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CONTENTS
Message From the CEO

Corporate Philosophy

Value Creation of Tokyo Tatemono
08

Editorial Policy

History of Value Creation

10

Value Creation Process

12

Materialities (Critical Issues)

FeatureValue Creation and Income GrowthIntegrated Report 2020 was prepared with the goalsof enhancing communication with stakeholders andfostering understanding regarding the propensity ofTokyo 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 to incorporate feedback from readers to improvethe contents.

“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.

Reporting Period

Medium-Term Business Plan
20

Summary: 2015-2019 Medium-Term Business Plan

22	New Medium-Term Business Plan

This report primarily covers the fiscal year ended
December 31, 2019. However, some information on
activities before or after this period and forward-looking
forecasts are also included.

We aim to create comfortable urban environments.

(Fiscal Years 2020-2024)26

We support affluent and dream-filled living.

Scope of Reporting

Message From the CFO

The scope of this report includes
Tokyo Tatemono Co., Ltd. andTokyo Tatemono Group companies.

Segment Information
30

Commercial Properties Business

34

Residence Business

Referenced Frameworks

37

Real Estate Service Business40

Other Businesses

In preparing this report, we referenced the Guidancefor Integrated Corporate Disclosure and Company–
Investor Dialogues for Collaborative Value Creation:
ESG Integration, Non-Financial Information Disclosure,and Intangible Assets into Investment released by
the Ministry of Economy, Trade and Industry andthe International Integrated Reporting Council’sInternational Integrated Reporting Framework. Nonfinancial information has been disclosed with reference
to the standards of the Global Reporting Initiative.

ESG Report
44

Environment: Activity Highlights

46

Society: Activity Highlights

48

Governance: Special Edition

52

Governance: Board of Directors

54

Governance: Structure and Initiatives

58

Compliance

59

Risk Management

We create worthwhile spaces offering peace of mind.

Disclaimer Regarding
Forward-Looking Statements

Data
60

Key Financial and Non-Financial Data

62

Financial Statements

67

Corporate Data

Data and information regarding future outlooks provided
in this integrated report are forward-looking statements
based on the Company’s judgments in light of currently
available information. Actual results may differ
materially from those projected as a result of economic
conditions, market trends, demand fluctuations, foreignexchange rate movements, and other factors.
02
TOKYO TATEMONO GROUP Integrated Report 202003
東京建物株式会社 統合報告書 2020

44.7

40
30

34.4

46.7

36.3

30.5

20
10
0

FY14

FY15

FY16

FY17

FY18

FY19

manufacturing, sales, and management in the Residence
Business, leading to the creation of better products andservices.
Further, cross-border collaboration between Group
companies and divisions working in various real estaterelated business fields has produced synergies acrossseveral businesses, and we are moving forward withspecific projects.
This heightened group unification is a major achievement
well beyond our quantitative targets. To maintain this trend
and build further sustainable growth, we have establisheda vision to be shared by all Group companies.

Raise the Bar to Solve Social Issues andAchieve Corporate Growth
In formulating our long-term vision, we conducted
a number of discussions to set concrete goals bybackcasting from a future vision of an ideal society.
The Yaesu, Nihonbashi, and Kyobashi areas aroundTokyo Station (and where the Tokyo Tatemono Group is
headquartered) make up Japan's greatest concentration of
corporations. This area is a hub exerting great influence on
the growth of the country's economy.
As populations decline, values diversify, and technologies
evolve, society is expected to change even more rapidly.
Real estate developers such as Tokyo Tatemono must
anticipate these issues early and leverage our businesses
to contribute solutions.
Under our present trajectory, we will complete many of
our large-scale redevelopment projects in or around theyear 2030. By coincidence, the year 2030 is also the target
year outlined in the SDGs. We have considered what kindof city we want Tokyo to be by 2030, as well as what kindof corporate Group we should strive to become.
We have distilled these thoughts into the words,
Becoming a Next-Generation Developer.
The root word of developer is develop, which not only

Brillia Towers Meguro05
TOKYO TATEMONO GROUP Integrated Report 2020

Data

04
TOKYO TATEMONO GROUP Integrated Report 2020

50

ESG Report

Becoming a Next-Generation Developer:
We are executing toward our vision, aiming to
be a company deserving of continued trust.

52.4

Segment Information

Message From the CEO(Billion yen)
60

Medium-Term Business Plan

Hitoshi Nomura

Operating Income

FeatureTokyo Tatemono Co., Ltd.
Representative Director
President and Chief Executive Officer

In 2019, the rental office and residential condominium
markets were strong throughout the year, with active
trading in various asset types within the real estate
investment market amid monetary easing policies.
In this business environment, our Group recorded anotheryear of higher sales and profits in fiscal 2019.
Further, fiscal 2019 was the final year of our most recent
five-year medium-term business plan, which began in
2015. We achieved a number of financial targets under
this medium-term plan, including our quantitative goal of¥50.0 billion in consolidated operating income.
This was a significant increase achieved over the past
five years compared with ¥30.5 billion yen consolidated
operating income in fiscal 2014. We reached this successthanks to a tailwind from the market and commendable
efforts from each of our Group employees.
In the Commercial Properties Business, we leveraged
Group strengths in development projects such as Hareza
Ikebukuro, making a series of proposals to meet thechallenges and needs of local communities and enhancing
the attractiveness and value of each region.
We also developed new assets that met the changing
needs of today. This includes our entering the logistics
facility development business by focusing on advances in
e-commerce.
In our Residence Business, we offer tower condominiums
such as Brillia Towers Meguro, which is the flagship ofthe Brillia condominium brand. We have also worked
to enhance brand value through customer satisfactioncentric development (e.g. the Bloomoi Project for
creating products to meet the needs of a diverse range ofcustomers), winning high praise from our customers.
We have been working to restructure our Groupbusinesses since the end of 2015. Our efforts here
have helped establish a service system that integrates

Value Creation

Taking the Successes of Our Medium-term
Business Plan (fiscal years 2015-2019)
to the Next Stage of GrowthKey External Environmental Factors
Changing financial environment

Declining population (total and working-age) in Japan

Diversification of work and life styles

Intensifying competition in acquiring talent

Advances in digital technology and accelerating
globalization

Increasing awareness of ESG

Growing geopolitical and natural disaster risks

Becoming a Next-Generation Developer
In an era full of uncertainty and rapid change in terms of demographics,
diverse values, accelerating technological progress, and more,various issues have emerged on the path to creating a sustainable society.
The Tokyo Tatemono Group recognizes
that the role developers play must also zchange significantly.
Our aim is to be a good company for stakeholders by leveraging our businesses
to solve social issues and achieve higher levels of growth as a company.

06
TOKYO TATEMONO GROUP Integrated Report 2020

Fundamental Policy for Our Long-Term Vision
Steady Profit Growth

Solve a Variety of Social Issues

Target for 2030:
Consolidated business income* of ¥120.0 billion

Contribute to the SDGs

*Consolidated business income = consolidated operating income + equity gains(losses) in earnings of affiliated companies

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

07
TOKYO TATEMONO GROUP Integrated Report 2020

Data

On our journey to achieving our 2030 long-term vision, theTokyo Tatemono Group established a new medium-termbusiness plan for the five-year period from 2020 to 2024.
In May 2020, we moved our headquarters to begin
teardown and construction of the Yaesu 1-Chome East
Area Tokyo Station B Area Urban Redevelopment Project.
Our first key strategy is the steady development of thisYaesu area, conducted in partnership with local landrights
owners.
In our Residence Business, we intend to use ouraccumulated expertise in redevelopment and rebuilding
to secure development opportunities in the highly
competitive condominium market. Here, we will provide
high-quality housing in response to social changes tofurther boost the Brillia brand power.
In addition, we will more aggressively and opportunisticallypursue the development and sale of properties forinvestors, an activity we had expanded during our previous
medium-term business plan. We will also strengthen ourservice businesses, including as brokerage, funds, andparking lots, meeting the needs of a stock-based society
and working together as a Group to grow our asset baseand solidify a foundation for profitability .
Our new medium-term business plan calls for continuing

At the outset of our long-term vision and new mediumterm business plan, our lives are undergoing drasticchanges with the global spread of COVID-19. I have cometo feel strongly that we must be vigilant in maintaining
awareness and make great efforts in our business.
Performance in the real estate business tends to be
influenced by market fluctuations; however, we cannot
just throw our hands up in frustration at poor market
conditions.

ESG Report

Pursuing a New Medium-term Business
Plan (fiscal years 2020-2024) to Achieve
our Ideal Future

Aiming to be a Good Company for All
Stakeholders, Founded on Trust

Segment Information

Long-Term Vision for 2030

In any event, we must respond appropriately to socialchanges and to capture business opportunities as we
secure ensuring profitability and productivity.
We also believe that we must place even greater
emphasis on our relationships with stakeholders than wehave in the past.
Our long-term vision includes the phrase being a goodcompany for all stakeholders. I can proudly say that I feelthe Tokyo Tatemono Group is the best good company inJapan.
We have built relationships with our customers andbusiness partners in the belief that trust creates the
future, as we state in our corporate philosophy.
We believe that this spirit of valuing the trust of our
stakeholders is the greatest strength of our Group.
In some ways, shareholders, customers, business
partners, employees, and others have conflicting interests.
Even so, I believe it is possible to be a balanced, goodcompany in all aspects, as long as we are committed now
and in the future to this posture of valuing the trust of all
our stakeholders.
The Tokyo Tatemono Group will forge ahead in singularunity to be a company trusted by society over the next
100, and even 200, years.

Medium-Term Business Plan

Intensifying international competition between cities

efforts to capture business opportunities in China andSoutheast Asia to achieve growth not only in Japan but
also overseas.
The impetus behind selecting these key strategies was
the concept of building a business portfolio that responds
to changes in society and the business environment (seeMessage From the CFO on P.26- 29).
We seek to establish a business portfolio featuring highcapital efficiency, being mindful of the balance between
profitability, efficiency, and stability.
In advancing these key strategies, it will be essential tohave an evolved approach to ESG management.
To this end, we have established systems for pursuingsustainability measures throughout the Group. These
measures include establishing our new Sustainability
Committee, as announced in our new medium-termbusiness plan.
The SDGs are composed of 17 global goals and 169
targets. We feel these include a number of inherent social
issues related to the real estate business. Therefore, we
can contribute to these goals as a Group, responding toclimate change and natural disasters, providing safe andsecure housing, and so on. We intend to work proactively
in making contributions to achieving the SDGs.
We believe the Group's sustainable growth will be
inevitable when our contribution to these goals is
recognized by society and our customers, leading to theachievement of our long-term vision.

Featurethe word developer.
In addition, modern society faces many pressing issues,
including climate change, frequent natural disasters, andintense global economic competition.
In this rapidly changing era, we have come to realize thatcompanies that fail to both solve social issues and growas a company to degrees greater than ever before will be
unable to survive through the generations. We selected
the phrase next-generation based on this concept.
The Tokyo Tatemono Group will address these issues
from a next-generation perspective, aiming to become acorporate entity with the ability to respond flexibly to any
situation.

Value Creationmeans to improve land and construct buildings, but alsomeans to evolve and grow in the softer sense of theword.
For us, becoming a next-generation developer means
something beyond building tangible structures andgrowing profits. This ideal also reflects how we strive tocreate services for lifestyles, work, and rest, building longterm cultures and functions for our communities.
This corporate image is what emerged from our many
discussions.
Each Group employee, not only those working in realestate development but also those in sales, management,
and other areas, pursue a shared sense of developing
communities and society. For these reasons, we choseValue Creation of Tokyo Tatemono

Strengths cultivated through our business formore than 120 years
Ingenuity and problem-solving supporting
customer/social needs

Since our foundation, Tokyo Tatemono, a pioneer of modern real estate,
has been engaged in pioneering initiatives under the philosophy ofthe customer always comes first and enterprising spirit inherited fromour founder, Zenjiro Yasuda, who is also the founder of the Yasuda conglomerate.
Our urban development initiatives for more than 120 years are the basis for our current strength.

Founded in Turbulent Times

The company actively expanded the officebuilding business to meet a growing demandfor office space as the Japanese economy
developed.
The company started the condominium businessto cope with the housing shortage in the highgrowth period of Japan.
Moreover, the company also started thebrokerage business to meet a demand for theseland transactions, and expanded the business as
a comprehensive real estate company.

Tokyo Tatemono was founded by Zenjiro Yasuda,
the founder of the Yasuda conglomerate, asa financial institution specialized in land andbuilding properties, in order to establish thefoundation for real estate transactions.
After the Sino-Japanese War, the company
started operation in China, where it conductedbusiness to manage and operate houses andbuildings and accumulated results.

Starting the condominium business to copewith the housing shortage

Founded by Zenjiro Yasuda with the aspiration
to contribute to society through business1997-20112012-

Rapid Expansion asa Comprehensive Developer

Urban Development for the Future Cities

To further expand the business, the company
tried out advanced initiatives such as large-scale
redevelopment projects and development of thefirst real estate securities product in Japan byusing the overall strength of a comprehensive
real estate company.
The company diversified the business into newareas, such as a commercial facility business,
fund business, and parking lots Business.
Point-to-surface urban development
Undertaking an office-residential-commercial
complex redevelopment project
The company used its development expertise accumulated
up until that point to promote the advanced use ofplanning zones, and became engaged in the office-tower
condominium-commercial facility complex redevelopment
project olinas in Kinshicho.

The company started thecondominium business in
response to the housing
shortage in the highgrowth period, whichbecame a social problem.
In 1969, the company
developed the HIROOHEIGHTS condominium,
which ignited acondominium boom inJapan.

olinasDeveloping large-scale office buildings
to cope with a growing demand for office space

Activities as a pioneerof modern real estateTokyo Tatemono Building

Shinjuku Center Building

Brillia Tama New Town

The Nakano Central Park
development project promoted
an industry-governmentacademia collaborative
urban development, whichstrengthened the local
community cooperation usingarea management and developed
a new office environment
working in greenery.

Urban development in cooperation withthe government
Promotingthe PFI project

Nakano Central Park

Urban development contributing
to strengthening international
competitivenessIn the Kasumigaseki
Common Gatedevelopment, the company
served as a lead manager
in charge of the PFI project,reserved floor spaceacquisition, maintenance,and management, andassumed leading roles, suchas planning and design of
the whole project.

Through the development of its flagshipproperty The Otemachi Tower,
the company designed an urban developmentthat contributes to strengthening thecompetitiveness in Tokyo, by placing the
Otemachi Forest across one-third of the whole
premises and luring the luxury hotel AMAN
Tokyo to the site.
Kasumigaseki Common Gate

The Otemachi Tower

08

09

TOKYO TATEMONO GROUP Integrated Report 2020

TOKYO TATEMONO GROUP Integrated Report 2020

Data

The company developed
a series of new officebuildings to cope with agrowing demand for officespace as Tokyo developed.
In 1979, the company built
the Shinjuku Center Building,a large-scale project, which
is now a landmark in the
Shinjuku subcenter area.

Zenjiro introduced an
installment sales methodthat is a prototype of thecurrent housing loan. The
company built the Tokyo
Tatemono Building directly
after the Kanto Great
Earthquake, and conductedbusiness as a pioneer ofmodern real estate.

The company has developed theBrillia Tama New Town, one of
the largest residential complex
reconstruction projects in Japan,
addressing the problems withan acceleration of demographic
aging with an increasing numberof aging condominiums.
The project contributed
to creating a new local
community by converting aging
residential complexes into new
condominiums.

Urban development to propose a new work style

HIROO HEIGHTS condominium

Zenjiro Yasuda

Local community-friendly urban development

ESG Report

Tokyo Tatemono wasfounded by Zenjiro Yasuda,
the founder of the Yasuda
conglomerate, in order toestablish the foundation fortransactions to fight against
widespread fraud real estatetransactions.
The customer always comes
first spirit and enterprisingspirit have been passed
down to today.

The company has undertaken a series of large-scale
redevelopment projects using its accumulated expertise, andbuilt a series of buildings representing Tokyo Tatemono.
Facing people, society, and global environment, the company isengaged in the urban development for the next generations in aneffort to achieve a sustainable society.

Segment Information

Business Expanded with the Times

120 years of trust, track record, know-how

Medium-Term Business Plan

1896-1945

A corporate culture capturing change over time
and taking on new challenges

Feature1946-1996

Value Creation

History of Value Creation

Value Creation

Value Creation

Value Creation Process
The Tokyo Tatemono Group properly understands the ever changing business environment andpromotes the business activities using our strengths, while at the same time engaged in theevolution of ESG management, with the aim of steadily growing profits and solving social issues.

Business Model of the Tokyo Tatemono Group
Input

Acquire business and development
opportunities continuously byutilizing our track record, expertise,and information sources, and makeproposals to suit social changes.

Total assets ¥1.564 trillion● Debt-equity ratio 2.5X●

Interest-bearing debt/EBITDA multiple 12.6X

Long-term held assets generating stable
income●Tangible/intangible fixed assets ¥902.7billion

機会の獲得

Business activity

Diversification ofwork and life styles●

Real estate for sale ¥337.3 billion

Intellectual capital
Intensifying competition in
acquiring talent

Expertise promoting large-scale redevelopment
projects and housing reconstruction●

Management and operation using the group’s
comprehensive strength

Undertake regional and local
community development andsupport lifestyles to inspire
confidence and reliability of theresidents and visitors

Development
Raise the attractiveness of the area
through urban development that
contributes to solving social issues
in cooperation with local residents,
government, financial institutions
and business partners.

Growing geopolitical andnatural disaster risks

Important ESG management themes●

Further strengthen environmental
measures

Secure and develop human resources
to support sustained growth

Number of headquarters employees 655
umber of group employees 5,396

Three Strengths

Social and related capital
Broad customer and tenant relationships● A wealth of information sources●

Ingenuity and problem-solving
supporting customer/social needs

Community development that
contributes to Tokyo as
an international city attractive to all

Segment Information→ P30

Product and service brand power● Ability to identify profit opportunities●→ Debt-equity ratio approx.2.4X

12X

Medium-Term Business Plan→P22

Target Social Value

Maintain and improve the financial
healthinessapprox.

●●→ ROE 8 to10%

Interest-bearing debt/EBITDA multiple

Human capital
Increasing awarenessof ESG

Maintain and improve the capital efficiency

Becominga Next-Generation
Developer

Evolution of ESG Management
Environment→ P44

Society→ P46

120 years of trust, track record,
know-how

Governance→ P48

Increase profitability and managementtransparency by strengthening thegovernance

Sustainable community
development considerate ofnature and the environment
Materialities→P12

Data

A corporate culture capturingchange over time and taking on
new challenges

Maintain and strengthen relationships
with stakeholders

Urban development so all can
live the lives they please
ESG Report

Advances indigital technology andaccelerating globalization●→ Business income ¥75 billion

Long-Term Vision

Segment Information

Short-term turnover assets leading todevelopment profits generationF inancial targets
in the medium-term business plan

Stable and sustainable income growth

Sales, leasing,and management

Business capital
Declining population(total and working-age)
in Japan●

Vision of
the Tokyo Tatemono Group
in 2030
Medium-Term Business Plan

Healthy financial foundation supporting thebusiness activities●

Changing financial
environment

Output(FY2024 targets)

Acquireopportunities

Finance capital
Intensifying international
competition between cities

FeatureFocus Factors
in the External
Environment

1011TOKYO TATEMONO GROUP Integrated Report 2020

TOKYO TATEMONO GROUP Integrated Report 2020

Value Creation

The Tokyo Tatemono Group has identified ninematerialities (critical issues) as social issues to be solved
through our businesses.
We provide three desirable social values through solving
these issues.

To move forward with our sustainability measures acrossthe group, we are also engaged in raising the levelof ESG management and have set key themes for E(Environment), S (Society), and G (Governance).

Materialities (Critical Issues)

Contributing to the SDGs

Strengthen and enhance city functions

Promote urban redevelopment, establish facilities for the public
good, create lively scenes through area management

Step 2
Evaluating
identified issues

Respond to globalization

Attract global enterprises, establish an environment that is
welcoming to foreign visitors in JapanFirst, to get a broad grasp of the social issues relevant to our business, the Tokyo Tatemono Group
listed 35 social issues to study. Our list was influenced by international issues (the SDGs), issues
unique to Japan (Future Investment Strategy), and issues unique to our industry (Basic Policy on Urban
Renaissance, National Strategic Special Zones Policy).

We evaluated 35 social issues and measured their relative importance.
In making this evaluation, we incorporated two perspectives: the scale of the social need (whether theissue requires a solution) and the affinity of the issue with our business (whether the issue is closely
concerned with our current business or something we may wish to deal with as a business in the future).
To further clarify the relative importance of issues, we assigned points based on four aspects.

Promote innovation•E valuation
perspectives

Scale of social need

Affinity with our business1R elationship with the real estate2R elationship with our businesses

Use and rebuild real estate stock•A ssigningpoint values
to indicators

Promote open innovation, use data and information technology

industry3R elationship with our medium-termbusiness plan

Promote reconstruction/redevelopment projects

Urban development so
all can live the lives theyplease4 Director questionnaire results

Respond to a growing diversity of values and lifestyles
Create and offer spaces that keep pace with changing times(changes in work styles, family structure, etc.)

Respond to declining birthrate and aging population

Map issues basedon evaluations

Sustainable community
development considerateof nature and theenvironment

Establish environments with greenery, maintain and protect
ecosystems

Reduce environmental impact

Use resources such as energy and water efficiently, reduce waste,
promote recycling

Engage in natural disaster emergency response

S: Society

G: GovernanceFurther strengthen environmental
measures through our business

Secure and develop human resources tosupport sustained growth•R educe emissions of greenhouse•R aise productivity by promoting work

Increase profitability and managementtransparency by strengthening
governance•S trengthen response to climate•P romote diversity•A ctively invest in and develop humangaseschange•P romote development of ecofriendly real estatestyle reform

resources to expand the scope of ourbusiness trengthen response to human rights•S
issues•O ffer products and services that respondto social change

12TOKYO TATEMONO GROUP Integrated Report 2020

framework•Strengthen supply chain management•F urther strengthen Group synergy•Review cross-shareholdings policy•F urther increase transparency andeffectiveness of management

Establish andreview materialityrelated KPIs

We establish KPIs to evaluate results and make concrete progress, ensuring we engage with and achieve
our materialities going forward.
We also plan to review materialities every three to five years to respond to changes in the businessenvironment, etc.

▶ Information Resources Related to Social Issues▶  The 17 SDGs

SDGs:
International goals for the years 2016–2030 as listed in The 2030 Agenda for Sustainable
Development (adopted at the United Nations Summit in September 2015)

Future Investment Strategy:
Future Investment Strategy 2018: Transforming into Society 5.0 and a Data-Driven Society
A summary of the strategic fields and measures on which the Japanese government will
focus its efforts

Basic Policy on Urban Renaissance:
A summary of the Japanese government’s basic policy for revitalizing cities
National Strategic Special Zones Policy:
A summary of the Japanese government’s zone policy for national strategic special
zones

13
TOKYO TATEMONO GROUP Integrated Report 2020

Data

Maintain and strengthen relationships
with stakeholders•S trengthen risk management

Determining
materialities (see P.12)

ESG Report

Step 4

E: Environment(materialities)

Scale of social need

Respond to natural disasters stemming from climate change,
engage in earthquake countermeasures

Key themes to be addressed to raise ESG management

CriticalissuesSegment Information

Harmonize with nature

We mapped the issues tonarrow them down to thoseof relatively great importance.
We organized these issues into
three categories based on theircontent and identified them as
Tokyo Tatemono materialities.

Affinity with our business

Establish an environment that facilitates child rearing andenvironments suitable for seniors

Step 3Medium-Term Business Plan

Community developmentthat contributes to Tokyo
as an international city
attractive to all

Step 1FeatureTarget Social Value

Materiality Identification Process

Examine andidentify social
issuesTokyo Tatemono Group Materialities

Value Creation

Materialities (Critical Issues)

Feature

Yaesu/Nihonbashi/Kyobashi (YNK) Area Urban Development[Development example] Tokyo Square Garden
We have realized one of the largest complex buildings in thesurrounding area by turning multiple city blocks into a single large
block in Kyobashi, a crossroads of traffic, which is located at the
middle point of Tokyo Station, Nihonbashi, and Ginza.
Site area
Approx. 8,131.39 m2
Total floor area Approx. 117,460.96 m2
Principal uses Office, store, clinic, assembly hall, showroom, car warehouse
Completed in 2013

Top level of environmental performance in Japana Stree

Muromachi

NihonbashitMitsukoshi
Bank of Japan
Currency Museum Department Store

oM
etro

So

chi

Tokyo Station❹

etMarunouchi
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tre

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Shangri-La
Hotel

Tok
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tob
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S

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Tekko
Building

etr

❸

oT
oza

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Nihonbashi
Station Tokyo Nihonbashi
Tower

Nihonbashi
Takashimaya❶ The Otemachi Tower❺

YanmarTokyo Building

Yaesu/Nihonbashi/Kyobashi Area

tre

et

Muromachi
Station❷ Shin-Gofukubashi Building❸ Tokyo Tatemono Nihonbashi
Building❶ The Otemachi Tower❹ Tokyo Tatemono Yaesu Building❺ Tokyo Tatemono Head Office Building❻ Kyobashi Edo Grand❼ Tokyo Square Garden❽ Urban Redevelopment Project for Yaesu 1-Chome North Area
(Gofukubashi Project)❾ Urban Redevelopment Project for Yaesu 1-Chome East Area in
Front of Tokyo Station (Yaesu Project)

15
TOKYO TATEMONO GROUP Integrated Report 2020

Data

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Sogokan
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Lin

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Kyobashi
Station

sa

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Ginza

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Tokyo
Traffic
Hall

Yurakucho
Station

14
TOKYO TATEMONO GROUP Integrated Report 2020

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Yaesu
Book
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KyobashiCenTo

Marunouchi
Brick
Square❸ Tokyo Tatemono Nihonbashi Building

Nihonbashi
Takashimaya
Mitsui Building

MARUZEN❾

Yaesu
CentralEntranceTokyo
StationHotel

COREDO
Nihonbashi

i Lin

DAIMARU

Tokyo Station

ESG Report

Maru

Line

● An umbrella sharing service (I KASA) in the area around

Edobashi
Entrance/Exit❷ ❽Marunouchi
OAZO

Tokyo
StationCentralEntrance

Mitsukoshimae
StationGofukubashi
Entrance/Exit

Toky

yoda

ro ChiTokyo Met

Otemachi Station

Marunouchi

Community development activities in the YNK areamajor festivals

Otemachi❶Mizuho Bank

COREDO
Muromachi

Bank of Japan

Otemachi Building

Shin-Marunouchi
Building● Participation in the Sanno Festival, one of Japan's three

Harmony with nature
Reduce environmental impact

Materiality issues
to be addressedHibiy

is headquartered in this attractive area and owns a large
number of assets, and has been engaged in a variety ofcommunity development activities in cooperation with thelocal community.
As a member of the local community, we will continue togrow with the area and play a role in envisioning the futureof the area and realizing the vision together.

Segment Information

The building utilizes natural and renewable energy sources, deployedadvanced technologies such as LED lighting and natural ventilation
system, and provides an energy conservation visualization tool
to share environmental awareness with tenants, and all building
stakeholders promote the energy conservation activities together.

Community Development Activities of Tokyo Tatemono
in the Yaesu/Nihonbashi/Kyobashi Area
The YKN area, a hub of railway and bus networks, enjoys
great traffic convenience and many companies areconcentrated there. This area therefore can be regarded
as a center of Japan in various aspects such as business,
culture, and information.
In this area, craftsmanship and food culture was cultivatedfrom the Edo period, and is deeply rooted and passed on
to today. Since its foundation in 1896, Tokyo Tatemono

Medium-Term Business PlanThe YNK area connects to the Nihonbashi/Muromachi area, Otemachi/Marunouchi/Yurakucho area,
and Ginza area centered on Tokyo Station to form a large Tokyo Station area, which functions as a hubconnected to every area in Tokyo, every city in Japan, and the world, and serves as a global business center,
where people, goods, and information come and go.
Many large-scale development projects are planned and going on in this area.
The Tokyo Tatemono Group is engaged in various ambitious projects in an effort to raise the value andinternational competitiveness of the entire area towards the futureusing the charms of the area cultivated in its history.

vision and values for buildings by identifying the needs ofthe local community and utilizing our expertise.
We will continue to undertake urban development thatprovides safety, security, and comfort for everyone whoworks in and visits our buildings, and contribute to the
future of the area.

The Tokyo Tatemono Group owns a large number ofbuildings, including our head office building, in the YNK
area. We envision the development of this area, whichis constantly changing with the changes of the times as
an area with rich culture and traditions and as a global
business center, and we have continued to propose the

FeatureValue Creation and Income Growth

Value Creation

Office Buildings Owned by Tokyo Tatemono around Tokyo Station

Feature

Value Creation and Income Growthurban functions.
We believe that this development will increase the leasing
profit of the group and we can contribute to raising thevalue of the existing properties by further increasing thecharm of the YNK area.

Urban Redevelopment Project for Yaesu 1-Chome East Area in Front of Tokyo Station(Yaesu Project)
In the Yaesu area in front of Tokyo Station where our headquarters
building is also located, we aim to create a community thatcombines a collection of advanced urban functions appropriate forthe land gateway to the international city of Tokyo and lively activities
that pass the history and traditions on to future generations.

This project creates an advanced financial center that raises international
competitiveness and designs an urban landscape appropriate for the
gateway to the area along the Nihonbashi River in a highly accessible
location close to the Nihonbashi entrance of Tokyo Station and directly
connected to the Nihonbashi subway station entrance.
Site area
Approx. 9,260 m2
Total floor area Approx. 181,500 m2
Principal uses
Office, store, accommodation facility, parking lot, etc.
Planned completion in FY2030 (south area), FY2035 (north area)

FeatureThe Tokyo Tatemono Group is currently engaged in
multiple development projects that contribute to the
future growth of the international city of Tokyo. We will
provide competitive office buildings by utilizing the assets
we have owned from long ago close to Tokyo Station andthrough reconstruction of environmentally-conscious and

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

Creating a continuous water-front space andpedestrian network along the Nihonbashi River

Materiality issues
to be addressed

Medium-Term Business Plan

This project undertakes various cooperative activities in an effort
to move the metropolitan highway underground and creates apark space that symbolizes the Nihonbashi River exchange center.
The project also builds underground passages that connect Tokyo
Station, Otemachi Station, and Nihonbashi Station to enhance theunderground pedestrian network.

Site area
Approx. 10,600 m2
Total floor area
Approx. 225,200 m2
Principal uses
Office, store, bus terminal, conference hall, medical facility, etc.
Planned completion in FY2025

Value Creation

Contributing to Raising the Competitiveness of Tokyo throughLarge-Scale Redevelopment Projects

Strengthen and enhance city functions* The above is an outline of the Urban Redevelopment Project for Yaesu 1-Chome East
B-Area in Front of Tokyo Station.

Enhancing the traffic hub function in front of Tokyo Station

Materiality issues
to be addressed

External view image

Advanced financial human resource support facility
to support the urban MICE for international finance

Strengthen and enhance city functions

This project builds an accommodation facility that can be comfortably
used in various business settings, such as business meetings andexchanges, or after conventions, for advanced financial humanresources that work in or visit the area around Tokyo Station.

Implementing urban functions that raise the international
competitiveness and creating lively activities
External view image

Materiality issues
to be addressed

Response to globalization
Promote innovation

Usage image

Promoting the energy utilization efficiency
in the entire area

Conference facility image

Materiality issues
to be addressed

Strengthen and enhance city functions
Response to globalization

Tokyo Station

Interchange
heat

Yae
su
Str
eet

Ce
ntr
al S
tre
et

Yaesu
project DHC
plant
Supplyheat

Gofukubashi
project DHC
plant

Nihonbashi Station

Materiality issues
to be addressed

Low-rise part of the building along the Sakura Street and Yaesunaka Street

16
TOKYO TATEMONO GROUP Integrated Report 2020

Existing
DHC plant

17
TOKYO TATEMONO GROUP Integrated Report 2020

Reduce environmental impact

Data

The Yaesu and Gofukubashi projects plan to deploy emergency-readyautonomous and distributed energy systems, such as cogeneration
systems (CGSs), emergency generation facilities, etc. The projects
build highly-efficient district heating and cooling (GHC) plants thatcombine the CGS, the direct use of waste heat from the CGS, arefrigerating system using waste heat, and a heat storage tank, withthe aim to use the energy effectively by providing electric power andheat.
The projects promote the effective use of energy by connecting the
Yaesu and Nihonbashi DHC plants.

ESG Report

This project builds an exchange facility, etc., connected to the life
science business center in Nihonbashi, and constructs a primary
medical facility connected to an advanced medical facility. The
project also builds a conference facility that creates lively events andundertakes event activities.

Segment Information

This project constructs a large bus terminal that connects to theinternational airports and local cities, and builds aboveground/
underground pedestrian networks that connect Tokyo Station to thesurrounding urban areas to alleviate aboveground congestion andimprove the pedestrian environment.

Feature

Value Creation and Income Growth

The Tokyo Tatemono Group has issued sustainability
bonds* to fund the urban development projects of thegroup ongoing in the YNK area that contribute to solvingsocial issues, such as the Yaesu and Gofukubashi urban
development projects and the initiatives to form theinnovation ecosystems.
We aim to widely communicate the group’s sustainability
initiatives by issuing the bonds. Issuance of bonds forthe purpose of solving social issues and environmental
sustainability is a first in the real estate sector in Japan.

creating an activity center for startups and venture capitals
and stimulating interaction among various companies
and people inside and outside Japan. The innovation
ecosystem accumulates initiatives that use the potentialof the area by designating management issues of major
companies and growth areas as priority categories, suchas X-Tech, SDGs, food, and mobility.

Image of innovation ecosystem promotion throughlarge-scale redevelopment projects and other initiatives
GrowthStartups

Supply ofresources
SupportMaturity ofissues5 years

10 yearsIssue amount20.0 billion yen

20.0 billion yen

Interest rate

0.220%

0.500%

Issue dateJuly 16, 2020

Credit rating

A- (Japan Credit Rating Agency, Ltd. (“JCR”))

Use ofproceeds(framework)

Urban development projects to contribute to solvingsocial issues in the YNK area
(1) Yaesu Project (2) Gofukubashi Project (3) Tokyo
Square Garden (4) Tokyo Tatemono Nihonbashi Building(5) City Lab TOKYO (6) TOKYO FOOD LAB (7) xBridge-Tokyo/xBridge-Tokyo Next (8) Kitchen Studio SUIBA(9) TOKYO IDEA EXCHANGE

Entry

TransferOpen
innovation

Major
companies
Transfer

Ideas/
Technology* Bonds where the proceeds are applied to projects which have both aspects:(1) solve social issues (social aspect) and (2) have environmental improvement
effects (green aspect).

32nd unsecured bonds(subject to a limited interbond pari passu clause)(sustainability bond)Overseas

Investors, etc.

Case examples of existing innovation ecosystem initiatives in the YNK areas

TOKYO FOOD LAB
A community hub offering food education and hands-on experiencein a cutting-edge plant factory. Fusing technology, science, andchef’s creativity, TOKYO FOOD LAB aims to solve social problems
shared globally and to build communities that support the SDGs.

Managing Officer andGeneral Manager of Urban
Development Department

Shinjiro
Kobayashi
Data

Kitchen Studio SUIBA
A kitchen studio using cuisine as catalyst for liveliness. This facility
encourages liveliness through food content, which naturally
drives the creation of communication, regardless of generation orgender.

by enhancing the function to respond to globalization,such as theaters that increase the charm of culture, andfacilities that support international finance. We also focus
not only on hardware but also on software initiatives.
We want to continue various efforts in connection
with the large-scale redevelopment projects, such assupporting startup venture companies and building an
open innovation facility.
This development absolutely requires cooperation withredevelopment association members, local residents,
companies in the area, and the government. We havespent a considerable amount of time on discussions
with many stakeholders. The confidence and expertise
cultivated through this process is a great strength for us.
We will undertake urban development and increase thevalue of the entire area by assuming the role necessary
to realize the future vision.

ESG Report

xBridge-Tokyo
This startup studio aims to support the creation and growth ofstartups, as well as the formation of a community where users
can share knowledge and expertise with each other.

The YNK area is located in front of Tokyo Station, a large
terminal station that connects to international airports
and local cities, and has very high accessibility. In themeantime, the area is a center of commerce and culture
continuing from the Edo period. It is a very rare area
where the history and traditions inherited through theunified efforts of the people of the community are still
thriving.
Many redevelopment projects are currently going on in
the YNK area. To survive the ever-increasing competition
between cities inside and outside Japan, we need aperspective to increase the value of the entire area
instead of focusing only on promoting individual projects.
Furthermore, our awareness of work style has beenchanged by COVID-19. The meaning and value of having
an office have gained more importance than ever. I
believe importance in the urban development of theentire area will increase in the future.
We are engaged in urban development that creates new
added value by utilizing the unique charm of the YNK area.
We have therefore formulated the urban development
vision of the YNK area, which is an internal vision,
with the concept of “community where the traditionaland modern co-exist.” We want to communicate thesuccessful co-existence of a new cityscape created by
the development and an old cityscape with history.
We are currently engaged in two large-scale
redevelopment projects, the Yaesu project and the
Gofukubashi project. We are focusing on the initiative
to increase the charm and competitiveness of the area.
We believe that we can attract more people to this area

Segment Information

City Lab Tokyo
This is an open innovation platform for sustainable urban andsocial development. This forum provides programs that tackle
three perspectives: knowledge provision, community-building, andbusiness creation support. The approximately 300m2 of floor areaat this facility includes meeting rooms, a salon, and rental spaces.

We aim for urban development that creates new added value by maximizing our strengths

Medium-Term Business Plan

Tokyo Tatemono focuses not only on the hardware quality
but also on improving the software service quality whendeveloping buildings.
The Yaesu and Gofukubashi projects that are ongoing in
the YNK area have pushed through regulatory reforms in
a comprehensive and concentrated manner, so the YNK
area is designated as a national strategic special zone
which is intended to promote strengthening international
competitiveness of industries and creating international
economic activity centers. The innovation and growth
in Japan as a whole can be greatly driven by developing
this area as an optimum environment for the business,forming an international business center that attracts
funds, human resources, and companies from around theworld, and creating new businesses that have international
competitiveness.
We aim to push forward the innovation ecosystem thatfurther promotes the collection of major companies
through the redevelopment of the YNK area, and at thesame time, encourages the innovation in the entire area by

31st unsecured bonds(subject to a limited interbond pari passu clause)(sustainability bond)FeatureIssuing Sustainability Bonds

Value Creation

Promoting the Innovation Ecosystem

18

19TOKYO TATEMONO GROUP Integrated Report 2020

TOKYO TATEMONO GROUP Integrated Report 2020

Medium-Term Business Plan

Our medium-term business plan covering the five years leading to fiscal 2019 (2015-2019) defined our
vision for the Tokyo Tatemono Group to be the continued leading choice. Under this plan we maintained
an awareness of both profit growth and discipline in our financial management, outperforming our initial
targets. As a result, we achieved operating income of ¥52.4 billion, a debt-equity ratio of 2.5 times, and a
12.6 times interest-bearing debt to EBITDA multiple.

The Tokyo Tatemono Group aims to be the continued leading choice.
Providing amazing value through innovative group synergies

Key Strategies and Results
Key Strategies
By focusing on these three strategies, we will continue

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

Strategy (1)Strategy (2)Strengthen services to be the continued
leading choice

Investments leveraging our uniqueness andStrategy emphasizing quality (soft) services in each business toboost customer satisfaction

Strategy devoting energy to areas and domains where thegroup can leverage our expertise and competitive advantages

FeatureFiscal 2015-2019 Plan

Value Creation

Summary: 2015-2019 Medium-Term Business Plan

strengths

To continue being the leading choice of customers, we aim to deliver unexpected,
Strategy (3)Exercise group synergies to deliver amazing value
Strategy emphasizing the delivery of exciting value through stronger value chains in each business, as well as organic cooperation
among the diverse group businesses

Quantitative Targets and Performance Results
Quantitative Targets

Major Results

Financial Targets

FY2019 Target¥50.0 billion

Debt-to-equity ratio*

3.0 times

Interest-bearing debt / EBITDA multiple*

13.0 times*Debt-to-equity ratio = Consolidated interest-bearing debt ÷ Consolidated equity capital*Interest-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)

Key Results

ProfitOperating income: ¥52.4 billion•Operating income up 72% from ¥30.5 billion in fiscal 2014, marking
the highest profit in two consecutive years since 2018
•Achieved profit growth exceeding initial targets

Financial
Indicators

Debt-equity ratio: 2.5 times
Interest-bearing debt /EBITDA multiple: 12.6 times•We engaged in management with an awareness of financial discipline,
raising funds by utilizing a favorable financial environment

CapitalEfficiency

ROE: 8.2%•Year-on-year profit growth, up from 5.6% in 2015
•We must continuously improve profitability and turnover rate tomaintain and improve current profit levels in a stable fashion

Shareholder
ReturnAnnual dividend per share: ¥41.0
Consolidated payout ratio: 29.0%

Investment

Cumulative net investment: ¥350 billion(Medium-term plan: ¥300 billion)•Profit growth led to six consecutive years of increased dividends•Repurchased ¥10 billion in shares in 2019(canceled on January 31, 2020)•F ocused on return on investment and conducted highly-selective
investments•Secured projects that will contribute to profits in the next mediumterm plan onward while also achieving profit growth

20
TOKYO TATEMONO GROUP Integrated Report 2020

Strategies (3)Improve customer service andbrand value through a stronger
value chain

Acquire high-quality projects using
a discerning, selective eye forinvestment

Capture business opportunities
through stronger intra-groupcooperation

Partner with and create newcommunities and engage in othercommunity development activities

Expand investments in new
asset types, capturing changes ininvestor and customer needs

Encourage information-sharing
and improve productivity throughgroupwide IT systems

xBridge-Tokyo
Opened a startup support facility to facilitate innovation

T-LOGI Kuki
Entry into logistics facility development business focusing on
logistics needs arising from the evolution of e-commerce

Kita-Aoyama 3-Chome Area Development Project
Partnered with residential, senior, and child carebusinesses to capture business opportunitiesof
e-commerce

Issues to Address in the Future● Strengthen businesses other than the Commercial Properties and Residence Businesses further●S trengthen business portfolio and asset composition, contributing to maintaining and improving capital efficiency● Respond to growing societal awareness of ESG

21
TOKYO TATEMONO GROUP Integrated Report 2020

Data

Evaluation (Positive Results, Issues to Address)

Strategies (2)ESG Report

Results: Fiscal Year Ended 2019/12

Strategies (1)Segment Information

Consolidated operating income

Medium-Term Business Plan

exciting value by engaging in business development that pursues quality in hard (finished products)
and soft (services offered) aspects through organic cooperation across a diverse range of businesses.

Medium-Term Business Plan

Financial Plan
We believe these targets will lead to business portfolio
optimization in consideration of capital efficiency and fiscal
discipline.

Our target for profit is ¥75.0 billion in consolidated
business income for fiscal 2024.
Our targets for ROE, debt-equity ratio, and interestbearing debt to EBITDA multiple are as provided below.

FY2024 Figures
Profit Target

Capital Efficiency

Financial Indicators

Positioning of the Medium-Term Business Plan

Debt-equity ratio*2:

business income for fiscal 2024, advancing our five key
strategies and initiatives that contribute to an evolved
approach to ESG management.

Consolidated business income:*1

Appr.

ROE

¥75.0 billion

8-10%Interest-bearing debt /EBITDA multiple*3:

Appr.

Medium-Term Business Plan and Consolidated Business IncomeLong-Term Vision to 2030

2015-2019
Medium-Term Business Plan

12 times*1 Consolidated business income = consolidated operating income + equity gains (losses) of affiliated companies

Consolidated business income*2020-2024 Medium-Term Business Plan

2.4 times¥120.0 billion*2 Debt-equity ratio = consolidated interest-bearing debt / consolidated owners’ equity*3 Interest-bearing debt / EBITDA multiple = interest-bearing debt / (operating income + interest & dividend income + equity gains (losses) of affiliated companies +depreciation expense + goodwill amortization expense)

Medium-Term Business Plan

In the first step toward achieving our 2030 long-term
vision, we have established a five-year period from 2020
to 2024 for our medium-term business plan.
We will target a milestone of ¥75.0 billion in consolidated

FeatureLooking at the business environment surrounding the group, we see great changes in a number of areas,
including intensified international competition between cities, diversification of lifestyles, advancements indigital technology, and increased awareness of ESG.
Aiming to achieve sustainable growth across the entire group in this business environment, we haveformulated our long-term vision (see P.4-7) looking ahead to 2030 (the target year for the Sustainable
Development Goals and the approximate time when a number of our large-scale redevelopment projects
will be completed), as well as our medium-term business plan for FY2020 to FY2024.
We will pursue our medium-term business plan goals and achieve our long-term vision through initiatives
that contribute to the evolution of ESG management and the promotion of our five key strategies (see P.24-25).

Value Creation

New Medium-Term Business Plan (Fiscal Years 2020-2024)

Consolidated business income*

¥35.2

2015

¥38.2

2016

¥46.4

¥47.1

2017

2018

Evolution of ESG Management
To promote sustainability initiatives across the group, we
have established a Sustainability Committee, which works
with business divisions to set goals, monitor progress,and evaluate performance levels. We manage ongoing

¥51.6

2019

2024

Around 2030

sustainability measures using the PDCA cycle.
In addition, we aim to leverage the positive evaluations
have received from ESG rating agencies as benchmarks
for our inclusion in ESG indices.

Segment Information¥75.0 billion

Promotion System for Sustainability Measures*Consolidated business income = consolidated operating income + equity gains (losses) of affiliated companies

ReportAchieving Our Medium-Term Business Plan Goals

Key(2) Strengthen our
Condominium Business(4) Strengthen Brokerage, Fund,and Parking Lot Businesses

Evolution of ESG Management

22
TOKYO TATEMONO GROUP Integrated Report 2020

(3) Expand Property Sales for
Investors(5) Grow Our Overseas Business

Goal-Setting

Promotion

PDCA Cycle
Review
Activities
MonitorMonitoring /Evaluation

Promotion of sustainability measures within each business division

Activity
Promotion
andInformation
Disclosure

Improved evaluations from ESG rating agencies, inclusion in ESG indices23
TOKYO TATEMONO GROUP Integrated Report 2020

Data

Strategies(1) Pursue Large-Scale
Redevelopment Projects

Evaluate
Implementation /Stakeholder Engagement

Achieving Our Long-Term Vision
Board of Directors

Roadmap 2030

ESG ReportManagement by the Sustainability Committee (chaired by the President)Value Creation

Aims of Our Five Key Strategies
Key Strategies (1)Pursue Large-Scale Redevelopment Projects

Key Strategies (3)We engage in initiatives to pursue large-scale redevelopment projects and improve the attractiveness of the respective
areas surrounding these projects, aiming to increase the value of our entire office building portfolio and expand the flowof stable rental income.

Through proactive investment in a broad pool of asset types,
including logistics facilities, rental apartments, and hotels,
we will continue to seize development
opportunities and dynamically sellproperties to generate profits.

Contributing to solving issues across wider areas and future
generations, while respecting local history and culture

Development of Assets for the Real Estate
Investment Market
Developing diverse assets in line with changing real estate
investment needs
Realizing high profitability through not only the Company's trackrecord and know-how in real estate operation, but also throughcooperation with a wide range of external operators
Contributing to healthy development of the real estate
investment market by supplying high-quality assets

Contributing to a sustainable society by reducing ourenvironmental footprint, engaging in stronger measures against
natural disasters, and more

Gofukubashi Project

T-LOGI Kuki

Aiming to grow our office building portfolio by solvingsocial issues to improve the attraction of surrounding areas

Key Strategies (4)Strengthen our Condominium Business

Redevelopment and rebuilding will be our tools enabling a continuous cycle of acquisition for opportunities to develop
highly-competitive condominiums, providing high-quality housing in response to social changes.
Providing High-quality Housing

Acquisition of business opportunities in highly-convenient locations

Homes that accommodate diverse values and lifestyles

Development of high value-added housing (complexes, etc.)

Safe, secure homes that are environmentally-friendly
and natural disaster-resistantRedevelopment of real estate stock,
developing favorable living environments

Homes leveraging advanced technology from diverse partner baseStrengthen Brokerage, Fund, and Parking Lot Businesses

We will strengthen our brokering and parking lot businesses
with a focus on expanding our portfolio of real estate stockand effective utilization needs. Our fund business will bestrengthened by expanding the sale of properties to investors;
for instance, to REITs sponsored by the company.

Distributing real estate stock through the brokerage business,
corporate growth and improved asset efficiency through corporate
real estate (CRE)

Expanding Group profit opportunities by strengthening the fund business

Providing investment products utilizing Company developed/
held assets

Property sales

Japan Prime Realty
Investment Corporation

Funding recovery

Services

Leverage deep experience and know-how to provide contemporary housing and further strengthen the condominium business

Effectively leveraging real estate through the parking lot
business and more

Tokyo Tatemono
Private REIT, Inc.

Tokyo Tatemono GroupFee revenue

Key Strategies (5)Contributing to a Stock-based Society
with Real Estate ServicesInvestment Market

New fund formations

Expansion of brokerage, fund, and parking lot businesses
capturing real estate effective use and investment needs

ESG Report

Acquiring Development Opportunities Leveraging
Redevelopment/Rebuilding Techniques

Brillia ist Komagome

Segment Information

Key Strategies (2)Creating new value by collaborating with diverse partners andleveraging advanced technologies

Continuous acquisition of development opportunities in
response to real estate investment needs, Contribution tostable profit by development of high-quality assets

Medium-Term Business Plan

Creating active hubs to foster rich, diverse, active communities

Yaesu ProjectFeatureCommunity-Building That Contributes toSolving Social Issues

Expand Property Sales for Investors

Grow Our Overseas BusinessWe will collaborate with leading local partners, primarily in
China and other Asian countries, in aiming to acquire new
business opportunities centered mostly on condominiums
with quick turnover.

●C hina: Primarily develop second & third-tier cities withTargetAreasstrong tiers of consumers with actual demand (CRE)●O ther Asian countries: Primarily develop countries where

we have an existing footprint● Invest in condominium businesses with quick turnover in

Investment
Policyinterest of risk management●D eepen collaborative relationships with leading local

partners, leading to new business opportunities

Data

Risk
Management
SHIROKANE The SKY

Brillia Tower Nishijin

24TOKYO TATEMONO GROUP Integrated Report 2020

Minato Ward Kaigan 1-chome
Rebuilding Project●F urther strengthen management systems to aid new

and expanded business initiatives in light of diverse risks
in doing business overseas

Xuzhou Qiaohu Project (Xuzhou City, China)

25
TOKYO TATEMONO GROUP Integrated Report 2020

Medium-Term Business Planmanner, making this source of income the core of our profit
composition.
Balancing profitability, efficiency, and stability, we manage
our business portfolio by classifying them in three categories
according to profit characteristics: leasing, property sales, andservices.
We plan to complete the seven current large-scale
redevelopment projects undertaken by the Group in or aroundthe year 2030.
As a result, we plan to increase profits significantly in theleasing category to more than 50% of the Group's profit
structure.
The second basic policy is to target a well-balanced profit
structure, mindful of capital efficiency.
In addition to expanding leasing income, we believe it is also
necessary to strengthen our property sales category, which
contributes to improving our total asset turnover ratio. We
also want to strengthen our services category, which is linked
directly to improving capital efficiency.
Furthermore, we intend to work on optimizing our businessportfolio and asset composition through initiatives that
including reviewing our asset portfolio as necessary with aneye toward improving return on assets (ROA).

tell us about your financial strategy
Q Please
under the long-term vision and new

medium-term business plan (FY2020-2024)
announced in 2020.

We announced a long-term vision looking ahead to 2030
to strengthen our management foundation from a longperspective, while also considering issues left over from ourprevious medium-term plan.
The vision of Becoming a Next-Generation Developer
represents our intent to solve social issues and secure firm
profit growth at a higher level. This vision also represents
where we want to be as a company ten years from now.
Our plan defines two basic policies for profit growth.

Director
Managing Executive Officer

Business Portfolio Concepts
Business classification and management by profit characteristics,
with awareness of the balance between profitability, efficiency, and stability

give us a summary of your FY2019
Q Pleasefinancial results and progress during theprevious medium-term business plan
(FY2015-2019).

Characterized By

Key Strategies

Profit Source

Leasing

Profit from leasing offices,condominiums, etc.

Highly-stable profit
Requires significant investment(1) P ursue Large-Scale Redevelopment
Projects(2) S trengthen our Condominium
Business

Property
sales

Development profit, acquired
from sale of properties held

Highly-volatile profit
High capital efficiency(3) Expand Property Sales for InvestorsServices

Fee revenue from facility
management/operation,
provision of services

Highly-stable profit
Does not require significant
investment

Projected Shift in Per-Area Profit Over Time

Leasing
Property
sales
Property
sales

(4) S
 trengthen Brokerage, Fund,and Parking Lot Businesses

Services(5) Grow Our Overseas Business

Propertysales¥120.0 billion
20％¥75.0 billion¥51.6 billion

20％

10％
30％

40％

60％

40％

2019

2024 (Expected)

30％

50％
*Chart percentages are approximations

Pursue Large-Scale Redevelopment Projects
Leasingaround 2030 (Projected)

Project completions in 2025 drive major expansion

Growth of leasing revenue from active properties

Well-balanced profit structure,
focused on leasing profit andProperty sales
Services

Expansion through primarily recovery on held properties

Ongoing profit generation

Steady growth

27
TOKYO TATEMONO GROUP Integrated Report 2020

mindful of capital efficiency

Data

26
TOKYO TATEMONO GROUP Integrated Report 2020

Profit TypeESG Report

In FY2019, consolidated operating revenue reached a record
high for a third consecutive year. Consolidating operating
income reached a record high for a second consecutive year.
I believe it was a year of positive financial results befitting theclose of our medium-term business plan.
Through this plan, which covered a five-year period rather thana traditional three-year plan, we set goals and worked as a
unified Group in pursuit of our vision for the Tokyo TatemonoGroup to continue to be the leading choice, providing amazing
value through innovative Group synergies.
We achieved significant profit growth primarily through thetwo pillars of the Commercial Properties and the Residence
Businesses. Consolidated operating income increased 72%
compared with FY2014 to ¥52.4 billion, clearing our profit
target of ¥50 billion.
Furthermore, in order to firmly maintain financial discipline
while advancing our growth strategy, we set target indicatorsof a debt-equity ratio of 3.0 times or less and interest-bearing
debt/EBITDA multiple of 13 times or less. Actual FY2019

performance was 2.5 times and 12.6 times, respectively,
achieving both targets.
ROE also improved steadily, from 5.6% at the end of 2015 to
8.2% at the end of 2019.
We will continue to practice management with an awarenessof capital efficiency, which we will strive to improve steadily by
optimizing our business portfolio and asset composition.
In the previous medium-term plan, we worked to build abusiness portfolio with high growth potential to create afoundation for sustainable growth in 2020 and beyond.
Particularly in the Commercial Properties Business, we
acquired properties that could serve as seed sites for future
redevelopment. At present, we are involved in seven largescale redevelopment projects, including projects in the Yaesu
area.
In the Residence Business, we are strengthening our
integrated production, sales, and management services,focusing on redevelopment and rebuilding businesses. We
are advancing a number of projects that will become a sourceof future growth, while still producing profit growth in themeantime .
We have worked to expand our stock of property for saleto investors, including urban compact commercial facilities,
hotels, logistics facilities, medium-sized offices, condominium

Key Strategies and Profit Sources

Segment Information

Katsuhito Ozawa

Medium-Term Business Plan

The first is to expand stable leasing profit in a stable

As a result, the balance of real estate for sale excluding
condominiums for FY2019 expanded to ¥205.3 billion, while
stock rose to nearly ¥300 billion on a total investment basis.
This figure includes construction costs for projects underdevelopment.
Even though our core Commercial Properties Business andResidence Business achieved significant profit growth, ourevaluation is that growth in other businesses was insufficient.
We intend to strengthen these areas for further growth.

Featurebuildings for rent, and others.

Value Creation

Message From the CFO

To improve capital efficiency, we will pursue growth in theon more property sales or higher prices/rents.
The essence of financial strategy is maintaining a soundfinancial position.
Maintaining a sound financial position means being resilient
under a variety of changes in the environment. By the same
token, a sound financial position means maintaining a capacity
to make investments when required.
Even in times of market sluggishness, maintaining ample
investment sources ensures we will not miss good investment
opportunities.
We also believe that the optimal debt-equity ratio will varydepending on the scale of total assets and the quality of thoseassets.
Under the new medium-term plan, total assets are expected
to increase by about ¥350 billion to ¥1,900 billion. Keeping awatchful eye over the balance of assets and liabilities, we have
set this financial indicator at about 2.4 times, slightly lower

property sales and services categories. At the same time, wewill review businesses that are less profitable or that have poor
growth prospects, reduce cross-shareholdings, and sell fixed
assets to create an optimal asset composition over time.

compared with our previous medium-term plan, as we expand
investments for large-scale redevelopment projects. However,our basic investment policy has not changed. We will
acquire high-quality projects using a keen, selective eye forthan the FY2019 level of 2.5 times.
In addition, to promote management that is aware of capitalefficiency, we have set an ROE of 8%-10%, a level we believe
is a strong indicator of capital efficiency.

Medium-term Investment Plan (Cumulative)

Balance Sheet Changes

Investment in large-scale redevelopment

230

Investment in condominium projects

430

Investment in properties for sale to investors

550

Investment in the overseas business

70

Other

120
900

Net investment

500

Assets¥1,564.0 billion

Interestbearing
debt¥924.8 billion

Owners’equity¥375.0 billion

AssetsInterestbearing
debt¥1,200 billion

2019

The Group has been consistent in providing shareholder
returns that allow for growth investment, while maintaining andimproving a stable dividend level. We have made no changes
to this fundamental approach.
We have set a payout ratio target of at least 30%, reflecting
the current and expected future business environment, as wellas our business development and financial plans.
We seek to offer stable and growing dividends through steadyprofit growth.
We will also consider stock buybacks based on the businessenvironment and our financial situation. Here, we will makeopportunistic and flexible decisions designed to improve ourcapital efficiency further.
We believe that the most important aspect of our relationshipwith shareholders and investors is information disclosure andactive dialogue.
By providing a wide range of opportunities for dialogue andsincerely listening to shareholder and investor feedback andperspectives, we can leverage this information in our businessdecisions, achieving the dual goals of solving social issues

Shareholder Return Projection¥1,900 billion

Debt-equity
ratio
2.5X

investors?

Owners’equity¥500 billion

Debt-equity
ratio
Appr.2.4X

2024 (Expected)

Yen
50.0

(Cancelled on January 31, 2020)

40.0

Achieve appropriate ROE
2024: 8-10%

Business profit ÷ total assets
Improve Margin/Turnover¥30.0

Interest-bearing
debt
AssetsOwners’equity

Guide optimization of business portfolio andasset composition

28
TOKYO TATEMONO GROUP Integrated Report 2020

¥26.0

20.0
2024:
2.4X

Decrease debt-equity ratio
Interest-bearing debt ÷ owners’ equity

10.0

Securing Financing Soundness1) Increase equity through accumulating greater
profit2) Recover funding through sales, not only throughfor-sale real estate, but also through fixed andnon-business assets (e.g. strategic shares)

0.0

2015

2016

2017

2018

2019

2020

2024

(Forecasted)(Forecasted)

Consolidated payout
ratio

26.3％

28.6％

28.8％

27.8％

29.0％

30.3％

30％ or more

Net income attributable toowners of the parent¥16.3 billion¥19.7 billion¥22.5 billion¥27.2 billion¥29.7 billion¥31.0 billion¥45.0 billion

¥76

¥91

¥104

¥126

¥142

¥148

¥215

EPS

29
TOKYO TATEMONO GROUP Integrated Report 2020

Data1) Enhance asset profitability through investment,
while mindful of capital cost2) Improve turnover rate through greater profit on
property sales3) Make adjustments to businesses with low
profitability/poor growth outlook

Profit growth drives
further increase¥20.0

Net income ÷ owners’ equity

Improve ROA

¥45.0
¥41.0

¥35.0

30.0

Approach to Capital Efficiency

2024:
4%

Treasury stock acquisition:¥10.0 billion

ESG Report

RecoveredOther¥264.2 billion

are your thoughts on shareholder
Q Whatreturn and what message do you have for

Segment Information

Other¥200 billion

1,400

Gross investment total

a great help to us in becoming a good company for all of our
stakeholders.
The Group has continued to hone our capabilities for stable andsustainable growth. At the same time, we strive for greater
resilience in times of recession, based on the lessons of pastexperiences.
We launched our new medium-term plan in 2020, alreadyfacing a great headwind from the global COVID-19 pandemic.
I am convinced that this turbulent time is a test of our true
capabilities in solving social issues, growing as a company, andimproving our corporate value.
We hope that the Tokyo Tatemono Group will continue todraw attention and positive expectations.

Medium-Term Business Plan

Unit: Billion yen

and growing as a company at a higher level. This approach is

Featureinvestment, and avoid irrational investments that focus solely

Value Creation

The new medium-term business plan for the five years
beginning 2020 serves as the first half of our roadmap to2030.
We are currently in the development phase of seven largescale redevelopment projects. Therefore, we have positioned
property sales and services categories as pillars of future
revenue.
We will act with greater opportunism in profit generation by
diversifying asset types, a measure we implemented during
the previous medium-term plan. In so doing, we are creating
a foundation for stable profit growth. At the same time, weplan to strengthen our overseas businesses and initiatives inproperty sales to investors, as well as accelerate growth in our
brokerage, funding, and parking lots businesses. Our target
for fiscal 2024 is to reach ¥75 billion in consolidated businessincome.
We expect net investments over these five years to amountto ¥500 billion, representing a major expansion in investment

Segment Information

Division Director of Commercial
Properties Business Division

Kengo Fukui

Business description
We provide services, such as facility management,
building maintenance, and maintenance/remodeling, inaddition to businesses, such as urban development andoffice building development /management, centered on
the international city of Tokyo.
The entire group is engaged in providing not only quality
hard services but also safe, secure, and comfortable soft
services for office building users.
The Otemachi Tower

Business
environment

Risk

Shinjuku Center Building Management Co., Ltd.

Tokyo Building Service Co., Ltd.

PRIME PLACE Co., Ltd.

▶ Changes in operating revenue

Seishin Service Co., Ltd.

▶ Changes in operating profit

Unit: billion yen
38

Unit: billion yen
135
120.9

120
103.4

105

103.4

Further strengthening the office building portfolio

31.0

31

108.6

37.0
31.9

Office building portfolio at the end of June 2020
▶ Breakdown of leasable spaceby standard floor space

90
17

60

Dec/2015

Dec/2016

Dec/2017

Dec/2018

Dec/2019

10

Dec/2015

30
TOKYO TATEMONO GROUP Integrated Report 2020

Dec/2016

Dec/2017

Dec/2018

Dec/2019▶ Breakdown of leasable spaceby building age

1,000 tsubo* or
more ··················19.2%

Under 10 years
old·····················48.5%

500-999 tsubo* ··38.3%

10-19 years old··13.3%

300-499 tsubo* ··24.5%

20-29 years old··11.6%

299 tsubo* orless ····················18.1%

30 years andolder··················26.5%*1 tsubo = approx. 3.3m2▶ Breakdown of leasable spaceby area of location

3 central wards of Tokyo ··40.6%
Shibuya and Shinjuku
wards····························· 16.9%
23 wards (excluding 5 central
wards of Tokyo)·············· 22.6%
Tokyo metropolitan area
(excluding 23 wards) ········ 2.5%
Other ····························· 17.3%

31
TOKYO TATEMONO GROUP Integrated Report 2020

Data

24

75

portfolio in this respect. We will further strengthen our
office building portfolio through urban redevelopment on
prime locations at the city center to expand the stablerevenue basis.

33.3

27.2

96.9

Office building needs are diversifying with changing work
styles. For example, there is a growing demand for BCPready buildings with good environmental performance.
However, demand for new, large, and accessible officebuildings is still high. We have a competitive office building

Medium-term business plan key strategy (1)ESG Report

Tokyo Fudosan Kanri Co., Ltd.

● Provide office buildings of choice by developing new office buildings to adapt to thediversification of work styles and by enhancing services
 romote area management to increase the allure of the Yaesu/Nihonbashi/Kyobashi and other●P
areas where the group owns buildings, and further strengthen competitiveness romote the large-scale urban redevelopment projects around the Tokyo Station and other●P
excellent locations at the city center to expand the revenue base

Segment Information

strategy● Increasing international competition between cities and areas
 hanges in the office needs associated with the spread of remote work●C ising construction and other costs due to a labor shortage●R● Strong track record and expertise in large-scale redevelopment projects
 rack record in area management activities that raises the value of the area and strong●Ttenant leasing activity
 highly competitive portfolio of a large number of office buildings owned by the group in●A
excellent locations at the city center and in particular around Tokyo Station

Advantage

FutureGroup Companies

 iversification of the work style and office needs aimed at higher productivity●D igher level of office needs in an attempt to retain and hire talents and ensure BCP●H
Opportunity● Increase in business opportunities for large-scale redevelopment associated with theeasing of regulations

Medium-Term Business Plan

OfficerLong-term holding businessFeatureDirector & Senior Managing Executive

The Commercial Properties Business is engaged in the development,
management, and operation of office buildings and other properties,
as well as the promotion of tenant relations and urban development
in cooperation with local communities.
In the new medium-term business plan, we have positioned thepromotion of large-scale redevelopment projects as one of the key
strategies and we focus on promoting multiple redevelopment
projects to be completed by around 2030. We aim to contribute tosolving local social issues through urban development by fosteringrich local communities by creating bustling hubs, reducing ourenvironmental impact, and strengthening measures against natural
disasters, with the aim to increase the competitiveness of not
only individual projects, but also the entire area and city. We also
contribute to constantly increasing leasing profit by identifying
changing work style needs and providing hard and soft services
that continue to be chosen by customers, and by increasing thecompetitiveness of our office buildings including active properties.
We will also significantly grow the business to sell properties toinvestors from now to 2024, which is another key strategy. We haveactively seized development opportunities for various asset types
such as logistics facilities and medium-sized office buildings to suit
the social changes such as real estate investment and use needs,
but from now, on we will achieve a high asset efficiency by further
expanding strategic investment and selling properties quickly.
We aim to contribute to solving social issues and increasing theallure of the area through urban development, with the aim of further
strengthening profitability by pursuing both goals: management of
stable assets centered on large-scale redevelopment projects andhigh asset efficiency through strategic investment and sale.

Value Creation

Commercial Properties BusinessMedium-term business plan key strategy (1)Development business for investors

Implementation of green office buildings meets the tenantneeds and contributes to increasing the allure of theentire area. In the office buildings owned and managed by
the group, we have undertaken a variety of initiatives toreduce greenhouse gas emissions, such as using energysaving equipment, improving operation methods, andactively using LED lighting.
We are also actively obtaining external evaluation. For
example, Hazera Tower completed in May 2020 has
been awarded the certification for five stars, which is thehighest rank in the overall building evaluation of the energy
conservation performance labeling system (BELS), and the
ZEB Ready for the partial evaluation for office use*1.
It was the first project to obtain ZEB Ready certification*2
for a super high-rise multipurpose building*3.

Hareza Ikebukuro

Medium-term business plan key strategy (1)Opportunity

 iversification of the real estate utilization needs associated with changes in society, such●Das the expansion of e-commerce market and in-bound market
 xpansion of real estate investment needs and assets for investment
●E

Risk

● Changes in the environment to acquire sites due to the increasing competition
 eak investment market associated with changes in the real estate investment●W
environment

Business
environment

Advantage

Futurestrategy

 variety of information sources such as financial institutions and existing business●Apartners, in addition to the group network evelopment track record and expertise of various asset types, and strong tenant leasing●D
activity eize further development opportunities by seizing projects utilizing information sources●S evelop buildings for a variety of asset types to suit location characteristics and demands in●Dcooperation with a broad range of operators
 ain development profits by selling properties quickly while monitoring the market environment and●G
performance after the development

Flea market held in Nakano Central Park

Asset development by identifying changes of the times
Medium-term business plan key strategy (1)Internal view of the new head office32
TOKYO TATEMONO GROUP Integrated Report 2020

Data

We have launched a working group, which is working
in an effort to develop and provide office buildings ofchoice, which adapt to changes in the work style aimed
at higher productivity and changes in the office needs thatare happening with the use of AI/IoT technologies. We
are engaged in various initiatives. One example is to use
a variety of layouts based on the Activity Based Working(ABW) concept in the new head office, to which our head
office function was transferred in May 2020.

We plan and develop properties to suit location conditions,regional characteristics, and use and investment needs
by seizing a variety of development opportunities utilizing
the group's information sources. We are actively engaged
in the logistics facility development business to meet theneeds of the expanding e-commerce market of late. We
gain high profitability by building an operation management
system that meets the requirements of preferred tenants,
in addition to our real estate development expertise. We
start the operations of the developed properties and thensell them to REITs and funds quickly to contribute tocreating stable profits and the healthy development of thereal estate investment market.

Medium-term business plan key strategy (3)ESG Report

Providing office buildings to suit new work styles

FUNDES GINZA

Segment Information

We also focus not only on developing and managing
buildings, but also on stimulating events in the area andcreating space where people mingle with each otherthrough area management activities.
For example, Nakano Central Park, a lush, threehectare public park nestled between and established byuniversities and government offices, hosts a variety ofevents, including flea markets, workshops, and summer
festivals. We are also implementing disaster-resistanturban development by working together with tenants toincrease disaster awareness by conducting a fire-fighting
drill simulating an earthquake disaster.
We believe that these kinds of initiatives in cooperation
with local communities contribute to increasing the allureof the areas around the buildings owned by the group,
solving social issues, and strengthening tenant relations.

We are engaged in a business focusing on both the needsof people living and working in surrounding areas andthe needs to invest in real estate. We develop properties
to suit location conditions and regional characteristics;
specifically, we develop commercial facilities and hotels
in city centers, medium-sized office buildings in local
city centers, and logistics facilities that cover the needsfrom neighboring areas adjacent to the city centers to thesuburbs. We start the operations of the properties andthen sell them to investors.

Medium-Term Business Plan

Promoting urban development activities

Business description

Feature*1 Use energy consumption performance calculation program (non-resident version) Ver.2.7.1(commonly called WEBPRO)*2 Based on the BELS example data list on the website of the Japan Housing Performance
Evaluation and Display Association (as of the end of June 2019)*3 Building height of 150m or more

Value Creation

Green office building development

T-LOGI Kuki

33
TOKYO TATEMONO GROUP Integrated Report 2020

Segment Information

Business description

Officer
Division Director of Residence
Business Division

Hideshi Akita

Brillia Tower Ueno Ikenohata

Opportunity

 rowing sophistication and diversification of customer needs associated with diversification●Gof life styles
 tronger trend to place emphasis on convenience associated with increasing two worker●Shouseholds and single-person households
 rowing compact city development due to population inflow into cities
●G

Risk

 ising land prices due to increasing competition for acquiring land sites, and rising●R
construction costs due to rising material prices and labor costs
 hrinking condominium market due to declining population●S

Business
environment

Advantage● Profitability-focused investment in well-selected sites with potentially high needs, such as very
convenient locations● Focus on the redevelopment and rebuilding projects to become engaged in highly competitive
projects while avoiding overpriced projects● Accelerate the development of compact rental apartment buildings in urban areas and sell themquickly to investors after starting the operation

Segment Information

Future strategy● Best brand and customer satisfaction rating in Japan trong track record and expertise in large-scale redevelopment and rebuilding●S ervice supply system that integrated production, sales, and management●S

Medium-Term Business Plan

Director and Managing Executive

We are engaged in the condominium business and rental
apartment building business that build properties in
downtown Tokyo under the Brillia brand, whose concept
is refinement and comfort.
We provide high quality housing with a unique integrated
system to provide all operations ranging from planningand development to management, repair, renovation, andbrokerage to provide a comfortable life for our customers.

FeatureIn the residence business, we are engaged in the condominium
business with focus on the “Brillia” brand, whose brand concept
is refinement and comfort. We provide high quality condominiums
with our integrated system of production, sales, and management.
Our attention to strict quality control, continuously hosting events
after the residents moved in, and other various initiatives support
the “Brillia” quality and increase the customer rating.
Under the new medium-term business plan, we have set a targetof further strengthening the condominium business. We will
seize development opportunities in very convenient locations byutilizing our redevelopment and rebuilding techniques, and we will
become engaged in the development of high value added housing
projects such as complex development projects. We also focus onproviding good quality nature and environment conscious housing
utilizing advanced technologies to adapt to social changes. We
will continuously win highly competitive projects by utilizing our
expertise and proven track record, with the aim to maintain highprofitability levels.
Furthermore, as part of the initiatives to develop housing that adapts
to changing needs, we also focus on the rental apartment building
business. We are building rental apartment buildings in downtown
Tokyo under the “Brillia ist” brand. We will further expand the rental
housing business into a business segment that sells properties toinvestors and contributes to generating profits constantly.
We will continue to supply housing selected by customers byidentifying and responding to needs that change every day, with theaim of achieving the number one customer rating in all categories
ranging from location, product planning, and customer service tomanagement.

Value Creation

Residence Business

Strengthening the “Brillia” brandGroup Companies
E-State Online Co., Ltd.

▶ Changes in operating revenue▶ Changes in operating profit

Unit: billion yen
160

Unit: billion yen
20
131.2
101.1

98.0

14.1

97.7

79.8

80

15.8

16.7
15

120

10

10.4

“Brillia” is a comprehensive housing brand that has
a strong track record in development and supply indowntown Tokyo, which provides comprehensive housing
services, ranging from planning and development tomanagement, repair, brokerage, renovation, and life support
under the brand concept of refinement and comfort.
We implement a thorough quality control until completionof Brillia condominiums, offer a construction site tour for
future condominium owners who signed the purchase
contract to look at the ongoing construction site, andprovide a construction report for customers as necessary.

We also provide after sales care support to ensure
customers can live comfortably. Furthermore, the Brillia
Bloomoi project launched in 2012 is developing products
under the concept of implementing housing that responds
to changes in the times and meets diversifying needs.
The product development includes an expanded rangeof services from condominium floor plans and housing
equipment through to management and after-sales
services.
These initiatives increase the value of the Brillia brand as
well as the competitiveness.

Data

6.2
5

40

0

0
Dec/2015

Dec/2016

Dec/2017

Dec/2018

Dec/2019

Dec/2015

34
TOKYO TATEMONO GROUP Integrated Report 2020

Dec/2016

ESG Report

Tokyo Tatemono Amenity Support Co., Ltd.

Dec/2017

Dec/2018

Dec/2019

35
TOKYO TATEMONO GROUP Integrated Report 2020

Segment Information

Promoting redevelopment and rebuilding

Medium-term business plan key strategy (2)supplies in case of disasters such as typhoons, floods, andlarge earthquakes.Brillia condominiums are managed inline with the Brillia Disaster Management Guidelines. We
create a disaster management manual for each property
and prepare for disasters. For example, we provide a Brillia
original disaster backpack which you can sit on for each
unit.

Director and Senior Managing
Executive Officer
Division Director of Real Estate
Service Business Division

Masami Kamo

Group Companies
Tokyo Tatemono Real Estate Sales Co., Ltd.

Japan Rental Guaranty Co., Ltd.

Parking Lots BusinessNihon Parking Corporation

Parking Support Center Corporation

Development of condo buildings for rent

Medium-term business plan key strategy (3)▶ Changes in operating profit▶ Changes in operating revenue

Unit: billion yen
10

Unit: billion yen
80

60

7.5

52.6
40.2

40

42.8

6.3

44.1
5.0

5.3
4.4

5.8

3.8

2.5

20
Brillia ist Sendagaya

036TOKYO TATEMONO GROUP Integrated Report 20200
Dec/2015

Dec/2016

Dec/2017

Dec/2018

Dec/2019

Dec/2015

37
TOKYO TATEMONO GROUP Integrated Report 2020

Dec/2016

Dec/2017

Dec/2018

Dec/2019

Data

47.7

ESG Report

Real Estate Transaction Business

External perspective of Brillia Tower Seiseki Sakuragaoka Blooming Residence

We accelerate the development of rental apartmentbuildings under the “Brillia ist” brand to meet the growing
demand for rental apartment buildings in downtown Tokyo
for living and investment purposes. We are also increasing
product appeal. As one of such efforts, recently weprovided a lounge as shared space to meet the growing
demand for remote work. With the exception of somelarge-scale rental apartment buildings, we will sell them toinvestors after operating them for a certain period of timeafter the development while comprehensively considering
the real estate trading market environment and ourbusiness performance.

Segment Information* ZEH-M stands for Zero Energy House-Mansion (Condominium/Rental Apartment Building)
ZEH-M refers to a net zero energy consumption condominium/rental apartment buildingthat aims to reduce the primary energy consumption balance to zero.

Medium-Term Business Plan

Brillia Tower Ikebukuro

Providing housing that is environmentally friendly and disaster resilient
We aim to promote the net zero energy houses (ZEHs)
in accordance with the ZEH Roadmap announced by the
Ministry of Economy, Trade and Industry (METI) to createa low energy consumption society. Tokyo Tatemono
was registered under the ZEH Developer Registration
Program in May 2018, and we are actively working topromote the net zero energy condominiums(ZEH-M)*.
The provisionally-named Brillia Tower Seiseki Sakuragaoka
Blooming Residence scheduled to be completed in 2022
has been adopted as the first and only project in theTokyo metropolitan area in the Super-High-Rise ZEH-M*
Demonstration Project in FY2019 sponsored by METI.
Brillia condominiums are built in line with the Brillia
Environmentally Conscious Housing Guidelines thatprovide a unified structure for our environmental
measures. In residential development, we designindividual properties based on these guidelines and strive
to reduce their environmental impact.
We also focus on providing housing that is resilient against
natural disasters and provide equipment and reserve

In the Real Estate Service Business, we are engaged in the real estatetransaction service that offers one-stop optimal solutions by using avariety of real estate assets owned by the group.
In the real estate transaction service business, we are engaged in thebrokerage and corporate real estate (CRE) service, with the aim to
expand opportunities to acquire real estate information using various
relationships. In addition, we offer asset solutions that increase thevalue of assets by converting primarily existing real estate properties
and improving their rental conditions, and provide a broad range of
products using our real estate appraisal expertise acquired by longyears of experience.
In the new medium-term business plan, we have set a goal oftransacting real estate inventory and providing good quality assets
by maximizing the utilization of real estate and identifying investment
needs through these businesses, with the aim to expand group related
assets, continuously grow profits, and improve capital efficiency.
Furthermore, our parking lots business that has a presence in theindustry is also a strength of the group. The business has also asignificant role as a solution to utilize real estate, and its strong
synergies with other businesses support our capability to offer awide variety of proposals. We will make the investment necessary tostrengthen our competitiveness by improving customer service andoperational efficiency, and we will further expand our business scale.
As a front line business for the market, we wish to create new
business opportunities for the group by serving as a hub of real estateand customer information and by making optimal proposals that createsynergies between competitive businesses and the broad range ofbusiness segments of the group.

development, but we will win highly competitive projects
by using our expertise and proven track record as adeveloper.

FeatureWe focus on the redevelopment and rehabilitation
projects to meet the demand for urban redevelopment
in areas where wooden houses are densely packed
and to meet the increasing needs to rebuilding aging
condominiums. We have a track record of many rebuilding
and rehabilitation projects, such as Brillia Tower Ikebukuro,
Brillia Towers Meguro, and Brillia Tama New Town.
We will seize project opportunities in very convenient
locations and become engaged in high value added
housing development projects such as complex
development projects. It is more difficult and takes
more time to achieve an agreement from landowners
and residents compared to normal land acquisition andMedium-term business plan key strategy (2)Value Creation

Real Estate Service BusinessValue Creation

Real Estate Transaction Business

Parking Lots BusinessBusiness description

We are engaged in three businesses: (1) brokeragebusiness, which includes wholesale brokerage to support
real estate needs of corporate customers and retail
brokerage to help individual customers to find a newhome, (2) asset solution business that increases the valueof acquired real estate for resale; and (3) management
service business that manages rental apartment and officebuildings on behalf of the owners.

We have developed and operate over 70,000 parking
spaces in 1,800 locations across Japan, primarily under
the NPC24H brand. By taking into account the surrounding
location, the area of the site, and other conditions, we areable to design and deliver the optimal parking lot.

● Increased real estate transactions due to higher real estate inventory● Growth in real estate investment demand due to low interest rates
Opportunity● Rise in CRE strategy (to maximize the utilization of real estate owned by companies)
Businessneeds for improving capital efficiency
environment● Lower willingness to buy real estate due to rising real estate prices, economic recession,
Risk
rising interest rates, etc.

Advantage● Actively identify customer needs utilizing information sources to increase volume and value oftransactions● Use the appraisal expertise to acquire properties with value-adding potential and sell properties
quickly in response to market conditions

Brokerage and asset solution initiatives using appraisal expertiseRisk ccelerated sale and repurposing of parking lots by landowners associated with rising●A
land prices

Advantage

Future strategy

 xperience and expertise in developing and operating large self-park parking garages●E● Investment and development capabilities for parking facilities and systems leveraging
scale as No.3 pay-by-the-hour parking business operator in Japan fficiently grow the business scale through aggressive investment in large parking facilities,●E
which is our strength area
● Increase competitiveness by developing and introducing new systems that contribute toimproved operating efficiency and customer service

Medium-term business plan key strategy (3) and (4)Expanding the parking lot business by identifying needs to utilize real estate

improvements, or other measures, after which theproperties are sold to investors flexibly.
▶ Changes in the value of real estate held in asset

solution business
Unit: billion yen
60
51.5
428
43.3

45
35.6
526
27.7

15

0

Dec/2016

38
TOKYO TATEMONO GROUP Integrated Report 2020

Dec/2017

Dec/2018

Dec/2019▶ Changes in the parking spaces operated

Parking spaces
80,00061,743526

74,17665,546

66,227

68,57869,40160,00040,000Data

30

Nihon Parking Corporation operates many parking lots. In
particular, we have extensive expertise in operating large
self-park parking garages. We acquire existing facilities
that have room for operating improvement and increase
their profitability using our unique expertise to keep
our advantages. The parking lots business serves as agateway to real estate information including land owned
by customers. Therefore, we are strengthening thisbusiness, including synergies with other businesses.
To enhance the function to operate parking lots byleveraging our scale as the No.3 operator in Japan, weare developing and introducing unique systems such asadvanced reservation and monthly web parking contract
in an attempt to increase efficiency. Furthermore, we
actively promote other services that can contribute toincreased customer convenience through means suchas partnering with car sharing and point card business
operators and installing delivery boxes.

Medium-term business plan key strategy (4)ESG Report

We are strengthening the brokerage and CRE businessin an effort to expand opportunities to acquire real estate
information. We are utilizing the strong relationships withcustomers and financial institutions cultivated over yearsof operation of the group’s various businesses to enhance
our wholesale brokerage operations targeting corporate
customers. As for retail brokerage operations aimed at
individual customers, we are opening brokerage offices inareas where we have supplied several condominiums tocapitalize on secondary brokerage transaction opportunities.
We acquire property information for asset solutions, sellproperties, and develop new customers in conjunction
with these brokerage activities. Capitalizing on our realestate appraisal expertise—the ability to comprehensively
judge the value of properties cultivated over years ofexperience—we seek to acquire properties with thepotential for increased value. We then take steps toimprove the value of these properties through repurposing,
repairs, renovations, rights consolidation, rent condition● Increased opportunities to operate large parking lots and public parking lots such as
municipal parking lots in conjunction with large-scale redevelopment projects● Improved efficiency and service in parking lot operation associated with the spread of IoT

Segment Information

Future strategy● Relationships with customers and financial institutions and real estate appraisal expertise
acquired over years of experience● Offer one-stop solution services utilizing the resources of the group

Business
environment

Opportunity

Medium-Term Business Plan

NPC24H Tachikawa Midoricho No.2 Parking

FeatureBusiness description

20,0000Dec/2015 Dec/2016 Dec/2017 Dec/2018 Dec/2019 Jun/2020

39
TOKYO TATEMONO GROUP Integrated Report 2020

Segment Information

Value Creation

Other Businesses
Senior business
Senior and Child Care
Business
Leisure Business

Grapes With YotsuyaChild care business
おはよう保育園

Ohayo Child Care Kameido

Leisure businessGroup Companies
Tokyo Tatemono Senior Life Support Co., Ltd.

Child care businessTokyo Tatemono Kids Co., Ltd.

Leisure businessTokyo Tatemono Resort Co., Ltd.

Tokyo Tatemono Staffing Co., Ltd.

DOGS hotels have proven incredibly popular among wealthy
dog owners, driving the number of these hotels to eight. We
also operate nine Ofuro no Osama bathhouses mainly in theTokyo metropolitan area, where customers can freely enjoy
a dozen different baths and bedrock baths that offer healthand beauty benefits. They are used by many customers as
a place to communicate with family and friends, as well as aspace that supports the health of mind and body. In addition,
we operate 12 golf courses across Japan.

ESG Report

Senior businessAs lifestyles grow more diverse and consumers increasingly
choose to spend their money on experiences as opposed togoods, our leisure business aims to provide real experience
opportunities and offer services with great hospitality thatprovide the best relaxation and comfort for customers.
Focusing on the boom of pet tourism of late, the pet-friendly
Regina Resort hotels feature facilities and services on a parwith luxury hotels, while allowing guests to be accompaniedby their dogs in all rooms and all areas. Regina Resort with

Segment Information

We entered the child care business in 2016 in light of mounting needs
for child care services accompanying women’s increased participationin the workforce and the rise 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 toachieve smooth growth in Ohayo Child Care facility numbers, opening 14
facilities in just four years. In April 2020, we opened the Sekimachi-Minami
After-School, the first school-aged child care center of Tokyo Tatemono
Kids. We constantly open child care and school-aged child care centers.

Medium-Term Business Plan

Hisatoshi Kato

To meet the growing demand for the housing for the elderly amid
declining birth rate and aging population, we develop and operate
serviced residences for the elderly and fee-based nursing homes underthe brand name Grapes by using our high quality residential development
expertise acquired over many years of experience with the Brillia brandcondominiums.
We acquired a nursing care service dispatch company in 2017 andestablished a system to constantly provide services by enhancing thehiring function.

FeatureDirector and Executive Managing
Officer
Division Director of Senior and Child
Care Business Divisionand Leisure Business Division

As the work style reform is advancing and the importance of worklife balance is growing, the senior and child care business and theleisure business are becoming more significant sectors that support
and occasionally enrich the lives of people.
In the senior and child care business, we are developing housing
for seniors by using our housing expertise cultivated to date andprovide a temporary staffing service for personnel who work there.
We are also developing and operating child care facilities. The
birthrate is declining while the aging population is growing, and thenumber of working woman’s households and two-parent working
households are increasing. Amid growing social needs, we provide
an environment where people can live a quality rich life.
In the leisure business, we are engaged in a wide variety ofbusinesses, such as the development and operation of pet-friendly
hotels, operation of golf courses, and development and operationof public baths and spas. Focusing on diversifying lifestyles and therediscovered value of real experience, we provide services withgreat hospitality that can be provided only by us.
In addition, the synergy effect between these businesses andother businesses is strong. We have a broad range of businesses
and they are the foundation for our strength. They provide us withnew development opportunities, such as a complex development
consisting of condominiums and child care facility.
We aim to contribute to solving social issues while steadily
accumulating proper profits by responding to radically changing
social circumstances and customer needs agilely.

Seizing profit opportunities by creating synergies with other businesses
certified day care center, stores, and community center.
We participate in the planning and operation of the project.
We seized the development
opportunity since wehave experience with awide variety of real estate
projects, including Senior,child care, and resort
businesses.
Nonoaoyama Building

40
TOKYO TATEMONO GROUP Integrated Report 2020

Data

We seize new profit opportunities and contribute torevitalizing local communities and increasing the allure of
the areas by developing hard and soft services that suit avariety of lifestyles, in addition to the office and housingbuildings.
The Kita Aoyama 3-Chome Urban Development Project (thebuilding has been named Nonoaoyama Building) completed
in May 2020 is a 25-story complex facility that houses rental
apartment units, serviced housing units for the elderly,

Ofuro no Osama Ooimachi

Regina Resort Kyu-Karuizawa

Kawaguchiko Country Club

41
TOKYO TATEMONO GROUP Integrated Report 2020

Real estate fund businessBusiness description

The Tokyo Tatemono Group has established overseas
subsidiaries in Shanghai and Singapore, and we areadvancing condominium operations with major Chinese
developer China Vanke Co., Ltd., as well as development
projects in emerging ASEAN countries with substantial
growth potential.

We provide various real estate investment products
offered through Japan Prime Realty Investment
Corporation (listed REIT) and Tokyo Tatemono Private REIT,
Inc., as well as through private funds, and the specified
joint real estate venture product Invest-Plus series for abroad range of investors from institutional investors andpension funds to individual investors.
Kawasaki Dice

Risk

● Intensified competition to acquire real estate hanging fund-raising environment●C

Advantage

Future strategy

 eize opportunities to acquire real estate and maximize the real estate value by utilizing●Sthe expertise of the group upport for the growth of REITs and funds by increasing the sales of properties to investors●S● Increase profit opportunities by increasing the group’s AUM

Segment Information

Future strategy● Collaborate with prominent developers that are knowledgeable about the business practices andmarkets of their respective countries● Develop chiefly in China and other countries where we have an existing footprint. Dispatch
employees to locations of operation, and practice rigorous risk management● Make the investment in rental apartment building business featuring relatively short businesscycles and few operating environment risks● Increased real estate investment needs● Increased number of investment asset types

Business
environment● Changes in economic and political conditions and tightening of real estate regulations● Strong development track record and relationship for more than 15 years with major
Chinese developer China Vanke● Wealth of real estate development expertise and high-quality condominium development
experience accumulated in Japan

Opportunity

Medium-Term Business Plan

● Rise in middle-income and wealthy individuals due to strong economic growth in Asian
countries
Opportunity
Business● Higher number of companies seeking cooperation with Japan and increased government
environment
support for incorporating foreign capital

Advantage

FeatureBusiness description

79 Robinson Road (CPF Building Redevelopment Project)

Risk

Value Creation

Overseas businessGroup Companies

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

Tokyo Tatemono Asia Pte. Ltd

Shenyang Tomorrow Square Project

Yinchuan Jinfeng Project

Qingdao Project

Xuzhou Qiaohu Project
Xuzhou Chengbei Project
Jiaxing Tongxiang Project

Yangzhou-North Project
Yangzhou-South Project
Yangzhou-East Project
Yangzhou-Chengxi Project

Former Site of Yangon Military Museum
Redevelopment Project
Sathorn 12 Project
Sukhumvit 26 Project
Sukhumvit 38 Project
CPF Building Redevelopment ProjectIncreasing group profit opportunities by strengthening the REIT and fund businessMedium-term business plan key strategy (4)We will expand our asset portfolio by using our realestate appraisal expertise to acquire promising properties
while improving the quality of this portfolio throughstrategic asset replacements. At the same time, we willcontribute to seizing group profit opportunities for theasset management, property management, and building
management by increasing the sales of properties to
REITs and funds to grow the group’s AUM.

● Japan Prime Realty Investment Corporation
Investment assets: office buildings, urban commercial
facilities, hotels
Total acquisition price (as of end of 2019)¥439.5 billion
Appraisal value (as of end of 2019)¥522.6 billion● Tokyo Tatemono Private REIT, Inc.
Investment assets: office buildings, commercial
facilities, rental apartment buildings, and other realestate properties
Total acquisition price (as of end of April 2020)¥60.5 billion
Appraisal value (as of end of April 2020)¥63.9 billion

Dharmawangsa Project
Loggia Project

42
TOKYO TATEMONO GROUP Integrated Report 2020

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TOKYO TATEMONO GROUP Integrated Report 2020

Data

In the overseas business, we have moved forward withprojects through partnership with local major real estatedevelopers and have constantly carried out activities
through risk control by employees dispatched to locationsof operation.
We have been involved in the development ofcondominium operations in China with major local
developer China Vanke Co., Ltd. for more than 15
years. We will continue to invest in cities that featuresolid demand by determining business confidence andidentifying demand for each city.

Medium-term business plan key strategy (5)Tokyo Realty Investment Management, Inc.
ESG Report

Seize business opportunities through collaboration with leading local partners

Tokyo Tatemono Investment Advisors Co., Ltd.

ESG Report

We have provided activity details P.15 to P.30 in Sustainability Report 2020.

System for Environmental Initiatives
The Tokyo Tatemono Group formulated the Group
Environmental Policy, which is a policy that serves as
the foundation for management structure designed tosuit the respective business attributes of our Office
Buildings Business. This business consists of building
development, operation and management, and our

Initiatives Supporting Environmental Measures through Businesshousing development business, which includes theBrillia brand. Other businesses and group companies
engage in environmentally friendly business underenvironmental guidelines established in line with theGroup Environmental Policy.

◯ Creating a pleasant city and living with greeneryWe will create a rich and comfortable environment for the earth and people by utilizing the strength of greenery as much as possible
with consideration to biodiversity.
We will actively implement environmentally friendly technologies and ideas into our products and services to lead the community inbuilding a low-carbon city.

◯ 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 to creatinga recycling-oriented society.

◯ Developing employees with high environmental awarenessExpressing Support for TCFD
We determined to express support for the Task Force on
Climate-related Financial Disclosures (TCFD) in the firstsustainability committee meeting held in May 2020 andsigned up to TCFD in June.
Based on understanding of opportunities and risks ofclimate change for our business, we will perform scenario
analysis and disclose
information.

We will comply with laws related to the environment and educate and raise the awareness of our employees about theEstablished January 2011environment.

■ External Evaluation (for our environmental activities)

Tokyo Tatemono actively acquires various environmentrelated certifications to highlight the environmental
friendliness of our buildings and housing from an external
perspective. We also strive to confirm the progress of
our activities and use the evaluation results for our future
activities.

CASBEE *2 Buildings
S RankHareza Tower
DBJ GB *3

BELS *4

Framework, which complies with the four requirements
defined in the Green Bond Principles and Green Loan
Principles (use of procured funds, project evaluation andselection process, management of procured funds, andreporting).

The term green finance refers to bonds (green bonds)
and loans (green loans) used to procure funds for special
use in environmental measures such as global warming
countermeasures and renewable energy.
Tokyo Tatemono has established the Green FinanceTokyo Square Garden
Otemachi Tower
Nakano Central Park
South

★★★
★★

Hareza Tower

The 50 billion yen hybrid bonds (green bonds) issued by Tokyo

SMART ISESAKI
Brillia ist Tower Kachidoki
★★
★★

★★★

Otemachi Tower

Tokyo Tatemono
Nihonbashi Building

Hareza Tower

Awarded the ESG Finance Award Japan (Silver)
Reasons for Presenting Tokyo Tatemono with the ESG FinanceTatemono in March 2019 were awarded the Minister of theAward Japan

Environment Award (Silver Award) in the bonds category of the・Issued Japan's first hybrid bond for the highest level of green

Ministry of the Environment ESG Finance Award Japan.
This award was created to evaluate and commend investors★★

Empire Buildingbuildings in Japan・Ensured high transparency by implementing measures in line

and financial institutions who make outstanding contributions
to the environment and society by engaging in ESG finance,with CBI (Climate Bonds Initiative) standards
・Acquired target assets of superior rankings in green building

green projects, or similar initiatives. Recognition includes
ABINC Certification *corporate initiatives that have a positive impact on corporate

6

ZEB *5
ZEB
ready

Hareza Tower(Association for Business
Innovation in harmony with Nature
and Community® Certification)

Otemachi Tower

SEGES Certification *7(Urban Oasis)

Tokyo Square Garden

certifications
・Large-scale financing on the order of 50 billion yen

value and the environment by incorporating key environmentrelated opportunities and risks into management strategy forthe purpose of increasing corporate value.

Otemachi Tower
Data*1 GRESB: Global Real Estate Sustainability Benchmark.An ESG benchmark specialized in real estate, established by a European pension www.gresb.com/*2 CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a method for evaluating and grading the environmental performance of structures*3 DBJ GB (DBJ Green Building Certification) is a certification system established by the Development Bank of Japan (DBJ) in April 2011 to support initiatives for environmental and social
awareness of real estate*4 BELS (Building-housing Energy-efficiency Labeling System) is a guideline established by the Ministry of Land, Infrastructure, Transport and Tourism to properly evaluate and display theenergy saving performance of non-residential buildings*5 ZEB (Net Zero Energy Building) is a building that has targeted a net-zero balance of annual primary energy consumption*6 ABINC Certification is a third-party evaluation and certification system for biodiversity conservation efforts, using the Japan Business Initiative for Biodiversity-developed Association for
Business Innovation in harmony with Nature and Community®, Certification Guideline, and the Land Use Score Card as evaluation standards*7 SEGES is the Social and Environmental Green Evaluation System

44
TOKYO TATEMONO GROUP Integrated Report 2020

ESG Report

Receiving High Honors from the GRESB Real Estate
Assessment
Tokyo Tatemono has received the Green Star award, thehighest from the GRESB*1 Real Estate Assessment, forthe fifth consecutive year. This assessment is a benchmark
evaluating ESG (environmental, social, governance) initiatives
in the real estate sector. The GRESB has also awarded Tokyo
Tatemono with the highest
5 Star Rating for the third
consecutive year. The GRESB
Rating system, implemented in2016, scores reporting entities
relative to global performance.

Externally Certified Properties

Segment Information■ Green FinanceMedium-Term Business Plan

◯ Climate change prevention that leads the community

Tokyo Tatemono. As of the end of FY2019, 89% of ouroffice buildings have completed or are in the process of
converting to LEDs.
As a result, as of the end of FY2019, the greenhouse gas
emissions averaged over five years decreased by 4.8%,
even though this fiscal year coincided with new openingof power-hungry commercial facilities and hotels.

Signatories to the Paris Agreement agree to keep the
global average temperature rise below 2̊C compared to
the Industrial Revolution, requiring efforts to achieve a
low-carbon society. The real estate industry as a whole
and Tokyo Tatemono must strive to reduce greenhousegases in real estate holdings and business activities.
Among all Tokyo Tatemono business activities, theOffice Buildings Business, which operates and manages
commercial office buildings, uses the most energy.
Reducing the amount of energy used in the Office
Buildings Business results in a significant reduction of
total Tokyo Tatemono greenhouse gas emissions.
Moreover, we have set a 1% annual reduction target
averaged over five years as a quantitative indicator in theform of a power consumption per floor area unit to reducegreenhouse gas emissions.
To reduce greenhouse gas emissions, we are deploying
high-efficiency air conditioning equipment and LED
lighting equipment in existing office buildings owned by

FeatureGroup Environmental Policy■ Responding to Climate Change

Value Creation

Environment: Activity Highlights

Award Ceremony for the ESG Finance Award Japan
Hitoshi Nomura, Representative Director, President
and CEO (L)Shinjiro Koizumi, Minister of the Environment (R)45TOKYO TATEMONO GROUP Integrated Report 2020

ESG Report

The details on the activities are reported on pages 31 to 65 of the Sustainability Report 2020.

Value Creation

Society: Activity Highlights
Work-Life Balance
Implementing Measures to Strengthen Human Resources
Looking Forward to the Future

Akira Izumi

Diversity & Inclusion

Human Resources Development
experience in their first ten years of employment.
In addition, we have established self-edification programs
and support systems to aid employees in acquiringcertifications. These are to help employees enjoy
independent learning at all stages of employment. We
also offer support for learning foreign languages, as well
as for dispatching employees to overseas training inconsideration of global business expansion.

We pursue the creation of an environment in which
diverse human resources are motivated and dedicated intheir work, acting freely without obstacles. The successful
activities of our diverse talent will drive services that meetthe level of sophistication and diversification demandedby our own customers. We support women taking activeroles, encouraging women to work with ambition and fully
realize their individual potentials and personalities.
We have established leave systems for both womenand men employees to use in the case of pregnancy,
childbirth, child rearing, and nursing care, and have set up

a re-employment system for former employees. We also
provide a system to approve leave for up to three years
for employees whose spouses have been transferredoverseas.

Ratio of Women

Ratio of Women

Employees

Managers

28.9%

5.0%
As of end of December 2019

Work-Style Innovation
specific measures for enhancing productivity, including useof external satellite offices and improving various ICT tools.
Recently we deployed the work from home system forall executives and employees to maintain and improve
productivity during the COVID-19 pandemic.

Tokyo Tatemono's Work-Style Innovation ImageTimeSavings

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

Joint Growth

Individual Growth and Happiness
GrowthHappiness

Personal relationships, selfactualization, social interactions
outside the company, wealth of
product knowledge

Maintain and improvehealth, work-life balance,
physical/mental refresh

More TimeWe support basic human rights as defined in theConstitution of Japan and the Universal Declarationof Human Rights. We also support international labor
standards set by the International Labor Organization (ILO)
and respect personalities and values as provided in ourCompliance Charter.
We also created the Tokyo Tatemono Group Compliance
Manual. The Compliance Manual helps ensure that all
persons engaged in work for the group comply with ourcode of conduct to respect human rights and prohibit
discrimination or harassment based on race, nationality,
creed, gender, sexual orientation, age, appearance,
disability, education, social status, or background. Ourcharter also calls for providing a comfortable work
environment and prohibiting child or forced labor in any
part of our supply chain.
To ensure that each and every employee has human rights
awareness, we also conduct compliance training, including
respect for human rights, for employees and managers as
appropriate. Due to our business characteristics to handle
real estate, we also provide ongoing training to ensure aproper understanding of human rights and discrimination
issues, as well as to ensure appropriate responses in our
activities, to prevent situations that could lead to humanrights violations.

Sharing Expertise Building IT/Other Infrastructure

46
TOKYO TATEMONO GROUP Integrated Report 2020

47
TOKYO TATEMONO GROUP Integrated Report 2020

Data

Strengthen
GrowthCapabilities

Corporate Growth

Respect for Human Rights
ESG Report

Tokyo Tatemono has set the goal of work-style innovation
to create more time through efficiency and other means,bringing about both corporate and individual growth, as wellas the happiness of the individual. Since 2018, we havebeen conducting remote work trials in an effort toward

Rapid Decision-Making

Segment Information■ Education and Training per Management Level
We strive to develop the skills of employees reflecting
our belief that employees are the foundation from whichsustainable corporate growth is built.
We offer training per management level from new
employees to executives. And to provide experienceand broader knowledge required for employees of acomprehensive real estate company, we rotate newgraduate hires among three departments to gain

■ Initiatives to Reduce Working Hours
We have been engaged in ongoing measures to prevent
overtime since 2008, and in 2010, we adopted a system
to shut down computers at the end of regular time. In
departments where long-working hours occur, we have
implemented a framework to address this issue by
requiring direct supervisors to report on improvement
measures and provide feedback to upper management.

Medium-Term Business Plan

Managing Officer

developing and hiring human resources withhigh expertise and those who can promote
digitization and globalization. Now that the world
has radically changed due to the COVID-19
pandemic, there is growing importance to build
reliable relationships with diverse stakeholders
from a long-term perspective and continue toreceive a high evaluation in order to achievesustainable management.
Based on this understanding, we aim todevelop human resources and build thefoundation for management from a longterm perspective to meet the expectations
and requirements from diverse stakeholders
by promoting efforts to provide products
and services that adapt to social changes,
contribute to local communities through urban
development, and strengthen complianceincluding respect for human rights.

■ Mental Health Initiatives
Each Tokyo Tatemono employee has access to an online
service for annual stress self-checkups.
We also conduct self-care and line care training to promotemental health awareness. This training is mandatory for
new managers in particular. Currently, this training boasts
a 100% attendance rate. We also invite sports trainers toteach company-wide training for all new employees.

FeatureDirector and Executive

The Tokyo Tatemono Group sees humanresources as the source of corporate value
creation and realize sustainable growth, and as
an important foundation for management.
As one of the most important management
issues, we will strengthen human resources tosecure and develop human resources who canlead the next generation in order to achieve
our long-term vision and continued growth
thereafter. As part of our efforts to create anenvironment where each and every employee
can maximize their ability, we will further
promote work-style innovation, including
remote work, to improve productivity, and wewill continue to promote health managementand diversity.
In order to adapt to radical changes inthe business environment and maintaincompetitiveness, we will also focus on■ Health Management Initiatives
We see the mental and physical health of our executives
and employees as the source of sustainable corporate
growth and actively promote activities for each and every
person to maintain and improve their health.
In March 2020, Tokyo Tatemono and our two groupcompanies, E-State Online Co., Ltd. and Tokyo Fudosan
Kanri Co., Ltd., were certified as 2020 Certified Healthand Productivity Management Organization Recognition
Program. Tokyo Fudosan Kanri Co., Ltd was certified as
one of the top 500 companies (White 500) for the firsttime.

ESG Report

What roles are required of external directors?

Data――― What is the ideal state of the board of directors for sustainable growth?
Makio Tanehashi, Chairman of the Board of Directors, and Yoshimitsu Onji, external director, talked about
the efforts made so far in the Tokyo Tatemono Group's operations of the Board of Directors, as well as thechallenges and expectations for the Group moving forward.

48
TOKYO TATEMONO GROUP Integrated Report 2020

ESG Report

Dialogue: Chairman Tanehashi and External Director Onji

Segment Information

External Director

Medium-Term Business Plan

Yoshimitsu
Onji

Representative
Director andChairman[Chairman of theBoard of Directors]

FeatureMakio
Tanehashi

Tanehashi: Tokyo Tatemono is a company with an Audit
and Supervisory Board, with 16 directors and Audit andSupervisory Board members combined. Of those, six are
external officers; these officers are asked to possess a
wealth of experience and knowledge in a variety of fields.
As the Chairman of the Board of Directors, what I wantfrom external directors is for them to provide us with theirevaluation standards and their opinions from their vantage
point as external stakeholders. This is because we are inan era where we must be constantly question the state ofour relationships with each stakeholder and our position
as a company in society. Therefore, I believe that this is an
important role for external directors, that they fulfill theirscreening function based on their respective evaluation
standards and check whether we are managing thebusiness properly.
My expectation is also that it will be of great service tous that we can utilize their wealth of experience andknowledge in our business judgment whilst simultaneously
monitoring the business. We on the inside tend to fall
into the habit of thinking about things as an extensionof the past. However, the times are changing so fastthat I think that there will be situations where businessjudgment based solely on past experience will not workout. Our external directors have a wealth of experienceand knowledge in their respective fields; however, they do
not simply speak out based on that individual experienceand knowledge, but offer their opinions in considerationof what the Group's business should be like. That's
something I'm extremely grateful for, and I know that
this has certainly helped improve the effectiveness of theBoard of Directors.
Onji: I believe that my role as a director is naturally
important in judging the pros and cons of an investment
and its appropriateness, including yields, from thestandpoint of monitoring executives. Beyond this,however, I believe that I am also tasked with keeping a
careful watch over whether these investments are alignedwith the Tokyo Tatemono Group's corporate philosophy
and management strategies as an independent external
director.
Tokyo Tatemono, with more than 120 years of history,
can be likened to a sort of wine cave that has built up
trust around the world over decades and decades. We

external directors swish the wine around in our mouth,
trying to scrutinize the vintage and identify whether there
are any grapes from other vineyards or any foreign objects
mixed in. In other words, we have to sense whether
an investment is firmly in adherence with the corporate
philosophy, and whether the choice made is one that is inline with the Tokyo Tatemono identity. For more than 20
years, I was involved with management of two companies
called Daiei and RECOF, though both are younger thanTokyo Tatemono. Because I have built a career that has
allowed me to detect any deviations in management
decisions, I think it's an important task I am given to handle
these decisions.
Tanehashi: After all, it is important to have a deeper
understanding of Tokyo Tatemono so that more rigorouschecking can be done to see if we have made the right
management decisions. Last year, in order to deepen
the understanding of our businesses and believing thatseeing the actual work done in those businesses would benecessary to do that, we invited all of our external directors
to join a business tour. It is my hope that they will also
be able to visit our new buildings to be completed in the
future, despite their busy schedules.
Onji: By touring the actual properties, I was able toexperience the high quality unique to the Tokyo TatemonoGroup and gain a deeper understanding of what Tokyo
Tatemono is trying to do. I imagine the content of the
discussions had at the Board of Directors will also change
going forward.
In addition, these business tours and regular discussions
at Board of Directors meetings have given me the sensethat Tokyo Tatemono has a serious and honest corporate
culture, and that it is a company that can grow sustainably,
like climbing a staircase. I am of course checking to makesure that there are no falsifications made in order to stayahead of the competition, and that the wrong decisions
aren't being made because of being stuck in the past;
however, I currently have no such worries about the Group.
Tanehashi: When factors such as excessive awarenessof competition and being stuck in the past come in, theconsciousness drifts somewhere away from the realessence of the work, leading to wrong decision-making.
Fortunately, I don't think this is such a situation faced by
the Group. Even in advancing our business, I think it'sunderstood that we don't talk about chasing scale, butinstead emphasize equality.

Value Creation

Governance: Special Edition

49
TOKYO TATEMONO GROUP Integrated Report 2020and management strategies of theTokyo Tatemono Group n future challenges and expectations forOsustainable growth
Tanehashi: While the Group has continued to growsteadily, the number of Group companies is increasing,
and we recognize that Group governance is an issue
that requires further attention in future management.
When considering the optimal allocation of resources
for the entire Group, it is necessary to have a common
measure applied to the Group as a whole. In addition, inorder for the Group as a whole to move toward growth,
it is necessary to have policies for the direction in whichbusinesses will be executed; I would like to move forwardwith both of these aspects.
Onji: I believe that the best state is one in whichorganization follows strategy. A total, perfect unification
may be challenging with variations in management cycles
and business timelines per business and/or company, but
if we're able to have a shared philosophy across the entire
Group and ensure that is firmly spread through Group
companies, this will no doubt lead to increased motivation
among employees.
In order to respond to social changes, it will be necessary
to fine-tune strategies in response to the current spreadof COVID-19. For example, while it is possible that the
number of seats within offices may decrease as workfrom-home grows, I think there are a number of people
who will not have enough space to work in their own
homes. It is possible that the required functionalities andfloor spaces will change significantly for both offices andresidences in the future. Moreover, we are already seeing
greater use of drones and other technologies; there is apossibility that robots will manage condominiums in the
future. In the future, it will likely be necessary for the
Board of Directors to hold discussions based on thesesocial changes and technological innovations.

Tanehashi: Experiencing the current situation, I think
many people have seen for themselves that there arejobs for which telecommuting increases productivity, andthere are those for which it doesn't. I think face-to-facecommunication is indispensable for exploring new ideasthat lead to innovation, so I think it is necessary to provide
offices that capture the dual needs of added value creationand efficiency. By pursuing a new kind of office called for
as a result of societal changes, I believe we can provide
our customers with value that is unique to the Group,and I take pride in the fact that our Group employees arehighly sensitive to this fact.
My sense is also that impact from the spread of COVID-19
is changing how we relate with our stakeholders. The
vision we have put forth of Becoming a Next-Generation
Developer is about achieving a high level of both solvingsocial issues and achieving corporate growth. As thesubtitle of that vision is Being a Good Company for
All Stakeholders, we place great importance on theperspective of stakeholders. Going forward, when weare faced with the challenge of how to deal with socialchanges, if we do not proceed firmly toward our guiding
star of being a good company for stakeholders we could
lose our way. That said, there's no intent to behave in a
way that pleases everyone all the time; what I would liketo think about is how we can delve into our core workso that our stakeholders can appreciate us. I would liketo ask all external directors, as representatives of our
stakeholders, to exercise their screening functions andprovide their opinions from their high vantage point.
Onji: I want the Tokyo Tatemono Group to shoot forproviding the best quality out there, consistent with a highquality that responds to changes in lifestyles around theworld, no matter the business. I have great expectations
that such a company can become a next-generation
developer.

business judgment
50
TOKYO TATEMONO GROUP Integrated Report 2020

51
TOKYO TATEMONO GROUP Integrated Report 2020

Dataof experience and knowledge inalign with the corporate philosophy

ESG Reportutilize external directors' wealthdeterminations are being made that

Segment Informationof great service to be able toI will carefully judge whether or not

Medium-Term Business Plan

My expectation is that it will be

As an independent external director,

FeatureTanehashi: We carry out an annual questionnaire survey
with all directors and Audit and Supervisory Board members
in order to further improve the effectiveness of the Board of
Directors. The opinion we found from this survey was that
there should be more time for discussions on medium tolong-term management policies and business strategies. Last
year, in light of this point, we were able to take in opinions
and have discussions within the Board of Directors at the
exploratory stages ahead of formulation of our long-term
vision and Medium-term Business Plan. This allowed us toproceed while making the necessary course corrections. We
also increased opportunities for discussions regarding crossshareholding policies and ESG management, including talks
about the SDGs. We've become able to have deliberations on
management at a higher level and take in a variety of opinions,creating what I see as an extremely informative place ofintellectual chemical reactions as we all engage in discussions.
Onji: Deliberation of individual investments is also
extremely important. However, in addition to that, I also
made a recommendation that the Board of Directors
should have more discussions about matters related tothe core of management from a medium to long-term
perspective. The Chairman has taken the lead in reforming
the Board of Directors, increasing the number of agenda
items regarding medium to long-term policies and making
the Board a place of active discussion where external
directors can also share opinions from their respective
positions. I feel we are going in a very good direction.
Tanehashi: Aside from that, in the interest of organizing
points to be made regarding deliberation items, we havealso tried to make it as clear as possible in our agenda
item explanation materials what the bases and processes
are for the decisions made by executive officers at theManagement Meeting. The particularities of real estatedevelopment mean that what we base our businessjudgments on will be different from general corporations.
Aside from that, our development projects are often longterm ones spanning five or ten years, and we see theinvestment risk in these slightly differently than we would

for a general capital investment. I think it is importantto have a clear understanding of the project in advance,
supported by clear information listed in materials, andto have discussions based on this. I also think it's now
understood how the executive officers recognize risks at
the Management Meeting.
Onji: In the past, there have been times when we needed
to ask questions to understand an issue before proceedingwith exchanging opinions and having debates, but nomatter how much time we had, it wouldn't be enough. By
including detailed information in the materials, we became
able to have larger discussions rather than make the finer
points. I also feel that our monitoring function has gotten
stronger, as I can check on the deliberation processes at
the Management Meeting.
Looking ahead, we are coming into an era where
advanced technologies such as robotics and informationand communication systems will be essential even in thereal estate industry as seen in the term "ReTech" (Real
Estate Tech). As a result, in order to further improve theeffectiveness of the Board of Directors, I feel that it isnecessary to welcome experts in this area as external
directors or advisors.
Tanehashi: I agree. The landscape is changing each andevery year as technologies evolve. Since last year, wehave had one woman join us as an external Audit andSupervisory Board Member, and I have felt that as thediversity of our Board of Directors increases, so too is thevigor in our discussions. Looking ahead to major changes
in society, I hope that people with diverse attributes andcareers will continue to participate in management.
In addition, one thing that I would like to work on going
forward is making it so that external directors canparticipate in the Management Meeting and see thediscussion process firsthand. Also, I think there is room
to improve, including establishing opportunities to meetwith directors and general managers promoting ourbusinesses, as well as expanding training opportunities
for directors. Just like this opportunity, I would like to alsofind more places to have discussions with representative
directors and external directors, and I'd like to proactively
work to review how we operate the Board of Directors.

Value Creation

 aking further improvements toM
the effectiveness of the Board of Directors

ESG Report(As of April 1, 2020)

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Feature１

Value Creation

Governance: Board of Directors

Medium-Term Business Plan

Position

Name

Areas of responsibility and important concurrent positions

President and Chief
Hitoshi Nomura
Executive Officer

Senior Managing
Executive Officer

Directors
Representative Director
Chairman of the Board
March 2019 Current position
Number of Shares Owned
11,545 shares

7 Hisatoshi Kato

2 Hitoshi Nomura

3 Masami Kamo

Representative Director
President and Chief
Executive Officer

Directors
Senior Managing Executive
OfficerJanuary 2017 Current position
Number of Shares Owned
12,200 shares

January 2020 Current position
Number of Shares Owned
21,000 shares

8 Hideshi Akita

Directors
Managing Executive Officer

Directors
Managing Executive Officer

January 2020 Current position
Number of Shares Owned
6,039 shares

March 2019 Current position
Number of Shares Owned
4,100 shares

4 Kengo Fukui
Directors
Senior Managing Executive
OfficerJanuary 2019 Current position
Number of Shares Owned
30,100 shares

5 Katsuhito Ozawa
Directors
Managing Executive
OfficerJanuary 2020 Current position
Number of Shares Owned
9,500 shares

10 Yoshiyuki Imai

11 Yoshimitsu Onji

External Director

External Director

External Director

March 2019 Current position
Number of Shares Owned
1,900 shares

March 2017 Current position
Number of Shares Owned ―March 2018 Current position
Number of Shares Owned ―9 Shuichi Hattori

14 Takashi Yoshino

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

Katsuhito Ozawa

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

Directors
Managing Executive Officer

Managing
Executive Officer

Akira Izumi

Responsible for Personnel Department, Corporate Planning Department, General Affairs
Department, Market Research Department, Solution Service Department, ICT and Digital
Strategy Promotion Department

January 2020 Current position
Number of Shares Owned
3,400 shares

Hisatoshi Kato

Division Director of Senior and Child Care Business Division and Leisure Business Division

Hideshi Akita

Division Director of Residence Division

Masami Tashiro

General Manager of Project Development Department

External Director

Satoshi Eida

President and CEO of Tokyo Tatemono Amenity Support Co.,Ltd.

March 2019 Current position
Number of Shares Owned ―Takeshi Jinbo

Vice Division Director of Residence Division and General Manager of Acquisitions
Department

Shinjiro Kobayashi

General Manager of Urban Development Department

12 Mitsuhiro Nagahama

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

Nobuyoshi Takahashi Department; Quality Management Office of Project Management (Kansai); and General
Manager of Customer Service Department

15 Takao Yamaguchi

Audit and Supervisory Board
MemberAudit and Supervisory Board
MemberAudit and Supervisory Board
Member (Independent)

March 2017 Current position
Number of Shares Owned
1,700 shares

March 2019 Current position
Number of Shares Owned
200 shares

March 2016 Current position
Number of Shares Owned
1,500 shares

52
TOKYO TATEMONO GROUP Integrated Report 2020

16 Sayaka Hieda
Audit and Supervisory
Board Member(Independent)

Masayuki Okubo

General Manager of Business Planning Department

Kazuki Sugise

President and CEO of Prime Place Co.,Ltd.

Yusuke Mishima

General Manager of Accounting Department

Katsuhiko Tamai

President and CEO of Nihon Parking Corporation

March 2018 Current position
Number of Shares Owned ―53
TOKYO TATEMONO GROUP Integrated Report 2020

Data

13 Kouji Kawakubo

Kengo Fukui

6 Akira Izumi

Managing Officers

Audit and Supervisory Board Members

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

ESG Report１Makio Tanehashi

Masami Kamo

Segment Information

Managing Officers

ESG Report

Policy and Concept of Corporate Governance

Executive Officers
activities accurately.
The code of conduct in our corporate philosophy espousesa spirit of compliance with the law. In this light, we haveestablished a system for compliance as we strive to improve
compliance awareness and prevent the occurrence of illegal
activities and misconduct.

Tokyo Tatemono strives to achieve optimal corporate
governance while ensuring the soundness and transparencyof management and enhancing its effectiveness in an effort
to increase the corporate value. In addition, we actively
and appropriately disclose information to shareholders andother stakeholders to ensure they understand our businessAppoint/Dismiss

Appoint/Dismiss

Coordinate

Appoint/Dismiss

Audit

Internal Control Committee

Dismiss

Financial
Statement Audit

Audit and Supervisory Board(Audit and Supervisory Board Members)

President and Chief Executive Officer
Group Management MeetingGroup Management Meeting

The committee discusses and monitors internal control risks (compliance risks and internal Management risks) and reports risks
to the board of directors, the audit and supervisory board, and others as necessary.

Sustainability Committee
The committee monitors ESG targets and their progress and evaluates achievements to advance sustainability measures. In
addition, important matters regarding sustainability measures are also discussed in group management meetings and board
meetings.

Board meeting related data
Item

Coordinate

Audit

Group Companies

Tokyo TatemonoTokyo Tatemono Group

Audit and Supervisory Board

We have 12 directors, four of whom are external directors.
In principle, we hold regular board of director meetings oncea month and other extraordinary meetings as necessary.
In these meetings, our directors make decisions about
important matters related to business execution and monitor
the execution of the business activities of the directors.
Auditors attend board meetings and offer opinions asnecessary.(Numbers are as of January 2020)

The audit and supervisory board consists of four auditors;
two are full-time auditors and the other two are external
auditors. In principle, the meeting is held once a month onan ad-hoc basis as needed. The meeting was held 15 times
in FY2019.

54
TOKYO TATEMONO GROUP Integrated Report 2020

2016

2017

2018

2019

Times

13

13

12

13

15

Number of directors

Director(s)

9

9

11

12

12

Number of executive directors

Director(s)

6

6

7

7

7

Number of non-executive directors (excluding
independent external directors)

Director(s)

0

0

1

1

1

Number of independent external directors

Director(s)

3

3

3

4

4

Average board meeting attendance

％

94.6

100

100

100

99

Average tenure of directors (including independent
external directors)

Years

6.7 (March)

5.3 (March)

5.0 (March)

5.8 (March)

3.8 (March)◯ Data collection period: January to December of each year. Data is as of December of each year unless stated otherwise.
◯ Scope of aggregation: Tokyo Tatemono

Data

Board of Directors

2015

ESG Report

Internal Audit Depertment
Headquarters/Divisions

Unit

Number of board meetings

Sustainability Committee

Segment Information

ReportAppoint/Dismiss

Financial Statement Audit

ReportBoard of Directors (Directors)

Chairman: Hitoshi Nomura (Representative Director andPresident)
Members: Makio Tanehashi (Representative Director andChairman), Hitoshi Nomura (Representative
Director and President), Akira Izumi (Director),
Yoshiyuki Imai (External Director), Yoshimitsu
Onji (External Director), Shuichi Hattori (External
Director), Mitsuhiro Nagahama (External Director)

Internal Control Committee

General Meeting of Shareholders

Advise

The committee selects candidates for directors andrepresentative director and recommends remunerationof the directors (excluding external directors). Committee
members are appointed from among directors; however,more than half of the seven members are external directors
to use their knowledge and advice and ensure objectivity
and transparency of procedures.

The meeting consists of executive officers with specific responsibilities and is held to discuss matters important to groupmanagement. Full-time auditors attend group board meetings to understand the deliberations and offer opinions as necessary.

Corporate Governance Structure

Nomination andRemuneration Advisory
Committee

Nomination and Remuneration Advisory Committee

Medium-Term Business Plan

Further, we appoint external directors and external auditors
to strengthen the supervision and ensure transparencyof management. We believe that we have established astructure that fully exercises the monitoring and supervisory
functions for management and directors.
We have also established a Group Management Meeting tofacilitate efficient and sound group management.

We have adopted an executive officer system to energize our board of directors and speed up decision-making through aseparation of management functions and business execution functions.

FeatureCorporate Governance Structure
Tokyo Tatemono has adopted an audit and supervisoryboard system as our corporate governance systemand established a board of directors and an audit andsupervisory board.
Our executive officer system clarifies the separation offunctions between management and business execution.
This system strengthens our management and supervisory
functions and business execution functions.

Value Creation

Governance: Structure and Initiatives

55
TOKYO TATEMONO GROUP Integrated Report 2020

Evaluation of the Effectiveness of the Board of Directors

representative director and appointment of director andauditor candidates are discussed in a meeting of theNomination and Remuneration Advisory Committee
consisting of mainly independent external directors andresolved in a board meeting.

We comprehensively evaluate the personality, ability,
knowledge, and experience of persons and selectthose who have qualities to contribute to increasing thelong- and medium-term corporate value of the group as
management members, and appoint them as candidates
for director and auditor. Selection and dismissal of

Remuneration of Directors and Auditors (Fiscal Year Ended December 2019)

Fixed Remuneration(Million Yen)

Performance-BasedRemuneration (Million Yen)

Stock Remuneration(Million Yen)

Total
Remuneration(Million Yen)

10

258

183

33

475

Auditors (excluding External Auditors)

３

52

－

－

52

External Directors

9

40

－

－

40

Total

22

351

183

33

569

Ratio by Type of Remuneration
Performance-Based Remuneration

Stock Remuneration

Basic Remuneration

Short-Term Incentive

Medium- and Long-Term Incentive

Single-Fiscal-Year Performance-Linked

Stock-Based

Ratio to Total Renumeration (Approx.)

30 to 40%

5 to 10%–50 to 60%

*1 Based on a resolution of the 190th Ordinary General Meeting of Shareholders held on March 28, 2008
*2 Based on a resolution of the 195th Ordinary General Meeting of Shareholders held on March 28, 2013

56
TOKYO TATEMONO GROUP Integrated Report 2020

Number of meetings, length of meeting, explanation provided prior to meeting, explanatory materials, explanation
time, discussion time, and report content

Other

Support system, training

Evaluation Results and Future Actions
The evaluation results confirmed that the Board of Directors is sufficiently effective.
In addition, discussion of the survey results in a Board of Directors meeting confirmed the following matters.
〇 Matters whose Evaluation Improved from Last Year ufficient time was allocated to discussion about the business and financial strategies from a medium- and long-term
・S
perspective during the process of formulating the long-term vision and medium-term management plan.
 board member support system was enhanced by providing detailed explanation prior to meeting about the・A
implementation of a property viewing tour and other agenda items.
〇 Future Issues and Actions
 ry to make discussion more efficient and active by scrutinizing the details to be discussed and reported in the meeting to・Tmake it possible to allocate more time to discussion about the medium- and long-term management issues, management
policies, etc.

We acquire and hold stocks of other companies for
non-investment purposes (cross-shareholdings) when
we have determined that holding them will contributeto maintaining and increasing the medium- and longterm corporate value of our group by maintaining andstrengthening business relations with our business
partners.
We verify the appropriateness of holding individual crossshareholdings stocks from a perspective of whether
continuing holding them contributes to maintaining
and increasing the corporate value of our group. The
verification is performed by viewing the transaction
results and prospects of real estate transactions, joint
venture, construction/equipment transactions, andfinancial transactions, in addition to the dividend results.
We report the verification and disposal results in a Boardof Directors meeting at least once every year, and once

it is determined that holding such stocks does not havesignificance anymore according to the verification results,
we try to reduce them while considering the impact on
the stock market, etc.
In the medium-term management plan (FY2020-FY2024),
we will reduce the cross-shareholdings stocks in an effort
to increase the asset efficiency as part of efforts to review
the asset portfolio.

Number of Cross-Shareholdings Stocks and Balance
Sheet Total Amount (as of end of December 2019)
Number of
StocksBalance Sheet Total Amount(Million Yen)

Unlisted Stock

26

5,153

Stock other than Unlisted
Stock

48

92,231

57
TOKYO TATEMONO GROUP Integrated Report 2020

Data

Fixed Remuneration

Variability

Number, content, and monetary value of agenda items

Operation

Cross-Shareholdings

Total Amount by Type of Remuneration

Internal Directors

Positioning

AgendaESG Report

Numberof Eligible
Individuals

Ratio, number, and diversity of external directors

Segment Information

over the medium and long term. With the introductionof this system, directors and others now receive
compensation in three ways: fixed remuneration,
performance-based remuneration, and stock-based
remuneration. Stock remuneration (excluding external
directors) consists of a maximum 40,000 points per fiscal
year (equivalent to 40,000 shares).
Remuneration for auditors consists of basic remunerationaccording to status as full- or part-time. The amount of
remuneration is capped at ¥8 million per month (¥96
million per year).

Structure

Medium-Term Business Plan

Policy on Determining Remuneration Amount and its Calculation

Executive Category

Evaluation Process
A questionnaire survey was conducted for all directors and auditors. The responses were aggregated and analyzed, and theresults were shared in a Board of Directors meeting, where future issues and measures were discussed.
FeatureWe have established a system that enables full-time
auditors to attend important corporate meetings, including
board meetings and Group Management Meetings,
receive reports from our financial statement auditors,
directors, and employees of various departments asnecessary, and exchange opinions with these parties at
any time.

Fixed remuneration for directors is capped at ¥35 million
per month (¥420 million per year)*1. Performance-based
remuneration (excluding external directors) is capped
at 1% of consolidated recurring income and 2% of net
income attributable to owners of parent for the year prior
to the fiscal year in question*2.
In March 2018, we introduced a stock remuneration
system via stock benefit trust. The goal of this system
is to create a clear link between director compensationand the value of our corporate stock and to encourageawareness of contributions to increasing corporate value

We conduct a survey on the structure, agenda items, and operation of the Board of Directors once a year and evaluate theeffectiveness of the Board of Directors based on the results. Below is an overview of the effectiveness evaluation in FY2019.

Evaluation Items

Support System for External Directors and External Auditors
We provide explanations and information as necessary
through the Planning Division to support external directors
and external auditors. The Planning Division serves as asecretariat for the board of directors.
At the request of the audit and supervisory board, weassign personnel to serve as audit staff to encourage thesmooth execution of audit procedures.

Value Creation

Selection and Appointment of Directors and Auditors

ESG Report

ESG Report

Risk Management

Compliance Promotion

Basic Policy and Concept

Tokyo Tatemono Group Compliance Charter

charter is our pledge to society to promote corporate
activities that are committed to unwavering compliance.
The Tokyo Tatemono Group established an Internal Control
Committee as part of our system to promote compliance.
This committee discusses internal management risks,
including group compliance, fraud, and anti-corruption,
overseeing group compliance activities.

The Tokyo Tatemono Group strives to manage risks that
affect the group's business to achieve stable improvement
in corporate value.
We have established risk management regulations
and created a risk management system, by means ofwhich we monitor and control risks constantly to ensure

Compliance Promotion Structure

Risk Management Structure

Board of Directors

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

Audit and Supervisory Board

Internal Control Committee
ReportChair: President and CEO

Secretariat

engage in fair, sound corporate activities.

General Affairs Division◯ We act faithfully by thinking from the customers'
Corporate Planning Division

standpoint.
◯ We contribute to making society better throughInternal Audit Department

corporate activities.
◯ We respect the personalities and values ofeach other and maintain a comfortable working
environment.
Established June 2009

Compliance
Awareness Report
Activities

Receive
Reports

Internal
Audit

We have identified and classified risks (and integrated
risks that are combinations thereof) that may have asignificant impact on the Tokyo Tatemono Group business:
Investment risk, financial risk, business risk, and internal
control risk.
Integrated risks are managed by the Corporate
Planning Division, which is the division in charge of risk
management. Our Internal Control Committee, chaired byour president and CEO, deliberates and enacts measuresrelated to internal control risk (internal management risk

Divisions

Coordinate

Audit and Supervisory Board

Board of Directors

Audit

Deliberate and Report
Important Matters

Compliance Training

Risk
Management
DivisionGroup Management Meeting

Internal Control Committee

Chair: President and CEO
Secretariat: Corporate Planning Division

Committee Chair: President and CEO
Secretariat: General Affairs DivisionCorporate Planning Division

General Affairs Division

Risk Management Officer: General Manager,
Corporate Planning Division

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

ESG Report

In addition, we conducted joint training for new grouphires, held seminars for harassment prevention training
instructors (general manager level), sponsored seminars
on the appropriate use of alcohol, conducted training for
new Tokyo Tatemono employees, and provided leadershiptrainings for newly promoted individuals.
On the subject of legal and tax matters of high importanceto our business, we invite outside experts as lecturers
for seminars. These seminars cover the latest examplesof trials, tax reforms, and other information related tobusiness activities throughout the group.

Deliberate and Report
Important Matters

Segment Information

Risk Management StructureGroup Companies
Person Responsible forCompliance

Every year, the Tokyo Tatemono Group conducts
groupwide joint training via e-learning.
During 2019, approximately 4,000 managers andemployees across 15 companies completed training or
updated their understanding of revised laws. Training
topics included the appropriate use of alcohol, information
management (including anti-corruption initiatives andprevention of insider trading), and matters related to the
Building Lots and Buildings Transaction Business Law and
the Act on Prevention of Transfer of Criminal Proceeds(prevention of money laundering, etc.).

and compliance risk) as a subset of integrated risks.
The Group Management Meeting considers policies
related to general business risk.
Important matters related to these risks are reported
to the board of directors as necessary. The Audit andSupervisory Board is responsible for conducting audits
related to these risks.
We engage in detailed risk management through a seriesof processes that includes monitoring and improving thestatus of risk management operations.

Medium-Term Business Plan

◯ We adhere to laws, regulations, and other rules andReportconsistent risk management.
When developing our risk management system, we
referenced ISO31000 (international standard for risk
management) and JIS Q 31010 (Japanese standard forrisk management).
FeatureThe Tokyo Tatemono Group defines compliance ascomplying not only with laws and regulations, but alsowith social norms and corporate ethics. This approachbuilds a long-lasting relationship of trust with society andallows us to continue sound corporate activities.
In June 2009, the Tokyo Tatemono Group established ashared Compliance Charter for group companies. This

Value Creation

ComplianceIntegrated Risk
(Combination of business risk, investment risk, financial risk, and internal control risk)

Helpline

Risk Category

checking independently.
We take appropriate measures, implementing prompt
corrective actions and preventing the recurrence of any
acts in violation of compliance.
The Internal Control Committee convenes to consider
responses to the most serious cases.
In the spirit of the Whistleblower Protection Act, we
take appropriate measures to ensure the protection ofwhistleblowers.

58
TOKYO TATEMONO GROUP Integrated Report 2020

Business risk, investment risk, and financial risk

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

ReportMonitor and Improve
Division Offices

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

59
TOKYO TATEMONO GROUP Integrated Report 2020

Data

The Tokyo Tatemono Group established the Tokyo
Tatemono Group Helpline, which is a shared group
resource for employees to consult and report as a means
to prevent legal issues or fraud. This resource is available
to all group employees.
The reports and consultations received through thissystem are reported to the Tokyo Tatemono Internal Audit
Department, which reports directly to the president. The
Internal Audit Department investigates and conducts fact-DataFinancial Data

Unit

FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019Million yen

262,609198,274

166,943

194,161

220,026

237,049

260,012254,498

266,983

273,302

323,036

Operating income (loss)

Million yen

29,162

24,055(678)

30,89229,361

30,55934,43936,36344,757

46,76552,410Business income*1

Million yen

̶

̶

̶

̶

̶

̶

35,281

38,20646,44047,174

51,668Recurring income (loss)

Million yen

19,331

13,687(10,875)

21,741

21,95917,317

24,79630,63539,41642,03644,611

Profit (loss) attributable to owners of the parent

Million yen

6,345

6,316

(71,774)

10,243

10,121

82,944

16,35919,742

22,59927,277

29,796

Total assets

Million yen

969,492

927,925

898,017895,296

938,161

1,319,465

1,297,112

1,314,558

1,441,050

1,450,091*2

1,564,049

Net assets

Million yen

259,292

262,597

192,101

212,491

262,276

305,808

312,530

325,593353,419

356,578

384,211

Interest-bearing debt

Million yen

510,934

460,835

513,616

479,746434,763748,273

707,356

727,302814,032

857,117924,891

Value Creation

Key Financial and Non-Financial Data
Operating Results
Revenue from operations

FeatureFinancial Position

Cash FlowMillion yen

66,29359,7308,053

57,332

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

19,74824,096

Million yen(48,915)(1,464)(37,164)(15,385)

37,083

257,798(21,250)(53,024)(64,508)(63,577)(64,082)

Cash flows from financing activities

Million yen(18,487)(53,122)

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

9,005

77,99834,43848,000Net increase (decrease) in cash and cash
equivalents

Million yen(1,080)

4,828

11,982

6,586

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

7,794

Cash and cash equivalents at beginning of year

Million yen

16,07820,90632,88939,46652,27186,90747,21742,053

41,22731,70239,497
8.2

Financial Indicators
ROE

%

2.7

2.5

(32.5)

5.3

4.4

33.2

5.6

6.4

6.8

7.9

ROA

%

3.1

2.6

0.0

3.5

3.3

2.3

2.8

3.1

3.6

3.5

3.7

Equity capital ratio

%

26.2

27.6

20.6

22.9

26.7

21.7

23.2

24.2

23.9

24.0

24.0

Debt equity ratio

Times

2.0

1.8

2.8

2.3

1.7

2.6

2.3

2.3

2.4

2.5

2.5

Interest-bearing debt / EBITDA multiple

times

13.2

13.8

53.6

11.6

10.9

15.9

13.4

13.0

12.5

12.7

12.6

Profit (loss) per share

Yen

19.51

14.67

(166.67)

23.79

23.55

193.1275.91*3

91.00

104.17125.79141.59Net assets per share

Yen

590.82594.74429.46476.23583.11665.51

1,390.07*3

1,465.30

1,589.98

1,605.70

1,794.15

Annual dividend per share

Yen

10

8

0

5

5

6

20*3

Payout ratio

%

51.3

54.5

̶

21.0

21.2

3.1

Medium-Term Business Plan

Cash flows from operating activities
Cash flows from investing activities

Stock price information

Non-Financial Data (Social)(Tokyo Tatemono, Non-Consolidated)

30

35

41

28.8

27.8

29.0

Non-Financial Data (Environmental)*9(Tokyo Tatemono, Non-Consolidated)

Unit

Energy Consumption (Crude Oil
Equivalent)klIntensity figure
2019

26
28.6

2015

2016

2017

2018

2019

22,822

21,59222,083*23,895*24,165*2

Kl / thousand m

36.3

35.4

34.2

35.0

34.0

t-CO2

45,05944,62942,147*48,888*51,465*

Greenhouse Gas (GHG) Emissions

2015

2016

2017

2018

576

584

687

719

749

Scope 1

t-CO2

3,243

2,553

2,402*

3,300*

2,871*

%

20.5

21.1

21.1

23.8

24.8

Scope 2t-CO241,81642,07639,745*41,259*41,392*

Persons

281

295

339

350

360

Scope 3

%

2.1

2.7

3.2

4.6

5.0

Persons

15

14

19

22

20

Intensity figure (ex-Scope 3)

Ratio of Women New Hires

%

33.3

28.6

21.1

36.4

25.0

Ratio of Disabled Persons Hired*4

%

2.06

1.88

1.98*

1.87*

1.81*

Ratio of Employees Re-hired at Retirement

%

66.7

75.0

91.7

87.5

100

Turnover Rate(personal reasons)

%

2.2

1.4

1.4

2.6*

2.1*

Ratio of FT Women Employees
Managers
Ratio of Women Managers
New Hires

Percent of Employees Taking Health
Checkups*5
6

Avg. Number of Paid Leave Days Taken*
Total Days Lost Due to Absence*8

100

100

100*

100*

100*

Days

8.8

8.7

8.8*

9.9*

10.6*

Incidents

2

1

0*

1*

0*

Days

138

47

81*

137*

122*

*4 As of June in each year
*5 April through March of the following year
*6 Other leave systems such as summer leave and national holidays are also provided (days under these systems are not included in the above figures). April through March of the following year
(beginning in 2018)*7 Workplace Incidents: Accidents that occur during work that result in one or more days of absence*8 April through March of the following year (beginning in 2018)*9 April through March of the following year Figures marked with an asterisk(*) have been guaranteed by a third party

60
TOKYO TATEMONO GROUP Integrated Report 2020

̶

̶

̶

4,329*

7,202*

71.6

73.1

65.3

65.2

62.3

3

Thousand m

569

579

584*

654*

622*

m3/ m2

0.9

0.9

0.9

1.0

0.9

t

4,685

4,914

5,173*

4,945*

5,151*

t/ Thousandm2

7.9

8.6

8.6

8.3

8.5

t

̶

̶

3,395

3,202*

3,280*

Unit

2015

2016

2017

2018

2019

Number of Helpline Calls and Consultations

Incidents

28

15

44

59

56

Number of corruption/bribery cases uncovered

Incidents

0

0

0

0

0

Number of antitrust/anti-competitive behavior
cases uncovered

Incidents

0

0

0

0

0

Number of other compliance violations uncovered Incidents

0

0

0

0

0

Water Usage (Potable Water)
Intensity figure
Total waste emissions
Intensity figure
Recyclable Waste Emissions

Non-Financial Data (Governance)(Tokyo Tatemono, Non-Consolidated)*See P.55 for data related to our board of directors

61
TOKYO TATEMONO GROUP Integrated Report 2020

Data

Workplace Incidents*5,*7

%

t-CO2
t-CO2/Thousand m2

ESG Report

Unit
Persons

Full-time (FT) Employees

Segment Information*1 Business income = operating income + equity gains (losses) of affiliated companies. This is a profit indicator set in our medium-term management plan (FY2020-FY2024) reflecting overseas
business growth. For comparative purposes, we have disclosed figures from the fiscal year ended December 2015 onward.
*2 We have applied the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. beginning in the fiscal year ended December 2019. Figures for the fiscal year ended December
2018 reflect the retroactive application of this accounting standard.
*3 We implemented a one-for-two common share reverse stock split on July 1, 2015. The annual dividend per share for the fiscal year ended December 2015 is calculated assuming the reverse
stock split occurred at the beginning of the fiscal year ended December 2015.

26.3

Data

Consolidated Balance Sheet

Millions of yen

Assets

FY2019FY2018*Millions of yen

Liabilities

Current assets:

Value Creation

Financial Statements
FY2019FY2018*Current liabilities

Cash and deposits

31,71639,504

Short-term borrowings

65,925226,119

Commercial papers

33,00085,00011,876

13,179Real estate for sale104,221151,004

Current portion of bonds payable

15,00015,00011,193

11,482

Real estate for sale in progress

101,059

98,216

Accounts payable, trade

Real estate for development

78,157

88,104

Accrued income taxes

Other current assets
Allowance for doubtful accounts
Total current assets

26,36934,635(43)(45)

353,358

424,600

8,321

10

9

Provision for bonuses

929

903

Provision for directors’ bonuses

43

24

Provision for environmental measures̶3

Provision for loss on liquidation of subsidiaries and affiliates

̶

280

8,042

8,991

Deposits received under real estate specified Joint enterprise law
Other45,944

53,107

Total current liabilities

185,924409,242

Bonds payable

145,000

210,000

Long-term debt

594,449

385,932

Deferred tax liabilities

20,29926,650Non-current liabilities

Fixed assets
Property and equipment

27,277

27,187

53

88

Provision for directors’ retirement benefits

169

192

Provision for environmental measures30

26

Guarantee deposits received

75,24577,062Retirement benefit liabilities

11,477

12,09928,042

Deposits received under real estate specified Joint enterprise law

18,60015,091(16,501)(17,219)

Other

14,985

16,263

11,782

10,822

Total long-term liabilities

907,588

770,595

772,800

789,628

Total liabilities

1,093,512

1,179,837

106,083

110,745

Net assets

Goodwill

3,136

1,192

Other

1,196

1,137

Capital stock

92,451

92,451

110,416

113,076

Capital surplus

66,722

66,744Retained earnings

107,468

129,170

127,788

155,858(237)(10,232)

4,904

4,469

266,404

278,133

361,679

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

Buildings and structures (net amount)

225,265

214,312527,272

550,565

Construction in progress

8,479

13,928Other

28,284

Accumulated depreciation
Other, net

Land

Total property and equipment

Segment Information

Deferred tax liabilities for land revaluation
Provision for directors’ incentive plan trust

362,482

Buildings and structures

Medium-Term Business Plan

5,835

Provision for warranties for completed construction

FeatureNotes and accounts receivable, trade

Intangible and other assets
Leasehold right

Investments and other assets
Investment securities
Investments in silent partnerships

Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income

6

1,855

1,900

Valuation difference on available-for-sale securities

49,85965,002

Guarantee deposits paid

21,232

21,754

Revaluation difference on land

30,932

31,022858

1,819

Foreign currency translation adjustments

872

248

56,96651,033Remeasurement of retirement benefits

61

600

81,72696,874

8,447

9,203

356,578

384,2111,450,091

1,564,049

Net defined benefit asset
Other investments
Allowance for doubtful accounts
Total investments
Total fixed assets
Total assets

(98)

(97)

213,515

236,745

1,096,732

1,139,449

1,450,091

1,564,049

Total of accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets*W e have applied the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. beginning in the fiscal year ended December 2019. Figures for the fiscal year ended
December 2018 reflect the retroactive application of this accounting standard.

62
TOKYO TATEMONO GROUP Integrated Report 2020

63
TOKYO TATEMONO GROUP Integrated Report 2020

Data

7

Deferred tax assets

Long-term loans

ESG Report

Total intangible and other assets

Shareholders’ equity

Consolidated Statement of Income

FY2019FY2018*

Revenue from operations
Cost of revenue from operations
Gross profit
Selling, general and administrative expenses
Operating income

8
2,411
408
430
333
3,593

35
2,848

54

6,970
1,159
742
728
213
1,207
313
11,33544,611
75
710
1,858
288
2,932

28,15530,824(12,987)

15,57345,32916,44817,277

Impairment loss

2,495

1,350

Amortization of goodwill

1,709

1,647

Equity in (income) loss of affiliated companies

(408)

742

Increase (decrease) in allowance for doubtful accounts

13

1

Increase (decrease) in provision for bonuses

151

(34)

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

(1)

(18)

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

53

35

Increase (decrease) in provision for retirement benefits for directors

(54)

(49)

Increase (decrease) in provision for environmental measures

(233)

(0)

Increase (decrease) in provision for loss on liquidation of subsidiaries and affiliates

̶

280

Increase (decrease) in retirement benefit liabilities

305

437

Interest and dividend income(2,420)(2,883)

Interest expenses

6,020

6,970

47

1,207

Loss (gain) on sales of investment securities(28)(1,858)Loss (gain) on sales of investments in capital of subsidiaries and affiliates

(637)

32

Loss (gain) on liquidation of subsidiaries and affiliates

̶

(710)

Loss (gain) on sales and retirement of fixed assets

105

187

Loss on investment partnerships(Increase) decrease in accounts receivable, trade(1,104)(1,278)(Increase) decrease in inventories(23,273)(34,533)

Increase (decrease) in guarantee deposits received

1,155

2,644

Increase (decrease) in accounts payable, trade

1,381

291

(Increase) decrease in guarantee deposits paid
Increase (decrease) in deposits

132

(485)

(5,936)

7,226

Other

772

(3,130)Subtotal

36,794

40,680Interest and dividends received

4,004

2,883

Interest paid

(6,013)(6,616)

Income taxes paid

(15,038)(12,850)

Net cash provided by (used in) operating activities

19,74824,096

ESG Report

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

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

0
159
2,495

40,101

Depreciation and amortization

Segment Information

̶
28
637
720

̶
319
334
3,537

Profit before income taxes and minority interests

Medium-Term Business Plan

̶
206
351
47
538
8,321
42,036FY2019Cash flows from operating activities

Feature323,036
233,342
89,69437,28352,410

6,020
1,156

Millions of yen

FY2018*273,302
192,134
81,16834,402
46,765Non-operating income
Interest income
Dividends income
Equity in income of affiliated companies
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing fee
Equity in loss of affiliated companies
Bond issuance expenses
Distribution from real estate specific joint enterprises
Loss on investment partnerships
Other
Total non-operating expenses
Recurring income
Extraordinary income
Gain on sale of fixed assets
Gain on liquidation of subsidiaries and affiliates
Gain on sales of investment securities
Gain on sales of investments in capital of subsidiaries and affiliates
Total extraordinary income
Extraordinary loss
Loss on sale of fixed assets
Loss on retirement of fixed assets
Impairment loss
Loss on sales of investments in capital of subsidiaries and affiliates
Provision for loss on liquidation of subsidiaries and affiliates
Total extraordinary loss
Profit before income taxes and minority interests
Current income taxes
Deferred income taxes
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Consolidated Statement of Cash Flows

Value Creation

Consolidated Statement of Income and Consolidated statement of comprehensive income Millions of yen* We have applied the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. beginning in the fiscal year ended December 2019. Figures for the fiscal year ended December
2018 reflect the retroactive application of this accounting standard.

Consolidated statement of comprehensive income
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurement of retirement benefits

(602)

90
(174)
538

Share of other comprehensive income of associates accounted for using equity method(3,401)

Total of other comprehensive income(17,248)(449)
15,578

10,907

46,402

10,36644,945540

1,456

Comprehensive income

Data

̶
(256)

Revaluation difference on land

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

64
TOKYO TATEMONO GROUP Integrated Report 2020

65
TOKYO TATEMONO GROUP Integrated Report 2020

Data

Consolidated Statement of Cash Flows

Millions of yen

FY2019FY2018*Cash flows from investing activities
Proceeds from sale of marketable and investment securities
Payment for purchase of marketable and investment securities
Payment for acquisition of subsidiary shares involving changes in the scope of consolidation

Proceeds from redemption of investments in capital of subsidiaries and affiliates
Proceeds from sales of investments in capital of subsidiaries and affiliates

8,186(11,625)(7,911)

̶(27)(6,235)(4,223)

̶

3,884

3,079

4,078

Established

October 1, 1896

Capital92.4 billion yen(As of December 31, 2019)(810)

Proceeds from withdrawal of investments in silent partnership

2,112

1,244

Proceeds from sale of fixed assets

1,350

4,518

Payment for purchase of fixed assets(40,798)(64,726)

Increase (decrease) in investments received for real estate specific joint enterprises(22,071)(2,560)

3,191

(105)

(63,577)(64,082)

Cash flows from financing activities

Representative

Head Office

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

Stock ListingFirst Section of the Tokyo Stock
Exchange

Listing Date

September 1907

Securities Code8804

Trading Unit

100 shares

18,00052,000

Increase in long-term debt

62,75017,500

Repayment of long-term debt

(51,868)(65,822)

(903)

(902)

Proceeds from issue of bonds

35,00080,000Stock Price

Redemption of bonds(20,000)(15,000)

2,000

Payment for acquisition of subsidiary shares not involving changes in the scope of consolidation

̶

(113)

Proceeds from sales of treasury stock

0

1

(205)

(10,004)

1,200(6,935)(8,085)1,000

Dividends paid to non-controlling interests

(577)

(591)

Other

(744)

(979)

34,43848,000

(122)

(220)

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

7,794

Cash and cash equivalents at beginning of year

41,22731,702(10)－

31,70239,497

Acquisition of treasury stock
Dividends paid

Effect of exchange rate changes on cash and cash equivalents

Decrease in cash and cash equivalents resulting from exclusion of subsidiaries from consolidation
Cash and cash equivalents at end of year

20,4309.77%

Japan Trustee Services Bank, Ltd.
(Trust Account)

17,2508.25%

J.P. MORGAN BANK LUXEMBOURG S.A.
384500

9,098

4.35%

Sompo Japan Nipponkoa Insurance Inc.

4,744

2.27%

Meiji Yasuda Life Insurance Company

4,729

2.26%

THE BANK OF NEW YORK MELLON 140051

4,396

2.10%

Japan Trustee Services Bank, Ltd.
(Trust Account5)

4,369

2.09%

SMBC Nikko Securities Inc.

3,244

1.55%

JP MORGAN CHASE BANK 385151

3,211

1.54%

BNYM AS AGT/CLTS 10 PERCENT

3,039

1.45%

Breakdown by Shareholder Type (As of December 31, 2019)%

400,000,000 shares
216,963,374 shares(As of December 31, 2019)■ Financial institutions

38.18■ Securities companies

5.51■ OtherJapanese corporations

11.01■ Foreign corporations

36.04■ Individuals, other

5.65■ Treasury stock Japan Securities
3.61
Depository Center, Inc.

(yen)

1,800
1,600
1,400

Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
2017
2018
2019

Please refer to the following for more information.
Financial Information

Non-Financial Data

Investor Relations

Sustainability

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

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

Sustainability Report 2020
IR Libraryhttps://tatemono.com/csr/english/reports/pdf/2020csrall_e.pdf

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

ESG Data Book 2020
https://www.tatemono.com/csr/english/uploads/esgdata_2020_01.pdf

66
TOKYO TATEMONO GROUP Integrated Report 2020

67
TOKYO TATEMONO GROUP Integrated Report 2020

Data

* We have applied the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. beginning in the fiscal year ended December 2019. Figures for the fiscal year ended December
2018 reflect the retroactive application of this accounting standard.

Number of
Shares Issued andOutstanding

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

ESG Report

Cash flows from financing activities

Number of Shares
Authorized

Ratio of
Shares
Owned

Segment Information

Increase (decrease) in commercial paper

Payments for long-term accounts payable, other

Hitoshi Nomura, President and Chief
Executive Officer
5,396 (As of December 31, 2019)

0

Number of
Shares Owned(As of December 31, 2019)(thousands of shares)

Number ofConsolidated
Employees(76)

Increase (decrease) in short-term borrowings

Principal Shareholders

Medium-Term Business Plan(767)

Net cash provided by (used in) investing activities

Tokyo Tatemono Co., Ltd.

2,556

Payment for investments in silent partnership

Other

Company Name

FeaturePayment for investments in capital of subsidiaries and affiliates

Value Creation

Corporate Data

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

Published: September 2020