May 14, 2018
Earnings Highlights for FY2018(The Fiscal Year Ended March 31, 2018)
Mitsubishi Estate Co., Ltd.
●Earnings for FY 2018 (Consolidated)
Millions of yen (rounded down)

FY2018Results
Office Building Business

506,161

FY2017
Results

ChangeChange(%)

FY2018 Estimates（Announced on Feb 7, 2018)484,238

21,9234.5%

501,000

Lifestyle Property Business

105,81788,955

16,86219.0%

108,000

Residential Business

410,598

407,850

2,747

0.7%

426,000

International Business

86,92566,556

20,36830.6%

82,000

Revenue from Operations

1,194,049

1,125,405

68,6446.1%

1,202,000Office Building Business

147,243

133,570

13,67210.2%

143,000

Lifestyle Property Business

31,18425,807

5,377

20.8%

30,000Residential Business

23,86019,253

4,607

23.9%

20,000International Business

24,14726,313(2,166)(8.2)%

24,000Operating Income

213,047

192,495

20,551

10.7%

205,000

Income Before Taxes and Special Items

190,506

169,851

20,65412.2%

179,000

Profit Attributable to Owners of Parent

120,443

102,681

17,762

17.3%

112,000

EBITDA

302,424

279,718

22,7068.1%

293,000＜Summary＞【Overview】
There is an increase in income and profits compared with FY2017. Main factors include an increase inrental income and profits in the Building Business; an increase in property sales income and profits both inthe Lifestyle Property Business and the International Business; and an increase in income and profits fromcondominiums in the Residential Business. Factors affecting individual segments compared with FY2017
are detailed below.
【Building Business】
An increase in rental income and profits from both new and existing buildings as well as an increase inproperty sales income resulted in an overall increase.
(Vacancy Rate)
The vacancy rate for Japan (all purpose) and Marunouchi (offices) had been improved due to anincrease of leasing among new buildings in Marunouchi as well as existing buildings in andoutside of Marunouchi.
(Average Rents)
The average rents increased as a result of rents from new buildings in Marunouchi as well as anincrease in rents from existing buildings mainly in Marunouchi.
(yen/tsubo.month)
2017/3Results

2017/12Results

2018/3Results

2018/3 Estimates(Announced on Feb 7, 2018)

Japan (all purpose)

2.93%

2.61%

1.87%

2.5%

Marunouchi (offices)

2.42%

2.57%

1.65%

Average rents (Japan, all purpose)¥25,842¥26,157¥26,193

Vacancy rates¥26,200

【Lifestyle Property Business】
An increase in property sales income and profits as well as a favorable performance in outlet mall businessresulted in an overall increase.
【Residential Business】
Despite a decrease in property sales income and profits, sales of large -scale tower condominiums led to anincrease in income and profits from condominiums; thus resulted in an overall increase in the Residential
Business segment.
【International Business】
An increase in property sales income resulted in an increase in income; however, factors, such as theabsence of temporary profits accounted in the previous period of the same year as well as a decrease inrental profits, led to an overall decrease in profits.
●Earnings Estimates for FY2019 (Consolidated)

Millions of yen (rounded down)
FY2019Estimates

FY2018Results

ChangeChange(%)(New Segment*)
Office Building Business

545,000

506,161

38,839

7.7%

Lifestyle Property Business

113,000

97,92015,08015.4%

Residential Business

440,000

410,598

29,402

7.2%

International Business

74,00086,925(12,925)(14.9)%

Revenue from Operations

1,290,000

1,194,049

95,9518.0%

Office Building Business

148,000

147,243757

0.5%

Lifestyle Property Business

31,00028,079

2,921

10.4%

Residential Business

23,00023,860(860)(3.6)%

International Business

25,00024,147853

3.5%

Operating Income

215,000

213,047

1,953

0.9%

Income Before Taxes and Special Items

191,000

190,506494

0.3%

Profit Attributable to Owners of Parent

123,000

120,443

2,557

2.1%

EBITDA

303,000

302,424576

0.2%(New Segment*)

As of April 2018, the following segments or businesses were integrated into newly
established Hotel and Airport Business segment:- previous Hotel Business segment- Hotel Development Business previously in Lifestyle Property Business segment- Airport Management Business and Resort Hotel Development Business previously inBusiness Creation Department

＜Summary＞【Overview】
While a decrease in sales and profits from condominiums is expected, an increase is also expected in incomeand profits. Main factors include an increase in rental income and profits in the Building Business and anincrease in income and profits in the Lifestyle Property Business. Factors affecting individual segments
compared with FY2018 are detailed below.
【Building Business】
While a decrease in temporary profits is expected, an overall increase is expected as a result of an increase
in rental income and profits from operations of new buildings to be completed in 2018 and Otemachi Park
Building completed in January, 2017.
(Vacancy Rate）
The vacancy rate for the end of March 2019 (Japan, all purpose) is expected to be 2.5%.
(Average Rents)
The average rents for the end of March 2019 (Japan, all purpose) is expected to reach
26,800/tsubo.month due to the effect of operations of new buildings and the rent increase forexisting buildings.
【Lifestyle Property Business】
An increase in income and profits is expected as a result of an increase in rental income from operations of
new commercial buildings as well as an increase in property sales profits.
【Residential Business】
While an increase in profits as a result of an increase in income and profits of property sales is expected,
an overall decrease in profits is expected due to a decrease in gross margin on condominiums.
【International Business】
While a decrease in income as a result of a decrease in property sales income is expected, an increase inprofits is expected due to profits generated from Hybrid model investment.
●Dividends
Although the Company recognizes capital requirements for future business developments such as theredevelopment of Marunouchi, it focuses on dividends and the provision of a stable return to allshareholders as a key point of the basic policy on dividends. While overall performance levels etc. will also
be taken into account, the Company has decided to aim for consolidated payment ra tio of 25% to 30%.
Interim dividends for the current term are ¥12 yen per share. Upon balancing the accounts, profit
attributable to owners of parent had considerably increased compared with the most recent full -year
financial forecasts. Therefore the year-end dividend is scheduled to be increased by ¥ 2, up to ¥ 14 per share(annual dividend payout is ¥ 26 per share).
After taking into deep consideration on future prospects as well as dividend policy stated in above, both theinterim dividend and the year-end dividend will be set at ¥13 and annual dividend payout will be ¥26 pershare for FY 2019.

●Estimates for Quantitative Targets in FY2020(in Medium-Term Management Plan announced on May 11, 2017)

GrowthPotentialOperating Income

Performance

Operating Income／ Total Assets(ROA）

Stability

Net Debt／EBITDA（Hybrid Finance reflected）

Quantitative Target

FY2020 Estimates（ announced on May 11, 2017）（ as of May 14, 2018）¥220 billion¥230 billion

Around 3.5%

3.8%

Around 8.5 times（Around 8 times）

Around 8 times（Around 7.5times）＜Summary＞【Overview】
In regards to quantitative targets for each indicator stated in Medium-Term Management Plan released in
May 11 th , 2017, each indicator is expected to exceed the target as a result of maintaining a goodbusiness environment particularly in Building Business.
【Growth Potential】
With exceeding the target over 10 billion, operating income of ¥230 billion is expected mainly due to anincrease in rental profits as well as property sales profits in Building Business.
【Performance】
As a result of an increase in operating income, ROA is expected to be 3.8 % with 0.3 % above the target.
【Stability】
The investment-return plan is expected to be improved as property sales income in each business segment tobe above the target stated in Medium-Term Management Plan as of 2017. As a result, a decrease in
newly acquired funds is expected; thus leads to an improvement in stability.
Disclaimer
The forecasts contained in this report, the Summary of Consolidated Financial Statements, and FACTBOOK are based on information available to the Company at the time of disclosure. Therefore, actual
performance may differ from such forecasts due to various factors.
The summary of Financial Statements and Fact Book can be found on the homepage.
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