Otemachi Building, 6-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8133, Japan
http://www.mec.co.jp/

ANNUAL REPORT 2010

ANNUAL REPORT 2010
Ye a r e n d e d M a r c h 3 1 , 2 0 1 0This report is printed using
environment-friendly soy ink.

Printed in JapanA Love for People
A Love for the City
—Forever Taking on New Challenges—The Mitsubishi Estate GroupOur wish is to provide people who live in, work in and visit the citywith enriching and fulfilling lives,
full of stimulating opportunities to meet.
The Mitsubishi Estate Group
has always pursued the genuine value sought by people
in the environments and services it provides.
With an eye to the future,
we carefully listen to each and every customer,
and create the true value they seek.
We wish to share with our customers
the inspiration and passion we derive from our work.
We will constantly take on new challenges to achieve this vision,and through it, we will continuously evolve.
This aspiration will always drive our growth.

Contents
2
4
6
16
20
35
66

A Message from the President
To Our Shareholders
Special Feature 1: The Second Stage of Marunouchi Redevelopment
Special Feature 2: Developing Tokyo into a Leading Environmental City
Business Information
Financial and Corporate Data Section
Corporate Social Responsibility

ANNUAL REPORT 2010 |A Message from the President

Creating New Value for Urban Areas—the Mitsubishi EstateGroup Becoming a Corporate Entity That Society Will Trust and
Rely on for Generations to Come
“A global real estate solutions provider—development as a core driver”—this is how the Mitsubishi
Estate Group envisions its future. In accordance with this vision, Mitsubishi Estate is working
diligently to develop into a real estate company that provides high added value to real estate
end-users, owners and investors, thereby providing exceptional benefits for its customers.
As the aforementioned vision clearly states, the Mitsubishi Estate Group keeps reinforcing its
foothold in the area of “development.” Meanwhile, we are aggressively tackling new challenges,
such as business globalization, real estate securitization, technological innovation andenvironmental co-existence. Through these endeavors, we are promoting business managementwith an eye on the sustainable growth of the Mitsubishi Estate Group as a whole.
In the fiscal year ended March 31, 2010, in response to dynamic changes in the management
environment, Mitsubishi Estate promoted the partial reshuffling of its asset portfolio to recover its
investments. At the same time, the Company thoroughly assessed the profitability of each project,which resulted in the posting of losses on valuation of inventories in the Residential Business,
Urban Development & Investment Management Business and other segments. It is really regrettablethat we had to record these valuation losses, which totaled a significant amount. We believe, however,that such profitability assessment and the accounting processes that followed have been necessary
to improve the efficiency and soundness of our balance sheets. Through these actions, Mitsubishi
Estate has successfully strengthened its financial base and is now well positioned to overcome
today’s severe operating conditions and return to the path that leads to sustainable growth.
Changes in the operating environment often provide opportunities for new successes. We are
currently experiencing a number of drastic structural changes. These changes include theacceleration of economic globalization, changes in consumer behaviors attributable to the declining
birthrate and growing population of elderly people, and pressing environmental issues. We are notafraid of these changes. Rather, the entire Mitsubishi Estate Group must continue to meet new
challenges, thereby entering a new stage of business that presents many new opportunities. The
Mitsubishi Estate Group is advancing quality-focused urban development, incorporating world-classtechnologies and advanced environmental features. We are confident that in the course of suchendeavors, Mitsubishi Estate will make significant contributions to enhancing the attractiveness ofTokyo and other cities throughout Japan as well as to the revitalization of regional cities.
Our slogan, “A Love for People, A Love for the City,” indicates our strong determination to create newvalue for urban areas—the stage on which we perform. It also expresses our genuine enthusiasm andspirit toward all stakeholders.
For generations to come, the Mitsubishi Estate Group will continue to reinvent itself while
reinforcing its position as the most trusted and preferred real estate solutions provider.
July 2010

Keiji Kimura, President & CEO |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |To Our Shareholders
Operating Environment

Ordinary income rose 8.1% year on year to ¥117,381 million. Afteraccounting for extraordinary gains on transference of air right and on sales ofinvestment securities and such extraordinary loss items as impairment loss andimpairment loss on equity investments, net income dropped 73.8% year on
year to ¥11,900 million. (For more details, please see the Financial Review
section starting on page 36 of this report.)

During the fiscal year ended March 31, 2010, in the office building leasing market in Japan, the vacancy rate in central Tokyo rose to a record-high level. It is
expected that the market will experience ever-intensifying competition to
attract tenants, and there will be further adjustments in rent levels. Accordingly,
it is necessary to monitor future market trends more carefully than ever before.
The condominium market has shown some positive signs, including a
steady recovery in the number of successful condominium sales contract signings, supported by price adjustments and government policies. Still, full-fledged
recovery in market conditions is anticipated to require a long time period.
With regard to the real estate investment market, the Japanese real estate
investment trust (J-REIT) market is showing a slower recovery compared with its
overseas counterparts. In addition to its reorganization through tie-ups among
J-REIT operators, the J-REIT market is witnessing the acceleration of public
offerings and other funding activities. This situation indicates that the entire
J-REIT market is ready to implement mergers and acquisitions to realize growth.
Under these circumstances, the Mitsubishi Estate Group will endeavor to
respond appropriately to changes in its operating and market environments, as it
strives to enhance management efficiency, earnings power and corporate value.

Dividend Policy
Mitsubishi Estate adheres to the basic policy of consistently returning profits
to its shareholders through such means as cash dividends. In doing so, theCompany gives due consideration to reserving the funds necessary for futurebusiness developments, including the Marunouchi Redevelopment Project.
In the fiscal year ended March 31, 2010, Mitsubishi Estate paid an interim
dividend of ¥6 per share, and decided to pay a year-end dividend of ¥6 pershare, for an annual per-share dividend of ¥12.
Mitsubishi Estate will determine future dividend levels by taking into
account on a comprehensive basis performance levels for each period andaiming to keep its consolidated payout ratio at a 25% to 30% level. In line withsuch a stance, the Company plans to pay an annual per-share dividend of ¥12
for the fiscal year ending March 31, 2011, which comprises an interim andyear-end per-share dividend of ¥6, respectively.

Financial Results
For the fiscal year under review, revenue from operations increased 7.5%
year on year to ¥1,013,415 million, while operating income also increased
7.5% to ¥148,972 million. Mitsubishi Estate posted an operating loss in its condominium business while suffering significant yen appreciation in theInternational Business segment. These negative factors were more than offset
by contributions from the Marunouchi Park Building, which was completed in
April 2009, and from new consolidated subsidiary Chelsea Japan Co., Ltd. Also,in the Urban Development & Investment Management Business segment, theCompany sold a portion of ownership interest in a property held by a specialpurpose company in which Mitsubishi Estate has invested, which added to thecontributions made to the increase in operating income.

Revenue from operations

¥

2006

775,381¥844,217947,641

2008¥

787,652

Millions of yen

Thousands of
U.S. dollars

2010

2010

942,626¥ 1,013,415$ 10,892,250

2009

¥

45,423

11,900127,901

4.7%

6.6%

10.3%

11.0%

4.8%

1.2%

—

4.0%

5.4%

8.3%

7.1%

3.8%

1.0%

—

Total assets

3,124,514

3,280,209

3,447,272

4,327,137

4,429,070

4,355,065

46,808,523

Total equity

920,930

1,133,623

1,225,644

1,238,889

1,148,494

1,183,156

12,716,638

Common stock

86,534

129,736

136,534

136,534

136,534

141,373

1,519,486

Yen

U.S. dollars

Per share amounts:
Cash dividends
applicable to the year

27.93

¥

8.00

42.60
10.00

¥

70.95
14.00

¥

62.99
16.00

¥

32.90
16.00

¥

8.58
12.00

$

0.09
0.13

Notes: 1. Yen amounts shown are translated into U.S. dollars, solely for convenience, at the prevailing exchange rate on March 31, 2010, of ¥93.04 to US$1.00.
2. Total equity is calculated by deducting minority interests and stock acquisition rights from total net assets.

Caution regarding forward-looking statements
Plans, estimates and strategies included in this annual report are forward-looking statements concerning the future performance of the Mitsubishi Estate Group. These statements are based on management’s assumptions,which have been made in accordance with information available to the Company as of the date of this report’s preparation. Accordingly, the content of this report should not be relied upon unduly. Mitsubishi Estate cautions that a number of factors could cause future results to differ from its forecasts.

 |ANNUAL REPORT 2010

Business Attribute

1stReal Estate Holding

2ndReal Estate Development and Investment

3rdReal Estate Investment Management

4th

Real Estate Services

DomainAction Item
Maximize the value of assets held in Marunouchi and other locations

Obtains rental revenues (income gain) from real estate

Further reinforce development and risk management capabilities

Obtains capital gains from real estate

Provides management services to investors and obtains a fee income

Provides fee-based services to customers involved in real estate

While seeking to continually increase the value of overseas assets held, position development and investment,
investment management and real estate services as
growth fields, and over the medium to long term, workto earn approximately 20% of consolidated operating
income overseas, while promoting globalization at a pace
optimal for each operation

86,963¥

DomainBuild a global platform
Aim to be a leading service provider that contributes to advancing
development capabilities

Strengthen Each Domain,
Leveraging Development Capabilities

Globalize Each Domain

97,662

Net income

W Practical Action Items for Each Business Domain

W Action Items for Strengthening Domain/Cross-Sectional Competitiveness

55,825

As a percentage ofrevenue from operations
As a percentage of
total equity

To become “a global real estate solutions provider — development as a core driver”

Domain36,245

Net income

Mitsubishi Estate’s Future Vision under ACTION 2010

Domain2007¥

Mitsubishi Estate’s current medium-term management plan, ACTION 2010, covers the three-year period from April 1, 2008 to March 31, 2011. Under ACTION
2010, Mitsubishi Estate has established a new corporate brand slogan, “A Love for People, A Love for the City.” Embracing this slogan, we have defined afuture vision for the Mitsubishi Estate Group, as described below, by reflecting the outcome of the previous medium-term management plan and ongoingchanges in operating environments. The entire Group is accelerating the implementation of various action items to realize this vision.

DomainFinancial Highlights Years ended March 31
2005

Medium-Term Management Plan “Action 2010”

Affirm development capabilities as the source of competitive strength for all domains and seek further reinforcement. At the same time, have the Real Estate Development
and Investment domain, which has gained strength as thecore of the Company’s development capabilities, help
other domains to grow and promote the creation of amechanism for producing synergies in investment management, real estate services, and so forth

Further Develop Proposal-Based Marketing
Focus on medium- to long-term “Customer Value” andreaffirm the significance of proposal-based marketing,which seeks new business creation by continually promoting solutions to customers, and, as an advantage
unique to Mitsubishi Estate, further strengthen this marketing capability

W Management Infrastructure Action Items
Reinforcing Management, People and Organization Infrastructure

Active Measures toward Harmonious Environmental Co-Existence

Facilitate the development of globally capable human resources and other initiatives byclearly defining the dissemination of management policies throughout the Group andfostering a corporate culture that promotes a spirit of taking on challenges and the globalization of management and personnel as basic infrastructure reinforcement policies.
Also, for each Group segment that continues to expand, diversify and increase sophistication, work to reinforce and raise awareness of the corporate governance system, including risk management, compliance and internal controls

Formulate a “Long-Term Environmental Vision” to proactively work toward harmonious
environmental co-existence and further clarify the Company’s stance of actively contributing to society with the view of reducing the environmental impact of Group operations.
In order to realize this “Long-Term Environmental Vision,” formulate and implement
action plans

W Management Indicator Targets for the Fiscal Year Ending March 31, 2011
In line with the formulation of ACTION 2010, Mitsubishi Estate has set management indicator targets from a quantitative perspective to be accomplished in the fiscal year
ending March 31, 2011—the final year of the medium-term management plan. Specifically, these targets are: (1) EBITDA*1 of ¥300.0 billion; (2) EBITDA*1 /total assets of
6.5%; and (3) net interest-bearing debt*2 /EBITDA multiple of under 6.0 times. Negatively impacted by unfavorable operating conditions after the setting of those targets,
the Company has not achieved these targets. Taking EBITDA for example, the Company recorded EBITDA totaling ¥230.7 billion for the fiscal year under review. The
Company expects to record EBITDA amounting to ¥233.0 billion for the final year of ACTION 2010. Still, Mitsubishi Estate will continue to improve its corporate value
through the expansion of cash flows with due consideration given to its financial soundness and other conditions.
*1 EBITDA = Operating income + Interest and dividend income + Equity in earnings (losses) of unconsolidated subsidiaries and affiliates + Depreciation and amortization*2 Net interest-bearing debt = Interest-bearing debt − Cash and cash equivalents

ANNUAL REPORT 2010 |Special Feature 1: The Second Stage of Marunouchi Redevelopment

With the Mitsubishi Ichigokan Museum
now standing in Marunouchi, more than
100 years after the original development plan,
additional urban rejuvenation isfurther expanding and deepening the

The Mitsubishi Ichigokan, Marunouchi’s first officebuilding, completed in 1894

global presence of the Marunouchi area.
The second stage of the Marunouchi Redevelopment Project extends from 2008 to
2017. As the first project in the second stage, the Marunouchi Park Building &Mitsubishi Ichigokan was completed in April 2009, followed by the completionof the Mitsubishi Ichigokan Museum in April 2010.
Mitsubishi Estate built Marunouchi’s first office building, the original
Mitsubishi Ichigokan, in 1894. From that time onwards, the Company has
maintained the vision of making Marunouchi a place that goes beyond being amere business district—envisioning a place full of cultural and artistic features.
Having sustained this vision to date, Mitsubishi Estate is working to realize
additional Marunouchi rejuvenation schemes, based on the achievements
made through the first stage of the Marunouchi Redevelopment Project.
In this way, we are pushing ahead to further expand and deepen the
global presence of the Marunouchi area.

Bank operations office in the early days

Architectural drawing of the unrealized Marunouchi
Museum Development Plan from 100 years ago |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |Special Feature 1: The Second Stage of Marunouchi Redevelopment

Mitsubishi Ichigokan Museum
The original Mitsubishi Ichigokan was the first office building constructed in Marunouchi, back in 1984. It was designed by Josiah Conder, aBritish architect renowned for his design of the Rokumeikan, a large,
two-story building in Tokyo that was completed in 1883.
In designing the entire Mitsubishi Ichigokan, Conder borrowed
from the Queen Anne Style, which prevailed in England during the lastpart of 19th century. This style is characterized by beautiful, elegant
design that projects an atmosphere of exuberant grandeur.
Prior to the restoration of the Mitsubishi Ichigokan into a museum
building, Mitsubishi Estate not only conducted careful study of preserved architectural drawings and the survey drawings created throughdismantling operations in 1948, but also performed a thorough inspection of related documents, photographs and preserved original building
materials. In actual construction, stone materials for stairways and otherpreserved materials have been reused in the Mitsubishi Ichigokan

屋根Museum. Also, the restoration has been carried out by applying design,material selection and construction methods that have been faithfully
revived from the Meiji era. Indeed, this restoration project has been one
big experiment.
The old Mitsubishi Ichigokan, which symbolized Japan’s modernization in the late 1800s, was reincarnated as the Mitsubishi Ichigokan
Museum in the spring of 2010.
Corridor of the Mitsubishi Ichigokan Museum

Ichigokan Square

Café 1894
Originally used as a bank operations office in the Meiji era, thetwo-story atrium room has been reconstructed as a café. Because theold Mitsubishi Ichigokan was designed by a British architect, this café
offers British-style menus, including Guinness beers and fish and chips.

 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |Special Feature 1: The Second Stage of Marunouchi Redevelopment

Édouard Manet, Portrait of Emile Zola (Musée d’Orsay, 1868)©RMN (Musée d’Orsay) / Hervé Lewandowski / distributed by
DNPartcom

Édouard Manet, Lola de Valence (Musée d’Orsay, 1862,
retouched sometime after 1867) ©RMN (Musée d’Orsay) /Gérard Blot / distributed by DNPartcom

Édouard Manet, The Garden of Pere Lathuille (Musée desBeaux-arts de la Ville de Tournai, 1879) ©Collection Muséedes Beaux-Arts de la Ville de Tournai

Perspective of Édouard Manet—Genesis of Modern Art

Opening Event I

Event period: April 6, 2010 to July 25, 2010
Édouard Manet (1832–1883) is one of the most important painters in the history of modern painting. He hadsignificant influence on many other painters, not just those who later became known as the Impressionists,
but also on all of the artists who came after his generation. Mitsubishi Estate has selected Manet for the event
commemorating the opening of the Mitsubishi Ichigokan Museum because his way of life—living in the thenmodern, maturing Paris and producing works of art—overlaps with the intentions of the Mitsubishi Ichigokan
Museum, which is aiming to grow in step with the rapidly developing Marunouchi area.

Future Exhibitions• Opening Event II   “From Dream to Reality: The Mitsubishi Iwasaki Collection”
Event period: August 24, 2010 to November 3, 2010
• The Städtische Galerie Collection from Lenbachhaus and Münich
   “Kandinsky and the Blue Rider”
Event period: November 23, 2010 to February 6, 2011
Édouard Manet, Berthe Morisot with a Bouquet of Violets (Musée d’Orsay, 1872) ©RMN (Musée d’Orsay) / Hervé Lewandowski / distributed by DNPartcom

Josiah Conder, Mitsubishi Ichigokan(South Face) (around 1890)

Vassily Kandinsky, Impression III (Concert)(1911, 77.5 x 100cm, oil on canvas)©Staedtische Galerie im Lenbachhaus, Münich

Various Events
for Additional
Entertainment

The Marunouchi area keeps developing, aiming to become the world’s most interactive and vital urban area. Mitsubishi Estate cooperates with land owners instaging art exhibitions and concerts and in holding cultural, environmental and health-related seminars within the Marunouchi area. Providing residents, workers andvisitors with intellectual experience and excitement, the Marunouchi area offers wide-ranging events throughout the year.
1  Tokyo Marunouchi Flower Week 2010
The Tokyo Marunouchi Flower Week 2010 was held during the six-day period from April 20, 2010 toApril 25, 2010. This event included a beautiful Japanese wisteria garden with wisteria trees, the FirstNaka Dori Avenue Hanging Basket Competition and the Marunouchi Flower Market. About 440
thousand people visited Marunouchi for this event.

2 La Folle Journée au Japon “Days of Enthusiasm” Music Festival 2010
1

10 |ANNUAL REPORT 2010

2

3

4

During the eight-day period from April 28, 2010 to May 5, 2010, approximately 840 thousand people
visited Marunouchi and its periphery to experience this music festival, attending small concerts andenjoying a special exhibition on Chopin—the theme of this year’s event.

3 Uchimizu Project 2009
From July 31, 2009 to August 11, 2009, the Uchimizu Project 2009 was held on the Marunouchi
Naka Dori Avenue and other streets. Uchimizu, literally translated as “sprinkling water,” is asummer tradition in Japan to help lower ambient temperature. Participants—many in Japanesesummer kimonos—enjoyed the uchimizu ritual and assisted in cooling down the Marunouchi area.

4 Marunouchi Illuminations 2009
From November 12, 2009 to February 14, 2010, approximately 850 thousand champagne-gold
LEDs installed throughout the Marunouchi Naka Dori Avenue illuminated the night scene of the
Marunouchi area.

ANNUAL REPORT 2010 |11

Special Feature 1: The Second Stage of Marunouchi Redevelopment

Major Redevelopment Projects
Marunouchi 1-4 Project (tentative name)W Eco-Friendly Office Building Certified by the Ministry of Land, Infrastructure,

Transport and Tourism
Scheduled for completion in January 2012, the Marunouchi 1-4 Project will create the largest office spacein the Marunouchi area, with each floor boasting approximately 3,306m2.
Through this project, the building will be equipped with large-scale solar power generation panels andwith airflow window systems for its Office Zone. Moreover, LED lighting systems have been adopted as
standard equipment for the project. Due to these bold initiatives aimed at reducing CO2 emissions, thisoffice building has been certified as a highly eco-friendly project under a program run by the Ministry ofLand, Infrastructure, Transport and Tourism (MLIT) to promote the reduction in CO2 emissions associatedwith buildings.

Project Profile
Address:

2-1, 2-2, 2-3, 2-4, 2-5 Marunouchi 1-chome,
Chiyoda Ward, Tokyo

Main uses:

Offices, financial institution branch office,retail shops, parking, etc.

Site area:

8,033.94m2

Floor area:

Approx. 139,000m2

W Project to Rejuvenate Otemachi—an International Business Hub

Number offloors:4 floors below ground, 27 floors above
ground with 3-story-high roof structureThis project, which uses a linked urban redevelopment process, has entered the second stage, andMitsubishi Estate is participating in the project as the owner of the land on which the Mitsubishi Soken
Building is sited. The establishment of sophisticated, high-quality business functions, as well as theconstruction of business support facilities apropos to Otemachi—an international business hub—are scheduled to be completed through this project. Specific undertakings include the Financial Education & Exchange
Center (tentative name) and the International Medical Service Facilities (tentative name).

Height:Approx. 150m

Completion:

January 2012 (scheduled)

Otemachi 1-chome Second Area 1st Class Urban
Redevelopment Project

Redevelopment Projects in Other Regions
Marunouchi Park Building
W Marunouchi’s Largest, High-Grade Business Center
The Marunouchi Park Building, completed in April 2009, is a leading-edge, large-scale, multipurpose
complex. This building boasts approximately 158,000m2 of Office Zone—one of the largest office facilities inMarunouchi—and approximately 18,000m2 of Retail Zone, as well as its courtyard, the Ichigokan Square.
Standard office floors combine the Office Zone, which offers superior layout efficiency, and thePanorama Zone, which comes in many variations. Measuring 2.85m in height and 20m in depth andproviding a 150mm-raised floor for IT cabling and other uses, each standard office floor can accommodate
any business scenario, with its column-free space totaling over 3,305m2.
Meanwhile, the Ichigokan Square entices the eye with various kinds of flora, collected from all over
the world, throughout the four seasons. In addition, a fountain and other waterscapes as well as gas
lights—a remembrance of the Meiji era past—offer Marunouchi office workers and visitors relaxing andrefreshing moments.

12 |ANNUAL REPORT 2010

Project Profile
Address:

6-1, 6-2 Marunouchi 2-chome, Chiyoda Ward,Tokyo

Completion:

April 2009

Main uses:

Offices, retail shops, art museum, parking,district heating and cooling facility, etc.

Structure:

Steel-frame, steel-reinforced-concrete /brick masonry (Mitsubishi Ichigokan)

Number offloors:4 floors below ground, 34 floors above
ground with 3-story-high roof structure /1 floor below ground, 3 floors above groundwith 1-story-high roof structure (Mitsubishi
Ichigokan)

Height:Approx. 157m

Site area:

Approx. 11,900m2 (approx. 3,600 tsubo)

Floor area:

Approx. 205,000m2 (approx. 62,010 tsubo)(High-rise + low-rise: approx. 199,000m2;
Mitsubishi Ichigokan: approx. 6,000m2)
Breakdown by use:
Office: approx. 158,000m2; retail shop:
approx. 18,000m2; art museum: approx.
6,000m2; and others: 23,000m2

Parking:

282 vehicles

W Dai Nagoya Building & Royal Park Inn Nagoya Reconstruction Project
Completed in 1965, the Dai Nagoya Building now requires the upgrading of its building specifications andfunctions on the back of ever-increasing needs for sophisticated office functions and improved environmental and disaster-prevention features. Accordingly, Mitsubishi Estate has decided to reconstruct the building
together with the Royal Park Inn Nagoya building located in an adjacent lot. The Company aims to promote
the reconstruction project in line with the Central Nagoya Future Vision, which has been formulated by the
Nagoya City government. Through such urban redevelopment, we will contribute to the prosperity of central
Nagoya and Central Japan. The project is scheduled for completion in the fiscal year ending March 31, 2016.

W Osaka Station North District Phase 1 Development Project
The project is aimed at establishing the Osaka Station North District as an international center for information, human resources and exchange and contributing to the additional development and prosperity ofOsaka City and Western Japan as well as of Japan as a whole. A concentration of urban functions will beorganized through this project. More specifically, this project is to include the “Knowledge Capital,” aknowledge-based industry creation center as a core function of the district. It will also feature high-grade
office buildings in which a standard floor offers Western Japan’s largest column-free office space, totaling
2,700m2, lifestyle-inspiring retail facilities and a hotel that provides world-class amenities and services, aswell as residences. Moreover, the Osaka North Plaza, totaling 10,000m2, will be designed under the supervision of the renowned architect, Tadao Ando, creating an urban landscape suitable for an international
gateway. This project is scheduled for completion in March 2013.

Project Profile
Location:

Former properties of the landowners who
participated in the Otemachi 1-chome 1stClass Urban Redevelopment Project(Otemachi 1-chome, Chiyoda Ward, Tokyo)

Project area:

Approx. 14,100m2 (total)

Floor area:

Approx. 242,000m2 (total)

Structure:

Steel-frame, partially steel-reinforced
concrete, concrete-filled steel tubular columns

Number offloors:4 floors below ground, 31 floors above ground(Building A), 35 floors above ground (Building B)

Height:Approx. 154m (Building A), approx. 177m
(Building B)

Main uses:

Offices, retail shops

Project
scheme:

1st class urban redevelopment project in accordance with the Urban Renewal Law of Japan(independent project)

Executingentity:Urban Renaissance Agency (representative entity)
Mitsubishi Estate Co., Ltd. (joint entity)

Schedule:

April 1, 2010 Building construction start
September 2012   Building construction
completion (scheduled)

ANNUAL REPORT 2010 |13

Special Feature 1: The Second Stage of Marunouchi Redevelopment

Marunouchi Map
Kokyo Gaien National GardenHarumi Dori

Palace Hotel Reconstruction Project(tentative name)(scheduled for completion in January 2012)

Marunouchi 2-chomeBldg.

Shin-Nisseki
Bldg.

Mitsubishi Bldg.

Marunouchi
Bldg.

Tokyo
Kaijo
Nichido
Bldg.

Tokyo
Kaijo
NichidoBldg.
(Annex)Shin-Marunouchi
Bldg.

The Bank ofTokyo-Mitsubishi UFJ,
Ltd. Head Office

Otemachi First Square

Mizuho Corporate Bank Ltd.
Head Office Bldg.

The Industry Clubof Japan and
Mitsubishi UFJ Trustand Banking Bldg.

Otemachi
Bldg.
OtemachiFinancial Center

The Marunouchi
1-4 Project

Marunouchi
South Exit

Marunouchi
Central Exit

Koko Bldg.
Shin-Koko
Bldg.

Otemachi 1-chome
Second Area 1st Class
Urban Redevelopment Project

Tokyo Sankei
Bldg.

Otemachi 1-6 Project(tentative name)(tentative name)e, Marunouchi Lin

Marunouchi Center Bldg.

Shin-Marunouchi
Marunouchi OAZO Center Bldg.

Marunouchi
North Exit

Tokyo Bldg.

Marunouchi Marunouchi
Hotel Kitaguchi Bldg.
(Marunouchi OAZO)NTT Communications
Otemachi Bldg.

Otemachi Nomura
Bldg.

Mitsubishi
Soken Bldg.

TeishinBldg.
NTT Communications
Otemachi Bldg. (Annex)
Urbannet Otemachi
Bldg.

Shin-Otemachi
Bldg.
NTT
Marunouchi
Bldg.

NTT Data
Otemachi
Bldg.

ou

te

Toyota Tsusho Corp.
Tokyo Head Office

Yomiuri Shimbun
Bldg.

Otemachi Station

Nihon Seimei
Marunouchi Bldg.

Tokyo Central Post Office“JP Tower”
Reconstruction Project(tentative name)(scheduled for completion in 2012)

Development Bankof JapanKDDI
Otemachi Bldg.

Tokyo StationrR

Circular RouteShin-Sumitomo
Bldg.

irc
ula

Infos
Yurakucho

Keidanren
KaikanMitsuiLife Insurance Bldg.

Pacific Century Place
Marunouchi Bldg.

Buildings Owned by Mitsubishi Estate

Marunouchi
CentralBldg.

GranTokyo
South Tower

Eitai Dori

Sapia
Tower

Asahi
Life Insurance
Otemachi Bldg.
(owned by aspecial-purpose
company undermanagementof Mitsubishi Estate)

JFE Shoji Bldg.
Nippon Bldg.
oky
To

The First StageThe Second Stage

Marunouchi
Trust Tower
Main

GranTokyo
North Tower

xp
res
sw
ay
Inn
er
C

(owned by a Mitsubishi Estate
consolidated subsidiary)

JA Bldg.

tro
po
lita
nE

Tokyo Kotsu
Kaikan Bldg.

Ginko
KaikanBldg.

Tokyo Station, Marunouchi Line

Daimyo Koji Ave.

Yurakucho ITOCiA

Otemachi
Pal Bldg.

Line

Yusen
Bldg.

Marunouchi 1st St.

Marunouchi-Nakadori
Bldg.

Mitsubishi
Corp.
Head Office

Tokyo
Ginko
KyokaiBldg.

(owned through a special-purpose company
capitalized by Mitsubishi Estate)

Marunouchi Park Bldg. &Mitsubishi Ichigokan

Shin-Tokyo Bldg.

(owned by aspecial-purpose
company undermanagementof Mitsubishi Estate)

Ote Center
Bldg.

Otemachi Station, Tozai Line

Shin-Kokusai
Bldg.

Tokyo International Forum

Tokyo
Metro
politanExpressway Inner

Kishimoto Marunouchi
MitsuiBldg.
Bldg.

Marunouchi Naka Dori Ave.

Yomiuri Kaikan
BIC Camera

Yu
rak
uc
ho
Sta
tio
n

(owned by a Mitsubishi Estate
consolidated subsidiary)

Meiji Yasuda Life Insurance
Bldg.

Mitsui Bussan Bldg.
(Annex)oda Line

Gyoko DoriFuji Bldg.

Meiji Seimei Kan
Bldg.

Marunouchi 3rd St.

Tokyo
KaikanBabasaki Dori

Kokusai Bldg.

Marunouchi 4th St.

Marunouchi 5th St.

ShinYurakucho
Bldg.

Imperial
Theater

The Bankof Tokyo
Mitsubishi UFJ
Otemachi Bldg.

NIKKEI Bldg.

Otemachi Station, Chiy

Nijubashimae Station, Chiyoda LineTokyo
Chamber ofCommerce &Industry

Tokyo Station, JR Keiyo Line

Yurakucho
Center Bldg.
Yurakucho
HankyuDepartment
Store
Yurakucho
Seibu
Department
Store

Yurakucho
Bldg.

Marunouchi 6th St.

Yurakucho
Denki Bldg.

Marunouchi 7th St.

The Peninsula Sanshi Kaikan
Tokyo
Bldg.

Yurakucho Station, Yurakucho Line

iya
, Hib
tion

Sta
iya

Togyo Kaikan-Nippon
DN
Broadcasting System Tower 21
Bldg.

Hib

Toho
Twin Tower
Bldg.

Marunouchi
Police Sta.
HibiyaSankei Bldg.

Marunouchi
1-chomeRedevelopment
Project(tentative name)

Mitsui Bussan Bldg.

Otemachi Station, Toei Mita Line

Hibiya DoriLine

Hibiya Station, Toei Mita Line

Hibiya Marine
Bldg.

Wadakura-bori
Moat

Marunouchi 2nd St.

Hib
Ch iya St
iyod atioa Lin n,eBabasaki-bori MoatN

(owned by aspecial-purpose
company under managementof Mitsubishi Estate)n, Hanzomon
Otemachi Statio

Hibiya-bori Moat

AIG Bldg.

ResonaMaruha Bldg.

e
M

Marunouchi
Trust Tower
North

JX Bldg.
Daini Tekko Bldg.

The First StageThe Second Stage

Daiichi Tekko Bldg.

Daiwa
Gofukubashi Bldg.
Bank of Japan

Mitsubishi
Jushi
Bldg.
Marunouchi Building
Completed inAugust 2002

14 |The Industry Club of Japan and
Mitsubishi UFJ Trust and Banking
Building Completed in
March 2003

ANNUAL REPORT 2010

Marunouchi Kitaguchi
Building (Marunouchi OAZO)
Completed in August 2004

Tokyo Building
Completed in
October 2005

Shin-Marunouchi Building
Completed in
April 2007

The Peninsula Tokyo
Completed in May 2007
Opened in
September 2007

Marunouchi Park Bldg.
& Mitsubishi Ichigokan
Completed in April 2009

The Marunouchi 1-4
Project (tentative name)

Otemachi 1-chome
Second Area 1st Class
Urban Redevelopment
Project(owned by aspecial-purpose
company undermanagementof Mitsubishi Estate)

ANNUAL REPORT 2010 |15

Special Feature 2: Developing Tokyo into a Leading Environmental CityThe Shin-Marunouchi Building Became

Shin-Marunouchi Building:Anti-Global Warming Features

the First Example of the Practical Use of“Fresh Green Electricity”—Zero CO2 Emissions Energy—in Japan.
The Shin-Marunouchi Building initiated the practical use of “fresh green electricity” in April 2010.
There have been past cases of the application of the Green Power Certification System*1 in Japan. But theShin-Marunouchi Building marks the very first case where an electric power user directly receives 100% renewablefresh green electricity*2 in this country.
Fresh green electricity generated at power plants in Rokkasho-mura, Kamikita-gun, Aomori Prefecture and otherlocations is directly supplied to the Shin-Marunouchi Building through the wheeling service.*3 Mitsubishi Estate will
use solely fresh green electricity for all the electric power required at the building, thereby reducing the building’s
CO2 emissions by approximately 20,000 tons per year.
*1 Green electricity is generated using such renewable energy sources as wind power, solar power and biomass (biological resources). It is considered to have environmental
value added to the value of the electricity itself. This environmental added value is separated from the value of the electricity and is traded in the form of a Green Power
Certificate. Under the Green Power Certification System, electricity users are assumed to have used green electricity through the use of ordinary electricity due to the effectof holding the Green Power Certificate.
*2 Fresh green electricity is directly transmitted to users from producers. These users actually use such electricity, as opposed to the case of the Green Power Certification System,
where electricity users are only assumed to have used green electricity.
*3 Through the wheeling service, electricity is sent to users from a producer by using the transmission and distribution networks owned and operated by other electric producers.

Flexibility- and Versatility-Oriented Design
The building has been designed so that usage alterations and theupgrade of facilities can be flexibly implemented in the future. It is
assumed that the building will last 100 years due to the advanced
characteristics of the basic building specifications, such as generous
ceiling height and high floor weight capacity.
Rooftop Greenery
Rooftop greenery not only reduces the cooling load of the building,but also creates a relaxed and refreshing atmosphere.
Cooling with Outside Air
The use of outside air for temperature control before, during andafter the winter reduces the heating load of the building.
Natural Ventilation
Ventilation windows are arranged for pericounters (a type of air-circulation system) installed on the exterior walls of each standard officefloor. These windows facilitate natural ventilation when air-circulation
systems are turned off before and after the winter as well as at night.
Use of Energy-Efficient Devices and Equipment
The use of transformers, lighting systems, motors and other devices
and equipment, all of which boast low energy loss, reduce the electric-load of the building.
Effective Sunlight Blocking with Exterior Vertical Fins andHorizontal Louvers
In addition to external vertical fins and louvers, upper office floors
have windows using low-emissive glass and are equipped with air-barrier air-circulation systems. These features help substantially reduce
the thermal load of the building.
Atrium Enabling Natural Lighting and Ventilation and Exhaust
Heat Recycling
A natural ventilation system using air drafts has been adopted, andexhaust heat is reused as a source for air heating.
� Air shaft

� Proactive use of(open space for air drafts)

recycled materials

� Natural ventilation /� Rooftop greenerynight purge

� Use of recycledA� Daylight utilization

wastewater inbathrooms

A

Air supply
Offices� Flexibility- andExhaust air

versatility-oriented design

Use of water drained
from air-conditioning
systemsW
W

� Floor cooling using� Outside air coolingusing drained waterdrained water� Rooftop greenery

Underground passage

AtriumSprinkler

� Energy-efficientdevices and equipment
Cross-Sectional Image

16 |ANNUAL REPORT 2010

Use of rainwater
Mist
Heat supply throughdistrict heating / cooling system
� Waste sorting and collection

ANNUAL REPORT 2010 |17

Special Feature 2: Developing Tokyo into a Leading Environmental City

Building Business Segment ’s Initiatives Aimed at Reducing CO 2Intelligent Lighting System Helps toHalve Energy Consumption

District Heating and Cooling—Reducing CO2
Emissions to the Level of a 4,200-Hectare Forest
Comparison of CO2 Emissions
Standalone heating
and cooling systems

25

District heating andcooling system

Emissions
Airflow Window System Offers High-Class
Habitability and Energy Saving
Airflow Window System (conceptual rendering)
Exhaust air
Ceiling(10,000 tons/year)

20
15

Laminated glass

10

Outside5

Pale whiteComparison basedon current supply

Incandescent white

Mitsubishi Estate has started verification tests on an intelligent lighting
system in certain sections of the Marunouchi area. The intelligent lighting
system helps balance the productivity of office workers with energy saving.
Under this lighting system, office workers can set their desired brightness andcolor temperature by using their PC and illuminometer. This system consequently realizes optimal, minimally required lighting for individuals and theentire office.
By dimming or turning off the lighting as necessary, the intelligent lighting system helps reduce power consumption significantly compared withordinary lighting systems that illuminate offices uniformly. In fact, the intelligent lighting system is expected to more than halve the power consumption
associated with lighting in offices. For the Shin-Marunouchi Building,
Mitsubishi Estate has adopted LED lighting equipment for grid ceiling systems,
making brightness and color temperature control possible. This equipment
saves energy and lasts longer than other lighting equipment.

Floor

Comparison basedon increased supply

Mitsubishi Estate has promoted the district heating and cooling business in
the Marunouchi area through consolidated subsidiary Marunouchi Heat
Supply Co., Ltd. since 1976. District heating and cooling refers to anenergy-efficient, air-conditioning and water supply system where cold or hot
water and steam are supplied through pipes from central thermal energy
plants and other similar facilities to a group of buildings in the same area.
When comparing the environmental performance of the district heating andcooling system and the standalone heating and cooling systems for individual
buildings, for example, in the service district covering Otemachi, Marunouchi
and Uchisaiwaicho, the former reduces CO2 emissions in a volume equivalent
to that absorbed by a 3,100-hectare forest annually.
If all of the buildings in the same area were to use the district heating andcooling system, it is assumed that CO2 emissions reduction could be achieved
at a level equal to that of a 4,200-hectare forest, further lowering the total
CO2 emissions in the area by approximately 35%. As explained above, thedistrict heating and cooling system has the potential for making direct andsignificant contributions to the protection of the global environment.
Reference: Marunouchi Heat Supply Co., Ltd. website, “Advantage of DHC” at
http://www.marunetu.co.jp/en/merit/point01.html

Ecozzeria—Our Environmental
Strategy Center for the
Otemachi, Marunouchi and
Yurakucho Area

InsideLow-emissive,
double-glazed glass

0

OrangeGround, Rooftop and Exterior-Wall
Greenery as a “Heat Island” Countermeasure

The airflow window system allows room air to circulate through space with abuilt-in window shade inside the window unit. This space serves as an “aircurtain,” enhancing the window’s thermal insulation and sunlight-blocking
performance.
Window units adopted for each standard office floor in the Marunouchi
Park Building, completed in April 2009, use low-emissive, double-glazed
glass for their exterior panes. The adoption of these window units has resulted in an improvement in the heat transmission coefficient of the building’s
exterior walls and the sunlight-blocking performance of these windows.
Also, equipped with the solar-tracker function, the built-in window
shades are automatically controlled. This feature minimizes the effect ofsunlight on room temperature, improving the building’s energy-saving
performance and habitability.

The heat island phenomenon is caused by factors that include increases in
artificial land cover such as buildings and asphalt paving and in artificial waste
heat emitted through industrial activities, as well as by automobiles, chillers
and office automation (OA) equipment. The arrangement of ground, rooftop
and exterior-wall greenery contributes to an increase in quasi-natural land
cover and a decrease in artificial waste heat emissions, which, in turn, ease
the heat island phenomenon. Mitsubishi Estate has already established suchgreenery at the Marunouchi Building, the Shin-Marunouchi Building, thePeninsula Tokyo and the Marunouchi Park Building.
The Company has aggressively promoted this heat-island countermeasure, particularly for the Marunouchi Park Building. This building has ground,rooftop and exterior-wall greenery of approximately 1,500m2, 290m2 and
800m2, respectively.

Utilizing “Green” Solar PowerDistrict Heating and Coolingin the Marunouchi 2-chome
Area

Launch of Kanagawa
Prefecture’s Largest Electric
Car Charging Station
District piping

Boiler andchiller facilities

Receiving facilities

Located on the 10th floor of the Shin-Marunouchi Building, Ecozzeria wasThis service district in the Marunouchi 2-chome area covers 15 hectares in front oflaunched in May 2007 as the Otemachi, Marunouchi and Yurakucho (OMY) area’s

Tokyo Station. It is bordered by the JR train line to the east, Babasaki-dori to theenvironmental strategy center and the source of environmental information. This

south, Hibiya-dori to the west, and Gyoko-dori to the north. The total squarefacility performs tests to verify the effectiveness of environmental activities con-footage of serviced buildings is roughly 1.1 million square meters. Marunouchi

ducted within the OMY area and of environmental technologies used in building

Heat Supply Co., Ltd. operates boiler and chiller facilities on the fourth basement

facilities and infrastructure to improve energy efficiency. Test results are submitted

level of the Marunouchi Park Building, cogeneration facilities in the Marunouchi

to related authorities, and information on the environmental activities and tech-

Building and backup air-conditioning facilities in the Tokyo Building.

nologies that are proved to be effective by Ecozzeria is disseminated to companies in the OMY area. At the same time, through environmental seminars andevents, Ecozzeria is working to originate a new “eco-culture” in the OMY area.

18 |ANNUAL REPORT 2010

Solar power generation uses solar cell panels (photovoltaic modules) to directly convert solar energy into electricity.
Mitsubishi Estate has already introduced solar power generation systems
in the Marunouchi Building, the Shin-Marunouchi Building, the Industry Clubof Japan and Mitsubishi UFJ Trust and Banking Building and the Marunouchi
Park Building and is promoting the use of green electricity. At the Marunouchi
Park Building, for example, solar cell panels boasting a maximum output ofapproximately 60kW are installed on the rooftop. Electricity generated bythese panels is used for illumination of the building’s surrounding area
during nighttime.

With the aim of contributing to the proliferation of electric cars, the Mitsubishi
Estate Group is advancing such infrastructure development as the installation of
rapid chargers and outlets for normal charging at the buildings that it owns
and manages.
For instance, in September 2009, Mitsubishi Estate began the operation of anelectric car charging station—the largest in Kanagawa Prefecture (as of the launchdate)—which offers one rapid charger and eight outlets for normal charging, rightwithin the parking facilities of the Yokohama Landmark Tower.

ANNUAL REPORT 2010 |19

Business Information
Business Structure of the Mitsubishi Estate Group
Maximize asset
Risk
efficiency
management

Building Business

Real estate
investment

Urban Development &Investment Management

Residential Business

International Business

Funds
procurement

Mitsubishi EstateCo., Ltd.

Custom-Built Housing

Determinecurrent
statusCustomers

Architectural Design &Engineering

Conduct
research
and analysis

Real estate-relatedplanning,
proposals and services

Considerinitiatives
and proposals

Hotel Business

Proposal determination
Real Estate Services

Implementation

Business Segment
Building BusinessBusiness Activities• Property Management and Office Leasing
Building Business segment revenues are derived mainlyGroupfrom building development and leasing in Japan. This
• Commercial Asset Management and Develop- segment is also engaged in building management,
ment Groupparking facilities, district heating and cooling, and• Retail Property Groupother operations.

Residential Business• Residential Development GroupUrban Development & Investment Management

International Business

The Mitsubishi Estate Group

Group Framework

Residential Business segment revenues are derived
from the construction and sale of condominiums,
single-unit homes, and residential and commercial
lots. This segment is also engaged in the managementof condominiums and homes, along with leisurerelated businesses.

• Commercial Property Development and Invest- Urban Development & Investment Management
ment Groupsegment revenues are derived from the development• Investment Management Groupof income-generating real estate for investment
purposes, asset management, and related activities.

• International Business GroupInternational Business segment revenues are derived
from the development and leasing of buildings conducted through U.S.-based Rockefeller Group, Inc.

Consolidated
Sales Breakdown¥489.6
Billion

33.8%

¥50.6

4.9%

¥40.1

3.9%

BillionBillionArchitectural Design & Engineering

Custom-Built Housing

Hotel Business• Architectural Design & Engineering Group• Custom-Built Housing Group• Hotel Business Group

Architectural Design & Engineering segment revenues
are derived from the design and project supervision of
construction and civil engineering projects and related
activities, mainly through Mitsubishi Jisho Sekkei Inc.

¥19.4

1.9%

Custom-Built Housing segment revenues are derived
from contracted construction of custom-built housing
and related activities through Mitsubishi Estate Home
Co., Ltd.

¥26.4

2.6%

¥28.5

2.8%

¥25.8

2.5%

¥3.2

0.3%

BillionBillionHotel Business segment revenues are derived from theoperation of Royal Park Hotels.
Billion

Real Estate Services• Real Estate Services Group

Real Estate Services segment revenues are derived
from real estate brokerage and related services
through Mitsubishi Real Estate Services Co., Ltd.

Billion

Other

Real estate development

Real estate investment

Real estate liquidity• Development method
proposals• Business plan support• Project management• Effective utilization/joint
ventures (equivalentexchanges/term leaseholdinterest method)• Provisional use• Reconstruction• Real estate investment
strategy formulation support• Market research and analysis• Due diligence• Acquisition support• Asset management• Real estate-backed
financing support• Securitization• Specified real estate
joint ventures• Sales and leaseback• Real estate brokerage

Real EstateConsulting &Solution
Department

Building operation andmanagement

Comprehensive building
analysis• Operation and management plan
analysis and proposals• Long-term maintenance plan consulting• Commissioned operation andmanagement of buildings,
retail facilities and hotels• Subleasing• Tenant marketing• Operation and management ofresidential complex and corporate
housing• Property management• Earthquake resistanceanalysis• Facility management• Energy saving andIT utilization in buildings
and facilities• Interior and exteriorrenovation• Barrier-free facility
construction• Anti-aging measures forbuildings and facilities• Conversion

Construction

Design and supervision

CRE strategy support• Single-unit homes
and rental andcorporate housing• Residential andoffice renovation• Environmental assessment
and research• Consulting for urban
development and private
finance initiatives (PFIs)• Consulting, design andsupervision for environmental
and civil-engineering solutions• Construction management• Design and supervision forbuildings and structures• Design and supervision forinterior and exterior• Organization of CRE
information• CRE valuation• Support for strategy
formulation andimplementation

Leveraging the Resources of the Entire Group to Expand Business
Opportunities in Proposal-Based MarketingStanding at the heart of Mitsubishi Estate’s strategic marketing structure, the Real Estate Consulting & Solution
Department works to foster deeper ties with clients through proposal-based marketing, which is conductedacross the Company as a whole. Making full use of its accumulated real estate development, planning and management expertise, the department is active in efforts to realize maximum value for its clients.

A Wide Range of Solutions Covering Everythingfrom Individual Real Estate Needs to Corporate Real
Estate Strategic Support
This department is independent from Mitsubishi Estate’s
eight business segments (comprised of the Building
Business, Residential Business, Urban Development &Investment Management, International Business,
Architectural Design & Engineering, Custom-Built
Housing, Hotel Business, and Real Estate Services).
In an effort to consistently provide optimal consultation and solutions services that address clients’ real estateneeds, such as effective methods for property utilization
and acquisition, we create business proposals that draw
on the resources of the entire Group.
The department offers consultation for individual
properties and multiple properties held and leased bycorporate clients. We analyze the situation, taking into
consideration the comprehensive features of the realestate under review, and provide solutions that match thefinancial and management strategies of individual clientcompanies. In this manner, Mitsubishi Estate endeavors torealize the maximum value of corporate real estate (CRE).

Other segment revenues are derived from related
operations other than the aforementioned.
Billion

20 |

47.4%

¥350.0BillionAnalysis and review

ANNUAL REPORT 2010

ANNUAL REPORT 2010 |21

BuildingBusiness

4

52(Millions of yen)

(Millions of yen)

200,000

489,696
149,836

300,000

119,204

400,000

200,000

406,606

500,000

100,0000

1

160,000

120,000

80,00040,0002009/3 2010/3

0

Revenue from operations (left scale)Operating income (right scale)

3

Enhancing Urban Functions from an Area Management Perspective

1 Mitsubishi Ichigokan
Mitsubishi Ichigokan has been completely
restored to what it was in 1894—the first
office building in Marunouchi. This building
will function as a key culture and arts complex
for expanding the area’s cultural horizons.

2 Otemachi 1-chome Area 1st Class

The Building Business primarily undertakes the development, leasing and property management of office buildings in Japan’s major cities. It also handles the management of large-scale shopping centers, the operation of
parking lots and district operation of heating and cooling services throughout Japan, thereby enhancing urban
functions from an area management perspective.

Urban Redevelopment Project

On the former site of government officebuildings in Otemachi, a multipurpose complex was completed in April 2009, including
office buildings, an international conference
center and retail facilities (front to back:Keidanren Kaikan; JA Building and NIKKEIBuilding). As a project partner, Mitsubishi
Estate has acquired a section of an officebuilding and retail space for leasing.

3 Marunouchi 1-4 Plan
(tentative name)Through this project, three existing officebuildings are being reconstructed into one
large-scale building to facilitate more effective land use. The new building will serve as
an advanced business center that accommodates the wide-ranging needs encountered intoday’s business globalization and informatization. Leveraging the extensive portfolio of
its business functions, Mitsubishi Estate will
promote this project to create a high-quality
urban environment and enhance urban infrastructure, while giving due consideration to
the environment-friendliness of the project.

22 |Promoting the Second Stage of Marunouchi
Redevelopment
Mitsubishi Estate is going beyond the role of developer tothat of producer, as it maximizes the full potential of the
Marunouchi area and delivers new functions that meet
the business needs of today and tomorrow. In 1998, we
commenced the first stage of Marunouchi
Redevelopment, a 10-year program encompassing the
upgrade, reconstruction and renovation of much of the
Marunouchi district. Beginning with the Marunouchi
Building in August 2002, six new buildings have been
completed, highlighted by the grand opening of theShin-Marunouchi Building in April 2007. With the opening of the Peninsula Tokyo in September 2007, the firststage of Marunouchi Redevelopment came to a close.
From 2008, we have been pushing ahead with thesecond stage. Designed to reorganize the area as one
comprehensive city block, the first project of the second
stage consisted of the Marunouchi Park Building &Mitsubishi Ichigokan, along with the simultaneous

ANNUAL REPORT 2010

redevelopment of the Mitsubishi Shoji Building, theFurukawa Building and the Marunouchi Yaesu Building.
This large-scale project was completed in April 2009.
Adding to these initiatives, Mitsubishi Estate haslaunched the second project of the second stage, the“Marunouchi 1-4 Plan” (tentative name), encompassing
the rebuilding of the Togin Building, the Sumitomo Trustand Banking Co., Ltd. Tokyo Building, and the Mitsubishi
UFJ Trust and Banking Corporation Tokyo Building. Goingforward, Mitsubishi Estate is tackling the third project—rebuilding the Mitsubishi Soken Building—throughparticipation in the second phase of the Otemachi
Redevelopment Project using a linked urban redevelopment process.
Based on the achievements of Marunouchi
Redevelopment to date, the second stage will encompass
broader and more comprehensive plans to further rejuvenate the Otemachi, Marunouchi and Yurakucho districts,
an area of approximately 120 hectares.

6

W Retail Property Group
Active Expansion of the Retail Property Businessthroughout Japan
In its retail property business, Mitsubishi Estate is pushingahead with the development of various types of retailproperties that match the unique features of each location and area. The Mitsubishi Estate Group continuously
engages in facility planning, development, tenant leasing
and management operations through its comprehensive
business structure.
A Fresh Breeze and a Joy—for People and City
Mitsubishi Estate is evolving its retail property business toprovide exciting new places where people of all walks oflife and lifestyles can gather in comfort. Since the 1989
opening of the Tenjin MM Building (IMS) in Fukuoka
Prefecture, retail property operations have become afull-blown business with numerous projects completed,including the Yokohama Landmark Tower, Aqua City
Odaiba and the Marunouchi Building.
In its efforts to create a more appealing city,
Mitsubishi Estate has continued to raise the value of retailfacilities in the Marunouchi area, including theShin-Marunouchi Building in 2007, followed by the
Marunouchi Brick Square (commercial zone in the
Marunouchi Park Building) in September 2009. Alongwith such infrastructure development, the Company isaggressively carrying out promotional activities. From anarea management perspective, Mitsubishi Estate is
focusing on operations that realize intangible benefits.
In projects outside the Marunouchi area, we opened
the Ami Premium Outlet in the town of Ami, Ibaraki
Prefecture in July 2009 and the Higashikurume Shopping
Center “Kurune” in Higashikurume City, Tokyo in
November 2009. Also, in December 2009, the Company
implemented the second stage of shop floor expansion at
the Kobe-Sanda Premium Outlets.
Mitsubishi Estate will continue to focus on three
types of retail properties: those located in the Marunouchi
area and urban centers; those situated in suburban areas,such as the Minamisunamachi Shopping Center“SUNAMO” in Tokyo’s Koto Ward and the Izumi Park
Town Tapio in Sendai City, Miyagi Prefecture; and outlet
shopping centers operated by Chelsea Japan Co., Ltd.,
which became a Mitsubishi Estate consolidated subsidiaryin March 2009. Maintaining this focus, the Company will
promote retail property projects throughout Japan.

7

4 Marunouchi Brick Square
Opened in September 2009 as a commercial
zone in the Marunouchi Park Building, theMarunouchi Brick Square offers retail functions suitable for the hub that joins the
Marunouchi and Yurakucho areas. Together
with the Mitsubishi Ichigokan Museum and its
surrounding park, this new shopping facility is
generating synergy that attracts people to
Marunouchi.

5 Higashikurume Shopping
Center “Kurune”

This shopping center opened in November
2009 in Higashikurume City, Tokyo, as the
fourth lifestyle-oriented retail facilities in thearea. The center houses approximately 25
retail shops offering diverse merchandise thathelps people realize a comfortable, enjoyable
lifestyle.

6 Ami Premium Outlets
Operated by Chelsea Japan Co., Ltd.—a developer specializing in outlet shopping centers—
this is the eighth CHELSEA PREMIUM OUTLETS
shopping center in Japan. Opened in July2009 in the town of Ami, Ibaraki Prefecture,
this shopping center accommodates approximately 100 retail shops.

7 Kobe-Sanda Premium Outlets
Located in Kita Ward of Kobe City, this outlet
shopping center started operations in July
2007. In December 2009, the shopping center
opened expanded shop floors. Total shop
floor area almost doubled from 19,174m2 to
35,041m 2, and the number of retail shops
doubled from 90 to 180.

ANNUAL REPORT 2010 |23

Residential
Business

3

2(Millions of yen)

(Millions of yen)

240,000

309,039

320,000

50,000350,008

400,000

40,00030,00035,73080,00020,00015,460160,000

0

10,0000

2009/3 2010/3

1

Revenue from operations (left scale)Operating loss (right scale)

4

Providing High-Quality Homes That Fulfill Market Needs

1 Azabudai Park House
Located in Azabudai 2-chome, Minato Ward,
Tokyo, Azabudai Park House is a 165-unit condominium building with fixed-term landleasehold interest. Adjacent to the Tokyo
American Club building, this building is situated within a residential area on a hill, offering
an open view of Tokyo Tower and the
Roppongi area. Scheduled for completion in
December 2010, the building also offers easy
access to four stations on three different subway lines, including a six-minute walk to
Azabu-juban Station. Its composite design—
factoring in the adjacent Tokyo American
Club building—was realized by the renowned
Cesar Pelli, who served as the master architect
for this project.

2 STYLE HOUSE MEGURO
MIDORIGAOKA

Located in Midorigaoka 1-chome, Meguro
Ward, Tokyo—a green, hilltop and quiet
residential area—this 19-unit condominium
building provides fully order-made condominiums. Scheduled for completion in February
2011, this building features easy access to four
stations on three different train or subway
lines, including a nine-minute walk to Toritsudaigaku Station on the Tokyu Toyoko Line.

24 |Through the Residential Business segment, we aim to provide ideal living environments in concert with healthy
and fulfilling lifestyles by developing and marketing condominiums, single-unit homes and residential land, as
well as engaging in businesses such as condominium management and consulting services for the optimal use ofreal estate. At the same time, Mitsubishi Estate operates and manages golf courses.

Expanding the Condominium Business throughDifferentiation Spurred by Prime Locations andMarket-Oriented Product Planning
In its condominium business, Mitsubishi Estate fulfills
market needs through location selection based on solid
market research. The Company continues to provide its“Park House” condominiums, mainly in the Tokyo
Metropolitan area, where demand is steady. Offering
excellent product planning based on the skillful development of a site’s potential, Mitsubishi Estate aims forcompetitive advantage by focusing on condominiums incentral Tokyo that offer superior convenience; large-scale
properties with comprehensive communal facilities builtwith the environment in mind; high-rise condominiums
that provide spectacular views; and differentiated designs
achieved through collaboration with leading building
designers and design offices from a variety of industries.
Also, in response to ever-diversifying consumer tastes, theCompany develops and markets its STYLE HOUSE series offully order-made condominiums.

ANNUAL REPORT 2010

In step with providing high-quality condominiums,
Mitsubishi Estate is reinforcing its focus on quality assurance services. Utilizing its proprietary disclosure system, theCompany delivers to its customers an easy-to-understandwritten record of property features, facilities and quality
evaluation at each stage of design, construction andcompletion. A maintenance report is regularly provided
after individual property owners take up residence.
In its residential leasing business, which sells properties to prospective institutional investors, Mitsubishi Estate
promotes the development of its PARK HABIO brand,
mainly in central Tokyo. The Company has already completed 19 properties, and it will continue to supply highquality leased condominiums, mainly in central Tokyo,that accommodate residential leasing needs, thereby
achieving stable profitability.

Integration of Residential Development andSales Operations
Based on a capital alliance agreement in December 2004,
Mitsubishi Estate and Towa Real Estate Development Co.,
Ltd. (“Towa”) have mutually pursued synergies throughjoint ventures by drawing on their respective strengths
while gradually reinforcing their capital relationship. Since
the autumn of 2008, business conditions have persistently
grown severe, and market competition has continued tointensify. In response, with the aim of bolstering its competitiveness in residential development and sales operations and maximizing its earnings power, Mitsubishi Estate
has decided to establish a new company around January
2011. This new company will be formed through integration of the residential development and sales functions ofMitsubishi Real Estate Services Co., Ltd. and Towa, while
having a comprehensive structure capable of performing
both residential development and sales operations.
Through this business integration, a framework willbe established to allow the three companies to leverage
their respective strengths. Based on such a framework, theMitsubishi Estate Group will provide residential units in a
wider price range and thereby further develop its residential business. At the same time, the Company will continue to deliver products and services of customers’ choice.

Environmental Initiatives
As part of efforts to promote its environmental initiatives,
Mitsubishi Estate established MEC eco LIFE Co., Ltd. in
December 2008.
In November 2009, following joint planning with
MEC eco LIFE, the Company started the construction of
the Kichijoji Eco Mansion (tentative name), which has
been certified as an eco-friendly project under the program run by the Ministry of Land, Infrastructure, Transport
and Tourism (MLIT) to promote the reduction in CO2emissions associated with residential and other buildings.
This building will be packed with features that contributeto CO2 emission reductions, including an exterior thermal
insulation construction method and a solar thermal
utilization hot-water supply system. Compared with ordinary condominium complexes, the Kichijoji Eco Mansion is
expected to reduce CO2 emissions by 13.3 tons annually.
Also, Mitsubishi Estate started marketing activities for
the Park House Komagomesomei in April 2010. This new
condominium complex introduced the “soleco” system,
which combines a solar power generation system and acentral high-voltage power reception system. The use ofthis system reduces initial facilities costs while enabling
the generation of electricity using solar power—a green
energy source. Furthermore, this system contributes to the
reduction of electricity charges in exclusively owned areas.
The “soleco” application has been designated as a newenvironmental business model for reducing greenhousegasses by MLIT. As such, Mitsubishi Estate will promote
the development of condominium complexes that contribute to CO2 emission reductions in the household sector.

5

3 Park House Komagomesomei
This 50-unit condominium building is locatedin Komagome 4-chome, Toshima Ward, Tokyo.
Combining Japanese tradition and Westernmodernism, the building’s external façade
provides a sense of depth. Around the building, seven types of cherry trees are planted—
including Somei-yoshino—creating an
atmosphere very apropos for the birthplace of
the Somei-yoshino. Also, as part of efforts to
put the Company’s environmental initiatives
into practice, the building uses the “soleco”
system, which integrates solar power generation and central high-voltage power reception
systems. Scheduled for completion in March
2011, this is the first Park House building to
introduce the “soleco” system.

4 Park House Enoshima
Scheduled for completion in February 2011,
this 77-unit condominium building is locatedin Katase-kaigan 2-chome, Fujisawa City,
Kanagawa Prefecture. In front of the site isvast Sagami Bay, and certain units offer a viewof Enoshima Island and Mt. Fuji. Featuring athree-minute walk to Katase-enoshima Stationon the Odakyu Enoshima Line and locatedapproximately one-hour by train to central
Tokyo, Park House Enoshima provides an optimal balance of urban and resort lifestyles.

5 PARK HABIO Shinjuku Eastside Tower
Located in Shinjuku 6-chome, Shinjuku Ward,
Tokyo, this 761-unit large-scale lease condominium building is scheduled for completionin December 2011. With a towering view ofShinjuku and the Tokyo skyline, the top floor
offers residents a swimming pool, Jacuzzi,
sports gym, hot bath and bar lounge.
Providing such premium communal facilities
and hospitality that go beyond those expected in ordinary leasing condominium buildings,
this building realizes unparalleled tenant satisfaction.

ANNUAL REPORT 2010 |25

UrbanDevelopment& Investment
Management

3(Millions of yen)

(Millions of yen)

80,00085,00091,919100,000

68,00050,691
40,25940,00051,00033,50460,00020,000034,00017,0002009/3 2010/3

0

Revenue from operations (left scale)Operating income (right scale)1

1 Nibancho Center BuildingStanding at the prestigious location adjacentto the new Belgian Embassy building in
Nibancho, Chiyoda Ward, Tokyo, this is a multipurpose complex housing high-grade offices
and residential units. Completed in July 2009,
this building provides greenery on external
walls and rooftop, and the site includes a vast
open space totaling 1,500m2. These features
add to the property’s pleasant and relaxing
atmosphere.

2 Toyosu 3-1 City Block Building
Project (tentative name)

Directly connected to Toyosu Station on theTokyo Metro Yurakucho Line, this project
boasts superior locational characteristics.
Housing offices and retail spaces, this ecofriendly multipurpose complex reduces CO2
emissions by 26% compared with ordinary
buildings thanks to greenery occupying 36%of the site and the effective utilization of natural air flow and sunlight. It is scheduled forcompletion in August 2010.

2

Prioritizing Development and Management in Business Opportunity
Expansion
In line with its fundamental policy, the Urban Development & Investment Management business develops andmanages high-quality, income-generating real estate that meets diversified investor needs in the real estate
investment market. We are working to expand these operations based on a two-tiered business model,
promoting development functions in concert with management functions.
Actively Promoting the Development Business byStrengthening Asset Solutions Capabilities
In the context of development functions, we build
income-generating real estate to be sold as prime investment products in a timely manner after the completion of
construction and the commencement of operations.
In July 2009, the Nibancho Center Building wascompleted in Chiyoda Ward, Tokyo, as were the YodoyaBashi Square in August of the same year in Osaka Cityand the Shijo Karasuma Center Building in January 2010
in Kyoto City. Currently, Mitsubishi Estate is undertaking
the Toyosu 3-1 City Block Building Project (tentative name)and the Harumi 2-chome 2-4 City Block Building Project(tentative name).

Mitsubishi Estate does not limit its activities solely
to office buildings: it also engages in the development ofa broad range of real estate, including serviced apartments and distribution centers, in an effort to address
the diverse needs of the investment market. As forserviced apartments, we opened the Citadines Kyoto
Karasuma-Gojo—a joint project with The Ascott Group
Limited, a Singapore-based global serviced apartment
operator—in Kyoto City in March 2010.
Looking forward, Mitsubishi Estate is making every
effort to secure more business opportunities by strengthening asset solutions capabilities to maximize asset value
for real estate customers.

4

3 Harumi 2-chome 2-4 City Block

Building Project (tentative name)

Providing a Broad Range of Specialized Services forReal Estate Investment Management
Mitsubishi Estate is active in the real estate investment
management business through Mitsubishi Jisho
Investment Advisors, Inc. and Japan Real Estate AssetManagement Co., Ltd. Mitsubishi Jisho Investment
Advisors provides specialized services relating to realestate investment management through such means asestablishing private funds that invest in real estate that
includes retail properties, residential properties and offices. Japan Real Estate Asset Management manages theinvestments of Japan Real Estate Investment Corporation,a Japanese real estate investment trust (J-REIT) specializing
in office buildings. These Group companies are steadily
growing their operations and working to continuously
expand the balance of assets under management.

Mitsubishi Estate will place equal emphasis on both
the development and management functions to contribute to the growth of the real estate investment market in
Japan. In this way, we will strive to capture new business
opportunities, thereby accommodating socioeconomic
needs for urban development.

The Harumi area in Chuo Ward, Tokyo, is seeing the acceleration of development projects
aimed at supporting lifestyles that balance
work and private life. Through this project,
Mitsubishi Estate is constructing a leased
office building. This eco-friendly project willfeature greenery occupying approximately
35% of the site, while using low-emissive,
double-glazed window glass and solar-tracker,
electric-powered window shades to reduce
CO2 emissions associated with the building. It
is scheduled for completion in March 2012.

4 Yodoya-Bashi Square(Osaka City)

Directly connected to Yodoya-bashi Station on
the Osaka Municipal Subway Midosuji Lineand the Keihan Railway Keihan Main Linethrough underground passages, this highgrade office building is located in the Yodoyabashi area—Osaka City’s mainstay business
district. Its 18-story high-rise structure captures the eye of passersby on Tosabori-doriStreet. It was completed in August 2009.

5 Citadines Kyoto Karasuma-Gojo(Kyoto City)

This is Mitsubishi Estate’s fourth project in theserviced apartments business jointly undertaken with Singapore-based The Ascott Group
Limited. Marking the penetration of the
Citadines brand into the Kansai region, thisserviced apartment targets foreigners who
have come to Japan on business for one nightor up to a several-month stay. It opened in
March 2010.

5

26 |

ANNUAL REPORT 2010

ANNUAL REPORT 2010 |27

International
Business

3(Millions of yen)

(Millions of yen)

22,00010,49633,00040,187

16,00012,52644,00020,00047,38255,00011,0000

12,000

8,000

4,000

2009/3 2010/3

0

Revenue from operations (left scale)Operating income (right scale)1

1 Central St Giles Redevelopment

2

4

5

A Globally Growing Real Estate Leasing and Development Business

4 River Plate House in London

Project in London

A joint redevelopment project with Legal &General, a major U.K. life insurance company,
this complex comprises 66,000m2 of offices,
retail shops and residences. Construction wascompleted in April 2010.

2 The McGraw-Hill Building in

In its International Business, Mitsubishi Estate operates mainly through Rockefeller Group, Inc. (RGI), whichowns and manages office buildings in such locations as New York City and London. The Company is working to
expand its real estate development business, mainly across the United States and in London, while currently
looking to grow its real estate investment management business. Furthermore, we established Mitsubishi Estate
Asia Pte. Ltd. in Singapore in October 2008, aiming to expand our Asian operations.

New York

With 51 floors above ground and five floors
below ground, the McGraw-Hill Building
boasts total floor space of 237,000m2. Locatedin Manhattan, New York, this office building
was completed in March 1972. Mitsubishi
Estate first acquired an interest in the building in April 1990.

3 Paternoster Square in London
Development of this multipurpose office complex located in the City of London was completed in May 2003. The Company owns twobuildings: Warwick Court, with floor space of
29,480m2; and 10 Paternoster Square, withfloor space of 34,866m2.

Advancing the Real Estate Development Business
Mainly across the United States and the United
Kingdom
In the United States, Mitsubishi Estate owns large-scale
office buildings—the McGraw-Hill Building and theTime-Life Building—in New York’s Manhattan, and it
acquired the One North Central office building in a prime
location in central Phoenix, Arizona, in March 2008. The
Company is currently undertaking approximately 30
development projects in 10 states, ranging from officecondominiums and distribution facilities to homes andmultipurpose complexes. In addition to expanding its realestate development business, Mitsubishi Estate aims toestablish a global platform by growing its real estate
investment management business. Such a platform will
enable Mitsubishi Estate to strengthen organic ties amongits business bases worldwide and to facilitate a unified
approach to investor marketing, research, investment
decision-making and fund formation.

Mitsubishi Estate is also aggressively expanding its
U.K. development business in London, England. Throughthe Paternoster Square Redevelopment Project completed
in 2003, the Company has developed a multipurpose
complex centered on an office building in the financial
district of the City of London. Also, we completed the
Bow Bells House Redevelopment Project—a joint venturewith Mitsubishi Corporation—in 2007 in the City of
London. In May of the same year, Mitsubishi Estate
acquired River Plate House, an office building situated ina prime location within the City of London. Expanding onthese successes, the Company completed the Central St
Giles Redevelopment Project in April 2010 in London’sWest End. Through this project, Mitsubishi Estate constructed a multipurpose complex having a floor space of
66,000m2 and housing offices, shops and residences.
Located adjacent to Oxford Street—West End’s main
artery—and such entertainment districts as Covent
Garden and Soho, this complex offers superior accessconvenience.

Acquired in May 2007, this classically designed
office building comprises 19,000m2 of floor
space.

In recent years, real estate investment funds are globalizing their operations, while real estate markets in Asiaand other emerging countries have, until recently, been
rapidly expanding due to the economic growth in theseregions. In response, in October 2008, Mitsubishi Estateestablished Mitsubishi Estate Asia Pte. Ltd. in Singapore as
its Asian flagship base. Mitsubishi Estate Asia will target

all Asian regions other than Japan, focusing on new
development projects as well as redevelopment projects
aimed at enhancing the value of existing real estate. At
the same time, Mitsubishi Estate Asia is providing support
to each of the Company’s business segments in promoting their business globalization.

5 One North Central in Phoenix
Constructed in 2001 in Phoenix, Arizona, thisoffice building has floor space totaling
38,000m 2. Mitsubishi Estate acquired thisbuilding in March 2008.

6 Distribution Center in Atlanta
Completed in May 2010 in Atlanta, Georgia,
this distribution center has floor space totaling 140,000m2.

6

28 |

ANNUAL REPORT 2010

ANNUAL REPORT 2010 |29

Architectural
Design &Engineering

Custom-Built
Housing2

21(Millions of yen)
(Millions of yen)

(Millions of yen)

40,0004,000

30,000

3,000

2,800

26,427

2,100
20,0002,000

510,000

5,000

700

0

0

370

1,400

281

1,392

10,00019,46615,0002,178

20,0003,500

20,05825,00029,349(Millions of yen)0

2009/3 2010/3

1,000

0

2009/3 2010/3
Revenue from operations (left scale)

Revenue from operations (left scale)Operating loss (right scale)Operating income (right scale)1

1 Marunouchi Park Building &Mitsubishi Ichigokan

This project involved the redevelopment of acity block consisting of a tower and a low-risebuilding, along with the Mitsubishi Ichigokanbuilding. In line with the designation of the
Marunouchi area as a Priority Urban
Redevelopment Zone, Mitsubishi Estate madea variety of environmental proposals throughthis project. Based on these proposals, therelaxing Ichigokan Square was created, surrounded by the Mitsubishi Ichigokan and thecommercial zone of the Marunouchi Park
Building, featuring rich greenery.

2 Otemon Gakuin University
No. 1 BuildingThis project was undertaken to reconstruct auniversity office building. To balance theoffice functionality required to facilitate efficient administrative operations with the architectural design that impresses students andvisitors, the building’s exterior walls are covered with casts having as a motif the cherry
blossom, which has been designated as theuniversity flower. So, this office building willbe blessed with cherry blossoms throughout
the year.

30 |3

Responding to Ever-Diversifying Needs through SophisticatedServices and Superior Technological Capabilities
At the core of Mitsubishi Estate’s Architectural Design and Engineering Business are Mitsubishi Jisho Sekkei Inc.
(MJS) and MEC Design International Corporation. MJS engages in the design and administration of construction
and civil engineering projects, building renovation work and projects related to urban and regional development,
as well as comprehensive consulting. MEC Design International directs interior design and construction projects.
Maintaining Solid Orders in the Architectural Design
and Engineering Business and Expanding Our
Presence in Peripheral Businesses and China
Major projects completed by MJS during the fiscal year
ended March 31, 2010 included the Marunouchi Park
Building & Mitsubishi Ichigokan, the Otemachi 1-chome
Type-1 Urban Area Redevelopment Project, the Hiroo
Garden Forest (first and second phases), the Otemon
Gakuin University No. 1 Building and the North PacificBank Hamanasu Complex. In the fiscal year ending March
31, 2011, MJS plans to complete such projects as thenew office buildings for Lower House Diet Members, theAzabudai Park House and the new Gakushuin Girl’s Junior& Senior High School Classroom Building. MJS will
aggressively pursue increased architectural design andengineering orders for new construction and renovation
projects. At the same time, it will continue to enhance
its position in such fields as construction managementand district heating and cooling facilities reconstruction,
where it boasts particular strengths based on its extensive
experience.

ANNUAL REPORT 2010

Also, during the fiscal year under review, MJS wonorders for such projects as the Shenyang Major Financial
District Urban Planning and Design Project. With its
Shanghai Office, which has been expanded in terms ofhuman resources and office functions, MJS will leverage
its highly acclaimed technological expertise in architecturaland urban design, environmental protection and energy
saving, thereby steadily expanding its Chinese business.
Realizing Eco-Friendly Design and Engineering
Considering environmental aspects has become an absolute requirement in urban development. In response to
the demands of the time, MJS will offer eco-friendly
proposals more aggressively than ever before, at affordable prices and with tangible results, to attain even higher
acclaim from its customers.

4

1 Akasaka Home Gallery “Everie”
Combining a sharply ridged roof with thegentle curves of the exterior pergola, thisEverie home has a simple yet distinctive overall silhouette. The Everie home helps owners
to pursue green lifestyles, optimally balancing
eco-friendliness and comfortable living.

2 “Everie” (Conservatory)
Equipped with a thermal storage floor, thisopen-ceiling space is an eco-friendly Everie feature that utilizes solar radiation for heating in
the winter. In the spring and fall, with windows
and the ceiling window left open, this multifunction space can function, for example, as aninterior patio to enjoy coffee and tea breaks.

3 “Everie” (Living Room/Enclosed
Electric-Car Garage)

Because an electric car does not emit exhaust, it
can be parked inside the Everie home. The space
adjacent to the enclosed garage can be arranged
as a living room and for many other uses.

4 Komazawa Stage 1 Home Gallery
This model home has a unique cubic overall
shape with natural stone exterior walls adding a stately impression.

5 Komazawa Stage 1 Home Gallery(Living Room)This is a living room, raised from the first floor,
with a vaulted ceiling. The outstanding open
design and space realize high-quality relaxation.

6 Komazawa Stage 1 Home Gallery(Kitchen/Dining Room)This model home features a “cockpit” style original kitchen and dining room, which faces anopen-ceiling space on the first floor. This spaceencourages communication between family
members, as well as between hosts and guests.

6

Building Homes That Accommodate Residents’ Lifestyle-Related Preferences
In the Custom-Built Housing Business segment, Mitsubishi Estate, mainly through Mitsubishi Estate Home Co.,
Ltd. (MEH), undertakes construction contracts for custom-built housing for individuals, housing complexes,
medical clinic buildings and other types of edifices, while conducting the renovation of homes and retail shops.
Also, Mitsubishi Estate Housing Components Co., Ltd. supplies high-quality construction materials for use withthe two-by-four construction method.

Realizing Customers’ Dream Homes through“Handmade” Custom Design
In the custom-built housing business, MEH works to meetcustomers’ preferences by offering custom-design services.
To this end, MEH has fostered its unique technological capabilities and established its own stringent quality standards.
Specifically, by combining its proprietary Super Two-by-Fourconstruction method, which demonstrates maximum
earthquake protection, fire resistance and durability, and
the Aerotech central air-conditioning method, MEH builds
homes that are comfortable to live in and are capable offlexibly satisfying customers’ custom-design needs.
MEH makes proposals regarding effective utilizationof land and other assets when constructing housing complexes. Meanwhile, MEH provides fully order-made medical clinic buildings and other structures without the use ofpredetermined construction and architectural methods.
In the renovation business, MEH offers an extensive
menu of renovation plans for homes, condominiums,
buildings, retail shops and other structures. Based on suchan advantage, we are precisely accommodating customers’ housing desires and preferences.

Proposing Eco-Friendly Home Building and Lifestyles
with Enjoyment in Space Utilization
Based on the concept of “Smart, Simple and Suitable,”the SELECUBE lifestyle-proposal small home series
released in the spring of 2009 offers highly cost-effective
homes through rational planning and trendy functional
specifications. Building on the success of its SELECUBE,
MEH has enabled the provision of the new SELECUBESOLAR series in the spring of 2010, within the same pricerange as SELECUBE. Through the adoption of a photovoltaic generation system, which is increasingly being soughtby home buyers, the SELECUBE SOLAR series boasts
substantially improved energy efficiency.
Also, leveraging its extensive expertise in spacedesign, which it has nurtured in fully order-made homebuilding, MEH has begun offering proposal-based services
to help home owners to more effectively and efficiently
utilize space in homes. Collecting various ideas presented
by a specialized team, consisting mainly of female members, MEH has created a catalogue that provides for
effective space utilization. Through such services, MEH is
proposing lifestyles with enjoyment in space utilization.
ANNUAL REPORT 2010 |31

Hotel Business

Real Estate
Services

2

0

500

2009/3 2010/3

25,8163,750

15,000

2,500

7,500

1,250

210

28,564

1,000

5,000

23,37422,5001,500

112

10,00019

20,000(Millions of yen)

30,0002,000

30,77540,00030,000(Millions of yen)

(Millions of yen)

445(Millions of yen)

0

0

0

2009/3 2010/3
Revenue from operations (left scale)

Revenue from operations (left scale)Operating income (loss) (right scale)Operating loss (right scale)1

3

Improving Our Brand Value and Expanding Our Hotel Chain

1 Sendai Royal Park HotelIn April 2010, this hotel marked the 15th anniversary since its opening. Adhering to its
catchphrase, “HAVE A ROYAL TIME,” Sendai
Royal Park Hotel is looking forward to welcoming guests to a luxurious, high-quality,
relaxing hotel experience.

2 Royal Park Hotel The Fukuoka

In the Hotel Business, Royal Park Hotels and Resorts Co., Ltd. coordinates the administration and managementof each hotel to ensure consistency throughout the hotel chain. At the same time, Royal Park Hotels and Resorts
is working to enhance management efficiency and improve the level of management, pursuing the benefits ofoperating the hotel chain. With hotels in Tokyo, Yokohama, Sendai and other locations in Japan, the Royal Park
Hotel chain comprises a network of six hotels.

1

1 Hiroo Garden Forest
Completed in February 2009 in Shibuya Ward,
Tokyo, Hiroo Garden Forest was a joint project
between Mitsubishi Estate and Mitsui Fudosan
Residential Co., Ltd. For this 474-unit, largescale condominium complex, Mitsubishi Real
Estate Services is serving as the sales agent.

Meticulously Responding to the Varied Real Estate Needs of Customers
Led by Mitsubishi Real Estate Services Co., Ltd., the Real Estate Services Business has instituted a system thatenables highly customized responses to individual customer needs. Leveraging its collective strengths andinformation capabilities, the Mitsubishi Estate Group provides a wide array of optimal solutions for individualand corporate real estate utilization, brokerage, new condominium sales and real estate leasing.

2(artist’s rendition)

Scheduled for opening in the summer of 2011,
this hotel is only a five-minute walk from
Hakata Station, located in Hakata-ekimae
2-chome, Hakata Ward, Fukuoka City. The
design concept of this hotel, offering 174
guestrooms, is “TRANSITIONAL.”

3 Royal Park Hotel The Kyoto(artist’s rendition)

Scheduled for opening in the autumn of 2011,
this hotel is only a three-minute walk from
Kyoto Shiyakusho-mae Station on the Tozai
Line of the Kyoto Municipal Subway. It is
located at Sanjo-dori higashi-iru,
Kawaramachi, Nakagyo Ward, Kyoto City.
Offering 174 guestrooms, this hotel has been
designed using motifs apropos to historic
Kyoto.

Increasing the Brand Value of Royal Park Hotels
through a Management Focus on Customer Delight
Based on the “Best for the Guest” philosophy of Royal
Park Hotels, we go one step beyond customer satisfaction
by aiming to delight our guests. This approach has been
well acknowledged, enabling us to win the leading rank
in the 2009 Japan Hotel Guest Satisfaction Index StudySM
conducted by J.D. Power Asia Pacific, Inc.,* an organization specializing in research and consulting relating tocustomer satisfaction. This marked the third consecutive
year for Royal Park Hotels to win the top position in the¥15,000 to ¥35,000 per night segment. We will further
promote customer delight-focused hotel management
and operations.

New Brand “Royal Park Hotel The [City Name]”
Launched
Royal Park Hotels and Resorts is currently preparing forthe opening of the Royal Park Hotel The Fukuoka and theRoyal Park Hotel The Kyoto. As the brand name explains,
hotels under this new brand will be located in city centers.
They will be of a relatively compact scale, with amenities
limited to just those that are necessary. Also, these hotels
will balance comfort with the functionality that economy
hotels often provide. Offering the ultimate in hospitality,
we will work to maximize hotel guests’ satisfaction
through hotel facilities and services. Looking forward,
Royal Park Hotels and Resorts will continue to seek
opportunities to establish new hotels in Tokyo and other
cities the government has designated as major cities,
thereby expanding the hotel chain and enhancing theRoyal Park Hotel brand power.

* Japan Hotel Guest Satisfaction Index StudySM conducted by J.D. Power Asia Pacific, Inc.
Royal Park Hotels ranked in the segment of ¥15,000 to ¥35,000 per night hotels with the most common guestroom space of 20m2 or larger. The study was based on
11,016 valid responses received from people who used applicable hotels within the previous year. For more details, please see the November 26, 2009 press release of
the J.D. Power and Associates Web site at:
http://www.jdpower.co.jp/press/pdf2009/2009JapanHotelGSI_E.pdf.

32 |ANNUAL REPORT 2010

CRE Strategy Support System“CRE@M”
CRE@M is an application service provider (ASP)
service that assists corporate clients not onlyin the central management of real estaterelated information, but also in the assessment and analysis of and strategy formulation
for CRE.

3

Parking Ecology Network “PEN”
To contribute to global environmental efforts
through parking operations, Mitsubishi Real
Estate Services donates a portion of the proceeds from parking charges to tree-planting
programs.

Real Estate Brokerage Services
Mitsubishi Real Estate Services engages in wide-ranging
operations relating to real estate owned by individuals
and corporations. These operations include purchase,sale, brokerage for leasing services and consulting services
for real estate utilization. Also, we provide “Consulting
M” one-stop services, which include the “CRE@M”
corporate real estate (CRE) strategy support system, tohelp companies raise their corporate value and facilitate
efficient corporate management. In addition, Mitsubishi
Real Estate Services is expanding outside Japan, offering
support services for corporations’ international operations
and for foreign corporations.
Sales Agency Operations for Properties such as
Condominiums
In Mitsubishi Real Estate Services’ sales agency operations,
qualified staff—people who are well versed in the uniquefeatures and characteristics of individual properties, aswell as real estate finance, law, taxation and related
matters—are on hand to assist sellers in transactions forcondominiums and other properties. In the area ofresidential development and sales, we are providing
comprehensive support to developers. We offer a fullrange of services including site, property and market
information surveys, product planning and advertisingand sales planning.
Accelerating Leased Condominium/Office Building
Management Support Business and Coin-Operated
Parking Lot Operations
Mitsubishi Real Estate Services offers a variety of leasemanagement support services relating to leased condominiums and office buildings, and its customer baseranges from individuals and corporate clients to asset
managers of securitized real estate. We have a structure
to enable comprehensive services covering everythingfrom business plan formulation and product planning tolease management after construction completion. In April
2008, Mitsubishi Real Estate Services established a new
Parking Operations Office. This office is working todevelop new, automated, coin-operated parking services,
applying Mitsubishi Real Estate Services’ extensive
expertise in lease management services.
ANNUAL REPORT 2010 |33

Financial and Corporate Data Section

Contents
36 | Financial Review
39 | Financial Statements
39 | Consolidated Statements of Income
40 | Consolidated Balance Sheets
42 | Consolidated Statements of Changes in Net Assets
44 | Consolidated Statements of Cash Flows45 | Notes to Consolidated Financial Statements
61 | Report of Independent Auditors

62 | Mitsubishi Estate Corporate Data
62 | Mitsubishi Estate Group63 | Directors, Statutory Auditors and Executive Officers
64 | Organization
65 | Corporate History

34 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |35

Financial Review
Millions of yen (rounded down)

Revenue from Operations / Operating Income
In the fiscal year ended March 31, 2010, consolidated revenue fromoperations increased ¥70,788 million, or 7.5%, from the previous fiscal yearto ¥1,013,415 million. Consolidated operating income also increased¥10,405 million, or 7.5%, year on year to ¥148,972 million. Results foreach business segment are as follows.
In the Building Business segment, Mitsubishi Estate enjoyed a
year-on-year increase in rental revenue due to contributions from the
Marunouchi Park Building, which was completed in April 2009, and a newconsolidated subsidiary—namely, Chelsea Japan Co., Ltd.—as well as fromthe sale of an ownership interest in the Aoyama Building. As of March 31,
2010, the vacancy rate stood at 3.40%, compared with 2.86% as of March
31, 2009. Reflecting these factors, revenue from operations increased¥83,089 million year on year to ¥489,696 million. Operating income
climbed ¥30,631 million to ¥149,836 million.
In the Residential Business segment, Mitsubishi Estate’s revenue in thecondominium business surged year on year, due to a substantial
year-on-year increase in the number of condominiums sold. As a result,revenue from operations jumped ¥40,968 million to ¥350,008 million.
However, the Company recorded an operating loss in this segment totaling¥35,730 million, a deterioration of ¥20,269 million from the previous fiscal
year. As a supplementary note, Mitsubishi Estate included ¥37,314 million
in cost of revenue from operations in connection with the write-down ofcertain inventories that have experienced deterioration in profitability.
In the Urban Development & Investment Management Businesssegment, the absence of capital gains from the sale of Trade Pier Odaiba(Minato Ward, Tokyo) and the Shin Fujita Building (Osaka City), which wererecorded during the previous fiscal year, resulted in a decrease in overall
capital gains in this segment. As a result, revenue from operations plunged¥41,227 million year on year to ¥50,691 million. However, owing to suchfactors as the sale of a portion of ownership interest in a property held by a

Royal Park Hotels and Resorts Co., Ltd. serves as the core driver in

special purpose company in which Mitsubishi Estate has invested, operating

strengthening Mitsubishi Estate’s operations in the Hotel Business segment.

income rose ¥6,755 million year on year to ¥40,259 million.

This consolidated subsidiary operates Royal Park Hotels in Japan. Most

Revenue from Operations

Ordinary Income

Operating Income(Billions of yen)

844.2

942.6

166.1

787.6

137.6

experienced deterioration in revenue during the fiscal year under review.

showed stable performance. However, revenue from operations declined

As a result, revenue from operations declined ¥2,211 million year on year to¥7,195 million year on year to ¥40,187 million, adversely affected by the¥28,564 million. Operating loss worsened ¥93 million to ¥112 million.

significant appreciation of the yen against the U.S. dollar (previous fiscal

In the Real Estate Services segment, Mitsubishi Real Estate Services Co.,

year: ¥103.48 = US$1.00; fiscal year under review: ¥93.65 = US$1.00) andLtd. enjoyed an increase in revenue in connection with a rise in the number

other currencies. Accordingly, operating income sank ¥2,030 million toof home agency sales. Revenue from real estate brokerage services also

¥10,496 million.

increased due to a rise in the number of cases handled. Reflecting theseIn the Architectural Design & Engineering Business segment, Mitsubishi

factors, revenue from operations soared ¥2,441 million year on year to

Jisho Sekkei Inc. recorded sales in connection with such projects as the¥25,816 million, and the segment posted an operating income totaling

Marunouchi Park Building (Chiyoda Ward, Tokyo), the Ami Premium Outlets¥210 million, a ¥655 million turnaround from the operating loss recorded(the town of Ami, Ibaraki Prefecture) and the La Mer Sanbancho (Chiyoda

in the previous fiscal year.

Ward, Tokyo). During the fiscal year under review, revenue associated with

Revenue from operations in the Other segment slipped ¥591 million

architectural design and engineering operations increased. On the otheryear on year to ¥3,281 million. Segment operating income also slipped

hand, revenue associated with interior design and construction projects¥480 million to ¥189 million.

declined despite an increase in the number of projects undertaken, due toa decrease in per-project revenue. As a result, revenue from operations slid
¥591 million year on year to ¥19,466 million, while operating income
dropped ¥785 million to ¥1,392 million.
Driven by Mitsubishi Estate Home Co., Ltd., the Custom-Built Housing
Business segment continued to focus on increasing orders for “MitsubishiHome” brand homes. The number of orders received for homes and theactual sales of these homes have consequently expanded year on year.
Meanwhile, the amount of sales of contract work decreased year on year,
and revenue associated with contract work declined accordingly. As a result,revenue from operations deteriorated ¥2,922 million to ¥26,427 million.
Operating loss worsened ¥89 million to ¥370 million.

Net Income

151.6

Other Income (Expenses)
Other income declined ¥1,893 million year on year to ¥9,342 million,
mainly owing to decreases in interest and dividend income and equity inearnings of unconsolidated subsidiaries and affiliates. Other expenses
contracted ¥245 million year on year to ¥40,933 million, primarily due toa decrease in interest expenses.
Turning to extraordinary items, Mitsubishi Estate posted an
extraordinary income totaling ¥2,323 million, which consisted of a ¥1,263
million gain on transference of air right and a ¥1,059 million gain on salesof investment securities. Meanwhile, the Company recorded an
extraordinary loss totaling ¥88,832 million, which was comprised of a¥54,523 million impairment loss on equity investments and a ¥34,309
million impairment loss.

Total Equity

Total Assets(Billions of yen)

177.9

138.5

businesses in this segment, including the accommodation business,of the United States and the City of London of the United Kingdom(Billions of yen)

1,013.4
947.6

In the International Business segment, properties located in major cities(Billions of yen)(Billions of yen)

162.0

97.6

4,327.1

4,429.0

4,355.0

86.9

148.9
121.2
108.6

3,280.2

117.3

Revenue from operations

2010/3

2009/3

YoY Change

70,7881,013,415

942,626

Building Business

489,696406,606

83,089Residential Business
Urban Development &Investment Management
Business
International BusinessArchitectural Design &Engineering
Custom-Built Housing

350,008

309,039

40,96850,691

91,919(41,227)

40,18747,382(7,195)

Hotel Business
Real Estate Services
Other

19,466

20,058(591)

26,427

29,349(2,922)

28,56430,775(2,211)25,81623,374

2,441

3,281

3,872

(591)

Eliminations(20,724)(19,752)(971)

Operating Income

148,972

138,567

10,405

Building Business

149,836

119,204

30,631

Residential Business
Urban Development &Investment Management
Business
International BusinessArchitectural Design &Engineering
Custom-Built Housing(35,730)(15,460)(20,269)

40,25933,504

6,755

10,496

12,526(2,030)

1,392

2,178

(785)

(370)

(281)

(89)

(112)

(19)

(93)

Real Estate Services

210

(445)

655

Other

189

669

(480)

(17,198)(13,309)(3,888)

Hotel BusinessEliminations or Corporate

Net Income
Income before income taxes and minority interests plunged ¥59,133
million, or 65.7%, year on year to ¥30,872 million. Net income alsoplunged ¥33,522 million, or 73.8%, to ¥11,900 million. Net income pershare stood at ¥8.58.

EBITDA

Interest-Bearing Debt
(Billions of yen)

1,225.6 1,238.8
1,183.1
1,148.4
1,133.6(Billions of yen)(Billions of yen)

1,834.1
1,645.4

1,762.1

233.4
200.9

3,447.2

55.8

245.9

230.7
209.5

1,007.7 1,012.5
45.4

11.9

2006/3 2007/3 2008/3 2009/3 2010/3

36 |2006/3 2007/3 2008/3 2009/3 2010/3

ANNUAL REPORT 2010

2006/3 2007/3 2008/3 2009/3 2010/3

2006/3 2007/3 2008/3 2009/3 2010/3

2006/3 2007/3 2008/3 2009/3 2010/3

2006/3 2007/3 2008/3 2009/3 2010/3

2006/3 2007/3 2008/3 2009/3 2010/3

2006/3 2007/3 2008/3 2009/3 2010/3

ANNUAL REPORT 2010 |37

Financial Statements
Analysis of Financial Position

Consolidated Statements of Income

declined ¥65,356 million year on year to ¥1,584,286 million.
Net assets increased ¥31,509 million year on year to ¥1,306,222(1) Consolidated Cash Flow

On a consolidated basis, cash and cash equivalents at the end of the fiscal

million. Decreases in such items as retained earnings were more than offset

year under review decreased ¥6,727 million year on year to ¥177,825

by increases in unrealized holding gain on securities and other items.

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 3)

Millions of yen

million. Major cash inflows included income before income taxes and

2010

2010

2009

minority interests, depreciation and amortization and an increase in

Disclosure of Fair Values of Investment and Rental Properties

long-term borrowings. Major cash outflows included purchases of property

Mitsubishi Estate and some of its consolidated subsidiaries own certain

Revenue from operations

and equipment and repayment of short-term borrowings.

office buildings and retail facilities in Tokyo and other major cities in Japan

Cost of revenue from operations(784,789)(728,002)(8,434,966)

Selling, general and administrative expenses(79,653)(76,056)(856,116)

Operating income

148,972

138,567

1,601,170

3,172

5,768

34,096(29,235)(31,240)(314,227)

763

1,558

8,208

(92,800)(24,647)(997,430)(118,100)(48,561)(1,269,354)

30,87290,005331,816

Current(16,319)(34,707)(175,406)

Deferred

4,966

6,606

53,381(11,353)(28,101)(122,025)(7,618)(16,481)(81,883)

as well as in the United States and the United Kingdom, with the aim ofCash Flows from Operating Activities

obtaining rental revenue from these buildings and facilities. Because certain

Net cash provided by operating activities stood at ¥212,668 million, up

leased office buildings among these are used by the Company or some of¥166,844 million from the previous fiscal year. For the fiscal year under

its consolidated subsidiaries, the Company has classified such buildings asreview, income before income taxes and minority interests amounted toreal estate that includes portions used as investment and rental properties.

¥30,872 million, and depreciation and amortization—a non-cash item—

The following table shows the year-end amounts of investment andrental properties and other real estate that includes portions used as

Interest and dividend income

reflect movements in inventories, notes and accounts payable and interest

investment and rental properties, which have been included in theInterest expenses

expense as well as other items.

consolidated balance sheets as of March 31, 2010, as well as the fair values

Cash Flows from Investing Activities

Amount Included in Consolidated
Balance Sheets (Millions of Yen)

Net cash used in investing activities totaled ¥112,639 million, a contraction

Fair Value as of March 31,
2010 (Millions of Yen)

Balance as of March 31, 2010of ¥101,860 million year on year. This was largely attributable to purchases

Investment and Rental Properties

2,615,827

4,549,292

of property and equipment.

Real Estate That Includes Portions Used
as Investment and Rental Properties

234,910357,303

Cash Flows from Financing Activities

Net cash used in financing activities amounted to ¥106,852 million, aturnaround of ¥247,907 million from the net cash provided by financing
activities in the previous fiscal year. This turnaround reflected the repaymentof long-term borrowings, the repayment of corporate bonds and other

Also, the following table shows the performance of the investment andfinancing activities.

rental properties and other real estate that includes portions used as
investment and rental properties for the fiscal year ended March 31, 2010.

(2) Consolidated Balance Sheets

Compared with the previous fiscal year-end, total assets decreased ¥74,005
million to ¥4,355,065 million as a result of the operating, investing andfinancing activities previously mentioned.
Total liabilities, when compared with the previous fiscal year-end,

Rental Revenue(Millions of Yen)

Rental Costs(Millions of Yen)

bearing debt as of March 31, 2010 shrank ¥72,084 million from theprevious fiscal year-end to ¥1,762,111 million. Deducting cash and cash
equivalents, the net balance of interest-bearing debt as of March 31, 2010

339,750

215,040

124,709(38,328)

21,474

17,352

4,121

(632)

(%)

(Times)10,892,253

Other, net (Note 13)

Income taxes (Note 8):

Minority interests
Net income¥

11,900¥ 	

45,423$

127,907

See accompanying notes to consolidated financial statements.

70.95
62.99

8.3
8.5

7.1
4.9

4.6

$

(Yen)

9.5
5.3

942,626

Net Income Per Share

Interest Coverage Ratio

ROE
(%)

Difference
Other Income (Loss)(Millions of Yen) (Millions of Yen)

¥ 	

Notes: 1.	Real estate that includes portions used as investment and rental properties has portions thatare used by Mitsubishi Estate and some of its consolidated subsidiaries for the purpose ofproviding related services and conducting operation management. Accordingly, rental revenue
associated with these portions has been excluded.
			 Costs associated with applicable properties and real estate, such as depreciation costs,
building management costs and taxes, have been included in rental costs.
2. Other income (loss) includes impairment loss, which totaled ¥34,243 million, and other.

dropped ¥105,514 million to ¥3,048,842 million. The balance of interest-

ROA

Investment and Rental
Properties
Real Estate That Includes
Portions Used as Investment
and Rental Properties

Equity in earnings of unconsolidated subsidiaries and affiliates

Income before income taxes and minority interests

Notes: 1.	The amount included in the consolidated balance sheets presented in the table above is equal
to the total acquisition price for applicable properties or real estate less the aggregate amountsof depreciation and impairment loss for these properties or real estate.
2.	The fair values of domestic properties and real estate have been calculated by Mitsubishi Estate,based mainly on the Japanese Real Estate Appraisal Standards. The fair values of overseas
properties and real estate have been calculated mostly by local appraisers.

1,013,415

Other income (expenses):

totaled ¥73,926 million. These and other cash inflows were adjusted toof such properties and real estate.

¥

42.60

7.4

5.4

32.90
3.8
5.2

3.5

1.0

3.3

2006/3 2007/3 2008/3 2009/3 2010/3

38 |2006/3 2007/3 2008/3 2009/3 2010/3

ANNUAL REPORT 2010

4.7

2006/3 2007/3 2008/3 2009/3 2010/3

8.58

2006/3 2007/3 2008/3 2009/3 2010/3

ANNUAL REPORT 2010 |39Consolidated Balance Sheets
Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 3)

Millions of yen

2010

2010

2009

2010

AssetsLiabilities and net assets

Current assets:

Current liabilities:¥

Cash (Notes 6 and 16)

175,159¥

181,168$

Thousands of
U.S. dollars (Note 3)

Millions of yen

1,882,622

Short-term borrowings and current portion of long-term debt (Note 6)

¥   	

2010

2009

431,672¥   	406,604$  	 4,639,644

Notes and accounts receivable – trade

31,88928,949342,745

Notes and accounts payable – trade78,800101,450

846,950

Marketable securities (Note 15)

3,567

4,442

38,339Accrued income taxes (Note 8)

8,472

20,27391,067

Allowance for doubtful receivables

(506)

(402)

(5,441)

Advances and deposits

85,369107,645917,556

Inventories (Notes 4 and 6)

493,775

600,536

5,307,132

Accrued expenses and other current liabilities

46,70853,623502,021Equity investments (Note 15)

226,201

257,879

2,431,223

Total current liabilities

651,023

689,597

6,997,240

Deferred income taxes (Note 8)

41,85043,559449,813Long-term debt (Note 6)

1,322,149

1,425,129

14,210,549

Other current assets

57,14659,006614,210

Lease deposits received

382,413371,141

4,110,201

1,029,082

1,175,139

11,060,647

Accrued employees’ retirement benefits (Note 7)

15,57014,296167,353

Deferred income taxes (Note 8)555,951

539,505

5,975,399

Goodwill

83,70584,921

899,674

Other non-current liabilities

38,02929,766

408,743

3,048,842

3,154,357

32,769,163

			 Issued – 1,390,397,097 shares in 2010 and 2009

141,373

136,534

1,519,488

		 Capital surplus

170,485

165,216

1,832,390

		 Retained earnings

402,792

408,775

4,329,235

Total current assets

Investments:

Total liabilities

Investments in and advances to unconsolidated
subsidiaries and affiliates

16,57915,100178,195

Investment securities (Notes 6 and 15)

184,743

137,354

1,985,639

Shareholders’ equity (Note 9):

Other investments (Note 5)

149,287

135,323

1,604,553

		 Common stock, without par value:

350,610

287,778

3,768,388

			 Authorized – 1,980,000,000 shares;

Total investments

Property and equipment (Note 6):

Net assets:

1,652,937

1,632,779

17,765,876

		 Less treasury stock, at cost

(3,926)(3,715)(42,203)

277,425

277,425

2,981,786

Total shareholders’ equity

710,724

706,810

7,638,910

1,972,256

1,840,117

21,197,937

Valuation, translation adjustments and others:

Machinery and equipment and other

118,483

106,956

1,273,467

59,72930,730641,980

Construction in progress

26,723

136,344287,227

(376)

(591)

(4,046)

4,047,825

3,993,622

43,506,295

		 Land revaluation reserve458,303

460,009

4,925,872(1,175,804)(1,123,904)(12,637,622)

		 Foreign currency translation adjustments(45,223)(48,462)(486,067)

2,872,021

2,869,718

30,868,672

472,432

441,684

5,077,737

305

218

3,283

122,760

125,999

1,319,433

1,306,222

1,274,713

14,039,364

LandLand in trust
Buildings and structures

Less accumulated depreciation
Property and equipment, net

		 Unrealized holding gain on securities
		 Deferred gains or losses on hedging instruments

Total valuation, translation adjustments and others
Stock acquisition rights
Minority interests

103,350

Intangible and other assets (Note 6)

1,110,819

96,434

Contingent liabilities (Note 12)
Total net assets¥

Total assets

4,355,065¥

4,429,070$

46,808,527

Total liabilities and net assets¥

4,355,065¥

4,429,070$

46,808,527

See accompanying notes to consolidated financial statements.

40 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |41Consolidated Statements of Changes in Net Assets

Consolidated Statements of Changes in Net Assets (continued)

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2010 and 2009

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2010 and 2009
Millions of yen

Thousands of U.S. dollars (Note 3)

Shareholders’ equity

Balance at March 31, 2008
Decrease due to the change of accounting policies forconsolidated foreign subsidiaries
Changes in the year:
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in consolidated subsidiaries and companies accounted
for by the equity method
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2010

Commonstock

CapitalsurplusRetainedearnings¥136,534¥165,216¥387,214

Shareholders’ equity
Treasurystock¥(3,440)(3,860)(22,088)
45,423(22,088)
45,423
(649)
274
2,062

(649)
374

123

165,216

4,839

5,269

123

25,421
408,775(275)(3,715)(19,372)
11,900
(27)
1,516
4,839
¥141,373

5,269¥170,485¥685,524(3,860)

(99)
2,062

136,534

Total shareholders’equity(5,983)¥402,792

(432)
221

(210)
¥(3,926)

25,145
706,810
10,108(19,372)
11,900
(432)
194
1,516
3,914
¥710,724

Balance at March 31, 2008
Decrease due to the change of accounting policies forconsolidated foreign subsidiaries
Changes in the year:
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in consolidated subsidiaries and companies accounted
for by the equity method
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than those in shareholders’ equity
Total of changes in the year
Balance at March 31, 2010

Commonstock

CapitalsurplusRetainedearnings$1,467,478$1,775,754$4,161,806

Balance at March 31, 2008
Decrease due to the change of accounting
policies for consolidated foreign subsidiaries
Changes in the year:
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in consolidated subsidiaries andcompanies accounted for by the equity method
Net change in items other than those inshareholders’ equity
Total of changes in the year
Balance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than those inshareholders’ equity
Total of changes in the year
Balance at March 31, 2010
See accompanying notes to consolidated financial statements.

42 |ANNUAL REPORT 2010

Unrealized
gain onsecurities¥ 89,621¥(357)

Land
revaluation
reserve

Foreigncurrencytranslation
adjustments

Totalvaluation,translation
adjustments
and others

StockacquisitionrightsMinority
interests

Total
net assets¥472,578¥ (8,478)¥ 553,364¥142¥108,264¥1,347,295

123(12,568)(12,568)
460,009(39,984)(39,984)(48,462)(111,679)(111,679)
441,684

75
75
218

17,735
17,735125,999(93,868)(68,722)
1,274,713
10,108(19,372)
11,900
(432)
194
1,516

28,99928,999¥ 59,729

215
215¥(376)(1,705)
3,238
(1,705)
3,238
¥458,303 ¥(45,223)(237,410)
488,209(237,410)
488,209(6,983)
2,955
22,164(6,983)4,020

1,775,754

52,01056,635273,229
4,393,545

1,329(2,963)(39,937)(208,220)
127,907(292)
16,29452,010$1,519,488

56,635$1,832,390(64,310)$4,329,235(4,648)2,383

270,266
7,596,840
108,646(208,220)
127,907(4,648)2,090
16,294(2,265)$(42,203)

42,070$7,638,910

Minority
interests

Total
net assets

Thousands of U.S. dollars (Note 3)(22,088)
45,423
(649)
274
2,062

(234)
(234)
(591)

(41,491)

1,329

1,467,478$7,368,064

Valuation, translation adjustments and others(3,860)(58,891)(58,891)
30,730$(36,974)

Total shareholders’equity(41,491)(1,064)
22,164

Millions of yen
Valuation, translation adjustments and others
Deferred
gains or losses
on hedging
instruments

Treasurystock

30,74730,747¥ 472,432

87
87
¥305

(3,239)
(3,239)
¥122,760

27,59531,509¥1,306,222

Balance at March 31, 2008
Decrease due to the change of accounting
policies for consolidated foreign subsidiaries
Changes in the year:
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)Changes in consolidated subsidiaries andcompanies accounted for by the equity method
Net change in items other than those inshareholders’ equity
Total of changes in the year
Balance at March 31, 2009
Changes in the year:
New issue of stock
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Land revaluation reserve (Note 1-h)
Net change in items other than those inshareholders’ equity
Total of changes in the year
Balance at March 31, 2010

Unrealized
gain onsecurities$ 963,259$(3,837) $5,079,300 $ (91,126) $ 5,947,596 $1,531 $1,163,631

Landrevaluation
reserve

Foreigncurrencytranslation
adjustments

Totalvaluation,translation
adjustments
and others

Deferred
gains or losses
on hedging
instruments

Stockacquisitionrights$14,480,824(41,491)(237,410)
488,209
(6,983)
2,955
22,164
1,329(632,968)
(632,968)
330,290(2,522)
(2,522)(6,360)

(135,092) (429,753)
(135,092) (429,753)
4,944,208 (520,879)

(1,200,337)
812
190,625
(1,200,337)
812
190,625
4,747,258 2,344 1,354,256

(1,008,899)
(738,633)
13,700,700
108,646
(208,220)
127,907
(4,648)2,090
16,294

311,689
2,313
311,689
2,313
$ 641,980 $(4,046)(18,336)
34,812
330,478
938
(34,822)
296,594(18,336)
34,812
330,478
938
(34,822)
338,664$4,925,872 $(486,067) $ 5,077,737 $3,283 $1,319,433 $14,039,364

See accompanying notes to consolidated financial statements.

ANNUAL REPORT 2010 |43Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2010 and 2009

Mitsubishi Estate Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 3)

Millions of yen

2010
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Loss on sales or disposal of property and equipment
Gain on sales of securities
Valuation loss on securities
Valuation loss on equity investments
Valuation loss on inventories
Impairment loss
Loss on cancellation of real estate sales contract
Gain on grant of transferable development air rights
Equity in net income of affiliates
Increase (decrease) in allowancesInterest and dividend income
Interest expense(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories(Increase) decrease in equity investments
Increase (decrease) in notes and accounts payable
Increase (decrease) in lease deposits received
Other		
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from sales of marketable securities
Proceeds from sales of property and equipment
Purchases of property and equipment
Proceeds from sales of investment securities
Purchases of investment securities
Purchase of investments in subsidiaries resulting in change in scopeof consolidation
Other (Note 16)
Net cash used in investing activities
Cash flows from financing activities
Net increase and decrease in short-term borrowings
Net increase and decrease in commercial paper
Increase in long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of corporate bonds
Repayment of corporate bonds
Cash dividends paid
Other
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase and decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
In�������������������������������������������������������������������������
crease in cash and cash equivalents arising from mergers and acquisitions
Cash and cash equivalents of subsidiaries excluded from consideration
Cash and cash equivalents at end of year (Note 16)¥30,87273,926
4,442(1,058)976
54,523–34,309–(1,263)(763)
23(3,172)
29,235(2,091)
106,227(20,284)(24,352)
11,272(16,518)
276,3023,422(29,219)(37,837)
212,668
312
4,468(112,214)1,911(4,112)

2010

2009
¥

90,00560,364
2,779(6,473)
7,532
–
7,375
2,447
4,991
–
(1,558)2,079(5,768)31,2407,394
16,048(93,848)(12,655)
6,082
7,303
125,343
6,330(30,555)(55,293)
45,824$

331,816
794,565
47,749(11,376)
10,497
586,019–368,758–(13,584)(8,208)249(34,096)314,227(22,481)
1,141,734(218,023)(261,739)
121,153(177,540)
2,969,721
36,788(314,052)(406,682)
2,285,775
3,362
48,026(1,206,087)
20,540(44,205)142
169(196,258)
8,903(10,681)1

Significant Accounting Policies

a. Basis of preparation

f. Marketable securities and investment securities

The accompanying consolidated financial statements of Mitsubishi Estate Co.,

Securities other than those of subsidiaries and affiliates are classified into

Ltd. (the “Company”) and consolidated subsidiaries are prepared on the basis

three categories: trading, held-to-maturity or other securities. Tradingof accounting principles generally accepted in Japan, which are different insecurities are carried at fair value and held-to-maturity securities are carried atcertain respects as to the application and disclosure requirements ofamortized cost. Marketable securities classified as other securities are carriedInternational Financial Reporting Standards, and are compiled from theat fair value with any changes in unrealized holding gain or loss, net of theconsolidated financial statements prepared by the Company as required byapplicable income taxes, included directly in shareholders’ equity. Non-the Financial Instruments and Exchange Law of Japan.

marketable securities classified as other securities are carried at cost. Cost of

The notes to the consolidated financial statements include information
which may not be required under accounting principles generally accepted inJapan but is presented herein as additional information.
As permitted by the Securities and Exchange Law of Japan, amounts ofless than one million yen have been rounded off. As a result, the totals shownin the accompanying consolidated financial statements (both in yen and U.S.
dollars) do not necessarily agree with the sums of the individual amounts.
Certain amounts in the prior year’s financial statements have been
reclassified to conform to the current year’s presentation.
b. Principles of consolidation

The accompanying consolidated financial statements include the accounts of
the Company and its consolidated subsidiaries that it controls directly or
indirectly. Companies over which the Company exercises significant influencein terms of their operating and financial policies have been included in the
consolidated financial statements on an equity basis.
All significant intercompany balances and transactions have been
eliminated in consolidation.

Inventories are mainly stated at cost, determined by the identified cost
method. Net book value of inventories in the consolidated balance sheet iswritten down when their net realizable values decline.
h. Property and equipment, depreciation and impairment

Property and equipment, except for land as discussed below, is stated at costless accumulated depreciation. Depreciation is calculated principally by the
declining-balance method, except for buildings acquired in Japan subsequent
to March 31, 1998 and property and equipment of foreign subsidiaries on
which depreciation is calculated by the straight-line method at rates
determined based on the estimated useful lives of the respective assets. The
Company and its consolidated subsidiaries have capitalized the costs incurred
for significant renewals and additions; however, costs for maintenance andrepairs are charged to income.
As of March 31, 2002, the Company revalued its land at fair value,
pursuant to Article 2 of the “Enforcement Ordinance for the Law Concerning
Revaluation Reserve for Land” and its amendments. The related unrealized

The preparation of financial statements in conformity with generally accepted

gain, net of applicable income taxes, has been recorded as “Land revaluationaccounting principles requires management to make certain estimates andreserve” in net assets.

(12,150)(4,625)(214,500)–(32,294)(1,210,658)(30,678)
81,114(10,000)–
236,677
267,790(261,603)(185,047)
45,784
66,649(61,190)(41,601)(19,372)(22,088)(6,467)(25,761)(106,852)
141,055612(7,585)(6,210)(35,206)
184,552
219,712
–
542
(516)
(495)
	���������
¥	�������
177,825 	���������
¥184,552(329,739)(107,480)
2,543,822(2,811,735)
492,096(657,683)(208,220)(69,515)(1,148,456)
6,584(66,755)
1,983,587–(5,555)
1,911,276

Current and non-current monetary accounts denominated in foreign$

g. Inventories

c. Use of estimatesassumptions that affect the amounts reported in the financial statements and–(3,004)(112,639)

securities sold is determined by the moving average method.

accompanying notes. The actual results could differ from those estimates.
d. Foreign currency translation

currencies are translated into yen at the current rates.
The revenue and expense accounts of the foreign consolidated
subsidiaries are translated using the average rate during the year. Except forshareholders’ equity, the balance sheet accounts are also translated into yen
at the rates of exchange in effect at the balance sheet date. The components
of shareholders’ equity are translated at their historical exchange rates.
e. Cash equivalents

The Company and its consolidated subsidiaries consider all highly liquid
investments that are readily convertible into cash and have an original
maturity of three months or less to be cash equivalents. Reconciliation
between cash in the balance sheet and cash equivalents at March 31, 2010

The Company and its consolidated subsidiaries review their property andequipment (including land) for impairment whenever events or changes in its
business circumstances indicate that the carrying amount of the assets may
not be fully recoverable. They perform cash flow analyses to determine if
impairment exits. If impairment is determined to exist, any related loss on
impairment is calculated based on the cash flow analyses.
The useful lives of property and equipment are summarized as follows:
Buildings and structures

2 to 75 years

Machinery and equipment and other2 to 22 years

i. Intangible and other assets

Intangible and other assets primarily consist of goodwill and land use rights.
Goodwill is stated on the basis of cost and is being amortized over a period of
5 years or an estimated economical period on a straight-line basis. A loss isrecognized if the fair value falls below the carrying amount. Land use rights
are stated on a cost basis.

and 2009 is presented in Note 16.

See accompanying notes to consolidated financial statements.

44 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |45

j. Retirement benefits

exchange rates (currency swaps), but do not enter into such transactions for

Partial Amendments to Accounting Standard for Retirement Benefits

Accounting Standard for Research and Development Costs, etc.” (Financial

The Company and most consolidated subsidiaries have noncontributory

speculative or trading purposes.

(Part 3)

Accounting Standard No. 23 issued by the Accounting Standards Board of

Derivative financial instruments are carried at fair value with any changes

Effective April 1, 2009, the Company has adopted “Partial Amendments toJapan on December 26, 2008), “Accounting Standard for Business Divestures,

Employees of the Company and its consolidated subsidiaries are entitledin unrealized gain or loss charged or credited to operations, except for thoseAccounting Standard for Retirement Benefits (Part 3)” (Financial Accountingetc.” (Financial Accounting Standard No. 7 issued by the Accounting

under most employment termination circumstances to annuity payments or

which meet the criteria for deferral hedge accounting under which unrealizedStandards No. 19 issued by Accounting Standards Boards of Japan on July 31,

Standards Board of Japan on December 26, 2008), “Accounting Standard forlump-sum payments, the amounts of which are determined principally bygain or loss is deferred as an asset or liability.

2008). This change had no effect on operating income and net income before

the Equity Method” (Financial Accounting Standard No. 16 announced by the

income taxes and minority interests.

Accounting Standards Board of Japan on December 26, 2008), andfunded and unfunded defined benefit plans covering most of their employees.

reference to their basic rates of pay, length of service, and the conditions
under which the termination occurs.
Accrued employees’ retirement benefits are provided mainly at an
amount calculated based on the retirement benefit obligation and the fairvalue of the pension plan assets as of the balance sheet date, as adjusted for
unrecognized actuarial gain or loss and unrecognized prior service cost. The
retirement benefit obligation is attributed to each period by the straight-line
method over the estimated years of service of the employees.
Actuarial gain and loss are amortized in the year following the year inwhich the gain or loss is recognized by the straight-line method over theperiod of the range from 1 year to 15 years which are shorter than the
average remaining years of service of the employees.
Prior service cost is being amortized as incurred by the straight-line
method over the period of 1 years or 10 years which are shorter than the
average remaining years of service of the employees.

m. Revenue recognition

The consolidated statements of income reflect revenue from operations in the

Accounting Standard for Business Combinations and Others

following manner:“Accounting Standard for Business Combinations” (Financial Accounting(a)	Revenue from the leasing of office space is recognized as rent accrued overStandard No. 21 issued by the Accounting Standards Board of Japan on

the leasing period.
(b)	Revenue from sales of condominiums, residential houses and land isrecognized when the units are delivered and accepted by the customers.

the Accounting Standards Board of Japan on December 26, 2008) can beapplied to the first business combination and divesture, etc. during theconsolidated fiscal year starting after April 1, 2009. Thus, the Company has
adopted these accounting standards effective April 1, 2009.

3

ownership transfer for services provided up to the transfer.

Translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation only, at the rate of ¥93.04 =(c)	Revenue from real estate brokerage is recognized when an underlying
lease agreement goes into force or the underlying units are delivered.
(d)	Revenue of construction contracts, of which the percentage of completioncan be reliably estimated, is recognized by the percentage-of-completion
incurred by the end of the consolidated fiscal year as a percentage ofstatements and the tax bases of assets and liabilities, using the enacted tax

estimated total cost. The completed-contract method continues to berates in effect for the year in which the temporary differences are expected toapplied for other contracts for which the percentage of completion cannot

reverse. Deferred tax assets are also recognized for the estimated future tax

be reliably estimated.
(e)	Other operating revenue is recognized on an accrual basis.
n. Appropriation of retained earnings

Under Corporation Law of Japan, the appropriation of retained earnings withl. Derivative financial instruments

respect to a given financial year is made by resolution of the shareholders at

The Company and certain of its consolidated subsidiaries utilize derivative

a general meeting held subsequent to the close of such financial year. The

financial instruments for the purpose of hedging their exposure to adverse

accounts for that year do not, therefore, reflect such appropriations. See Notefluctuations and changes in interest rates (interest rate swaps) and foreign

10 for more information.

2(Financial Accounting Standard Implementation Guidelines No. 10 issued byconclusion for services provided up to the conclusion and at the time ofDeferred tax assets and liabilities are determined based on the financial

some portion or all of the deferred tax assets will not be realized.

Standards Board of Japan on December 26, 2008), “Partial Amendments to

Combinations and Accounting Standard for Business Divestures, etc.”

real estate service business segment is recognized at the time of contract

method. The percentage-of-completion method is calculated at the costestablished to reduce deferred tax assets if it is more likely than not that theStatements” (Financial Accounting Standard No. 22 issued by the Accounting

Revenue from consignment commissions for residential sales earned by thek. Income taxes

effects attributable to operating loss carry forwards. Valuation allowances are

December 26, 2008), “Accounting Standard for Consolidated Financial“Implementation Guidelines for Accounting Standard for Business

U.S. Dollar Amounts

U.S.$1.00, the approximate rate of exchange prevailing on March 31, 2010. The inclusion of such amounts is not intended to imply that yen amounts havebeen or could be readily converted, realized or settled in U.S. dollars at the above or any other rate.

4

Inventories

Inventories at March 31, 2010 and 2009 are summarized as follows:
Millions of yen

2010
Real estate for saleLand and housing projects in progress
Land held for development
Other
Total

5

Thousands of U.S. dollars

2009¥150,245
323,9438,844
10,741¥493,775¥198,085
383,352
8,974
10,123¥600,536

Other investments at March 31, 2010 and 2009 were as follows:
Millions of yen

2010
Contracts” (Financial Accounting Standards Implementation Guidelines No. 18

Until the year ended March 31, 2009, revenue from architectural design andissued by Accounting Standards Board of Japan on December 27, 2007).

engineering business was recognized at the date of completion of each

Under the new accounting standard and guidelines, revenues and costs ofrelevant project in the Architectural Design and Engineering Division, except

construction contracts that commenced on or after April 1, 2009, of whichthat certain long-term (over one year) projects over ¥500 million in total

the percentage of completion can be reliably estimated, are recognized byrevenue were recognized by the percentage of completion method. Revenue

the percentage-of-completion method. The percentage of completion isfrom construction contracts was recognized at the date of completion of eachcalculated at the cost incurred as a percentage of the estimated total cost. The

relevant project in the Architectural Design and Engineering Division, except

completed-contract method continues to be applied for other contracts forthat certain long-term (over one year) projects over ¥5,000 million in total

which the percentage of completion cannot be reliably estimated. Due torevenue were recognized by the percentage of completion method.

these changes, revenue from operations for the fiscal year ended March 31,

Effective April 1, 2009, the Company has adopted the “Accounting

2010 increased by ¥421 million ($4,534 thousand), while operating income

Standard for Construction Contracts” (Financial Accounting Standard No. 15

and net income before income taxes and minority interests all increased byissued by Accounting Standards Board of Japan on December 27, 2007) and¥131 million ($1,417 thousand).

$1,614,851
3,481,769
95,065
115,446$5,307,132

Other Investments

Changes in Accounting Policy

Accounting standards for construction contracts

2010

Lease deposits
Long-term prepaid expenses and other
Total

6

Thousands of U.S. dollars

2009¥  96,017
53,270¥149,287¥  88,983
46,340¥135,323

2010$1,032,000
572,552$1,604,553

Short-Term Borrowings and Long-Term Debt

At March 31, 2010 and 2009, short-term borrowings and the current portion of long-term debt consisted of the following:
Millions of yen

2010
Loans, principally from banks
Commercial paper
Current portion of long-term debt
Total

¥105,586–
326,085¥431,672

Thousands of U.S. dollars

2009¥139,300
10,000257,303¥406,6042010$1,134,851–
3,504,792$4,639,644“Implementation Guidelines for Accounting Standard for Construction
The weighted-average interest rates per annum on short-term borrowings outstanding at March 31, 2010 and 2009 were 0.72% and 1.43%, respectively.
Short-term borrowings are principally unsecured.

46 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |47

At March 31, 2010 and 2009, long-term debt consisted of the following:

The aggregate annual maturities of long-term debt subsequent to March 31, 2010 are summarized as follows:
Millions of yen

Thousands of U.S. dollars

Year ending March 31,

2010

–
–
–
–
–
¥10,000
10,00010,00010,00010,00010,00020,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00010,00010,00020,00010,00010,00010,00015,00010,00015,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00020,00010,000
–
9,916

2009
¥10,000
10,00010,00010,00010,00010,00010,00010,00010,00010,00010,00020,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00010,00010,00020,00010,00010,00010,00015,00010,000–––10,00010,00010,00010,00010,00010,00010,00010,00010,00015,00010,00010,00010,00010,00020,00010,00013,216
–

2011
2012
2013
2014
2015
2016 and thereafter
Total

316,498
741,820
1,648,235(326,085)¥1,322,150

403,640
670,576
1,682,432(257,303)¥1,425,129

3,401,743
7,973,138
17,715,342(3,504,792)$17,715,342

2010
1.82% unsecured bonds due 2009
3.075% unsecured bonds due 2009
2.0% unsecured bonds due 2009
1.985% unsecured bonds due 2009
0.72% unsecured bonds due 2009
1.9% unsecured bonds due 2010
2.29% unsecured bonds due 2010
1.55% unsecured bonds due 2011
1.44% unsecured bonds due 2011
1.16% unsecured bonds due 2011
1.47% unsecured bonds due 2012
1.58% unsecured bonds due 2012
3.275% unsecured bonds due 2012
2.77% unsecured bonds due 2012
1.395% unsecured bonds due 2012
1.2% unsecured bonds due 2012
1% unsecured bonds due 2013
0.785% unsecured bonds due 2013
1.675% unsecured bonds due 2014
1.349% unsecured bonds due 2014
1.65% unsecured bonds due 2014
1.75% unsecured bonds due 2014
1.655% unsecured bonds due 2014
1.409% unsecured bonds due 2015
1.295% unsecured bonds due 2015
1.572% unsecured bonds due 2015
1.443% unsecured bonds due 2016
1.985% unsecured bonds due 2016
1.88% unsecured bonds due 2016
1.79% unsecured bonds due 20172.045% unsecured bonds due 20171.825% unsecured bonds due 20173.125% unsecured bonds due 20171.77% unsecured bonds due 20171.65% unsecured bonds due 2018
2.005% unsecured bonds due 2018
3% unsecured bonds due 2018
1.84% unsecured bonds due 2018
1.72% unsecured bonds due 2018
1.87% unsecured bonds due 2019
1.62% unsecured bonds due 2019
1.53% unsecured bonds due 2019
1.975% unsecured bonds due 2019
1.805% unsecured bonds due 20192.5% unsecured bonds due 2020
2.42% unsecured bonds due 2022
1.50% unsecured bonds due 2022
2.075% unsecured bonds due 2023
2.28% unsecured bonds due 2024
2.305% unsecured bonds due 2027
2.385% unsecured bonds due 2027
2.52% unsecured bonds due 2027
2.425% unsecured bonds due 2027
2.555% unsecured bonds due 2028
2.9% unsecured bonds due 2032
2.615% unsecured bonds due 2032
2.04% unsecured bonds due 2032
1.72% unsecured bonds due 2033
Floating rate bonds due 2009 (payable in U.S. dollars)
Floating rate bonds due 2010 (payable in U.S. dollars)
Loans from banks and insurance companies:
SecuredUnsecuredLess current portion

48 |ANNUAL REPORT 2010

–
–
–
–
–
$107,480
107,480
107,480
107,480
107,480
107,480
214,961
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
161,220
107,480
107,480
107,480
107,480
107,480
107,480
214,961
107,480
107,480
107,480
161,220
107,480
161,220
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
107,480
161,220
107,480
107,480
107,480
107,480
214,961
107,480–
106,582

Millions of yen

Thousands of U.S. dollars¥   326,085
234,099
271,957
114,262
177,656
524,173¥1,648,235$  3,504,792
2,516,116
2,923,012
1,228,105
1,909,462
5,633,853$17,715,342

The assets pledged as collateral for short-term borrowings of ¥100 million ($1,074 thousand) and long-term debt of ¥316,498 million ($3,401,743 thousand) at
March 31, 2010 were as follows:
Millions of yen

Thousands of U.S. dollars

¥

$

Cash
Land and housing projects in progress
Buildings and structures
Machinery and equipment
Land
Land in trust
Other property and equipment
Investment securities
Total

5,640
16,675
179,178
5,278
256,393
276,4430
68¥739,679

60,626179,226
1,925,825
56,7352,755,735
2,971,228
9739$7,950,126

As is customary in Japan, collateral must be given if requested by lending

a bank which become due in cases of default or certain other specified

institutions under certain circumstances, and banks, in general, have the right

events. The Company has never received any such requests nor does it expect

to offset cash deposited with them against any debt or obligations payable tothat any such requests will be made.

7

Pension and Severance Plans

The following table sets forth the funded status of the plans, and the amounts recognized in the consolidated balance sheets at March 31, 2010 and 2009 for
the Company’s and its consolidated subsidiaries’ defined benefit pension plans:Millions of yen

2010
Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
The net retirement benefit obligation at transition of the accounting standards
Unrecognized actuarial loss
Unrecognized prior service cost
Net amounts recognized in the consolidated balance sheet
Prepaid pension expenses
Accrued employees’ retirement benefits

Thousands of U.S. dollars

2010

2009

¥(97,035)
74,687(22,348)30
15,154946(6,215)
9,691¥(15,907)$(1,042,946)
802,745(240,201)331
162,885
10,177(66,807)104,163$(170,970)¥(94,714)
62,832(31,882)
38
27,521
1,099(3,223)
11,422¥(14,645)* The accrued employees’ retirement benefits recognized by Rockefeller Group, Inc., a consolidated subsidiary, in the amount ¥336 million ($3,617 thousand) was presented in other current liabilities.

The components of expenses related to the pension and severance plans for the years ended March 31, 2010 and 2009 were as follows:
Millions of yen

2010
Service cost
Interest cost
Expected return on plan assets
Amortization of net retirement benefit obligation at transition
Amortization of actuarial loss
Other
Total

¥ �����
4,493
2,267(1,342)9
3,080
518¥ �����
9,027

Thousands of U.S. dollars

2009¥ �����
4,182
2,251(1,645)10635
352¥ 5,7872010$ ������
48,294
24,374(14,433)
106
33,1075,574$ ������
97,022

ANNUAL REPORT 2010 |49

The assumptions used in accounting for the pension and severance plans for the years ended March 31, 2010 and 2009 were as follows:
Discount rate
Expected rate of return on plan assets

8

9

2010

2009

1.5 ~ 5.75%
0.5 ~ 7.5%

2.0 ~ 6.0%
0.5 ~ 7.5%

Income Taxes

Shareholders’ Equity

The Corporation Law of Japan (the “Law”) provides that an amount equal tothousand), and the legal reserve amounted to ¥21,663 million ($232,843

10% of the amount to be disbursed as distributions of capital surplus (otherthousand) at March 31, 2010. Such distributions can be made at any timethan the capital reserve) and retained earnings (other than the legal reserve)by resolution of the shareholders or by the Board of Directors if certain

be transferred to the capital reserve and the legal reserve, respectively, until

conditions are met, but neither the capital reserve nor the legal reserve isthe sum of the capital reserve and the legal reserve equals 25% of the capital

available for distributions.

stock account. The capital reserve amounted to ¥170,485 million ($1,832,390

Income taxes in Japan applicable to the Company and its domestic

40.69% for the years ended March 31, 2010 and 2009. Income taxes of theconsolidated subsidiaries consist of corporation tax, inhabitants’ taxes andforeign consolidated subsidiaries are based generally on the tax rates

enterprise tax which, in the aggregate, resulted in statutory tax rates ofapplicable in their countries of incorporation.

10

Amounts per Share
Yen

2010

The effective tax rates reflected in the consolidated statements of income for the two years ended March 31, 2010 differ from the statutory tax rate for theYear ended March 31,

following reasons:

Net income:
Basic
DilutedCash dividends applicable to the year

Statutory tax rate
Increase (decrease) in income taxes resulting from:
Change in valuation allowance
Different tax rates applied
Revenues deductible for income tax purposes
Expenses not deductible for income tax purposes
Undistributed earnings of affiliates
Equity income
Expiration of net operating loss carry forwards
Other
Effective tax rates

2010

2009

40.69%

40.69%

3.03(0.19)(24.50)1.65
0.28(0.88)
9.37
7.33
36.78%

23.02
0.66(0.74)
0.71(30.66)(0.57)–(1.89)
31.22%The significant components of deferred tax assets and liabilities as of March 31, 2010 and 2009 were as follows:

Deferred tax assets:
Net operating loss carry forwards
Accrued retirement allowances and pension costs
Valuation loss on inventories
Unrealized loss on property and equipment
Unrealized loss on property and equipment by consolidation
Land revaluation reserve
Loss on valuation of equity investments
Other
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Reserves under Special Taxation Measures Law
Land revaluation reserve
Unrealized gain on property and equipment by consolidation
Unrealized gain on securities
Other
Total deferred tax liabilities
Net deferred tax liabilities2010¥ 8.58
8.58
12.00

$0.09
0.09
0.12

¥32.90
32.90
16.00
Yen

2010

March 31,¥852.36

Net assets

U.S. dollars

2010

2009

$9.16

¥832.01

Basic net income per share was computed based on the net income available

Amounts per share of net assets are computed based on net assets

for distribution to shareholders of common stock and the weighted averageavailable for distribution to the shareholders and the number of shares ofnumber of shares of common stock outstanding during the year, and diluted

common stock outstanding at the year end.

net income per share was computed based on the net income available for

Cash dividends per share represent the cash dividends proposed by the

distribution to the shareholders and the weighted average number of shares

Board of Directors as applicable to the respective years together with theof common stock outstanding during each year after giving effect to theinterim cash dividends paid.

dilutive potential of shares of common stock to be issued upon the exercise

Millions of yen

2010

U.S. dollars

2009

Thousands of U.S. dollars

2009

2010

¥   24,669
14,501
17,16363,75917,66854,306
21,64228,936242,648(69,545)
173,103¥   20,105
13,57147,65153,43617,991
55,109–29,323
237,188(69,505)
167,683$    265,149
155,862
184,477
685,292
189,906
583,690
232,612311,0132,608,004(747,479)
1,860,525(65,373)(375,804)(178,755)(39,476)(20,035)(679,446)¥(506,343)(63,802)(377,647)(180,405)(21,800)(16,053)(659,709)¥���������
(492,026)(702,643)(4,039,174)(1,921,278)(424,296)(215,346)(7,302,739)$(5,442,214)of warrants and stock subscription rights.

11

Leases

The following pro forma amounts represent the acquisition costs,

reflected in the consolidated balance sheets if finance lease accounting had

accumulated depreciation, accumulated impairment loss and net book value

been applied to the finance leases currently accounted for as operating leases:of the leased assets as of March 31, 2010 and 2009, which would have been
Millions of yen

Thousands of U.S. dollars

2010

Buildings and structures
Others
Total

Acquisition
costs

Accumulated
depreciation

Accumulated
impairment loss

¥16,546
3,987¥20,533¥  9,870
2,654¥12,524

¥278
1
¥280

Net book
value¥6,3971,331¥7,729Acquisition
costs

Accumulated
depreciation

Accumulated
impairment loss

$177,845
42,853$220,698$106,084
28,527$134,611$2,99514$3,010Net book
value$68,764
14,311$83,076

Millions of yen

2009

Buildings and structures
Others
Total

Acquisition
costs

Accumulated
depreciation

Accumulated
impairment loss

¥18,373
6,290¥24,663¥  9,315
3,807¥13,122

¥357
4
¥361

Net bookvalue¥  8,701
2,478¥11,179

Lease payments relating to finance leases accounted for as operating leases in the accompanying consolidated financial statements amounted to ¥2,498 million($26,848 thousand) and ¥3,394 million for the years ended March 31, 2010 and 2009, respectively.

50 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |51

Future minimum lease payments subsequent to March 31, 2010 on noncancelable operating leases and finance leases accounted for as operating leases area real estate appraiser. Future cash flows mainly discounted at a rate of 5% areused to compute the use value.
As for the impairment loss in the international business, the impairment loss iscalculated for consolidated foreign subsidiaries in accordance with the U.S.
accounting standards.
The Company recorded consolidated impairment losses for the following asset
groups for the fiscal year ended March 31, 2009:

summarized as follows:
Millions of yen

Thousands of U.S. dollars

Year ending March 31,

FinanceleasesOperatingleasesFinanceleasesOperatingleases

2011
2012 and thereafter
Total¥3,8704,139¥8,009¥  2,773
53,934¥56,708$41,598
44,487$86,086$  29,813
579,688$609,502

Major Application

The Company and its consolidated subsidiaries lease office buildings and commercial properties and earn income on these leases. Future minimum lease income
subsequent to March 31, 2010 from noncancelable operating leases is summarized as follows:Year ending March 31,

Millions of yen

20112012 and thereafter
Total¥181,365
656,107¥837,473

Thousands of U.S. dollars$1,949,327
7,051,891$9,001,218

Contingent Liabilities

At March 31, 2010, the Company and its consolidated subsidiaries had the following contingent liabilities:
Millions of yen¥  2,290
53,686260¥56,237

Guarantees of affiliates’ loans from banks
Guarantees of house purchasers’ loans from banks and others
Other
Total

13

Thousands of U.S. dollars$  24,613
577,026
2,803$604,442

Other Income (Expenses)

The components of “Other, net” in “Other income (expenses)” for each of the years ended March 31, 2010 and 2009 were as follows:
Millions of yen

2010¥ 1,060
–
1,263
1,059
(6,676)––(34,309)(54,523)––(675)¥(92,800)

Amortization of negative goodwill
Gain on sales of shares of affiliated companies
Gain on grant of transferable development air rights
Gain on sales of investment securities
Loss on disposal of fixed assets
Loss related to retirement of fixed assets
Loss on valuation of inventories
Impairment loss (*1)
Loss on valuation of equity investments
Loss on valuation of investment securities
Loss on cancellation of contracts for sales of real estate
Other, net(*1) Impairment loss
The Company recorded consolidated impairment losses for the following asset
groups for the fiscal year ended March 31, 2010:
Major Application

Category

Location

Leased assets, etc.
(total 9 groups)

Construction inprogress, etc.

Shinjuku-ku, Tokyo,
etc.

International businesses(total 6 group)

Construction inprogress, etc.

California, USA, etc.

Asset grouping for the Group was made based on a minimum unit thatgenerates cash flows, which is substantially independent from cash flows ofother assets or asset groups. Company condominiums are regarded as shared

52 |ANNUAL REPORT 2010

Thousands of U.S. dollars

2009¥ 1,041
  6,283––(4,024)(2,562)(7,375)(2,447)–(7,524)(4,991)(3,045)¥(24,647)2010$ 11,400
������
–13,584
11,386(71,762)––(368,758)(586,019)––(7,261)$(997,430)

assets. As a result, for the fiscal year ended March 31, 2010, the book values of
15 asset groups, consisting of those for which the market prices fell considerablycompared with the book values due to the decline of land prices and those forwhich profitability decreased considerably due to fallen rent levels or deteriorated
market conditions, etc., were reduced to the respective collectible amounts andsuch reduced amounts were recorded as an impairment loss in the amount of¥34,309 million ($368,758 thousand).
The breakdown of such impairment loss was ¥815 million ($8,761 thousand)in land, ¥427 million ($4,599 thousand) in buildings and structures and ¥33,066
million ($355,397 thousand) in construction in progress, respectively.
The collectible amounts of asset groups are measured with net sale value or
use value, and the net sale value is principally expressed as an appraised value byLocation

Leased assets, etc.
(total 15 groups)

Buildings, land, etc.

Minato-ku, Tokyo, etc.

International businesses(total 1 group)

Construction inprogress, etc.

Florida, USA

Asset grouping for the Group was made based on a minimum unit thatgenerates cash flows, which is substantially independent from cash flows ofother assets or asset groups. Company condominiums are regarded as shared

14
12

Category

assets. As a result, for the fiscal year ended March 31, 2009, the book values of
16 asset groups, consisting of those for which the market prices fell considerablycompared with the book values due to the decline of land prices and those forwhich profitability decreased considerably due to fallen rent levels or deteriorated
market conditions, etc., were reduced to the respective collectible amounts andsuch reduced amounts were recorded as an impairment loss in the amount of¥2,447 million.
The breakdown of such impairment loss was ¥976 million in land, ¥1,057
million in buildings and structures and ¥413 million in construction inprogress, respectively.
The collectible amounts of asset groups are measured with net sale value or
use value, and the net sale value is principally expressed as an appraised value by
a real estate appraiser. Future cash flows mainly discounted at a rate of 5% areused to compute the use value.
As for the impairment loss in the International Business, the impairment loss iscalculated for consolidated foreign subsidiaries in accordance with the U.S
accounting standards.

Financial Instruments

Overview(1) Policy for financial instruments
In consideration of plans for capital investment, the Company and its
consolidated subsidiaries (collectively, the “Group”) raise funds mainly
through bank borrowings and bond issues. In terms of fund management,
the Group makes every effort to avoid market risks by emphasizing liquidity
and shortening the fund management period. The Group uses derivatives forthe purpose of hedging exposures to interest rates and reducing interest
expenses and do not enter into derivatives for speculative purpose.
(2) Types of financial instruments and related risk
Trade receivables – notes and accounts receivable- are exposed to credit risk inrelation to customers. Trade receivables denominated in foreign currencies,
which arise from overseas operation, are exposed to foreign currency
exchange risk.
Marketable securities and investment securities are exposed to market
risk. Those securities are composed of mainly held-to-maturity debt securities
and the shares of common stock of other companies with which the Grouphas business relationships.
Equity investments are composed of mainly preferred equity investmentsin special purpose companies under the Law concerning Liquidation of Assets,
investments in investment unit of trust held in real estates and investments insilent partnership for special purpose companies. They are exposed to credit
risks of issuers, risks of fluctuations in interest rates and market prices,
respectively.
Lease and guarantee deposit for leased assets are exposed to credit risks
of customers.
Substantially all trade payables - accounts and notes payable - havepayment due dates within one year. Some of them denominated in foreign
currencies are exposed to foreign currency exchange risk.
Borrowings and bonds are taken out principally for the purpose of
making capital investments and the repayment dates of the long-term debt
extend up to 23 years from the balance sheet date. Certain long-term debt
with variable interest rates is exposed to interest rate fluctuation risk.
However, to reduce such risk for long-term debt bearing interest at variable
rates, the Group utilizes derivative transactions (interest rate swap) as ahedging instrument.
Derivative transactions include interest rate swap and currency swap
transactions. The Group also enters into interest rate swap transactions to fix

interest expense for long-term debt bearing interest at variable rates and to
reduce interest rate fluctuation risk. Some of the consolidated subsidiaries
enter into interest swap and currency swap transactions in accordance withthe same policies and purposes adopted by the Company.
(3) Risk management for financial instruments(a)	Monitoring of credit risk (the risk that customers or counterparties may
default)
In accordance with the internal policies for managing credit risk of theGroup arising from receivables and lease and guarantee deposits, eachrelated division in each business segment monitors credit worthiness of
their main customers periodically, and monitors due dates and outstandingbalances by individual customer. In addition, the Group is making efforts
to identify and mitigate risks of bad debts from customers who are having
financial difficulties.

(b)	Monitoring of market risks (the risks arising from fluctuations in foreignexchange rates, interest rates and others)
In order to mitigate the interest rate risk for loans payable and bonds
bearing interest at variable rates, the Group may also enter into interest
rate swap and currency swap transactions.
For marketable securities and investment securities, the Group
periodically reviews the fair values of such financial instruments and thefinancial position of the issuers (business partners). In addition, the Group
continuously evaluates whether securities other than those classified as
held-to-maturity should be maintained taking into account their fair values
and relationships with the issuers (business partners).
(c)	Monitoring of liquidity risk (the risk that the Group may not be able tomeet its obligations on scheduled due dates)
Based on the report from each division, the Group prepares and updates
its cash flow plans on a timely basis and stabilizes liquidity to manage
liquidity risk.
(4) S upplementary explanation of the estimated fair value of financial
instruments
The fair value of financial instruments is based on their quoted market price, if
available. When there is no quoted market price available, fair value isreasonably estimated. Since various assumptions and factors are reflected inestimating the fair value, different assumptions and factors could result indifferent fair value.

ANNUAL REPORT 2010 |53

Estimated Fair Value of Financial Instruments

Note 4: The redemption schedule for bonds and long-term borrowings

Carrying value of financial instruments on the consolidated balance sheet as of March 31, 2010 and unrealized gains (losses) are shown in the following table.

Millions of yen

Millions of yen

Thousands of U.S. dollars

2010
Carrying
Value

Estimated
Fair Value¥����������
   175,159
31,889(506)
31,382¥   175,159–

31,382–

3) Securities and Investment securities   (i) Held-to-maturity debt securities   (ii) Other securities
4) Equity investments
Total assets

3,927
174,5238,248¥   393,241

3,947
174,5238,248¥   393,261¥       19––¥       1942,215
1,875,792
88,653$  4,226,588

42,423
1,875,792
88,653$  4,226,796$       208––$       208

1) Notes and accounts payable – trade2) Short-term borrowings
3) Current portion of long-term borrowings
4) Current portion of long-term bonds5) Long-term bonds6) Long-term borrowings
Total liabilities¥     78,800
105,586
286,169
39,916550,000
772,149¥���������
1,832,622¥     78,800
105,586
286,169
39,916560,818
776,558¥���������
1,847,849––––¥10,818
4,408¥������
15,227$     846,950
1,134,851
3,075,768
429,024
5,911,435
8,299,113$����������
19,697,144$     846,950
1,134,851
3,075,768
429,024
6,027,714
8,346,497$����������
19,860,807––––$116,279
47,383$�������
163,662

1) Cash and due from banks2) Notes and accounts receivable – trade   Allowance for doubtful receivables (*1)

Carrying
Value

Difference

Estimated
Fair Value

Difference$  1,882,622 $  1,882,622
342,745(5,441)
337,304
337,304––

Thousands of U.S. dollars

As of March 31, 2010

Due inOne Yearor Less

Due after
One Yearthrough
Two Years

Due after
Two Years
throughThree Years

Due afterThree Years
through
Four Years

Due after
Four Years
throughFive Years

Due after
Five Years

Corporate bonds¥ 40,000¥ 30,000¥ 70,000¥ 30,000¥ 40,000

Long-term borrowings

286,189

204,099

201,957

84,262

137,656

Total¥326,169¥234,099

¥271,957¥114,262¥177,656

15

Marketable Securities and Investment Securities

The following table does not include financial instruments for which it is extremely difficult to determine the fair value. (Please refer to Note 2 below).

Note 2: Financial instruments for which it is extremely difficult to determine the fair value
Thousands ofMillions of yen
U.S. dollars
2010

Liabilities
Notes and accounts payable - trade   Since these items are settled in a short period of time, their carrying value approximates fair value.
Short-term borrowings   Since these items are settled in a short period of time, their carrying value approximates fair value.
Current portion of long-term borrowings   Since these items are settled in a short period of time, their carrying value approximates fair value.
Current portion of bonds   Since these items are settled in a short period of time, their carrying value approximates fair value.
Bonds   The fair value of bonds is based on the quoted market price.

(i) Unlisted stocks *1¥ 26,418$ 283,952(ii) Equity investments *2

217,952

2,342,569(iii) Lease and guarantee deposit receivables *3

96,017

1,032,000(iv) Lease and guarantee deposit payables *4¥382,413

4,110,201*1. Because no quoted market price is available and it is extremely difficult to determine the fair value,
unlisted stocks are not included in the above table.
*2. Because it is extremely difficult to determine the fair value for equity investments which are not listed
and have no quoted market price, they are not included in the above table.
*3. Because no quoted market price for lease and guarantee deposit receivables for rental properties isavailable and calculation of the actual period of duration from lease initiation to evacuation is difficult,it is extremely difficult to estimate a reasonable amount of cash flow and therefore they are notincluded in the above table.
*4. Because no quoted market price for lease and guarantee deposit payables for rental properties isavailable and calculation of the actual period of duration from lease initiation to evacuation is difficult,it is extremely difficult to estimate a reasonable amount of cash flow, and therefore they are notincluded in the above table.

Millions of yen

As of March 31, 2010
Cash on hand and in banks¥175,009–

31,889–

Notes and accounts receivable – tradeDue after
One Yearthrough Five Years

Thousands of U.S. dollars

Due after
Five Years
through Ten Years

Due after
Ten Years

Due inOne Yearor Less

Due after
One Yearthrough Five Years

Due after
Five Years
through Ten Years––

$1,881,016

–

–

–

–

–

342,745

–––Due after
Ten Years

Marketable securities and investment securities:
Held-to-maturity debt securities
National and local government bonds

15

¥ 150

Corporate bonds

220
–

Other

¥

30

–

161

$  1,612$     322

–

1,951

1,556

–

2,367

20,975

16,729

–

25

–

–

–

268

–

–

–

–

–

$22,856$17,051–

Other marketable securities with maturities:
Corporate bonds
Other
Total

54 |

–

–

–

–

–

2,279

–

–

–

24,504¥209,414¥2,126¥1,586–$2,250,796

ANNUAL REPORT 2010

Due after
Four Years
throughFive Years

Due after
Five Years¥380,000$   429,922$   322,441$   752,364$   322,441$   429,922$4,084,264

144,173

3,075,768

2,193,674

2,170,647

905,663

1,479,539

1,549,588¥524,173

$3,505,690$2,516,116$2,923,012 $1,228,105$1,909,462$5,633,853

Millions of yen

Thousands of U.S. dollars

2010
Cost

Fair
value

Unrealized
gain (loss)

Cost

Fair
value

Unrealized
gain (loss)

Securities whose fair value exceeds their cost:
Equity securities
Other   Subtotal¥������
67,335
5,481
72,817¥164,626
8,249
172,875¥  97,290
2,767
100,058$723,729
58,912782,642$1,769,415
88,662
1,858,077$1,045,685
29,749
1,075,434

Securities whose cost exceeds their fair value:
Equity securities
Total

11,204¥84,0219,896¥182,772(1,308)¥  98,750

120,428$903,071

106,368$1,964,446(14,059)$1,061,374

2009
Cost

Fair
value

Unrealized
gain (loss)

Securities whose fair value exceeds their cost:
Equity securities
Other   Subtotal¥51,170
5,331
56,501¥102,701
7,682
110,384¥51,5312,351
53,882

Securities whose cost exceeds their fair value:
Equity securities
Total

27,905¥84,407

25,774¥136,158(2,131)¥51,751

Proceeds from sales of securities classified as other securities totaled ¥1,472 million ($15,828 thousand) in 2010 and ¥279 million in 2009, respectively. Grossrealized gain was ¥1,059 million ($11,386 thousand) in 2010 and ¥197 million in 2009, respectively. Gross realized loss was “¥0” in 2010 and ¥0 million in
2009, respectively.
Marketable debt securities classified as held-to-maturity securities at March 31, 2010 and 2009 are summarized as follows:
Millions of yen

Thousands of U.S. dollars

2010
Amortized
cost

Fair
value

Debt securities whose fair value exceeds their cost:
Government bonds
Corporate bonds   Subtotal¥������
162
863
1,025

¥ 164
880
1,045

¥ 2
17
20

$ 1,743
9,279
11,022$ 1,766
9,468
11,235

$ 23
192
215

Debt securities whose cost exceeds their fair value:
Government bonds
Corporate bonds   Subtotal
Total

29
2,872
2,902
¥3,927

28
2,872
2,901
¥3,947

(0)
–
(0)
¥19

315
30,87731,192$42,215310
30,87731,188$42,423

(4)
–
(4)
$211

Note 3: Redemption schedule for receivables and marketable securities with maturities at March 31, 2010

Due inOne Yearor Less

Due afterThree Years
through
Four Years

Millions of yen

Long-term borrowings  Since variable interest rates of certain long-term borrowings are determined based on current interest
rate in a short period of time, their carrying value approximates fair value. The fair value of long-termborrowings with fixed interest rate is based on the present value of the total of principal and interest
discounted by the interest rate to be applied if similar new borrowings were entered into.
Derivatives Transactions   Please refer to Note 17. “Derivatives and hedging activities”.

AssetsCash on hand and in banks   Since these items are settled in a short period of time, their carrying value approximates fair value.
Notes and accounts receivable - trade   Since these items are settled in a short period of time, their carrying value approximates fair value.
Marketable securities and investment securities  The fair value of stocks is based on quoted market prices. The fair value of debt securities is mainly
based on prices provided by the financial institutions making markets in these securities. For
information on securities classified by holding purpose, please refer to Note 15. “Marketable Securities
and Investment Securities.”
Equity investments   The fair value of equity investments is based on quoted market prices.

Due after
Two Years
throughThree Years

Marketable and investment securities classified as other securities at March 31, 2010 and 2009 are summarized as follows:(*1) The value of notes and account receivable-trade is shown at net value, after deducting allowance for doubtful accounts.
Note 1: Methods to determine the estimated fair value of financial instruments and other mattersrelated to securities and derivative transactions

Due inOne Yearor Less

Due after
One Yearthrough
Two Years

Unrealized
gain (loss)

Amortized
cost

Fair
value

Unrealized
gain (loss)

ANNUAL REPORT 2010 |55

2. Interest-related transactions

Millions of yen

Millions of yen

Thousands of U.S. dollars

2009

Debt securities whose fair value exceeds their cost:
Government bonds
Corporate bonds   Subtotal
Debt securities whose cost exceeds their fair value:
Government bonds
Corporate bonds   Subtotal
Total

2010

Amortized
cost

Fair
value

¥ 214
–
214

¥ 215
–
215

–
1,913
1,913
¥2,127

Unrealized
gain (loss)

¥1
–
1

–
1,905
1,905
¥2,121

–
(8)
(8)
¥(6)

Short-term borrowings andLong-term borrowings¥ 20,630

18

Millions of yen

Thousands of U.S. dollars

2010

2009

¥  6,342
344
2,279
15
22,993851¥32,827$  68,169
3,703
24,503
171
247,132
9,154$352,835¥ 6,504
344
1,499
16
22,9352,758¥34,058

The Company recognized losses on other securities considered temporary amounting to ¥522 million ($5,610 thousand) in 2010 and ¥7,120 million in 2009,and on other securities considered other-than-temporary amounting to ¥438 million ($4,717 thousand) in 2010 and ¥404 million in 2009, respectively.

Supplemental Cash Flow Information

The following table represents a reconciliation of cash and cash equivalents as of March 31, 2010 and 2009:
Millions of yen

2010

Thousands of U.S. dollars

2010

2009

¥175,159
(665)
3,331
¥177,825

Cash
Time deposits with maturities of more than three months
Marketable securities with maturities of three months or less
Cash and cash equivalents

Interest swap contracts Pay/fix
and Receive/floating
Interest swap contracts
Receive/fix and Pay/floating
Interest swap contracts by short-cut
Method Pay/fix and Receive/floating
Total

Corporate bonds
Long-term borrowings andCorporate bonds

Fair
value

Notional
AmountDue after
One Year

Fair
value

¥

7,736
�����

¥342

$   221,736$     83,151$3,67810,000–339

107,480–

3,650

282,810¥313,441

150,364¥�������
158,101(*)¥684

3,039,668$3,368,886

1,616,132$1,699,283(*)$7,329(*) T he estimated fair value of interest rate swap contracts is included in the estimated fair value of long-term borrowings and corporate bonds since amounts in such derivative contracts accounted for short-cut method
are handled together with long-term borrowings and corporate bonds that are subject to hedged accounting.

2010

16

Subject to hedged accounting

Due after
One YearCalculation method of fair value is based on the data obtained from financial institutions.

Marketable and investment securities recorded at cost at March 31, 2010 and 2009 are summarized as follows:

Other securities:
Nonmarketable equity securities(other than equity securities listed on the over-the-counter market)
Mutual funds
Commercial papers
MMF
Investments in silent partnerships
Other
Total

Class of Transactions

Notional
Amount$1,882,622(7,149)35,802$1,911,276¥181,168
(760)
4,145
¥184,552

Segment Information

Business segments

The Company and its consolidated subsidiaries are primarily engaged in thereal estate business. Their business segments are classified in terms of thenature of each operation or service and consist of eight segments: (1) Building
Business; (2) Residential Business; (3) Urban Development & Investment

Management; (4) International Business; (5) Architectural Design andEngineering; (6) Custom-Built Housing; (7) Hotels Business; (8) Real Estate
Services; and (9) Other businesses.

The business segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2010 and 2009 are summarized as follows:
Millions of yen

2010

Revenue and operating income
Revenue from:
External customers
Intersegment or transfers
Total revenue
Operating expense
Operating income (loss)
Assets, depreciation,
impairment loss andcapital expenditures
AssetsDepreciation
Impairment loss
Capital expenditures

Urban
Develop­ment
Architecturaland Investment International Design and Custom-Built
Management
BusinessEngineering Housing

Building
Business

Residential
Business

Hotel
Business¥   483,821
5,875
489,696
339,859¥   149,836¥348,720
1,288
350,008
385,739¥ (35,730)¥ 50,551
139
50,691
10,432¥  40,259¥  40,187–
40,187
29,690¥  10,496¥12,636
6,829
19,466
18,073¥  1,392¥26,374 ¥28,017 ¥22,122
52
546
3,694
26,427 28,564 25,816
26,797 28,676 25,606¥    (370) ¥    (112) ¥     210

¥   983 ¥1,013,415
2,298
20,724
3,281 1,034,140
3,092
867,968¥     189 ¥   166,171¥           – ¥1,013,415¥ (20,724)–(20,724) 1,013,415(3,526)864,442¥ (17,198) ¥   148,972¥2,846,909
61,74339¥   79,748¥688,298
1,962
43¥   6,502¥250,005
1,780
31,501¥ 21,964¥318,075
6,302
2,630
¥   8,222¥25,01669–¥     151

¥14,250144–¥     321

¥55,691537–¥     301

¥27,188 ¥4,250,851
79
73,89590
34,309¥       34 ¥   117,578¥104,21331–¥    4,197¥4,355,065
73,92634,309¥   121,775

Real Estate
Services

Other

Eliminations
or corporate

Consolidated¥25,4161,275
3¥   330

Real Estate
Services

Other

Total

Eliminations
or corporate

Consolidated

Thousands of U.S. dollars

2010

17

Derivatives and Hedging Activities
Building
Business

1. Currency-related transactions
Millions of yen

Thousands of U.S. dollars

2010Class of Transactions

Subject to hedged accounting

Notional
AmountCurrency swap contracts

Corporate bonds¥10,000

Calculation method of fair value is based on the data obtained from financial institutions.

56 |ANNUAL REPORT 2010

Due after
One Year

Fair
value

Notional
AmountDue after
One Year

Fair
value

–

¥339

$107,480–$3,650

Revenue and operating income
Revenue from:
External customers$  5,200,140
Intersegment or transfers
63,145
Total revenue
5,263,286
Operating expense
3,652,834
Operating income (loss)$  1,610,452
Assets, depreciation,
impairment loss andcapital expenditures
Assets$30,598,766
Depreciation
663,623
Impairment loss
427
Capital expenditures$   857,147

Residential
Business

Urban
Develop­ment
Architecturaland Investment International Design and Custom-Built
Management
BusinessEngineering Housing

Hotel
Business

Total$3,748,065 $   543,335 $   431,935 $135,821 $283,479 $301,129 $237,775 $  10,571 $10,892,253 $             – $10,892,253
13,8501,502– 73,404
561
5,878 39,704 24,702
222,750 $ (222,750)–
3,761,916
544,837
431,935 209,225 284,041 307,008 277,479 35,273 11,115,004 (222,750) 10,892,253
4,145,948
112,128
319,117 194,258 288,020 308,221 275,220 33,237 9,328,987(37,903) 9,291,083$ (384,031) $   432,708 $   112,817 $  14,967 $   (3,978) $   (1,213) $ 2,259 $    2,036 $  1,786,017 $ (184,847) $  1,601,170$7,397,878 $2,687,075 $3,418,696 $268,877 $153,161 $273,179 $598,575 $292,223 $45,688,434 $1,120,093 $46,808,527
21,08919,13367,735745
1,552 13,713
5,781
853
794,229335
794,565471
338,582
28,269––39–969
368,758–
368,758$    69,889 $   236,075 $    88,380 $    1,626 $    3,455 $   3,553 $    3,239 $     371 $  1,263,739 $ 45,111 $  1,308,850

ANNUAL REPORT 2010 |57

BuildingBusiness

Revenue and operating income
Revenue from:
External customers
Intersegment or transfers
Total revenue
Operating expense
Operating income (loss)
Assets, depreciation,
impairment loss andcapital expenditures
AssetsDepreciation
Impairment loss
Capital expenditures

Residential
Business

Millions of yen

2)	The exchange ratio for each type of share, the calculation basis of the(iii) Number and valuation of the shares distributed

2009

Share Exchange ratio, the number of shares distributed, and their

Number of issued shares: 7,878,746 shares

Urban
Develop­ment
Architecturaland Investment International Design and Custom-Built
Management
BusinessEngineering Housing

valuation
Hotel
Business

Real Estate
Services

Other

Total

Eliminations
or corporate

Fair value:(i) The exchange ratios of each type of share

Consolidated

The Company(wholly owning parent company)¥   400,653
5,953
406,606
287,402¥   119,204¥307,871
1,168
309,039
324,500¥ (15,460)¥ 91,744
174
91,91958,414¥  33,504¥  47,382–
47,382
34,855¥  12,526¥15,114
4,943
20,05817,880¥  2,178¥27,447 ¥30,243 ¥20,610 ¥  1,559 ¥   942,626
1,901
532
2,764
2,313
19,752
29,349 30,775 23,374
3,872
962,379
29,630 30,795 23,820
3,202
810,502¥    (281) ¥      (19) ¥    (445) ¥     669 ¥   151,876         – ¥   942,626¥(19,752)–(19,752)
942,626(6,443)804,059¥(13,309) ¥   138,567

Common stock1

Towa Real Estate Development(wholly owned subsidiary)¥325,851
1,260
1,014
¥ 11,128¥303,982
6,070
413¥  70,829¥25,32945–¥     132

¥14,113143–¥     213

¥26,9021,425
280¥  1,057¥56,026451–¥     725

¥26,401 ¥4,357,948
114
60,3615
2,447¥       99 ¥   207,075

0.042
0.585

	It was generated from differences between the value of sharesClass B preferred stock

0.316
0.572

The Company and its consolidated subsidiaries operate primarily in Japan, the United States and certain other areas. In the fiscal year ended March 31, 2010,
Japan area accounted for more than 90% of the consolidated revenue of all segments and the total amount of segment assets. Consequently, disclosure ofsegment information by geographic area has been omitted.

As part of its real estate business, the Company makes preferred investments
in 14 special purpose companies that are established under the Asset
Liquidation Law of Japan. The Company intends to recover such preferred
has been obtained by the special purpose companies from their customers or

For the fiscal year ended March 31, 2010, overseas sales accounted for less than 10% of the consolidated revenue. Consequently, disclosure of overseas sales

sale of such real estate after construction of buildings on it. The following

information has been omitted.

tables represent the Company’s transactions with major special purpose
companies for the fiscal year ended March 31, 2010.
Amounts of preferred investment as of March 31, 2010

On April 30, 2009, the Company carried out a share exchange (the “Sharesubscribing the new shares through a third-party allocation issued by

Exchange”) with its consolidated subsidiary, Towa Real Estate Development

Towa to make it a consolidated subsidiary in January 2008.

Co., Ltd. (“Towa”), to make the Company a wholly-owing parent company

Nevertheless, the Company and Towa have recognized that they

and Towa a wholly-owned subsidiary. The Share Exchange was treated asneed to reconstruct their business organization by improving theirtransactions under common control and the following is its summary:strategic integration and agility and implemented the Share Exchange(1) Name and business description of the company under businesssince they consider that the condominium market will continue to show

combination, legal form of the business combination, name ofcompany subsequent to the combination, overview of theaccordance with “Accounting Standard for Business Combinations”   Towa Real Estate Development Co., Ltd.
• Business description  Sales, intermediate service and leasing of real estate,contract of construction2) Legal form of the business combination
Share exchange(Financial Accounting Standards No. 21 issued by the AccountingStandards Board of Japan on December 26, 2008) and “Implementation
Guidelines for Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures” (Financial AccountingStandard Implementation Guidelines No. 10 issued by the AccountingStandards Board of Japan on December 26, 2008).
(3) Information concerning the additional acquisition of shares in thesubsidiary3) Name of company subsequent to the combination
Towa Real Estate Development Co., Ltd.
4) Overview of the transaction including its objectives
To maximize synergies stemming from joint projects in real estatebusiness where the Company and Towa have a strong advantage, theCompany established a capital relationship with Towa by concluding acapital alliance agreement with Towa in December 2004 and58 |(2) Summary of the accounting treatment of the transactions1)	Name and business description of the company under business• Name of the company under business combination:

ANNUAL REPORT 20102010
Preferred investment securities(*1)1) The acquisition cost and its breakdown
Total Acquisition cost:¥108,829$1,169,702¥10,283 million ($110,531 thousand)(Breakdown)
Shareholders’ equity:¥4,839 million ($52,010 thousand)Capital surplus:¥5,269 million ($56,636 thousand)Cost spent in acquiring the shares:(*5) The Company and Mitsubishi Real Estate Services Co., Ltd. provide real estateintermediate business to special purpose companies and record such service
income as revenue from operations.
(*6) The Company enters into real estate rental agreements with special purpose
companies and records such rent expenses as cost of revenue from operations.
(*7) Mitsubishi Jisho Sekkei Inc. and MEC Design International Corporation provide
design management services and remodeling services to special purpose
companies and record such service incomes as revenue from operations.
The Company does not own investments with voting rights for any special
purpose companies and does not send directors and employees to any special
purpose companies. The following table sets forth major assets and liabilities ofthe special purpose companies as of their recent financial closing dates.
Excluded are special purpose companies whose financial closing dates are yet tocome because their initial fiscal years have just started.

Major assets

Thousands of
U.S. dollars

2010
Preferred investment securities: revenue (*2)
Other income(*3)
Management business: revenue(*4)
Intermediate business: revenue(*5)
Real estate rent: cost(*6)
Design management business: revenue (*7)

¥   908
48
1,658
202
8,198
854

$  9,766
519
17,826
2,175
88,123
9,184(*1) Preferred investment securities are indicated as amount of investment andspecific bonds as at March 31, 2010. The Company considers that its exposure
to loss that may arise in the future is limited to the amount of its preferredinvestments.
(*2) The Company records dividends from such investments as revenue fromoperations and related expense as cost of revenue from operations.
(*3) The Company records interest incomes from such specific bonds as other income.
(*4) The Company, Mitsubishi Estate Building Management Co., Ltd. and Mitsubishi
Jisho Property Management Co., Ltd. provide asset management business to
special purpose companies and record such service income as revenue fromoperations.

Thousands of
U.S. dollars

Millions of yen

Major revenue (cost) from transactions with special purpose companies
Millions of yen

The Share Exchange was treated as transactions under common control in

combination

Thousands of
U.S. dollars

Millions of yen

severe sings of slow-down.

transaction including its objectives.

period on a straight-line basis.

Transactions with Special Purpose Companies

investments through rental revenue and subsequent sale of real estate that

Business Combination

Amount of goodwill is amortized over an estimated economicalsome financial advisers.

Overseas revenue

19

increasing in the Share Exchange and the acquisition cost.
(iii) Method and period of amortization

Share Exchange ratio, using examples from reports calculated by20
Geographical segments¥4,486 million ($48,218 thousand)Class A preferred stock
Class C preferred stock¥ 71,122 ¥4,429,070
3
60,364–2,447¥     (393) ¥   206,681(i) Amount of goodwill:

Common stock

The Company and Towa Real Estate Development negotiated the¥750,489
1,643
431¥  11,475

period of amortization(ii) Reason(ii) Calculation basis of the Share Exchange ratio¥2,828,850
49,207302¥   111,413¥10,108 million ($108,646 thousand)3)	Amount of goodwill generated, reason for the generation, method and2010
Real estate
Other
Total

¥515,818
78,466¥594,284$5,544,046
843,362$6,387,409

Millions of yen

Thousands of
U.S. dollars

Major liabilities and net assets

2010
Debt and otherPreferred investments
Total

(*8)
(*9)

¥385,966
208,318¥594,284$4,148,393
2,239,015$6,387,409(*8) Debt and other include specific bonds.
(*9) Preferred investments include contributions made by the Company.

Amounts of preferred investment as of March 31, 2009
Millions of yen

2009
Preferred investment securities(*1)¥153,392¥175 million ($1,885 thousand)

ANNUAL REPORT 2010 |59

Major revenue (cost) from transactions with special purpose companies
Millions of yen

2009
Preferred investment securities: revenue (*2)
Other income(*3)
Management business: revenue(*4)
Intermediate business: revenue
Real estate rent: cost(*5)
Design management business: revenue (*6)¥  598
47
1,873
–
6,531
1,019

(*1) Preferred investment securities are indicated as amount of investment andspecific bonds as at March 31, 2009. The Company considers that its exposure
to loss that may arise in the future is limited to the amount of its preferredinvestments.
(*2) The Company records dividends from such investments as revenue fromoperations and related expense as cost of revenue from operations.
(*3) The Company records interest incomes from such specific bonds as other income.
(*4) The Company, Mitsubishi Estate Building Management Co., Ltd. and Mitsubishi
Jisho Property Management Co., Ltd. provide asset management business to
special purpose companies and record such service income as revenue fromoperations.
(*5) The Company enters into real estate rental agreements with special purpose
companies and records such rent expenses as cost of revenue from operations.
(*6) Mitsubishi Jisho Sekkei Inc. and MEC Design International Corporation provide
design management services and remodeling services to special purpose
companies and record such service incomes as revenue from operations.

21	  The Company does not own investments with voting rights for any special
purpose companies and does not send directors and employees to any special
purpose companies. The following table sets forth major assets and liabilities ofthe special purpose companies as of their recent financial closing dates.
Excluded are special purpose companies whose financial closing dates are yet tocome because their initial fiscal years have just started.

Major assets
Millions of yen

2009
Real estate
Other
Total

¥499,187
29,067¥528,254

Report of Independent Auditors
Major liabilities and net assets
Millions of yen

2009
Debt and otherPreferred investments
Total

(*7)
(*8)

¥339,893
188,361¥528,254(*7) Debt and other include specific bonds.
(*8) P referred investments include contributions made by the Company as describedin (*1) above.

Rental Properties

The Company and some of its consolidated subsidiaries own office buildings

Some office buildings for lease in Japan are regarded as real estate

for lease, commercial facilities for lease and others in Tokyo and other areas

including space used as rental properties since they are used by the Company

including overseas countries (the United States and the United Kingdom) forand some of its consolidated subsidiaries.

the purpose of obtaining revenue from leases.
The followings are the carrying value on the consolidated balance sheet as of March 31, 2010 and the fair values of these rental properties and real estateincluding space used as rental properties as of March 31, 2010;
Millions of yen

Thousands of U.S. dollars

2010

Rental properties
Real estate including spaces used as rental properties

Report of Independent Auditors

Carrying
value (*1)

Fairvalue (*2)

Carrying
value (*1)

Fairvalue (*2)¥2,615,827
234,910¥4,549,292
357,303$28,115,081
2,524,834$48,896,094
3,840,319(*1) The carrying value represents the acquisition cost less accumulated depreciation and accumulated impairment loss.
(*2) The fair value is based on the following:(1) The fair value of real estate in Japan is calculated by the Company based mainly on the Real Estate Appraisal Standards.
(2) The fair value of real estate in overseas countries is appraised principally by local real estate appraisers.

We have audited the accompanying consolidated balance sheets of Mitsubishi Estate Co., Ltd. andconsolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements ofincome, changes in net assets, and cash flows for the years then ended, all expressed in yen. These
financial statements are the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, theconsolidated financial position of Mitsubishi Estate Co., Ltd. and consolidated subsidiaries at March
31, 2010 and 2009, and the consolidated results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2010 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 3.

Tokyo, Japan
June 29, 2010

The income or loss from rental properties and real estate including space used as rental properties for the year ended March 31, 2010 were as follows:
Millions of yen

The Board of Directors
Mitsubishi Estate Co., Ltd.

Thousands of U.S. dollars

2010
Lease
incomeLease cost

Lease
income, net

Other, net

LeaseincomeLease cost

Lease
income, net

Other, net

Rental properties
Real estate including space¥339,750¥215,040¥124,709¥(38,328)

$3,651,660$2,311,269$1,340,390$(411,959)

used as rental properties

21,474

17,3524,121(632)

230,806

186,50244,303(6,793)

(*1) Lease income excludes the one from real estate including space used as rental properties that was used by the Company and some of its consolidated subsidiaries for leasing
service and operating management.
(*2) Other, net includes impairment loss ¥34,243 million ($368,048 thousand).

60 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |61Mitsubishi Estate Corporate Data

Mitsubishi Estate Group

Directors, Statutory Auditors and Executive Officers (As of June 29, 2010)

Corporate Information

Building BusinessDirectors and Statutory Auditors(as of March 31, 2010, except where indicated)

Building Leasing Business•

Sunshine BS Corporation•

Sunshine City Corporation•

Sunshine Enterprise Corporation•

Yokohama Sky Building Co., Ltd.

O.A.P. Management Co., Ltd.

•Tokyo Kotsu Kaikan Co., Ltd.

Parking Business•

Chelsea Japan Co., Ltd.

•Grand Parking Center Co., Ltd.

Building Management Business•Tokyo Garage Co., Ltd.

Head Office
Otemachi Building, 6-1, Otemachi 1-chome, Chiyoda Ward
Tokyo 100-8133, JapanWeb site: http://www.mec.co.jp/index_e.html
Phone: +81-3-3287-5100

Date of Establishment•

Mitsubishi Estate Building
Management Co., Ltd.

•

Mitsubishi Jisho Retail Property
Management Co., Ltd.

¥141,373 million•

Mitsubishi Jisho Property Management
Co., Ltd.

Number of Shares of Common Stock Issued•

Hokuryo City Service Co., Ltd.

1,390,397,097 shares•

IMS Co., Ltd.

•

Yuden Building Kanri Co., Ltd.

May 7, 1937

Paid-in Capital

District Heating and Cooling Business

Major Shareholders
The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
Meiji Yasuda Life Insurance Company
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
State Street Bank and Trust Company
CBLDN STICHTING PGGM DEPOSITORY
Asahi Glass Co., Ltd.
State Street Bank and Trust Company 505225
The Chase Manhattan Bank, N.A. London S.L. Omnibus Account

6.16
4.31
3.77
3.23
2.87
2.59
1.69
1.63
1.49
1.45

Stock Exchange Listings
Tokyo Stock Exchange and other major Japanese stock exchanges•

Nobuyuki Iizuka

Deputy President

Nobuyuki Iizuka

Representative Director

Toshio Nagashima

Executive Vice President

Toshio Nagashima

Representative Director

Hiroshi Danno

Executive Vice President

Hiroshi Danno

Representative Director

Masaaki Kono

Executive Vice President

Masaaki Kono

Hiroyoshi Ito

Executive Vice President

Takao Yagihashi

Representative Director

Yutaka Yanagisawa

Executive Vice President

Hiroyoshi Ito

O.A.P. D.H.C. Supply Co., Ltd.

Representative Director

Hirotaka Sugiyama

Executive Vice President

Yutaka Yanagisawa

Director

Masamichi Ono

Executive Vice President

Hirotaka Sugiyama

Director (see Note 1)

Isao Matsuhashi

Senior Executive Officer

Yuzuru Shibagaki

Director (see Note 1)

Fumikatsu Tokiwa

Senior Executive Officer

Masao Ouchi

Director (see Note 1)

Yasumasa Gomi

Senior Executive Officer

Toshihiko Kazama

Director (see Note 1)

Shu Tomioka

Senior Executive Officer

Masamichi Ono

Standing Statutory Auditor

Eiji Tan

Senior Executive Officer

Jo KatoMinato Mirai 21 D.H.C. Co., Ltd.
Others•Marunouchi Direct Access Limited
Marunouchi Hotel Co., Ltd.

•MEC Urban Resort Tohoku Co., Ltd.

Towa Real Estate Development Co., Ltd.

•

Towa Nasu Resort Co.
Sakura Golf Development Co., Ltd.

Izumi Park Town Service Co., Ltd.

OthersStanding Statutory Auditor (see Note 2)

Kazuhiko Hasegawa

Senior Executive Officer

Naoto Aiba

MEC Eco LIFE Co., Ltd.

Statutory Auditor (see Note 2)

Kenjiro Hata

Executive Officer

Yasuo Fujiwara

Statutory Auditor (see Note 2)

Akio Utsumi

Executive Officer

Ichiro Watarai

Executive Officer

Megumu Ono

Executive Officer

Shiro Fujisawa

Executive Officer

Soichiro Hayashi

Executive Officer

Takao Tojo

Executive Officer

Koji Kiyosawa

Executive Officer

Masao Toyoizumi

Executive Officer

Kazuyuki Yabu

Executive Officer

Kenichi Iwata

Executive Officer

Atsuo Kyono

Executive Officer

Hirokazu Kano

Executive Officer

Kazuhiko Arahata

Executive Officer

Toru Okusa

Executive Officer

Yutaka Tajima•

Mitsubishi Jisho Towa Community
Co., Ltd.

•

Ryoei Life Service Co., Ltd.

•MT Community Staff Co., Ltd.

•

Towa Real Estate Brokerage Co., Ltd.

Recreational Facilities

Tsunagu Network Communications, Inc.

Higashinihon Kaihatsu Co., Ltd.

Urban Development & Investment Management
Mitsubishi Jisho Investment Advisors, Inc.

Transfer Agent and Registrar•

Japan Real Estate Asset Management Co., Ltd.

Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda Ward, Tokyo 100-8212, Japan

International Business

Ascott International Management Japan Co., Ltd.
•Rockefeller Group, Inc. (RGI)

Transfer Account Management Institution for Special Account•

Mitsubishi Estate New York Inc.

Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda Ward, Tokyo 100-8212, Japan•MEC UK Limited

The Chuo Mitsui Trust and Banking Company, Limited
33-1, Shiba 3-chome, Minato Ward, Tokyo 105-0014, Japan

Representative Director

Representative Director

Real Estate Sales•

Transfer Account Management Institution for Special Account establishedfor shareholders of the former Towa Real Estate Development Co., Ltd.

Keiji Kimura

Ikebukuro District Heating and CoolingCo., Ltd.

••

Chief Executive Officer

Marunouchi Heat Supply Co., Ltd.

Residence Management Business•

Keiji Kimura•

Residential Business% of total

President & Representative Director•

Number of Shareholders
79,533 (excluding shareholders with less than 1,502 shares)

Executive Officers

Mitsubishi Estate Asia Pte. Ltd.

Architectural Design & Engineering•

Mitsubishi Jisho Sekkei Inc.

•

MEC Design International Corporation

Custom-Built Housing•

Mitsubishi Estate Home Co., Ltd.

Auditor•

Mitsubishi Estate Housing Components Co., Ltd.

Ernst & Young ShinNihon LLC

Hotel Business•Royal Park Hotels and Resorts Co., Ltd.

•Royal Park Inn Nagoya Co., Ltd.

•

Tohoku Royal Park Hotel Co., Ltd.

•Royal Park Shiodome Tower Co., Ltd.

•

Yokohama Royal Park Hotel Co., Ltd.

•Royal Park Hotel Co., Ltd.

Notes: 1.	Among directors, Isao Matsuhashi, Fumikatsu Tokiwa, Yasumasa Gomi and Shu Tomioka
are outside directors who fulfill the qualifications set forth under Article 2-15 of the
Corporation Law of Japan.
2.	Among statutory auditors, Kazuhiko Hasegawa, Kenjiro Hata and Akio Utsumi are outside auditors who fulfill the qualifications set forth under Article 2-16 of the Corporation
Law of Japan.

Real Estate Services•

Mitsubishi Real Estate Services Co., Ltd.

Others•MEC Information Development Co., Ltd.

•MEC Human Resources, Inc.

•

Keiyo Tochi Kaihatsu Co., Ltd.

• Consolidated subsidiary
Equity-method affiliate

62 |ANNUAL REPORT 2010

ANNUAL REPORT 2010 |63Organization (As of April 1, 2010)

Corporate History• Real Estate Consulting & Solution Group

Real Estate Consulting & Solution Dept. 1

1890

March The Marunouchi site (over 353,000m2)—a former military training ground
known as Kanda Misaki-cho—purchased by Mitsubishi Company from theJapanese government
September Marunouchi Architectural Office established1893

December Mitsubishi Goshi Kaisha (limited partnership) establishedReal Estate Consulting & Solution Dept. 2• Property Management and Office Leasing Group
Property Management Dept.

Building Safety Management Office
Yokohama Renewal Office

1894

Commercial Property Advisory Dept.
Office Leasing and Tenant Relations Dept.

Relocation Management Office
Master Lease Planning and Management Office• Commercial Asset Management and Development Group

President &Chief Executive Officer

Internal Audit Office

1923

CSR
Committee

Marunouchi Building

Compliance
Subcommittee

1937• Retail Property Group

Retail Property Planning Dept.
Retail Property Development Dept.
Retail Property Leasing Dept.

•

1945

Commercial Property Development and Investment Group
Commercial Property Development and Investment Planning Dept.

Environmental
Subcommittee

Commercial Property Development and Investment Dept.

Risk Management
Subcommittee

Toyosu Development Project Office

Executive Committee
Strategic Investment
Committee

Board of Statutory Auditors
Statutory Auditor•

Office of Statutory Auditors

1950

Development Planning Office• Residential Development Group

1952

Residential Development Planning Dept.

Condominium Sales Promotion Office

Condominium Development Dept.

Residential Development Group Integration Planning Office

1953

May Mitsubishi Estate Company, Limited established with paid-in capital
totaling ¥15 million, with the ownership of the Marunouchi Building and its
site, as well as business rights for buildings and land within the Marunouchi
area, transferred from Mitsubishi Goshi Kaisha
November Construction-related businesses of Mitsubishi Goshi Kaisha transferred to
Mitsubishi Estate
April Ownership of Yaesu Building (completed in March 1928 and renamed
Marunouchi Yaesu Building in 1962) and its site transferred from
Mitsubishisha Co., Ltd. to Mitsubishi Estate
January Business rights for the Marunouchi site and other land and buildings,
excluding those for Marunouchi Building and Yaesu Building, were returned
to Mitsubishihonsha Co., Ltd. . Mitsubishihonsha Co., Ltd.
dissolved and its operations transferred to two newly establishedsecondary corporations, Yowa Fudosan Ltd. and Kaito Fudosan Ltd.

1993

July Akasaka Park Building completed
Yokohama Landmark Tower completed
September Yokohama Royal Park Hotel opened

Yokohama Landmark Tower

April Yowa Fudosan and Kaito Fudosan merged with Mitsubishi Estate
May Mitsubishi Estate’s shares listed on the Tokyo Stock Exchange and the Osaka
Securities Exchange

Detached Housing Office

PARTNER System Dept.

Condominium Redevelopment Office

1959

Apartment Development Dept.

Residential Cost Management Office

1960

February Marunouchi Parking Area completed

Residential Design Planning and Marketing Dept.

Residential Customer Service Office

1962

December Hokkaido Building completed

Recreational Facility Office

Residential Quality Management Office

1969

International Business GroupInternational Business Dept.
1972

Investment Management OfficeNovember Reconstruction of Marunouchi Building announced

1996

January Osaka Amenity Park (OAP) completed
November Head Office relocated to Tokyo Building

1999

April Mitsubishi Estate New York Inc. established
June The first phase of the Izumi Park Town
Project launched

April Reconstruction of Marunouchi Building commenced

2000

April Aqua City Odaiba commercial complex opened under the management of
Mitsubishi Estate subsidiary Aqua City Co., Ltd. (renamed Mitsubishi Jisho
Retail Property Management Co., Ltd. in July 2007)
November Royal Park Hotels and Resorts Co., Ltd. established

2001

April Mr. Shigeru Takagi and Mr. Takeshi Fukuzawa appointed president andchairman, respectively
June Mitsubishi Jisho Sekkei Inc. established through a spin-off of thearchitectural design and engineering business
September Mitsubishi Jisho Investment Advisors, Inc. established

2002

March Properties and equipment revaluated in accordance with
the Law Concerning Revaluation of Land and otherrelevant laws and regulations
September Marunouchi Building opened (completed in August)Marunouchi Building
2003

July Marunouchi Remodeling Plan formulated

May Mr. Otokazu Nakata and Mr. Takejiro Watanabe appointed president andchairman, respectively
Akasaka Park House offered for sale in lots, marking the launch of theCondominium Business

June Mr. Takeshi Fukuzawa and Mr. Jotaro Takagi appointed as president andchairman, respectively

1995

May Mr. Takejiro Watanabe appointed president
November Shin-Marunouchi Building completed

Master-Planned Residential Dept.

• Investment Management Group

February Participation in the City of London’s Paternoster Square Project announced
April Capital investment in the Rockefeller Group, Inc. initiatedSeptember Construction of Ryokuendai New Town commenced

1994

Commercial Asset Development Dept.

Strategic Planning
Committee

1990

February Marunouchi Building completed

Group Companies Management Office

Area Planning OfficeTenjin MM Building (IMS) opened in Fukuoka City
Royal Park Hotel in Hakozaki, Tokyo opened
Hiroshima Park Building completed
Hiroshima Branch (renamed Chugoku Branch in April 2000) andKyushu Branch established

July Real Estate Division established within Mitsubishi Goshi Kaisha

Museum Management Office

Board of Directors
Chairman of the Board

1906

Area Brand Management Dept.

Meeting of Shareholders

April
June
July
July

Mitsubishi Ichigokan

Tenant Improvements Management OfficeCommercial Asset Management Dept.

June Mitsubishi Ichigokan,
the first office building in
Marunouchi, completed

1989

February Mitsubishi Trust and Banking Building completed (renamed Mitsubishi UFJ
Trust and Banking Building in October 2005)
March Head Office relocated to Otemachi Building
April Introduction of an executive officer system
May Paternoster Square completed in the City of London
July Royal Park Shiodome Tower opened

2004

September Marunouchi OAZO opened (completed in August)December Capital investment in Towa Real Estate Development Co., Ltd. initiated2005

March Construction of Shin-Marunouchi Building commenced
June Mr. Keiji Kimura appointed president
November Tokyo Building opened (completed in October)

2007

April Shin-Marunouchi Building opened
September The Peninsula Tokyo opened (completed in May)

• Corporate Group

Corporate Planning Dept.
Izumi Park Town

Affiliate Group Office
Human Resources Dept.

Human Resources Compliance OfficeFinance & Accounting Dept.

1973

Corporate Communications Dept.

Investor Relations Office

1975

General Affairs Dept.

Secretary Office1978

CSR Dept.

Legal Office

1980

Environmental Sustainability Office
Sapporo Branch

1981
1983

Tohoku Branch

1984

Yokohama Branch

1986

Nagoya Branch
Osaka Branch
Chugoku Branch
Kyushu Branch

64 |ANNUAL REPORT 2010

Shin-Marunouchi Building

December Mitsubishi Real Estate Services Co., Ltd. established

1987
1988

November Branches established in Sapporo, Sendai, Nagoya and Osaka

2008

May Semiannual settlement of accounts changed to annual
October Shin Aoyama Building completed
June Mr. Tatsuji Ito and Mr. Otokazu Nakata appointed president andchairman, respectively

2009

October Hibiya Kokusai Building completedApril Nagoya Dai-Ichi Hotel opened (renamed Royal Park Inn Nagoya in April
November 2001) MEC USA, Inc. established
July Mitsubishi Estate Home Co., Ltd. establishedMarch MEC UK Limited established
July The first consolidated financial statements announced
October Yokohama Office established (reorganized as Yokohama Branch in April 2000)
June Mr. Jotaro Takagi appointed president

January Towa Real Estate Development turned into a Mitsubishi Estate consolidated
subsidiary
March Sunshine City Corporation turned into a Mitsubishi Estate consolidated
subsidiary
October Mitsubishi Estate Asia Pte. Ltd. commenced operations
March Chelsea Japan Co., Ltd. turned into a Mitsubishi Estate
consolidated subsidiary
April Towa Real Estate Development turned into a
Mitsubishi Estate wholly owned subsidiary
April Marunouchi Park Building & Mitsubishi Ichigokancompleted
September Marunouchi Brick Square opened
Marunouchi Park Building & Mitsubishi Ichigokan

2010

March Construction under the Osaka Station North District Phase 1 Development
Project commenced
April Mitsubishi Ichigokan Museum opened

January Yokohama Minato Mirai 21 Block-25 Development Plan announced

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Corporate Social Responsibility
CSR Case Studies
The Mitsubishi Estate Group has adopted as its fundamental mission the goal of
creating a truly meaningful society by building attractive, environmentally soundcommunities where people can live, work and relax with contentment. Putting
this mission into practice itself underpins Mitsubishi Estate’s CSR activities, all ofwhich are aimed at helping realize the sustainable growth of the Company andsociety as a whole. At the same time, Mitsubishi Estate believes that the promotion of CSR activities will directly lead to the improvement of its corporate brand.

All Group employees share the Mitsubishi Estate Group Code of Corporate
Conduct as ethical guidelines to achieve the mission. Meanwhile, with the aimof promoting Groupwide CSR activities, the Company has established a CSR
Committee, chaired by the president. With the CSR Committee serving as thecentral driver, we are proactively implementing a wide variety of CSR activities
that draw on the Group’s distinctive features.

The Mission of the Mitsubishi
Estate GroupWe contribute to society through urban development
By building attractive, environmentally sound communities where people can live, workand relax with contentment, we contribute to the creation of a truly meaningful society.

The Mitsubishi Estate Group
Code of Corporate Conduct
In order to carry out the Group Mission, we pledge
to observe the following Code of Conduct:

1. We will act with integrity
We will base our conduct on laws and ethics and always reflect with humility upon
our behavior, valuing our communication with society and placing priority in our
corporate activities on earning trust through fairness and transparency.

Compliance
Mitsubishi Estate considers compliance as not simply the adherence to legal
standards, but as meeting the expectations of people in society at large, not tomention the adherence to internal company rules and ethical corporate standards. Furthermore, because we recognize how essential compliance is to the
profit base of the Company, we view the maintenance of a compliance system
as a priority task of management. Moreover, all Group employees are deepening their awareness of compliance issues while proactively promoting compliance-focused activities.
Risk Management
To maintain proper risk assessment and management of a wide range of internal and external business risks, Mitsubishi Estate has placed the CSR Committee
in overall charge of risk management. In addition, we have established a Risk
Management Subcommittee as a working-level body tasked with gathering risk
management-related information. This subcommittee is implementing crosssectional risk management throughout the Group.
Environmental Management
The Mitsubishi Estate Group has clarified its commitment to proactively contributing to efforts of society aiming to reduce its environmental impact. By
aggressively implementing initiatives toward realizing a low-carbon, recyclingoriented society in partnership with its customers, the Company is leading
sustainable urban development that gives due consideration to such environmental aspects as biodiversity. Specifically, we are implementing various initiatives to reduce the environmental impact in general in the Otemachi,
Marunouchi and Yurakucho areas through public-private collaboration. Actual
initiatives are categorized into those with direct or indirect results. Initiatives
with direct results include the introduction of high-efficiency air-conditioning
systems and “dry mist” generators as well as the arrangement of roof-top
and external-wall greenery on our properties. In fact, the Shin-Marunouchi
Building has started the use of 100% renewable, “fresh green electricity.”
Initiatives with indirect results involve the staging of environment-related
events and seminars, which are aimed at promoting environmental awarenessand the dissemination of environmental information.

Social Contributions
As a good corporate citizen, the Mitsubishi Estate Group engages in a wide
range of social contribution activities centered on promoting its harmonious
coexistence with communities, its environmental preservation and social welfare
activities, and its support for culture and the arts. For example, during the fiscal
year under review, Mitsubishi Estate participated as a supporter in the La Folle
Journée au Japon “Days of Enthusiasm” Music Festival 2010, held small concert
events in the Marunouchi and other areas, implemented “Experience Nature”
projects nationwide to promote communication between urban and rural people, and hosted the annual Dazzling Art Competition—a drawing contest fordisabled children throughout Japan.

Small concert event held as part of the La Folle Journée au Japon “Days of Enthusiasm” Music
Festival 2010 (a number of concerts were held at the MARUCUBE atrium on the first floor of
the Marunouchi Building as well as at many other places in the Marunouchi and other areas
between April 28, 2010 and May 4, 2010).

2. We will strive to earn the trust of our clients
We will approach all objectives from our clients’ point of view, providing safe andreliable products and services, and make information available as appropriate.

3. We will strive to create a vibrant workplace
While aiming at personal growth, we will respect the human rights and diversity ofopinions of others and increase our creativity and professionalism, while displaying
our collective strengths as a team.
“Experience Nature” project to revitalize abandoned farmland in Yamanashi Prefecture (July 2009)
For details of the Mitsubishi Estate Group Guidelines for Conduct,
please visit our Web site at:
http://www.mec.co.jp/e/company/charter/index.html(Formulated December 1, 1997)(Revised August 1, 2002)(Revised January 1, 2006)

Mitsubishi Ichigokan Museum and courtyard

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