Integrated
Report 2021
TOKYO TATEMONO GROUP
Integrated Report

CONTENTS

Corporate Philosophy“Trust beyond the era.”

INTRODUCTION

We aim to grow the Company and to create a prosperous society,

VALUE CREATION

taking pride in the trust placed in us that extends over a century.

CAPITAL
STRENGTHENING

Corporate Stance
We support affluent and dream-filled living.
We aim to create comfortable urban environments.
We create worthwhile spaces offering peace of mind.

FOUNDATIONS FORVALUE CREATIONFounding Spirit“The Customer Always Comes First” Spirit
Established in 1896 by Zenjiro Yasuda, the founder of the former Yasuda conglomerate,
Tokyo Tatemono is Japan’s oldest comprehensive real estate company. From the outset,
Yasuda’s principle of always putting the customer first, along with an enterprising spiritthat has anticipated changes in the times, have been the ground of the Company’s activities.
From this foundation, Tokyo Tatemono has helped to enhance the attractiveness andvalue of various regions and expanded into a range of real estate development businesses,
including the development of new assets thathave responded to the needs of society over time.
Even now, more than a century after theCompany’s founding, this mindset continues toinform and guide the Tokyo Tatemono Group.
Taking pride in the trust we have accumulated
over the years, Tokyo Tatemono will continue togrow as a company as we contribute to thecreation of a prosperous society.

Zenjiro Yasuda

01

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

DATA SECTION
Editorial Policy
Integrated Report 2021 was prepared with the goals ofenhancing communication with stakeholders and fostering
understanding regarding the intention of the Tokyo TatemonoGroup to create value over the medium to long term throughthe provision of financial and non-financial information. For
future reports, we intend to incorporate feedback from readers
to improve the contents.

Reporting Period
This report primarily covers the fiscal year ended December 31,
2020. However, some information on activities before or after
this period and forward-looking forecasts are also included.

Scope of Reporting
The scope of this report includes Tokyo Tatemono Co., Ltd.
and Tokyo Tatemono Group companies.

Corporate Philosophy ........................................................ 01
Contents ........................................................................... 02
At a Glance ....................................................................... 03

Overview of the Medium-Term Business Plan..................... 05
Message from the CEO...................................................... 08
History of Value Creation ................................................... 13
Value Creation Process ...................................................... 15
Long-Term Vision .............................................................. 17
Materiality .......................................................................... 19
FeatureThe Value Urban Development Brings: Hareza Ikebukuro .... 21

Financial Capital: Message from the CFO .......................... 25
Intellectual Capital ............................................................. 29
Social and Relationship Capital ......................................... 31
Business Capital
Commercial Properties Business ................................ 32
Residential Business .................................................. 36
Asset Service Business .............................................. 39
STRATEGIC FOCUS Meeting Demand for Real Estate
Investment: Property Sales to Investors....................... 41
Other Businesses ....................................................... 43
Human Capital .................................................................. 46
Natural Capital ................................................................... 49

Corporate Governance ...................................................... 53
Dialogue between the Chairman of the Boardand an External Director .................................................. 57
Management Structure ...................................................... 61
Risk Management ............................................................. 65
Compliance ....................................................................... 66

Key Financial and Non-Financial Data ................................ 67
Financial Statements ......................................................... 69
Corporate Data ................................................................. 74

Referenced Frameworks
In preparing this report, we referenced
the Guidance for 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 International Integrated
Reporting Council’s International Integrated Reporting
Framework. Non-financial information has been disclosed withreference 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 materiallyfrom those projected as a result of economic conditions,market trends, demand fluctuations, foreign exchange
rate movements, and other factors.

Company headquarters at its
establishment in 1896

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

02

INTRODUCTION
At a GlanceTokyo Tatemono Group in Numbers
Operating revenue

Business profit / Profit attributable to owners of parent
Business profit(Billion yen)(Billion yen)

400

50

323.0
266.9

254.4

334.9

Earnings per share (EPS)Annual dividend per share / Payout ratio

(Yen)

(Yen)

200

100

Profit attributable to owners of parent

47.1

46.4

Annual dividend per share

51.6

49.8

38.2

273.3

25

200

19.7

27.2

22.5

29.7

31.7

125.7991.00

141.59152.12(%)

28.6

FY2016FY2017FY2018FY20190

FY2020Operating revenue per segment

FY2016FY2019FY2020

Other 15%
8.6
Commercial Properties
43%
144.5

334.9
billion yen

Residential 30%
99.1

FY201850

Total assets / ROA

Residential 12%
7.1

49.8
billion yen*

ROE

ROA

(Billion yen)

(%)

3.4

3,000

3.3

3.4

2.9

1,500

0

1,314.5

FY2016

3.1

4

(%)
10

7.9
6.4

1,441.0

FY20171,450.0

FY20181,564.0

FY2019

8.2

8.3

6.8

2

5

FY2020 00

FY2016FY2017FY2018FY2019FY2020(Times)(Times)

2.3

2.4

2.5

2.5

1.5

0

03

20

13.0

12.5

12.7

12.6

13.4

FY2016FY2017FY2018FY2019FY202010FY2016FY2017

TOKYO TATEMONO GROUPFY2018FY2018FY2019FY20200FY2016FY2017FY20184641

20

FY2019FY2020 0

FY2019INTEGRATED REPORT 2021

Commercial Properties BusinessResidential Business

The Commercial Properties Business encompasses
business activities ranging from urban development
and office building development and operation tofacility management, building maintenance, andmaintenance/remodeling. Our sphere of operations
centers mainly on the international city of Tokyo. We
are working together as a group to provide not only
quality properties and facilities but also a range ofservices to provide office building users with asense of safety, security, and comfort.

The Residential Business is engaged in the for-salecondominiums and for-rent condominiums businesses,
centered on the Brillia brand of refinement andcomfort, primarily in the Tokyo metropolitan area.
We offer high-quality housing based on a unique,comprehensive framework that includes all thefunctions needed to support a more comfortable life
for our customers, ranging from planning anddevelopment to management, repair, renovation,and brokerage.

pp. 32-35

Interest-bearing debt/EBITDA multiple

Debt-equity ratio

2.5

FY2017

30

35

30.2

1,624.6* ROA=Business profit ÷ total assets (average at start and end of fiscal year)

3.0

FY201629.0

Segment Overview
Commercial Properties
69%
40.8

Asset Service 5%
2.6* After elimination and corporate

Total assets

0

27.8

40

Business profit per segment

Other 13%
44.5
Asset Service 14%
46.6

FY201728.8

104.17100

26

0Payout ratio

FY20200pp. 36-38

Asset Service Business

Other Businesses

Capitalizing on the range of services offered by
the Tokyo Tatemono Group for the effective use ofproperty and land, the Asset Service Businessprovides comprehensive solutions through several
business activities: the real estate brokerage business;
the asset solution business, which seeks to increase
the value of and sell acquired real estate; themanagement service business; and the parking
business, centered on the NPC24H brand ofparking lots.

Other Businesses have grown to include a variety ofbusiness activities: overseas businesses engaged inproperty development in China and other Asian
countries; real estate fund business, which offers
and manages various real estate investment
products such as J-REITs, private REITs, and private
funds; and leisure and child care businesses which
address the real lifestyles and needs of people.

pp. 39-40

pp. 43-45

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

04

VALUE CREATION
Overview of the Medium-Term Business Plan
Long-Term Vision

Trajectory of Past Business Plans
2012–2014 Medium-Term Business Plan

2015–2019 Medium-Term Business Plan

Quantitative Targets

Results

Quantitative Targets

Results

Operating profit

35 billion yen

30.5 billion yen

50 billion yen

52.4 billion yen

Debt-equity ratio

3

2.6
Targets for Financial
Indicators

Results

Debt-equity ratio

3

2.5

Interest-bearing debt/
EBITDA multiple

13

12.6

Operating profit

In light of our desired future direction for the Group,
this medium-term business plan was positioned as astage for reinforcing the business foundation. The plancalled for the company’s transformation centered on
strategically focused structural realignment andoptimization of the value chain. Our aim was tothoroughly strengthen earnings power and the Group’s
financial position.
We implemented various measures, including sellingsome business units and reorganizing the special
purpose company structure for large-scale projects. In
addition, by keeping interest-bearing debt down andexpanding the equity base, we reinforced the financial
position beyond the plan’s initial targets.

Targets
Achieved

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

IssuesRemaining

The objective of this medium-term business plan was
to strengthen earnings power and build a businessportfolio with high growth potential. To achieve this,the plan called for us to provide a range of high-quality
services to enhance customer satisfaction, strategicallyfocus on fields and business domains where we could
take full advantage of the Group’s unique expertiseand competitive strengths, strengthen the value chain,and deliver “amazing value” through organic
collaboration between a variety of business units.
We achieved profit growth in excess of the initial
target and practiced a more disciplined financial
management approach. At the same time, in addition
to pursuing consistent growth in each business, we took
various initiatives for future growth, such as investing inhotels and logistics facilities and other new asset types
and expanding the stock of quality real estate.

Targets
Achieved

We were successful in strengthening earnings power
and maintaining a sound financial position. However,the need for actions that would ensure sustainablegrowth became more apparent as we faced shifts in thebusiness environment, including mounting competition
between international cities, increasingly diverse lifestyles,
and rapid advances in digital technology, coupled withthe pressing issue of sound ESG management.

IssuesRemaining

Long-Term Vision Looking Ahead to the Period around 2030

Becoming a Next-Generation Developer
The pace of change in the business environment is accelerating, while the need for sounder ESG management grows moreurgent every year. In this environment, to equip the Tokyo Tatemono Group as a whole to realize sustainable growth after
2020, in February 2020 we formulated a long-term vision looking ahead to the period around 2030, the year when a numberof large-scale redevelopment projects currently under way will be completed, and which also coincides with the target yearof the Sustainable Development Goals (SDGs).
Long-Term Vision and Materiality p. 17

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, together with a new long-term visionstatement, 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

Consolidated business profit*

120 billion yen

Consolidated business profit*

75 billion yen
35.2

46.4

47.1

2017

2018

51.6

49.8

2019

2020

38.2

Operating profit, Debt-equity ratio, ROE
Operating profit

Debt-equity ratio (times)

2015

ROE

70

33.2%
5.3%

30.8

Profit and Financial Plan

52.4

4.4%

2.6

FY2024 Figures

49.6

46.7

44.7

Profit Target

36.3

34.4

30.5

29.3

2.3

2.3

2.3

2.4

2.5

2.5

2.5

1.7

05

around 2030

8.3%

8.2%

7.9%

6.8%

6.4%
5.6%

0

2024

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

35

2016

FY2012

TOKYO TATEMONO GROUPFY2013

FY2014

INTEGRATED REPORT 2021

FY2015FY2016FY2017FY2018FY2019FY2020Capital Efficiency

Financial Indicators

Consolidated
business profit

ROE

Debt-equity ratio*1

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)

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

06

VALUE CREATION
Message from the CEO

Overview of the Medium-Term Business Plan
Key Strategies
Key
Strategies

1

Key
Strategies

2

Key
Strategies

3

Pursue large-scale
redevelopment projects

Key
Strategies

4

We engage in the pursuit of large-scale
redevelopment projects and take initiatives toenhance the appeal of the areas around theseprojects, aiming to increase the value of ourentire office building portfolio and expand theflow of stable leasing profit.

Strengthen the for-salecondominiums business
Redevelopment and rebuilding will be our tools
enabling the ongoing acquisition of opportunities
to develop highly-competitive condominiums,
providing quality housing in response tosocial changes.

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

Key
Strategies

5

Strengthen brokerage, fund, andparking businesses

Grow our overseas businesses
We aim to collaborate with leading local partners,
primarily in China and other Asian countries, toacquire new business opportunities centered
mostly on for-sale condominiums withquick turnover.

Expand property sales toinvestors

Building on a foundationof trust, we will achievea balance at a higher
level between providing
solutions to social
issues and pursuing

Through proactive investment in a broad pool ofasset types, including logistics facilities, for-rentcondominiums, and urban hotels, we will continue
to seize development opportunities and sellproperties expeditiously to generate profits.

growth as a business.

Evolution of ESG Management
We are developing ongoing sustainability measures, having established a Sustainability Committee to work with businessdivisions to set goals, monitor progress, and evaluate performance levels. We aim to leverage positive ratings from ESG
rating agencies as benchmarks for our inclusion in ESG indices.
System to promote sustainability measures

Management by the Sustainability Committee (chaired by the President)

Implementation,
promotion

Goal-setting

Evaluate

PDCA cycle
Review ofactivities

MonitorMonitoring,evaluation

Promotingactivities,
disclosure

Promoting sustainability measures within each business division

Improving ratings from ESG rating agencies, seeking inclusion in ESG indices

07

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Stakeholder engagement

Board of Directors

ReportHitoshi Nomura
Representative Director
President andChief Executive Officer
Tokyo Tatemono Co., Ltd.

VALUE CREATION
Message from the CEO“Trust beyond the era.” Our corporate
philosophy is grounded in trust
extending over a century.

Creating shared values with society

In a world that is changing rapidly and will continue to

Of course, if you keep taking on challenges like this,change, no matter how far property technology and other

you will inevitably fail at times. I appreciate the words of

IT may progress, I’m convinced that we must never lose

the famous swordsman-philosopher Miyamoto Musashi:

After much discussion among management, centered onsight of our corporate philosophy, which is the DNA of the“Do not regret what you have done.”

the Sustainability Committee formed in 2020, the Tokyo

Tokyo Tatemono was established in 1896 by Zenjiro

Group, and what will sustain us as long as business is

Yasuda, founder of the Yasuda conglomerate, and issomething that human beings create together.

In times like these when no one can tell what lies

Tatemono Group identified new material issues in Juneahead and even what tomorrow may bring is uncertain,

2021. I take materiality to be issues that are crucial to

Japan’s oldest comprehensive real estate company. Eiichi

anyone who is trying to decide whether or not to takeour long-term vision of achieving a balance between

Shibusawa, the father of modern Japanese capitalism,

some course of action will naturally be afraid to fail, andproviding solutions to social issues and pursuing growth

many will find it hard even to take the first step. Breaking

as a business—which is precisely the concept ofdown the psychology of not wanting to fail, it is not sosustainability management. We looked at materiality frommuch that people can’t stand the thought of failing itself,

the perspective of both creating social value and thewas also deeply involved in our establishment. He helped
start about 500 companies in his lifetime, of which 186

Companies that shirk challenges will
never achieve their vision.

are said to still be in business. Tokyo Tatemono is one ofthem. Capital markets today are trending away from

Guided by our long-term vision of “Becoming

but rather they can’t stand the thought of themselves

infrastructure needed to create such value. We identified

shareholder capitalism. One illustration of this is that thea Next-Generation Developer,” we will continue to take on

regretting having failed. In other words, if I’m confident

14 material issues, including strengthening Tokyo’s

topic of the World Economic Forum annual meeting inchallenges as we look ahead to 2030. We purposefully

that I can live with my mistakes, I won’t shy away fromcompetitiveness as an international city, value co-creation

Davos in January 2020 was “stakeholder capitalism.”

used the word “next-generation”—this reflects ourtaking on a challenge. To fail after making a rational

and innovation, promoting a decarbonized society, andIn that sense, we can say that what many entrepreneurs

resolve that, as issues emerge in our quest to realize a

judgment and taking action is simply to have the chancediversity and inclusion. Going forward, we will ensure alike Yasuda and Shibusawa aspired to, and what hassustainable society, the role our Group plays should

to reflect on what happened and bring that insight to bearcommon understanding of these issues among all Group

continued down the years through the Japanese spirit ofchange significantly. Our ideal of a next-generationon the next action. As a manager, my personal philosophy

employees as we pursue specific business initiatives. For

valuing both the public good and economic potential,

developer is an organization that can achieve a high-levelis guided by the essence of Musashi’s words, which

instance, one initiative related to strengthening Tokyo’s

already incorporated the notion of sustainability. Thisbalance between providing solutions to social issues andinspire me to do what needs to be done day by day. It iscompetitiveness as an international city and to value

ethos is especially deeply engrained in Tokyo Tatemono.

pursuing growth as a business. To become such anin this spirit that I hope to foster a corporate culture whereco-creation and innovation involves building an “innovation

Our Group has always put emphasis on quality ratherorganization, in our development projects we have to

people are prepared to give their best in dealing with any

ecosystem” in the area around Tokyo Station, where

than the sheer pursuit of revenue and asset building. Our

pursue transformative ideas both in terms of properties

situation, no matter how hard, to make our vision a reality.

our company was founded. By bringing together andtop priority when we do business is to earn the trust ofand buildings and in terms of thinking and innovation, tofostering exchanges among various players, such as

our stakeholders. This has borne fruit in a variety of ways.

create places that allow people to thrive, where they work,

major corporations, venture startups, investors, andAfter World War II, nearly all of Tokyo Tatemono’s overseas

live, and relax. Building the value of such places is how

research institutes, our redevelopment project in theassets were seized, and the company was compelled to

we can create the value of experience and contribute todramatically scale down its assets. But I believe this focus

people’s flourishing. This is the greatest value Tokyoon earning trust is precisely why we were able to go on

Tatemono can bring to society, and the reason for theand establish our position as one of Japan’s foremostGroup’s existence.

property developers. Without question, trust will be the

The force driving us to realize this vision is the ethos

lifeline for our sustainable growth going forward, and I

that has animated Tokyo Tatemono from the beginning: anbelieve the source of that trust lies in the way each of ourenterprising spirit unafraid of failure as we boldly embracepeople engages with our customers. Tokyo Tatemono,challenges. A strong determination to break new groundI feel, is blessed with many winsome employees who areruns through the heart of our corporate culture. Looking

well received by people. Customers often contact us

back, we see many instances of this—we were first in therequesting to work with a certain employee. As employees

industry to develop real estate securitized products underbuild a reputation for trustworthiness, this opens the door

the Special Purpose Company Act (now the Act on

to new business opportunities. Any project, no matter

Securitization of Assets), first to build a complex that

how large, starts with gathering information, but in many

integrates local government offices with residential spacecases, it is customers who come to us with information(Brillia Tower Ikebukuro), first to build a net zero-energy

first, and we end up winning the project.

(ZEH) high-rise condominium (Brillia Tsurumaki). The list
goes on.

09

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

10

VALUE CREATION
Message from the CEO

Yaesu, Nihonbashi, and Kyobashi areas around theincome attributable to owners of the parent was up for thestation will engender a virtuous cycle of developing new

fifth year in a row, making fiscal 2020 a very fruitful andfields and driving economic growth. We expect thisimportant year for the Group.

organic collaboration to bring new energy and excitement
to the area.
In terms of promoting a decarbonized society, calls for

In line with the policy of optimizing the businessResponding to the environment andensuring a growth trajectory

have increased the total investment amount for properties
earmarked for sales to investors to around 340 billion yen(decided), of which more than 110 billion yen is for logis-

Looking ahead at market conditions, although our leasingtics facilities. Going forward, we will more actively develop

portfolio and asset structure laid out in the Medium-Termoffice portfolio at the moment has been spared any

such properties, drawing on a broad range of information

Business Plan, in December 2020 we transferred all

significant impact in terms of rent levels or vacancy rates,routes, relationships with various operating companies,

companies to turn their attention to the environment areshares of Tokyo Tatemono Senior Life Support, an operator

it takes time for companies to decide to relocate offices,and our expertise in the field.

growing more urgent. In 2020, many of the world’s leadingof nursing homes and assisted living residences, toand leasing periods are tending to lengthen somewhat.

countries, including Japan, declared that they will be

another company.

Vacancy rates in the market as a whole are also climbing,

Providing value and continuing tomeet expectations

carbon neutral by 2050.The Group has set medium- and

It is far from clear what course the COVID-19 pandemic

long-term targets for reducing greenhouse gas emissions,will take in fiscal 2021 and further ahead, but we will steer

aiming by fiscal 2030 to reduce CO2 emissions by 40%

the company through this crisis. Some news media have

As for for-sale condominiums, real demand is firm,compared to fiscal 2019 and to net zero emissions byreported on the notion that offices are no longer necessary.

and sales have been robust both in highly convenient city

A key target set out in our previous Medium-Term Business2050. With our sights on this target, we will step up ourIf that notion actually gained traction, it would represent a

center locations and in suburban areas with favorable

Plan (FY 2015-2019) was significant growth in operating

efforts to achieve carbon neutrality.

serious risk to our Group, but I don’t think it will come toliving conditions. We expect to continue seeing a market

profit. All of our employees worked together to put thethat. Rather, although ways of working will likely shift toenvironment conducive to sales, particularly against theplan into action, and we ended up going above anda hybrid of working from home and in offices, as AI,

backdrop of low interest rates and high stock market

beyond the target. Even though the current Medium-Termrobotics and other technologies take over more routine

prices, which both tend to encourage investment inBusiness Plan (FY 2020-2024) was impacted by thetasks, I think human creativity will become more andreal estate.

COVID-19 pandemic soon after we launched it, we are

Taking the lead in uncertain times

and I think we have to keep close watch on leasing officemarket trends.

The impact of the COVID-19 pandemic caused earnings

more important. Regardless of how much digitalizationin our hotel and retail facility leasing businesses and park-

advances, there is definitely a need for places where

foreign investors remain enthusiastic about property

qualitative and quantitative targets. However, there haveing and leisure businesses to decline in fiscal 2020. Per-people can sit down together and thoroughly discuss

investment, not only in conveniently located offices,been occasions in the past when we failed to achieve ourformance in the office leasing business remained solid,

issues. I see the diversification of values as an opportunity—

logistics facilities, and for-rent condominiums—there istargets, and after the global financial crisis of 2008 thehowever, and sales of condominiums were up both in city

Tokyo Tatemono will take the lead in further adding value

also renewed investment interest in hotels and retailCompany recorded a deficit. Some of the stakeholders

centers and suburban areas. As a result, operating profit

to the office buildings, condominiums, and other “places”

facilities that are expected to see a recovery in demand

who have supported Tokyo Tatemono over the years may

reached a record high for the fourth year in a row, and net

we provide.

once the pandemic subsides. We expect ongoing solid

be wondering if we really have what it takes to carryperformance in this market.

through with the current plan and achieve our targets.

In the real estate transaction market, domestic andIn the short term, we will make a considered response

making extremely good progress in terms of both

We take such concerns to heart, and are committed toto these market conditions while continuing to ensure asteadily implementing the priority measures outlined in

growth trajectory for the Group. One key to enabling thethe current plan, while reinforcing corporate governanceGroup to increase profits and continue to grow over thethrough greater management transparency and a more

longer term is the steady expansion of leasing profit,

diverse board of directors. In these ways we will carrywhich is primarily supported by large-scale developments.

forward the trust we have earned into our future business

However, having completed the Hareza Tower in May

activities. Our aim is always to become, as our long-term

2020, we have no such developments in the pipeline until

vision says, a “next-generation developer.” I am convinced

the Yaesu Project, planned for completion in 2025. During

this is the way the Tokyo Tatemono Group can provide

this four-year lull when we can’t expect a sizable influx ofvalue to our customers, employees, business partners,

leasable space, we will seek to grow profits by channelinglocal communities, shareholders, and all our stakeholders.

resources into areas like the for-sale condominium businessand property sales to investors. A current focus is theI am grateful to our stakeholders for your continued
understanding and support for the Group.

development of logistics facilities. Given the tremendous
growth of the e-commerce market, we anticipate robust
demand for logistics facilities to continue. Already, we

11TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

12

VALUE CREATION
A History of Value Creation

Operating revenue (FY2020)

334.9 billion yen

Since our foundation, Tokyo Tatemono, a pioneer of modern real estate, has been engaged in industry-shaping
initiatives under the philosophy of the customer always comes first and the enterprising spirit inherited from ourfounder, Zenjiro Yasuda, who was also the founder of the Yasuda conglomerate. Our track record of doing
business for more than 120 years is the basis for our current strengths.
Strengths Cultivated over More Than 120 Years of Doing Business
Ingenuity and problem-solving ability to meetthe needs of customers and society

Accumulated Trust, Track Record of Accomplishments,
and Expertise

Corporate Culture Able to Read the Times andTake on New Challenges

Customer-centered office building and for-sale condominiums yielding
high levels of customer satisfaction, as indicated in repeated surveys.
Participation in many of Japan’s largest urban revitalization projects,
leveraging integrated strengths to realize complex developments.
Efforts to address social issues, such as enhancing urban functions
and bolstering disaster prevention.

An unbroken history of supporting the development of the real estatemarket in Tokyo and throughout Japan, from postwar reconstruction
through the period of rapid economic growth to the present day.
Strong brand recognition for the Brillia series of condominiums.
Track record in public-private partnerships, such as Kasumigaseki
Common Gate and a project on the site of the former Toshima ward
office in Tokyo.

* Colored squares in front of years correlate to the Strengths listed above

1896-1945

1946-1996

1997-20112012-

Business Expansion in
Response to Social Needs

Rapid Expansion asa Comprehensive Developer

Urban Development for
Cities of the Future

Tokyo Tatemono was founded by Zenjiro Yasuda, the founderof the Yasuda conglomerate, as a real estate company withspecialized financial functions for land and building properties, inorder to lay the groundwork for real estate transactions in Japan.
After the Sino-Japanese War, the company was first to establish
a business in China to manage and operate residences andbuildings, going on to establish a track record in this area.

As the Japanese economy developed, the company actively
expanded its office building business to meet growing demandfor office space. The company started the condominium businessto 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 become a truly comprehensive
real estate company.

To further expand the business, the company has taken on
the challenge of advanced initiatives such as large-scale
redevelopment projects that draw on its integrated strengths as
a comprehensive real estate company, and the development ofJapan’s first real estate 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 undertakena series of large-scale redevelopment projects, continuing tocomplete 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, andthe natural environment in its pursuit of urban development thattakes into consideration generations to come.

1998 With its serviced apartments for foreign residents in the
Takanawa district, the company was first in Japan to
package a real estate securitized product under theSpecial Purpose Company Act (now the Act on
Securitization of Assets).
2003 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.
2006 Completed Olinas, Tokyo’s first complex redevelopmentin which urban planning was carried out in tandem with
district planning and zoning changes.
2007 Completed Kasumigaseki Common Gate, a publicprivate, large-scale redevelopment project using a private
finance initiative (PFI) structure.
2007 Selected as partner company
for the Suwa 2-Chome
Housing reconstruction projectin Tama New Town, the largest
condominium redevelopment
project in Japan, rebuilding
from 640 units to 1,249 units.
Completed as Brillia Tama
New Town in 2013.
2011 Acquired a stake in Nihon
Parking, which engages in theparking business nationwide.

2012 Completed Nakano Central Park, a large-scale officebuilding project that not only incorporates highearthquake-resistant buildings but a range of disasterprevention features throughout the area, and that is
conducive to new working styles.
2013 Began sales of Brillia Tower Ikebukuro, Japan’s first high-rise
condominium complex integrating local government
offices with residential space. Completed in 2015.
2013 Completed Tokyo Square Garden, one of Japan’s mostenvironmentally friendly office buildings.
2014 Completed Otemachi Tower, which seeks toconserve biodiversity, and encompasses a 3,600 m2
Otemachi Forest.
2016 Drawing on its extensive redevelopment expertise,participated in numerous urban redevelopment projects,
such as the Yaesu 1-Chome East Area in front of Tokyo
Station and Hareza Ikebukuro, on the site of the former
Toshima ward office.
2017 Pursued health and productivity management,
certified as a Health & Productivity Management
Outstanding Organization.
2020 Received an award in the Bond category at the Ministryof Environment’s ESG Finance Awards Japan.

Zenjiro Yasuda

13

Worked with local communities in urban development, in the creationof venues bustling with energy, and in supporting community
formation.
Pursue various environmental initiatives, such as urban developmentthat incorporates climate change countermeasures and conserves
biodiversity.
Certified as a Health & Productivity Management Outstanding
Organization (since 2017).

Birth of Japan’s Oldest Comprehensive
Real Estate Company

1896 Yasuda founded the company at the height of the Meiji
era, a time when Japan was booming, because heperceived that specialized financial functions for land andbuildings 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 real estate transactions which became
the prototype for residential loans in Japan.
1903 Quickly branched out into overseas markets. Startingwith an office in Tianjin, the company soon expanded into
six cities in China, engaging in the management andoperation of residences and buildings.
1907 Listed on the Tokyo Stock Exchange

1896 1900“First” in Japan in countless ways. First to engage in real estatetransactions using a monthly installment plan, which became theprototype for residential loans in Japan. First in the industry to packagea real estate securitized product under the Special Purpose Company
Act (now the Act on Securitization of Assets). Introduced private
finance initiatives (PFI) into the field of urban development. First to build
a high-rise complex integrating local government offices withresidential space.
In 1903, became the first Japanese real estate company to enter the
Chinese market, soon expanding to six cities.
Aggressively entered new business domains such as the leisurebusiness, including dog-friendly hotels, and the parking business.

Striving to Satisfy All Stakeholders

1910

Tokyo Tatemono Building(former Tokyo Tatemono Headquarters Building)

1920

TOKYO TATEMONO GROUP

1930

1940

INTEGRATED REPORT 2021

1950

1960

1960 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.
1965 Set up a specialized real estate appraisal department
even before a legal framework was established in Japan,
setting its own standards and conducting appraisals,
which provided a source of profit even during the postwar
recession. Registered as a real estate appraisal company
in 1965.
1969 Entered the for-sale condominiums business in responseto the pressing housing shortage during Japan’s period of
rapid economic growth. Leading the condominium boom,
launched sales of condominiums in Fujisawa city in 1968
and of Hiroo Heights condominiums in 1969.
1979 With rising demand for office space amid Tokyo’s
economic development, began
development of new officebuildings, completing thelandmark Shinjuku Center
Building at the heart of theTokyo subcenter of Shinjuku.
1987 Launched To-Be,
a comprehen­sive system
supporting customers with realestate holdings, ranging fromproposals for effective site use
and basic planning, to businessand financial planning,
recruitment of tenants, andmanagement and operation
Shinjuku Center Building
after completion.
1970

1980

Kasumigaseki
Common Gate
Hareza Ikebukuro (built on the site of the former
Toshima ward office)
1990

2000

2010

2020

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

14

VALUE CREATION
Value Creation Process

Management CapitalBusiness activities

Material Issues
Material Issues for
the Tokyo Tatemono Group

Financial Capital
The Role of the Tokyo Tatemono Group in Society

A sound financial foundation supporting
business activities

1,624.6 billion yen
Debt-equity ratio
2.5X
Interest-bearing debt/EBITDA multiple 13.4X
Rating
ATotal assets

Strengthening Tokyo’s competitivenessas an international city

Creating the value of place andthe value of customer experience tocontribute to people’s flourishing

Intellectual Capital
Expertisein large-scale redevelopment projects
and residential reconstruction

Contributing to a safe andsecure society
Community building and revitalization

Value of customer experienceManagement
and operation drawing on theGroup’s integrated strengths
Well-known product and service brand
Relationships
with a broad range of customers
and tenants
A wealth of information sourcesLong-term assets generating stable income

Services

936.8 billion yen

As a nexus of real estate and customer information gained throughbrokerage and corporate real estate strategy support, parking lots,
and other business activities, promote the effective use of realestate inventories and help capture business opportunities.

348.5 billion yen

Human CapitalNumber of employees(Tokyo Tatemono only)

Sales,
leasing, andmanagement

Pursue the enhanced value of experience and the developmentof communities by being a strong presence in the places where
people live, work, and gather, facilitating trust and a senseof security.

Real Estate Broker
Real Estate AppraiserFirst-Class Architect

697
22
95

Development

With an enterprising spirit, create new value of place in communities
by being able to read the times and engage in urban developmentthat helps solve social issues.

Capturebusiness
opportunities

Capitalizing on trust, achievements, expertise, and information
sources cultivated over 120 years, continuously capture new
business and development opportunities. Propose solutions that
address and help solve the needs of customers and society.

41.4%

Sustainability finance initiatives

Total
issue amount of green bonds
90 billion yen
and sustainability bonds
(including 50 billion yen in hybrid
corporate bonds)

Capital Strengthening pp. 25-52

15

TOKYO TATEMONO GROUP

Shared values with society

INTEGRATED REPORT 2021

Corporate Philosophy “Trust beyond the era.”Creating
value ofplace and valueof experience

Promoting a decarbonized society oexistence withC
the earth andthe environment

Promoting a recycling-oriented society

Improve employee growth andjob satisfaction
Diversity & inclusion

Advancement of governance
Strengthen risk management
framework

Materiality pp. 19-20

Value creation platform

Natural Capital
Proportion of leasable office space

120 billion yen

Contribution to
the SDGs

Value co-creation and innovation

Revitalizing and utilizing
real estate stock

Value creation platform* Tokyo Tatemono alone, including employees
seconded from Tokyo Tatemono to outside positions

Green Building certification

Consolidated
business profit

5,344
677

Number of employees with certification*

Target for 2030

Addressing the diverse needs ofcustomers and society

Social implementation of technology

Short-term turnover assets leading todevelopment profits

Number of group employees

Becoming a Next-Generation Developer

Social value creation

Business CapitalSocial value creation

Value of place

Social and Relationship CapitalReal estate for sale

Long-Term Vision (For 2030)

Wellbeing

Expertise in identifying profit opportunities


Propertyand Equipment/
intangible assets

The Group We Want to BecomeValue-creating talent ealizing sustainabilityRmanagement

Long-Term Vision and Values Tokyo Tatemono Shares withSociety pp. 17-18
TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

16

VALUE CREATION
Long-Term Vision
Long-Term Vision for 2030

Values Tokyo Tatemono Shares with Society
Creating value of place and value of experience
Material Issues in Realizing the Vision

Becoming a Next-Generation Developer
We live in a time of profound change. We are experiencing shifting demographics,

 trengthening Tokyo’s
Scompetitiveness as
an international city
Contributing to a safe andsecure society
Community building
and revitalization
Wellbeing

 ddressing the diverse needsAof customers and societyValue co-creation and innovation
Social implementation oftechnology
Revitalizing and utilizing
real estate stock

growing diversity among personal values,
ever-accelerating technological development, and more. Amidst these uncertainties,
a broad range of challenges to achieving social sustainability have emerged.
The Tokyo Tatemono Group understands that the role of developers must also change
in fundamental 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.

Coexistence with the earth and the environment
Material Issues in Realizing the Vision
 romoting a decarbonizedP
society romoting a recycling-orientedP
society

By doing so, we aim to be a good company for all our stakeholders.

Value-creating talent

Fundamental Policy for Our Long-Term Vision
Steady Profit GrowthTarget for 2030:
Consolidated business profit* ofbillion yen

Material Issues in Realizing the Vision

Solve a Variety of Social Issues

Improve employee growth andjob satisfaction

Diversity & inclusion

Contribute to the SDGs

120

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

Realizing sustainability management
Basic Profit Growth Policy

Material Issues in Realizing the Vision
Advancement of governance teadily expand stable leasing profit,S
making it the core of our profit composition

 trengthen risk managementS
framework arget a well-balanced profit structure,T
mindful of capital efficiency
17

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

18

VALUE CREATION
Materiality
In response to recent changes in social conditions and values, in 2021 we revised our materiality demanding
the Group’s attention.

Materiality Identification Process
2018

Materiality of the Tokyo Tatemono Group2019
Material Issues

Shared values with society

Contribution to SDGs

Strengthening Tokyo’s competitivenessas an international city

Community building and revitalization

 reating value of placeCand value of experience

Value co-creation and innovation
Social implementation of technology

Evaluation
perspectives

Assigning point values
to indicators

Scale ofsocial need

1. Relationship with the real estate industry

Affinity withour business

2. Relationship with our businesses
 elationship with our medium-term
3. R
business plan
4. Director questionnaire results

Promoting a recycling-oriented society

Determining
material issues

Scale of social need

Revitalizing and utilizing real estate stock

Promoting a decarbonized society

Material
issuesAffinity with our businessSocial value creation

Addressing the diverse needs ofcustomers and society e evaluated the importance of 35 social issues. In making this evaluation, we incorporated two perspectives: theWscale of the social need (whether the issue requires a solution) and the affinity of the issue with our business (whether
the issue is closely concerned with our current business or something we may wish to deal with as a business in the
future). To further clarify the relative importance of issues, we assigned points based on four aspects.
 ased on the above evaluation, we mapped the issues to narrow them down to those of relatively high importance. We
Borganized these issues into three categories based on their content and identified them as the Group’s material issues.

Contributing to a safe and secure society

Wellbeing o obtain a broad grasp of the social issues relevant to our business, the Group listed 35 social issues to study. Our
Tlist was influenced by international issues (the SDGs), issues unique to Japan and issues unique to our industry(Basic Policies for Urban Renaissance, Law on National Strategic Special Zones).

 oexistence with the earthCand the environment

2020

In response to recent changes in social conditions and values, we initiated the process of reviewing our materiality.
We organized the material issues based on their relationship to key themes in the advancement of ESG management.
 e engaged in discussions with internal and external directors on themes related to materiality, consolidating theirW
expectations of the Group as well as their views on areas for improvement.

Value creation platform

Improve employee growth andjob satisfaction

Value-creating talent

Diversity & inclusion

Advancement of governance
Strengthen risk management framework

 ealizing sustainabilityRmanagement2021

 ased on our corporate philosophy and long-term vision, we considered the social issues identified in the SDGs andBinternational guidelines on sustainability. We incorporated the knowledge that we have gained through advice fromexternal experts, participation in various initiatives, and communication with stakeholders.
 e also view the advancement of ESG management as a key component of materiality. We have categorized this inWterms of the perspective of value creation for society and the perspective of realizing that value creation for society.
 he Sustainability Committee judged the materiality to be appropriate, finding that it encompassed the social issues
T
expected of the Group.
The Board of Directors also deemed them to be appropriate.

Our Approach to the SDGs
The SDGs are international goals targeting 2030 that were adopted at
the United Nations Summit. The SDGs comprise 17 goals in a wide
range of fields based on diverse social issues that affect developing anddeveloped countries. Companies are expected to contribute to achieving
the goals. Tokyo Tatemono Group takes this demand from society
seriously. As such, we have incorporated the SDGs into our long-term
vision and medium-term business plan and are actively implementing
sustainability measures throughout the Group. As we operate ourbusiness as a developer, we will continue to be guided by the aim ofrealizing a sustainable society.

19TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Going forward, we will consider revising our materiality as necessary depending on changes insocial conditions or updates to management policies.

Information Resources Related to Social Issues
SDGs: International goals for the years 2016–2030 as listed in the 2030 Agenda for Sustainable Development (adopted at the United Nations Summit
in September 2015)
Action Plan of the Growth Strategy: A summary of the government’s priority policies, including its actions toward a new social vision in the context of COVID-19.
Green Growth Strategy: A summary of government policies to achieve carbon neutrality in 2050
Basic Policies for Urban Renaissance: A summary of the Japanese government’s basic policy for revitalizing cities
Law on National Strategic Special Zones: A summary of the Japanese government’s zoning policy for national strategic special zones

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

20

VALUE CREATION
FeatureThe Value Urban Development Brings:
Hareza Ikebukuro

Urban development aimed at solving local
issues in the Ikebukuro area
Developing “a theater city, where anyone can play a leading role”
Toshima Ward, site of the Hareza Ikebukuro development, is home to
Ikebukuro, one of Tokyo’s leading commercial districts which is also known
as one of the city’s three major sub-centers, along with Shinjuku andShibuya. Ikebukuro Station is one of Japan’s largest terminal stations,servicing nine railway lines of four railway operators (JR East, Seibu Railway,
Tobu Railway, and Tokyo Metro). It has an average daily footfall of 2.64
million passengers, the third highest of any station in Japan.
While Ikebukuro attracts a large daytime population as a commercial
district, Toshima Ward also came into the spotlight in 2014 as the only oneout of Tokyo’s 23 wards at risk of disappearing*, due to a declining birthrate
and population outflow.
Tokyo Tatemono had prior experience in the area, having participatedin the planning of Brillia Tower Ikebukuro, a construction project in MinamiIkebukuro 2-chome Area A which centered on the development of new
government office facilities for Toshima Ward. This experience gave us asolid grasp both of the issues facing the ward and of the immense potentialof the Ikebukuro area for resolving these issues, giving rise in January 2015
to the concept of “a theater city where everyone can shine.”Tokyo Tatemono’s approach to urban development
Since its founding, the Tokyo Tatemono Group has established a lengthy track record in urban development,with large-scale projects including office buildings, condominiums, and retail facilities, as well as services thatadd value to property assets. The long-term vision we formulated in February 2020 reemphasized this approach
to urban development, declaring our commitment to promote urban development that contributes to solvingsocial issues, striving thereby to improve the appeal of the areas we develop and increase both the relativecompetitiveness of these areas and the value of our entire portfolio of owned office buildings.

Hareza Ikebukuro
In July 2020, we held the grand opening for Hareza
Ikebukuro, a new large-scale complex developed andoperated by Tokyo Tatemono together with joint venture
partner, the Sankei Building Co., Ltd. The property is
located around 300 meters from the east entrance of
Ikebukuro Station in the heart of Tokyo’s Toshima Ward.
The site consists of the Hareza Tower office building,a new landmark in Ikebukuro with 33 floors above ground;Tokyo Tatemono Brillia HALL, a multipurpose hall building
where up to around 1,300 people can enjoy Takarazuka
Revue performances and musicals; the Toshima Civic
Center; and Naka-Ikebukuro Park, which is surrounded by
the three buildings. The name “Hareza Ikebukuro” derives
from a combination of two Japanese words: “hare,” whichmeans a special place to dress up and go out, and “za,”which means a place where many people gather.

21

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Hareza Tower (office building)
Address

18-1, Higashi-Ikebukuro 1-chome, Toshima-ku, Tokyo

Number offloors/height

33 floors above ground, 2 floors below ground/approx. 158 m

Total floor
space

Approx. 68,600m2

CompletedMay 2020
Tokyo Tatemono Brillia HALL (hall building)

Address

19-1, Higashi-Ikebukuro 1-chome, Toshima-ku, Tokyo

Number offloors/height

8 floors above ground, 1 floor below ground/approx. 41 m

Total floor
space

Approx. 10,700m2

Completed

April 2019As a property developer, we wanted to fully bring out theunique, long-standing appeal of Ikebukuro as a “town” in
its own right, captured in the phrase “a theater city where
everyone can shine.” Guided by this concept, our proposal
envisioned an unprecedented large-scale complex, uniquely
suited to Ikebukuro, consisting of theaters offering cultural
creativity and a large-scale, high-specification office space
to serve as a business hub. Recognizing the potential forbringing renewed vitality to the area, Toshima Ward
selected Tokyo Tatemono as project operator. The notion
of “a theater city where everyone can play a leading role”
lives on—it became the core concept of the International
City of Arts and Culture Vision set forth by Toshima Ward
to bring renewal to the area.
* As designated in May 2014 by the Japan Policy Council, a policy advocacy group of
private sector experts

Turning to a financing scheme to solve the issuesof Toshima Ward
Toshima Ward faced the challenge of needing to build newward office facilities but facing a fragile financial position.
It came up with an innovative financing scheme toresolve this problem. The scheme established a fixed-term
land lease on the site of the old government building andthe adjacent site of the former Toshima Public Hall,
supplementing this using a lump-sum prepaid rent method.
A public solicitation of developers resulted in the project
being awarded to Tokyo Tatemono and joint venture
partner Sankei Building. The proceeds of the 76-yearand-six-month fixed-term land lease were paid as a
lump-sum in advance, enabling Toshima Ward to fund theconstruction cost of the new government building without
incurring a substantial financial burden.

Tokyo Tatemono’s initiatives and role in Hareza Ikebukuro
Implementing area management toenhance the area’s appeal

Capitalizing on local cultural resources
to create a vibrant atmosphereWith the objective of bringing renewed
vitality to the Hareza Ikebukuro
location and its surrounding area, weestablished a general incorporated
association to plan and attract events
that contribute vibrancy to thearea, and to manage the area’sparks and other public assets.

Hareza Ikebukuro’s eight theaters createa space in which an array of cultural
resources, including traditional
performing arts rooted in Ikebukuro andthe fruit of other subcultures, can bepassed on simultaneously.

Creating public spaces congenial toyoung parents
A new public space was born that iseasy for families to use and stimulatesinteractions among residents, helping tocurb population decline in the ward.

Tokyo
Tatemono

Creating a business hub
We developed a large-scale, highspecification office space that has
become a new landmark for Ikebukuro,
not previously known as an office district.

Rebirth of the aging ward
office building
Development of the new Toshima
Ward government building was
possible through a financing scheme
which did not generate an additional
financial burden.

Toshima
WardTOKYO TATEMONO GROUPINTEGRATED REPORT 2021

22

VALUE CREATION
Feature: The value that urban development brings
Hareza Ikebukuro
Efforts to enhance the local appeal of Ikebukuro
Eight theaters have been built, boosting the ward’spresence as an international city of arts and culture.
Hareza Ikebukuro has eight theaters, which plan to host anarray of performances and events, ranging from traditional
performing arts such as Kabuki, which dates from the17th century, Takarazuka Revue, and other high culture, tosubcultures such as manga, anime and cosplay, as wellas cutting-edge art and culture that fuses the virtual andthe real. The site is positioned as an art and culture centerfor communicating diverse cultural resources to the world.
Of the eight theaters, Tokyo Tatemono acquired
naming rights for the multipurpose hall, the core facility
which has a seating capacity of 1,300: Tokyo Tatemono
Brillia HALL (Toshima Arts and Culture Theater) will help
realize Toshima Ward’s vision of becoming an international
city of arts and culture.
Relevantmateriality

Initiatives to address social issues through urban development

Creating a new business hub in the international
city of Tokyo
Hareza Tower in Hareza Ikebukuro boasts about 39,000 m2
of leasable floor space, one the largest in the Ikebukuro
area. Each floor offers roughly 1,700 m2 of highly efficient,column-free space. The office spaces are both easy to
use and easy to work in, featuring a grid air conditioning
system that enables precise control, movement-sensitive
lighting that becomes brighter upon entry to exclusive
areas, and other amenities.
In addition to this high-specification building functionality,
the convenient transportation in Ikebukuro, the appeal of thearea as represented by local artistic and cultural offerings,
and a location that allows people to live close to where
they work combine to yield a highly competitive office space.
As a result, the contract rate for Hareza Tower reached100% at the time of completion, even though the COVID-19
pandemic was in full swing. In this way, we were able tocreate a new business hub in Tokyo, contributing to thearea’s diversity and appeal.
Relevantmateriality

Strengthening Tokyo’s
competitiveness as aninternational city
Tokyo Tatemono Brillia HALL

Strengthening Tokyo’s
competitiveness as aninternational city

Addressing thediverse needs ofcustomers and society(Above) Ground floor entrance to theoffice building(Below) Office space

23

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Area map of Hareza Ikebukuro

Hareza Ikebukuro

An office building offering high environmental
performance
Hareza Tower received the highest rating of five stars in
the overall building evaluation*1 of the Building-Housing
Energy efficiency Labeling System (BELS). In the partial
evaluation for office use, it was also recognized forhaving achieved a roughly 50% reduction*2 in annual
energy consumption, becoming the first superhigh-rise
mixed-use building over 150 meters tall to obtain ZEB
Ready*3 certification.
In addition to BELS certification, in fiscal 2019 thebuilding also received the highest rank of five stars in the
DBJ Green Building*4 certification by the Development
Bank of Japan Inc. and the highest rank of S in CASBEE
Building (New Construction)*5 of theRelevant
Comprehensive Assessment System
materiality
for Built Environment Efficiency(CASBEE), a system to assessbuildings’ environmental performance.
Promoting a*1 Calculated using the Energy Consumption
decarbonized
Performance Calculation Program (Nonresidential
Version) Ver. 2.7.1 (commonly known as WEBPRO)
society*2 Compared to a standard building of the same level*3 According to the website of the Japan Housing
Performance Evaluation and Display Association,
BELS case data list (as of the end of June 2019)
Promoting a*4 The DBJ Green Building Certification is a system
recycling-oriented
established by the Development Bank of Japan tosocietyevaluate environmental and social initiatives inreal estate*5 CASBEE Building (new construction): A system for evaluating the energy efficiency
and environmental impact of buildings in general, excluding detached houses, basedon their design at the time of new construction. Managed by the Institute for Building
Environment and Energy Conservation

JR L

ine

Hareza Tower
Naka-IkebukuroPark

Bic Camera

M

eij

i-

r
do

ve
iA

(office building).

Tokyo Tatemono Brillia HALL
(hall building)

WACCA

Toshima Civic Center
AnimateYamada Denki
Ikebukuro
StationEast exit

Sun

Seibu
Department
Store

shin

e 60

Stre

et

Metropolitan Expressway Route 5

Activities of Hareza Ikebukuro Area Management
In June 2018, we established a general incorporated
association, Hareza Ikebukuro Area Management, to carryout activities that contribute to the vibrancy and appeal ofHareza Ikebukuro and its surrounding area.
The association draws on the event spaces in Hareza
Ikebukuro to plan and manage an array of different events,
including those that showcase culture rooted in Ikebukuro.
It has also been designated as trustee of Naka-Ikebukuro
Park, owned by Toshima Ward. By
working to make more effective use
Relevantof the area’s roads and parks, which materiality
are public assets, the association isseeking to heighten the overall
appeal of Hareza Ikebukuro from
Community
multiple angles and to build thebuilding andvalue of the Ikebukuro area.
revitalization

Our pursuit of sustainable urban development, including the promotion of decarbonization, enhances the appeal of an urban
area while also bringing stability to our business activities. In the Hareza Ikebukuro project, we sought an urban development
approach that was fitting for the office hub of an international city like Tokyo, developing buildings equipped with highenvironmental performance and putting disaster-preparation measures in place.

Creating a community that is prepared for disasters
Creating safe, secure communities that are prepared fordisasters like earthquakes and typhoons is society’s chief
demand for urban development in Japan.
Tokyo Tatemono concluded an agreement with
Toshima Ward on measures to deal with people who havedifficulty returning home in the event of a disaster. This
includes not only accepting stranded people at Hareza
Tower and Tokyo Tatemono Brillia HALL, but also liaisingwith Naka-Ikebukuro Park, which is designated as a temporary evacuation area, and the Toshima Civic Center
operated by Toshima Ward. In this way we are playing apart in creating a safe and secure community.
Relevantmateriality

Contributing to asafe and securesocietyNaka-Ikebukuro Park (after renovation) has
been designated as a temporary evacuation
area in the event of a disaster

The value that ongoing urban
development brings
To enhance the appeal of an urban area like Hareza
Ikebukuro and its ability to communicate culture, Tokyo
Tatemono puts priority on keeping its finger on the pulse of
new developments in the area and deepening collaboration
with various partners, while at the same time respecting
local history and culture. Through ongoing efforts topromote such urban development, we are striving both tobuild the value of the area and improve corporate value.

SunshineCity

ZEB Ready certification label
Hareza Tower

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

24

CAPITAL STRENGTHENING
Financial Capital
Redevelopment and other urban development projects involve sizable investment andrisk that extends over many years, but such development is the purpose for which theGroup exists and something that creates tremendous social and economic value. Tokyo
Tatemono will move ahead steadily with development initiatives through a financial
strategy that balances building shareholder value with maintaining financial soundness.

Message from the CFO

We will build a sound,stable financial base toachieve sustainable growth
while continuing to meet thedemands and expectationsof various stakeholders.

FY2020 financial results and progressin the first year of the medium-termbusiness plan (FY2020–2024)
The global outbreak of the COVID-19 pandemic began
shortly after the start of 2020. In its wake, we continue toface highly unusual circumstances in society and in theeconomic environment, due to constraints on social
behavior among other factors. For the Group, althoughsome businesses were hard hit by the pandemic, theirshare of the total business is small and the impact on
results was limited.
In fiscal 2020, sales were up on the back of higher
property sales to investors. On the other hand, businessprofit was down 3.5% year on year to 49.8 billion yen
due to lower sales of condominiums and a decrease inprofitability in the hotel, retail facility, and parking businesses
amid the pandemic. Profit attributable to owners of parent
was 31.7 billion yen (up 6.7% year on year) due to thetransfer of shares of a subsidiary that operated assisted
living residences, a part of our actions to optimize thebusiness portfolio. Operating revenue reached a record
high for the fourth year in a row and profit attributable toowners of parent was up for the fifth year in a row. In fiscal
2021, we are making solid progress toward our goal of
53 billion yen in business profit, which is higher thanpre-pandemic levels. Thus, our goal of achieving 75 billion
yen in consolidated business profit for fiscal 2024, as set
out in the medium-term business plan, remains unchanged.
In terms of financial targets, we achieved ROE of 8.3%,
a debt-to-equity ratio of 2.5 times, and an interest-bearing
debt/EBITDA multiple of 13.4 times. Regarding shareholder
returns, we increased the dividend by 5 yen from theprevious fiscal year to 46 yen—the seventh consecutive yearof dividend increases—yielding a payout ratio of 30.2%.

Financial Strategy in the Long-Term
Vision and Medium-TermBusiness Plan
Akira Izumi
Director
Senior Managing
Executive Officer &Chief Financial Officer

25

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Since its founding, Tokyo Tatemono has been a company
whose mission is to provide value to customers throughthe real estate business and contribute to solutions tosocial issues. Based on our long-term vision, our policy is
to continue to pursue urban development that contributes
to solving social issues, provide quality housing, anddevelop various assets to meet the needs of society. As aproperty developer, we will continue to meet the demands
and expectations of various stakeholders while achieving
sustainable growth by optimizing our business portfolio
and building a sound, stable financial base.

The Group’s long-term vision and medium-term businessplan divide our businesses into three categories according
to earnings characteristics—leasing, property sales, andservices, and aim to build a business portfolio that takes
into consideration the balance between stability, profitability, and efficiency. We have established two basic policies
for profit growth. The first is to steadily expand stableleasing profit, making this source of income the core of
our profit composition. By completing and starting up
operations at seven large-scale redevelopment projects
by around 2030, we intend to significantly expand the
profit base in the leasing business, to account for morethan half of the 120 billion yen in total business profit weare aiming for at that time. The second basic policy is totarget a well-balanced profit structure, mindful of capitalefficiency. In tandem with the expansion of leasing profit,
we will work to strengthen the property sales business,
which carries high margins and contributes to theimprovement of total asset turnover, and the services
business, which is directly linked to greater capital efficiency. We expect profit growth over the period of themedium-term business plan to cause total equity toincrease to around 500 billion yen at the end of 2024.
Projected Shift in per-Area Profit over Time
Leasing

Property Sales

120.0 billion yen

Services20%75.0 billion yen

30%

20%

51.6 billion yen
10%

40%

30%
50%
60%

40%

FY20192024 (Expected)

Around 2030 (Expected)* Chart percentages are approximations

Our Thinking about the Key Financial Indicators
The medium-term business plan assumes that total assets
will increase by about 350 billion yen from the end of fiscal
2019 due to growth investment, reaching 1,900 billion
yen by the end of fiscal 2024. In addition, as a financial
indicator, we set a debt-to-equity ratio of about 2.4 times,
slightly lower than the fiscal 2019 level of 2.5 times. At theTOKYO TATEMONO GROUPINTEGRATED REPORT 2021

26

CAPITAL STRENGTHENING
Financial Capitalsame time, to promote management that is conscious of
capital efficiency, we have set an ROE of 8%-10%, a level
we believe is a strong indicator of capital efficiency.
In the real estate business, assets held as non-current
assets also carry market liquidity, and are readily convertible
into cash, while on the liabilities side, it is easy to utilizefinancial leverage. In setting the financial indicators of themedium-term business plan, our goal was to improve
capital efficiency while maintaining management stability
by means of balance sheet control that takes advantageof these characteristics. We arrived at the indicators as
the optimal targets, derived from the outcomes ofrepeated simulations.
Having a high proportion of long-term assets that are asource of stable leasing profit is a point in our favor interms of how we are evaluated by external rating agencies,
and also helps us keep procurement costs down.
Moreover, our efforts to expand latent profit by realizing
large-scale complex projects that offer high added value
and competitiveness, as well as by building value
through area management activities, will lead to a morerobust financial buffer. Building on the stable foundationof the leasing business, we will pursue growth in theproperty sales and services businesses, reassessing
those business areas that are unprofitable or have low
growth potential and selling off non-current assets basedon a review of the asset portfolio, striving in this way to
improve capital efficiency.
Recognizing the soundness of our strategy, businessperformance, and future outlook, an external rating agency
upgraded Tokyo Tatemono’s long-term issuer rating to A
from A- this past March.
Changes in the Balance Sheet
Other
200.0 billion
yen
Other
258.3 billion
yen

Assets1,624.6
billion yen

Interestbearing debt
976.8 billionyen
Debt-equity
Owners’equity389.3 billionyen

End of FY2020

Assets1,900.0
billion yen

ratio
2.5x

Interestbearing debt
1,200.0
billion yen

Owners’equity500.0 billion
yen

Investment Plan over the Period of the Medium-TermBusiness Plan (Cumulative)
Debt-equity
ratio
Approx.
2.4x

End of FY2024(Expected)

Capital Allocation
The medium-term business plan calls for the Group to
invest a total of 1.4 trillion yen over five years. Since wealso expect to recover 900 billion yen over the period(book value), net investments will come to 500 billion yen.

27

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

We are looking toward future growth: Although the scaleof the investment plan is larger than past plans, we will
harness our expertise in tightly focusing our investments
to acquire a growing stock of quality development projects
and create a virtuous cycle of investment and recovery.
The main point of the medium-term business plan’sinvestment plan is to steadily invest 230 billion yen in largescale redevelopment projects. In addition to developmentof the Yaesu-Nihonbashi-Kyobashi area around Tokyo
Station, multiple large-scale redevelopment projects
currently underway in Minato and Shibuya wards will
significantly expand the asset portfolio.
However, these large-scale projects will not start contributing leasing profit to our operating revenue base inearnest until 2025. Therefore, to achieve the goals of themedium-term business plan, we will pursue profit growth
primarily through strategic investment and recovery in thecondominium business and in property sales to investors.
The plan calls for the Group to invest just shy of 1 trillion
yen, and we are making steady progress across the board
in acquiring land and making other investments. We havelaid the groundwork for profit growth: Condominium sales
are robust, supporting a high gross profit margin, and wehave already secured the land bank for about 5,700 units,
which are due to start recording profits within the four-year
period to 2024. In terms of property sales to investors,
we have expanded the pipeline of logistics facilities andhave started preliminary discussions about the formationof a new J-REIT. When these efforts come to fruition, they
will not only boost the probability of recovering capital andgenerating profit on sales of properties but also feed into
asset management fees and further improvement incapital efficiency.
In terms of shareholder return, the policy of themedium-term business plan is for a consolidated payout
ratio of at least 30%. We will continue to strive for continuous
increases in dividends through sustainable profit growth.

(Billion yen)

Gross investment

1,400

Investment in large-scale redevelopment

230

Investment in condominium projects

430

Investment in properties for sale to investors

550

Investment in overseas businesses

70

Other

120

Recovered900

Net investment

500

Per-Share Dividends
Treasury stock acquisition: 10.0 billion yen(cancelled on January 31, 2020)(Yen)

46.0 yen50

48.0 yen

41.0 yen
35.0 yen
26.0 yen

Profit Growth Drives
Further Increase

30.0 yen

25

0

FY2016

Consolidated
payout ratio

FY2018FY2019FY2020

FY2021(Forecast)

FY2024(Forecast)

28.8%

27.8%

29.0%

30.2%

30.4%

30% or more

Profit attributable to 19.7 billionyenowners of parent

22.5 billionyen

27.2 billionyen

29.7 billionyen

31.7 billion
yen

33.0 billion
yen

45.0 billion
yen

91.00 yen104.17 yen

125.79 yen

141.59 yen

152.12 yen

157.88 yen

215 yen

EPS

28.6%

FY2017

We will consider whether or not to buy back shares in lightof the future business environment and financial situationof the Group.
The medium-term business plan set as a goal the
reduction of cross-shareholdings. We will periodicallyreview the significance of our holdings and move forwardwith reductions to improve capital efficiency.

More Sophisticated ESG management
In its early days, Tokyo Tatemono introduced what would
become the prototype for residential loans in Japan, so
in a sense bringing together real estate and finance tocontribute to urban development is part of the Group’s
DNA. To address the growing trend toward ESG investment
in recent years, we have undertaken a series of pioneering
efforts in ESG financing in the real estate sector. We were
the first real estate company in the world to issue a green
hybrid bond, in 2019. The following year, we issued thefirst sustainability bond in the Japanese real estate sector,
followed in February 2021 by the issue of a sustainability
hybrid bond. I believe we were able to carry out all ofthese issues under appropriate conditions, thereby helping
to diversify our financing sources and contributing to
growth in the ESG finance market. Our efforts wererecognized in 2020 with a Silver Award at the ESG FinanceAward Japan of the Ministry of the Environment, followed
by a Gold Award in 2021. I take these as indications that
the Group’s efforts to pursue urban development that
contributes to solving social issues are becoming more
widely known and appreciated. We would like to continue
to make active use of sustainable funding.

The Sustainability Committee met several times during
the year to deliberate on measures to realize a carbon-freesociety, establish medium- and long-term targets for
reducing greenhouse gas emissions, and formulate an
action plan for achieving these targets. We are also
preparing to participate in global initiatives, having appliedfor RE100 (Renewable Energy 100%) membership andrequested Science Based Target initiative (SBTi) certification(both pending), and will step up efforts to reach net zeroCO2 emissions, such as incorporating renewable energy
frameworks into various future business activities.
For Tokyo Tatemono, urban development does not
end with development. We believe our major role andresponsibility as a property developer is to ensure thesustainable growth of the urban areas we develop.
Redevelopment and other urban development projects
involve sizable investment and risk that extends over many
years, but such development is the purpose for which
the Group exists and something that creates tremendous
social and economic value. Guided by this thinking, Tokyo
Tatemono is working not only to develop highly unique,appealing urban areas in various regions, but also tocontinuously increase the value of such areas by offering
a full range of services and pursuing area management
activities. By increasing the value of the urban areas where
we have a presence, we increase the value of Tokyo
Tatemono’s own assets and build corporate value. I intend
to redouble my efforts to explain this approach to theGroup’s sustainability, seeking the understanding of evenmore investors, further enhancing our reputation in thecapital markets.

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

28

CAPITAL STRENGTHENING
Intellectual CapitalIndustry-Shaping Initiatives that
Anticipate the Changing Needsof Society

Establishing a line-up of services that truly offer value to customers, including real estatedevelopment and management and operation services, requires a wide range of knowledge
and experience, which cannot be attained overnight. The lengthy track record of results
and experience Tokyo Tatemono has accumulated through consistent effort and ingenuity
is a source of strength for the company now and going forward, and serves as thefoundation for further growth of the Group.

Redevelopment and Rebuilding
Expertise Cultivated over 120 Years
Tokyo Tatemono in 2007 completed Kasumigaseki Common
Gate, a project involving the integrated redevelopment ofan entire city block, which used a private finance initiative(PFI) structure. In 2013, we completed Tokyo Square Garden,
one of Japan’s most environmentally friendly complex
buildings, boasting among the greatest standard floor
space of any building in the area around Tokyo Station,
which has helped revitalize the functions of an entire block.
We have also undertaken numerous projects to help
strengthen Tokyo’s competitiveness as an international city.
A prime example is Otemachi Tower, completed in 2014.
About a third of the site (roughly 3,600m2) is occupied by
Otemachi Forest, and above- and below-ground pedestrian
access was improved. Having attracted an internationallyrenowned hotel chain to the site, Otemachi Tower ispositioned as a venue for international exchange.
Brillia Tama New Town, completed in 2013, was Japan’slargest condominium redevelopment project. We rebuilt 640
units in the Suwa 2-Chome Housing reconstruction project
there. In addition, as part of the Meguro Station area
redevelopment project, Brillia Towers Meguro involved thedevelopment of a large swathe of land (about 2.3 hectares)
in front of Meguro Station. It was completed in 2017.
These are just a few examples of the many redevelopment
projects Tokyo Tatemono has engaged in with landowners
and the rebuilding projects we have undertaken withthe cooperation and support of community residents andgovernment partners. We will continue to pursue
community development that helps enrich the lives ofcommunity residents and generate further urban vitality.

Value Chains and Management andOperation Expertise that Draw on
the Group’s Integrated Strengths
In the Commercial Properties Business, Tokyo Tatemono
is mainly in charge of planning, development, and property
management, Tokyo Fudosan Kanri Co., Ltd. is in chargeof building management and construction, and Tokyo
Building Service Co., Ltd. is in charge of cleaning operations.
Through organic collaboration between the three companies,
we will continue to enhance operations for existing buildings
and seek ways of providing better services. With new
projects, our marketing efforts draw on the knowledge
we have acquired through our business operations, andposition Tokyo Tatemono to continue to be customers’
first choice for real estate planning and development.
In the Residential Business, Tokyo Tatemono is mainly
in charge of planning, development, and sales, Tokyo
Tatemono Amenity Support Co., Ltd. is in charge ofcondominium management, remodeling, and renovation,
and Tokyo Tatemono Real Estate Sales Co., Ltd. is incharge of sales, reselling, and leasing management. The
three companies are working together to cultivate Brillia
as a comprehensive residential brand and to help bringabout fulfilling lifestyles for customers.
In a survey* assessing condominium residents’ satisfaction
with property management companies, Tokyo Tatemono
Amenity Support ranked second overall and ranked first forthree consecutive years in the group of companies with lessthan 100,000 units under management. Its condominium
management contract volume had risen to 77,589 as ofApril 2021. Alongside the growth of the Brillia brand,Tokyo Tatemono Amenity Support has branched out fromcondominium management into a range of other businessareas, including remodeling and renovation.
* Source: “Property Management Company Satisfaction Ranking,” www.sumai-surfin.
com website of Style Act Co., Ltd.

77,589 units* As of April 2021.

Otemachi Tower

29

TOKYO TATEMONO GROUP

Brillia Tama New Town

INTEGRATED REPORT 2021

Units Under ManagementNo.

1among companies withless than 100,000 units
under management.

TOPICS

Dynamic Building Matrix: Japan’sFirst Cloud-Based Smart Building
Management System
Starting in December 2020, with technical support
from Techsor Inc. and Silicon Technology Co., Ltd.,Tokyo Tatemono initiated trials of the Dynamic
Building Matrix (DBM) system at its Head Office
Building. DBM is a new smart building management
system that uses cloud-computing and ZETA*
communication technology. After verifying theeffectiveness of DBM in offering more sophisticated,
more efficient building management throughthese trials, we will further improve the systemand expand its functionality, aiming to realize
smart buildings that generate new value andsupport services that offer greater safety, security,and comfort to customers.
* Based on LPWA network standards developed by ZiFiSense, atechnology that enables multi-channel ultra-narrow band (UNB)
communication, distributed wide-area access using a mesh network,and low-power bi-directional communication, among other features

Strong Brand Recognition and
Design Capabilities
Since launching the Brillia
brand of condominiums in
2003, the Tokyo TatemonoGroup has supplied a total of27,237 residential units*1. As a comprehensive residential
brand, Brillia offers a broad line-up of services apart from
simply selling buildings. Our design capabilities have been
widely recognized: Brillia has won 22 Good DesignAwards in the condominium business field. Brillia alsoranked third in terms of brand awareness*2 in the Tokyo
metropolitan area. As the flagship brand of our Group,
Brillia continues to put primary emphasis on customer
satisfaction and contribute to increasing corporate value.
Newly-built
Condominiums for sale in
the Greater Tokyo Area Customer
Satisfaction Ranking, Smaller
Condominiums segment

For-Sale Condominium
Units Under Management

Property Management
Company Satisfaction
Ranking

Tokyo Tatemono has built up
its business over the years by
being firmly grounded in aphilosophy of always putting
the customer first and in anenterprising spirit. From its
founding, the company
began engaging in real estatetransactions using a monthly
installment plan, which
Kasumigaseki Common Gatebecame the prototype forresidential loans in Japan. We were the first real estatecompany to commercialize a financing mechanism directly
to customers wanting to build a home or buy property—in
the past they had to rely on individual financiers.
In the 1990s, Tokyo Tatemono was first in the industry
to package a real estate securitized product, a serviced
apartment complex, under the Special Purpose Company
Act. In the 2000s, we developed and completed
Kasumigaseki Common Gate, the first urban redevelopment
project in Japan to use a private finance initiative (PFI)
structure. We again moved out ahead of the industry in2015 with Brillia Tower Ikebukuro, Japan’s first high-rise
condominium complex integrating local government
offices with residential space. Tokyo Tatemono will continue
to draw on all of its extensive resources to take on thechallenge of new business opportunities.

*3 Ranked no.1 for five consecutive years (2017-2021) in the ORICON Customer
Satisfaction Survey in the Newly-built condominiums for sale in the Greater Tokyo
Area, Smaller Condominiums segment (respondents living in condominiums withfewer than 100 units).

Actions to Strengthen Intellectual Capital

We have seen tremendous strides in technologicalinnovation and the diversification of customer needs inrecent years. Recognizing that these represent business
opportunities for Tokyo Tatemono, we will work to further
reinforce our intellectual capital, continuing to draw on awell-spring of expertise and achievement gained throughthe enterprising spirit that has characterized the company
since its founding. In particular, we will evolve and employ
digital technologies with a view to both generating added
value and improving productivity.

Customer Satisfaction
for five
consecutive years*3.
No.

1*1 Cumulative Brillia brand condominiums
delivered as of May 2021
*2 Nikkei 2020 Condominium Brand Survey (responses of Tokyo metropolitan area (Tokyo,
Kanagawa, Chiba, Saitama) residents were extracted)

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

30

CAPITAL STRENGTHENING
Social and Relationship CapitalBusiness Capital

Many of Tokyo Tatemono’s business activities have been born out of and developed
through collaborations with various stakeholders. Points of contact with customers haveoften led to new business endeavors as well. From this experience, we recognize thatsocial and relationship capital is a critical resource for Group management in terms ofboth expanding into new business areas and generating profit.

A Broad Range of Customer andTenant Relationships
Tokyo Tatemono manages the bulk of the real estate it hasdeveloped and purchased, including office buildings andretail facilities. Our office buildings currently house about
900 tenants, and we own approximately 1,500 rental
apartment units. Also, as of March 2021, the number of
TIMEWORK space sharing sites, which Tokyo Tatemono
is involved in managing, has grown to 150. Such points ofcontact enable us to identify customer needs and provide
a wide range of services that help us build deeper andbroader relationships.

TOPICS

Relationships with Start-Up Companies
Redevelopment of the broad Yaesu-Nihonbashi-Kyobashi
area that surrounds Tokyo Station has not only drawn agreater number of leading companies to the area but has also
created a base for the activities of numerous startups andventure capital businesses. Tokyo Tatemono has helped form
an innovation ecosystem here, fostering innovation across theentire development area by serving as a venue encouraging
interactions between a variety of companies and individuals inJapan and overseas. Through such innovation ecosystems,
we will promote initiatives that capitalize on the potential ofan area to help leading companies address their management
objectives and foster growth in key growth fields, such astechnology integration, SDGs, food, and mobility.
Yaesu-Nihonbashi-Kyobashi Area Innovation Hubs
Tokyo Tatemono Is Involved in

Brillia Condominium Brand Initiatives

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Operating revenue

Average rent / Occupancy rate

Business profit

Average rent (left axis)(Billion yen)

(Yen/tsubo)

144.5

150

103.4

103.4

108.6

50,000120.9

96.3
29,31975

0Occupancy rate (right axis)

31.4

32.3

33.8

37.5

40.8

FY2016FY2017FY2018FY2019FY202097.3

29,62498.4

29,882

98.9

30,583(%)

97.7

30,83525,0000100

90Dec/2016 Dec/2017 Dec/2018 Dec/2019 Dec/2020 80* Figures before 2017 are calculated according to the previous standard* 1 tsubo = approx. 3.3m2

Sotobori-dori Ave.
Urban Redevelopment
Project for Yaesu
1-Chome East Area in
Front of Tokyo StationTokyo
Shin-Gofukubashi Building
Tatemono
Yaesu Building

Tokyo Square
GardenKyobashi Sta.

Takaracho Sta.

Chuo-dori Ave.

Tokyo Metro Ginza Line

Urban
Redevelopment
Project for
Yaesu 1-Chome
North Area

Nihombashi Sta.

Yaesu-dori Ave.

31

Outdoor movie showing

Operating revenue / Business profit

Tokyo Sta.

Kajibashidori Ave.

Parent-child foot race workshop

The Commercial Properties Business encompasses business activities ranging from urban development andoffice building development and operation to facility management, building maintenance, and maintenance/
remodeling. Our sphere of operations centers mainly on the international city of Tokyo. We are working together
as a group to provide not only quality properties and facilities but also a range of services to provide officebuilding users with a sense of safety, security, and comfort.

Yaesu Central Entrance
JR Keiyo Line

We formed the Brillia Owners Club, made up mainlyof buyers of our condominiums. The organization
boasted a membership of approximately 36,000
people as of December 2020. The Club has
developed various member services, such as
events where members can mingle, follow-up
maintenance for residences, and a range of
support services that foster lifestyle comfort.
In this way, the Club is enhancing customer
convenience while cultivating new profit
opportunities for the Group.
Brillia has also been holding the Brillia Art
Award open exhibition program since 2018 aspart of its efforts to support art, sports, andvarious other cultural activities. Public support for
the work of various artists also ties into stronger
Brillia brand recognition.

Commercial Properties BusinessToei Subway Asakusa Line
Nihombashi Sta.
Showa-dori Ave.

In fiscal 2020, amid the COVID-19 pandemic, although rent reductions and exemptions given to some hotels and retailfacilities put downward pressure on performance, growth in revenue from new properties and properties that continued tooperate throughout the year, coupled with an increase in property sales to investors, enabled higher overall revenue andprofit for the segment. The Commercial Properties Business continues to grow steadily, reflecting robustness in the officebuilding market in recent years.
As of March 2021, average rent was 31,061 yen per tsubo while the occupancy rate remained high, at 96.6%, indicating
the highly competitive nature of Tokyo Tatemono’s office building portfolio.

Future Strategies
Operating Environment / Social Issues

Opportunities

Actions to Strengthen Social and Relationship Capital

As development projects currently in the pipeline continue
to take shape, Tokyo Tatemono will encounter even morecustomers and other stakeholders. We will carve out new
business opportunities by capitalizing on points of contact
with existing customers and pursuing collaboration withcompanies ranging from small start-up ventures to leading
corporations. At the same time, we have formulated
Sustainable Procurement Standards (see page 55) toguide us in fulfilling our social responsibilities and helping
to bring about a sustainable society, as we manage theproperty supply chain in an appropriate way.

Risks

Diversification of working styles and office needs
targeting productivity increases
Increasingly sophisticated needs for offices to attract/
retain talented staff and provide business continuity
Greater business opportunities for large-scale
redevelopment associated with deregulation

Advantages
	A wealth of achievement and expertise in large-scale redevelopment
	Track record in urban development activities that increase thevalue of an area and strong tenant leasing capabilities	A highly competitive portfolio comprising numerous officebuildings owned by the group in prime city-center locations,particularly around Tokyo Station

Mounting competition between international cities
and between areas
Rising construction costs due to higher costs ofmaterials and labor

Key Strategies in the Medium-Term Business Plan	Providing the office buildings that are the first choice of customers by developing new properties that address diversifying working styles andenhancing 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 base
TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

32

CAPITAL STRENGTHENING
Providing Office Buildings Suited to
New Working Styles

Overview of the Portfolio
Leasable space

Total for Commercial
Properties Business

893,705m

Office buildings owned
by Tokyo Tatemono

514,907m2

2

Proportion of leasable space bystandard floor space
299 tsubo or less 19.9%

500–999
tsubo
37.9%

Proportion of leasable space by building age
Under 10 years old 47.3%

20–29 years old
9.4%

10–19 years old
14.6%

Proportion of leasable space by location
3 central wards of Tokyo (Chiyoda,
Chuo, and Minato wards)
40.6%

Other 16.9%

Tokyo Tatemono is currently 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
the assets the company has long held in the area near
Tokyo Station, looking to rebuild with an eye to the urban

functions demanded by tenants and to the reduction ofenvironmental footprints.
By feeding into growth in leasing profit for the Group
while enhancing the allure of the Yaesu-Nihonbashi-Kyobashi
area, we are confident that this development will contributeto increasing the value of our existing properties.

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

Urban Redevelopment Project for Yaesu 1-Chome
North Area (Gofukubashi Project)

In the Yaesu area in front of Tokyo
Station where our headquarters
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 ofTokyo and bustling activities that passon the history and traditions of theYaesu district to future generations.

1,000 tsubo or more 19.4%

300–499
tsubo
22.8%

30 years and older 28.7%

Tokyo Tatemono has launched a working group that isworking to develop and provide the office buildings thatare the first choice of customers. The working group is
exploring buildings that can adapt to changes in working
styles aimed at productivity improvements as well aschanges in office needs brought about by advances in
AI/IoT technologies. One example of the working group’s
initiatives is the wide range of layouts drawing on the
Activity Based Working (ABW) concept that are incorporated
into the new head office, to which Tokyo Tatemono
transferred its head office functions in May 2020.

Pursuing Large-Scale
Redevelopment Projects

Tokyo metropolitan
area (excluding
23 wards)
2.5%

23 wards(excluding
5 central wardsof Tokyo)
22.9%

Interior of the new head officeUrban Development Activities
Tokyo Tatemono focuses not only on developing andmanaging buildings, but also on area management
activities that bring vitality to areas and foster theinteractions of people.
For example, making use of the lush, three hectare
public park that is part of the Nakano Central Park project,
we join forces with neighboring universities and government
offices to host a variety of events, including flea markets,
workshops, and summer festivals. We are also implementing
disaster-resistant urban development, working with tenants
to increase disaster awareness, such as by conducting
a fire-fighting drill simulating an earthquake disaster.
We believe these kinds of initiatives in cooperation withlocal communities increase the allure of the areas aroundthe buildings owned by the group and help to addresssocial issues, while also strengthening our relationships
with tenants.

Site area

Approx. 10,600 m2

Site area

Approx. 9,260m2

Total floor space

Approx. 225,200 m2

Total floor space

Approx. 81,500 m2

Number of floors

51 floors above ground,
4 floors below groundNumber of floors

45 floors above ground,
5 floors below ground

Main uses
Planned completion

Business offices, stores, bus terminal,
conference halls, medical facilities, etc.

* As of the end of March 2021
* The above proportions are for office buildings owned by Tokyo Tatemono

Flea market in Nakano Central Park

* The above is an overview of the Urban Redevelopment Project for Yaesu 1-Chome East District B in Front of Tokyo Station.

Major Development Projects
in Progress
In addition to the Yaesu and Gofukubashi projects, Tokyo
Tatemono is moving forward with multiple development
projects in Tokyo’s Chuo, Minato, and Shibuya wards.
Targeting a timeframe around 2030, we are planning tocomplete projects representing a total of approximately
320,000 m2 of leasable area, based on area owned by
Tokyo Tatemono. We expect this to contribute to
substantial growth in profit.
Period from Start of Construction to Completion

Current Status

Project Name

Area

2020

2024

INTEGRATED REPORT 2021

2025

Estimated leasable area
(owned byTokyo Tatemono)

2030

Chuo ward

Establishment of Preparatory
Organizing Committee
Determination of city plan

Gofukubashi Project Chuo ward

Establishment of Preparatory
Organizing Committee

Redevelopment 1

Minato ward

Establishment of Preparatory
Organizing Committee

Redevelopment 2

Chuo ward

Establishment of Preparatory
Organizing Committee

Redevelopment 3

Shibuyaward

Establishment of Preparatory
Organizing Committee

Redevelopment 4

Minato ward

Under discussion

Redevelopment 5

Minato ward

Total
Approx. 120,000 m2

Total leasable area

Total
Approx. 200,000 m2

Approx.

TOKYO TATEMONO GROUP

FY2030 (south area), FY2035 (north area)

Planned completion

Estimated investment

33

Business offices, stores,
accommodations, parking lot, etc.

Main uses

FY2025Rights transfer approval (District B) Yaesu Project

Shibuya andShinjuku wards
17.1%

This project is creating an advanced
financial center that helps to raiseTokyo’s international competitivenessand presents an urban landscapeappropriate for the gateway to thearea along the historic Nihonbashi
River, in a highly accessible location
close to the Nihonbashi entrance ofTokyo Station and directly connectedto the Nihonbashi subway station.

230

billion yen

Approx.

320,000 m

2

Estimated investment
Approx.

330

billion yen

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

34

CAPITAL STRENGTHENING
Initiatives toward Property Sales toInvestors in the Commercial
Properties BusinessIn addition to owning and leasing office buildings, theCommercial Properties Business Division develops
logistics facilities, medium-sized office buildings, urban
hotels, and retail facilities, and engages in the sales ofsuch properties to investors after they get up and running.
Please refer to page 41 (STRATEGIC FOCUS Meeting
Demand for Real Estate Investment: Property Sales toInvestors) for details.

Balance of real estate for sale in the commercial
properties business
Completed

Residential Business

Under development(Billion yen)

107.9

120

110.2

85.2
55.4
60

Tokyo Tatemono is engaged in the condominium and residential leasing businesses, centered on the Brillia brandof refinement and comfort, primarily in the Tokyo metropolitan area. We offer high-quality housing based on aunique, comprehensive framework that includes all the functions needed to support a more comfortable life forour customers, ranging from planning and development to management, repair, renovation, and brokerage.

24.6

Operating revenue / Business profit0

Dec/2016 Dec/2017 Dec/2018 Dec/2019 Dec/2020

Operating revenue

Number of condominium sales posted / Gross margin

Business profit

Number of condominium sales posted(Billion yen)(units)

131.2

140

101.1

97.7

Property Sales to Investors: Accelerating Growth
Property sales to investors is another key strategy of the medium-term business plan. We are targeting significant growth in
this area leading up to 2024. To date, we have aggressively pursued development opportunities for various asset types,
such as logistics facilities and medium-sized office buildings, in response to trends toward real estate investment, real estateutilization, and other social shifts. We will further expand strategic investments going forward, with an eye to achieving highasset efficiency through the flexible sale of properties. (Please refer to page 41 STRATEGIC FOCUS Meeting Demand forReal Estate Investment: Property Sales to Investors for details.)
Although Japan’s office building market as a whole is currently characterized by rising vacancy rates and falling rent levels,
Tokyo Tatemono’s competitive portfolio has not been as hard hit as the market, and our leasing profit from commercial
properties remains firm. Under the impact of the pandemic, leasing profit from hotels and retail facilities is under pressure at
the moment, but we are hopeful that if the dissemination of vaccines and other measures can restore some normality topeople’s lifestyles, we will see a return to growth in profit.
The Commercial Properties Business is striving to help address social issues and enhance the allure of cities through urban
development, while aiming to further reinforce profitability by means of a two-fold approach involving the management of
stable assets centered on large-scale redevelopment projects and high asset efficiency through strategic investments and sales.

35

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

971

20.9
750

6.4
0

33.3

1,500

70

Large-Scale Redevelopment: Multiple Projects Targeting a Timeframe around 2030
The Commercial Properties Business is involved in developing, operating, and managing
office buildings and other properties, and pursuing urban development projects incollaboration with tenants and members of the community.
Tokyo Tatemono Group’s medium-term business plan set out large-scale
redevelopment as a key strategy. We are currently focusing our efforts on multiple
redevelopment projects targeting completion by 2030. Our planning seeks to help
address social issues through urban development, such as by cultivating flourishingcommunities through the creation of centers of bustling activity, and developing properties
with smaller environmental footprints and reinforced disaster-response capabilities, aswell as to enhance the competitiveness not only of individual projects but the entire
area and city as well. We are aiming to identify the increasingly diverse needs arising
Katsuhito Ozawa
from changes in working styles and to provide properties and facilities and services that
Director & Senior Managing
continue to make us the first choice of customers. In this way, we are striving to
Executive Officer
enhance the competitiveness of our office building portfolio, including buildings already
Division Director of Commercial
in operation, and expand stable leasing profit.
Properties Division
Hareza Tower, completed near Ikebukuro Station last year, is expected to contributeto performance over a full year of operation in the current fiscal year, given that full occupancy by corporate tenants was
already decided at completion. The Yaesu Project, a showcase of the Group projects currently in the pipeline, started
teardown work last year. The project is moving ahead steadily, with new construction work slated to begin in the fall.

(%)

99.1

79.8

Actions to Strengthen Business Capital

Gross margin

FY2016

16.9

14.1

15.8

FY2017FY2018FY2019

1,315

29.8

1,196

40

24.6

988

22.4

700

20

7.1
0

FY2020FY2016FY2017FY2018FY2019FY20200

In the fiscal year ended December 2020, revenue and profits in the division were down, mainly reflecting the absence ofcontributions from high-margin tower condominiums posted in the previous fiscal year and a decline in the overall number ofcondominiums posted. Going forward, we will continue to secure appropriate returns by carefully selecting and investing inproperties that promise a high return.
We posted a total of 1,196 units in 2020. The gross margin remained high, at 22.4%.

Future Strategies
Operating Environment / Social Issues

Opportunities

Diversifying lifestyles are engendering moresophisticated, more diverse customer needs
Trend toward prioritizing convenience amid anincrease in dual-income and single-personhouseholds
Growth in “compact city” urban development due topopulation inflows into cities

Risks

Rising land prices due to mounting competition for
acquiring land sites, and rising construction costs
due to higher costs of material and labor
Contraction in the condominium market due topopulation decline

Advantages
Among the highest brand recognition and customer satisfaction ratings
in Japan
Strong track record and expertise in large-scale redevelopment
and rebuilding
Service supply framework integrating production, sales,and management

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

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

36

CAPITAL STRENGTHENING
Pursuing Redevelopment
and Rebuilding
We are focusing on redevelopment and rebuilding projects
to meet the need for redevelopment in urban districts
that are densely packed with wooden houses and thegrowing need for rebuilding due to the increase in aging
condominiums. Our track recordin redevelopment and rebuilding
includes Brillia Tower Ikebukuro,
Brillia Towers Meguro, and Brillia
Tama New Town. We are currently
promoting development and saleof the SHIROKANE The SKY tower
residence redevelopment project.
Going forward, we will continue
to seize project opportunities inBrillia Tower Ikebukuro
highly convenient locations andengage in mixed-purpose
development and other high-valueadded residential development
projects. Reaching an agreementwith landowners and residents inthese projects is more difficult
and time-consuming than withnormal land acquisition anddevelopment, but we will makeuse of our expertise and proven
Brillia Towers Meguro
track record as a developer towin highly competitive projects.

Major Properties Scheduledfor Delivery

Initiatives for For-Rent Condominiums

Land bank* by region
Kansai region and others

27.9%

Tokyo 23 wards 43.9%

Greater Tokyo
metropolitan areaother than at rightFor-rent condominiums: balance of real estate for saleTokyo, other than
23 wards

21.3%

6.8%

Total units:
Approx.

8,100(as of March 2021)(including 980 units scheduled
for delivery in 2021)

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

37

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Completed

Postedin 2021

Postedin 2021
Scheduled
for delivery
in 2022SHINTO CITY

Total units: 306(Tokyo Tatemono units: about 245)

Total units: 1,411(Tokyo Tatemono units: about 353)

Scheduled
for delivery
in 2022

Scheduled
for delivery
in 2022

Brillia City Nishi-Waseda

Brillia Tower Seiseki Sakuragaoka
BLOOMING RESIDENCE

Total units: 454(Tokyo Tatemono units: all)

Total units: 520(Tokyo Tatemono units: 312)

Scheduled
for delivery
in 2023

Scheduled
for delivery
in 2024SHIROKANE The SKY

Brillia Tower Dojima

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

Total units: 465(Tokyo Tatemono units: all)

43.3

50

29.1
20.4

25

1.7
0

Brillia Tower Nishijin

Under development(Billion yen)

* Listed for the total number of dwelling units for the acquired
development site

Reinforcing the Brillia Brand
We have taken concrete steps to reinforce the Brillia
brand. We carry out rigorous quality management throughto the completion of construction of Brillia condominiums,
hold tours so contracted condominium buyers can see
ongoing construction sites for themselves, and periodicallyprovide customers with construction progress reports.
We also provide support services after the condominium
is sold to ensure the comfort of owners.
Furthermore, we established Brillia Bloomoi in 2012,a project that engages in the co-creation of residenceswith our customers. Seeking to offer residences that are
responsive to changes in society and to diversifying needs,
we are expanding the scope of our product development
to include condominiums where owners can provide input
not only about floor plans and furnishings but also about
management and other after-sales services.
These initiatives are enhancing the value andcompetitiveness of the Brillia brand.

We are accelerating the development of for-rentcondominiums under the Brillia ist brand in response to
growing needs for residential space and investment in
for-rent condominiums in and around central Tokyo.

1.7

Dec/2016 Dec/2017 Dec/2018 Dec/2019 Dec/2020

Creating Spaces to Stay Abreast ofa Changing Society
Completed in 2020, the Nonoaoyama Building is a 25-story
mixed-purpose facility that houses for-rent condominium
units, serviced housing units for the elderly, retail facilities,
a certified child care center, and a community center. The
project brings together a wide array of achievements andexpertise Tokyo Tatemono has accumulated over the years,
in large-scale project development, for-rent condominiums,
housing for the elderly,
and child care. Also, weare designing the for-rentcondominium project
Kurasu Aoyama whichfeatures home-officespaces and otherfacilities to support thekind of flexible working
Nonoaoyama Building
styles and individualized
living environments thatwill be required in the future.

Actions to Strengthen Business Capital

Further Reinforcing the For-Sale Condominiums BusinessA core focus of the Residential Business is the condominium business, centered on the
Brillia brand of refinement and comfort. We offer high-quality condominiums through an
integrated framework spanning production, sales, and management. The quality Brillia
is known for stems from our attention to rigorous quality control, ongoing efforts to host
events for residents after they move in, and a host of other initiatives that have earned
high ratings from 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. We are also pouring ourresources into offering quality housing that responds to changes in society, such as
residences that are more attuned to nature and more environmentally conscious, andresidences that incorporate state-of-the-art technologies in line with social changes.
Hideshi Akita
For-sale condominium sales grew steadily in the fiscal year under review, and we
Director & Managing
project that the business will be able to maintain a high degree of profitability. The
Executive Officer
environment for acquiring land remains fiercely competitive, but by leveraging ourDivision Director ofexpertise and track record, we were able to secure a land bank that can accommodate
Residence Division
up to 8,100 condominium units (as of March 2021).
One recent project is Brillia City Nishi-Waseda, scheduled for completion in 2022, which has a total of 454 units and went
on sale in October last year. In a location that strikes a balance between convenience and a pleasant living environment, theproject also supports working from home and remote working. We have received strongly positive feedback from customers
about these amenities.
Residential Development in Tune with Changing Needs: The For-Rent Condominiums Business
The for-rent condominiums business is another housing development initiative keeping Tokyo Tatemono in tune withchanges in society. The thrust of the business is the Brillia ist series, which we are developing mainly in central Tokyo. Goingforward, we will further expand this series as part of the lineup in our property sales to investors, further growing the businessas an area that can contribute to stable profit generation.
By keeping our finger on the pulse of constant change in society and responding to emerging needs, we will continue tooffer 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.
TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

38

CAPITAL STRENGTHENING
Asset Service Business
Capitalizing on the range of services offered by the Tokyo Tatemono Group for the effective use of property andland, we provide comprehensive solutions through our real estate brokerage business, asset solutions
business, management service business, and parking business.
Operating revenue / Business profit
Operating revenue

Balance of assets owned in the Asset Solution BusinessBusiness profit(Billion yen)
60

52.6

51.5

60

46.6

44.1

42.8

We have developed and are operating
about 74,000 parking spaces in 1,800
locations across Japan (as of the end of
March 2021) under the NPC24H brand.
By taking into account surrounding
conditions, the size of the site, andother factors, we are able to designand deliver the optimal parking lot.

49.9
Opportunities

30

Growing opportunities to operate large parking lots
and municipal and other public parking lots inconjunction with large-scale redevelopment projects
Improved efficiency and service in parking lot
operation associated with the spread of IoT

Risks
0

Accelerated sale and repurposing of parking lots
by landowners associated with rising land prices
Pandemic-related public health measures cancause deterioration in operating conditions

43.3
35.6
27.7

30

5.3
0

FY2016

3.8
FY2017

6.3
FY20185.8FY20192.6
FY2020Efficiently scale the business through aggressive investment in large
parking lots, a competitive strength of the company
Boost competitiveness by developing and rolling out systems that
contribute to improved operational efficiency and customer service

Operating Environment / Social Issues(Billion yen)

40.2

Key Strategies in the Medium-Term Business Plan

Parking Business

Dec/2016 Dec/2017 Dec/2018 Dec/2019 Dec/2020

Expand parking business targeting needs for theeffective use of real estate
We are seeking to expand the number of facilities underoperation by drawing on sophisticated operational expertisein large self-park parking lots and other areas. We will also
take steps to enhance operating functions by developing
and rolling out proprietary systems, such as those thatenable advance reservations and online monthly parking
contracts, and take proactive measures to improve
convenience, such as partnering with car sharing operators,
installing delivery drop-off boxes, and collaborating withvarious point card operators.
Parking spaces under operation(Individual spaces)
80,00065,546

66,227

68,57869,401

76,173

Advantages

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 the value ofacquired real estate for resale, and a management service
that manages for-rent condominiums and office buildings
on behalf of owners.
Operating Environment / Social Issues

Opportunities

Increased real estate transactions due to theshift toward a society in which properties areused across generations
Growth in real estate investment demand due to
low interest rates

Risks

Lower willingness to buy real estate due to risingproperty prices, recession, higher interest
rates, etc.

Advantages
Relationships with customers and financial institutions and expertise injudging the value of real estate acquired over many years of experience
Offer one-stop solution services drawing on the resources of the Group

39

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Key Strategies in the Medium-Term Business Plan
Increase the volume of transactions by capitalizing on information
sources to actively identify customer needs
Use expertise in judging the value of real estate to acquire properties
with value-adding potential and sell properties quickly in response tomarket conditions

Track record and expertise in developing and operating large self-park
parking lots
Investment and development capabilities for parking facilities andsystems leveraging scale as Japan’s third-largest pay-by-the-hourparking business operator

40,0000Dec/2016 Dec/2017 Dec/2018 Dec/2019 Dec/2020

Actions to Strengthen Business Capital
Brokerage and asset solution initiatives using
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 of operation of the Group’s
various businesses to enhance our wholesale brokeragetargeting corporate customers, including owners of rental
management properties. As for retail brokerage aimed at
individual customers, we are opening offices in areas where
we have supplied several condominiums to capitalize on
secondary brokerage transaction opportunities.
In conjunction with these trends in the brokeragebusiness, we are working to acquire property information
for use in the asset solution business, sell properties, anddevelop new customers. We are taking action to expand
the asset solution business. Capitalizing on real estateexpertise gained through extensive experience—the ability
to comprehensively judge the value of properties—we seek
to flexibly acquire properties with the potential for increased
value and enhance their value through repurposing,
repairs and renovations, rights consolidation, improving
rent conditions, and other measures, after which theproperties are flexibly sold to investors.

Building on Trust to Create Products and Services Unique to Tokyo Tatemono
The world is changing at a dizzying pace, and the environment for real estate isconstantly shifting. Unlike normal mass-produced products, the real estate productsTokyo Tatemono handles are one-of-a-kind and carry extremely high value. Consequently,
for us to complete transactions for buying and selling or leasing properties, the trust of
our customers is indispensable. Gaining that trust requires us to be highly sensitive tothe various demands and needs of customers with regard to their properties, and thencreate products and services that no other company can simulate.
Drawing on the Expertise of the Tokyo Tatemono Group to Address Social
Issues and Achieve Sustainable Growth
The Asset Service Business derives optimal solutions from the wide range of businessactivities of the Tokyo Tatemono Group. The integrated strengths of the Group are whatmake our comprehensive consulting business possible. Through the Asset Service
Kengo Fukui
Business, we are aiming to achieve a high-level balance between providing solutions toRepresentative Director &social issues and pursuing growth as a company by adding new value to real estate
Executive Vice President
and meeting the needs of customers. For instance, in the brokerage and asset solution
Executive Officer
businesses, we can contribute to the realization of a society in which properties are
Division Director of Asset
used across generations by repurposing existing, unused properties into quality prodService Business Divisionucts with high market value. Or we can contribute to disaster prevention for residents
and areas through earthquake-resistant and disaster-prevention work that yieldrenewed, highly disaster-resistant properties. Our parking business will contribute to the transition to electric vehicles inJapan by developing parking lots equipped with power supply devices. We also believe that we can promote efficient parking
lot utilization and help eliminate traffic congestion through the use of digital technology, such as an advance reservation
system for pay-by-the-hour parking lots and a system for smartphone-based confirmation of vehicles available for car sharing.
The medium-term business plan calls for us to work through these businesses to facilitate the distribution of 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 Group is involved in, we are pursuing ongoingprofit growth and the improvement of capital efficiency.
TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

40

CAPITAL STRENGTHENINGS TRAT EG I CF O C U S
Priority Areas with High Growth Potential

Meeting Demand for Real Estate Investment:
Property Sales to Investors

Commercial properties

Capitalizing on information sources across the Group, Tokyo Tatemono is pursuing a wide range ofdevelopment opportunities according to differing locations and area characteristics. In bustling city-center
commercial districts and regional urban centers, we are developing medium-sized 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 are developing logistics facilities. After theseprojects start operations, we sell them to investors.
In line with recent growth in the e-commerce market, we are actively expanding our logistics facility
development business. In addition to our property development expertise, our ability to construct operation
management frameworks that meet the requirements of preferred tenants helps us to realize high profitability.
After such facilities are up and running, we expeditiously sell the developed properties to J-REITs or funds,
contributing to steady profit generation and the sound development of the real estate investment market.

T-LOGI Kuki

Sendai Kakyoin PJ(sold in 2020)

Balance of real estate for saleIn fiscal 2020, we recorded a profit of 17.7 billion yen fromproperty sales to investors. The balance of real estate forsale to investors stood at 206.5 billion yen, as a result of
acquisitions of land for logistics facility development in theCommercial Properties Business and land for for-rentcondominium development in the Residential Business.
We have increased the amount of investment in the stockof property for sales to investors to around 340 billion yen(based on decisions made). This stock of properties
represents a valuable source of future profits: We projectthat gains on sales of these properties will increase toroughly 80 billion yen.
We also plan to regularly review our asset portfolio,
shifting non-current assets to the property sales toinvestors business, further increasing the volume ofproperties for sale.
Also, through measures such as selling properties forsale to J-REITs the company is seeking to sponsor, we
will expand Group assets under management and realize
continuous profit growth and improved capital efficiency.
As one of the key strategies set out in the mediumterm business plan, we will continue to channel resources
into expanding property sales to investors.

For-rent condominiums

Asset service

Other(Billion yen)
250

205.2

206.5

2.7
50.1

152.8

43.3

96.6

125

54.2

0

110.2

Dec/2016 Dec/2017 Dec/2018 Dec/2019 Dec/2020

Property sales to investors gross profit trends(Billion yen)

17.7

20

10

6.4

5

4
1

0

FY2016FY2017FY2018FY2019FY2020Brillia ist Sendagaya(sold in 2021)

Candeo Hotels
Tokyo Roppongi

Actions to Strengthen Business Capital

Stock of properties for sale to investors

Logistics
facilities

16

Medium-sized
officebuildings

Urban hotels andcompact retail facilities

6

13

For-rent
condominiums

26* Properties as of March 2021. Including properties
under development or planned for acquisition

Future Strategies
Operating Environment / Social Issues

Opportunities

Risks

Diversifying needs for real estate utilization associated withsocial shifts, such as growth in the e-commerce and inboundtourism markets
Expansion of real estate investment needs and assets
for investment

Advantages
A wide array of information sources, such as financial institutions
and existing business partners, in addition to the Group network
Development track record and expertise in various asset types,
and strong tenant leasing capabilities

Mounting competition causing changes in conditions foracquiring sites
A sluggish investment market associated with changes in thereal estate investment environment

Key Strategies in the Medium-Term Business Plan

Expand various asset types; continuously acquire development opportunities
One of the key strategies in the medium-term business plan that started in 2020 is toexpand property sales to investors. By targeting investment needs in the real estate
trading market and developing various asset types, we will continue to capturedevelopment opportunities. Our aim is to achieve high asset efficiency by investing
strategically, and developing and selling quality assets. Moreover, by including J-REITs
sponsored by the company among potential buyers, we will contribute to the expansionof total assets under management for the Group while growing the fee business.
As part of our initiatives in property sales to investors business, I am in charge ofacquiring and developing assets (logistics facilities, medium-sized office buildings,
hotels, retail facilities) for the Commercial Properties Business. Although the environment
for acquiring land for development remains fiercely competitive, we are seeking tocarefully choose investments by drawing on the wide range of information sources anddevelopment expertise the Group has accumulated over the years. As a result, out of thetotal stock and investment amount for all assets earmarked for sales to investors of 340
billion yen (based on decisions made), we were able to boost assets for the Commercial
Properties Business to 220 billion yen (both amounts are as of December 2020).
Going forward, we will continue to reinforce our property acquisition and development
framework to meet the buoyant demand for real estate investment among investors.

Hiroshi Takahashi
Managing Officer
Responsible for Logistics Properties
Development & Management
Department; General Manager of
Retail Properties Development &Management Department andHotel Development &Management Department

Take advantage of further development opportunities by drawing on information sources to win projects
Ally with a broad range of operators to develop a variety of asset types to match locations and area characteristics
After development, achieve profitability by monitoring the market environment and selling properties expeditiously

41

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

42

CAPITAL STRENGTHENING
Other Businesses
Overseas Businesses

Fund Business

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

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

Operating Environment / Social Issues

Operating Environment / Social Issues

Opportunities

Risks

Advantages

Rise in middle-income and wealthy individuals due to strong
economic growth in Asian countries
Growing number of local companies seeking tie-ups with Japanese
partners and increased local government backup for attracting
foreign capital

Strong development track record (a total of about 25,000 units
delivered to date) and relationship built up over more than 15 years
with major Chinese developer China Vanke
Wealth of real estate development expertise and high-quality
condominium development experience gained in Japan

Risks

Growing needs for real estate investment
Expanding asset types available for investment

Able to draw on the real estate expertise of Tokyo Tatemono togain opportunities to acquire real estate and maximize asset value

Mounting competition to acquire real estate
Shifts in the financing environment

Changes in economic and political conditions and tightening ofreal estate regulations

Key Strategies in the Medium-Term Business Plan

Key Strategies in the Medium-Term Business Plan

Collaborate with prominent local developers knowledgeable about business practices and markets in their countries
Expand the business chiefly in China and other countries where we have an existing footprint. Dispatch employees to operational sites and implement
rigorous risk management
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

Support the growth of J-REITs, private REITs, and private funds by increasing property sales to investors
Increase profit opportunities by expanding the Group’s assets under management

Increase profit opportunities for the Group by strengthening the J-REIT, private
REIT, and private fund businesses

Tokyo Tatemono has steadily expanded its Overseas Businesses through partnerships with leading local property developers
and send its employees to operational sites to ensure continuous risk control. We have been involved in the development of
for-sale condominium operations in China with major local developer China Vanke for more than 15 years. We will continue
to assess the level of business confidence and demand in each city in China, and newly invest in cities demonstrating
robust actual demand. In other Asian countries as well, we will continue to grow the business while assessing the level ofbusiness confidence and demand in each country.

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.

79 Robinson Road

Japan Prime Realty Investment Corporation

Tokyo Tatemono Private REIT, Inc.

Assets targeted for investment: office buildings, urban retailfacilities, hotels

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

Total acquisition price(as of December 2020)

Total acquisition price(as of March 2021)

Yangzhou-Chengxi
Project, China

In Tanjong Pagar, Singapore’s
central business district, Tokyo
Tatemono was involved indeveloping a high-grade officebuilding, a rarity in the district. It isdue to be directly connected toa nearby subway station in the
future, and has already filled about
90% of tenant applications.

Total project cost:

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

Approx.

Tokyo Tatemono share:

43

Opportunities

Advantages

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

75 billion yen
Approx. 15%

Total project cost:
Tokyo Tatemono share: 

Total acquisition price(as of December 2020)

Approx.

467.5 billion yen
549.9 billion yen

Total acquisition price(as of March 2021)

61.2 billion yen
64.8 billion yen

37 billion yen
Approx. 25%

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

44

CAPITAL STRENGTHENING
Human capital

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 thatprovide customers with maximum relaxation and comfort.
Targeting the recent boom in pet tourism, pet-friendly
Regina Resort hotels feature facilities and services ona par with luxury hotels while allowing guests to beRegina Resort Kyu-Karuizawa

accompanied by their dogs in all rooms and areas. Highly
popular among wealthy dog owners, the number ofRegina Resort with DOGS hotels has increased to eight.
We also operate nine Ofuro no Osama bathhouses mainlyin the Tokyo metropolitan area, where customers canfreely enjoy a dozen different baths and stone spas thatoffer health and beauty benefits. Many customers enjoy
these bathhouses as places to communicate with family
and friends as well as support their mental and physicalwell-being. The Group also operates 12 golf courses
throughout Japan.

Ofuro no Osama Ooimachi

Kawaguchiko Country ClubTokyo Tatemono sees human resources both as the source of creating corporate value
and realizing sustainable growth, and as an indispensable foundation for management.
With an eye toward realizing the company’s long-term vision and beyond, we arepositioning the strengthening of human resources as a critical issue, and are working tosecure and develop personnel who can lead the company into a new era of growth.

Human Resources Management

Human Resources Development

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, and have also taken
steps to open up growth opportunities for employees,
such as introducing a job challenge system and overseas
training. We are also focusing on securing diverse humanresources who can stay abreast of the changing times, byrecruiting both new graduates and mid-career job seekers.
Although Tokyo Tatemono’s organizational structure isbased on business divisions, we manage personnel
functions on a group-wide basis, and have in place asystem to flexibly allocate the right people to the right jobs.

The company strives to develop the skills of employees,
reflecting our belief that human resources are the foundation upon which sustainable corporate growth is built. We
offer job level-specific training, from new employees to
executives. To instill the experience and broader knowledge
base required for employees of a comprehensive realestate developer, we rotate new graduate hires among
three departments to gain experience in their first ten
years. In addition, we have established self-development
programs and support systems to assist employees inacquiring certification. These are to help employees
pursue independent learning at all stages of their career.
We also offer support for learning foreign languages, aswell as for employees going abroad for training, with aview to the future global business expansion of the Group.

Summary 2021 Training ProgramsChild 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 andthe rise in dual-income households, as growing waiting
lists for child care facilities became a pressing social

concern. Driven by considerable demand and backed bygovernment support, we have steadily expanded ourchild care network, opening 14 new Ohayo (Good Morning)Child Care centers in just four years and opening
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

Training per Management Level
Executives

Executive Training

General Managers

New General Manager Training

Group Leaders

New Group Leader Training

Managers

New Manager Training

Assistant Managers

New AssistantManager Training

Electives
Coaching: Basics
Coaching: Advice
Strategic OJTLeadership
Business
Development
Data Science

45

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Ohayo Child Care Oomorimachi

Ohayo Child Care Nonoaoyama

Design Thinking
Negotiation
Action Learning
Break Throughs
Lectures by
Outside Experts

Senior Employees

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

New Employees

New Employee Training
Basic Practical Real Estate Training
Logical Thinking
IT Training

Initiatives to Encourage Certification

Ohayo Child Care Nishi-Sugamo

Self-Edification/
External Dispatch

Global Training

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 andacquire certification in various areas, the system helps
them carry out their work at a higher level and accumulatevaluable work-related knowledge.

 ttending language
A
schools
Overseas on-site
observation
Overseas dispatch
training
Internships with local
subsidiaries

 upport forS
attending business/
graduate school
Single-subject
business school
training dispatch
Cross-industry
training
Distance learning
External seminars

Holders of major certification types
Real Estate Broker 697
Real Estate Appraiser 22
First-Class Architect 95
 ertified Building
C
Administrator 157

 eople Who Passed the RealP
Estate Consulting Skills Exam 76
 ssociation for Real EstateA
Securitization (ARES)
Certified Master 64
Urban Renewal Planner 87* Figures for the company alone as of May 2021
Includes employees seconded from Tokyo Tatemono to outside positions

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

46

CAPITAL STRENGTHENING
Diversity & Inclusion
Tokyo Tatemono is creating an environment in which
diverse personnel are motivated and dedicated in theirwork, able to act freely without constraint. The successful
activities of a diverse HR pool will drive services that meetthe increasingly sophisticated and diversified needs ofcustomers. We support women taking active roles in theworkplace, seeking to empower them to pursue theirambitions by making use of their unique talents and fully
reaching their potential. We have established leave systems that all employees regardless of gender can use in
the case of pregnancy, childbirth, child rearing, and longterm care, and have set up a re-employment system forformer employees. We also provide a system to approve
leave for up to three years for employees whose spouses
have been transferred overseas. Our hiring practices do
not distinguish based on nationality or race. Overseas, forlocal subsidiaries we aim to hire qualified personnel ofvarious nationalities and support their success.

Health Management Initiatives
Tokyo Tatemono Group Health Management
Declaration
The corporate philosophy of Tokyo Tatemono is “Trustbeyond the era.” This incorporates our will to strive for thegrowth of the company and the creation of a prosperous
society, taking pride in the trust placed in us that extends
over a century.
To embody this corporate philosophy, we believe thehealth of our executives and employees as well as theirfamilies is vital.
We see the mental and physical health of executives
and employees as the source of sustainable corporate
growth and actively promote activities for each and every
person to maintain and improve their health.
I will strengthen the environment to achieve this as theChief Health Officer, and I vow that we will pursue healthmanagement, unified as a group.
Hitoshi Nomura
President & Chief Executive Officer
Tokyo Tatemono Co., Ltd.

Health Management Initiatives
Based on its HealthManagement Declaration,
the Group is pursuing
activities to encourage eachand every person to maintainand improve their health,so that all executives andemployees can reach theirfull potential. In 2021, the47TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

company and four group companies—Tokyo Tatemono
Real Estate Sales Co., Ltd., E-State Online Co., Ltd.,Tokyo Fudosan Kanri Co., Ltd., and Tokyo Realty
Investment Management, Inc.—were recognized as
Certified Health and Productivity Management
Organizations. In addition, our company has been certified
as one of the top 500 companies in Japan (White 500).
Mental Health Initiatives
Each company employee has access to an online service
for annual stress self-checkups. We also conduct training
on self-care and the care of subordinates to promotemental health awareness. This is mandatory for newgroup leaders in particular. The training currently boasts
a 100% participation rate. We also invite sports trainers
to conduct company-wide training seminars for all
new employees.
Improving the Working Environment
We are working to foster pleasant workplaces that help
prevent occupational accidents and health issues byreducing work fatigue and stress. When the head officerelocated to the Tokyo Tatemono Yaesu Building in
2020, we put particular emphasis on creating officespaces that allow employees to work comfortably. Thisearned the company an “S” (highest) score in thegovernment-sponsored CASBEE Wellness Officecertification scheme. The certification took special noticeof the building’s operation and management approachand other measures to realize a high degree of comfort
and create a conducive environment.

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 human rights. We require every person
engaged in the business of the Group to observe thepolicy, and expect our business partners and otherstakeholders to observe it as well. Keenly aware of theimportance of respecting the rights of all stakeholders
involved in the business, the Group, based on the policy,
carries out human rights due diligence efforts to grasp,
mitigate, redress, and remedy any human rights issues
that may arise in the course of business.

Metrics Related to Human Capital

Item

Scope

KPIs and targets

Workplace
Incidents

Average training time of 15 hours or
Promotion of
more of training per employee per yearTokyoskillsTatemono Career training participation rate:
development
100% each year

24 hours/month 51.2 %None

Health checkup and reexamination
Promotion ofTokyo
rates: 100% each year
healthTatemono
management
Smoking rate: 12% or less by 2022

Data collection period:
January 2020 to
December 2020

Data collection period:
April 2020 to March 2021

Data collection period:
April 2020 to March 2021

Ratio of Women
Employees

Ratio of WomenManagers

30.2 %

6.0 %As of December 2020

As of December 2020

Overtime

Paid Leave Taken

Work-life
balance

Average annual paid leave utilization
rate: 70% or more each year
Tokyo
Tatemono Ratio of male employees taking
parental leave: 30% or more by 2025

Ratio of women in management
Promotion of
positions: 10% or more by 2030
Tokyo
diversity in
Tatemono Employment rate of persons with
our workforce
disabilities: 2.3% or more each year
Dissemination of the Human Rights
Tokyo
Respect for
Tatemono Policy to all Group companies andhuman rights
Group compliance

Initiatives to Strengthen Human Capital

HR Measures to Foster TrustTokyo Tatemono has always done business with an emphasis on earning the trust of
our various stakeholders, including customers, business partners, and community
residents. Further deepening this trust is essential to our efforts to achieve sustainablecorporate growth and help address social issues. We believe that when every employee
performs to a high standard, this engenders trust. Investing in and developing humanresources and fostering diversity have long been important themes for the company,
but now we are making these more explicit: Having reviewed the Group’s material issues
in the year under review, we identified improving employee growth and job satisfaction
and fostering diversity and inclusion as being central to building a foundation fromwhich to create value. To this end, we will further reinforce our HR measures.
In terms of steps to help improve employee growth and job satisfaction, we are
Masahiko Nishimura
preparing a systematic training framework, which includes job level-specific training
General Manager,that sets out the training elements needed for various positions, as well as global training
Personnel Departmentthat lays the groundwork for cultivating diversity in the workplace. Going forward, we
will further enhance training for skill development and focus on creating an HR portfolio
to respond to the expectations and needs of all stakeholders over the long term.
Regarding diversity and inclusion, empowering the active participation of women in the workplace is a particular priority.
Our goal is to raise the ratio of women managers from the current 6% to more than 10% by 2030. Also, for employees tocontinue to play a long-term, active role in the company, the physical and mental health of employees and their families isof the utmost importance. The company’s health management framework is under the direct oversight of the president,
who acts as Chief Health Officer. Partly for this reason, we have been recognized as a Certified Health and Productivity
Management Organization for five years in a row.
Flexible Working Styles for the New Normal
The COVID-19 pandemic caused the pace of change in working styles to accelerate. Tokyo Tatemono is promoting thecreation of workspaces that are conducive to good health and to new approaches to working. Like many companies, we
introduced a system to allow working from home or at satellite offices both to prevent infection and to enable more efficientworking styles. Our Head Office also earned an “S” (highest) score in the CASBEE Wellness Office certification scheme.
Responsibility Toward Human Rights
The Group formulated a new human rights policy this year to help us fulfill our duty to respect human rights, which isindispensable for a company to grow sustainably. Aside from observing international norms and regulations, we are working
to establish a system for human rights due diligence, relief, and redress.
TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

48

CAPITAL STRENGTHENING
Natural Capital
Based on our shared Group Environmental Policy, the Group is helping to bring about asustainable society through environmentally sensitive business activities. We are working toenhance the environmental performance of real estate properties and achieve a balancewith nature to prevent intensifying climate change and further environmental destruction.

Medium- and Long-term Targets for
Reducing Greenhouse Gas Emissions
In May 2021, we established medium- and long-termtargets for reducing greenhouse gas emissions toward therealization of a carbon-free society.
Targets for reducing greenhouse gas emissions

2030

A 40% reduction in CO2 emissions
compared to fiscal 2019*1.

2050

Net zero CO2 emissions

Actions to achieve medium- and long-term targets

 y fiscal 2030, ensure that 40% of the electricity
B
consumed by our real estate holdings is converted
to renewable energy*2. By fiscal 2050, ensure that
100% of the electricity consumed in our businessactivities is converted to renewable energy.
In principle, develop ZEB*3 and ZEH*4 in all new
office buildings, logistics facilities, and for-salecondominiums by fiscal 2030.
In principle, acquire green building certification*5
for all newly developed office buildings and logistics
facilities by fiscal 2030.
*1 CO2 emissions: Total emissions from Scope 1, 2 and 3
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 purchasedby the Group
Scope 3: Indirect emissions that occur from other business activities(building construction, use of sold real estate, etc.)*2 Includes consumption of non-fossil fuel certificates categorized as renewable energy*3 Zero Energy Buildings (ZEB) is a building that aims to achieve an annual primaryenergy consumption balance of zero by maximizing energy independence throughthe use of advanced technologies that enable significant energy savings and theintroduction of renewable energy. ZEB consists of Nearly ZEB (energy savings of atleast 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*4 Zero Energy Houses (ZEH) reduces total energy consumption through measures
such as heat insulation and energy savings as well as generating energy throughpower generation to balance out the annual primary energy consumption to zero.
ZEH-M, the zero energy housing standard for condominiums, consists of Nearly
ZEH-M (energy savings of at least 75%), ZEH-M Ready (energy savings of at least
50%) and ZEH-M Oriented (energy savings of at least 20%), each of which will be
included in the Group’s initiatives

49

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

*5 Green building certification indicates an objective index for evaluating buildings
designed to improve overall environmental performance, such as reduction of energy
and water consumption related to construction and operation and the greening offacilities. There are several certification programs in Japan. DBJ Green Building
Certification is a system carried out by the Development Bank of Japan. The Ministryof Land, Infrastructure, Transport and Tourism’s Comprehensive Assessment
System for Built Environment Efficiency (CASBEE) assesses a building from several
perspectives, including environmental performance and comfort. The Building-Housing
Energy efficiency Labeling System (BELS) is a third-party certification system forindicating the energy-saving performance of buildings.

Environmental Management in
the Commercial Properties BusinessOf all Tokyo Tatemono business activities, the Commercial
Properties Business, which operates and manages officebuildings and retail facilities, uses the most energy. Since
lower energy use in this business means a significant
reduction in Tokyo Tatemono’s overall energy consumption,
for this segment we have formulated and are pursuingenvironmental action plans and guidelines and striving to
be environmentally aware. When developing office buildings,
we actively adopt environmental and energy-saving
technologies to create environmentally friendly buildingsthat are well-received by society. For existing buildings,
we promote energy conservation by strategically renovatingsuch buildings using energy-saving equipment. From an
operating standpoint, we also collaborate with tenants toconserve energy and reduce environmental impact.
We have set a quantitative indicator in the form of apower consumption per floor space 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.

Environmental Management in
the Residential BusinessIn the Residential Business, we have taken a variety ofcreative approaches to environmental management. We
formulated the Brillia Environmental Guidelines to systematize
our environmental initiatives. We have also established
two concepts for the development of condominiums:“Creating green lifestyles” and “Realizing homes with
reduced environmental impact (CO2 reduction).”The guidelines define a set of environmental performance
ratings with four levels of environmental friendliness. In
addition to the required specifications for each level, ateach stage of the project from planning stage to design,
we also check details such as the environmental certification
rankings (CASBEE, etc.) and CO2 emission reduction foreach level.
We revise the guidelines periodically in response tosocial changes and technological advancements, and in
this way continue to increase the value of the Brillia brand.

Environmental Certification
As of the date of this report, nine offices and commercial
buildings owned and managed by Tokyo Tatemono havereceived high ratings of four or five stars in the DBJ Green
Building Certification*.
* DBJ Green Building Certification is a system established by the Development Bankof Japan to evaluate initiatives related to the environmental and social awareness ofreal estate

Issuance of Sustainability Bonds
The Group issued sustainability bonds* in July 2020 to fundour ongoing urban development projects that contributeto solving social issues in the Yaesu-Nihonbashi-Kyobashi
area, such as the Yaesu and Gofukubashi projects andinitiatives to form innovation ecosystems. One aim of thebond issuance is to gain wide recognition for the Group’s
sustainability initiatives. Issuing bonds with the goal of solvingsocial issues and achieving environmental sustainability
was a first for the Japanese real estate sector.
The bond issue received the highest Gold Award in thefundraiser category at the Minister of the Environment
ESG Finance Awards Japan. We are the only company toreceive an award in the fundraiser category for two years
in a row.
* Sustainability Bonds are debt instruments whose proceeds must be used to financeeligible projects that: (1) contribute to solving social issues (social features); and (2)have a positive impact on the environment (green features)

Balance of green bonds
and sustainability
bonds issued

90 billion yen(including 50 billion yen in hybrid
corporate bonds)

Certified Properties
DBJ Green Building Certification

★★★
★★

★★
★★

Hareza Tower
Otemachi Tower
Tokyo Square Garden
Nakano Central Park SouthSMARK ISESAKI
Brillia ist Tower Kachidoki(Residence)

Tokyo Tatemono
Nihonbashi Building
Tokyo Tatemono
Yaesu Building
Osaki Center Building

BELS
★★★

Hareza Tower★★
★★★

Otemachi Tower★★

Empire Building

ZEB
ZEB

Hareza Tower

Ready

CASBEE Building
S rank: Hareza Tower, Nagoya Prime Central Tower
ABINC Certification*1 (Association for Business Innovation inharmony with Nature and Community® Certification)
Otemachi Tower, Tokyo Square Garden
SEGES Certification*2 (Urban Oasis)
Otemachi Tower, Tokyo Square Garden

ESG Benchmark Evaluation
Tokyo Tatemono received the highest rating of 5 Stars in
the GRESB* Real Estate Standing Investments Benchmark, which assesses a company’s real estate management portfolio and is a category of the GRESB Real
Estate Evaluation, a benchmark that evaluates ESG initiatives in the real estate sector. We are the only real estatedeveloper in Japan to receive the highest rating of 5 stars
for four consecutive years.
We have also received a 5 Star rating in the GRESB
Development Benchmark, a benchmark introduced in2020 that evaluates new real estate development andlarge-scale renovation portfolios.

*1 ABINC Certification is a third-party evaluation and certification system for biodiversity
conservation efforts, using the Japan Business Initiative for Biodiversity-developed
Association for Business Innovation in harmony with Nature and Community®,
Certification Guideline and the Land Use Score Card® as evaluation standards*2 SEGES is the Social and Environmental Green Evaluation System* GRESB (Global Real Estate Sustainability Benchmark). An ESG benchmark
specializing in real estate, established by a group of European pension funds

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

50

CAPITAL STRENGTHENING
Disclosure Based on TCFD Recommendations

Green Office Building Development
Tokyo Tatemono is registered in the ZEB Leading Owner
Registration System and we aim to contribute to thepromotion of ZEB.
Hareza Tower is the first high-rise*, mixed-use building toreceive ZEB Ready certification, thanks to the installationof a highly versatile facility system that includes LED lighting,brightness sensor and motion sensor controls, and ahigh-efficiency air-cooled heat pump package, as well as
consideration of appropriate design conditions, such as
the selection of 500
lux lighting fixtures for
dedicated office areas.
* BELS case data list according to
the website of the Japan Housing
Performance Evaluation and Display
Association (as of June 2019)

Hareza Ikebukuro

Providing Housing that Is
Environmentally Friendly andDisaster Resilient
Having been registered under the ZEH Developer
Registration Program since it was launched in May 2018,
the Group is actively promoting net zero energy (ZEH-M)*
condominiums. Brillia Tower Seiseki Sakuragaoka Blooming Residence, scheduled for completion in 2022, is thefirst and only project in the Tokyo metropolitan area to be
adopted in the Super-High-Rise ZEH-M* Demonstration
Project in FY2019 sponsored by the Ministry of Economy,
Trade and Industry.
This condominium meets the standards for a ZEH-M
Oriented condominium, which are the standards urged forhigh-rise apartments of six or more floors. It does so by
boosting the heat insulation performance of the outerwalls and by adopting high heat insulation sashes andhigh-efficiency hot water supply equipment.

As part of environmental
measures in theCommercial Properties
Business, we are
installing solar panelswith the largest possible
capacity at T-LOGI Kuki,
a logistics facility
developed by Tokyo
Tatemono. The electricity
generated will be
consumed onsite at thefacility, which will acquire
ZEB certification as anenvironmentally friendly
Hiroto Fukui
logistics facility.
General Manager, BusinessIn addition, surplus
Planning Department,
electricity that cannot
Commercial Properties Division
be fully consumed by
T-LOGI Kuki will be self-consigned to SMARK ISESAKI,
a retail facility owned by Tokyo Tatemono.
Going forward, we will incorporate solar panels andenergy saving measures into the T-LOGI series of logistics
facilities scheduled for construction to realize environmentallyfriendly logistics facilities (ZEB Logistics). We will also build
a self-consignment business model in which a number of
T-LOGI facilities will supply electricity to SMARK ISESAKI
and other Group-related facilities.
Building on these efforts, we will continue to help solve
social issues by pressing forward with the implementation of
distributed energy systems that use energy conservation
measures and renewable energy power sources.

Image of Self-Consignment Business
1

T-LOGI
Series1
2
3

SMARK ISESAKI

2

T-LOGI
Kuki

3

ZEB Logistics with solar power generation
Self-consignment of surplus electricity
A similar scheme will be used for other T-LOGI facilities
developed in the future

Actions to Strengthen Natural Capital

The environment-related materiality of the Tokyo Tatemono Group includes promoting a decarbonized society and promoting
a recycling-oriented society (see page 49). We have set both medium- and long-term targets for the former. We submitted thesetargets for approval by the Science Based Targets initiative (SBTi)*1, a global partnership that recommends the setting of
scientifically-based greenhouse gas emission reduction targets for achieving the goals set forth by the Paris Agreement, andexpect to obtain certification. We have also applied to join RE100 (Renewable Energy 100%)*2, a global initiative for companies
committed to 100% renewable energy use for their business. These medium- and long-term targets will guide us in helping tobring about a sustainable society by further reinforcing our efforts to achieve net zero CO2 emissions.

Expressing Support for TCFD
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. The Groupconsiders the increasingly severe natural disasters causedby climate change, such as storm and flood damage, tobe a major risk to its assets. On the other hand, Japan’s
declared goal of achieving a carbon neutral society withzero greenhouse gas emissions by 2050 is likely to lead tothe further expansion of green investment in areas suchas sustainable energy, which we expect will lead to new
business opportunities for our Group.

Governance
The Group’s Sustainability Committee discusses theformulation 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
the president, the Committee reports its findings to theBoard of Directors for discussion.
The Sustainability Committee proposes and formulates
policies and strategies for important matters related tothe promotion of sustainability, such as greenhouse gas
emissions reduction targets and studies toward expanding
the use of renewable energy. In addition, the Sustainability
Promotion Committee, a subordinate organization of the
Sustainability Committee, examines specific measures for
implementing these policies.

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 topre-industrial levels by 2100, and the transition scenario(<2°C scenario), in which temperature rise is limited toless than 2°C. The scope of the analysis was to identify
the main risks and opportunities—primarily for the Group’s
core businesses, the Commercial Properties Businessand Residential Business—and to assess their materiality
in terms of their expected degree of impact on theGroup’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 the results of thisanalysis, the Group set its targets for its initiatives towardrealizing 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

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 agenda as necessary.

Indicators and Targets
Target for fiscal 2050

 et zero CO2 emissions
NEnsure that 100% of the electricity consumed
in our business activities is from renewableenergy sources.
Target for fiscal 2030

A 40% reduction in CO2 emissions compared tofiscal 2019.
Ensure that 40% of the electricity consumed byour real estate holdings is from renewableenergy sources.
In principle, develop ZEB and ZEH in all new officebuildings, logistics facilities, and condominiums.
In principle, acquire green building certification
for all newly developed office buildings andlogistics facilities.

*1 The SBTi is a global partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF),established in 2015. Its role is to verify and certify whether or not targets set by private-sector companies for reducing greenhouse gas emissions to achieve the targets of
the Paris Agreement (limiting global temperature rise to well-below 2°C above pre-industrial levels) have a scientific basis*2 RE100 (Renewable Energy 100%) is a global initiative led by NGO the Climate Group in partnership with CDP. It is a coalition of the world’s most influential businesses
committed to transitioning to 100% renewable electricity used in business by 2050

51

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

52

FOUNDATIONS FOR VALUE CREATION
Corporate Governance
Policy and Concept

Corporate Governance Structure

Tokyo Tatemono strives to build optimal corporate governance, aiming to enhance efficiency while ensuring thesoundness and transparency of management to increase
corporate value. In addition, we actively and appropriately
disclose information for shareholders and other stakeholders to understand the company’s business activities accurately. In the spirit of legal compliance as stated in the
Compliance Charter, we have also built a compliancesystem and are working to raise awareness of legal compliance as well as curb and prevent the occurrence ofillegal or fraudulent activities.

We have selected a Company with Audit and Supervisory
Board format as our corporate management system. We
have also established a Board of Directors and an Audit
and Supervisory Board. Our executive officer systemclarifies the separation of functions between management
and business execution. This system strengthens management and supervisory functions and business execution functions in the Company. Furthermore, we appoint
external directors and external Audit and Supervisory
Board members who help us operate under stronger
management supervision and ensure transparency.
Furthermore, based on the Group Business Management Standards, we are striving to enhance group governance, and have established the Executive Committee toensure efficient and sound group management.

General Meeting of Shareholders

times

Nomination and Remuneration
Advisory Committee
7 directors, four of whom are external directors
Committee Chair: Hitoshi Nomura(Representative Director and President)
Advise14

times

Appoint/Dismiss
Appoint/
Dismiss

ReportMen Women

Men Women

Internal
Officers

External
Officers

Board of Directors(Directors)

We comprehensively evaluate the personality, abilities,
knowledge, and experience of candidates and selectthose who possess qualities that can contribute toincreasing the longer-term corporate value of the Group as
members of management, and appoint them as candidates
for directors and Audit and Supervisory Board members.
Selection and dismissal of representative directors andappointment of candidates for director and Audit andSupervisory Board member are discussed in meetings of
the Nomination and Remuneration Advisory Committee,
which mainly consists of independent external directors,
and decided in Board meetings.

Support System for External
Directors and External Audit andSupervisory Board Members

Corporate Governance Structure

4

Selection and Appointment of
Directors and Audit and Supervisory
Board Members

Appoint/Dismiss

Financial Statement Auditor

ReportCoordinate

Dismiss

Financial Statement Audit

Audit and Supervisory Board(Audit and Supervisory
Board Members)

13

times

The Corporate Planning Department provides explanations
and information as necessary to support external directors
and external Audit and Supervisory Board members.
The Department also serves as secretariat for the Boardof Directors.
At the request of the Audit and Supervisory Board, weassign personnel to serve as audit staff to encourage thesmooth execution of audit procedures. We have establisheda system that enables full-time Audit and Supervisory
Board members to attend important corporate meetings,
including Board meetings and Executive Committee

meetings, receive reports from our financial statement
auditors, directors, and employees of various departments
as necessary, and exchange opinions with these parties
at any time.

Cross-Shareholdings
We acquire and hold shares of other companies for
non-investment purposes (cross-shareholdings) when
we have determined that holding such shares is likely tocontribute to maintaining and increasing the medium- andlong-term corporate value of the Group by maintaining
and strengthening business relationships withbusiness partners.
We verify the appropriateness of our individualcross-shareholdings with a view to whether holding themwill continue to contribute to maintaining and increasing
the corporate value of the Group. Verification is performedby viewing the transaction results and prospects of realestate transactions, joint ventures, construction andequipment transactions, and financial transactions, inaddition to dividend results. We report verification anddisposal results to the Board of Directors at least once every
year, and if we determine that such cross-shareholding
is no longer significant, we seek to reduce thecross-shareholding while considering the impact on thestock market and other factors.
The medium-term business plan (fiscal 2020 to 2024)
calls for us to reduce cross-shareholdings, partly in aneffort to increase asset efficiency as part of efforts toreview the asset portfolio.

Audit
4 members,
two of whom are external members
Chair: Kouji Kawakubo(Audit and Supervisory Board Member(full-time))

12 directors,
four of whom are external directors
Chair: Makio Tanehashi(Representative Director and Chairman)

Board of Directors Related Data
Unit

2016

2017

2018

2019

2020

Number of Board meetings

Meetings

13

12

13

15

14

Number of directors

Persons

9

11

12

12

12

Number of executive officers on Board

Persons

6

7

7

7

7

Number of non-executive officers on Board(excluding independent external directors)

Persons

0

1

1

1

1

Number of independent external directors

Persons

3

3

4

4

4

Proportion of external directors

%

33

27

33

33

33

Average Board meeting attendance

%

100

100

100

99

100

5.3 (March)

5.0 (March)

5.8 (March)

3.8 (March)

4.8 (March)

Appoint/Supervise

President
Coordinate

39

times

Executive
Committee

2

times

Internal Control
Committee

2

times

Sustainability
Committee
Internal Audit Department

Divisions/Departments
Audit

Tokyo Tatemono

Average tenure of directors(including independent external directors)

Group Companies

Tokyo Tatemono Group

53

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Years

Data collection period: January to December of each year. Unless otherwise specified, figures are as of December each year
Data collection scope: Tokyo TatemonoTOKYO TATEMONO GROUPINTEGRATED REPORT 2021

54

FOUNDATIONS FOR VALUE CREATION
Corporate GovernanceEvaluation 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
the effectiveness of the Board based on the results.
Below is an overview of the effectiveness evaluation forfiscal 2020.
Evaluation Process / Topics

Evaluation
Process

TopicsA 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 future issues and measures
were discussed.
Structure: Ratio, number, and diversity of
external directors
Agenda: Number, content, and standard
expressions of monetary amounts inagenda 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 and Future Actions
The evaluation results confirmed that the Board of Directors
is sufficiently effective. In addition, discussion of thesurvey results in a Board of Directors meeting confirmed
the following issues.

Matters whose Evaluation Improved Year on Year
Greater discussion of longer-term management issues
and policies.
Future Issues and Actions
Actions to review and improve the standard expressionsof monetary amounts and content of submitted agendas, advance explanation of the agenda, and timing ofadvance distribution of explanatory materials; actions toimprove the efficiency and liveliness of discussions.

55

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Sustainable Procurement Standards
As well as ensuring respect for human rights, the Tokyo
Tatemono Group recognizes the need to ensure commitment
throughout the entire supply chain to sustainable procurementthat considers environmental conservation. In May 2021,
the Group formulated the Sustainable Procurement
Standards to clearly set forth the Group’s approach and to
gain further understanding and cooperation from business
partners. We obtained advice from external experts when
formulating the plan, to ensure our correct understandingof the demands and requirements of society. The plan has
also been approved by the Board of Directors.
These standards are intended for business partners
involved in the Group’s business, and reflect ourcommitment to managing our entire supply chain. We
request that business partners understand and comply
with the nine items listed in the standards. We also askthat they make improvements as necessary.
Summary of the Sustainable Procurement Standards
1 Observance of Laws and Regulations

Compliance with the laws and regulations of the countries
and regions in which we operate
2 Respect for Human Rights
Ensuring respect for basic human rights based oninternational standards
Elimination of discrimination and harassment
3 Assurance of Sound Labor Practices andWorking Environments
Ensuring freedom of association and the right tocollective bargaining
Eliminating and preventing forced labor and child labor
Eliminating discrimination in working conditions
Complying with laws and regulations governing minimum
wages, overtime pay, benefits, etc.
Eliminating illegal overtime and excessive labor
Creating a safe and healthy working environment
4 Fair Business Activities
Prohibition of bribery and other corrupt practices
Prohibition of unfair and anti-competitive transactions
Blocking relationships with antisocial forces
Protection and appropriate management of personal
information and confidential matters
Protection of confidentiality of information related toreporting and the anonymity of whistleblowers
5 Assurance and Improvement of Safety and Quality
Ensuring and improving the quality of products andservices and disclosing related information
Responding sincerely to requests and complaints
6 Environmental Considerations
Reduction of greenhouse gas emissions
Promotion of 3R, efficient use of resources, reduction ofwaste generation
Prevention of pollution of air, water, soil, etc., and appropriate
management and disposal of chemical substances
Preservation of biodiversity
Elimination of illegal raw material procurement
7 Co-existing with Local Communities
Building good relationships with local communities
Understanding and respecting the culture and customs of
local communities
8 Formulation and Creation of BCP
Formulate a business continuity plan (BCP) and builda system to implement it
9 Collaboration in the Supply Chain
Encourage business partners to understand, comply with,and improve these procurement standards

Director Remuneration
Based on our Corporate Philosophy, “Trust beyond theera,” the Group strives for sustainable growth and theimprovement of corporate value over the longer term.
Regarding director remuneration as well, our aim is toinstill awareness of directors’ responsibility to contributeto building corporate value not only in the short term but
also over the longer term. To this end, we have adopted asystem that links a certain percentage of remuneration tobusiness and stock price performance.
Remuneration Policy
Director remuneration comprises three elements: fixed
remuneration, performance-based remuneration, andstock-based remuneration. The ratio of these elements is
set appropriately based on the policy described below,
and the amount of remuneration for each director isdecided by the Board of Directors after consulting with
the Nomination and Remuneration Advisory Committee.
Remuneration of external directors and Audit and Supervisory
Board members is limited to fixed remuneration inconsideration of their duties.
Remuneration Structure
Fixed Remuneration: Up to 35 million yen per month (420
million yen per year) *1

Breakdown by Remuneration TypeFixed
remuneration

Performancebased
remuneration

Stock-based
remuneration

Positioning

Basic
remuneration

Short-term
incentive

Medium- andlong-term
incentive

Variability—

Performancelinked to single
fiscal year

Stock-based

50%-60%30-40%

5-10%

Proportion of
total renumeration(approx.)*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

Remuneration AmountThe Nomination and Remuneration Advisory Board
deliberates on the selection of candidates for directors
and representative directors and the director remuneration(excluding external directors). Committee members areappointed from among the directors, but to capitalize on
the knowledge and advice of external directors andensure the objectivity and transparency of procedures,
external directors will make up the majority of Committee
members, which is set at seven or less.

Performance-based remuneration (for directors excluding
external directors): Capped at 1% of consolidated ordinary
profit and 2% of profit attributable to owners of parent for
the year prior to the fiscal year in question*2

Remuneration of Directors and Audit and Supervisory
Board Members (fiscal 2020)

Stock-based remuneration (for directors excluding
external directors): Based on the stock-based remuneration
system determined by a board benefit trust scheme,
directors will be awarded a maximum of 40,000 points
per fiscal year (equivalent to 40,000 shares). At the time ofretirement, the director will be paid an amount equivalent
to the amount of company stock held and market value.

Director
category

Audit and Supervisory Board member remuneration:
Remuneration of external directors and Audit and Supervisory
Board members is limited to basic remuneration according
to whether the member serves in a full-time or part-time
position, capped at 8 million yen per month (equivalent to
96 million yen per year).

Total remuneration by type(million yen)
Eligible
individuals

Fixed
remuneration

Total
remuneration
PerformanceStock-based
based
remuneration
remuneration

Directors(excluding
external
directors)

8

254

156

33

444

Audit andSupervisory
Board
members(excluding
external
members)

2

52

—

—

52

External
directors andAudit andSupervisory
Board
members

6

54

—

—

54

Total

16

360

156

33

550

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

56

FOUNDATIONS FOR VALUE CREATION

Dialogue between
the Chairman of the Boardand an External Director—How can the Board of Directors
engender sustainable growth?

Makio
Tanehashi

YumikoKinoshita

Representative
Director and Chairman(Chairman of
the Board of Directors)

External Director

Tanehashi: It sounds like you have a very wide range ofvaluable experience.
You talked about raising children. Our Group has a lotof very talented women employees. I would like to hold up
your experience as a role model for them.

Makio Tanehashi, Chairman of the Board of Directors, and Yumiko Kinoshita, External Director, sat down to
discuss actions taken so far in the management of Tokyo Tatemono Group’s Board of Directors and upcoming
issues and expectations for the Group.

1 The Role and Skills Expected of
New External Director
Yumiko Kinoshita

Tanehashi: Tokyo Tatemono appointed two new external
directors at the General Meeting of Shareholders held on
March 25, 2021. As a result, of the 16 directors and Audit
and Supervisory Board members, six are external officers,of whom two are women. We decided on this framework
because we wanted to strengthen the governance functionof the Group and aim for sustainable growth by bringing
the diverse experiences and skills of each officer to bearon management. We believe that the oversight of thebusiness by external directors and the advice they bringto the table, drawing on their knowledge and experience,
make for a more effective Board of Directors. The diversityof the overall skill matrix is crucial to this end.
That’s why I have high expectations for you,
Ms. Kinoshita, as one of our newly appointed external
directors. That’s also why I wanted to sit down with you
to talk about the experience and skills you’ve acquired
throughout your career, and based on that, to hear what

57

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

it was considered necessary to close a factory as part ofa corporate merger, the theory on paper by itself was notcompelling. I experienced firsthand the importance ofbuilding relationships of trust, empathizing with otherpeople’s feelings, and taking the time to make a case. I was
raising young children at the time, so it was a daily struggle
as I felt overwhelmed by the quality and quantity of work.
It was difficult at times, but the experience of working hardin the midst of friendly but strong rivalry would serve mewell later on.
After that, I held several jobs. I worked in theinternational department of the National Museum of
Emerging Science and Innovation, as Director of
Corporate Planning for KidZania, as Director of the Japan
Professional Football (Soccer) League, and as Director of
the Tokyo Football Association.

your hopes are as you take part in the management ofTokyo Tatemono.
Kinoshita: I started out my career at the Bank of Japan.
At a time when there were only a few women college
graduates at the Bank, there was a lot of trial and error in
the beginning, but I think I got off to a solid start as amember of society.
After that, I went for a Master’s degree at Harvard
Kennedy School. At that time, there was a lot of “Japan
bashing” going on in the United States, so through myclasses and discussions with other students, I was reallymade to think again about Japan’s place in the world.
I came back to Japan to work for McKinsey & Company.
I recall being overwhelmed by all the talented people
working together in the Tokyo office, all of whom had theirown unique perspectives and ways of thinking about theworld. Because McKinsey’s personnel evaluation system
was based on global standards, it was also a highly
competitive culture. Your output was compared withcolleagues from all over the world. At the same time,
I encountered many situations in which numbers and logic
alone couldn’t paint the whole picture. For example, when

Kinoshita: People find themselves in all sorts of contexts,
so I would like to hear what your employees have to sayrather than using my own experience as a model. I’ve
found that as people interact with each other it more
often leads to new insights and understanding.
Tanehashi: Thank you. I’d really like to create opportunities
for that to happen, so that employees who are concerned
about the work they are facing can come to you with
their opinions.
I’m also excited about the breadth of experience you
bring to your role—your career since you came back toJapan exposed you to the worlds of culture and sports.
The work of real estate developers isn’t just about
constructing office buildings and residences. Beyond that,it’s essential that we have a perspective of how to makebetter cities. That’s why I think we need a grounding in theliberal arts. Our Group is currently engaged in redevelopment
projects like the one at Yaesu. When we come to a project
like that, our aim is not to simply build physical structures.
We need an overarching concept to guide us in increasing
the value of an area. So, we want to look back on thelocal history, while also thinking about what will enhance
Tokyo’s stature as an international city. Passing on thelocal food culture might be one way to approach a project.
In this way, development demands that we have insight
into the local area, and creative ambitions for the future. I
think the liberal arts provide the background for that.

Kinoshita: I think you’re right. I agree that the culture andthinking that underpin the various work we engage in arevery important.
For example, when I was at KidZania, at one point mymain responsibility was customer support as onsite
manager. At the time, there was a shared awarenessamong the staff that our role was not simply to help
customers have a good time at the facility, but to think
about how we could empower children for their future
lives through the experience of working.
Also, when I was involved in managing the Japan
Professional Football League (J League), touring aroundobserving all the football clubs throughout the country
gave me the chance to encounter the history and culture invarious regions. What I sensed was the profound diversityof each region. All the different clans in feudal Japan wereso unique that they left a distinct mark, which still remains.
That seems to be exactly the point of regional revitalization
and urban development.

2 What the Board of Directors
Should Focus on

Kinoshita: What struck me in participating in my first
Board meeting was that the directors were keenly aware of
the issues the Group is facing, and also that the discussions
were quite lively. It was a climate in which the external
directors could freely express themselves. Also, theagenda was separated into deliberation and reporting
sections, so it was easy to know what kind of response
was expected in each section.
Tanehashi: External directors are expected to exercise
oversight and advisory functions for the companies they
serve. So, I would like to talk with you a bit about someof the issues I see facing the company in our current
business environment.
First, since real estate development is a long-termbusiness, it bears business risks such as economic
fluctuations. It’s also a business area that requires
approaching social issues, such as those spelled out in
the SDGs, from a long-term strategic perspective.
The second thing I would say is that it is necessary to
grasp the nature and impact of country risks and legalrisks associated with expanding the business overseas.
We have to recognize that the risks are different from what
we find when doing business in Japan.
The third issue is bringing opinions from a user
perspective into the management of the company. As aTOKYO TATEMONO GROUPINTEGRATED REPORT 2021

58

FOUNDATIONS FOR VALUE CREATION
Dialogue between the Chairman of the Board and an External Director

Tanehashi: As you said, actually going overseas andseeing things with your own eyes can bring you to anunderstanding of the local culture, and is sure to open up
new perspectives and ideas.
Kinoshita: Regarding your third point about user
perspectives, I’m hoping to speak as a consumer at
Board meetings. By the way, when I first heard about
the external director offer, I was surprised to find out
that, despite the company being called Tokyo Tatemono,
you were also actively involved in suburban development
as well.

developer, it is essential to have a good sense of theneeds of the people who actually use what we build, ofcourse on the residential side but on the office building
side as well. I see our external directors as being ideallyplaced to provide such valuable user perspectives.
Kinoshita: First I’d like to respond to the issue of having
a long-term management perspective, especially withregard to the SDGs. I think what’s important is to set
clear goals and make the output visible. For example, I’msure there are numerous environmental initiatives that wehave taken for granted in Japan but that we could be
proud of at a global level. But we haven’t been able toquantify, demonstrate, and manage these initiatives as
they do overseas.
On the other hand, it is also vital to keep in mind thatthe world is constantly moving forward and changing.
When we look at other countries, we may actually belagging behind in areas where we thought we were out infront. I think the burden is on Tokyo Tatemono to take fullstock of the response measures it has taken so far so as
to not get stuck in a rut. From there the company can turnto building on its distinctive strengths.
On the second issue of risks related to overseas businessdevelopment, I see my role as being in conversation withvarious people, exchanging opinions and offering diverse
perspectives to the Board. Also, I know there are a lot ofthings young employees can pick up when they actually
go abroad. I definitely hope the company will provide
employees with such opportunities and capitalize on
their insights in future business activities.

59

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Tanehashi: In part because of the pandemic, more andmore people are keen to pursue a suburban lifestyle. We
have to address those needs. Suburban residents tend toplace higher priority on the living environment, such as theabundance of greenery and the ease of raising children,than on the convenience of being near the city center.
So, we are exploring the kinds of properties we ought tooffer based on these new needs.
Kinoshita: It seems to me that the work of a real estatedeveloper has a very strong creative side. I think theextent to which employees can maintain a wide range ofperspectives is what feeds into a high degree of creativity.
Especially in recent years, the company has been involved
in some development projects like Hareza Ikebukuro
which have become immediate landmarks and made a
big impact. I think projects like that are crucial to setting
the company apart in the real estate business and giving
Tokyo Tatemono a stronger market presence.

Three key points inexercising oversight andadvisory functions

4 Toward Achieving the Long-Term
Vision and Medium-TermBusiness Plan

“I’d like to see
Tokyo Tatemono
be a company that
acknowledges people whotake on new challenges.
So I will encourage people
who try new initiatives.”

3 Social Trends to Keepan Eye on

Kinoshita: I think we should pay particular attention to
the risk that technologies that didn’t exist before will
dramatically alter the market landscape. For example,
some logistics centers are shifting to fully unmanned
operation and the business format is totally different fromwhat it used to be. Similar changes may occur in the realestate industry, too, and the form of real estate distribution
may change significantly.

Tanehashi: The Group has formulated two strategies
looking forward over the longer term—our medium-termbusiness plan and our long-term vision. We are working toachieve the goals set out in these statements, but that’s
not something that a single business area can accomplish
on its own. For example, we can point to our logistics
facility development business as an area that has recently
demonstrated robust performance. But there’s noguarantee that there will be stable demand in this area
down the road. Under these circumstances, it is vital that
we keep our finger on the pulse of market trends andcontinue to offer real estate that society demands.
Kinoshita: I was struck by the opening words of thelong-term vision, which define “Becoming a Next-Generation
Developer” as the direction Tokyo Tatemono wants tohead in.
As stated in the long-term vision, solving a variety ofsocial issues and reaching consolidated business profitof 120 billion yen are goals which are, in my opinion,
unattainable without the free thinking and ingenuity of
everyone on the management team and each and every
employee. To cultivate that kind of environment, I’d liketo see Tokyo Tatemono be a company that acknowledges
the young people who aggressively take on new
challenges. I hope to be in deep discussions with people
throughout the company, including fellow Board members,
and will encourage people who try new initiatives.

Tanehashi: You’re absolutely right. For example, robots
and sensors are already beginning to be introduced totake over building management operations such as
cleaning and monitoring. In addition, with the emergenceof autonomous driving technology, the movements andlifestyle patterns of people in cities will change. We needto address the needs of our customers while keeping
close tabs on the way these changes are impacting thereal estate field.

 long-term perspectiveAGrasp of overseas trendsUser perspectives

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

60

FOUNDATIONS FOR VALUE CREATIONManagement Structure
Directors

Makio Tanehashi
Representative Director andChairman of the Board

Hitoshi Nomura
Representative Director, President
and Chief Executive Officer

Kengo Fukui
Representative Director,
Executive Vice President andExecutive Officer

Katsuhito Ozawa
Senior Managing Executive
Officer and Director

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

April 1981 Joined the Company
March 2005 General Manager of Property Management Department of the Company
March 2008 Director, and General Manager of Property Planning Department of the Company
March 2011 Managing Director, and Division Director of Commercial Properties Division responsible for Kansai Branch and Kyushu Branch of the Company
March 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 the present)

April 1982 Joined the Company
October 2002 General Manager of Fukuoka Branch of the Company
March 2011 Director and General Manager of Corporate Planning Department of the Company
March 2013 Managing Officer and General Manager of Leasing & Consulting Department of the Company
March 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
January 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
January 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 theCompany; President & Chief Executive Officer of Tokyo Tatemono Real Estate Sales Co., Ltd. (to the present)
April 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) (to the present)

April 1987 Joined the Company
March 2007 General Manager of Residential Management Business Department of the Company
July 2009 Director and General Manager of Finance Department of Tokyo Realty Investment Management, Inc.
March 2015 Managing Officer and General Manager of Corporate Planning Department of the Company
January 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
March 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 ofFinance Department and International Business Department of the Company
August 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 ofInternational Business Department of the Company
January 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
January 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
January 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
April 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 (to the present)

Akira Izumi
Senior Managing Executive
Officer and Director

Hisatoshi KatoManaging Executive Officer
and Director

Hideshi Akita

April 1987 Joined the Company
March 2009 General Manager of Retail Management Department of the Company
March 2015 Managing Officer and General Manager of Urban Development Department of the Company
January 2017 Managing Executive Officer responsible for Personnel Department, Corporate Planning Department, and General Affairs Department; andGeneral Manager of Corporate Planning Department of the Company
March 2017 Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, and General Affairs
Department; and General Manager of Corporate Planning Department of the Company
January 2019 Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, General Affairs Department,
and Appraisal Department; and General Manager of Corporate Planning Department of the Company
July 2019 Managing Executive Officer and Director responsible for Personnel Department, Corporate Planning Department, General Affairs Department,
and Market Research Department; and General Manager of Corporate Planning Department of the Company
January 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 Departmentof the Company
January 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, and Acquisitions & Sales Department (joint responsibility) of the Company (to the present)

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

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

Managing Executive Officer
and Director

Takeshi Jinbo
Managing Executive Officer
and Director

April 1988 Joined the Company
January 2015 General Manager of Acquisitions Department of the Company
January 2018 Managing Officer and General Manager of Acquisitions Department of the Company
January 2019 Managing Officer; Vice Division Director of Residential Development Division; and General Manager of Acquisitions Department of theCompany
January 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 (to the present)

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

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

61

TOKYO TATEMONO GROUP

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

INTEGRATED REPORT 2021

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

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

62

FOUNDATIONS FOR VALUE CREATIONManagement Structure
External Directors

Shuichi Hattori
External Director

Yoshimitsu Onji
External Director

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

Takeo Nakano
External Director

April 1977 Joined The Daiei, Inc.
April 1994 General Manager of Corporate Planning Division of The Daiei, Inc.
September 1998 Director and Vice President of R.E. Partners, Co., Ltd. (retired in April 2000)
December 1999 CEO of OZ Corporation (to the present)
March 2000 Managing Executive Officer of RECOF Office (currently RECOF Corporation)
June 2007 Director and Chief Corporate Officer of RECOF Corporation
June 2010 President and Chief Executive Officer of RECOF Corporation
October 2016 Chairman and Representative Director of RECOF Corporation (retired in September 2017)
December 2016 Director of M&A Capital Partners Co., Ltd. (retired in September 2017)
March 2018 External Director of the Company (to the present)
April 2018 Chairman and Director of Hongo Tsuji Business Consulting Co., Ltd. (retired in November 2018)
June 2018 Outside Director of NIHON CHOUZAI Co., Ltd. (to the present)
December 2019 Outside Audit and Supervisory Board Member of United Foods International Co., Ltd. (to the present)
June 2020 Outside Director of Sotetsu Holdings Co., Ltd. (to the present)

Yumiko Kinoshita
External Director

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

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

External Audit & Supervisory Board Members

Takao Yamaguchi
Audit and Supervisory
Board Member(Independent)

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

September 2007 Registered as a lawyer
September 2007 Joined HANZOMON SOGO LAW OFFICE (resigned in December 2009)
January 2010 Joined OMOTESANDO SOGO LAW OFFICE (to the present)
March 2019 External Audit and Supervisory Board Member of the Company (to the present)

Sayaka Hieda
Audit and Supervisory Board
Member (Independent)

Executive Officers
Position

Name

President and Chief
Executive Officer

Kengo Fukui

Assistant to President
Division Director of Real Estate Solution Service Division responsible for Solution Service Department (joint responsibility)
President and Chief Executive Officer of Tokyo Tatemono Real Estate Sales Co., Ltd.

Katsuhito Ozawa

Division Director of Commercial Properties Division responsible for Acquisitions & Sales Department (joint responsibility),
Kansai Branch, Kyushu Branch, and Nagoya Branch

Akira Izumi

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, and Acquisitions & Sales Department (joint responsibility)

Hisayoshi KatoManaging Executive
Officer

63

TOKYO TATEMONO GROUP

Position

Hitoshi Nomura

Executive Vice President
and Executive Officer

Senior Managing
Executive Officer

Areas of responsibility and important concurrent positions

Hisatoshi Kato

Division Director of Leisure, Child Care & Staffing Business Division
President & Chief Executive Officer of Tokyo Tatemono Resort Co., Ltd. (to the present)

Hideshi Akita

Division Director of Residential Division

Takeshi Jinbo

Vice Division Director of Residential Development Division responsible for Solution Service Department (joint
responsibility), Acquisitions Department, and Project Development Department

INTEGRATED REPORT 2021

Name

Areas of responsibility and important concurrent positions

Satoshi Eida

President & Chief Executive Officer and Representative Director of Tokyo Tatemono Amenity Support Co., Ltd.

Shinjiro Kobayashi

General Manager of Urban Development Department

Nobuyoshi Takahashi General Manager of Kansai Branch and General Manager of Project Management (Kansai) Department

Managing Officers

Masayuki Okubo

General Manager of Business Planning Department of Residential Development Division

Kazuki Sugise

President & Chief Executive Officer and Representative Director of Prime Place Co., Ltd.

Yusuke Mishima

General Manager of Accounting Department

Katsuhiko Tamai

President and Representative Director of Nihon Parking Corporation

Hiroshi Takahashi

Responsible for Logistics Properties Development & Management Department; General Manager of Retail Properties
Development & Management Department and Hotel Development & Management Department

Fumio Tajima

Division Director of International Business Division

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

64

FOUNDATIONS FOR VALUE CREATION
Risk Management

Compliance

Policy and Concept

Risk Management System

The Group strives to manage risks that affect theGroup’s business to achieve stable improvement incorporate value. We have established risk management
regulations and created a risk management system, bymeans of which we monitor and control risks constantly
to ensure consistent risk management. In developing
our risk management system, we referenced ISO31000(international standard for risk management) and JIS Q
31010 (Japanese standard for risk management).

We have identified and classified risks that may have asignificant impact on the Tokyo Tatemono Group business:business risk, investment risk, financial risk, climate changerisk, and internal control risk.
Of these, integrated risk, particularly that involving
business risk or investment risk, is managed by the
Corporate Planning Department, which is the department
in charge of risk management. Internal control risk (internalmanagement risk and compliance risk) and climate change
risk are discussed and reviewed by the Internal Control
Committee and Sustainability Committee, which are
chaired by the President, and measures are enacted
accordingly. The Executive Committee considers policies
related to general business risk.
Important matters related to these risks are reported
to the Board of Directors as necessary. The Audit andSupervisory Board is responsible for conducting audits
related to these risks. We engage in detailed risk
management through a series of processes that
include monitoring and improving the status of risk
management operations.

Compliance Promotion

Compliance Training

The Group defines compliance as complying not onlywith laws and regulations, but also with social norms
and corporate ethics. This approach builds a long-lasting
relationship of trust with society and allows us to continue
sound corporate activities. In June 2009, the Groupestablished a shared Compliance Charter for groupcompanies. This charter is our pledge to society topromote corporate activities that are committed tounwavering compliance.
The Group established an Internal Control Committee
as part of our system to promote compliance. This
committee discusses internal management risks, includinggroup compliance, fraud, and anti-corruption, overseeing
group compliance activities. The Tokyo Tatemono
General Affairs Department coordinates with Group
companies, aiming to improve compliance functions
across the Group.

Tokyo Tatemono Group Compliance Charter

Helpline

As we engage in corporate activities, we observe theCompliance Charter below:

Risk Management Structure
Audit and Supervisory
Board

Board of Directors

Audit
Deliberate and Report
Important Matters

Deliberate and Report
Important Matters

Deliberate and Report
Important Matters

Executive Committee

Internal Control Committee

Sustainability Committee

Committee Chair: President
Secretariat: Corporate Planning Department

Committee Chair: President
Secretariat: General Affairs Department

Committee Chair: President
Secretariat: Corporate Communications Department

 e adhere to laws, regulations, and other rules andWengage 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 otherand maintain a comfortable working environment.
Established June 2009

Compliance Promotion Structure
ReportRisk Management
Department

Audit andSupervisory Board

Board of Directors

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

General Affairs Department
Internal Control Committee
ReportAssistance: General Manager, General Affairs Department(Only for internal management risk)

Committee Chair: President
Secretariat
General Affairs Department
Corporate Planning Department

Integrated Risk

Risk Category

Internal Audit Department
Internal Control Risk

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

(Combination of internal management risk and compliance risk)

ReportMonitor and Improve

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

65

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

Every year, the Group conducts training via e-learning.
During 2020, approximately 3,900 managers andemployees across 15 companies completed training or
refreshed their knowledge in various areas. Training topics
included general compliance (including anti-corruption),harassment prevention, information management (including
prevention of insider trading), and matters related to the
Building Lots and Buildings Transaction Business Law and
the Act on Prevention of Transfer of Criminal Proceeds(prevention of money laundering, etc.). The participation
rate was 98.1%. In addition, we conducted job
level-specific training, including anti-harassment training,training for directors and department heads, and training
for newly appointed leaders.
On the subject of legal and tax matters of highimportance to our business, we invite outside experts as
lecturers for seminars. These seminars cover the latest
examples of court trials, tax reforms, and other information
related to business activities throughout the group.

Compliance
Awareness Activities

ReportReceive Reports

Internal Audit

The Group established the Tokyo Tatemono Group
Helpline, a shared group resource. Using the Helpline,
employees can report to and seek consultation with an
external contact for matters such as harassment, toprevent legal issues or fraud, or to take early action in
addressing such matters. All employees throughout theGroup are entitled to use the helpline. The privacy ofanyone who uses the helpline is protected.
The reports and consultations received through thissystem are reported to the Tokyo Tatemono Internal Audit
Department (an organization that reports directly to thepresident). Depending on the case, the investigationand fact-checking is conducted by the Internal Audit
Department, by the reporting desk at each Group company,or by the harassment response desk of each company.
As a result of the investigations, we take appropriate
measures to address actions that constitute complianceviolations, such as promptly taking corrective measuresand measures to prevent recurrence. The Internal Control
Committee convenes to consider responses to the mostserious cases. In the spirit of the Whistleblower Protection
Act, we take appropriate measures to ensure theprotection of whistleblowers.

Business Divisions

Group Companies
Person Responsible
for Compliance

Coordinate

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

66

DATA SECTION
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 beginning of 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

FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020Million yen
Million yen
Million yen
Million yen
Million yen

198,274
24,055—
13,687
6,316

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

Million yen
Million yen
Million yen

927,925
262,597
460,835

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

Million yen
Million yen
Million yen

59,730(1,464)(53,122)

8,053(37,164)
41,11657,332(15,385)(35,855)

22,13537,083(47,119)(4,790)257,798(277,787)

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

38,783(53,024)
9,005(14,196)(64,508)
77,99819,748(63,577)
34,43824,096(64,082)
48,00043,524(66,724)
38,307

Million yen
Million yen

4,828
20,906

11,98232,8896,586
39,466

12,80452,271(24,744)
86,907(39,689)
47,217(5,164)42,053(825)
41,227(9,513)31,702

7,794
39,497

15,14854,645

%
%
%
Times
Times

2.5
2.6
27.6
1.8
13.8

(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

Yen
Yen
Yen

14.67
594.748
54.5(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

%

*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 thereverse stock split occurred at the beginning of the fiscal year ended December 2015

Non-Financial Data (Social)(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*2
Voluntary Turnover Rate
Average annual training hours
Ratio of employees who underwent
a health check-up*3
Average Number of Paid Leave Days Taken*4
Percentage of Paid Leave Taken
Percentage of Childcare Leave Taken (Men)
Number of Lost Time Injuries*3, *5
Total Days Lost Due to Absence*6
Ratio of Absenteeism

Unit

2016

2017

2018

2019

2020

Persons%
Persons%
Persons
%
%
%
Time

584
21.1
295
2.7
14
28.6
1.88
1.4
—

687
21.1
339
3.2
19
21.1
1.98*
1.4
—

719
23.8
350
4.6
22
36.4
1.87*
2.6*
12.0

749
24.8
360
5.0
21*1
33.3
1.81*
2.1*
14.4

772
25.5
367
6.0
20
25.0
1.75*
2.2*
12.2

%
Days
%
%
Incidents
Days
%

100
8.7
—
0.0
1
47
—

100*
8.8*
—
3.6
0*
81*
—

100*
9.9*
—
41.2
1*
137*
—

100*
10.6*
57.7*
28.6
0*
122*
0.06*

100*
9.3*
51.2*
18.2
0*
7*
0*

*1 Following an examination of past figures, some figures for 2019 have been revised.
*2 As of June in each year
*3 April through March of the following year
*4 Other leave systems such as summer leave and national holidays are also provided(days under these systems are not included in the above figures). April throughMarch of the following year (beginning in 2018)67

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

8.3
3.1*3
24.0
2.5
13.4
152.12
1,862.81
46
30.2

Non-Financial Data (Environmental)*1(Tokyo Tatemono, Non-Consolidated)

Energy Consumption (Crude Oil Equivalent)
Unit Load
CO2 Emissions
Scope 1 (Fuel-Derived)
Scope 2
Scope 3
Water Usage (Potable Water)
Unit Load
Total Waste Emissions
Unit Load
Recyclable Waste Emissions

Unit

2016

2017

2018

2019

2020

Kl
Kl/thousand m2
t-CO2
t-CO2
t-CO2
t-CO2
Thousand m3
m3/m2
tt/thousand m2
t

21,59235.4
44,6292,553
42,076
—
579
0.9
4,914
8.6
—

22,083*34.2
42,147*2,402*
39,745*—584*
0.9
5,173*
8.6
3,395

23,895*35.0
44,559*3,300*
41,259*—654*
1.0
4,945*
8.3
3,202*

24,165*34.0
1,100,693*2
15,050*2
115,897*2
969,745*2
622*
0.9
5,151*
8.5
3,280*

23,497*28.6
1,288,946*2
11,981*2
104,736*2
1,172,229*2
467*
0.6
3,769*
5.5
2,424*

Unit

2016

2017

2018

2019

2020

Incidents
Incidents

16
0

44
0

59
0

56
0

41
0

Incidents

0

0

0

0

0

Incidents

0

0

0

0

0

*1 April through March of the following year
*2 From 2019, the scope of aggregation is changed to the Tokyo Tatemono Group

Non-Financial Data (Governance)(Tokyo Tatemono, Non-Consolidated)*5 Number of lost time injuries: Accidents that occur during work that result in one ormore days absence*6 April through March of the following year (beginning in 2018)

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 toother compliance violations(*) have been guaranteed by a third party* See p. 54 for data related to our board of directors

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

68

DATA SECTION
Financial Statements
Consolidated Balance Sheet
Assets(Million yen)

FY2018*FY2019FY2020Cash and deposits

31,71639,50454,647

Trade notes and accounts receivable

11,876

13,17913,730Real estate for sale104,221151,004

Real estate for sale in process

101,059

Real estate for development
Other(Million yen)

Liabilities

FY2018*FY2019FY2020

Short-term borrowings

65,925226,119

68,314

Commercial papers

33,00085,00055,000164,578

Current portion of bonds payable

15,00015,00020,00098,216112,485

Accounts payable - other

11,193

11,482

9,784

78,157

88,10471,508

Income taxes payable

5,835

8,321

10,20326,36934,63530,857

Provision for warranties for completed construction

10

9

11

(43)

(45)

(49)

Provision for bonuses

929

903

944

353,358

424,600

447,757

24

Current assets

Current liabilities

Allowance for doubtful accounts
Total current assets

Provision for bonuses for directors (and other officers)

43

24

Provision for environmental measures

—

3

1

Provision for loss on liquidation of subsidiaries and associates

—

280

275

Deposits received under real estate specified joint enterprise law

8,042

8,991

5,083

Other

45,944

53,10750,228

Total current liabilities

185,924409,242

219,869

Bonds payable

145,000

210,000

205,000

Long-term borrowings

594,449

385,932

625,944

Deferred tax liabilities

20,29926,65020,351

Deferred tax liabilities for land revaluation

27,277

27,187

23,666

Non-current liabilities

Non-current assets
Property, plant and equipment
362,482361,679

372,585

Provision for share-based remuneration for directors (and other officers)

53

88

139

Accumulated depreciation(137,216)(147,366)(147,740)

Provision for retirement benefits for directors (and other officers)

169

192

76

Buildings and structures, net

225,265

214,312

224,844

Provision for environmental measures

30

26

26

527,272

550,565

530,963

Leasehold and guarantee deposits received

75,24577,062

78,975

Buildings and structures

Land
Construction in progress

8,479

13,92839,042Retirement benefit liability

11,477

12,09912,634Other

28,28428,042

28,995

Deposits received under real estate specified joint enterprise law

18,60015,09115,800(16,501)(17,219)(17,563)

Other

14,985

16,26323,026

Accumulated depreciation
Other, net
Total property, plant and equipment

11,782

10,822

11,431

772,800

789,628806,281

Intangible assets

Total non-current liabilities
Total liabilities

907,588

770,595

1,005,640

1,093,512

1,179,837

1,225,510

92,451

Net assets
106,083

110,745

128,991

Goodwill

Leasehold interests in land

3,136

1,192

546

Share capital

92,451

92,451

Other

1,196

1,137

1,013

Capital surplus

66,722

66,744

66,587Retained earnings

107,468

129,170

141,422

Total intangible assets

Shareholders’ equity

110,416

113,076

130,552

127,788

155,858

139,308

4,904

4,469

8,829

7

6

8

Deferred tax assets

1,855

1,900

2,278

Deferred gains or losses on hedges

Leasehold and guarantee deposits

21,232

21,754

21,594

Revaluation reserve for land

Treasury shares

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

Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

Total shareholders’ equity(237)(10,232)(219)

266,404

278,133

300,242

49,85965,002

54,928——(42)30,932

31,022

34,965(850)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

858

1,819

1,217

Foreign currency translation adjustment

872

248

56,96651,033

66,906

Remeasurements of defined benefit plans

61

600

120

(98)

(97)

(94)

81,72696,874

89,122

213,515

236,745

240,049

1,096,732

1,139,449

1,176,882

1,450,091

1,564,049

1,624,640

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

8,447

9,203

9,765

356,578

384,211399,129

1,450,091

1,564,049

1,624,640* 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

69

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

70

DATA SECTION
Financial Statements
Consolidated Statement of Income andConsolidated Statement of Comprehensive Income
Consolidated statement of income
Operating revenue
Operating costs
Operating gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Gain on investments in investment partnerships
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing fee
Share of loss of entities accounted for using equity method
Bond issuance costs
Dividends paid on real estate specified joint enterprise law
Loss on investments in investment partnerships
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Gain on sales of investments in capital of subsidiaries and associates
Gain on liquidation of subsidiaries and associates
Reversal of provision for loss on liquidation of subsidiaries and associates
Compensation income
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss
Loss on sales of investment securities
Loss on sales of investments in capital of subsidiaries and associates
Loss on valuation of investment securities
Provision for loss on liquidation of subsidiaries and associates
Loss on redemption of bonds
Loss on COVID-19
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Million yen)

FY2018*FY2019(Million yen)

FY2020Consolidated statement of comprehensive income
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

273,302
192,134
81,16834,402
46,765

323,036
233,342
89,69437,28352,410334,980
251,954
83,02533,39349,631

8
2,411
408
—
430
333
3,593

35
2,848
—
5
319
329
3,537

18
3,302
215
1,386
407
360
5,691

6,020
1,156
—
206
351
47
538
8,321
42,036

6,970
1,159
742
728
213
1,207
313
11,33544,611

6,725
998
—
197
116
10
202
8,250
47,072

54
28
—
637
—
—
—
720

75
1,858
—
288
710
—
—
2,932

628
1,911
2,014
—
5
5
165
4,730

0
159
2,495
—
—
—
—
—
—
2,655
40,101
13,266(1,321)
11,94528,155878
27,277

0
262
1,350
—
321
—
280
—
—
2,215
45,32915,244(739)
14,50430,824
1,027
29,796

23
263
899
128
—
2,013
—
814
736
4,879
46,923
16,639(2,556)
14,083
32,8391,044
31,795FY2018*FY2019FY202028,15530,824

32,839(12,987)
—
(256)
(602)

15,573
90
(174)
538

(10,338)
3,611
(19)
(479)

(3,401)(17,248)
10,907(449)
15,57846,402(1,122)(8,349)24,49010,366540

44,945
1,456

23,711779

FY2018*FY2019FY202040,101
16,448
2,495
1,709
(408)
13
151
(1)

45,32917,277
1,350
1,647
742
1
(34)
(18)

46,923
18,971
899
645
(215)
1
83
(0)

53

35

50

(54)
(233)

(49)
(0)

(115)
(1)

—
305
(2,420)
6,020
47
—
(28)
—
—
(637)
—
105
(1,104)(23,273)
1,155
1,381
132
(5,936)—772
36,794
4,004(6,013)(15,038)
19,748280
437(2,883)
6,970
1,201
—
(1,858)
—
—
32
(710)
187
(1,278)(34,533)
2,644
291
(485)
7,226
—
(3,125)40,6802,883(6,616)(12,850)
24,096(5)454(3,321)
6,725(1,376)
2,013(1,783)(2,014)
814
—
(5)
(340)
(784)
(10,925)
2,243
(296)
(366)
(5,086)5,493
2,802
61,482
4,860(7,175)(15,642)
43,524

Consolidated Statement of Cash Flows
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
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-based remuneration for directors(and other officers)
Increase (decrease) in provision for retirement benefits for directors(and other officers)
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 investments in investment partnerships
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Loss (gain) on sales of shares of subsidiaries and associates
Loss on redemption of bonds
Loss (gain) on sales of investments in capital of subsidiaries and associates
Loss (gain) on liquidation of subsidiaries and associates
Loss (gain) on sales 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 (paid) refund
Net cash provided by (used in) operating activities(Million yen)

* 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

71

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

72

DATA SECTION
Corporate Data

Financial Statements
Consolidated Statement of Cash FlowsFY2018*Cash flows from investing activities
Proceeds from sales and redemption of investment securities
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting in change in scopeof 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 sales of non-current assets
Purchase of non-current assets
Decrease (increase) 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
Payments for long-term accounts payable - other
Proceeds from issuance of bonds
Redemption of bonds
Payments from changes in ownership interests in subsidiaries that do not resultin change in scope of consolidation
Proceeds from sales 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
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Cash and cash equivalents at end of period

Group Companies(Million yen)

FY2019FY2020Company Name

8,186
(11,625)—

2,556(7,911)(27)

4,455(4,158)——(6,235)—(4,223)

1,542(5,186)

—
3,079
(767)
2,112
1,350
(40,798)

3,884
4,078
(810)
1,244
4,518
(64,726)

63—(4,647)288
3,907(58,184)

Number of Consolidated
Employees

Head Office

Tokyo Tatemono Yaesu Building
1-4-16 Yaesu, Chuo-ku, Tokyo 103-8285
Phone: 03-3274-0111 (Representative)(22,071)
3,191(63,577)(2,560)(105)(64,082)(3,199)(1,604)(66,724)

Stock ListingFirst Section of the Tokyo Stock Exchange

Listing Date

September 1907

(76)
18,00062,750(51,868)(903)
35,000(20,000)

0
52,00017,500(65,822)(902)
80,000(15,000)(0)(30,000)
310,700(228,492)(202)
40,000(40,000)

Securities Code

—
0
(205)
(6,935)
(577)
—
(744)
34,438(122)(9,513)
41,227(113)
1(10,004)(8,085)
(591)
—
(979)
48,000(220)
7,794
31,702(458)
0(2)(9,194)(672)
770(4,139)38,30741
15,14839,497(10)
31,702—39,497—54,645

Established
CapitalRepresentative

Trading Unit
Number of
Shares Authorized
Number of Shares Issued
and Outstanding

October 1, 1896
92.4 billion yen (As of December 31, 2020)

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

5,344 (As of December 31, 2020)

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.

400,000,000 shares

Leisure and Child Care BusinessTokyo Tatemono Resort Co., Ltd.
Tokyo Tatemono Kids Co., Ltd.
Tokyo Tatemono Staffing Co., Ltd.

209,167,674 shares(As of December 31, 2020)

(Yen)
2,000
1,500
1,000
500

2018

2019

2020

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

Non-Financial Data

Investor Relations

Sustainability

IR Libraryhttps://tatemono.com/english/ir/library/

INTEGRATED REPORT 2021

Residential Business

Hitoshi Nomura,President and Chief Executive Officer

https://tatemono.com/english/ir/

TOKYO TATEMONO GROUPTokyo Fudosan Kanri Co., Ltd.
Tokyo Building Service Co., Ltd.
Shinjuku Center Building Management Co., Ltd.
Seishin Service Co., Ltd.
PRIME PLACE Co., Ltd.

Stock Price0* 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

73

Commercial Properties BusinessTokyo Tatemono Co., Ltd.

https://tatemono.com/csr/english/

Sustainability Report 2021
https://tatemono.com/csr/english/reports/
pdf/2021csrall_e.pdf

TOKYO TATEMONO GROUPINTEGRATED REPORT 2021

74

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

Published: September 2021