Policiesandregulations

Strengthen environment-related certification standards
Development, operation, and management:
Procurement of materials and installation of equipment necessary to meet the standards

Medium-term

 romote energy conservation and efficiency / Spread renewable energy / Raise environmentalPawareness among customers
Development, operation, and management: Increase in demand for green buildings, ZEB and ZEH, etc., and decrease in costs related to supply
Increased opportunities to acquire tenants due to strengthened measures to create energy andconserve energy

Medium-term

Improved reputation due to strengthening of environmental laws and regulations
Development, operation, and management:
Improving the reputation of our own environmentally friendly buildings

Medium-term

MSCI Japan ESG Select Leaders Index
Index

Contents

GRESB Standing Investment Benchmark

Risk

The Group participates in major national andinternational initiatives, working with various entities
around the world. The greenhouse gas emission
reduction targets set by the Tokyo TatemonoGroup for fiscal 2030 have been certified by SBT*
as being consistent with the levels required by theParis Agreement.
In addition, in June 2022, Tokyo Tatemono was
included in the MSCI Japan ESG Select Leaders
Index, an ESG index adopted by the General
Pension Investment Fund (GPIF).

Type

MSCI Japan Empowering Women Index (WIN)S&P/JPX Carbon Efficient Index
FTSE Blossom Japan Sector Relative Index(Sustainability Report) Participation in Initiatives p. 13

Opportunity* Science Based Targets

Products &Transition
Services

Transition

Products &Services50

51TOKYO TATEMONO GROUP

Foundation for Value Creation

HUMAN RESOURCES STRATEGYTokyo Tatemono sees human resources both as the source of creating corporate value and realizing
sustainable growth, and as an indispensable foundation for management. In our material issues, wetarget improving employee growth and job satisfaction as well as diversity and inclusion. With theseissues in mind, we are working to secure and develop our next generation of human resources.

Human Resource Development
We offer job level-specific training, from new employees to executives. To instill the experience and broader knowledge baserequired for employees of a comprehensive real estate developer, we rotate new graduate hires among around three departments to gain experience in their first ten years. We have established self-development programs and support systems toassist employees in acquiring certification. We also offer support for learning foreign languages, as well as for employees
going abroad for training, with a view to the future global business expansion of the Group.
Summary 2022 Training Programs
Training per Management Level
Executives

HR-related KPIs and Targets
Item
Promotion of skills
development

KPIs and Targets

Scope

Target year

Target value

Average training time per employee

Tokyo Tatemono

Each year

15 hours or more

Career training participation rate

Tokyo Tatemono

Each year

100%

Health checkup rate

Tokyo Tatemono

Each year

100%

Health check reexamination rate

Tokyo Tatemono

Each year

100%

Smoking rate

Tokyo Tatemono

2022

12% or less

Respect for human rights

Dissemination of the Human Rights Policy

Tokyo Tatemono Group

Each year—

Work-life balance

Average annual paid leave utilization rate

Tokyo Tatemono

Each year

70% or more

Ratio of male employees taking parental leave

Tokyo Tatemono

2025

30% or more

Ratio of women in management positions

Tokyo Tatemono

2030

10% or more

Employment rate of persons with disabilities

Tokyo Tatemono

Each year

2.3% or more

Promotion of healthmanagement

Promotion of diversity in
our workforce

Human Resource Policy

Human Resource Policy

We have established a Human Resource Policy. It is
designed to enable us to build a workplace that creates
added value. It also provides an image of the kind of
human resources we should target. We follow this policy
as we secure and develop human resources.

1 Developing ideal human resource
Ideal human resource: a person that is trusted and that
opens new avenues for the future
2 Realization of a satisfying working place where
employees can feel their growth

Human Resources System and Structure
Our HR management system consists mainly of threecomponents: a role rating system, a management by
objectives system, and a behavioral assessment system.
We have implemented 360-degree feedback for somelevels of management to give managers a chance to takestock of their own performance. We have also put in placemeasures that open up growth opportunities for employees.
Although Tokyo Tatemono’s organizational structure isbased on business divisions, we manage personnel functions on a groupwide basis, and have in place a system toflexibly allocate the right people to the right jobs.

Employee engagement survey
Starting in 2021, we have been conducting an employee
engagement survey that measures the level of connectionthat employees feel toward the company. We report theresults of the survey and subsequent responses tomanagement and to employees. Conducting this survey
regularly gives us a quantitative understanding of therelationship between the company and its employees.
We use this information as we formulate measures fororganizational improvement.

INTEGRATED REPORT 2022

Global Training

Self-Edification/
External Dispatch

Support Systems for
Acquiring Certifications

Executive Training
Electives

General Managers

New General
Manager Training

Group Leaders

New Group Leader
Training

Managers

New Manager
Training

Assistant Managers

New AssistantManager Training

Senior Employees

Strategic Communication
Presentation
Accounting
Finance
MarketingManagement Strategy
Third-year Group Training

New Employees

New Employee
Logical Thinking

 oaching: Basics
CCoaching:
AdvancedStrategic OJTLeadership
Business
Development
Data Science esign Thinking
DNegotiation
Action Learning
BreakthroughLectures by
Outside Experts

Attending
languageschools
Overseas
on-siteobservation
Overseas
dispatchtraining
Internships
with local
subsidiaries

 upport forS
attendingbusiness/
graduateschoolSingle-subject
businessschool training
dispatch
Cross-industry
training
Distance
learning
External
Seminars

Training Basic Practical Real Estate Training
IT Training

Initiatives to Encourage Certification
The company has established a system to encourage
employees to seek various kinds of certification, such as
Real Estate Broker, Real Estate Appraiser, and First-Class
Architect. By supporting employees who study for and eal Estate
R
Broker
The Official
Business Skill
Test inBookkeepingJapan Business
Law ExamCertified
Building
Administrator
Real EstateConsulting
Master Exam
Real Estate
Securitization
MasterUrban Renewal
PlannerReal EstateAppraiserFirst-classArchitectacquire certification in various areas, the system helps
them carry out their work at a higher level and accumulatevaluable work-related knowledge.

Holders of major certification types
Real Estate Broker 723
Real Estate Appraiser 22
First-Class Architect 99
Certified Building Administrator 159

 eople Who Passed the Real EstateP
Urban Renewal Planner 73* Figures for the company alone as of March 2022
Consulting Skills Exam 73
Association for Real Estate Securitization Includes employees seconded from Tokyo Tatemono tooutside positions(ARES) Certified Master 71

Diversity & Inclusion
Tokyo Tatemono is creating an environment in which diverse
personnel are motivated and dedicated in their work, able toact freely without constraint. The successful activities of adiverse HR pool will drive services that meet the increasingly
sophisticated and diversified needs of customers.
Hiring activities
Hiring without discrimination against nationality or raceEmploying human resources of various nationalities atthe local subsidiaries of overseas businesses

Creating a workplace where diverse humanresources can thriveEstablished leave systems that all employees regardlessof gender can use in the case of pregnancy, childbirth,child rearing, and long-term care; set up a re-employment system for former employees
Established a system to approve leave for up to three
years for employees whose spouses have been transferred overseas
Ratio of Women Employees

Ratio of Women Managers

30.8 %

7.2 %As of December 2021

As of December 2021

52

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TOKYO TATEMONO GROUP

Foundation for Value Creation

HUMAN RESOURCES STRATEGY
Health Management Initiatives
To enable our executives and employees to reach their full potential, Tokyo Tatemono Group has designated the president
as the Chief Health Officer (CHO) and is working to maintain and improve the health of each individual in accordance with
the Group Health Management Declaration. We will promote initiatives to maintain and improve the health of our suppliers
through sound labor practices and a healthy working environment, based on our Sustainable Procurement Standards.
Health Management / Occupational Safety and Health (Initiatives in fiscal 2020) (Only available in Japanese)

Tokyo Tatemono Group Health Management Declaration
The corporate philosophy of Tokyo Tatemono is “Trust beyond
the era.” This incorporates our will to strive for the growth of thecompany and the creation of a prosperous society, taking pridein the trust placed in us that extends over a century.
To embody this corporate philosophy, we believe the healthof our executives and employees as well as their families is vital.
We see the mental and physical health of executives andemployees as the source of sustainable corporate growth andactively promote activities for each and every person to maintainand improve their health.
I will strengthen the environment to achieve this as the Chief
Health Officer, and I vow that we will pursue health management,
unified as a group.
Hitoshi Nomura
Representative Director,
President and Chief Executive Officer
Tokyo Tatemono Co., Ltd.

Health management promotion system
Tokyo Tatemono established the Health Committee, which
consists of representatives from the Personnel Department and each office or location, as well as industrial
physicians. The Health Committee generally convenes
once a month for the purpose of improving standards ofoccupational health in the workplace and encouraging
officers and employees to maintain and improve theirhealth. In addition to the setting and monitoring of occupational health and health-related targets, and evaluating
their achievement, important matters are discussed under
the Sustainability Committee, which is chaired by thepresident, and reported to the Board of Directors.
Average Overtime Hours

26 hours/month
Data collection period:
January 2021 to
December 2021

Third-party evaluation of health management
In March 2022, Tokyo Tatemono and five group companies were certified as Excellent Health Management
Corporations. This marked the fifth time in two consecutive years that Tokyo Tatemono has been recognized as
one of the “White 500” (the top 500 corporations in thehealth management survey results). In addition, Tokyo
Tatemono and ten group companies were recognized by
the National Federation of Health Insurance Societies(Kenporen) in Tokyo, receiving
Silver or Gold certifications as
outstanding health organizations under the Health &Productivity Management
Outstanding Organizations
Recognition Program.
Evaluation of the work environment
We are working to ensure a work-friendly environment by
reducing fatigue and stress caused by work. This helps toprevent occupational accidents and health problems. The
Tokyo Tatemono head office has received the rank of S,
the highest in the CASBEE Wellness Office Certification.
The office was highly evaluated for its high level of comfort
achieved through innovations both at a conceptual level
and at a physical level. These ranged from office fixturesand fittings that were selected with health in mind to seating
selected to suit different work styles to our various efforts
to maintain and promote health.

INTEGRATED REPORT 2022

Respect for Human Rights
We formulated the Tokyo Tatemono Group Human Rights
Policy, based on the United Nations Guiding Principles on
Business and Human Rights, to ensure respect for humanrights. The Group strongly recognizes the importance ofrespecting the human rights of all stakeholders involved inour business. Based on this policy, we will conduct humanrights due diligence to identify, mitigate, correct, andremedy any human rights issues in our business. Tokyo
Tatemono is a signatory to the UNGC and registered theTokyo Tatemono Group as a participating company.
The Company is also a member of the Global Compact
Network Japan, which is composed of Japanese companies
and other signatories to the UNGC.

Initiatives for human rights due diligence
The Tokyo Tatemono Group has been working to establish
a human rights due diligence process. In April 2022, theSustainability Committee discussed and identified humanrights issues that the Tokyo Tatemono Group will prioritize.
Based on the priority issues identified, throughout ourbusiness we are working to understand the current statusof human rights issues, which vary between businessfields and countries or regions. We will take appropriate
action should we identify any problems.
(Sustainability Report)
Participation in the UN Global Compact p. 55
Human Rights Policy

Supply Chain Management
The Tokyo Tatemono Group engages in business in collaboration with numerous business partners, including
design and construction companies. We must be mindfulof the environmental and social impact of our business
partners, such as through the procurement of materials
and employment associated with construction. We therefore believe that building a sustainable supply chain thatcovers all business partners of the Group is indispensable.

Sustainable Procurement Standards
In May 2021, the Group formulated Sustainable
Procurement Standards and notified our major business
partners. We will strive to expand the scope of theseprocurement standards and to ensure that all of ourbusiness activities comply with it.
Sustainable Procurement Standards

Message from the General Manager of the Personnel Department
HR Measures to Support the Teamwork for Creating New Value
Tokyo Tatemono has always done business with an emphasis on earning the trust of our various stakeholders,
including customers, business partners, and community residents. To further deepen this trust, we feel it isvital to invest in and train human resources and promote diversity. Based on this concept, the Company has
defined improving employee growth and job satisfaction as a material issue, along with diversity and inclusion.
We will continue to strengthen our HR measures in a number of areas, including: further expanding training
programs for skill development; increasing the ratio of female managers; promoting health management; andimproving engagement between employees and the Company. We are actively promoting the hiring of new
graduates and career professionals. And also promoting the activities of senior human resources. Throughthese measures we are strengthening our human resources—our most important resource for value
creation as we pursue our long-term vision. We are actively communicating our philosophy as well as
the type of human resources we should aim for. In this way, we aim to create teamwork that isstronger than ever, building an organization that creates new value and contributes to society.

Average Annual Paid Leave
Utilization Rate

Group-wide Initiatives to Promote Respect for Human Rights

57.5 %

Masahiko Nishimura

Data collection period:
April 2021 to March 2022

General Manager,
Personnel Department

We believe that a company can only continue to grow sustainably if it actively engages in respect forhuman rights. That is why we have in recent years strengthened and expanded our efforts to fulfill
this responsibility. In 2021, we conducted a study to develop a human rights policy and identify
human rights priorities. In 2022 we identified priority human rights issues that we must address.
Going forward, we will work as a Group to consider specific measures for human rights due
diligence based on the priorities we have identified. We will actively implement Group-wide initiatives
to promote respect for human rights.

54

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TOKYO TATEMONO GROUP

Foundation for Value Creation

Corporate Governance
Policy and Concept

Corporate Governance Structure

Based on our corporate philosophy of “Trust beyond theera,” Tokyo Tatemono is striving to build optimal corporate
governance, with the primary aim of enhancing efficiency
while ensuring the soundness and transparency ofmanagement, to achieve sustainable growth and increase
corporate value over the longer term. In addition, we
actively and appropriately disclose information forshareholders and other stakeholders to understand thecompany’s business activities accurately.
We have also identified the advancement of governance as a material issue for the Group. By further
enhancing the governance framework and promoting a
range of measures, we are striving to improve profitability
and the transparency and objectivity of management.

Tokyo Tatemono has selected a Company with Audit andSupervisory Board format as our corporate management
system. We have also established a Board of Directors
and an Audit and Supervisory Board. Our executive officer
system clarifies the separation of functions between
management and business execution. Furthermore,
we appoint external directors and external Audit andSupervisory Board members who help us operate understronger management supervision and ensure transparency. This system ensures effective supervision andsupervisory functions with regard to management andalso to business execution by directors of the Company.
To heighten the efficiency of Group management andachieve group synergies, we also make a contractual
agreement with each Group company based on theGroup Business Management Standards. By setting out
and informing each company of conditions such as items
subject to prior approval and items to be reported to theCompany, we are working to reinforce Group governance.

Corporate Governance Structure

Appoint/Dismiss

7
times

Nomination and Remuneration
Advisory Committee
7 directors, four of whom are external directors
Committee Chair: Hitoshi Nomura(Representative Director and President)
AdviseSelection and Appointment of Directors
and Audit and Supervisory Board Members

Support System for External Directors andExternal Audit and Supervisory Board Members

We comprehensively evaluate the personality, abilities,
knowledge, and experience of candidates and select those
who possess qualities that can contribute to increasing
the longer-term corporate value of the Group as membersof management, and appoint them as candidates for
directors and Audit and Supervisory Board members. The
Articles of Incorporation stipulate the term of office as two
years for directors and four years for Audit and Supervisory
Board members. In making nominations, we seek theappropriate involvement of external directors, who make up
a majority of the Nomination and Remuneration Advisory
Committee. The Board of Directors approves nominations
after they have been deliberated by the committee.

The Corporate Planning Department provides explanations and information as necessary to support external
directors. The Department also serves as secretariat for
the Board of Directors.
At the request of the Audit and Supervisory Board, weassign personnel to serve as staff for external board
members to encourage the smooth execution of audit
procedures. We have also established a system thatenables full-time Audit and Supervisory Board members
to attend Board of Directors and Executive Committee
meetings, and receive regular reports from financial statement auditors and various departments, as well as
exchange opinions with these parties at any time.

Directors’ expertise and experience p. 66

Criteria for Independence ofIndependent External Directors

1 A business partner of Tokyo Tatemono that constitutes
2% or more of the Company’s consolidated net sales in
the most recent fiscal year or a person executing businessof such partnerTokyo Tatemono deems external directors to be independent when, in addition to meeting the criteria for independence stipulated by Tokyo Stock Exchange*, they do not
fall under any of the categories shown on the right:

2 A shareholder of the Company that holds more than 10%of the total number of voting rights of the Company ora person executing business of such shareholder
3 A representative, member, or employee of an auditing
firm employed as the financial statement auditor for theCompany* From Tokyo Stock Exchange standards: Guidelines III 5, (3) 2 relating to the listing
management, etc. Rule 436-2: Examination to ensure effectiveness.

General Meeting of Shareholders

ReportAppoint/Dismiss

4 A consultant, accounting professional, or legal professional that received remuneration (excluding director
remuneration) of more than 10 million yen from theCompany in the most recent fiscal year

Financial Statement Auditor

Appoint/Dismiss

ReportCooperation

Dismiss

INTEGRATED REPORT 2022

Financial Statement Audit

Board of Directors and its Composition
15
times

Board of Directors (Directors): 12

Audit and Supervisory Board(Audit and Supervisory Board members): 4

15Internal Officers: 8 (male only)
External Officers: 4 (3 male and 1 female)
Chair: Makio Tanehashi(Representative Director and Chairman)

times

Internal Officers: 2 (male only)
External Officers: 2 (1 male and 1 female)
Chair: Kouji Kawakubo (Audit and Supervisory
Board member (full-time))

Audit

Appoint/Supervise

President
Cooperation

37
times

Executive
Committee

2
times

Internal Control
Committee

3
times

Sustainability
Committee
Internal Audit Department

Divisions/Department

Group Companies

Audit

Item

Tokyo Tatemono Group

2017

2018

2019

2020

2021

Meetings

12

13

15

14

15

Number of Directors

Persons

11

12

12

12

12

Number of Executive Officers on Board

Persons

7

7

7

7

7

Number of Non-Executive Officers on Board(Excluding Independent External Directors)

Persons

1

1

1

1

1

Number of Independent External Directors

Persons

3

4

4

4

4

Proportion of External Directors

%

27

33

33

33

33

Average Board Meeting Attendance

%

100

100

99

100

100

5.0 (March)

5.8 (March)

3.8 (March)

4.8 (March)

4.6 (March)

Average Tenure of Directors (Including Independent External Directors)

Tokyo Tatemono

Unit

Number of Board Meetings

Years

Data Collection Period: January to December of each year. Unless otherwise specified, figures are as of December each year.
Data Collection Scope: Tokyo Tatemono.

56

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TOKYO TATEMONO GROUP

Foundation for Value Creation

Corporate Governance

Remuneration of Officers
Regarding remuneration of officers (excluding certain officers), our aim is to instill awareness of each officer’s responsibility tocontribute to building corporate value not only in the short term but also over the longer term. To this end, we have adopted
a system that links a certain percentage of remuneration to business and stock price performance.

Evaluation of the Effectiveness of the Board of Directors
We conduct an annual survey on the structure, agenda items, and operation of the Board of Directors and evaluate theeffectiveness of the Board based on the results. Below is an overview of the effectiveness evaluation for fiscal 2021.
Evaluation process
A questionnaire survey was administered to all directors
and Audit and Supervisory Board members. Their
responses were aggregated and analyzed, and the results
shared in a Board of Directors meeting, where futureissues and measures were discussed.

Topics
Structure: Ratio, number, and diversity of external directors
Agenda: Number, content, and standard expressions ofmonetary amounts in agenda items
Operation: Number of meetings, length of meetings,
explanation provided prior to meetings, explanatory
materials, time taken for explanation, time taken for
discussion, and reported content
Other: Support system, training

Results of evaluation
As a result of our evaluation, we confirmed that the effectiveness of the Board of Directors has been adequately ensured. In
fiscal 2021, we reviewed the monetary standards and content of the main agenda items to be discussed. We worked to
expand discussions on medium- to long-term management issues and management policies. We will continue to address
the issues identified so that we can further enhance the effectiveness of the Board of Directors.
Evaluation

Main evaluation items

Future issues

Composition

The number of directors is generally appropriate, as areother considerations such as their composition.

Agenda item

The number of agenda items are generally appropriate, as
are the criteria for their inclusion.
Discussions on medium- to long-term management issues
and management policies were expanded to some extent
compared to the previous year.

The agenda should continue to be reviewed with a view to further
expanding discussions.

Management

The frequency of meetings and the time and operation of
meetings are generally appropriate.

To stimulate discussions at each meeting, compliance with
operational rules must be ensured. This includes circulating
agenda materials earlier in advance and clearly describing in
explanatory materials the issues and matters for discussion.

—

Major agenda items for the Board of Directors
The main resolutions and reports of the Board of Directors in fiscal year 2021 were as follows. In particular, discussion was
expanded on matters related to ESG management.
Classification
Business & financeMatters
related to
management
strategy

ESG management
E: Environment
S: Society
G: Governance

Other

INTEGRATED REPORT 2022

Main agenda
Approval of annual accounts and budget, funding plans and funding procurement policy
Approval of business plan for the fiscal year
E: Establishment of medium- and long-term KPIs and targets for reducing greenhouse gas emissions;determine policy for participation in initiatives
S: Establishment of KPIs and targets for skills development, health management, promotion of diverse humanresources, etc.
S: Establishment of Group Human Rights Policy and Sustainable Procurement Standards
G: Confirmation of purpose of cross-shareholdings and review of policy
G: Confirmation of results of evaluation of the effectiveness of the Board of Directors; consideration of ways tofurther enhance effectiveness
G: Revision of criteria for selecting and submitting proposals to the Board of Directors for the next fiscal yearwith a view to expanding deliberations from a medium- to long-term perspective
G: Review and assessment of risks shared by the Group with a view to rebuilding the risk management system
Sharing of IR activity reports and feedback

Stock-related matters

Convocation of general meetings of shareholders and determination of proposals to be submitted
Approval of appropriation of surplus and dividends policy

Other matters

Approval of office strategy direction and M&A projects (Expert Office, Inc.)
Progress report on large projects

Basic policy
Remuneration of directors (excluding external directors) comprises three elements: fixed remuneration, performance-based
remuneration, and stock-based remuneration. The ratio of these elements is set appropriately based on the policy regarding
the determination of payment ratios by type of compensation for Directors. The amount of remuneration for each director isdecided by the Board of Directors after consulting with the Nomination and Remuneration Advisory Committee. Remunerationof external directors and Audit and Supervisory Board members is limited to fixed remuneration in consideration of their duties.
Remuneration structure
Fixed remuneration (for Directors):
Up to 35 million yen per month (420 million yen per year)*1
Performance-based remuneration (for directors
excluding external directors):
Capped at 1% of consolidated ordinary profit and 2% ofprofit attributable to owners of parent for the year prior to
the fiscal year in question*2
Stock-based remuneration (for directors excluding
external directors):
Based on the stock-based remuneration system determined by a board benefit trust scheme, directors will beawarded a maximum of 40,000 points per fiscal year
(equivalent to 40,000 shares). At the time of retirement,
the director will be paid an amount equivalent to theamount of company stock held and market value.
Audit and Supervisory Board member remuneration:
Remuneration of external directors and Audit andSupervisory Board members is limited to basic remuneration according to whether the member serves in a full-timeor part-time position, capped at 8 million yen per month(equivalent to 96 million yen per year).
*1 Based on a resolution of the 190th Ordinary General Meeting of Shareholders heldon March 28, 2008
*2 Based on a resolution of the 195th Ordinary General Meeting of Shareholders heldon March 28, 2013

System for decision-making
The Nomination and Remuneration Advisory Committee
deliberates on directors’ remuneration (excluding external
directors) and other matters. Committee members areappointed from among the directors. To capitalize on theknowledge and advice of external directors and ensure
the objectivity and transparency of procedures, external
directors will make up the majority of Committee members,
which is set at seven or less.

Amount of Compensation and Number of Directors(for Fiscal 2021)
Total Amount by Type of Remuneration
ExecutiveClass

Number of
Fixed
Eligible
Individuals Remuneration(Million Yen)

PerformanceLinked
Remuneration(Million Yen)

Total
Stock-Based Remuneration
Remuneration (Million Yen)
(Million Yen)

Directors(Excluding
External
Directors)

9

263

174

41

479

Audit andSupervisory
Board
Members(Excluding
External
Members*)

2

52

—

—

52

External
Officers

8

54

—

—

54

Total

19

370

174

41

585

* Two External Members

Policy on Payment Breakdown by Remuneration TypeFixed
remuneration

Performance-based
remuneration

Stock-based
remuneration

Positioning

Basic
remuneration

Short-term
incentive

Medium- andlong-term incentive

Variability—

Performance linked
to single fiscal year

Stock-based

50-60%

30-40%

5-10%

Proportion of
total
remuneration(approx.)

Cross-Shareholdings
We acquire and hold shares of other companies for noninvestment purposes (cross-shareholdings) when we determine thatholding such shares is likely to contribute to maintaining and increasing the medium- and long-term corporate value of theGroup by maintaining and strengthening business relationships with business partners. We verify the appropriateness of ourindividual cross-shareholdings with a view to whether holding them will continue to contribute to maintaining and increasing
the corporate value of the Group. Verification is performed by viewing the transaction results and prospects of real estatetransactions, joint ventures, construction and equipment transactions, and financial transactions, in addition to dividend
results. We report verification and disposal results to the Board of Directors at least once every year, and if we determinethat such cross-shareholding is no longer significant, we seek to reduce the cross-shareholding while considering theimpact on the stock market and other factors. The medium-term business plan (fiscal 2020 to 2024) calls for us to reducecross-shareholdings, partly in an effort to increase asset efficiency.

58

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TOKYO TATEMONO GROUP

Foundation for Value Creation

INTEGRATED REPORT 2022

External Directors Roundtable
Further enhancing effectiveness in pursuit of our long-term vision
As external directors, we must be mindful ofthe perspectives of not only shareholders andinvestors, but also customers, local communities,
Yoshimitsu Onji

Shuichi Hattori

External Director

External Director

employees, and other diverse stakeholders.

outcomes of management meeting discussions are
circulated as materials ahead of each meeting. This
enables everyone to be fully aware of the deliberation
process on the executive side. Alongside this, we havemade various other improvements. We have taken to
holding preliminary briefings earlier. We have conducted
tours of the Group’s sites to give Board members a better
understanding of the situation on the ground. We havealso given presentations about the business to newly
appointed directors.

constructive discussions. Inside directors provide external
directors with detailed information about the execution of
the business.

2

Further deepening discussions froma medium- to long-term perspective

To further increase the effectiveness of theBoard of Directors, I see it as critical that we first enhance
discussions based on a medium- to long-term perspective.
In particular, we need to have a thorough discussion
about major changes in the external environment that
may affect us. These would include the geopolitical situation, or climate change and technological innovation.
Addressing such changes in the environment will deepen
our discussions of future growth strategies and risk
management. That is also why as external directors wemust aim to offer input based on the perspectives of awide range of stakeholders. We have to consider not only
shareholders and investors, but also customers, local
communities, employees, and so on.
NakanoYumiko Kinoshita

Makio Tanehashi

Takeo Nakano

External Director

Representative Director
and Chairman of the Board

External Director

How can the Tokyo Tatemono Group further improve the effectiveness of its Board of Directors?
How should the Group approach realizing its long-term vision? The chairman of the Board of Directors
and four external directors addressed these topics in a discussion.

1

Enhancing the effectiveness of
the Board of Directors at
Tokyo Tatemono

Tanehashi Over the past few years, we have worked toenhance the effectiveness of the Board of Directors, incooperation with our external directors. In this discussion,
I’d like to look back on that process and talk about thetasks ahead.

One commendable feature of Tokyo
Tatemono’s Board of Directors is the atmosphere it hascreated, which is conducive to frank discussion. There
have been lively debates between the inside directors,
who have a wealth of hands-on experience, and theexternal directors, who come from a variety of careerbackgrounds. There is an overall willingness to actively
take on board the views that come forth in these discussions. There is also a clear intention to conduct thorough
Nakanodiscussions from a medium- to long-term perspective,
including on setting environmental targets and formulating
human rights policies.
It has been four years since I assumed theposition of external director. To your point, I feel that
there are more discussions from a medium- to long-term
perspective than in the past. When I took up my position,
discussions tended mainly to focus on individual investment projects. In recent years, however, the board has
been addressing topics related to the revised Corporate
Governance Code, SDGs and sustainability, as well as
issues related to specific business strategies. In thatsense, I feel that the effectiveness of the Board has
steadily improved.
Onji

Particularly over the past few years, we haveworked to broaden our discussions, keenly aware of theimportance of a medium- to long-term perspective. We
have also been working to improve how we operatemeetings of the Board of Directors. For example, theTanehashi

Kinoshita The detailed preliminary briefings are very
helpful for our discussions. For discussions of investment
projects, we receive explanations on Tokyo Tatemono’s
activities to date and on the background to the project
under consideration. This leads to fruitful discussions,while deepening our understanding of the Company andits business.

There is clear communication of manageHattori
ment meeting discussions and the situation on the executive side, which is a very positive point. In recent years,
governance reforms have been devoted to strengthening
the presence of external directors. But I take the view that
effectiveness cannot be improved merely by carrying out
formal measures. In this respect, I think the system thatTokyo Tatemono has established is one that supports

As I mentioned earlier, I feel that there has
Hattoribeen an improvement to the preliminary briefings on

It is necessary to discuss thoroughly
the significance of Tokyo Tatemono’s approachto a given project in a way that satisfies
external directors.

60

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TOKYO TATEMONO GROUP

Foundation for Value Creation

INTEGRATED REPORT 2022

External Directors Roundtable
I hope the Company can become a place
where discussions among a wide range of
people are reflected into business strategies
and sustainability goals.

management policies and the status of the company.
But what I ask of the executive side more than anythingelse is that they thoroughly examine the fundamentals ofeach proposal. That means asking themselves questions
like: “Why should Tokyo Tatemono take on this project?”;“What direction is this project intended to take Tokyo
Tatemono?”; and “How will implementing this project leadto the next step?”. I would like for them to then brief
external directors from that perspective. The monitoring
function of directors basically means to respect the business judgment of the executive side, with all its expertise.
But it is also necessary to discuss thoroughly the significance of Tokyo Tatemono’s approach to a given project ina way that satisfies external directors. They need to beable to understand the background and thinking behindthe consideration of the project.
To frame our discussions from such a longOnji
term perspective, we need to base them more directly on
our vision of becoming a next-generation developer. One
further point is that the directors should reflect carefully on
the cases that did not go well. There should be opportunities for the Board of Directors to compare such cases
against the long-term vision, and to discuss approaches
for future improvements. I also see a need for deeper

discussions on whether the current business portfolio is
optimal and on the quantitative criteria that should guidethe selection of businesses.
As I enter my second year as an external
director, I am keenly aware of the fundamental need tomaintain a medium- to long-term perspective when considering Tokyo Tatemono’s business, which has many
projects with long time spans, such as large-scale redevelopment projects. I would add that external directors,
including myself, bring extensive knowledge from otherfields. I think we can make further use of that breadth ofexpertise of the Board of Directors. We can do this byspending less time discussing resolutions of ordinary
individual matters and, as Mr. Nakano mentioned, moretime on topics such as changes in the external environment. In the current era, completion of the construction ofa building is not the end of the process. Urban development requires an integrated perspective that includes
post-development operations. This requires an attitude ofbeing unrestrained by established boundaries, of seeking
out new information. I think the discussion of the businessportfolio is very important in terms of breaking throughexisting frameworks to create new value.
Kinoshita

If employees can have confidence that their daily
work is helping to realize a long-term vision,
they will feel greater loyalty to the Company.

Tanehashi I think you are right. We should provide suchbackground information to external directors as material
for discussion. In addition, regarding discussion topics
such as business portfolios, we do have a meeting groupwithin the Company that holds free discussions on a wide
range of topics to consider our future business direction.
Going forward, I would like us to share the contents of
those meeting discussions. In my view it is important forTokyo Tatemono’s governance to have expertise on theexecutive side and provide thorough explanations toexternal directors. That should be the starting point for
discussion, with the directors providing advice and oversight.

3

Human resources are at the core ofTokyo Tatemono’s businesshires increasingly coming from other industries. I hope
the Company can become a place where discussions
among a wide range of people yield insights that arereflected into business strategies and sustainability goals.
In particular, as we aim to become a next-generation
developer—a company that goes beyond the boundaries
of conventional developers—we should actively create
opportunities to share information and hold discussions
across organizational boundaries.
We touched earlier on the direction Tokyo
Tatemono is pursuing in the medium to long term, and our
vision of becoming a next-generation developer. We needto ensure that employees thoroughly understand these
also. If employees can have confidence that their daily
work is helping to realize a long-term vision, that will leadto greater loyalty to the Company.
Onji

We recently conducted an internal
engagement survey. One thing that came across wasthat we still lack a vertical communication channel
between board members to employees. In particular,
discussions on long-term vision and the Company’s
strategic direction have yet to fully penetrate from theexecutive level to employees.
Given the growing diversity of our workforce, there
will be a need to be more thoughtful in sharing thethinking of board members. We need communication that
empathizes with employees. We must continue to work
steadily on these areas so that we can make the company
a rewarding place to work for our employees. We willcontinue to receive your feedback as we work to
improve our governance based on the perspectives of ourvarious stakeholders.
Tanehashi

Based on the series of discussions, I would
Nakanolike to reiterate that human resources are extremely
important to Tokyo Tatemono’s business. We must foster
people with strong personal skills—people who aretrusted by customers. We need people who have theenterprising spirit needed to embrace difficult goals. I see
that as the foundation for the long-term growth of ourcompany and for the creation of a distinctive Tokyo
Tatemono character. Going forward, there will be a needfor the Board of Directors to discuss the institutionalframework and measures for strengthening its recruitment
and training systems. As directors, we want to aid theCompany in providing a nurturing environment fordeveloping its human resources.
In terms of variety in our human resources,
we expect that going forward we will have mid-career
Kinoshita

We will work to improve governance based onrelationships with various stakeholders.

62

63

TOKYO TATEMONO GROUP

Foundation for Value Creation

INTEGRATED REPORT 2022

Management Structure
April
March
September
January
January
March
April

Directors

Makio Tanehashi
Representative Director
and Chairman of the Board

Hisatoshi Kato
April
March
April
June
June
March
July
March

1979 Joined The Fuji Bank, Limited
2006 Executive Officer, General Manager of Internal Audit Division of Mizuho Corporate Bank, Ltd.
2008 Managing Executive Officer and Officer in charge of Sales of Mizuho Corporate Bank, Ltd.
2011 Deputy President & Executive Officer, in charge of Branches Department of Mizuho Bank, Ltd.
2011 Representative Director, Deputy President & Executive Officer, in charge of Branches Department of Mizuho Bank, Ltd.
2013 President & Chief Executive Officer of Tokyo Tatemono Real Estate Sales Co., Ltd.
2015 Senior Managing Executive Officer and Division Director of Real Estate Solution Service Division of the Company
2016 Senior Managing Executive Officer, Director, Division Director of Real Estate Solution Service Division, and Division Director of International Business Division of
the Company
January 2017 Representative Director, Chairman and Executive Officer of the Company Director and Chairman of Tokyo Tatemono Real Estate Sales Co., Ltd.
March 2019 Representative Director and Chairman of the Board of the Company (to present)
January 2021 Director of Tokyo Tatemono Real Estate Sales Co., Ltd. (to present)

Managing Executive
Officer and Director

1986 Joined the Company
2011 General Manager of Residential Management Department of the Company
2014 President and CEO of Tokyo Tatemono Senior Life Support Co., Ltd. (retired in December 2020)2016 Managing Officer of the Company
2019 Managing Executive Officer and Division Director of Senior Business Division and Leisure Business Division of the Company
2019 Managing Executive Officer and Director; and Division Director of Senior Business Division and Leisure Business Division of the Company
2019 Managing Executive Officer and Director; Division Director of Senior Business Division and Leisure Business Division; and General Manager of Business Planning
Department of Senior Business Division and Business Planning Department of Leisure Business Division of the Company
anuary 2020 Managing Executive Officer and Director; and Division Director of Senior Business Division and Leisure Business Division of the Company
January 2021 Managing Executive Officer and Director; and Division Director of Leisure, Child Care & Staffing Business Division of the Company (to present) President & Chief
Executive Officer of Tokyo Tatemono Resort Co., Ltd. (to present)

April
March
January
January
January
March

1987 Joined the Company
2006 General Manager of Residential Management Department of the Company
2016 Managing Officer and General Manager of Personnel Department of the Company
2017 Managing Officer and Vice Division Director of Residential Development Division of the Company
2019 Managing Executive Officer and Division Director of Residential Development Division of the Company
2019 Managing Executive Officer and Director; and Division Director of Residential Development Division of the Company (to present)

Hideshi Akita
April
March
March
March
March

Hitoshi Nomura

1981 Joined the Company
2005 General Manager of Property Management Department of the Company
2008 Director, and General Manager of Property Planning Department of the Company
2011 Managing Director, and Division Director of Commercial Properties Division responsible for Kansai Branch and Kyushu Branch of the Company
2013 Managing Executive Officer and Director; and Division Director of Commercial Properties Division responsible for Kansai Branch, Sapporo Branch, Kyushu Branch
and Nagoya Branch of the Company
March 2015 Senior Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, and General Affairs Department of
the Company
January 2017 President and Chief Executive Officer, and Representative Director of the Company (to present)

Managing Executive
Officer and Director

Representative Director,
President andChief Executive Officer

April
January
January
January
January

Takeshi Jinbo
April
October
March
March
March
January

Kengo Fukui

January

Representative Director,
Executive Vice President
and Executive Officer

January

April1982 Joined the Company
2002 General Manager of Fukuoka Branch of the Company
2011 Director and General Manager of Corporate Planning Department of the Company
2013 Managing Officer and General Manager of Leasing & Consulting Department of the Company
2015 Managing Executive Officer and Director; and Division Director of Commercial Properties Division responsible for Kansai Branch, Sapporo Branch,
Kyushu Branch and Nagoya Branch of the Company
2019 Senior Managing Executive Officer and Director; and Division Director of Commercial Properties Division responsible for Kansai Branch, Sapporo Branch,
Kyushu Branch and Nagoya Branch of the Company
2021 Representative Director, Executive Vice President and Executive Officer; Assistant to President; Division Director of Real Estate Solution Service Division
responsible for Solution Service Department (joint responsibility); and General Manager of Business Planning Department of the Company; President & Chief
Executive Officer of Tokyo Tatemono Real Estate Sales Co., Ltd. (to present)
2021 Representative Director, Executive Vice President and Executive Officer; Assistant to President; Division Director of Real Estate Solution Service Division
responsible for Solution Service Department (joint responsibility)
2022 Representative Director, Executive Vice President and Executive Officer; Assistant to President; Division Director of Real Estate Solution Service Division(to present)

1988 Joined the Company
2015 General Manager of Acquisitions Department of the Company
2018 Managing Officer and General Manager of Acquisitions Department of the Company
2019 Managing Officer; Vice Division Director of Residential Development Division; and General Manager of Acquisitions Department of the Company
2021 Managing Executive Officer; Vice Division Director of Residential Development Division responsible for Solution Service Department (joint responsibility),
Acquisitions Department, and Project Development Department
March 2021 Managing Executive Officer and Director; Vice Division Director of Residential Development Division responsible for Solution Service Department(joint responsibility), Acquisitions Department, and Project Development Department
January 2022 Managing Executive Officer and Director; Vice Division Director of Residential Development Division responsible for Business Development Department,
Acquisitions Department, and Project Development Department (to present)

Managing Executive
Officer and Director

Audit and Supervisory Board Members
April
March
July
March
January

Katsuhito Ozawa
Senior Managing
Executive Officer
and Director

March
AugustJanuary
January
January
April
January
April
March
March
January
MarchAkira Izumi
Senior Managing
Executive Officer
and Director

January
July
January
January
January

1987 Joined the Company
2007 General Manager of Residential Management Business Department of the Company
2009 Director and General Manager of Finance Department of Tokyo Realty Investment Management, Inc.
2015 Managing Officer and General Manager of Corporate Planning Department of the Company
2017 Managing Executive Officer; Division Director of International Business Division and Leisure Business Division responsible for Corporate Communications
Department, Finance Department, Accounting Department and Appraisal Department; and General Manager of Finance Department and International Business
Department of the Company
2017 Managing Executive Officer and Director; Division Director of International Business Division and Leisure Business Division responsible for Corporate
Communications Department, Finance Department, Accounting Department and Appraisal Department; and General Manager of Finance Department andInternational Business Department of the Company
2017 Managing Executive Officer and Director; Division Director of International Business Division and Leisure Business Division responsible for Corporate
Communications Department, Finance Department, Accounting Department and Appraisal Department; and General Manager of International Business
Department of the Company
2019 Managing Executive Officer and Director; Division Director of International Business Division responsible for Corporate Communications Department, Finance
Department, and Accounting Department; and General Manager of International Business Department of the Company
2020 Managing Executive Officer and Director; Division Director of International Business Division responsible for Corporate Communications Department, Finance
Department, and Accounting Department; and General Manager of International Business Department of the Company
2021 Senior Managing Executive Officer and Director; Division Director of International Business Division; Division Director of Commercial Properties Division
responsible for Acquisitions & Sales Department (joint responsibility), Kansai Branch, Sapporo Branch, Kyushu Branch and Nagoya Branch of the Company
2021 Senior Managing Executive Officer and Director; Division Director of Commercial Properties Division responsible for Acquisitions & Sales Department(joint responsibility), Kansai Branch, Kyushu Branch and Nagoya Branch of the Company
2022 Senior Managing Executive Officer and Director; Division Director of Commercial Properties Division responsible for International Business, Acquisitions & Sales
Department (joint responsibility), Kansai Branch, Kyushu Branch, and Nagoya Branch (to present)
1987 Joined the Company
2009 General Manager of Retail Management Department of the Company
2015 Managing Officer and General Manager of Urban Development Department of the Company
2017 Managing Executive Officer responsible for Personnel Department, Corporate Planning Department, and General Affairs Department; and General Manager ofCorporate Planning Department of the Company
2017 Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, and General Affairs Department; andGeneral Manager of Corporate Planning Department of the Company
2019 Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, General Affairs Department, andAppraisal Department; and General Manager of Corporate Planning Department of the Company
2019 Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, General Affairs Department, andMarket Research Department; and General Manager of Corporate Planning Department of the Company
2020 Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, General Affairs Department, Market Research
Department, Solution Service Department (joint responsibility) and ICT and Digital Strategy Promotion Department of the Company
2021 Senior Managing Executive Officer and Director responsible for Corporate Communications Department, Personnel Department, Corporate Planning Department,
General Affairs Department, Finance Department, Accounting Department, Market Research Department, ICT and Digital Strategy Promotion Department, andAcquisitions & Sales Department (joint responsibility) of the Company
2022 Senior Managing Executive Officer and Director responsible for Corporate Communications Department, Personnel Department, Corporate Planning Department,
Sustainability Management Department, General Affairs Department, Finance Department, Accounting Department, Market and Policy Research Department,
DX Promotion Department, Acquisitions and Sales Department (joint responsibility) (to present)

April
October
April
April
March
July
March

1980 Joined The Yasuda Trust and Banking Co., Ltd.
1999 General Manager of Consulting Department of The Yasuda Trust and Banking Co., Ltd.
2007 Executive Officer and General Manager of Corporate Business Planning Department of Mizuho Trust & Banking Co., Ltd.
2009 Managing Executive Officer and General Manager of Consulting Department of Mizuho Bank, Ltd.
2013 President and Representative Director of Mizuho Trust Realty Co., Ltd.
2015 President and Representative Director of Mizuho Realty Co., Ltd. (retired in March 2017)2017 Audit and Supervisory Board Member (full-time) of the Company (to present)

April
April
October
Apri
April

1983 Joined The Yasuda Fire and Marine Insurance Co., Ltd.
2009 General Manager of Marine Insurance Office of Sompo Japan Insurance Inc.
2011 President and Director of Sompo Japan Nipponkoa Insurance Company of Europe Limited (retired in March 2016)2013 General Manager of Europe Division of Sompo Japan Insurance Inc.
2014 Executive Officer and General Manager of Europe Division of Sompo Japan Insurance Inc. Executive Officer and General Manager of Europe Division of
NIPPONKOA Insurance Co., Ltd.
2014 Executive Officer and General Manager of Europe Division of Sompo Japan Nipponkoa Insurance Inc. Executive Officer and General Manager of Europe Division of
Sompo Japan Nipponkoa Holdings, Inc. (retired in March 2016)2016 Executive Vice President of Sompo Japan Nipponkoa Insurance Inc.
2018 Executive Vice President and General Manager of Enterprise Market Promotion Division of Sompo Japan Nipponkoa Insurance Inc. (retired in March 2019)2019 Audit and Supervisory Board Member (full-time) of the Company (to present)

Kouji Kawakubo
Audit and Supervisory
Board Member (full-time)

September

Takashi Yoshino
Audit and Supervisory
Board Member (full-time)

April
April
March

64

65

TOKYO TATEMONO GROUP

Foundation for Value Creation

INTEGRATED REPORT 2022

Management Structure
External Audit and Supervisory Board Members
February
September
January
June
June
March
March

External Directors

Shuichi Hattori

April
July
June
April
March
January
March
June
March

1984 Registered as a lawyer
1988 Established Hattori Law Firm (currently Hattori General Law Firm) (to present)
2004 External Audit and Supervisory Board Member of USHIO INC. (retired in June 2016)2007 Lecturer (in charge of Financial Instruments and Exchange Act) at Keio University Law School (to present)
2009 External Audit and Supervisory Board Member of LOOK INCORPORATED (currently LOOK HOLDINGS INCORPORATED) (retired in March 2019)2013 External Audit and Supervisory Board Member of POKKA SAPPORO Food & Beverage Ltd. (retired in March 2016)2015 External Audit and Supervisory Board Member of the Company (retired in March 2019)2016 External Director of USHIO INC. (retired in June 2018)2019 External Director of the Company (to present)

1985 Registered as a certified public accountant
1987 Joined Yamaguchi Certified Public Accountant Office
1996 Head of Yamaguchi Certified Public Accountant Office (to present)2013 External Audit and Supervisory Board Member of SATO HOLDINGS CORPORATION (retired in June 2021)
2015 Outside Corporate Auditor of KYORIN Holdings, Inc. (to present)2016 External Audit and Supervisory Board Member of the Company (to present)
2019 External Audit & Supervisory Board Member of Lion Corporation (to present)

Takao Yamaguchi
Audit and Supervisory Board
Member (Independent)

External Director

September
September
January
March
March

Yoshimitsu Onji
External Director

April
April
September
December
March
June
June
October
December
March
April
June
December
June
December

April
April
Apri
April
June
April

Takeo Nakano
External Director

April
April
June
March
April
June
March

April
September
April
June
February
March
July
March

Yumiko Kinoshita
External Director

1977 Joined The Daiei, Inc.
1994 General Manager of Corporate Planning Division of The Daiei, Inc.
1998 Director and Vice President of R.E. Partners, Co., Ltd. (retired in April 2000)
1999 CEO of OZ Corporation (to present)
2000 Managing Executive Officer of RECOF Office (currently RECOF Corporation)2007 Director and Chief Corporate Officer of RECOF Corporation2010 President and Chief Executive Officer of RECOF Corporation
2016 Chairman and Representative Director of RECOF Corporation (retired in September 2017)2016 Director of M&A Capital Partners Co., Ltd. (retired in September 2017)2018 External Director of the Company (to present)2018 Chairman and Director of Hongo Tsuji Business Consulting Co., Ltd. (retired in November 2018)2018 Outside Director of NIHON CHOUZAI Co., Ltd. (to present)
2019 Outside Audit and Supervisory Board Member of United Foods International Co., Ltd. (to present)
2020 Outside Director of Sotetsu Holdings Co., Ltd. (to present)
2021 Outside Director of Sanyu Appraisal Corporation (to present)

1980 Joined The Fuji Bank, Limited
2007 Executive Officer and General Manager of Kobunacho Branch of Mizuho Bank, Ltd.
2009 Managing Executive Officer of Mizuho Financial Group, Inc.
2010 President and Representative Director of Mizuho Financial Strategy Co., Ltd. (retired in April 2012)2010 Managing Director of Mizuho Financial Group, Inc.
2012 Member of the Board of Directors of Mizuho Financial Group, Inc. (retired in June 2012) Deputy President and Representative Director of Mizuho Bank, Ltd.
(retired in April 2013)2013 President & CEO and Representative Director of Mizuho Trust & Banking Co., Ltd.
2017 Director and Chairman of Mizuho Trust & Banking Co., Ltd.
2018 External Audit & Supervisory Board Member of Sompo Japan Nipponkoa Insurance Inc. (currently Sompo Japan Insurance Inc.) (to present)
2019 External Director of FUJIYA CO., LTD. (to present)
2019 Senior Adviser of Mizuho Trust & Banking Co., Ltd. (to present)
2020 Chairman of Shouohkai Foundation (to present)
2021 External Director of the Company (to present)

1984 Joined Bank of Japan
1991 Joined McKinsey & Company
2004 Joined The National Museum of Emerging Science and Innovation of Japan Science and Technology Agency
2011 General Manager, Corporate Planning Department of KCJ GROUP INC.
2016 Chairperson of JAPAN PROFESSIONAL FOOTBALL LEAGUE (retired in March 2018)2018 Chairperson responsible for extraordinary diplomacy of JAPAN PROFESSIONAL FOOTBALL LEAGUE (retired in March 2020)
2020 Chairperson of Tokyo Football Association (to present)
2021 External Director of the Company (to present)

2007 Registered as a lawyer
2007 Joined HANZOMON SOGO LAW OFFICE (resigned in December 2009)2010 Joined OMOTESANDO SOGO LAW OFFICE (to present)
2019 External Audit and Supervisory Board Member of the Company (to present)
2021 Audit & Supervisory Board Member (Independent), Institution for a Global Society Corporation (to present)

Sayaka Hieda
Audit and Supervisory
Board Member (Independent)

Directors’ expertise and experience
Name

Position in the Company

Makio Tanehashi
Hitoshi Nomura
Kengo Fukui
Katsuhito Ozawa
Akira Izumi
Hisatoshi Kato
Hideshi Akita
Takeshi Jinbo

Representative Director
Representative Director
Representative Director
Director
Director
Director
Director
Director
Independent
Shuichi Hattori
External Director
Independent
Yoshimitsu Onji
External Director
Independent
Takeo Nakano
External Director
Independent
Yumiko Kinoshita
External Director

Gender

Male
Male
Male
Male
Male
Male
Male
Male

Corporate
management

Finance andaccounting

Legal, compliance andrisk management

○
○
○
○
○
○

○
○

○

○
○

○

Male

Sustainability

Real estatebusiness andurban
development

○
○

○
○
○
○
○
○
○
○

○
○
○

○

Male

○

○

○

Male

○

○

○

Overseasbusiness

Human resources andhuman resource
development

○

○

○
○
○

○
○
○
○

○

○

Female

ICT/digital○○* The above list does not represent all of the expertise and experience that each director possesses.

Executive Officers
Position

Name

Position

Name

Position

Name

Name

President andChief Executive
Officer

Hitoshi Nomura

Senior Managing
Executive Officer

Katsuhito Ozawa

Managing
Officers

Satoshi Eida

Katsuhiko Tamai

Shinjiro Kobayashi

Hiroshi Takahashi

Executive Vice
President andExecutive Officer

Kengo Fukui

Managing
Executive Officer

Akira Izumi
Hisayoshi Kato

Nobuyoshi Takahashi Fumio Tajima

Hisatoshi Kato

Masayuki Okubo

Shigeru Sabayashi

Hideshi Akita

Kazuki Sugise

Hiroto Fukui

Takeshi Jinbo

Yusuke Mishima

Kenji Sugaya

66

67

TOKYO TATEMONO GROUP

Foundation for Value Creation

Risk Management

Compliance

Policy and Concept
The Tokyo Tatemono Group seeks to appropriately
manage risks that affect the Group’s business to achieve
stable improvement in corporate value. To this end, having
established risk management regulations and created arisk management framework, we are working to ensureongoing risk monitoring and control. In developing our risk
management framework, we referenced ISO 31000(international standard for risk management) and JIS Q
31010 (Japanese standard for risk management).
We have also identified the need to strengthen the risk
management framework as a material issue for the Group.
We will revise our risk management approach with the aimof dealing more effectively and more accurately withchanges in social conditions in recent years and withthe attendant risks, which are becoming more diverseand complex.

Risk Management System

Policy, Concept and System

We have identified and classified risks that may have asignificant impact on the Tokyo Tatemono Group business:business risk, investment risk, financial risk, climatechange risk, and internal control risk.
Of these, integrated risk, primarily that arising frombusiness risk or investment risk, is managed by the
Corporate Planning Department, which is the division in
charge of overall risk management. Internal control risk
(internal management risk and compliance risk) and climatechange risk are both managed by the Internal Control
Committee and Sustainability Committee, which are
chaired by the President. The various risks are monitored
on a regular basis, and measures taken as needed. The
Executive Committee chiefly considers policies related togeneral business risk, while each department generalmanager acts as a risk manager in monitoring such risks
and taking appropriate measures to prevent, manage, andmitigate risk. Important matters related to each type ofrisk are reported to the Board of Directors as necessary
and audited by the Audit and Supervisory Board.

The Tokyo Tatemono Group defines compliance as complying not only with laws and regulations, but also withsocial norms and corporate ethics. This approach builds a
long-lasting relationship of trust with society and allows us
to continue sound corporate activities.
We believe companies must respond sincerely to theneeds of people in our surrounding environment, including
our customers, local communities, employees, shareholders
and investors, and business partners. In June 2009, theGroup established a shared Compliance Charter for groupcompanies. We carry out various initiatives based on thischarter, which serves as our pledge to society that we will
ensure strict compliance throughout our business.
The Tokyo Tatemono Group established an Internal
Control Committee as part of our system to promotecompliance. This committee discusses internal management risks, including group compliance, fraud, andanti-corruption, overseeing group compliance activities.
The Tokyo Tatemono General Affairs Department aims to
improve compliance functions throughout the Group throughcollaboration between and among group companies.

Risk Management
Department

Board of Directors
Audit

Compliance Training

Tokyo Tatemono Group Compliance Charter

Risk Management Structure
Audit & Supervisory
Board

INTEGRATED REPORT 2022

Deliberate and reportimportant matters

Deliberate and reportimportant matters

Deliberate and reportimportant matters

Executive Committee

Internal Control Committee

Sustainability Committee

Chair: President
Secretariat: Corporate Planning Department

Committee Chair: President
Secretariat: General Affairs Department

Committee Chair: President
Secretariat: Sustainability Management Department

Corporate Planning Department
Risk Management Officer: General Manager,
Corporate Planning Department

General Affairs Department

As we engage in corporate activities, we observe the Compliance Charter below:
We adhere to laws, regulations, and other rules and engage in
fair, sound corporate activities.
We act faithfully by thinking from the customers’ standpoint.
We contribute to making society better throughcorporate activities.
We respect the personalities and values of each other andmaintain a comfortable working environment.
Established June 2009

Assistance: General Manager, General Affairs Department(Only for internal management risk)

Integrated Risk
Business risk, investment risk, financial risk,
and climate change risk

Board ofDirectors

Internal Control Risk
(Combination of internal management risk and compliance risk)
Monitor and Improve

Department Offices
Risk Manager: Department General Manager
Operational Execution Management and Promotion: Manager Over Operation in Question

Number of training participants
Training completion rate
(Persons)(%)
1,250
1,000

Audit andSupervisory Board

ReportInternal Control Committee

ReportSecretariat
General Affairs Department
Corporate Planning Department
Internal Audit Department

Receive Reports

Internal Audit

Business Divisions
Group Companies
Person Responsible
for Compliance

99.9

100.0

98.5
847

860

873

884

934

100
99

750

98

500

97

250

96

2017

2018

2019

2020

2021

0

Establishment of a Helpline

Audit and Supervisory
Board Members

Directors

Committee Chair: President

99.8
99.3

Scope of Collection: Tokyo Tatemono Co., Ltd.

ReportReportData Related to Compliance Training (E-learning)0Compliance Structure

Risk Category

Every year, the Tokyo Tatemono Group conducts training
via e-learning. During 2021, approximately 3,900 managers
and employees across 16 companies participated in the
training (a participation rate of 98.0%). Training topics
included: harassment prevention; general complianceincluding anticorruption; information management including
prevention of insider trading; and the Real Estate Brokerage
Act and the Criminal Proceeds Transfer Prevention Act
including prevention of money laundering. Other topics
included communication aimed at sustaining good working
relationships amid changes in work styles, and overviewsof the Act against Unjustifiable Premiums and Misleading
Representations, the Subcontract Act, and the Unfair
Competition Prevention Act. With each of these topics,
our aim was to prevent violations of laws or regulations
that could arise due to a lack of legal knowledge byenabling participants to gain knowledge about each area
and update their knowledge of regulatory changes. On
the subject of legal and tax matters of high importance toour business, we invite external experts as lecturers forseminars. These seminars cover the latest examples oftrials, tax reforms, and other information related to business activities throughout the Group.

Cooperation
Compliance Awareness Activities

The Group has established the Tokyo Tatemono Group
Helpline (an external helpline), which can be used by all
Group companies, in addition to internal helplines in placeat each company. This external helpline is intended toprevent and quickly resolve compliance violations, including
legal violations, bribery, fraud, and harassment, by receiving
whistleblowing complaints, reports, and consultations.
The privacy of anyone who uses the helpline is protected. If the investigation or fact check that is carried out
by the responsible department identifies a complianceviolation, we act quickly to rectify it and prevent recurrence.
For more serious cases, the Internal Control Committee isconvened to discuss a response.

68

69

TOKYO TATEMONO GROUP

Data Section

INTEGRATED REPORT 2022

Key Financial and Non-Financial Data
Financial Data
Operating Results
Operating revenue
Operating profit (loss)
Business profit*1
Ordinary profit (loss)
Profit (loss) attributable to owners of parent
Financial Position
Total assets
Net assets
Interest-bearing debt
Cash Flow
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash andcash equivalents
Cash and cash equivalents at beginningof period
Financial Indicators
ROE
ROA
Equity ratio
Debt-equity ratio
Interest-bearing debt/EBITDA multiple
Stock price information
Profit (loss) per share
Net assets per share
Annual dividend per share
Payout ratio

Unit

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021Million yen
Million yen
Million yen
Million yen
Million yen

166,943(678)—(10,875)(71,774)

194,161
30,892—
21,741
10,243220,026
29,361—
21,95910,121

237,049
30,559—17,317
82,944260,01234,43935,281
24,796
16,359254,498
36,36338,20630,63519,742

266,983
44,75746,44039,416
22,599273,30246,76547,17442,03627,277

323,036
52,41051,66844,611
29,796334,980
49,631
49,84747,072
31,795

340,477
58,78447,97946,27034,965

Million yen
Million yen
Million yen

898,017
192,101
513,616

895,296
212,491
479,746

938,161
262,276434,763

1,319,465
305,808
748,273

1,297,112
312,530
707,356

1,314,558
325,593
727,302

1,441,050
353,419
814,032

1,450,091*2
356,578
857,117

1,564,049
384,211924,891

1,624,640
399,129
976,896

1,650,770
427,661
956,836

Million yen
Million yen
Million yen
Million yen

8,053(37,164)
41,116
11,98257,332(15,385)(35,855)
6,586

22,13537,083(47,119)
12,804(4,790)257,798(277,787)(24,744)

21,762(21,250)(40,177)(39,689)

38,783(53,024)
9,005(5,164)(14,196)(64,508)
77,998(825)

19,748(63,577)
34,438(9,513)24,096(64,082)
48,0007,794

43,524(66,724)
38,307
15,14865,889(1,642)(32,187)
32,362Million yen

32,88939,46652,27186,90747,21742,053

41,22731,70239,49754,64587,008

%
%
%
Times
Times

(32.5)
0.0
20.6
2.8
53.6

5.3
3.5
22.9
2.3
11.6

4.4
3.3
26.7
1.7
10.9

33.2
2.3
21.7
2.6
15.9

5.6
2.7*3
23.2
2.3
13.4

6.4
2.9*3
24.2
2.3
13.0

6.8
3.4*3
23.9
2.4
12.5

7.9
3.3*3
24.0
2.5
12.7

8.2
3.4*3
24.0
2.5
12.6

8.3
3.1*3
24.0
2.5
13.4

Yen
Yen
Yen
%

(166.67)
429.460—23.79
476.23
5
21.0

23.55
583.11
5
21.2

193.12665.516
3.1

75.91*4
1,390.07*4
20*4
26.3

91.00
1,465.30
26
28.6

104.17
1,589.9830
28.8

125.791,605.70
35
27.8

141.591,794.15
41
29.0

152.12
1,862.81
46
30.2*1 Business profit = operating profit + share of profit (loss) of entities accounted for using equity method. This is a profit indicator set in our medium-term business plan (FY2020-FY2024)
reflecting overseas business growth. For comparative purposes, we have disclosed figures from the fiscal year ended December 2015 onward.
*2 We have applied the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc., beginning in the fiscal year ended December 2019. Figures for the fiscal year ended
December 2018 reflect the retroactive application of this accounting standard.
*3 After the fiscal year ended December 2015, ROA = Business profit ÷ total assets (average at start and end of fiscal year).
*4 We implemented a one-for-two common share reverse stock split on July 1, 2015. The annual dividend per share for the fiscal year ended December 2015 is calculated assuming
the reverse stock split occurred at the beginning of the fiscal year ended December 2015.

(Tokyo Tatemono, Non-Consolidated)

Full-time (FT) employees
Ratio of FT women employees
Managers
Ratio of management positions held by women
New hires
Ratio of women among new hires
Ratio of employees with disabilities
Voluntary turnover rate
Average annual training hours
Ratio of employees who underwent
a health check-up
Average number of paid leave days taken*2
Percentage of paid leave taken
Percentage of childcare leave taken (men) *3
Number of lost time injuries*4
Total days lost due to absence
Ratio of absenteeism

Unit

2017

2018

2019

2020

2021

Persons%
Persons%
Persons
%
%
%
Hours
%

687
21.1
339
3.2
19
21.1
1.98†
1.4
—
100†

719
23.8
350
4.6
22
36.4
1.87†
2.6†
12.0
100†

749
24.8
360
5.0
21
33.3
1.81†
2.1†
14.4
100†

772
25.5
367
6.0
20
25.0
1.75†
2.2†
12.2
100†

805
26.1
376
7.2
33
30.3
2.21†
1.5†
18.3
100†

Days
%
%
Incidents
Days
%

8.8†
—
3.6
0†
81†
—

9.9†
—
41.2
1†
137†
—

10.6†
57.7†
28.6
0†
122†
0.06†

9.3†
51.2†
18.2
0†
7†
0†

10.2†
57.5†
30.4
1†
386†
0.18†

*1 For detailed information and notes for each item, please refer to the Data section of
the Sustainability Report.

(Sustainability Report) Data (Society) p.99
*2 Other leave systems such as summer leave and national holidays are also provided(days under these systems are not included in the above figures).

*3 Male employees taking childcare leave = total number of male employees who tookchildcare leave in the relevant year/total number of male employees who had a childborn in the relevant year.
*4 Number of lost time injuries: Accidents that occur during work that result in one ormore days absence.
(†) have been guaranteed by a third party.

167.35
1,996.52
51
30.5

Non-Financial Data (Environmental)*1Unit

CO2 emissions*
Scope 1 (fuel-derived)
Scope 2
Scope 3
Potable water consumption*3
Unit load (results)
Waste emissions*4
Unit load
Recycling rate2

Non-Financial Data (Social)*1

8.7
2.9*3
25.3
2.3
13.3

2017

2018

—
—
—
—
—
—
—
—
—

t-CO2
t-CO2
t-CO2
t-CO2
Thousand m3
m3/m2
tt/Thousand m3%*1 For detailed information and notes for each item, please refer to the Data section of
the Sustainability Report.

—
—
—
—
—
—
—
—
—

2019

2020

2021

1,100,693
15,050115,897
969,745—————

1,288,946†
11,981†
104,736†
1,172,229†
—
—
—
—
—

943,489†
12,657†
96,195†
834,638†567†
0.58
6,350†
5.3
65.7†*3 Scope of Collection: Long-term buildings and commercial facilities for which Tokyo
Tatemono has substantial energy management authority.
*4 Scope of Collection: Long-term buildings and commercial facilities for which Tokyo
Tatemono has substantial energy management authority and for which waste reuse/
reduction plans have been submitted.
(†) have been guaranteed by a third party.

(Sustainability Report) Data (Environment) p.97
*2 Scope of Collection: Tokyo Tatemono Group.

Non-Financial Data (Governance)*(Tokyo Tatemono, Non-Consolidated)

Number of reports and consultations to
the helpline
Number of incidents related to bribery
Number of incidents related to antitrust or
anti-competitive behavior
Number of incidents related to othercompliance violations

Unit

2017

2018

2019

2020

2021

Incidents

44

59

56

41

61

Incidents
Incidents

0
0

0
0

0
0

0
0

0
0

Incidents

0

0

0

0

0

* For detailed information and notes for each item, please refer to the Data section of the Sustainability Report.

(Sustainability Report) Data (Governance) p.102

70

71

TOKYO TATEMONO GROUP

Data Section

INTEGRATED REPORT 2022

Financial Statements
Consolidated Balance Sheet
Assets(Million yen)

FY2020

FY2021

Cash and deposits

54,64787,010Trade notes and accounts receivable

13,73014,041

Real estate for sale

164,578

Real estate for sale in process(Million yen)

Liabilities

FY2020

FY2021

Short-term borrowings

68,314

83,726

Commercial papers

55,00040,000133,251

Current portion of bonds payable

20,000—112,485

139,389

Accounts payable - other

9,784

13,849Real estate for development

71,50871,579

Income taxes payable

10,203

11,094Other

30,85736,004

Provision for warranties for completed construction

11

10

(49)

(58)

Provision for bonuses

944

945

447,757

481,217

Provision for bonuses for directors (and other officers)

24

2Provision for loss on guarantees

—

30

1

26

275

—

Current liabilities

Current assets

Allowance for doubtful accounts
Total current assets
Non-current assets

Provision for environmental measures

Property, plant and equipment
372,585

383,995

Provision for loss on liquidation of subsidiaries and associates

Accumulated depreciation(147,740)(160,377)

Deposits received under real estate specified joint enterprise law

5,083

4,500

Buildings and structures, net

224,844

223,618

Other

50,22858,316

Land

530,963539,786

Total current liabilities

219,869

212,502

Construction in progress

39,042

38,536

Non-current liabilities

Buildings and structures

28,99530,098

Bonds payable

205,000

255,000

Accumulated depreciation(17,563)(18,788)

Long-term borrowings

625,944575,676

Other, net

11,431

11,309Deferred tax liabilities

20,351

19,861

806,281813,251

Deferred tax liabilities for land revaluation

Other

Total property, plant and equipment
Intangible assets
Leasehold interests in land

128,991

128,730

Goodwill

546

1,162

Other

1,013

986

130,552

130,880

Total intangible assets
Investments and other assets
Investment securities
Investments in silent partnerships
Long-term loans receivable

139,308

128,586

8,829

8,128

23,666

23,663

Provision for share awards for directors (and other officers)

139

190

Provision for retirement benefits for directors (and other officers)

76

94

Provision for environmental measures

26—

Leasehold and guarantee deposits received

78,97578,381Retirement benefit liability

12,634

12,955

Deposits received under real estate specified joint enterprise law

15,80019,076

Other
Total non-current liabilities
Total liabilities

8

8

Deferred tax assets

2,278

2,148

Leasehold and guarantee deposits

21,594

21,261Retirement benefit asset

1,217

2,215

Net assets

Other

66,906

63,170Shareholders’ equity

(94)

(97)

240,049

225,421

1,176,882

1,169,553

1,624,640

1,650,770

Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

23,02625,7081,005,640

1,010,607

1,225,510

1,223,109(Million yen)

FY2020

FY2021

Share capital

92,451

92,451

Capital surplus

66,587

66,587Retained earnings

141,422

166,356

Treasury shares
Total shareholders’ equity

(219)

(439)

300,242

324,955

54,92854,276

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(42)

(17)

34,96534,959Foreign currency translation adjustment

(850)

2,144

Remeasurements of defined benefit plans

120

736

89,122

92,099

Revaluation reserve for land

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

9,765

10,605399,129427,661

1,624,640

1,650,77072

73TOKYO TATEMONO GROUP

Data Section

INTEGRATED REPORT 2022

Financial Statements
Consolidated Statement of Income andConsolidated Statement of Comprehensive Income(Million yen)

(Million yen)

Consolidated statement of income

FY2020

FY2021

Consolidated statement of comprehensive income

FY2020

FY2021

Operating revenue

334,980

340,477

Profit32,83935,938Operating costs

251,954

247,933

Other comprehensive income

Operating gross profit

83,02592,543

Valuation difference on available-for-sale securities(10,338)(676)

Selling, general and administrative expenses

33,39333,759

Revaluation reserve for land

Operating profit

49,63158,784Non-operating income
Interest income

18

21

Dividend income

3,302

5,336

215

—

Other

2,154

1,523

Total non-operating income

5,691

6,881

Share of profit of entities accounted for using equity method

6,725
998

1,012

Share of loss of entities accounted for using equity method—

10,804

Bond issuance costs

197

443

Dividends paid on real estate specified joint enterprise law

116

75

Provision for loss on guarantees

—

30

Other

212

361

8,250

19,39547,072

46,270Ordinary profit
Extraordinary income
Gain on sale of non-current assets

628

7

Gain on sale of investment securities

1,911

8,804

Gain on sale of shares of subsidiaries and associates

2,014

—

Gain on sale of investments in capital of subsidiaries and associates

—

1,538

Gain on liquidation of subsidiaries and associates

5367

Reversal of provision for loss on liquidation of subsidiaries and associates

5—

Compensation income

165

—

4,730

10,719Loss on sale of non-current assets

23

3

Loss on retirement of non-current assets

263

208

Impairment losses

899

273

Loss on sale of investment securities

128

2

2,013

138

Total extraordinary income
Extraordinary losses

Loss on valuation of investment securities

(19)

253

Remeasurements of defined benefit plans, net of tax

(479)

617

Share of other comprehensive income of entities accounted for using equity method(1,122)

2,766

Total other comprehensive income(8,349)2,960

24,49038,89823,71137,949779

949

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent

6,667

Borrowing fee

Total non-operating expenses—

Foreign currency translation adjustment

Comprehensive income attributable to non-controlling interests

Non-operating expenses
Interest expenses

3,611

Loss on redemption of bonds

814—

Loss on COVID-19

736

129

Total extraordinary losses

4,879

754

Profit before income taxes

46,92356,234

Income taxes - current

16,63920,231

Income taxes - deferred(2,556)64

Total income taxes

14,083

20,295

Profit32,83935,938

Profit attributable to non-controlling interests

1,044

972

Profit attributable to owners of parent

31,79534,965

Consolidated Statement of Cash Flows
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Share of loss (profit) of entities accounted for using equity method
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors (and other officers)
Increase (decrease) in provision for share awards for directors (and other officers)
Increase (decrease) in provision for retirement benefits for directors (and other officers)
Increase (decrease) in provision for loss on guarantees
Increase (decrease) in provision for environmental measures
Increase (decrease) in provision for loss on liquidation of subsidiaries and associates
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Loss (gain) on valuation of investment securities
Loss (gain) on sale of investment securities
Loss (gain) on sale of shares of subsidiaries and associates
Loss on redemption of bonds
Loss (gain) on sale of investments in capital of subsidiaries and associates
Loss (gain) on liquidation of subsidiaries and associates
Loss (gain) on sale and retirement of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in leasehold and guarantee deposits received
Increase (decrease) in trade payables
Decrease (increase) in leasehold and guarantee deposits
Increase (decrease) in deposits received
Compensation income
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities(Million yen)

FY2020

FY2021

46,923
18,971
899
645
(215)
1
83
(0)
50
(115)
—
(1)
(5)
454
(3,321)
6,725
2,013(1,783)(2,014)
814
—
(5)
(340)
(784)
(10,925)
2,243
(296)
(366)
(5,086)
5,493
1,426
61,482
4,860(7,175)(15,642)
43,52456,234
18,572273
290
10,804
12
(11)
(21)
50
17
30
(1)
(275)
209
(5,358)6,667
138(8,802)——(1,538)
(367)
204
(310)
3,467
(999)
(47)
807
(380)
—
5,181
84,847
6,196(6,535)(18,619)
65,88974

75

TOKYO TATEMONO GROUP

Data Section

Corporate Data

Financial Statements
Consolidated Statement of Cash Flows
Cash flows from investing activities
Proceeds from sale and redemption of investment securities
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Proceeds from sale of shares of subsidiaries resulting in change in scope of consolidation
Purchase of investments in capital of subsidiaries and associates
Proceeds from redemption of investments in capital of subsidiaries and associates
Proceeds from sales of investments in capital of subsidiaries and associates
Payments for investments in silent partnerships
Proceeds from withdrawal of investments in silent partnerships
Proceeds from sale of non-current assets
Purchase of non-current assets
Increase (decrease) in deposits received under real estate specified joint enterprise law
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of long-term accounts payable - other
Proceeds from issuance of bonds
Redemption of bonds
Purchase of shares of subsidiaries not resulting in change in scope of consolidation
Proceeds from sale of treasury shares
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Proceeds from share issuance to non-controlling shareholders
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

INTEGRATED REPORT 2022

(Million yen)

FY2020

FY2021Company Name

4,455
(4,158)—
1,542(5,186)63—(4,647)288
3,907(58,184)(3,199)(1,604)(66,724)

10,786(1,578)(1,105)—(2,871)
2,204
7,643
(73)
774
19
(19,386)
2,693
(749)
(1,642)

Established(0)(30,000)
310,700(228,492)(202)
40,000(40,000)
(458)
0
(2)
(9,194)(672)
770(4,139)38,30741
15,14839,49754,645(0)(15,000)
33,500(68,814)(202)
50,000(20,000)—
2(234)(10,029)
(596)
—
(811)
(32,187)
303
32,36254,64587,008Group Companies

Tokyo Tatemono Co., Ltd.

Commercial Properties Business

CapitalRepresentative

October 1, 1896
92.4 billion yen (As of December 31, 2021)
Hitoshi Nomura
President and Chief Executive Officer

Tokyo Fudosan Kanri Co., Ltd.
Tokyo Building Service Co., Ltd.
Shinjuku Center Building Management Co., Ltd.
Seishin Service Co., Ltd.
PRIME PLACE Co., Ltd.
EXPERT OFFICE Co., Ltd.

Residential Business
Number of Consolidated
Employees

5,648 (As of December 31, 2021)

Tokyo Tatemono Amenity Support Co., Ltd.
E-State Online Co., Ltd.

Head Office

Tokyo Tatemono Yaesu Building
1-4-16 Yaesu, Chuo-ku, Tokyo 103-8285
Phone: 03-3274-0111 (Representative)

Stock Listing

Prime Market in Tokyo Stock Exchange

Listing Date

September 1907

Securities Code
Trading Unit

Asset Service BusinessTokyo Tatemono Real Estate Sales Co., Ltd.
Japan Rental Guaranty Co., Ltd.
Nihon Parking Corporation
Parking Support Center Corporation

Other Businesses
Overseas Business

8804

Tokyo Tatemono (Shanghai) Real Estate Consulting Co., Ltd.
Tokyo Tatemono Asia Pte. Ltd.

100 shares

Fund BusinessTokyo Tatemono Investment Advisors Co., Ltd.
Tokyo Realty Investment Management, Inc.

Number of Shares Authorized 400,000,000 shares

Leisure and Child Care Business

Number of Shares Issued and 209,167,674 shares
Outstanding(As of December 31, 2021)

Tokyo Tatemono Resort Co., Ltd.
Tokyo Tatemono Kids Co., Ltd.
Tokyo Tatemono Staffing Co., Ltd.

Stock Price
(Yen)
2,000
1,500
1,000
500
0

2019
2020
2021
Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

Please refer to the following for more information.
Financial Information
Investor Relations
https://tatemono.com/english/ir/

IR Libraryhttps://tatemono.com/english/ir/library/Non-Financial Information
Sustainability
https://tatemono.com/csr/english/

Sustainability Report 2022
https://tatemono.com/csr/english/reports/pdf/2022susrepo_e.pdf

76Contact:
Corporate Communications Department
Tokyo Tatemono Co., Ltd.
TEL: +81 (3) 3274-1984

Published: August 2022