TOKYO TATEMONO GROUP
Integrated Report 2019

Integrated Report2019

Fiscal year ended December 31, 2018

Publication date: September 2019
Printed in Japan

CONTENTS

Overview of Tokyo Tatemono
1 Corporate Philosophy
2 History of Tokyo Tatemono

Value Creation
4 Message from the CEO
8 Value Creation Model of Tokyo Tatemono
12 Message from the CFO

Editorial Policy

20 Commercial Properties Business

Integrated Report 2019 was prepared withthe goals of enhancing communication withstakeholders and fostering understanding regarding the propensity of Tokyo Tatemono Co., Ltd.,to create value over the medium to long term
through the provision of financial and non-financial
information. For future reports, we intend toincorporate feedback from readers to improve thecontents.

24 Residence Business

Reporting PeriodBusiness Overview
16 Business Portfolio Policies
18 Tokyo Tatemono’s Businesses

26 Real Estate Service Business
27 Parking Lot Business
28 Overseas Business
29 Other Real Estate Businesses

This report primarily covers the fiscal year ended
December 31, 2018. However, some informationon 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., andTokyo Tatemono Group companies.
Referenced Frameworks

ESG Initiatives
32 Environmental Initiatives
37 Social Initiatives
43 Corporate Governance46 Risk Management
47 Compliance

In preparing this report, we referenced the
Guidance for Integrated Corporate Disclosure andCompany–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 with reference tothe standards of the Global Reporting Initiative.

Corporate
Philosophy

Trust beyond the era.
We aim to grow the Company and to createa prosperous society, taking pride in the trust
placed in us that extends over a century.
We support affluent and dream-filled living.
We aim to create comfortable urban environments.
We create worthwhile spaces offering peace of mind.

48	Directors, Audit and Supervisory Board Members,

and Managing Officers

Corporate Data
52	Financial and Non-Financial Data
54 Consolidated Financial Statements
59 Corporate Information

Disclaimer Regarding
Forward-Looking Statements
Data and information regarding future outlooks
provided in this integrated report are forwardlooking statements based on the Company’s
judgments in light of currently available information. Actual results may differ materially fromthose projected as a result of economic conditions, market trends, demand fluctuations, foreignexchange rate movements, and other factors.
TOKYO TATEMONO GROUP Integrated Report 20191

History of Tokyo Tatemono

Ongoing Quest of Tokyo Tatemono
Inspired by the Founding Spirit
Tokyo Tatemono founder Zenjiro Yasuda, who also established Yasuda
Conglomerate, advocated a customer-first spirit and an enterprising spirit.
Since our founding, this spirit has inspired us to overcome various challenges,
and continues to do so, as a pioneer in modern real estate.

Trust beyond the era.
Tokyo Tatemono’s history of more than
120 years is one of working together
with all the people involved in urban

Urban development
initiatives aimed
at the future

development.
To transmit the trust we have fosteredover these years beyond the era, we will
harness our customer-first spirit as we

Diversification ofbusinesses in response
to diversifying values

strive to build more comfortable urban
environments by swiftly responding to
the needs and changes of the times.

2012–
Fortifying of foundations withan eye to the 21st century

Founder Zenjiro Yasuda

Growth together withpeople and the times

1980–2000
Start as a pioneer inmodern real estate

1896–1945
Tokyo Tatemono was established in 1896,
more than 120 years ago, by Yasuda
Conglomerate Founder Zenjiro Yasuda.
We were the first to commence real estate
sales and purchases through installment sales,
the original form of the residential loans oftoday, making large contributions to the invigoration of the real estate market.
Tokyo Tatemono was quick to expand
overseas by launching residence and officebuilding management and operation businesses in Tianjin and other parts of China.

1946–1979
Aggressive expansion was pursued in theoffice buildings business amid the rise indemand for office buildings that accompanied
economic growth in Japan. In 1979, we completed the Shinjuku Center Building througha massive construction project, creating a newlandmark in the Shinjuku urban center.
The period of the so-called Japanese
economic miracle saw a shortage in residential
housing in Japan, prompting the Company toenter the residential condominium business.
We also commenced a real estate brokeragebusiness to respond to demand for landtransactions related to condominiums, thereby
growing as acomprehensive
real estatecompany.

Capitalizing on our collective strength as acomprehensive real estate company, we won
the right to participate in a redevelopment
project around the east exit of Osaki Station
amid intensifying competition to acquire land.
This project culminated in the completionof Osaki New City in 1987, enabling us toacquire expertise in large-scale urban redevelopment projects.
We then moved on to undertake even moresophisticated challenges, such as developing
condominiums with fixed-term leaseholds,
earthquake-resilient condominiums, andJapan’s first securitized real estate product.

2001–2011
As people’s lifestyles and values became
more diverse, we unified our previous
condominium brands under the, at the time,
new Brillia brand, which is based on theconcepts of refinement and comfort, seeking to adapt the customer-first spirit that
we have carried since our founding to thecontemporary climate.
It was also at this time that Tokyo
Tatemono branched out into new fields,
developing operations in new areas suchas commercial facilities, real estate funds,
parking lots, senior services, and evenoverseas.

Leveraging the expertise acquired thus far,
Tokyo Tatemono proceeded to take part innumerous large-scale redevelopment
projects.
Over the years, we have completed construction of such representative works as
Nakano Central Park, Tokyo Square Garden,
and The Otemachi Tower in the office buildings
business and Brillia Tower Ikebukuro and Brillia
Towers Meguro in the residence business.
Always conscious of the needs of people,
society, and the environment, we will continue
advancing forward-looking real estate development to contribute to the realization of asustainable society.

Tokyo Square Garden

The Otemachi Tower
Nakano Central Park
SMARK Isesaki

Osaki New City

Head office building

1896

1949

1979

1997

1903

1952

1980

1998

Tokyo Tatemono is established
Opens Tianjin Branch in China

1907

Listed on the former Tokyo Stock
Exchange

1929

Completes Tokyo Tatemono Building(current head office building ofTokyo Tatemono)2

Brillia Tower Ikebukuro
Shinjuku Center Building

Listed again on the Tokyo Stock Exchange
Obtains building lots and buildings
transaction business license

1964

Completes Yokohama Station
West Exit Building

1966

Establishes new Tokyo Tatemono
residential housing loans throughcollaboration with financial institutions

TOKYO TATEMONO GROUP Integrated Report 2019

Finishes Shinjuku Center Building
Establishes Tokyo Tatemono Real Estate
Sales Co., Ltd.

1987

Completes Osaki New City

1996

Celebrates 100th anniversary, introduces
corporate philosophy and symbol

Begins real estate syndication business
Develops first securitized real estate
product in Japan

2002

Lists Japan Prime Realty Investment
Corporation on the Tokyo Stock Exchange

2003

Unifies condominium brands under
Brillia brand2004

Begins offering on-site tours of construction sites for all Brillia condominiums

2005

Commences first condominium businessin Shanghai, China

2007

Completes Kasumigaseki Common Gate
through private finance initiative project

2008

Finishes SMARK Isesaki large-scalecommercial facility

2009

2013

2011

Completes Brillia Tama New Town,
the largest subdivided condominium
reconstruction project in Japan

Opens Grapes Asakusa residential facility
with services for senior citizens, enterssenior businessConverts Nihon Parking Corporation
into Group company, enters parking
lot business2012

Completes Nakano Central Park proposing
a new, green workstyle

Develops Tokyo Square Garden as
environmentally friendly building reaching
the highest standards in Japan2016

Establishes Tokyo Tatemono Kids Co., Ltd.,
enters child care business2017

Completes Brillia Towers Meguro, an
integrated development project creating
a forest in front of Meguro Station

2014

Constructs The Otemachi Tower to realize
revitalization of urban areas and nature

2015

Completes Brillia Tower Ikebukuro, Japan’s
first high-rise condominium integrated witha main government building
TOKYO TATEMONO GROUP Integrated Report 20193

Message from the CEO    Final Year of Tokyo Tatemono Group
Medium-term Business Plan (2015–2019)
Performance at Tokyo Tatemono was brisk in the fiscal year ended December 31, 2018, asa result of the impressive performance of our mainstay Commercial Properties and Residence
businesses. In the Commercial Properties Business, occupancy rates were full at practicallyall of our buildings, and we made good progress in revising rent rates. As for the Residence
Business, smooth sales were seen in units in urban towers and in prime-location buildings
connected to train stations in regional cities.
In the fiscal year ending December 31, 2019, the final year of Tokyo Tatemono Group
Medium-term Business Plan, we are targeting consolidated operating income of ¥50.0 billion.
When the plan was formulated, we initially intended to grow operations centered on our mainstay
businesses while expanding our Real Estate Service, Senior, Leisure, and Overseas businesses.
However, the favorable operating environment for the Commercial Properties and Residence
businesses prompted us to increase our focus on these businesses, bringing the aforementioned target even closer within sight.
Meanwhile, trends in Japan, such as the aging of the population and women’s increased
participation in the workforce, are expected to expand the social needs for our Senior andChild Care businesses. In these businesses, we will leverage our expertise as a developer toprovide value that is distinctive of the Tokyo Tatemono Group, in terms of not only quality products
and other hard aspects but also excellent services and other soft aspects. We thereby hope toaddress these expanding social needs and subsequently achieve further earnings growth.

    Strengths and Expertise Cultivated over
Our Long History
Looking ahead, it can be anticipated that the overall population in Japan will decline. We also,
however, expect that Tokyo will come to be equipped with various functions as an international
city, resulting in increased amounts of people, commodities, and funds flowing into the city.
We therefore believe that the primary area of operations for the Tokyo Tatemono Group going

The Tokyo Tatemono Group contributes tothe resolution of the issues of customers andsociety through its business activities:
providing spaces in which people can spend
a fulfilling time, whether spaces for work,
living, or rest.

forward will be Tokyo and its surrounding metropolitan area. This area has already been thesubject of much development, and the number of greenfield sites is therefore limited. When it
comes to the prominent areas in the heart of Tokyo, it is incredibly rare for a promising property
to hit the market. With this regard, the Tokyo Tatemono Group has a significant edge in that,over its more than 120-year history, it has long held properties in prime locations in the Yaesu,
Nihonbashi, and Kyobashi districts around Tokyo Station. Centered on these properties, wehave been aggressively taking part in large-scale redevelopment projects that incorporate thesurrounding areas. Another important strength of the Tokyo Tatemono Group is the track record,
experience, and expertise it has accumulated in large-scale redevelopment projects and area
management practices that contribute to increased value throughout the surrounding areas.
We are committed to exercising these strengths in the currently underway Hareza Ikebukuro
Project and Type-1 Urban Redevelopment Project for Yaesu 1-Chome East Area in Front ofTokyo Station.
As for taking advantage of business opportunities, the finely tuned communication skills ofHitoshi Nomura
Representative Director
President & Chief Executive Officer

our employees are another major strength. An example of these skills at work can be seen in
Brillia Tama New Town, which, developed in 2013, was the largest subdivided condominium
reconstruction project in Japan. We faced competition in earning the right to participate in thisproject, but we were chosen as the partner for the project by winning the trust of management
associations and residents through close and ongoing communication with rights holders and4TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 20195

other relevant parties prior to the project’s commencement. In this manner, not just the communication skills but also our employees themselves—who embody our corporate philosophy
of “Trust beyond the era.” and excel at building strong, trusting relationships with customers—
are important strengths of the Tokyo Tatemono Group. If we can continue to leverage thesestrengths to respond accurately to customer needs, we will no doubt be able to keep capturingbusiness opportunities going forward.

    

ESG Initiatives for Realizing a Sustainable Society

developing our Overseas Business by forming relationships with local developers that areknowledgeable regarding the business practices and markets of their countries and by exercising
our expertise as a Japanese developer, all while minimizing country and other risks.

I believe that the role of the Tokyo Tatemono Group is to provide spaces in which people can

We also recognize that technological progress will certainly bring about an era in which today’s

spend a fulfilling time, whether spaces for work, living, or rest. Thus, a part of this role is to con-industries will have to fundamentally reinvent themselves. Based on this recognition, we aretribute to the resolution of the issues of customers and society through our business activities.

currently engaged in wide-ranging discussions on the vision for the future we should pursue by

Environmental, social, and governance (ESG) issues are an important part of accomplishing thistaking advantage of our strengths. Even junior employees are invited to express their ideas inobjective. For this reason, the Group has long emphasized ESG in its management activities.

these discussions, and no matter how strange their ideas may seem, we are careful not to dis-In regard to environmental initiatives, we are aggressively promoting the development of

miss them immediately as being unsuited to Tokyo Tatemono. We are thereby incorporating any

eco-friendly office buildings and residences in accordance with our Group Environmental Policy.

and all insight with the potential to lead to new business opportunities into these discussions.

Social initiatives, meanwhile, include cultivating workplace environments that are conducive toFurthermore, we realize that creating new possibilities requires us to look beyond the Company,

the efforts of diverse human resources, by means of such initiatives as workstyle innovations

collaborating with those outside of the organization through open innovation and other schemes.

advanced through a united labor–management effort and health and productivity management

It was for this reason that we set up xBridge-Tokyo, a facility designed to support venture capi-

practices. As for corporate governance, we always have four external directors, each of whom

tal funds and business start-ups, in our head office. In addition, the City Lab TOKYO open

boasts a wealth of experience and insight and attend monthly meetings of the Board ofinnovation base aimed at developing sustainable cities and societies was established inside of

Directors. These directors join me and the other seven internal directors in lively discussions

Tokyo Square Garden. Through such initiatives, we aim to enhance the appeal and competi-

geared toward the improvement of corporate value. We also strive to ensure that our corporate

tiveness of the Yaesu, Nihonbashi, and Kyobashi districts while also creating new businessgovernance systems are rich in diversity as well as in experience and insight. For example, we

opportunities for Tokyo Tatemono.

welcomed our first female external Audit and Supervisory Board member in March 2019.
We are dedicated to the exhaustive practice of ESG management in order to resolve theissues faced by customers and society through our business activities and contribute to the    realization of a sustainable society.

Message to Readers of Integrated Report 2019    

Prior to becoming CEO in 2017, I gained experience primarily on the front lines in the Commercial

Initiatives for Achieving Long-Term Growth

Properties, Residence, and Real Estate Service businesses. I therefore feel that my strength lies
in my experience, expertise, and market awareness pertaining to a wide range of real estate
fields. I am dedicated to continuously visiting the front lines going forward and practicing man-

We are currently moving ahead with discussions to formulate the next Medium-term Businessagement that is always reflective of the circumstances on the front lines, in order to deliverPlan, which is scheduled to be announced in 2020. The Yaesu,

services that satisfy our customers and to create comfortable workplace environments for our

Nihonbashi, and Kyobashi districts, where the Tokyo Tatemono

employees. I hope to actively utilize this, our first integrated report, through venues of commu-

Group owns numerous properties, are home to one of Japan’s

nication with stakeholders to explain, as clearly and concisely as possible, our forward-looking

foremost concentrations of major companies. As these areas

initiatives and our long-term growth story. I hope we can look forward to your ongoing support

are a major proponent of the growth of the Japanese economy,

and guidance as we advance into the future.

enhancing the appeal and competitiveness of these areas will
no doubt make substantial contributions to the heightening of

September 2019

our earnings power. For this reason, we have positioned urban
development efforts in these areas as the backbone of ourbusiness plan.
Elsewhere, we see potential for the expansion of our operations in China and Southeast Asia, which are expected to experience population and economic growth going forward. Since
entering the residential condominium business in Shanghai,		

Representative Director
President & Chief Executive Officer

China, in 2005, we have been moving forward with projects
through collaboration with major Chinese developer China
Vanke Co., Ltd. In the future, we intend to continue aggressively

6TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 20197

Value Creation Model of Tokyo Tatemono

As it seeks to accurately assess the ever-changing operating environment, the Tokyo Tatemono Groupis practicing ESG management based on its corporate philosophy of “Trust beyond the era.”
Through this approach, we will strengthen our competitiveness and enhance our various types ofcapital in order to create social value and thereby improve our economic value.

Operating Environment
Establishment and revision of regulatory andtaxation systems
OPPORTUNITIES•	Increased opportunities to take part in redevelopment
projects due to deregulation

The Tokyo Tatemono Group’s Business Model

Business Domains
Commercial Properties
Business

Targeted Social Value

Starting on Page 18

Residence Business

Real Estate
Service Business

Other Businesses

Urban development forheightening the appeal of“TOKYO” as an international city•	New business opportunities created through privatization
RISKS•	Long-term interest rate increases due to revision of
government’s low interest rate policy•	Diminished consumption appetite due to revisions toreal estate and consumption taxes
Changes in demographics and family structures
OPPORTUNITIES•	Increased real estate revitalization business opportunities
due to higher real estate stock•	Growth in demand for businesses catering to seniorcitizens as a result of population aging

Management Capital

RISKS•	Reduced real estate demand stemming from population
aging, birth rate decline, and workforce contraction
Diversification and globalization of values and lifestyles

Healthy financial base supporting
business activities
Financial
CapitalOPPORTUNITIES• Total assets: ¥1,451.5 billion• Debt-to-equity ratio: 2.5 times• Interest-bearing debt / EBITDA multiple:
12.7 times•R ating from Japan Credit Rating Agency,
Ltd.: A– / Stable•	Business opportunities to be seized by responding tochanges in workstyles and lifestyles

Advancements in artificial intelligence, Internet of Things,
and other digital technologies

Intellectual
CapitalBusiness
CapitalLong-term holding assets generating
stable profits and short-term turnoverassets producing development profits• Property and equipment andintangible assets: ¥883.2 billion•R eal estate held for sale: ¥283.4 billion

OPPORTUNITIES• Discerning eye for earnings opportunities• Development capabilities for creating value• Comprehensive Group capabilities enabling
responses to various needs• Non-consolidated number of
employees: 616• Consolidated number of
employees: 5,010

Trust and brand fostered overSocial and more than 120-year history
Relationship • Relationships with wide range of customers
Capitaland extensive information routes• Historic brand• Creation of new businesses through innovation•	Improved productivity achieved using technology

Strengthening of Business Competitiveness

Urban development for
fostering spaces in whichanyone can be themselves

Diverse human resources
Human
Capital•	Increased business opportunities in regional cities
stemming from trend toward densely packed
urban centers•	Higher demand in businesses catering to
inbound travelers

Extensive expertise and comprehensive
Group capabilities

Enhancement of Various Types of Capital

Urban development for
creating sustainable cities
that are considerate to
the nature and the environment

Climate change and natural disasters
OPPORTUNITIESESG Management

Starting on Page 31•	Higher demand for businesses that are considerate to
the environment•	Increased opportunities to take part in redevelopment
projects in conjunction with city infrastructure building
RISKS•	Rising costs for addressing climate change risks

Ongoing improvementof corporate
governance andcompliance

Establishment of
comfortable workplaceenvironments

Fostering of workplaceenvironments
conducive tocontributions by diverse
human resources

Environmental
initiatives•	Growing business continuity risks

8TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 20199

If the Tokyo Tatemono Group is to achieve ongoing growth while responding to society’s needs, it is
crucial for it to continue to create value for society through its business activities. For this reason,
it has designated those among the social issues to be resolved through its business activities thatwarrant particular attention as material issues. By identifying the link between our business activities
and social issues, we have clarified the type of value that the Tokyo Tatemono Group should create.
Addressing these material issues will be a priority in all of the Group’s major businesses.

Economic Value Generated
As the Tokyo Tatemono Group creates social value through its business activities, it also generates economic value and thereby
improves its corporate value.

Important Management Indicators
Targeted Social Value

Operating Income
Contributions to the Sustainable
Development Goals

Material Issues

46.7

Reinforcement and enhancement of city functions
Urban development
for heightening
the appeal of“TOKYO” as an

ROE

7.9

billion yen

Promotion of city redevelopment, establishment of facilities beneficial
to the public, and energization of cities through area management
Billions of yen

%

60.0

Response to globalization

40

Attraction of global companies and establishment of framework forwelcoming non-Japanese visitors to Japan

44.7

international city

40.0

34.4

Pursuit of innovation

33.2*

46.7
12

36.3

30.5

7.9

8

Promotion of open innovation and utilization of data and IT

5.6

6.4

6.8

3.1

3.6

3.5

2016/122017/122018/12

20.0
4

2.3

Utilization and redevelopment of real estate stock
Promotion of reconstruction and redevelopment projects

Urban development
for fostering spaces
in which anyone canbe themselves0%

2014/122015/122016/122017/120

2018/12

2014/122.8

2015/12

ROE
ROA

Response to diversification of values and lifestyles* Outlier resulting from recording of extraordinary income from gain on sales of
fixed assets

Provision of spaces that accommodate changes in workstyles,family structures, and the times

Response to population aging and birth rate decline
Development of environments that are conducive to child-rearing andcomfortable for senior citizens

Debt-to-Equity Ratio

2.5

Harmony with nature
Urban development
for creating
sustainable cities
that are considerate
to the nature and theenvironment

Appraisal Gain on
Rental Properties

Fostering of greener environments and preservation of ecosystems

Reduction of environmental impacts

422.1

times

billion yen

Efficient use of energy, water, and other resources; reduction of waste;
and promotion of recycling

Billions of yenTimes

Billions of yen

1,600.041,600.0

Implementation of natural disaster countermeasures

1,200.0

1,441.0
1,319.4

Enactment of countermeasures against natural disasters resulting
from climate change and earthquakes

800.0

10 TOKYO TATEMONO GROUP Integrated Report 2019

Degree ofsocial need

Compatibility
with businesses

748.2

343.4

707.3

2.3
727.3

2.4

2.5

814.0

857.1

400.0

0

Material issues

1,314.5

2.6

2014/12

Total assets
Interest-bearing debt
Debt-to-equity ratio

2015/122016/122017/122018/12

422.1

372.2
3

2.3

Process for Identifying Material Issues
In identifying its material issues, the Group mapped various social issues after evaluating their importance based on (1) the degree of social need (the extent to which a
resolution is desired) and (2) compatibility with its businesses (whether the issue isstrongly related to existing businesses or potential future businesses). These material
issues will be revised every three to five years so that they may be updated in
response to changes in the operating environment.

1,297.1

1,451.5

Billions of yen

1,200.0

2

800.0

1

400.0

0

0

249.8
853.5

1,110.6
1,103.4
274.0
836.5

1,272.4

1,240.9330.0

1,193.3

849.9

868.6

440.0

850.2
220.0

110.0

2014/122015/122016/122017/122018/120Book value
Appraised value of rental properties
Appraisal gain

TOKYO TATEMONO GROUP Integrated Report 201911

Message from the CFOTokyo Tatemono Group Medium-term Business Plan (2015–2019)

The Tokyo Tatemono Group aims to continue to be the leading choice.
Providing amazing value through innovative Group synergies
To continue being the leading choice of customers, we aim to deliver value filled with charm by carrying out
business development that pursues quality products (hard aspect) and excellent services (soft aspect) throughorganic cooperation across a diverse range of businesses.

Quantitative Targets
Targets for the Fiscal Year Ending December 31, 2019

Target Financial Indicators

Consolidated operating income

Debt-to-equity ratio

3.0 times

Interest-bearing debt / EBITDA multiple

13.0 times¥50.0 billion

Notes:
Debt-to-equity ratio = Consolidated interest-bearing debt ÷ Consolidated equity capitalInterest-bearing debt / EBITDA multiple = Consolidated interest-bearing debt ÷ (Consolidated operating income + Consolidated interest and dividend income + Gain on equity-method
investments + Consolidated depreciation + Consolidated amortization of goodwill)

Katsuhito Ozawa

STRATEGY 1

STRATEGY 2

Strengthen services to continue being theleading choice

Investments backed by uniquenessand strengths

Strategy placing emphasis on the provision of quality
services in each business to boost customer satisfaction

Strategy devoting energy to areas and domains where theGroup can leverage its know-how and superiority

Director
Executive Managing Officer &Chief Financial Officer

STRATEGY 3

Execute Group synergies to deliver amazing value
Strategy emphasizing the delivery of amazing value through reinforcement of the value chain of each business andorganic cooperation among the Group’s diverse businesses

Performance in the
Fiscal Year Ended
December 31, 2018,
and Progress ofTokyo TatemonoGroup Medium-term
Business Plan
(2015–2019)

In the fiscal year ended December 31, 2018, we achieved steady growth in almost all businesses, posting operating income of ¥46.7 billion, a year-on-year increase of ¥2.0 billion andthe first new high in 11 years. In addition, we positioned ourselves to achieve the target of

Utilizing these strategies, we will continue

strengthening our earnings power by building a business portfolio with high growth potential.

consolidated operating income of ¥50.0 billion set for the final year of Tokyo Tatemono Group
Medium-term Business Plan. Our two mainstay businesses—the Commercial Properties
Business centered on the rental of office buildings and the Residence Business focused onsales of condominiums—both performed well. Meanwhile, our Real Estate Service Business

Maintaining a healthy financial base, I believe, is crucial to the Tokyo Tatemono Group. Should

achieved impressive growth in sales of properties to investors. The Company was thereby able
to achieve increases in income in line with its expectations in these businesses, contributing to
the strong overall performance.
As for other businesses, such as the Senior and Leisure businesses, we are taking steps tostrengthen these businesses. However, the initial investments required ended up being higher
than we expected, and income in these businesses has therefore been consistently lower than
anticipated. However, these businesses are getting on track, with property numbers rising. We
therefore expect them to begin contributing profits during the period of the next Medium-term
Business Plan.

economic conditions deteriorate, such a financial base will enable the Group to stably operate

Maintenance ofa Healthy
Financial Base

its businesses and to seize promising investment opportunities. We are therefore implementing
a financial strategy that aims to secure a healthy financial base through a balance between
assets and liabilities. To this effect, the Medium-term Business Plan sets the targets of a debt-toequity ratio of 3.0 times and an interest-bearing debt / EBITDA multiple of 13.0 times. In the fiscal
year ended December 31, 2018, these indicators were 2.5 times and 12.7 times, respectively,
indicating that we have been effectively controlling our finances with this regard. I feel that ourcurrent financial balance grants us sufficient resilience to a certain degree of market fluctuation.
Funding measures for ensuring a consistently healthy financial base include employing fixedinterest rate schemes and longer procurement periods as well as diversifying funding sources.
As one facet of these efforts, we floated an issue of ¥80.0 billion in publicly issued hybrid
bonds in March 2019. The goal of this issuance was to boost financial health and capital efficiency. Equity credit rating certification has been acquired for ¥40.0 billion, or 50%, of the issue
amount. We therefore anticipate that this capital will be highly viable in fortifying our financialbase and supporting growth strategies from a medium- to long-term perspective.

12 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201913

1st issue

tandem with business scale. From the perspective

increase ROA in these ways, we will also focus on boosting earnings from sources that feature¥50.0 billionof financial health, we therefore realize the need tohigh asset turnover rates or which generate profits with minimal use of assets to adopt a busi-

gradually lower the debt-to-equity ratio in response

ness management approach that emphasizes capital efficiency.

March 15, 2059

to medium- to long-term increases in the volume of

2nd issue (green bonds)

Total issue amount¥30.0 billion

Payment date

March 15, 2019

Maturity date

March 15, 2056

Interest payment date

March 15 and September 15 of every year

liabilities. Going forward, we will continue to main-

Initial optional early
redemption date

March 15, 2026

tain an appropriate balance between assets andOptional early
redemption

The Company may redeem the bonds early at its own
discretion on any interest payment date on or after the
initial optional early redemption date.

March 15, 2029

Initial: 1.66% per annum
Interest rate

revenues through means not requiring large amounts of assets, such as commissions. As we

It is not uncommon for liabilities to grow in

Overview of Hybrid Bonds

liabilities to constantly build a healthier and more

The Company’s basic shareholder returns policy is to issue consistent dividends targeting arobust financial base. We will, of course, not forgetpayout ratio of 30% while continuously growing business profits with an emphasis on improv-

to practice risk management to prepare for market

Initial: 2.15% per annum

fluctuations as we engage in this undertaking.

The coupon rate will step up on the day following the initial
optional early redemption date.

Optional deferral ofinterest payment

The Company may defer all or part of the interest payments at its own discretion on any interest payment date.

Subordination

The bonds are ranked subordinate to the Company’s
general debts and senior to the common stock.

Credit rating

BBB (JCR)

Rated equity credit

An equity credit rating has been received from Japan
Credit Rating Agency for 50% of the issued amount.

ing earnings per share (EPS). The emphasis is a reflection of our dedication to increasing

Basic Shareholder
Returns Policy

shareholder value through higher EPS.
Share buybacks may be conducted based on comprehensive evaluations of factors including
our financial balance, cash flows, and stock price. Through such comprehensive evaluations,
we judged that our stock price had dropped to a point that could not be overlooked during theperiod from the end of 2018 to the beginning of 2019. We therefore decided to conduct sharebuybacks with an upper limit of ¥10.0 billion in January 2019. Going forward, we will continue
to carry out flexible financial measures while taking into account the operating environment,
our performance, the balance between growth investments and financial health, and theCompany’s stock price.

A common trait of real estate companies is how their consistently high levels of assets tend toprevent them from achieving significant levels of capital efficiency. Regardless, the Company isBusiness
Management
Emphasizing
Capital Efficiency

I believe that our net asset value, the amount of our net assets measured at market value, isemphasizing capital costs in its business management with the aim of maintaining return on

not properly being reflected in Tokyo Tatemono’s stock price. This is a serious issue. One

equity (ROE) of 8% or more over the medium to long term.
Specifically, we are increasing return on assets (ROA) through office building and other rental

reason for this could be that we have failed to sufficiently communicate our policies, perfor-

Message to Investors

mance, and plans for the future.

businesses, which form a core pillar of earnings, while also aggressively developing property

This is our first time publishing an integrated report. This report contains information on thesales businesses to increase asset efficiency (see the “Balanced Business Portfolio” section on

history of Tokyo Tatemono, its present state, and its basic policies for future business activities.

page 16 for details). In the Commercial Properties Business, we will step up development of

I hope that this integrated report will help readers gain a deeper understanding of Tokyo

compact urban commercial facilities, urban hotels, and logistics facilities, and then stably oper-

Tatemono. Moving forward, we intend to provide even more thorough explanations and engage

ate or sell these assets as appropriate. Efforts in the Residence Business will include the ongo-

in more extensive discussions with investors with the aim of fostering greater understanding

ing supply of condominiums, primarily in urban centers; accelerated development of

among investors and earning an accurate appraisal from the market. We look forward to yourcondominiums for lease; and sales to investors for growing overall profits together with theongoing support and understanding as we progress forward.

condominium business. Meanwhile, we will seek to fortify operations in the Real Estate Service
Business, in which we heighten the value of real estate to be sold to investors. As for the realestate brokerage, parking lot, and asset management businesses, as well as other real estatebusinesses, we will seek to strengthen light asset and non-asset operations that generate

Debt-to-Equity Ratio

ROE

Dividends per Share / Payout Ratio

Times

%

Yen%

3

40

2.6
2.3

2.3

2.4

2.5

Earnings per Share

40

Yen

40

200

30

150

193.12*

35

33.2*
30

30

26.3

2

28.6
26

20

30
28.8

20

20

125.7927.8
20104.17

100

91.00
75.91

12

1
10

5.6

6.4

6.8

2016/122017/12

7.9

10

10

50

0

0

3.1
0

2014/122015/122016/122017/122018/120

2014/122015/122018/12* Outlier resulting from recording of extraordinary income from gain on sales of
fixed assets

14 TOKYO TATEMONO GROUP Integrated Report 20190

2014/12Dividends per share
Payout ratio

2015/122016/122017/122018/12

2014/122015/122016/122017/122018/12* Outlier resulting from recording of extraordinary income from gain on sales of
fixed assets

TOKYO TATEMONO GROUP Integrated Report 201915

Business Portfolio Policies

Balanced Business Portfolio

Future Directives

The Tokyo Tatemono Group manages its business portfolio in accordance with its business segments based on asset types

Ongoing growth will be pursued with a focus on organic growth.

(Commercial Properties, Residence, Real Estate Service, and Other businesses) as well as categories based on business charac-

Stockteristics (stock, property sales, and light asset and non-asset).

Further growth is anticipated after 2025 as a result of contributions from the gradual completion oflarge-scale redevelopment projects.

The relationship between the business segments and the business characteristic categories is as follows.

Business Characteristic Categories

Stock

Commercial Properties
Business

Residence Business

Office buildings

Condominiums for lease(large scale)

Property Sales

Compact urban commercial
facilities
Urban hotels
Logistics facilities
Medium-sized offices

Residential condominiums
Condominiums for lease(compact)

Light Asset andNon-Asset

Property management

Property management

Property Sales

A balance will be maintained as growth is achieved by disbursing operations among asset types.

Light Asset andNon-Asset

The Tokyo Tatemono Group’s expertise will be fully capitalized on to drive growth.

Projected State of Tokyo Tatemono around 2024
(Prior to Completion of Large-Scale Redevelopment Projects)

EBITDA of ¥80.0–¥90.0 Billion

ROE of 8% or More

EBITDA is expected to become a principal income indicatorfollowing the growth of the Overseas Business in which
income is primarily recorded through investments in equitymethod affiliates.

ROE will be increased steadily through the expansion ofproperty sales businesses with high asset efficiency.

EBITDA

ROE

Billions of yen

%

100.0

Real Estate Service
Business—

Asset solutions(purchase and resale)

Parking lots
Real estate brokerage
Rental property management

75.0
50.0

9

80.0‒90.0
52.6

55.9

65.1

67.7

6

Other Businesses—

Highly stable profits

Overseas businessHigh asset efficiency

LeisureSeniorChild care
Real estate funds

Low dependence
on assets

7.9

8% or more

2018/12Around 2024

6.8

3

25.0
0

5.6

6.4

2015/122016/122017/122018/120Around 2024

2015/122016/122017/12Current Debt-to-Equity Ratio
Maintained

Basic Shareholder Returns Policy

Financial health will be maintained through stringent selectionof investments to ensure preparedness of the funding needs
associated with future large-scale redevelopment projects.

As a basic policy, the Company will issue consistent dividends
targeting a payout ratio of 30%. We intend to increase dividend payments in line with income growth going forward.

Debt-to-Equity Ratio

Payout Ratio

Times

%

3

2.3

2.3

2.4

2.5

About 2.5 times

40
30

2

26.3

28.6

28.8

27.8

2016/122017/122018/12

About 30%

20Management based on comprehensive consideration
for balance between profitability, efficiency, and stability
16 TOKYO TATEMONO GROUP Integrated Report 2019

1

0

10

2015/122016/122017/122018/12Around 20240

2015/12Around 2024

TOKYO TATEMONO GROUP Integrated Report 201917

Tokyo Tatemono’s Businesses

Business Segment

Revenue from Operations

Operating Income (Loss)

Billions of yen

40.0

103.4

103.4

30.0

108.6

80.0

31.0

• Office buildings• Compact urban commercial
facilities• Urban hotels• Logistics facilities

Tokyo Fudosan Kanri Co., Ltd.

Residence Business• Residential condominiums• Condominiums for lease

Tokyo Tatemono Amenity Support Co., Ltd.

Real Estate Service
Business• Real estate brokerage• Rental property management• Asset solutions

Parking Lot Business• Hourly and monthly
parking lot rental

Nihon Parking Corporation

Overseas Business• Real estate development in China
and emerging Asian countries

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

2.0

Senior Business• Housing and nursing care services
for senior citizens

Tokyo Tatemono Senior Life Support Co., Ltd.

1.0

Child Care Business• Child care facilities

Tokyo Tatemono Kids Co., Ltd.

P.29

Leisure Business• Resort hotels, public baths andspas, and golf courses

Tokyo Tatemono Resort Co., Ltd.

P.30

Real Estate FundBusiness• Real estate investment products

27.2

Commercial Properties
Business

Tokyo Building Service Co., Ltd.
Shinjuku Center Building Management Co., Ltd.

P.20

PRIME PLACE Co., Ltd.
Seishin Service Co., Ltd.

10.0

15/12

16/12

17/12

18/12

19/12

0

(Forecast)Billions of yen

15/12

16/12

17/12

18/12

19/12

(Forecast)Billions of yen

160.0

20.0

16.7

129.0
120.0

15.0

101.1

98.0

Residence
Business

31.9

33.3

20.0

40.0

0

Relevant Pages

36.5

126.0
120.0

96.9

Group Companies

Billions of yen

160.0Commercial
Properties
Business

Major Businesses

15.0

97.7

79.8

80.0

14.1

10.0

10.4

E-State Online Co., Ltd.

P.24

6.2
40.0

0

5.0

15/12

16/12

17/12

18/12

19/12

Billions of yen

15/12

16/12

17/12

18/12

19/12

(Forecast)Billions of yen

60.0

8.0

52.6

50.0

47.7
45.0

Real Estate
Service Business

0(Forecast)

40.2

42.8

6.3
6.0

5.5

5.3

Tokyo Tatemono Real Estate Sales Co., Ltd.
Japan Rental Guaranty Co., Ltd.

P.26

4.4
30.0

4.0

15.0

2.0

0

15/12

16/12

17/12

18/12

19/12

Billions of yen

22.1
17.2

Other Businesses

15/12

16/12

17/12

18/12

24.0

P.27

Parking Support Center Corporation

19/12(Forecast)Billions of yen

30.0

20.0

0

(Forecast)

3.8

25.0

Tokyo Tatemono Asia Pte. Ltd.

Tokyo Tatemono Staffing Co., Ltd.

P.28

P.29

0.5

18.5
0.1

0

–0.1
–0.5

10.0
–1.0

–1.3
0

18 TOKYO TATEMONO GROUP Integrated Report 2019

15/12

16/12

17/12

18/12

19/12

(Forecast)

–2.0

15/12

16/12

17/12

18/12

19/12

(Forecast)Tokyo Tatemono Investment Advisors Co., Ltd.
Tokyo Realty Investment Management, Inc.

P.30

TOKYO TATEMONO GROUP Integrated Report 201919

Commercial
Properties Business

Commercial Properties Business (Stock Business Initiatives)

Multiple Office Buildings Owned in Area Surrounding Tokyo Station

Business Activities
The Tokyo Tatemono Group conducts urban development and officebuilding development and operation businesses centered on theinternational city of Tokyo while also providing facility operation,building and equipment management, and repair construction services. The Group is making concerted efforts to ensure that its officebuildings exude quality in terms of the hard aspects and emanate asense of safety, security, and comfort from the soft aspects that isclearly transmitted to the customers who use these buildings.

Nakano Central Park SouthThe area surrounding Tokyo Station is becoming a major hub fortransportation and business in Japan as competition amongareas within the country as well as with other international cities
grows more intense. Tokyo Tatemono is focused on this area,

Operating
Environment• Intensifying competition between areas• Soaring construction costs due to labor shortages

Risks

Competitive
Advantages

FutureStrategies• Diversification of office needs in conjunction with changes in workstyles• Demand for more sophisticated offices designed with consideration for human resource
recruitment and retention, productivity improvements, and business continuity planning• Increased opportunities to take part in large-scale redevelopment products following deregulation

which is expected to see further growth going forward, and it
possesses several office buildings and is engaged in multiple
redevelopment projects therein.

Major Office Buildings Surrounding Tokyo Station (Including partial-stake holdings)
Office Buildings

Completion

1 JA Building / Keidanren-Kaikan

2009

2 Otemachi Financial City Grand Cube

2016

3 Otemachi Financial City North Tower

2012

4 The Otemachi Tower

2014

5 Nihonbashi TI Building

2012

6 Tokyo Tatemono Nihonbashi Building

2015

7 Tokyo Tatemono Yaesu Building

2011

8 Tokyo Tatemono Head Office Building

1929

9 Kyobashi Edogrand2016

10 Tokyo Square Garden

2013

Projects under Development

Opportunities

Stock

Type-1 Urban Redevelopment Project for Yaesu
1-Chome East Area in Front of Tokyo Station
Yaesu 1-Chome North District Redevelopment Project
12(South Area)
11

1 2 3

ScheduledCompletion
2025

5
Nihonbashi

4

12

6

7
Tokyo
Sta.

11
8
Yaesu
9
10
Kyobashi

4

10

The Otemachi Tower

Tokyo Square Garden

2030

Large-Scale Redevelopment Projects• Wealth of experience and expertise pertaining to large-scale redevelopment projects• Noteworthy track record and exceptional tenant leasing capabilities in area management
activities for raising area value• Highly competitive portfolio comprising several office buildings surrounding Tokyo Station and inother prime locations

Stock

Tokyo Tatemono is reinforcing its earnings foundations byaggressively advancing redevelopment projects in prime urban
locations in order to develop highly competitive office buildings.
We are currently moving ahead with several redevelopment
projects in the area surrounding Tokyo Station, including theType-1 Urban Redevelopment Project for Yaesu 1-Chome East
Area in Front of Tokyo Station, which encompasses our head
office. The Yaesu district is the entrance to the international cityof Tokyo. By energizing this district through redevelopment, we
aim to help boost Tokyo’s international competitiveness while
also heightening the asset value of Company-owned businesses.

• Realize organic growth by building strong relationships with tenants and raising rent rates• Promote area management activities to raise the appeal of the Yaesu, Nihonbashi, andKyobashi districts and other areas surrounding Company-owned buildings and thereby increase
the competitiveness of Tokyo Tatemono• Bolster earnings foundations through urban redevelopment projects in areas surrounding
Tokyo Station and in other prime locations

11 Type-1 Urban Redevelopment Project for

Yaesu 1-Chome East Area in Front of Tokyo Station
This project will involve building a large-scale bus terminal withroutes to international airports
and prefectural cities to enhance
Yaesu’s functionality as a transportation hub. The reinforcementof this district’s functionality as
an international nerve center will
also be pursued through means
such as establishing conference
centers and medical facilities
that can accommodate nonJapanese patients.

Promotion of Innovation in Yaesu, Nihonbashi, and Kyobashi Districts

Specific Initiatives
Realization of a Competitive Portfolio

Stock

Tokyo Tatemono’s office building portfolio primarily comprises
buildings that boast high competitiveness in terms of their proximity to major train stations, their relatively young age, and theirsize. The need for buildings to accommodate productivity

improvements and workstyle changes is expected to continue
increasing going forward. Against this backdrop, the Company
will pursue organic growth through swift tenant leasing and rent
rate increases.

Breakdown of Rentable Space byStandard Floor SpaceBreakdown of Rentable Space by
Building Age

Breakdown of Rentable Space byLocation%%% ore thanM
1,000 tsubo

21.0

 ess than 1,000 tsubo,L
more than 500 tsubo 39.4
 ess than 500 tsubo,L
more than 300 tsubo 18.1
Less than 300 tsubo 21.5
Note: 1 tsubo is approximately equal to 3.3 m2.

Less than 10 years

62.2

 ore than 10 years,
M
less than 20 years

Three central
Tokyo wards

45.2

2.8

 ore than 20 years,
M
less than 30 years hibuya andS
Shinjuku wards

15.7

12.9

More than 30 years

22.1

23 Tokyo wards(excluding five central
16.3
Tokyo wards)
Tokyo metropolitan area
(excluding 23
2.7
Tokyo wards)
Others20 TOKYO TATEMONO GROUP Integrated Report 2019

Further elevating the status of Tokyo above rival international cities
will require area management activities for heightening the appealof areas. Based on this recognition, we have been moving forward with efforts to attract innovators and promote collaboration
within the Yaesu, Nihonbashi, and Kyobashi districts in order tocreate an ecosystem of innovation within this area. For example,+OURS Yaesu

xBridge-TokyoStock

the +OURS membership-based share office was opened in July
2017 to help realize diverse workstyles while xBridge-Tokyo wasestablished in April 2018 to support the growth of business startups. Later, in December 2018, the City Lab TOKYO open innovation base was set up with the aim of developing sustainable cities
and societies.

City Lab TOKYO

20.0

TOKYO TATEMONO GROUP Integrated Report 201921

Commercial
Properties Business

Commercial Properties Business (Property Sales Business Initiatives)

Compact Urban Commercial Facilities

Business Activities
The Tokyo Tatemono Group is engaged in businesses in which it
develops various facilities and then sells these facilities to investors. Examples include commercial facilities and hotels for urban
locations, medium-sized office buildings for regional cities, andlogistics facilities that accommodate the needs seen near urban
areas and in suburban areas. When undertaking such tasks in any
given location, we assess the use needs of people living and working in the surrounding area as well as the relevant investment
needs and tailor our efforts to the conditions and regional characteristics of the site in question.

FUNDES Ueno

Property Sales

The FUNDES series of compact urban commercial facilities isrooted in communities to provide convenience and joy in termsof food and entertainment that cannot be found elsewhere.
FUNDES Ueno, for example, is a facility designed to provide
enjoyment to various customers, ranging from business people
to tourists, as a new spot of interest in the Ueno area.
Compact Urban Commercial Facilities
Area

Completion /ScheduledCompletion

Facility

Suidobashi

FUNDES Suidobashi

Jul. 2015

Jimbocho

FUNDES Jimbocho

Nov. 2016

Ueno

FUNDES Ueno

Jul. 2017

Tenjin (Fukuoka)

TENJIN249

Jul. 2018

GotandaFUNDES Gotanda

Jul. 2019

Ginza

FUNDES Ginza

Nov. 2019
FUNDES Jimbocho

Operating
Environment

Opportunities

Risks

Competitive
Advantages• Growth of markets related to inbound travel to Japan• Expansion of e-commerce market

FUNDES Ginza(conceptual drawing of exterior)Urban Hotels• Intensified competition resulting in changes to site acquisition climate• Changes in real estate investment market leading to investment market stagnancy• Wide-ranging information routes formed through intra-Group cooperation as well as collaboration
with financial institutions and current business partners• Development track record and expertise and strong tenant sourcing capabilities pertaining todiverse asset types

Property Sales

Tokyo Tatemono is moving ahead with the development of urban hotels in both the heart ofTokyo and in major regional cities where it can anticipate significant use for business purposes as well as for inbound and other travel purposes. Rather than operating these hotels
directly, the Company employs a scheme in which the buildings are rented to operators overextended periods of time after development. In addition, we take steps to mitigate operating
risks by researching the location-opening needs of hotel operators when examining possible
site acquisitions while stabilizing cash flows to make these properties appealing acquisitions
to Japanese real estate investment trusts (REITs) and other investors.
Urban Hotels

FutureStrategies• Leverage information routes to acquire new properties in order to take part in a wider range of development opportunities• Develop commercial facilities and urban hotels in highly prosperous areas, medium-sized office buildings in high-convenience areas, logistics facilities in coastal and suburban areas, and other properties
that match location characteristics and demand, regardless of whether in urban or suburban areas• Generate development profits by flexibly selling properties based on market conditions and performance after development

Area

Hotel Name

Hotel Operator

Guest Rooms

Completion /ScheduledCompletion
Sept. 2017

Roppongi

Candeo Hotels Tokyo Roppongi Candeo Hospitality Management, Inc.

149

Ginza

The Square Hotel Ginza

Solare Hotels and Resorts Co., Ltd.

182

Aug. 2018

Asakusa

Hotel Gracery Asakusa

Fujita Kanko Inc.

125

Sept. 2018

Midousuji

the b osaka midousuji

Ishin Hotels Group Co., Ltd.

306

Feb. 2019

Omiya

Candeo Hotels Omiya(provisional name)

Candeo Hospitality Management, Inc.

321

Aug. 2019

Sanjo, Kyoto

To be decided

To be decided

122

Dec. 2019

Shijo, Kyoto

To be decided

To be decided

106

Spring 2021

Sanjo, Kyoto

To be decided

To be decided

To be decided

To be decided

Candeo Hotels Omiya (provisional name,conceptual drawing of exterior)Specific Initiatives
Expansion of Assets for Sales to Investors
The Tokyo Tatemono Group leverages its extensive informationroutes to take part in diverse development opportunities, in orderto plan and develop properties matched to the pertinent location
conditions, regional characteristics, and use and investment
needs. We are steadily expanding our asset portfolio through thedevelopment of urban hotels eying the rise in inbound travel
demand, logistics facilities catering to the growing e-commercemarket, and other properties. After these properties have beendeveloped and operated for a certain period, it is our policy tosell them to investors based on a comprehensive evaluation offactors including real estate market conditions and theCompany’s performance.

Property Sales

Real Estate for Sale in Commercial Properties BusinessBillions of yen
100.0

85.2
75.0

55.4

0

Logistics Facilities

Logistics facility
Logistics facility

24.6

Logistics facility

2016/122017/12

Property Sales

The need for suburban logistics facilities is rising in tandem with the growth of the e-commerce market, and logistics facilities have thus
become appealing targets of investment. In response to these trends, Tokyo Tatemono is advancing logistics facility development operations founded on its expertise.

Type

50.0
25.0

Logistics Facilities

Name
Kuki Logistics Center Project(provisional name)To be decided(Location: Ayase City, Kanagawa Prefecture)
To be decided(Location: Akiruno City, Tokyo)

ScheduledCompletion
Fall 2020
To be decided
To be decided

2018/12

Kuki Logistics Center Project(provisional name, conceptual drawing of exterior)

22 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201923

Residence
Business

Residence Business
Development of Residential Condominiums Emphasizing Convenience and Quality

Business Activities
In its Residence Business, the Tokyo Tatemono Group develops
residential condominium and condominium for lease operations,primarily in the Tokyo metropolitan area, under its Brillia brand,which is based on the concepts of refinement and comfort.
Handling everything from planning and development to management, repair, renovation, and brokerage, we offer a comprehensive
lineup of services that contribute to more comfortable lives forcustomers through a unique framework enabling us to deliver
high-quality residences.

Property Sales

Tokyo Tatemono’s site acquisition policy calls for us to adopt a
stringent approach, focusing on urban centers while elsewhereacquiring sites only in highly convenient locations, such asaround train stations. Meanwhile, we aspire to provide

high-quality residences through a service supply system integrating production, sales, and management in order to meet theever-more sophisticated and diverse needs of customers.

Distribution of Condominium
Sales Posted by Area

Condominium Sales Posted / Gross Margin
Condominium sales posted
Gross margin
Units%%2,000
23 Tokyo wards

40

33.3

80.3

Tokyo (excluding 23 wards)

2.4

Tokyo metropolitan area (excluding Tokyo)

14.3

Kansai region, etc.

3.0

29.8

1,500
1,000

1,300

20.9

988

971

25.0

30
20

700
Brillia Towers Meguro

Condominium sales posted in 2018:500

988 units0

Operating
Environment

Opportunities

Risks

Competitive
Advantages

FutureStrategies• More sophisticated and varied customer needs arising from the diversification of lifestyles• Increased emphasis on convenience due to rise in dual-income families and individuals living alone• Trend toward more compact cities following population outflux from cities• Rising land costs due to intensified site acquisition competition as well as higher construction
costs stemming from increases in material and labor costs• Contraction of residential condominium market due to domestic population decline• Reputation as No. 1 in customer satisfaction in Japan and unparalleled brand image inthe domestic market• Wealth of experience and expertise in large-scale redevelopment and reconstruction projects• Service supply system integrating production, sales, and management• Focus on profit margins as opposed to units supplied and carefully select sites for investment for
which strong demand can be anticipated due to convenience of location or other characteristics• Devote attention to redevelopment and reconstruction projects to secure competitive properties
while avoiding paying high prices• Accelerate development of compact condominiums for lease in urban centers and flexibly sell suchcondominiums to investors after operation commences10

2016/122017/12

Redevelopment and Reconstruction Projects
Tokyo Tatemono is turning its attention to redevelopment andreconstruction projects in light of the need for urban redevelopment in such areas as those with dense concentrations ofwooden structures and of the rising reconstruction demandassociated with the increased number of aged condominiums.
However, redevelopment and reconstruction projects requireconsent from land owners and tenants. Accordingly, these

Brillia Tama New Town

Brillia Condominium Brand Based on Refinement and Comfort
Under the Brillia brand, we have an extensive track record ofdevelopment and supply in the heart of Tokyo. We provide Brillia
brand condominiums together with services spanning fromplanning and development to management, repair, brokerage,
renovation, and life support. We have won great praise for initiatives such as construction site tours in which condominium unit

Property Sales

contract holders are able to visit the actual site of construction of
their condominiums. Tokyo Tatemono has thereby been able toachieve an unparalleled brand image in the domestic market, as
indicated by its being ranked No. 1 in both 2017 and 2018 for
new condominiums in the Tokyo metropolitan area in the Oricon
Customer Satisfaction Survey.

Amid rising living and investment
demand for condominiums for lease inurban centers, Tokyo Tatemono isaccelerating the development of Brillia
ist brand condominiums for lease. With
the exception of certain large-scalelease condominium projects, it is ourpolicy to sell properties to investors after
they have been operated for a certain
amount of time based on comprehensive consideration of factors including
trends in the real estate market and in
the Company’s performance.

0

projects are often more difficult and require longer time frames
than projects conducted on newly acquired sites. Nevertheless,
we are committed to utilizing
our experience and expertiseas a developer to secure
participation in highly
competitive projects.

Brillia Tower Yokohama Higashikanagawa

Minato Ward Kaigan 1-chome
Reconstruction Project(conceptual drawing of exterior)

Property Sales

Stock

Condominiums for Lease (to Be Sold to Investors)
Name

Units

Completion /ScheduledCompletion
Aug. 2008

Brillia ist Kitazawa KEYAKI

44

Brillia ist Nishiazabu Kasumicho

21

Jul. 2008

Brillia ist Nakano Central Park Residence

17

May 2012

Brillia ist Nakano Shinbashi

42

Apr. 2016

Brillia ist Ueno Okachimachi

33

Nov. 2017

Brillia ist Kiyosumi Shirakawa

47

Jan. 2018

Brillia ist Yotsuya Honshiocho

85

Jun. 2018

Brillia ist Bunkyo Myogadani

43

Feb. 2019

Brillia ist Sendagaya

149

May 2019

Nishigahara 1-chome Project (provisional name)

75

Jan. 2020

Ryogoku 1-chome Project (provisional name)
Akebonobashi Station Front Project(provisional name)Taihei 4-chome Project (provisional name)85Mar. 2020

52

Apr. 2020

Motoasakusa 1-chome Project (provisional name)Ohashi 2-chome Project (provisional name)

24 TOKYO TATEMONO GROUP Integrated Report 20192019/12 (Forecast)

Property Sales

Development of Condominiums for Lease Capitalizing on Brand Image

Specific Initiatives

2018/1241

Oct. 2020

49
Approx.
200

Dec. 2020

Brillia ist Kiyosumi Shirakawa

Sept. 2023

TOKYO TATEMONO GROUP Integrated Report 201925

Real Estate
Service Business

Real Estate Service Business

Real Estate
Service Business

Parking Lot BusinessBusiness Activities

Business Activities

The Tokyo Tatemono Group conducts wholesale brokerage torespond to the real estate needs of corporate customers, retail
brokerage to help with the relocation of individual customers, asset
solution operations in which it raises the value of acquired realestate for resale, and rental property management through which it
manages lease condominiums and rental offices on behalf ofowners.

The Tokyo Tatemono Group has developed and operates over
68,000 parking spaces in 1,700 locations across Japan, primarily
under its NPC24H brand. By taking into account the surrounding
location, the area of the site, and other conditions, we are able todesign and deliver the optimal parking lot.

NPC24H Tachikawa Midoricho No. 2 Parking

Operating
Environment

Opportunities• Increased real estate transactions due to higher real estate stock• Growth in real estate investment demand due to low interest rates• Rise in corporate real estate strategy (strategies for maximizing the utilization of real estate
owned by companies) needs for improving capital efficiency

Risks• Diminished real estate purchase appetite due to soaring real estate prices, economic recession,or rising interests

Competitive
Advantages

FutureStrategies• Relationships with customers and financial institutions and discerning eye for real estate
cultivated over years of operation• One-stop solution services leveraging resources of the Tokyo Tatemono Group• Utilize information routes to proactively research customer needs and thereby increase transaction
numbers and amounts• Leverage discerning real estate eye to acquire properties with value improvement potential and toflexibly sell properties in response to market conditions

Operating
Environment

Opportunities• Increased opportunities to operate large-scale parking lots in conjunction with large-scale
redevelopment projects• Improvements in efficiency and to services in parking lot operations due to advancements inInternet of Things technologies

Risks• Expansion in sales and repurposing of parking lots by landowners due to rising land prices

Competitive
Advantages

FutureStrategies• Experience and expertise in developing and operating large-scale self-park parking structures• Investment
and development capabilities pertaining to parking lot facilities and systems leveraging
scale as No. 3 domestic pay-by-the-hour parking lot business operator• Efficiently grow business scale through aggressive investment in large-scale parking lots
• Bolstercompetitiveness by developing and introducing new systems that contribute to improved
operating efficiency and customer service

Specific Initiatives
Specific Initiatives

Aggressive Investment in Large-Scale Parking Lots

Enhancement of Brokerage Operations
We are utilizing the strong relationships with customers andfinancial institutions cultivated over years of operation of theGroup’s various businesses to enhance our wholesale brokerage
operations targeting corporate customers. As for retail brokerage

Light Asset and Non-Asset

operations aimed at individual customers, we are opening brokerages in areas where Tokyo Tatemono has supplied several
condominiums to capitalize on secondary distribution brokerage
opportunities.

Development of Asset Solution Operations
Capitalizing on its discerning eye for real estate—the ability tocomprehensively judge the value of properties cultivated overyears of experience—Tokyo Tatemono seeks to acquire properties with the potential for increased value. We then take steps toimprove the value of these properties through repurposing,
repairs, renovations, rights consolidation, rent condition improvements, or other measures, after which the properties are sold toinvestors. These acquisitions and sales are conducted flexibly
based on accurate appraisals of the real estate market.

Property Sales

Light Asset and Non-Asset

Parking Spaces Operated
Parking spaces
80,00061,74360,00065,546

66,227

68,578

2016/122017/122018/12

46,24840,00020,000Real Estate for Sale in Asset Solution Business
0

Billions of yen
50.0

43.3

40.0
30.0

35.6
27.7

10.0

2016/12Development and Introduction of New Systems
Leveraging our scale as the No. 3 domestic pay-by-the-hourparking lot business operator, we are developing and introducing
various unique systems at parking lots, including advanced
reservation systems and cashless payment systems. The Group

20.0

0

26 TOKYO TATEMONO GROUP Integrated Report 2019

Nihon Parking Corporation employs a business model in which it
rents land from customers to utilize it effectively on their behalf in
addition to a business model whereby it develops and operates
parking lots using its own land and buildings. We boast highlysophisticated expertise regarding large-scale self-park parking
structures. One of the focuses of Nihon Parking is thus to acquire
facilities with room for improvement in terms of operating procedures and then utilize its unique ingenuity to boost profitability.

2017/12

2014/122015/12Light Asset and Non-Assetis also proactively embracing other services that can contributeto increased customer convenience through means such as
partnering with car sharing and point card business operatorsand installing delivery boxes.

2018/12

TOKYO TATEMONO GROUP Integrated Report 201927

Overseas Business

Other Businesses

Other Businesses

Specific Initiatives

Business Activities

Senior Business

The Tokyo Tatemono Group has established overseas subsidiaries
in Shanghai and Singapore, through which it is advancing residential condominium operations in China through collaboration withmajor Chinese developer China Vanke Co., Ltd., as well as realestate development operations in emerging ASEAN countries with
substantial growth potential.

Dharmawangsa Project (conceptual drawing of exterior)

Operating
Environment

Opportunities

Risks

Competitive
Advantages

Other Real Estate Businesses

Light Asset and Non-Asset

The population aging in Japan is stimulating growth in demand forresidences for senior citizens. Against this backdrop, we are capitalizing on the high-quality residence development expertise cultivated over our years of developing Brillia brand condominiums tobuild and operate residential facilities with services for seniorcitizens and private nursing homes under the Grapes brand.
In 2018, the Group established a nursing care service dispatch company and took steps to increase its recruitment capabilities, thereby furnishing the frameworks needed to consistently
provide services. In addition, the Kita-Aoyama 3-chome District
Redevelopment Private Venture Project (provisional name) currently under development is scheduled for completion in May
2020. This integrated development project entails the construction of rental housing, residences for senior citizens, and childcare facilities on the site of the former Toei Aoyama Kitamachi
Apartment grounds in Kita-Aoyama, Minato Ward, Tokyo.

• Rise in middle-income and wealthy individuals due to strong economic growth in Asian countries• Higher number of companies seeking aid from Japan and increased government support forincorporating foreign capital• Changes in economic and political conditions, implementation of stricter real estate regulations• Robust development track record and relationship spanning for more than a decade withmajor Chinese developer China Vanke• Wealth of real estate development expertise and high-quality condominium development
experience accumulated in Japan

Units

Completion

1

Adonis Plaza Omiya

Private Nursing Homes

45

Jan. 2000

2

Sans Souci Kita-Urawa

69

Aug. 2004

3

Sans Souci Owada

53

Nov. 2012

4

Grapes with Yotsuya

48

Aug. 2017

Grapes Setagayachitosedai
Units

1

Grapes Asakusa

98

2

Grapes Fujimino

86

Oct. 20133

Kosha Heim Chitose Karasuyama

86

Feb. 2014

4

Grapes Garden Nishi-arai Daishi

62

Aug. 2014

5

Grapes with Omori-nishi

56

Dec. 2014

6

Grapes J Higashi Ikebukuro

51

Dec. 2014

7

Grapes Felicity Totsuka

97

Jan. 20158

Grapes Kawasaki Shinmachi

69

Mar. 2015

9

Grapes Season Totsuka

74

Nov. 201510

Grapes Tsujido Nishikaigan

158

Aug. 201611

Grapes Tateishi

96

Jan. 201712

Grapes Yoga

120

Mar. 201713

Kosha Heim Hirao

65

Mar. 201714

Grapes Shonantsujido

70Jul. 201715

Grapes Setagayachitosedai
Kita Aoyama 3-chome District Redevelopment
Private Venture Project (provisional name)83

Aug. 201749

May 2020

16

Child Care Business

FutureStrategies• Collaborate with prominent developers that are knowledgeable regarding the business practices
and markets of their respective countries• Limit scope of operations to Asia, dispatch employees to locations of operation, and practicerigorous risk management• Ramp up investments centered on residences featuring relatively short business cycles andfew operating environment risks

Specific Initiatives
Business Development through Collaboration with Local Companies

Property Sales

The Tokyo Tatemono Group has been involved in the development of residential condominium operations in China together
with major Chinese developer China Vanke for more than adecade. Going forward, we will continue to invest in Tier 2 andTier 3 cities in China, which feature solid demand. Meanwhile, in
the ASEAN region, we will adhere to a policy of carefully selecting
investment targets for which we can anticipate high demand
while strengthening relationships with local developers.

Projects in China

Projects in ASEAN Region

Name
Shenyang Tomorrow Square
Project
Qingdao Project

Main Uses

Completion /ScheduledCompletion

Residence, commercial, office2013

Residence, commercial

2015

Yangzhou-Kita Project

Residence, commercial

2016

Xuzhou Qiaohu Project

Residence

2019

Yangzhou-Minami Project

Residence, commercial

2019

Yangzhou-Higashi Project

Residence, commercial

2021

Yinchuan Jinfeng Project

Residence, commercial

2021

Jiaxing Tongxiang Project

Residence

2020

28 TOKYO TATEMONO GROUP Integrated Report 2019

Location

Name

Singapore CPF Building
Redevelopment Project
Former Site of
Yangon, Myanmar Yangon Military Museum
Redevelopment Project
Bangkok, Thailand Sukhumvit 26 Project
Singapore

Light Asset and Non-Asset

The Tokyo Tatemono Group entered the Child Care Business in2016 in light of mounting needs for child care services accompanying women’s increased participation in the workforce and therise in dual-income households, such as those represented by
the increase of children on child care facility waiting lists becoming a social problem. Supported by robust demand and government aid, we have been able to achieve smooth growth in facility
numbers, opening 11 facilities in the just three years.
The Group is also pursuing synergies between its Child Care
Business and other businesses, an example of which being theestablishment of Small-Scale Day Care Center Ohayo Child Care
Oyamanishicho in the Brillia Oyama Park Front residential condominium facility in April 2019.

ScheduledCompletion

Office2020

おはよう保育園

Ohayo Child Care Nishi-sugamo

1

Ohayo Child Care Mitsuzawa ShimochoChild care business led by company

15

Opening /Scheduled Opening
Apr. 20172

Ohayo Child Care Yokohama Negishi

Yokohama City small-scale child care business

15

Apr. 20173

Ohayo Child Care Minami-sunamachi

City-authorized day care center in Tokyo80

Apr. 2018

4

Ohayo Child Care Nishi-sugamo

City-authorized day care center in Tokyo

47

Apr. 20185

Ohayo Child Care Shiinamachi

City-authorized day care center in Tokyo

20

Apr. 2018

6

Ohayo Child Care Omorimachi

City-authorized day care center in Tokyo

54

Apr. 2018

Name
Main Uses

Completion /ScheduledCompletion
Dec. 2009

Residences with Services for Senior Citizens

Business Model

Capacity

Office, commercial,
hotel

2021

Residence

2021

7

Ohayo Child Care HanasakichoCity-authorized day care center in Yokohama City

58

Apr. 2018

Bangkok, Thailand Sathorn 12 Project

Residence2022

8

Ohayo Child Care Machinoma Omori

City-authorized day care center in Tokyo

50

Apr. 2019

Bangkok, Thailand Sukhumvit 38 Project

Residence

2023

9

Small-Scale Day Care Center Ohayo Child Care OyamanishichoCity-authorized, small-scale day care center in Itabashi Ward

19

Apr. 2019

Office, residence

2021

10

Ohayo Child Care Kiyosumi Shirakawa

City-authorized day care center in Tokyo

60

Apr. 2019

Residence

2022

11

Ohayo Child Care Kameido

City-authorized day care center in Tokyo

45

Apr. 201912

Ohayo Child Care Sekimachiminami (provisional name)

City-authorized day care center in Tokyo

34

Apr. 2020

Jakarta, Indonesia

Dharmawangsa Project

Jakarta, Indonesia

Loggia ProjectTOKYO TATEMONO GROUP Integrated Report 201929

Leisure Business

Light Asset and Non-Asset

As lifestyles grow more diverse and consumers increasingly
choose to spend their money on experiences as opposed togoods, the Tokyo Tatemono Group is developing and operating
resort hotels and public baths and spas while also operating golfcourses and providing related consulting services.
One of our offerings in this area is our Regina Resort with
DOGS line of pet-friendly hotels. Launched in 2013 in responseto the recent boom in pet ownership, these hotels feature facilities and services on a par with luxury hotels, while allowing
guests to be accompanied by their dogs in all rooms and allareas. Regina Resort with DOGS hotels have proven incredibly
popular among wealthy dog owners, driving smooth growth in
the number of these hotels.

Guest Rooms

Opening

1

Regina Resort Fuji

Regina Resort with DOGS Hotels

21Nov. 20132

Regina Resort Hakone Ungaiso

10

Jul. 2014

3

Regina Resort Izu Murin

8Mar. 2016

4

Regina Resort Karuizawa Mikage Yosui

26

Jul. 20165

Regina Resort Tateshina

23

May 2017

6

Regina Resort Kyu-Karuizawa

26

Nov. 20177Regina Resort Biwako Nagahama

15

Jun. 20188

Regina Resort Kamogawa

25

Jul. 20189Regina Resort Hakone Sengokuhara

22

Oct. 2018

ESG Initiatives
Opening / Scheduled
OpeningJul. 2001

Bathing and Spa Facilities

Golf Courses
1

Kawaguchiko Country Club1

Ofuro no Osama Higashi Kurume2

J-Golf Tsurugashima

2

Ofuro no Osama Shiki

Jan. 2003

3

River Fuji Country Club3

Ofuro no Osama Konandai

Mar. 2005

4

Holon Golf Club

4

Ofuro no Osama Hana Koganei

Nov. 2006

5

J-Golf Kasumigaura

5

Ofuro no Osama Tama Mogusa

Jul. 2008

6

Byron Nelson Country Club

6

Ofuro no Osama Ooimachi

7

Miyako Golf Club

7

Ofuro no Osama Ebina

Acquired in Feb. 20148

Washu Golf Club

8

Ofuro no Osama Seya

Acquired in Feb. 2014

9

Tojo Golf Club

9Ofuro no Osama Kouza-Shibuya Ekimae

Acquired in Feb. 201410

Akasaka Country Club10

11

Tohnosho Golf Club

12

Shirakawa Kogen Country Club

Ofuro no Osama Machida
Ofuro no Osama Wako (provisional name)(Wako City Hirosawa Complex Development andOperation Project)

Kawaguchiko Country Club

11

Regina Resort Karuizawa Mikage Yosui

Jun. 2015
Dec. 2021

37 Social Initiatives
43 Corporate Governance46 Risk Management
47 Compliance48	Directors, Audit and Supervisory

Board Members, and Managing Officers

Ofuro no Osama Ooimachi

Real Estate Fund Business
The Tokyo Tatemono Group provides various real estate investment products to respond to the growing real estate investment
market. These products are offered through Tokyo Tatemono
Private REIT, Inc. as well as through private funds and Japan
Prime Realty Investment Corporation (JPR), which became thefifth J-REIT listed on the stock market in 2002.
In this business, we are expanding our asset portfolio byusing our discerning eye for real estate to acquire promisingproperties while improving the quality of this portfolio throughstrategic asset replacements. At the same time, the Group offers
contract fund management and property services with the aim of
securing stable income in the form of management fees.

Mar. 2011

32 Environmental Initiatives

Light Asset and Non-Asset

As of December 31, 2018
Assets under Management
Japan Prime Realty
Investment: ¥435.0 billion
Private REITs: ¥51.0 billion
Olinas Tower

30 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201931

Environmental Initiatives

Field of Initiative

TargetWaste reduction target:
Reduce the unit load of waste emissions 5% by the fiscal year ending December 31, 2022, compared with the fiscal year
ended December 31, 2017 (equivalent to 1% reduction each year)

3. Promotion ofrecycling waste

Water reduction target:
4. Water-saving measures Reduce the unit load of water 5% by the fiscal year ending December 31, 2022, compared with the fiscal year ended
December 31, 2017 (equivalent to 1% reduction each year)
5. Measures to prevent
global warming

Greenhouse gas emission reduction target:
Reduce the moving average over five years by 1% unit load each year

*1 The DBJ Green Building Certification is a system established by the Development Bank of Japan to evaluate initiatives for environmental and social awareness of real estate.
*2 CASBEE for Buildings (New Construction) is a system to evaluate the energy savings and environmental impact of buildings in general, excluding detached housing, based on thedesign at the time of new construction. This system is managed by the Japan Sustainable Building Consortium and Institute for Building Environment and Energy Conservation.
*3 The BELS Energy Efficiency Certification is a system to evaluate and label the energy efficiency of non-residential buildings based on guidelines issued by the Ministry of Land,
Infrastructure and Tourism. This system is managed by the Jutaku Seinou Hyouka Kyoukai.

Basic Policy and Stance
The Tokyo Tatemono Group has formulated the Group Environmental Policy to guide it in the development of management structures
matched to the characteristics of each of its businesses and in contributing to building a sustainable society through business activities
that consider the environment.

Creation of a pleasant city and coexistence with greeneryWe will create a rich and comfortable environment for society
and the planet alike by utilizing the strength of greenery as
much as possible with consideration to biodiversity.

Resource-saving activities that are kind to the earth
We will strive to reduce the use of resources and environmental impact through all available opportunities and contribute increating a recycling-oriented society.

Climate change prevention that leads the community
We will actively incorporate technologies and ideas that areconsiderate to the environment into our products and services
to lead the community in building low-carbon cities.

Development of employees with high environmental
awareness
We will comply with laws related to the environment and educate and raise the awareness of our employees about theenvironment.


Environmental Impact Reduction Data

Collection Scope• Buildings subject to regulation under the Act on Rationalizing
Energy Use of the Company (non-consolidated)
Note: The floor space of applicable buildings changes each year.

Applicable Indicators• Energy use and unit load
• Greenhouse gas emissions and unit load
• Potable water use and unit load
• Total waste emissions and unit load

Established January 2011
Item

Unit

2014

2015

2016

2017

2018

kl

19,18522,822

21,59222,083*23,895*kl / thousand m2

37.8

36.3

35.4

34.2

35.0

t-CO2

39,92945,05944,62942,147*48,888*

Scope 1

t-CO2

3,493

3,243

2,553

2,402*

3,300*

Scope 2t-CO236,436

41,81642,07639,745*41,259*

Scope 3

t-CO2

—

—

—

—

4,329*

t-CO2 / thousand m

78.6

71.6

73.1

65.3

65.2

Thousand m

486

569

579

584*

654*

m /m

1.0

0.9

0.9

0.9

1.0

Thousand m2

508

629

611

645

683

3,208

4,685

4,914

5,173*

4,945*

7.4

7.9

8.6

8.6

8.3

Energy use (crude oil equivalent)

Environmental Management
In the Commercial Properties Business, we have formulated anenvironmental execution plan, based on which we implement
daily energy-saving activities.
We actively adopt environmental energy-saving technologies
in the development of new buildings for the purpose of building
environmentally friendly buildings lauded by society. In existingbuildings, we promote energy savings by strategically upgrading
the buildings with energy-saving equipment in addition to efforts

Unit load

to save energy from an operational perspective and reduce theenvironmental impact with the help of tenants.
Moreover, in the reduction of energy consumption, we havedefined unit consumption based on floor area as an indicator andset a 1% unit reduction every year on a moving average basis
over five years as a target in accordance with the Act on
Rationalizing Energy Use (per unit basis also applies to greenhouse gas emissions).

TargetAcquire one of the top two levels in either certification or recertification for the third-party certifications listed in (1) to (3) in new
long-term retention buildings; if the certification has already been acquired, the certification shall be maintained and acquired
1. Energy savings through through subsequent certifications.
development(1) 4 or 5 stars in the DBJ Green Building Certification*1(2) S-rank or A-rank in the CASBEE for Buildings (New Construction)*2(3) 4 or 5 stars in the BELS Energy Efficiency Certification*3
2. Energy savings throughEnergy reduction target:
renewal and operaReduce the moving average over five years by 1% unit load each year as a crude oil equivalenttional improvements

32 TOKYO TATEMONO GROUP Integrated Report 2019

Greenhouse gas emissions

Unit load (excluding Scope 3)

2

Potable water use
Unit load

Environmental Execution Plan
Field of Initiative

Tokyo Tatemono has received third-party assurance from Lloyd’s
Register Quality Assurance Limited to assure the integrity of partof its environmental and social data for 2017 and 2018. The
numerical data assured is marked with an asterisk. The thirdparty quality assurance statement is included in CSR Report2019 and the ESG Data Book.

Collection Period• April 1 to March 31 of each year

3

Area of applicable floor space(for energy, greenhouse gas, and water reporting)Total waste emissions

3

2

t

Unit loadt / thousand m

Waste recycled

t

—

—

—

3,395

3,202*

Thousand m2

436

590

571

603

593

Area of applicable floor space(for waste reporting)2* Third-party assurance has been received for these figures.

TOKYO TATEMONO GROUP Integrated Report 201933

Acquisition of DBJ Green Building Certification Certifying Environmental and Social AwarenessCurrently, seven properties from the office buildings, commercial
facilities, and other buildings owned and managed by Tokyo
Tatemono have received high praise in the form of the DBJ
Green Building Certification Four Stars or Five Stars.
The DBJ Green Building Certification is a system establishedby the Development Bank of Japan to evaluate initiatives for theenvironmental and social awareness of real estate. The certification is ranked* from One Star to Five Stars based on a comprehensive score from the five perspectives of environmental
performance in the building, comfortability of tenants, risk management, consideration for the surrounding environment andcommunity, and collaboration with stakeholders.
Tokyo Tatemono will continue to respond to social requests
related to real estate from its stakeholders, address the diversification of tenants’ needs, and develop real estate with consideration for environmental and social impact.
* Evaluation by rank: (Five Stars) Building with top class environmental and social
awareness in Japan; (Four Stars) Building with exceptionally high environmental andsocial awareness; (Three Stars) Building with excellent environmental and social
awareness; (Two Stars) Building with high environmental and social awareness;(One Star) Building with satisfactory environmental and social awareness

Other Major Certifications and Receptions
2014

Receipt of Good Design Award(creation of town, local area, or community category)Tokyo Square Garden
As one of Japan’s foremost eco-friendly buildings, Tokyo Square
Garden is equipped with low-carbon technologies and also
features such areas as Kyobashi Environmental Station, a site for
initiatives that reduce CO2 emissions in the surrounding areas,
and Kyobashi no Oka, a dynamic greenery area.
Other Major Certifications and Awards
2010

Designation as Leading Project of CO2 Reduction for
Residential Housing and Buildings

2014

Receipt of Good Design Award(industrial space, construction, and facility category)

2015

Receipt of Minister of Land, Infrastructure, Transport and Tourism
Award in Rooftop, Walls, Special Greening Technology Competition(Rooftop Greening Category)

2016

Receipt of Social and Environmental Green Evaluation System(SEGES) Urban Oasis 2016 certification

Properties with DBJ Green Building Certification
Name (Location)

Rank

Nakano Central Park South(Nakano, Nakano-ku, Tokyo)
Tokyo Square Garden(Kyobashi, Chuo-ku, Tokyo)

Tokyo Tatemono Nihonbashi Building(Nihonbashi, Chuo-ku, Tokyo)
SMARK Isesaki(Isesaki, Gunma)

Hareza Tower*(Higashiikebukuro, Toshima-ku, Tokyo)* Scheduled for completion in May 2020

Introduction of Properties withDBJ Green Building Certification
Nakano Central Park South
Together with the surrounding universities and government
agencies, Nakano Central Park South contributes to the 16.8 haarea known as “Nakano Shiki no Machi (Nakano Town of Four
Seasons)” by creating an approximately 3 ha open area ofgreenery (including Nakano Shiki no Mori Koen Park).

The Otemachi Tower
The Otemachi Tower features Otemachi Forest, a natural forest
sprawling across approximately 3,600 m2, or approximately onethird of the tower’s site, to realize a development concept of revitalizing both cities and nature.
Other Major Certifications and Awards
2014

Receipt of first certification issued under ABINC Certification System(Urban & SC Version)
Receipt of Minister of Land, Infrastructure, Transport and Tourism
Award (Planning and Originality Category), the best award in Urban
Park Contest

2015* The GRESB is an ESG benchmark that specializes in real estate established throughEuropean superannuation funds and other financing.

ZEH-M Initiatives
Tokyo Tatemono was registered in the ZEH Developer Registration
Program pertaining to net-zero-energy houses (ZEHs) as part ofits first batch of registrations in May 2018, and we intend toactively develop ZEH-Mansions (ZEH-Ms) in the future.*1 We are
gradually putting in place initiatives to popularize ZEH-Ms. We also
aim to standardize ZEHs based on the ZEH road map announced
by the Ministry of Economy, Trade and Industry in 2015.
Brillia Tsurumaki satisfies the ZEH-M Oriented criteria,*2 andis the only building in Tokyo included in the High-rise ZEH-M(ZEH Mansion) Proof-of-Concept Project undertaken to facilitate
the establishment of design guidelines for promoting multipledwelling ZEH complexes organized through open application by
the Ministry of Economy, Trade and Industry in 2018.

Conceptual drawing of completed Brillia Tsurumaki

Creation of New Greenery in Cities
Human-made greenery is needed more than preserving natural
greenery when seeking to achieve a certain scale of greenery in
office districts that generally have a scarcity in this regard. The
area surrounding Tokyo Station is an office district that bustles
with large buildings, but the Imperial Palace and ocean are close
by with many birds and insects migrating to live in this area.
The approximately 3,600 m² Otemachi Forest area was createdon the grounds of The Otemachi Tower, making up roughly
one-third of the entire property. We reproduced a richly diverse

forest in Otemachi by gathering natural trees from mountains in
the Kanto region based on the concept of creating a real forest.
We also created the Kyobashi Hill area as an approximately
3,000 m² greenery area dynamically linked from the first-floor
basement to the fifth floor of Tokyo Square Garden.
The greenery areas at The Otemachi Tower and Tokyo Square
Garden have been certified as Urban Oases, designated as
spaces in which visitors can relax, by the Social and Environmental
Green Evaluation System (SEGES) third-party certification entity.

Otemachi Forest, The Otemachi Tower

Kyobashi Hill, Tokyo Square Garden

Receipt of Social and Environmental Green Evaluation System(SEGES) Urban Oasis 2015 certification
Receipt of Minister of Land, Infrastructure, Transport and Tourism
Award Green City Award (Green Project Activity Category)2017

34 TOKYO TATEMONO GROUP Integrated Report 2019

Tokyo Tatemono has been highly evaluated by the Global Real
Estate Sustainability Benchmark (GRESB),* a benchmark forevaluating efforts in the environmental, social, and governance(ESG) performance of real estate centers, receiving the highest
honor of the “Green Star” for four consecutive years. We also
earned for the second consecutive year the highest rating of 5stars (out of 5 stars) in the GRESB Real Estate Rating that provides a comparative assessment based on a comprehensivescore that was introduced in 2016.

*1 A ZEH uses heat insulation, energy conservation, and other measures for reducing
energy use as well as power generation to balance out the annual primary energy
consumption (air-conditioning, hot water, lighting, and ventilation) to zero. ZEH-M isthe ZEH standard for multiple-dwelling complexes.
*2 The ZEH-M Oriented criteria are the ideal ZEH standards for high-rise multipledwelling complexes with six or more stories released by the Ministry of Economy,
Trade and Industry in May 2018.

The Otemachi Tower(Otemachi, Chiyoda-ku, Tokyo)

Brillia ist Tower Kachidoki(Kachidoki, Chuo-ku, Tokyo)

High Evaluations in Global Real Estate Benchmark

Receipt of Minister of the Environment Award in Rooftop and Wall
Greening Technology Competition (Rooftop Greening Category)TOKYO TATEMONO GROUP Integrated Report 201935

Social Initiatives• Development of Comfortable Workplace Environments• Fostering of Environments That Empower Diverse Human Resources• Response to Social Change• Community Involvement

Preservation of Original Landscapes
The preservation of green spaces native to regions is desirablefrom the perspective of conserving biodiversity. Such efforts are
anticipated to help preserve microorganism and plant species
living in the soil and maintain the relationship with the surrounding environment through topography.
Brillia Towers Meguro, completed in November 2017, realized
a new urban block boasting roughly 17,000 m2 in front of Meguro
Station. Under the concept of creating a forest in front of thestation, we established the Forest Square on the premises,
where roughly 900 trees were planted, in addition to building
waterways. The property also interconnects with the neighboring
Meguro River and the Institute for Nature Study of the National
Museum of Nature and Science to contribute to the preservationof biodiversity in the region.

Development of Comfortable Workplace Environments
Fostering of Environments That Empower Diverse Human Resources Forest Square of Brillia Towers Meguro

Issuance of Green Bonds
Tokyo Tatemono will contribute to the development of a sustainable society through its businesses while continuing to further
environmental awareness. In addition, it issued ¥50.0 billion in
public hybrid corporate bonds (green bonds) in March 2019
based on the Green Finance Framework to diversify its financing
methods.
These bonds were the first case in Japan of public hybrid
corporate bonds issued as green bonds, and the amount of thisissue was also the largest of any prior green bond issue in Japan.
The highest rating of Green 1 was received in regard to theeligibility of this issue as a green bond through JCR Green Bond
Evaluation*1 by third-party rating association Japan Credit Rating
Agency, Ltd. (JCR).
All capital acquired through the green bonds is planned to be
used for the acquisition and refinancing of construction capitalfor Hareza Ikebukuro and Nakano Central Park South, which aregreen buildings*2 that fulfill the criteria of the Green Finance
Framework.

Overview of Green Bonds
Name

2nd Series Deferrable Interest and Callable
Unsecured Subordinated Bonds (Green Bonds)

Condition
determination date

March 8, 2019

Issue date

March 15, 2019

Redemption date

March 15, 2059

Total issue amount¥50.0 billion

Use of proceeds

Hareza Ikebukuro acquisition, construction funds,
and financing
Nakano Central Park South acquisition,
construction funds, and financing

Eligibility

Evaluations Green 1 (JCR)*1 This system for third-party evaluations for green bonds by JCR is based on thegreen bond principles formulated by International Capital Market Association (IMCA)
and the Ministry of the Environment’s Green Bond Guidelines, 2017. The processevaluates whether the use of the capital is for green projects as well as the management, operating structure, and transparency of the bonds. The results of theseevaluations are then comprehensively assessed to decide the JCR Green Bond
Evaluation.
https://www.jcr.co.jp/en/greenfinance/*2 G reen buildings are those that have acquired, or for which acquisition is planned,
one of the top two levels for either certification or recertification in the third-party
certifications listed in (1) to (3):(1) 4 or 5 stars in the DBJ Green Building Certification(2) S-rank or A-rank in the CASBEE for Buildings (New Construction) Certification(3) 4 or 5 stars in the BELS Energy Efficiency Certification

The Group also recognizes that enabling employees to realize
a good work–life balance and achieve improved productivity is an
important task for ensuring the ongoing growth of both employees and the Group. For this reason, we have established theTokyo Tatemono Group Health Management Declaration and are
implementing initiatives to help all Group members maintain andimprove their health.

Initiatives for Empowering Diverse Human Resources
At the Tokyo Tatemono Group, the Tokyo Tatemono Personnel
Department coordinates with the departments in charge ofadministration at Group companies to promote various measuresfor providing support throughout the Group to enable diverse
human resources to continuously grow without obstacles impeding their development.
Encouragement of Women to Take Active Roles
Tokyo Tatemono is striving to build a workplace and appoint
diverse human resources in order to enable women to fully exercise their skills and individuality and work with a greater sense of
self-determination.
In December 2018, female employees represented 28% of all
employees, an increase of 7 percentage points from 2015.
Incorporation of Senior Citizens into the Workforce
Tokyo Tatemono has introduced a re-employment policy for
employees at retirement age so that employees who have reached
the age of 60 can play active roles by leveraging their careers up
to that point. In addition, the Personnel Department consults with
employees who have put off retirement and works to help themleverage the careers they have built up to that point to take anactive role in line with their desire to work based on their individual life plans.

Conceptual drawing of completed Hareza Ikebukuro

36 TOKYO TATEMONO GROUP Integrated Report 2019

Basic Policy and Stance
The Tokyo Tatemono Group believes that workplaces staffed bydiverse human resources contribute to the supply of higherquality services by providing a wider range of perspectives andmaking better decisions. Accordingly, we are developing workplace environments in which diverse human resources are able
to excel by focusing on their work while feeling motivated andfacing no obstacles.

Promotion of Employment of People with Disabilities
Tokyo Tatemono has prepared a system in which people withdisabilities can achieve long-term stable employment that
includes assigning them to the most appropriate department,
conducting regular consultations with the Personnel Department,
and setting working hours based on each individual’s situation.

Initiatives to Reduce Overtime
Tokyo Tatemono has continued measures to prevent excessive
overtime since 2008 from the perspectives of work–life balanceand employee health management. We adopted a system toshut down computers at the end of a normal working day in2010 to restrict late-night working hours and prevent overwork.
Furthermore, in departments where long working hours occur,
we have implemented a framework in which involved partiesare required to report on improvement measures to their directsupervisors so that this information can be relayed to management. Through the resulting PDCA (plan-do-check-act) cycle,
we are striving to reduce overtime, and we have succeeded inachieving a reduction of approximately 50% in overtime incomparison with 2008.
Systems for Facilitating Career Building
with Flexibility to Life Events
Tokyo Tatemono has various systems in place for enabling
employees to continue building their careers with flexibility to life
events, further supporting the contributions of employees witha wide range of backgrounds.
• Leave systems for pregnancy, childbirth, child-rearing, andnursing care
• Re-employment system for people who have resigned becauseof pregnancy, childbirth, child-rearing, and nursing care
• System for accompanying a spouse transferred overseas

TOKYO TATEMONO GROUP Integrated Report 201937

Commitment to Health Management

Human Resource Development
Tokyo Tatemono focuses on the development of new employees
over their first five years after joining the Company by implementing a group training program that includes basic business training(logical thinking, marketing, management strategy, among others).
Furthermore, for the purpose of enabling employees to gain theexperience and broad-ranging knowledge required of employees
of a comprehensive real estate company, new graduate recruits
are rotated, in general, among three departments to experience
the work therein in the 10 years after joining the Company.
To strengthen the on-the-job training development cycle in theworkplace, training for the managers who perform on-the-job
training has been implemented along with counseling systems
for new recruits. The operation status of these initiatives is monitored through regular interviews by the Personnel Department.

We are providing enhanced programs such as volunteer-type
internal training and external dispatch training as well as crossindustry exchange training for mid- and higher-level employees
to cultivate a self-learning climate for employees.
Training for managers includes training to enhance daily line
management skills, such as training for evaluators and mental
health and line care training, in addition to dispatches of employees to external training agencies, such as business schools, toenhance their strategic perspective and management capabilities.
In addition, we have established self-education programs andcertification acquisition support systems to assist in independent
learning throughout all levels of employment. Furthermore, withan eye to future global expansion, we support learning English
and Chinese and dispatching employees for overseas training.

Training Program in 2019 (Outline)
Stratified Training

Executives

Executive training

Global Training

Self-Education
External Dispatch

Certification Acquisition
Support Systems

New general manager
training• Building Lots andBuilding Transaction
Business• Strategic on-the-job
training• Support for attending
business or graduate
school•L eadershipGroup Leaders

New group leader
training

Managers

New manager training• Business development• Language school
attendance• Data science•D esign thinking• On-site observation•N egotiation• Overseas dispatch
training•A ction learning•B reakthroughs

Assistant Managers

New assistant manager
training• Internships atoverseas subsidiaries• Lectures by outside
experts

Senior Employees

Strategic communication, presentation, accounting,finance, marketing, management strategy, andthird-year group training

New Employees

New employee training and basic practical real estate
training, logical thinking and IT training• Dispatch to complete
single businessschool course• Cross-industry
exchange training• The Official Business
Skills Test in
Bookkeeping• Association for Real
Estate Securitization•O utside seminars• Real EstateAppraiser• First-class Architect

Workstyle Innovationscommittee’s activities commenced in April 2017, with wideranging discussions between labor and management taking
place as we share the purpose and goals intended by workstyleinnovations. Since 2018, we have been conducting telework
trials as one of our specific measures geared toward enhancing
productivity.

Overview of Tokyo Tatemono’s Workstyle Innovations
Corporate Growth

Achieve Both

Individual Growth /Happiness
Personal relationships, self-education,social interactions outside the Company
and wealth of product knowledge
GrowthHealth maintenance and improvement,
work–life balance, sufficient rest
Happiness

Pursuit of profits, more opportunities
to visit customers, new initiatives and
Key words
businesses, improvement efforts, greater
motivation of employees, creativity, AI

The corporate philosophy of Tokyo Tatemono is“Trust beyond the era.” This incorporates our will to strive
for the growth of the company and the creation ofa prosperous society, taking pride in the trust placed in us
that extends over a century.
To embody this corporate philosophy, we believe
the health of our executives and employees as wellas their families is vital.
We see the mental and physical health of executives andemployees 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 executive officer in charge of health management,
and I vow that we will endeavor in health management
unified as a group.
Hitoshi Nomura
Tokyo Tatemono Co., Ltd.

• Certified Building
Administrator• Real EstateConsulting Induction•D istance learning

Tokyo Tatemono Group
Health Management Declaration

President & Chief Executive Officer• The Japan Business
Law Examination• MasterRedevelopment
PlannerTokyo Tatemono has established the Workstyle Innovation LaborManagement Review Meeting with the labor union. This committee is a venue for discussion between labor and management on
specific measures for implementing appropriate workstyle innovations to further improve productivity and efficiency in businessexecution with consideration of the accomplishment of Groupmedium-term business plans and growth thereafter. The

Strengthen
GrowthCapabilities

Third-Party Evaluation of Health Management
Our sincere efforts toward health have been evaluated, and we
received the highest rank in 2014 for distinguished initiatives considering the health of employees in the DBJ Health Management
Rating run by the Development Bank of Japan.
In addition, we were recognized under the Certified Health andProductivity Management Organization Recognition Program(White 500), a program in which the Ministry of Economy, Tradeand Industry certifies companies practicing excellent healthmanagement, for the third consecutive year since the program
was founded in 2017.

Electives• Coaching basics•C oaching advice

General Managers

Realizing a good work–life balance and increasing productivity
have become important tasks in the sustainable development of
employees and companies amid rising concerns regarding theissues of long working hours and mental health.
The Group is promoting health improvement based on theTokyo Tatemono Group Health Management Declaration.

Health Management Initiatives
Health Improvement Activities
Tokyo Tatemono aims to have a checkup rate of 100% for periodic health examinations and is advancing initiatives to raise
greater awareness in all employees about health management(a 100% rate has been maintained since 2011).
We coordinate with health insurance associations to conduct awide range of initiatives for improving health. We also maintain anunderstanding of the health risk attributes of employees in addition to actively engaging in preventive measures against severe
illnesses for non-obese and young people not eligible for special
screenings with the purpose of improving health through preventive and early-term treatment. We have also been introducing
group dental checkups since 2017 as part of health management efforts.
As daily health management measures, we are strengthening
support for maintaining the health of employees by ensuring thatthe costs required for voluntary health management—such as
physical examinations, various cancer screenings, medical treatment, pharmaceuticals, and health management programs—arecovered in the Welfare Cafeteria Plan.*
We had also been subsidizing the cost for influenza vaccines
until recently, but we bolstered measures to prevent mass infection during the influenza season by inviting physicians to theCompany to provide vaccinations as of 2016.

Mental Health Initiatives
Tokyo Tatemono conducts stress tests through an online service
every year for all of its employees in order to accurately and easily
understand the stress levels of each employee.
In addition, we are providing mental health counseling via healthinsurance associations, and these counseling services have been
made available to employees who have unstable mental health.
We started coordinating with psychiatric advisors in 2016 andhave put in place a support system that includes return-to-worktraining.
As mental health education activities, we are conducting training
on self-care and employee care overseen by line managers, andnewly appointed managers in particular are required to participate in the training on employee care overseen by line managers(100% attendance rate).
For new employees, we invite sports trainers as lecturers andconduct training in which all employees participate. We understand the importance of mental health for all of our employees
and strive to support the early diagnosis and prevention ofmental health problems.

* This plan assigns a set number of points to each employee, and employees can
individually choose a menu of their own within the set number of points. This provides
a benefit of being able to put together a menu suitable to individual health needs.

Reduce Time

Generate Time

Make Decisions Swiftly

38 TOKYO TATEMONO GROUP Integrated Report 2019

Fully Manage Time

Share Know-How

Build IT and Other
Infrastructure

TOKYO TATEMONO GROUP Integrated Report 201939

Response to Social Change Response to the Increase of Children on Waiting Lists

Support for the Aging Society
Residences with Services for Senior Citizens
The birth rate is declining and the ratio of elderly people has been
rapidly growing in recent years in Japan. Amid this situation,
determining the ideal state of final housing and enhancing nursing
care and medical services are important social issues.
To expand its business of providing residences for seniorcitizens, the Tokyo Tatemono Group established Tokyo Tatemono
Senior Life Support Co., Ltd., which develops and operates
residences with nursing care services for senior citizens, in July
2014. As of December 31, 2018, this company operated 15
residences with services for senior citizens.*
Tokyo Tatemono Senior Life Support is developing the Grapes
series of residences with services for senior citizens. Through thisbrand, we aim to supply spaces in which senior citizens can live ina manner suited to their individuality by providing housing functions and services for realizing lifestyles centered upon people.

High-Quality Living Unique to a Developer
The Grapes series realizes the high quality cultivated in the Brillia
brand of newly built residential condominiums while also offering
a barrier-free environment. In addition to the one-room units
common to residences for senior citizens, various other types ofrooms, up to a two-bedroom unit, are available depending on theproperty, enabling each resident to live in a manner suited to theirindividuality.
Furthermore, the living environment has been built for the easeof use by senior citizens, with consideration given to such details
as the height of switches and other fixtures and the adoption ofeasy-to-clean materials and shapes.

* Residences with services for senior citizens are rental homes where people who
require nursing care can live freely while using the nursing care services without
paying expensive admission fees. These residences are regulated by the Act on the
Securement of a Stable Supply of Housing for the Elderly. As of December 31, 2018,
238,000 units were available, and the supply continues to grow.

Soft Services Based on Concierge Services
At Tokyo Tatemono Group residences for senior citizens, a concierge is always present throughout the day to work with in-homelong-term care support service providers and medical institutions
to provide optimal support tailored to each resident. Even if thelevel of nursing care required grows, we are able to provide
services of the same caliber as a private retirement home.
In addition to being accessible due to having no expensive
admission fees, our residences use lifetime building leases that
do not require the renewal of lease contracts, enabling residents
to live comfortably in their final home.

Expansion of Ohayo Child Care Facilities
In recent years, the issue of children on waiting lists for nurseryhas been growing more serious due to the lack of child carefacilities caused by population concentration and an increasing
number of dual-income households in urban areas. Many problems are manifesting as social issues as a result, such as delays
in women returning to work because child care is not available
for their children.
We established Tokyo Tatemono Kids Co., Ltd., in August 2016
with the cooperation of Global Kids Company Corp., which is
expanding as a nursery business. Tokyo Tatemono Kids opened
eight nurseries between 2017 and 2018 and then four new nurseries in April 2019 (one of these four nurseries transitioned from acertified nursery to an authorized nursery).
Based on the child care philosophy of nurturing the abilities
needed to lead fulfilling lives, we prepare an environment inwhich children can think for themselves and independently
engage in tasks.
Origin of Ohayo Child Care
Nurseries are often the first place in which children interact withsociety. We hope to foster children who have no problems
engaging in the proper greeting customs that are of utmost importance to social life. For this reason, it is our goal to help children

start each day invigorated by a greeting of “Good morning!” or“Ohayo!” in Japanese. Ohayo Child Care aspires to always remain
a comforting safe haven, a nursery loved by all. This was thesentiment that inspired us in the creation of Ohayo Child Care.
Atmosphere Exuding the Warmth of Natural Materials
Ohayo Child Care makes a point to use wooden materials for theinterior of their child care facilities so that the children can feel thewarmth of the natural materials that they are interacting with on adaily basis. From the softness to the touch and the fragrance ofthe natural wood, we are passionate in our desire for children tointeract with genuine wood as their senses blossom.

Child care facility with fixtures and specifications prioritizing safety to ensure children
can enjoy their time there

Support for the Empowerment of Women
Room suited to life in a wheelchair

Strengthening of Nursing Care Functions
In June 2018, we established Tokyo Tatemono Staffing Co., Ltd.,by integrating four Tokyo Tatemono Group companies—Care
Like, Frontier, Frontier Western Japan, and MedicalLink—that
dispatch and introduce human resources primarily to care giving
and nursing care facilities.
This corporate merger reinforced our human resource hiring
function by enhancing the efficiency of advertising efforts andincreasing recognition of our offerings. In addition, the merger
enabled us to improve our ability to provide stable humanresource dispatching and professional introductions throughoptimized matching and thereby respond to the chronic labor
shortfalls in the nursing care field.
Expansion of the Nursing Care Facility Business
There are some elderly people who prefer nursing care facilities
based on such factors as the state of their health. Seiaien Co.,
Ltd., an operator of nursing care facilities, merged with Tokyo
Tatemono Senior Life Support in July 2018. With this merger,
our nursing care facility business has grown to four facilities asof December 31, 2018.

Project Bloomoi for Supporting the Happiness ofWorking Women
As women increasingly participate in the workforce and the ideal
lifestyle and happiness sought by women grow more diverse,
there is a need for both residences and offices to adapt in
response to the changes to the diverse ways of life.
Tokyo Tatemono has been carefully researching the insights ofworking women and advancing the Brillia Bloomoi Project since2012 to examine and promote the realization of housing that
responds to their diversified needs. Through this project, wehope to support not only working women but also a wide rangeof women engaging in household affairs, child care, nursing care,
community contribution, and learning.
The members of this project, mostly made up of female employees of the Company, value empathy, dialogue, and co-creation
and believe in lifestyles in which working women can live in linewith their individuality and with greater levels of happiness.
“Bloomoi,” a word coined by combining bloom and moi (me),incorporates our desire to see the many smiles and talents ofworking women fully bloom with grace.
In this project, we are conducting product development aimed
at constantly unveiling new products founded on the core valuesof Bloomoi. These efforts are not limited to condominium floor

plans and housing facilities, but rather include a broader perspective encompassing soft elements such as management andaftercare services.
Investigation of Co-Creation Needs
Working women have a wide range of lifestyles. Bloomoi hasdeveloped a new business scheme that entails an approach
toward product development through a co-creation process.
Under this scheme, we investigate the insights of working women
through efforts such as events, dialogue, and Facebook and incorporate those insights into product planning. The floor plans andfacilities designed based on survey results and feedback are thenfurther refined through an exchange of ideas with working women.
Adoption of Multiple Bloomoi Project Products at
Brillia Oyama Park Front
Completed in October 2018, Brillia Oyama Park Front is locatedin a convenient location within a 2 km distance from the city
center of the Tokyo district of Ikebukuro, which is undergoingredevelopment, on the Fukutoshin Line and many of the residents are working women. This property has adopted facilities
developed through the Bloomoi project to bring greater levels ofhappiness to the lives of residents.
Bloomoi LibraryWorkspaces have been
installed next to the kitchen
to be used to conduct small
tasks when there is extra
time, such as on breaks
during cooking. This spacecan be hidden by closing
the door if an unexpected
visitor shows up.
(Left: When open;
Right: When closed)

40 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201941

Corporate GovernanceCommunity Involvement 
Yaesu, Nihonbashi, and Kyobashi Development Activities
The Tokyo Tatemono Group believes that improving regional
value through various community and volunteer activities is not
only part of community development but also contributes to thesustainable growth of its business.
Therefore, we are conducting a wide range of community andvolunteer activities by gathering participants from inside theGroup, including city clean-up activities and community revitalization and other events, to improve regional value in areas such as
the Yaesu, Nihonbashi, and Kyobashi districts, where we own
and manage real estate.

Major Community Development Activities (2018)
Activity (Contribution)

Group Employee
Participants

Sanno Festival

Carrying mikoshi portable shrines in the Sanno Festival, one of the three major festivals of Japan(Jun. 8 to 10)

Total of 656
participants

Sakura Festival

Holding rugby and other events(Apr. 6 to 8)

Total of 25
participantsTokyo Station area clean-up team

Cleaning the Tokyo Station area
(Feb. 23, Apr. 20, Sep. 28)

Total of 531
participantsChuo-dori Street Clean Walk event(picking up trash, re-planting flowers)

Picking up trash and re-planting flower beds along Chuo-dori street(Mar. 22, Jul. 19, Dec. 12)

Total of 55
participants

La Folle Journée TOKYO2018

Held area concert at Tokyo Square Garden(May 3 to 4)

Total of 8participantsTokyo Ekimachi Kirapika Project

Cleaning areas around Tokyo Station(Jul. 19, Nov. 29)

Total of 297
participants

Nihonbashi / Kyobashi Festival

Acting as special sponsor, staffing executive committee, organizing rugby team
(Oct. 28)

Total of 11
participants

Art & Craft Market

Holding event at Tokyo Square Garden(once per month)

Total of 24
participants

Name

Basic Policy and Stance
To enhance the corporate value of Tokyo Tatemono, we strive to build an optimal corporate governance system with a focus on ensuring
the soundness and transparency of management and increasing its effectiveness.

Corporate Governance System
Tokyo Tatemono has adopted the Company with Board ofCompany Auditors structure described in the Companies Act ofJapan for its corporate governance system, and it has established a Board of Directors and an Audit and Supervisory Board.
In addition, we introduced an executive officer system to clarify
the division of functions for management and business execution
in order to strengthen the management and oversight functions
and the business execution functions. We are also reinforcing theauditing functions and the transparency of management by
appointing external directors and external Audit and Supervisory
Board members. The Company has thereby built a system thatenables the sufficient execution of the supervisory and auditing
functions of management and directors.
Furthermore, we established the Group Management Meetingin an effort toward efficient and sound Group management.

Overview of Corporate Governance System
General Meeting of Shareholders

Clean-Up Activities

Appointment / Dismissal

Appointment / Dismissal

The Tokyo Tatemono Group regularly conducts clean-up activities
by using time such as that before the start of work to contributeto urban beautification in several areas that include the Yaesu
district, where the Tokyo Tatemono head office is located, as wellas the Nihonbashi and Kyobashi districts. These activities havebeen praised, and we even received a letter of appreciation fromthe Nihonbashi Clean Business Cooperative for these activities.

Advisory Committee
Advisory

Account Auditor

ReportCoordination

ReportBoard of Directors (Directors)
Appointment / Audit

Audit

Appointment / Dismissal

Dismissal

Account Audit

Audit and Supervisory Board(Audit and Supervisory
Board Members)

President & Chief Executive Officer
Coordination

Group Management Meeting

Internal Control Committee
Internal Audit Division

Morning cleaning activities

Head Office / Divisions

Audit

Tokyo Tatemono

Participation in Sanno Festival, One of the Three Major Festivals of Japan
Group Companies

The Tokyo Tatemono Group actively participates in the Sanno
Festival, an important event in the area where the head office ofTokyo Tatemono is located, to help pass down traditional culture.
The Sanno Festival is counted as one of the three major festivals
in Japan along with the Tenjin Festival in Osaka and the Gion
Festival in Kyoto. Many Group employees participate during theparading of 12 mikoshi portable shrines through the Yaesu,
Nihonbashi, and Kyobashi districts. In addition to helping carry
the mikoshi portable shrines, Group employees take part in otheractivities to help invigorate the festival with members of the local
community association.

Tokyo Tatemono Group

Sanno Festival

42 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201943

External Directors and External Audit and Supervisory Board Members

Overview of Committees
Name

Overview

Tokyo Tatemono appoints members of senior management andnominates candidates for positions as directors and Audit andSupervisory Board members based on comprehensive judgmentof the character, skills, knowledge, and experience of the individual in order to select persons capable of contributing toenhancing the Tokyo Tatemono Group’s corporate value over the
medium to long term.

Board of Directors

The Board of Directors comprises 12 directors, of whom four are external directors. In principle, regular Board of Directors’ meetings areheld once a month and extraordinary meetings are held when a need arises to decide on important matters related to business execution and to the auditing of the business execution of directors. Audit and Supervisory Board members also attend Board of Directors’
meetings and share their opinions when necessary.

Audit and Supervisory
Board

The Audit and Supervisory Board consists of four Audit and Supervisory Board members, of whom two are full-time Audit andSupervisory Board members and two are external Audit and Supervisory Board members.

Group Management
Meeting

The Group Management Meeting consists of executive officers with additional titles and deliberates on important matters related to the
management of the Group. In addition, full-time Audit and Supervisory Board members participate in the Group Management Meeting
to gain an understanding of the status of deliberations and share opinions when necessary.

Internal Control Committee

The Internal Control Committee discusses and monitors management of internal control risks (compliance and internal management
risks) and reports to the Board of Directors, the Audit and Supervisory Board, and other bodies when necessary.

External Directors
NameAdvisory Committee

The Advisory Committee was put in place as a body to advise the Board of Directors that deliberates on matters such as the selectionof director and representative director candidates as well as the remuneration for directors (excluding external directors). Committee
members are appointed from among the directors, and external directors are appointed as a majority of the total of five directors toguarantee the objectivity and transparency of procedures while leveraging the knowledge and advice of these external directors.

Designation as
independent
director

Reason for appointment

Years of service as
director

Attendance at Board of Directors’
meetings in 2018

Yoshiyuki Imai

Mr. Imai was appointed as an external director on the basis of his considerable
management experience and wide-ranging insight, which are expected to continue contributing to the strengthening of the governance system through means
such as enhancement of oversight of the execution of the duties of directors froman independent point of view.

2 years

13/13 (100%)

Yoshimitsu Onji

Mr. Onji was appointed as an external director on the basis of his considerable
management experience and wide-ranging insight, which are expected to continue contributing to the strengthening of the governance system through means
such as enhancement of oversight of the execution of the duties of directors froman independent point of view.

1 year9/9 (100%)

Shuichi Hattori

Mr. Hattori was newly appointed as an external director on the basis of his specialized expertise and experience as a lawyer, which are expected to contribute to
the strengthening of the governance system through means such as enhancement of oversight of the execution of the duties of directors from an independent
point of view.

New

Mitsuhiro Nagahama

Mr. Nagahama was newly appointed as an external director on the basis of his
considerable management experience and wide-ranging insight, which are
expected to contribute to the strengthening of the governance system throughmeans such as enhancement of oversight of the execution of the duties of directors from an independent point of view.

New

Remuneration Amounts and Policy for Determining Calculation Method
The remuneration for directors is set to be no more than ¥35
million a month (equivalent to ¥420 million a year) as fixed compensation and no more than 1% of consolidated recurring income,and no more than 2% of the profit attributable to owners of theparent from the previous fiscal year is set as performance-based
remuneration.
The adoption of a stock remuneration system via a stock bondtrust was approved at the 200th General Meeting of Shareholders
held on March 28, 2018, for the purpose of clarifying the link
between remuneration, such as that for directors, and the shareprice of the Company and increasing motivation in order to contribute to growth in medium- to long-term corporate value. As aresult of adopting this policy, remuneration, such as that for directors, has come to be composed of three types of payments: fixed
remuneration, performance-based remuneration, and share-based
remuneration. We limit the payment of share-based remuneration(excluding external directors) to a maximum of 40,000 points(equivalent to 40,000 shares) per fiscal year.
Remuneration for Audit and Supervisory Board members islimited to basic fixed remuneration based on the role of full-timeand external Audit and Supervisory Board members, and theamount of remuneration is set to be less than ¥8 million a month(equivalent to ¥96 million a year).

In nominating candidates for positions as directors and Audit
and Supervisory Board members, deliberations are first held by
the Advisory Committee, which has independent external directors as core members, and then a resolution is made by the
Board of Directors.

13/13 (100%)**Attendance as external
Audit and Supervisory
Board member—

Audit and Supervisory Board Members
Director and Audit and Supervisory Board Member Remuneration Amounts
Category

Recipients

Directors(of whom, external directors)

Audit and Supervisory Board members(of whom, external Audit and Supervisory Board
members)

Total(of whom, external officers)

Fixed remuneration(Millions of yen)

Total amount by type of remuneration
Performance-based
Share-based remuneration
remuneration(Millions of yen)
(Millions of yen)

Reason for appointment

Kouji Kawakubo—

Mr. Kawakubo was appointed as an Audit and Supervisory Board
member on the basis that his considerable management experienceand wide-ranging insight can be expected to continue to be applied to
the reinforcement of the Company’s auditing systems.

2 years

13/13 (100%)

14/14 (100%)

Takashi Yoshino—

Mr. Yoshino was newly appointed as an Audit and Supervisory Board
member on the basis that his considerable management experienceand wide-ranging insight can be expected to be applied to the reinforcement of the Company’s auditing systems.

New

—

—

Total remuneration(Millions of yen)

12
(4)

314
(27)

155
(–)

35
(–)

505
(27)

4
(2)

64
(12)

–
(–)

–
(–)

64
(12)

16
(6)

379
(39)

155
(–)

35
(–)

570
(39)

No more than
¥35 million per month

No more than 1% of consolidated recurring income and 2% of the profit
attributable to owners of the parent from the previous fiscal year

No more than 40,000 points (equivalent to 40,000 shares)
per fiscal year

Fixed remuneration
Fixed remuneration

Performance-based remuneration—

Share-based remuneration—

NameTokyo Tatemono administers a questionnaire about theconstitution, proposals, and management of the Board of
Directors to all directors and Audit and Supervisory Board
members once a year. The results of this questionnaire are
analyzed and then discussed by the Board of Directors.
We have been able to sufficiently ensure and verify theeffectiveness of the Board of Directors.

Evaluation Items
Category

Composition
Proposals
Operation

OthersDesignation as
independent
auditorYears of service asAttendance at Board
Attendance at Audit
Audit and Supervisory of Directors’ meetings and Supervisory Board
Board member
in 2018
meetings in 2018

Reason for appointment

Takao Yamaguchi

Mr. Yamaguchi was appointed as an external Audit and Supervisory
Board member on the basis that his expertise and experience as acertified public accountant can be expected to continue to be applied to
the reinforcement of the Company’s auditing systems.

3 years

13/13 (100%)

14/14 (100%)

Sayaka Hieda

Ms. Hieda was newly appointed as an external Audit and Supervisory
Board member on the basis that her expertise and experience as alawyer can be expected to be applied to the reinforcement of theCompany’s auditing systems.

New

—

—

Evaluation of the Effectiveness of the Board of Directors

44 TOKYO TATEMONO GROUP Integrated Report 2019Years of service asAttendance at Board
Attendance at Audit
Audit and Supervisory of Directors’ meetings and Supervisory Board
Board member
in 2018
meetings in 2018

External Audit and Supervisory Board Members

Director Remuneration Framework

Internal directors
External directors

Designation as
independent
auditorName

Details

Ratio, number, and diversity of external directors
Number, content, and financial criteria of proposals
Number and length of meetings, ideal form of advanced explanations,materials and time for explanations, time for debate, and content ofmatters to report
Ideal form of support systems and training

Support System for External Directors and External Audit and Supervisory Board Members
The Planning Division, which acts as a Board of Directors’ secretariat, provides explanations and information as necessary tosupport the external directors and external Audit and Supervisory
Board members at Tokyo Tatemono.
In addition, personnel are assigned as a staff to support Audit
and Supervisory Board members upon request from the Audit
and Supervisory Board to facilitate the smooth execution ofauditing duties.

Furthermore, full-time Audit and Supervisory Board members
participate in important meetings, including the GroupManagement Meeting in addition to Board of Directors’ meetings, while receiving relevant reports from the account auditor,
directors, and employees of each division to enable theexchange of opinions with individual bodies at any time.

TOKYO TATEMONO GROUP Integrated Report 201945

Risk Management

Compliance

Basic Policy and Stance

Promotion of Compliance

The Tokyo Tatemono Group strives to manage risks that have thepotential to impact the businesses of the Group in order to stably
heighten corporate value. We have established risk management
regulations and put in place a risk management structure, basedon which we practice rigorous risk management by continuously

monitoring and controlling risks. Furthermore, in the preparationof the risk management structure, we referred to the ISO-31000
international risk management standards and the JIS-Q-31010
Japanese standards.

Risk Management System
We categorize and manage investment risk, financial risk, internal
control risk, business risk, and integrated risk, the aggregate of
the preceding four risks, as material risks.
The Corporate Planning Department is in charge of integrated
risk, and the Internal Control Committee, which is chaired by thepresident (executive officer), deliberates on and manages internal
control risk (internal management risk and compliance risk)
among those general risks.

We also review policies to respond to general business risks
through the Group Management Meeting and other venues.
Furthermore, important matters related to these risks arereported to the Board of Directors and the Audit and Supervisory
Board as necessary.
We are thoroughly managing risks through a series of processes that include monitoring and improving the operational
status of risk management.

The Tokyo Tatemono Group defines compliance as complying
not only with laws but also with social standards and corporate
ethics to gain everlasting trust from society and to continue
engaging in sound corporate activities. Corporations need torespond to the expectations of customers, business partners,
shareholders, investors, local communities, employees, andother stakeholders, and responding to the needs of these stakeholders with integrity is paramount.
The Tokyo Tatemono Group established the Compliance
Charter to promote corporate activities that observe compliancein June 2009, and it is advancing such efforts accordingly.
Meanwhile, the Internal Control Committee has been established to discuss Group compliance as well as general internal
control risks and as a framework for supervising Group compliance activities.

Tokyo Tatemono Group
Compliance Charter
As we engage in corporate activities, we observe theCompliance Charter below:
We adhere to laws, regulations, and other rules andengage 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

Overview of Risk Management System
Audit andSupervisory
Board

Compliance Training
Board of Directors

Audit
Report of important matters

Report of important matters

Debate and report of important matters

Corporate Planning Department
Risk Management
Division

Person Responsible for Overseeing Risk Management:
General Manager of Corporate Planning Department
Person Who Assists in Overseeing Risk Management*:
General Manager of the General Affairs Department* Only for internal management risks

Internal Control Committee
Chairperson: President
Secretariat: General Affairs
Department
Assistance: Corporate Planning
Department, Internal
Audit Division

Group Management
Meeting, etc.
Chairperson: President
Secretariat: Corporate Planning
Department

Integrated Risk
(Aggregate of Investment Risk, Financial Risk, Internal Control Risk, and Business Risk)

Risk Category

The Tokyo Tatemono Group conducts joint Group e-learning
training every year. In 2018, the training program was oriented
toward gaining knowledge about overall compliance, harassment
prevention, information management for purposes such as preventing insider training and corruption, and the prevention ofmoney laundering and other aspects of the Real Estate Brokerage
Act and the Act on Prevention of Transfer of Criminal Proceeds.
In addition, steps were taken to update knowledge following
amendments to laws and regulations. Roughly 2,800 executives
and employees in 13 Group companies took part in these training sessions. In addition, we have introduced stratified training,such as group training for new Group employees; harassment
prevention training for executives, general managers, and managers; training for new Tokyo Tatemono employees; and training

for newly appointed supervisors as well as training on preventing
insider trading.
In addition, we take steps to prevent corruption and bribery byusing the corporate intranet to post spotlight articles about theprevention of insider trading, drinking responsibly, and proper
relationships with public officials to raise awareness throughout
the Group.
Furthermore, we hold seminars in which we invite outside
experts to serve as lecturers on themes regarding laws andregulations as well as taxes, which are of great importance tooperations. We also share information on the latest judicial precedent, tax amendments, and other topics related to our businesses throughout the entire Group.

Internal Control Risk
Investment Risk

ReportFinancial Risk

Monitoring /Improvement(Aggregate of Internal Management
Risk and Compliance Risk)

ReportMonitoring /Improvement

Business Risk

ReportMonitoring /Improvement

Divisions, Offices, and Other Locations
Risk Management Representative: Head of Division, Office, or Location; Implementation Oversight: Operational Management Representative

46 TOKYO TATEMONO GROUP Integrated Report 2019

Tokyo Tatemono Group Helpline
The Tokyo Tatemono Group has set up the Tokyo TatemonoGroup Helpline, which can be used throughout the Group as aconsultation and reporting venue to prevent violations of laws
and illegal acts. Furthermore, the helpline features a contact
venue with an external law office, making it a system for easy
consultation and reporting. All employees who engage in thebusinesses of any of the Group companies can use this helpline.
Consultations and reports received through these venues arereported to the Company’s Internal Audit Division (under the
direct control of the president), and the facts are reviewed andverified in accordance with the content from an objective
standpoint.
We appropriately respond to actions that violate compliancethrough means such as immediately implementing corrective
measures and taking steps to prevent recurrence. The Internal
Control Committee is convened for more important matters toconsider the appropriate response.
Furthermore, we properly protect whistleblowers in accordancewith the Whistleblower Protection Act.

TOKYO TATEMONO GROUP Integrated Report 201947

Directors, Audit and Supervisory Board Members, and Managing Officers(As of April 1, 2019)

Directors

Makio Tanehashi

Hitoshi Nomura

Hisatoshi Kato

Hideshi Akita

Representative Director
Chairman of the Board

Representative Director
President &Chief Executive Officer

Director
Executive Managing
Officer

Director
Executive Managing
Officer

1979/4 Joined The Fuji Bank, Limited
2006/3	Executive Officer, General Manager of Internal Audit Division of Mizuho Corporate Bank, Ltd.
2008/4	Managing Executive Officer and Officer in charge of Sales of Mizuho Corporate Bank, Ltd.
2011/6	Deputy President & Executive Officer, in charge of Branches Department of Mizuho Bank, Ltd.
and then later Representative Director, Deputy President & Executive Officer, in charge ofBranches Department of Mizuho Bank, Ltd.
2012/4	Representative Director, Deputy President & Executive Officer, in charge of Sales Branches
Department of Mizuho Bank, Ltd.
2013/3 President & Chief Executive Officer of Tokyo Tatemono Real Estate Sales Co., Ltd.
2015/7	Senior Executive Managing Officer and Division Director of Real Estate Service Division of
the Company
2015/10	Senior Executive Managing Officer, Division Director of Real Estate Service Division, andDivision Director of International Business Division of the Company
2016/3	Senior Executive Managing Officer, Director, Division Director of Real Estate Service Division,and Division Director of International Business Division of the Company
2017/1	Representative Director, Chairman and Executive Officer of the Company
Director and Chairman of Tokyo Tatemono Real Estate Sales Co., Ltd. (to present)
2019/3 Representative Director and Chairman of the Board of the Company (to present)

1981/4 Joined the Company
2005/3 General Manager of Property Management Department of the Company
2008/3 Director, and General Manager of Property Planning Department of the Company
2011/3	Managing Director responsible for Kansai Branch and Kyushu Branch, and Division Director ofCommercial Properties Division of the Company
2012/3	Managing Director and Division Director of Commercial Properties Division of the Company
2013/3	Executive Managing Officer, Director responsible for Kansai Branch, Sapporo Branch,
Kyushu Branch, and Nagoya Branch, and Division Director of Commercial Properties Divisionof the Company
2015/3	Senior Executive Managing Officer and Director responsible for Personnel Department,
Corporate Planning Department, and General Affairs Department of the Company
2017/1	President & Chief Executive Officer, and Representative Director of the Company(to present)

1986/4 Joined the Company
2011/3 General Manager of Residential Management Department of the Company
2012/3 General Manager of Residential Leasing Department of the Company
2014/9	General Manager of Residential Leasing Department of the Company
President and CEO of Tokyo Tatemono Senior Life Support Co., Ltd. (to present)
2016/1 Managing Officer of the Company
2019/1	Executive Managing Officer and Division Director of Senior and Child Care Business Divisionand Leisure Business Division of the Company
2019/3	Executive Managing Officer, Director, and Division Director of Senior and Child Care Business
Division and Leisure Business Division of the Company
2019/4	Executive Managing Officer, Director, and Division Director of Senior Business Division,
Leisure Business Division, Senior and Child Care Business Planning Division,and Leisure Business Planning Division of the Company (to present)

1987/4 Joined the Company
2006/3 General Manager of Residential Management Department of the Company
2007/3 General Manager of Acquisitions Department of the Company
2015/1 General Manager of Personnel Department of the Company
2016/1 Managing Officer and General Manager of Personnel Department of the Company
2017/1	Managing Officer and Vice Division Director of Residential Development Division of
the Company
2019/1	Executive Managing Officer and Division Director of Residential Development Division of
the Company
2019/3	Executive Managing Officer, Director, and Division Director of Residential Development Divisionof the Company (to present)

Masami Kamo

Kengo Fukui

Yoshiyuki Imai

Yoshimitsu Onji

Director
Senior Executive
Managing Officer

Director
Senior Executive
Managing Officer

External Director

External Director

1984/4 Joined The Fuji Bank, Limited
2011/4	Managing Officer and General Manager of Wealth Marketing Department of Mizuho Bank, Ltd.
2011/7	Executive Officer and General Manager of Head Branch Department No. 2, Head Branch ofMizuho Bank, Ltd.
2012/10	Executive Officer and General Manager of Tokyo Branch Department No. 2, Tokyo Branch ofMizuho Bank, Ltd.
2013/3	Executive Managing Officer and Director responsible for Finance Department, Accounting
Department, and Administration Service Department, Division Director of Real Estate Service
Division and General Manager of Finance Department of the Company
2014/2	Executive Managing Officer and Director responsible for Finance Department, Accounting
Department, and Division Director of Real Estate Service Division and General Manager ofFinance Department of the Company
2015/3	Executive Managing Officer and Director responsible for Corporate Communications
Department, Finance Department, Accounting Department, and Appraisal Department;
Division Director of Real Estate Service Division; Division Director of Senior Business Division;and General Manager of Finance Department of the Company
2015/7	Executive Managing Officer and Director responsible for Corporate Communications
Department, Finance Department, Accounting Department, and Appraisal Department;
Division Director of Senior Business Division; and General Manager of Finance Department of
the Company
2017/1	Senior Executive Managing Officer, Director, and Division Director of Real Estate Service
Division and Senior Business Division of the Company
President & Chief Executive Officer of Tokyo Tatemono Real Estate Sales Co., Ltd. (to present)
2019/1	Senior Executive Managing Officer, Director, and Division Director of Real Estate Service
Division of the Company (to present)

1982/4 Joined the Company
2002/10 General Manager of Fukuoka Branch of the Company
2011/3 Director and General Manager of Corporate Planning Department of the Company
2012/3	Director and General Manager of Property Leasing and Consulting Department of
the Company
2013/1 Director and General Manager of Leasing & Consulting Department of the Company
2013/3	Managing Officer and General Manager of Leasing & Consulting Department of the Company
2015/3	Executive Managing Officer and Director responsible for Kansai Branch, Sapporo Branch,
Kyushu Branch, and Nagoya Branch; and Division Director of Commercial Properties Divisionof the Company
2019/1	Senior Executive Managing Officer and Director responsible for Kansai Branch,
Sapporo Branch, Kyushu Branch, and Nagoya Branch; and Division Director of Commercial
Properties Division of the Company (to present)

1978/4 Joined The Yasuda Mutual Life Insurance Company
1995/4 Head of Numazu Branch of The Yasuda Mutual Life Insurance Company
2008/4 Director and Head of Osaka Central Branch of Meiji Yasuda Life Insurance Company
2009/6 Executive Director of Meiji Yasuda Mental Health Foundation (retired in March 2012)2011/4	President and Representative Director of Meiji Yasuda Insurance Service Company, Limited(retired in March 2017)2017/3 External Director of the Company (to present)

Katsuhito Ozawa

Akira Izumi

Shuichi Hattori

Director
Executive Managing
Officer

Director
Executive Managing
Officer

External Director

1987/4 Joined the Company
2007/3 General Manager of Residential Management Business Department of the Company
2009/7	Director and General Manager of Finance Department ofTokyo Realty Investment Management, Inc.
2012/3	General Manager of Corporate Planning Department of the Company
2015/3	Managing Officer and General Manager of Corporate Planning Department of the Company
2017/1	Executive Managing Officer responsible for Corporate Communications Department,
Finance Department, Accounting Department, and Appraisal Department; Division Director ofInternational Business Division and Leisure Business Division; and General Manager of Finance
Department and International Business Department of the Company
2017/3	Executive Managing Officer and Director responsible for Corporate Communications
Department, Finance Department, Accounting Department, and Appraisal Department;
Division Director of International Business Division and Leisure Business Division; and General
Manager of Finance Department and International Business Department of the Company
2017/8	Executive Managing Officer and Director responsible for Corporate Communications
Department, Finance Department, Accounting Department, and Appraisal Department;
Division Director of International Business Division and Leisure Business Division; and General
Manager of International Business Department of the Company
2019/1	Executive Managing Officer and Director responsible for Corporate Communications
Department, Finance Department, and Accounting Department; Division Director ofInternational Business Division; and General Manager of International Business Department of
the Company (to present)

48 TOKYO TATEMONO GROUP Integrated Report 20191987/4 Joined the Company
2009/3 General Manager of Retail Management Department of the Company
2012/3	General Manager of Commercial Properties Business Planning Department of the Company
2013/3	General Manager of Retail Management Department and Commercial Properties Business
Planning Department of the Company
2015/3	Managing Officer and General Manager of Urban Development Department of the Company
2017/1	Executive Managing Officer responsible for Personnel Department, Corporate Planning
Department, and General Affairs Department; and General Manager of Corporate Planning
Department of the Company
2017/3	Executive Managing Officer and Director responsible for Personnel Department, Corporate
Planning Department, and General Affairs Department; and General Manager of Corporate
Planning Department of the Company
2019/1	Executive Managing 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 (to present)

1977/4	Joined The Daiei, Inc.
1994/4	General Manager of Corporate Planning Division of The Daiei, Inc.
1998/9	Director and Vice President of R.E. Partners, Co., Ltd. (retired in April 2000)
1999/12 CEO of OZ Corporation (to present)
2000/3 Managing Executive Officer of RECOF Office (currently RECOF Corporation)
2007/6 Director and Chief Corporate Officer of RECOF Corporation
2010/6 President and Chief Executive Officer of RECOF Corporation
2016/10	Chairman and Representative Director of RECOF Corporation(retired in September 2017)2016/12 Director of M&A Capital Partners Co., Ltd. (retired in September 2017)2018/3 External Director of the Company (to present)
2018/4	Chairman and Director of Hongo Tsuji Business Consulting Co., Ltd.
(retired in November 2018)2018/6 Outside Director of NIHON CHOUZAI Co., Ltd. (to present)

Mitsuhiro
Nagahama
External Director

1984/4 Registered as a lawyer
1988/7 Established Hattori Law Firm (currently Hattori General Law Firm) (to present)
2004/6 External Audit and Supervisory Board Member of USHIO INC. (retired in June 2016)2007/4	Lecturer (in charge of Financial Instruments and Exchange Act) at Keio University Law School(to present)
2009/3	External Audit and Supervisory Board Member of LOOK INCORPORATED(currently LOOK HOLDINGS INCORPORATED) (retired in March 2019)2013/1	External Audit and Supervisory Board Member of POKKA SAPPORO Food & Beverage Ltd.
(retired in March 2016)2015/3	External Audit and Supervisory Board Member of the Company(retired in March 2019)2016/6 External Director of USHIO INC. (retired in June 2018)2019/3 External Director of the Company (to present)

1976/4 Joined The Fuji Bank, Limited
2003/3	Executive Officer and General Manager of Otemachi Corporate Banking Division No. 6 andOtemachi Corporate Banking Division No. 7 of Mizuho Corporate Bank, Ltd.
2005/4	Managing Executive Officer in charge of Corporate Banking of Mizuho Corporate Bank, Ltd.
2010/4	Director and Deputy President and Head of the Americas of Mizuho Corporate Bank, Ltd.
(retired in April 2013)2013/4	Chairman of the Board of Mizuho Securities Co., Ltd. and Chairman ofMizuho Securities USA Inc.
2015/4	Senior Adviser of Mizuho Securities Co., Ltd. and Chairman of Mizuho Securities USA Inc.
2015/5 Senior Adviser of Mizuho Securities Co., Ltd. (to present)
2015/6 Outside Audit & Supervisory Board Member of Azbil Corporation (to present)
2018/3 Outside Company Auditor of Kuraray Co., Ltd. (to present)
2019/3 External Director of the Company (to present)

TOKYO TATEMONO GROUP Integrated Report 201949

Audit and Supervisory Board Members

Kouji Kawakubo

Takashi Yoshino

Audit and Supervisory
Board Member

Audit and Supervisory
Board Member

1980/4 Joined The Yasuda Trust and Banking Co., Ltd.
1999/10	General Manager of Consulting Department of The Yasuda Trust and Banking Co., Ltd.
2007/4	Executive Officer and General Manager of Corporate Business Planning Department ofMizuho Trust & Banking Co., Ltd.
2009/4	Managing Executive Officer and General Manager of Consulting Department ofMizuho Bank, Ltd.
2011/4	Managing Executive Officer in charge of Branches Department and Deputy General Manager
of Corporate Services Group of Mizuho Trust & Banking Co., Ltd.
2012/4	Managing Executive Officer in charge of Sales Branch Department ofMizuho Trust & Banking Co., Ltd.
2013/3	President and Representative Director of Mizuho Trust Realty Co., Ltd.
2015/7	President and Representative Director of Mizuho Realty Co., Ltd.
(retired in March 2017)2017/3	Audit and Supervisory Board Member of the Company (to present)

1983/4 Joined The Yasuda Fire and Marine Insurance Co., Ltd.
2009/4 General Manager of Marine Insurance Office of Sompo Japan Insurance Inc.
2011/10	President and Director of Sompo Japan Nipponkoa Insurance Company of Europe Limited(retired in March 2016)2013/4	General Manager, Europe Division of Sompo Japan Insurance Inc.
2014/4	Executive Officer and General Manager of Europe Division of Sompo Japan Insurance Inc.
	Executive Officer and General Manager of Europe Division of NIPPONKOA Insurance Co., Ltd.
2014/9	Executive Officer and General Manager of Europe Division of
Sompo Japan Nipponkoa Insurance Inc.
	Executive Officer and General Manager of Europe Division of
Sompo Japan Nipponkoa Holdings, Inc. (retired in March 2016)2016/4	Executive Vice President of Sompo Japan Nipponkoa Insurance Inc.
2018/4	Executive Vice President and General Manager of Enterprise Market Promotion Division of
Sompo Japan Nipponkoa Insurance Inc. (retired in March 2019)2019/3	Audit and Supervisory Board Member of the Company (to present)

Corporate Data
52 Financial and Non-Financial Data

Takao Yamaguchi

Sayaka Hieda

External Audit andSupervisory Board
MemberExternal Audit andSupervisory Board
Member1985/2 Registered as a certified public accountant
1987/9 Joined Yamaguchi Certified Public Accountant Office
1996/1 Head of Yamaguchi Certified Public Accountant Office (to present)
2013/6	External Audit and Supervisory Board Member of SATO HOLDINGS CORPORATION(to present)
2015/6 Outside Corporate Auditor of KYORIN Holdings, Inc. (to present)
2016/3 External Audit and Supervisory Board Member of the Company (to present)

54 Consolidated Financial Statements
59 Corporate Information

2007/9	Registered as a lawyer
Joined HANZOMON SOGO LAW OFFICE (resigned in December 2009)2010/1 Joined OMOTESANDO SOGO LAW OFFICE (to present)
2019/3 External Audit and Supervisory Board Member of the Company (to present)

Managing Officers
Position

Name

Areas of responsibility and important concurrent positions

President & Chief Executive Officer

Hitoshi Nomura

Senior Executive Managing Officers

Masami Kamo

Division Director of Real Estate Solution Service Division
President & Chief Executive Officer of Tokyo Tatemono Real Estate Sales Co., Ltd.

Kengo Fukui

Responsible for Kansai Branch, Sapporo Branch, Kyushu Branch, and Nagoya Branch;
and Division Director of Commercial Properties Division

Katsuhito Ozawa

Responsible for Corporate Communications Department, Finance Department, and Accounting Department;
Division Director of International Business Division; and General Manager of International Business Department

Akira Izumi

Responsible for Personnel Department, Corporate Planning Department, General Affairs Department,
and Appraisal Department; and General Manager of Corporate Planning Department

Hisatoshi Kato

Division Director of Senior and Child Care Business Division and Leisure Business Division; and General
Manager of Senior and Child Care Business Planning Division and Leisure Business Planning Division
President and CEO of Tokyo Tatemono Senior Life Support Co., Ltd.

Hideshi Akita

Division Director of Residential Development Division

Yasushi Suzuki

General Manager of Building Engineering Department

Yoshihiro Jozaki

President and CEO of Tokyo Realty Investment Management, Inc.

Masami Tashiro

General Manager of Project Development Department

Satoshi Eida

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

Takeshi Jinbo

Vice Division Director of Residential Development Division and General Manager of Acquisitions Department

Shinjiro Kobayashi

General Manager of Urban Development Department

Nobuyoshi Takahashi

General Manager of General Affairs Department

Masayuki Okubo

General Manager of Business Planning Department

Kazuki Sugise

General Manager of Retail Management Department (1)Executive Managing Officers

Managing Officers

50 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201951

Financial and Non-Financial Data

Financial Data
As of / Years ended December 31

Unit

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Profit or Loss
Revenue from operations

Millions of yen

199,811

262,609198,274

166,943

194,161

220,026

237,049

260,012254,498

266,983

273,302

Operating income (loss)

Millions of yen

27,71029,162

24,055(678)

30,89229,361

30,55934,43936,36344,757

46,765Recurring income (loss)

Millions of yen

20,50019,331

13,687(10,875)

21,741

21,95917,317

24,79630,63539,41642,036

Profit (loss) attributable to owners of the parent

Millions of yen

10,101

6,345

6,316

(71,774)

10,243

10,121

82,944

16,35919,742

22,59927,277

Total assets

Millions of yen

964,030

969,492

927,925

898,017895,296

938,161

1,319,465

1,297,112

1,314,558

1,441,050

1,451,584

Net assets

Millions of yen

231,354259,292

262,597

192,101

212,491

262,276

305,808

312,530

325,593353,419

356,578

Interest-bearing debt

Millions of yen

539,606

510,934

460,835

513,616

479,746434,763748,273

707,356

727,302814,032

857,117

Net cash provided by (used in) operating activities

Millions of yen(16,753)

66,29359,7308,053

57,332

22,135(4,790)21,76238,783(14,196)

19,748Net cash provided by (used in) investing activities

Millions of yen(76,761)(48,915)(1,464)(37,164)(15,385)

37,083

257,798(21,250)(53,024)(64,508)(63,577)

Financial Position

Cash flows

Net cash provided by (used in) financing activities

Millions of yen

100,176(18,487)(53,122)

41,116(35,855)(47,119)(277,787)(40,177)

9,005

77,99834,438Net increase (decrease) in cash and cash equivalents

Millions of yen

6,461(1,080)

4,828

11,982

6,586

12,804(24,744)(39,689)(5,164)(825)(9,513)

Cash and cash equivalents at end of year

Millions of yen

17,15916,07820,90632,88939,46652,27186,90747,21742,053

41,22731,702

4.5

2.7

2.5

(32.5)

5.3

4.4

33.2

5.6

6.4

6.8

7.9

Financial Indicators
Return on equity%

Return on assets

%

3.2

3.1

2.6

0.0

3.5

3.3

2.3

2.8

3.1

3.6

3.5

Equity capital ratio

%

23.2

26.2

27.6

20.6

22.9

26.7

21.7

23.2

24.2

23.9

24.0

Debt-to-equity ratio

Times

2.4

2.0

1.8

2.8

2.3

1.7

2.6

2.3

2.3

2.4

2.5

Interest-bearing debt / EBITDA multiple

Times

15.0

13.2

13.8

53.6

11.6

10.9

15.9

13.4

13.0

12.5

12.7

Earnings (loss) per share

Yen

31.99

19.51

14.67

(166.67)

23.79

23.55

193.1275.91*1

91.00

104.17125.79Net assets per shareYen

709.62590.82594.74429.46476.23583.11665.51

1,390.07*1

1,465.30

1,589.98

1,605.70

Dividends per share

Yen

16

10

8

0

5

5

6

20*1

26

30

35

Payout ratio

%

50.0

51.3

54.5

—

21.0

21.2

3.1

26.3

28.6

28.8

27.8

Per Share Information

		*1 Effective July 1, 2015, the Company conducted a one-for-two reverse stock split pertaining to shares of common stock. Dividends per share for the fiscal year
ended December 31, 2015, has been calculated assuming that this stock split was conducted on January 1, 2015.

Non-Financial Data (Social)

Non-Financial Data (Environmental)*7(Non-consolidated)

Unit

Number of employees

People

543

576

584

687

719

Ratio of female employees
Number of managers
Ratio of female managers
New hires

2014

2015

2016

2017

2018

2017

Energy use (crude oil equivalent)kl

19,18522,822kl / thousand m

37.8

t-CO2

Unit load

201821,59222,083†23,895†

36.3

35.4

34.2

35.0

39,92945,05944,62942,147†48,888††3,300†

20.5

21.1

21.1

23.8

281

295

339

350

%

1.8

2.1

2.7

3.2

4.6

Scope 1

t-CO2

3,493

3,243

2,553

2,402

Scope 2t-CO236,436

41,81642,07639,745†41,259†

Scope 3

t-CO2

—

—

—

—

4,329†

t-CO2 / thousand m2

78.6

71.6

73.1

65.3

65.2

Thousand m2

486

569

579

584

†

654†

m /m

1.0

0.9

0.9

0.9

1.0

t

3,208

4,685

4,914

5,173

4,945†

11

15

14

19

22

33.3

28.6

21.1

36.4

Ratio of employees with disabilities*2

%

2.06

2.06

1.88

1.98

%
%
%
Days

60.0
1.7
100
8.6

66.7
2.2
100
8.8

75.0
1.4
100
8.7

†

91.7
1.4
100†
8.8†

Greenhouse gas emissions

1.87

†

87.5
2.6†
100†
9.9†

Number of occupational accidents*

Cases

1

2

1

0†

1†

Number of lost workdays due to employee
absence*6

Days

86

138

47

81†

137†

3, 5

2016

274

36.4

Average number of paid vacation days acquired*4

2015

16.0

%

Health examination checkup rate*3

2014

%

PeopleEmployee turnover (at employee discretion)

Unit

PeopleRatio of women among new hires
Ratio of employees rehired after mandatory
retirement(Non-consolidated)

Unit load (excluding Scope 3)
Potable water use
Unit load
Total waste emissions

2

3

2

†

Unit loadt / thousand m

7.4

7.9

8.6

8.6

8.3

Waste recycled

t

—

—

—

3,395

3,202†

2*7 Figures are for the period from April 1 of the given year to March 31 of the following year.
† Third-party assurance has been received for these figures.

*2 Figures are as of June 1 of each year.
*3 Figures are for the period from April 1 of the given year to March 31 of the following year.
*4 Leave systems include summer vacation days, a day off on the anniversary of the Company’s founding, and other such vacation days, but these days are notincluded in the figures above. Figures are for the period from April 1 of the given year to March 31 of the following year.
*5 Number of occupational accidents is the number of occupational accidents requiring one or more days off of work.
*6 The figure for 2018 is for the period from April 1 of the given year to March 31 of the following year.
† Third-party assurance has been received for these figures.

52 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201953

Consolidated Financial Statements
Consolidated Balance Sheets
As of December 31, 2017 and 2018

(Millions of yen)

Assets2017

Current assets
Cash and deposits(Millions of yen)

Liabilities

2018

2017

2018

¥   51,743¥   65,925

Current liabilities¥   45,149¥   31,716

Short-term borrowings

Notes and operating accounts receivable

10,77911,876

Commercial paper

15,00033,000Real estate for sale

77,636104,221

Current portion of bonds

20,00015,000Real estate for sale in progress

67,678101,059

Accounts payable, trade

11,132

11,193

Real estate for development

76,62678,157

Deferred income taxes

7,999

5,835

Deferred income taxes

2,014

2,095

Reserve for compensation for completed work

15

10

Other current assets

28,75026,369Provision for bonuses

778

929

(35)

(43)

Reserve for bonuses to directors and corporate auditors

44

43

308,600

355,454

Provision for environmental measures

210—

Allowance for doubtful accounts
Total current assets

Investments received for real estate specific joint enterprises

26,552

8,042

Other

54,09645,944

Total current liabilities

187,571

185,924

Long-term liabilities

Fixed assets
Property and equipment   Buildings and structures

370,725

362,482   Accumulated depreciation(130,014)(137,216)    Buildings and structures (net amount)

240,711225,265  Land531,906

527,272

6,526

8,479

   Construction in progress  Other

25,88028,284   Accumulated depreciation(15,481)(16,501)   Other, net

10,39911,782   Total property and equipment

789,543772,800

106,410106,083  Goodwill

4,845

3,136

  Other

955

1,196

Bonds payable

125,000

145,000

Long-term debt

597,642594,449

Deferred income taxes

28,682

21,793

Deferred income taxes on revaluation

27,27727,277

Provision for share-based remuneration for directors—

53

Allowance for retirement benefits for directors

224

169

Provision for environmental measures
Guarantee deposits received

53

30

74,18775,245Retirement benefit liabilities

11,156

11,477

Investments received for real estate specific joint enterprises

22,161

18,600Other

13,673

14,985

Total long-term liabilities

900,059

909,081

1,087,630

1,095,005

Total liabilities

Intangible and other assets  Leasehold rights   Total intangible and other assets   Investments in silent partnership  Long-term loans   Deferred income taxes

Shareholders’ equity
Capital92,451

92,451

110,416

Capital surplus

66,722

66,722Retained earnings

87,153

107,468

139,635

127,788

Treasury stock

(32)

(237)

4,686

4,904

246,295

266,404

112,212Investments and other assets  Investment securities

Net assets

Total shareholders’ equity
Accumulated other comprehensive income

21

7

1,249

1,252

Valuation difference on available-for-sale securities

62,50849,859

Revaluation difference on land

30,93230,932   Lease and guarantee deposits

21,365

21,232   Retirement benefit assets

1,711

858

Foreign currency translation adjustments

4,530

872

62,11756,966

Remeasurement of retirement benefits

664

61

(93)

(98)

98,636

81,726  Other   Allowance for doubtful accounts   Total investments and other assets
Total fixed assets
Total assets

54 TOKYO TATEMONO GROUP Integrated Report 2019

Total of accumulated other comprehensive income
Non-controlling interests

230,694

212,912

1,132,449

1,096,130

Total net assets¥1,441,050¥1,451,584

Total liabilities and net assets

8,487

8,447

353,419

356,578¥1,441,050¥1,451,584

TOKYO TATEMONO GROUP Integrated Report 201955

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Consolidated Statements of Cash Flows

Years ended December 31, 2017 and 2018

Years ended December 31, 2017 and 2018

(Millions of yen)

Consolidated Statements of Income

2017

2018

Revenue from operations¥266,983¥273,302

Operating cost

189,095

192,134

Gross profit

77,887

81,168Selling, general and administrative expenses

33,13034,402

Operating income

44,757

46,765Interest income

408Dividend income

1,961

2,411

Equity in income of affiliated companies

1,682

408

71
622
4,378

Non-operating income

Subsidy income
Other
Total non-operating income¥ 40,101

Depreciation

15,03916,448

Impairment loss

3,808

2,495

Amortization of goodwill

1,637

1,709

Gain on negative goodwill

Profit before income taxes and minority interests

—

22

—

430

Loss (gain) on exchange from business combination

27

—

333
3,593

(1,682)(408)

Increase (decrease) in allowance for doubtful accounts

(204)

13

Increase (decrease) in provision for bonuses

(13)

151

Increase (decrease) in provision for bonuses to directors and corporate auditors

(10)

(1)

Increase (decrease) in provision for share-based remuneration for directors—

53

Interest expense

6,103

6,020

1,757

1,156

Bond issuance expenses

184

206

Distribution from real estate specific joint enterprises

640

351

1,033
9,719

585
8,321

39,41642,036

Total non-operating expenses¥ 35,818

Cash flows from operating activities(135)

Borrowing fee

Recurring income

2018

Loss (gain) on step acquisitions

Non-operating expenses

Other(Millions of yen)
2017

Extraordinary income

Equity in earnings of affiliated companies

Increase (decrease) in provision for retirement benefits for directors

(48)

(54)

Increase (decrease) in provision for environmental measures

209

(233)

Increase (decrease) in retirement benefit liabilities

60

305

Interest and dividend income(2,002)(2,420)

6,103

6,020

Gain on sale of fixed assets

266

54

Interest expense

Gain on sale of investment securities—

28

Gain on negative goodwill

135

Loss (gain) on sales of investment securities

—

—

(28)

Gain on sales of investments in capital of subsidiaries and affiliates

—
401

637
720

Loss (gain) on sales of investments in capital of subsidiaries and affiliates

—

(637)

Loss (gain) on sales and retirement of fixed assets

(126)

105

(Increase) decrease in accounts receivable, trade(926)(1,104)

9

0

130

159

3,808

2,495

22

—

27
3,999

—
2,655

Profit before income taxes and minority interests

35,81840,101

Current income taxes

12,115

13,266Other(5,502)

819

Deferred income taxes

Subtotal(7,615)36,794

Interest and dividends received

4,408

4,004

Interest paid

Total extraordinary income
Extraordinary loss
Loss on sale of fixed assets
Loss on retirement of fixed assets
Impairment loss
Loss on step acquisitions
Loss on exchange from business combination
Total extraordinary loss

133

(1,321)

Total income taxes

12,24911,945

Profit23,56928,155970

878¥ 22,599¥ 27,277

Consolidated Statements of Comprehensive Income

2017

2018

Profit¥23,569¥ 28,155

9,827(12,987)

Profit attributable to non-controlling interests
Profit attributable to owners of the parent(Increase) decrease in inventories(67,501)(23,273)

Increase (decrease) in guarantee deposits received

2,277

1,155

Increase (decrease) in accounts payable, trade

(200)

1,381

(Increase) decrease in guarantee deposits paid

(159)

132

Increase (decrease) in deposits

5,892(5,936)(6,542)(6,013)

Income taxes paid

(4,447)(15,038)

Net cash provided by (used in) operating activities(14,196)

19,748(Millions of yen)

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

152—

Foreign currency translation adjustments

305

(256)

Remeasurement of retirement benefits

(100)

(602)

591
¥10,776(3,401)¥ (17,248)

34,346

10,907

Comprehensive income attributable to owners of the parent

33,123

10,366Comprehensive income attributable to non-controlling interests

1,222

540

Share of other comprehensive income (loss) of associates accounted for using the equity method
Total of other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to:

56 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201957

Corporate Information(As of December 31, 2018)

Consolidated Statements of Cash Flows(Millions of yen)
2017

2018

Cash flows from investing activities

Company Overview
Tokyo Tatemono Co., Ltd.

Date of Establishment

October 1, 1896

Capital¥92.4 billion

Master Trust Bank of Japan, Ltd.
(Trust Account)

20,645

9.52%

Japan Trustee Services Bank, Ltd.
(Trust Account)

13,747

6.34%

SSBTC CLIENT OMNIBUS ACCOUNT

5,910

2.72%

Sompo Japan Nipponkoa Insurance Inc.

5,242

2.42%

Meiji Yasuda Life Insurance Company

4,729

2.18%

THE BANK OF NEW YORK MELLON 140051

4,282

1.97%

Japan Trustee Services Bank, Ltd.
(Trust Account 5)

4,219

1.95%

JP MORGAN CHASE BANK 380634

4,009

1.85%

JP MORGAN CHASE BANK 385151

3,128

1.44%

STATE STREET BANK AND TRUSTCOMPANY 505001

2,896

1.34%

Number of
Ratio ofshares owned
shares(thousands of shares) owned

Proceeds from sale of marketable and investment securities

2,180

8,186

Payment for purchase of marketable and investment securities(3,229)(11,625)(532)—

Representative

Hitoshi Nomura, President &Chief Executive Officer

64—

Number of Employees(consolidated)

5,010

Payment for acquisition of subsidiary shares involving changes in the scope of
consolidationProceeds from the acquisition of the shares of subsidiaries involving changes in the scopeof consolidation
Payment for investments in capital of subsidiaries and affiliates
Proceeds from sales of investments in capital of subsidiaries and affiliates(10,858)—(6,235)
3,079

Payment for investments in silent partnership

(828)

(767)

Proceeds from withdrawal of investments in silent partnership

2,469

2,112

956

1,350

Proceeds from sale of fixed assets
Payment for purchase of fixed assets(42,692)(40,798)

Payments of loans receivable

(69)

—

Collection of loans

15

5(10,647)(22,071)

Increase (decrease) in investments received for real estate specific joint enterprises
Other(1,337)

3,186

Net cash provided by (used in) investing activities(64,508)(63,577)

Increase (decrease) in short-term borrowings(1,280)(76)

Increase (decrease) in commercial paper

15,00018,000

Increase in long-term debt

159,000

62,750

Repayment of long-term debt

(94,449)(51,868)

(907)

(903)

Proceeds from issue of bonds

30,00035,000

Redemption of bonds(20,761)

Cash flows from financing activities

Payments for long-term accounts payable, other

Proceeds from sales of treasury stock
Acquisition of treasury stock0

Stock ListingFirst Section of Tokyo Stock Exchange

Listing Date

September 1907

Securities Code8804

Trading Unit

100 shares

Number of Shares
Authorized

400,000,000

37.39
5.79
10.40
39.59
6.82
0.01

2,000

25,0001,800

22,500(20,000)

1,600

20,0000

1,400

17,5001,200

15,000

(554)

(577)

100,000

Other(1,974)(744)

80,000Net cash provided by (used in) financing activities

77,99834,438

Effect of exchange rate changes on cash and cash equivalents

(119)

(122)

Net increase (decrease) in cash and cash equivalents(825)(9,513)42,053

41,227—(10)¥ 41,227¥ 31,702

Cash and cash equivalents at end of year

Financial institutions
Securities companies
Other Japanese corporations
Foreign corporations, etc.
Individual, etc.
Treasury stock

YenYen(6,935)Decrease in cash and cash equivalents resulting from exclusion of subsidiaries
from consolidation%

Share Price and Trading Volume(6,068)Cash and cash equivalents at beginning of year

Distribution of Shares Heldby Shareholder Type

Number of Shares
216,963,374
Issued and Outstanding(205)

Dividends paid to non-controlling interests

Tokyo Tatemono Head Office Building
1-9-9 Yaesu, Chuo-ku, Tokyo
103-8285
Phone: 03-3274-0111(Representative)

Head Office(5)

Dividends paid

Principal Shareholders

Company Name

1,000

Thousand shares

60,00040,00020,0000

2016/1 2

3

Share price (left)

4

5

6

7

Trading volume

8

9

10

11

12 2017/1 2

3

4

5

6

7

8

9

10

11

12 2018/1 2

3

4

5

6

7

8

9

10

11

12

Nikkei 225 (right)

Additional References
Financial Information Resources

Non-Financial Information Resources

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

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

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

CSR Report 2019https://tatemono.com/csr/english/reports/pdf/2019csrall_e.pdf
ESG Data Book 2019https://tatemono.com/csr/english/uploads/esgdata_2019_01.pdf

58 TOKYO TATEMONO GROUP Integrated Report 2019TOKYO TATEMONO GROUP Integrated Report 201959