FY 2021 – 3Q
(For the Year Ending March 31, 2021)

IR Presentation

For details of “Long-Term Management Plan 2030”, which began from April 2020, please refer to the following link.
https://www.mec.co.jp/j/investor/plan/pdf/plan200124.pdf

Contents
Summary of Financial Statements

3

Summary of FY 2021-3Q Results
Revision of FY 2021 Estimates

4
11

Financial Supplemental Data
Overview of “Long-Term Management Plan 2030”
Business Overview
Commercial Property Business

19
27
37

Office Building
Outlet Malls, Retail Properties,
Logistics Facilities, Hotels, and Airports

Residential Business
International Business
Other business
Investment / Financial Data etc.
ESG Initiatives
MITSUBISHI ESTATE CO., LTD.

40
54
59
64
67
69
74
2

Summary of Financial Statements

Summary of Financial Statements＜FY 2021-3Q Financial Results＞•

Revenues and operating incomes both decreased from on a YoY basis, while profits attributable to owners of parent
increased.

•

While rental profits from office buildings increased on a YoY basis, operating income decreased on a YoY basis as retailproperties and hotels were impacted as a result of COVID-19.

＜Revision of FY 2021 Estimates＞•

Reviewing the outlook for asset sales etc., earning estimates are upgraded. Operating income increased by ￥26 billion.
Profit attributable to owners of parent increased by ￥20 billion.

•

Dividend forecasts for FY 2021 have increased from ￥25 to ￥30.

＜Major Topics＞•

Awarded “Five Star” in GRESB Real Estate Assessment (November 2020).

•

Selected as A-list, the highest rating, in the CDP Climate Change 2020 Assessment (December 2020).

•

Began construction of the "Umekita Second Zone (Tentative Name) Development Project" (December 2020).

•

Decided to switch to renewable energy sources for all electricity used in office buildings owned in the Marunouchi area
by FY 2023 (January 2021).

MITSUBISHI ESTATE CO., LTD.

3

Summary of FY 2021-3Q Results

MITSUBISHI ESTATE CO., LTD.

4

Summary of FY 2021-3Q Results

1. Income Statement Results for FY 2021-3Q
YoY profits have decreased due to COVID-19 and a decrease in capital gains, although office rental
profits increased.
Millions of yen (rounded off
Millions of yen (rounded down)

Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

FY2021-3Q
777,883
481,831206,086
53,281
14,53741,484△ 19,338
139,477
131,355
6,972
20,2142,642△ 4,318△ 17,388
23,782274
23,794
139,465
15,61024,48588,782Business profits
EBITDA
Interest-bearing debt

FY2021
FY2020-3Q-3Q
139,752
149,746
222,604
222,0422,739,639 2,600,005<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

FY2020-3Q
827,231488,950
215,593
84,556
14,07043,255△ 19,196
149,515
131,848
3,120
32,342
2,349△ 3,285△ 16,860
11,506231
26,794
134,227
86,646

Change△ 49,347△ 7,119△ 9,507△ 31,274466△ 1,771△ 141△ 10,037
△ 493
3,851
△ 12,127292△ 1,032△ 528
12,27543△ 3,000
5,238
15,61024,4852,135

Capital Gains included in Operating Income
FY2021-3Q
Total
25,000Commercial Property Business
17,000Residential Business
6,000International Business
2,000
Investment Management Business
Other
Eliminations or corporate-

to the nearest billion)

FY2020-3Q
31,0006,000
4,000
21,000-Change△ 6,000
11,0002,000△ 19,000-

Major Factors for Changes in
Operating Income by Business
Commercial
Property△ 493

Residential
International
3,851△ 12,127

Others△ 1,268

Increase in rental profits
Increase in residential
businesses in Asia
Decrease in capital gains

149,515

Increase in capital gains
Increase of condominium profits

139,477

Millions of yen (rounded down)△ 9,994562
139,634*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

Increase in capital gains
Increase in office rental profits
Decrease in profits from retail properties andhotels due to the impact of COVID-19

ChangeFY2020-3Q

Commercial
Property

Residential

International

Others

FY2021-3Q

5

Summary of FY 2021-3Q Results

2. Impact of COVID-19 (Major impacts on 3Q results)
No significant changes in the impact of COVID-19 on the retail properties and hotels businesses.
Sales of domestic condominiums remain steady.
Full-year impact
after revision

Categories

Capital Gains-

Domestic
Condominiums, etc.*1

Retailproperty

HotelsIncomeGain

Offices

Operating profits

Impact on
3Q(Total)Major situation and impact

Extraordinary
losses*2---(Previous:▲JPY 5.0B)-▲JPY 18.0B(Previous:▲JPY16.0B)▲JPY 18.0B(Previous:▲JPY 15.0B)▲JPY 0.5B(Previous:▲JPY 0.5B)▲JPY 14.3B▲JPY 11.0B▲JPY 3.3B▲JPY 11.0B▲JPY 13.4B▲JPY 2.4B-▲JPY 5.0B

Others▲JPY 8.5B(Previous:▲JPY 8.5B)▲JPY 5.0B-

Subtotal
Total

MITSUBISHI ESTATE CO., LTD.

▲JPY 45.0B(Previous:▲JPY 40.0B)▲JPY 45.0B(Previous:▲JPY 45.0B)▲JPY 32.7B▲JPY 32.7B• 52% of the revised full-year forecast (previous estimate + ￥17 billion) has
been recorded by 3Q• Model units visitors in 3Q surpassed numbers in FY 2020-3Q• Steady decrease in inventory due to the continued high demands ofresidences with high convenience in urban areas, and the increasing demand
for large unit in suburb (373 units at the beginning of FY 2021 ⇒ 240 units
at the end of the 3Q)• See P7 for details• While sales recovered from October to mid-November, sales declined fromthe end of November due to the re-spread of COVID-19.
• See P8 for details• Occupancy rate recovered until November due to government measures tostimulate demand, but has been declining since late December due to the respread of COVID-19 and the suspension of government measures.
• No impact• Transaction volume and number of brokerage decreased in the real estateservice business.
• Impact on certain businesses of consolidated subsidiaries (exhibition, parking
lot, golf course, etc.)• Some international residential businesses are stronger than expected▲JPY 27.0B▲JPY 5.7B▲JPY 27.0B▲JPY 5.7B*1 Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income*2 Some costs incurred by retail properties and hotels that were closed during this period arerecorded in extraordinary loss for COVID-19 (e.g. depreciation cost or rent)

6

State of businesses

3. State of businesses: Retail properties and outlet malls
Status of retail properties and outlet malls operations(from Oct-Dec 2020)• Sales recovered during October to mid-November 2020 when the number of new cases of
COVID-19 stabilized, but have declined since late November 2020.

• "Outlet malls" and "Stand-alone shopping center" remain steadily recovering. Sales in October
2020, in particular, recovered to the same levels of the prior year when the increase in
consumption tax affected sales.

Outlet malls (GOTEMBA PREMIUM OUTLETS)• While sales of "Urban, mixed-use buildings Commercial zone” continue to be negatively impacted
due to the lower numbers of office workers commuting compared to pre-COVID-19 numbers,
dining and retail sales gradually recovered until October to mid-November 2020.

Sales trends in retail properties and outlet malls
Sales levels from July to
September(YoY comparison)

Sales level from October toDecember(YoY comparison)

Outlet malls

Approx. 80-90%

Approx. 80-100%

Stand-alone shopping center

Approx. 80-90%

Approx. 90-100%

Urban, mixed-use buildings
Commercial zone

Approx. 50-60%

Approx. 60-70%

Type of facility

MITSUBISHI ESTATE CO., LTD.

Stand-alone shopping center(MARK IS Minatomirai)

Urban, mixed-use buildings Commercial zone
(Marunouchi Bldg.)

7

State of businesses

4. State of businesses: Hotels
Status of hotel operations (from Oct-Dec 2020)• Occupancy rates are on a recovering trend until November 2020 as a result of government
measures initiated on July 22, 2020 in order to stimulate demand.
• Hotels popular among Japanese consumers and resort-type hotels are relatively steadily
recovering.

Sendai Royal Park Hotel(Occupancy rates of Sendai RPH and Yokohama RPH for November 2020: Approx. 80%)
• Due to the re-spread of COVID-19 and the suspension of government measures at the end of
December 2020, demand is on a weakening trend.

Royal Park Hotels/Trend in occupancy rate (Jan-Dec 2020)
80%

74.1%
57.6%

60%

56.9%
48.1%

43.6%
40%

22.2%
20%

4.5%

10.4%

15.9%

22.3%

29.1%

1.4%

0%
Jan.

MITSUBISHI ESTATE CO., LTD.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Yokohama Royal Park Hotel(Yokohama Landmark Tower)

8

State of businesses

5. The Second State of Emergency and the Operation Status of our Facilities(as of February 10, 2021)
Timeline surrounding the second state of emergency
January 7, 2021:

The second declaration of a state of emergency to theGreater Tokyo Area (Tokyo, Kanagawa, Saitama,
Chiba)(Jan. 8, 2021 to Feb. 7, 2021)
January 14, 2021: The targeted areas were expanded to include a total of
11 prefectures (Osaka, Hyogo, Kyoto, Aichi, Gifu,
Fukuoka, Tochigi)
February 8, 2021: The extension of a state of emergency applied to ten
prefectures except Tochigi (until March 7)

Key elements of the second state of
emergency• Shortened business hours for retail properties
with more than a 1,000㎡ floor space• Voluntary shortened business hours for dining
facilities (closing at 8pm)
• 70% reduction of commute by WFH• Voluntary self-quarantine after 8pm• Restriction of the number of attendees
at events

Operation status of our facilities during the second state of emergency(Reference: during the first state of emergency)
Type of facility

Operation status of our facilities during
the second state of emergency

Operation status of our facilities during
the first state of emergency (Apr. to May. 2020)

OfficesStandard business operations(MEC aims to decrease the office attendance rate to
30% or less)Standard business operations(In principle, MEC adopted a WFH policy)

Retail Properties

Close by 8pm (for wholly owned facilities) with some
exceptions

Temporarily closed with some exceptions

HotelsDining facilities, such as restaurants, close at 8pm

Temporarily closed a portion of hotels

Condominiums(Model Units)

Operating on a 100% appointment-only basis. Close at
Temporarily closed
8pm

MITSUBISHI ESTATE CO., LTD.

9

State of businesses

6. State of businesses: Offices (initiatives looking ahead to post-COVID-19)
Enhancing offices' ability to create value by sophisticating the core function of the center officeand keeping pace with diversified workstyles.
Previous workstyles
Common to work at thesame place/time, both ofwhich are predetermined.

New workstyles
Center office should be the coreand hub of a company to maintaina sense of belonging and trust
among employees in thediversification of values.

Sophistication of the center officeTOKYO TORCH (Tokiwabashi PJ）• 2ha outdoor space• Communal space for workers• Flexible office use by multiple
tenants• Implementation of contactlesssecurity• Large hall (2,000 seats)• World-class hotel (100 rooms)• Eco-friendly city development (e.g.
green bonds)

FINOLAB (renewal)• Financial support for startups(investing in FINOLAB FUND)• Renewal and expansion• Support services for businessexpansion

Approaches to diversified workstyle
WORK × ation Site (Workation)• Establishment of a new hub(second hub)
• Reinforcing cooperation with local
governments

Telecubes• Increasing installment numbers• Establishing a Web meeting center(Demonstration trial)

MITSUBISHI ESTATE CO., LTD.

10

Revision of FY 2021 Estimates

MITSUBISHI ESTATE CO., LTD.

11

Revision of FY 2021 Estimates

1. Income Statement Estimates for FY 2021 (vs Previous Estimates)
Upward revision of full-year estimates due to the accumulation of capital gains and the favorable
sales trends of domestic condominiums.
Millions of yen (rounded off
Millions of yen (rounded down)<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

FY 2021
FY 2021
Current
Previous
Estimates Estimates
1,200,000 1,142,000
678,000
674,000
362,000
320,000
100,000
88,00020,00020,00066,00066,000△ 26,000 △ 26,000
217,000
191,000
178,000
169,000
21,00012,00038,00029,000
4,000
4,000
0
1,000
△ 24,000 △ 24,000
22,00018,000300
300
34,00034,000205,000
175,000
16,00015,00026,00031,000130,000
110,000

Change58,0004,000
42,00012,00000026,000
9,000
9,000
9,000
0
△ 1,000
04,000
0030,0001,000△ 5,000
20,000Millions of yen (rounded down)

Business profits
EBITDA
Interest-bearing debt

FY 2021
FY 2021
Current
Previous
Estimates Estimate
217,300
191,300
323,900
293,800
2,620,000 2,610,000

Major Factors for Changes in
Operating Income by Business

Commercial
Property
9,000

26,00030,10010,000International
9,000
Residential
9,000

Others△ 1,000

Increase in capital gains
Profit increase in residential
businesses in Asia

Increase in capital gains
Increase in condominium profits

217,000

191,000
Increase in capital gains
Increase in office rental profits
Decrease in profits from retail properties andhotels due to the impact of COVID-19

Change*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

Capital Gains included in Operating Income
to the nearest billion)
FY 2021
FY 2021
Current
Previous
ChangeEstimates Estimates
Total
48,00031,00017,000Commercial Property Business
31,00022,0009,000
Residential Business
7,000
6,000
1,000
International Business
10,0003,000
7,000
Investment Management Business
Other
Eliminations or corporate-

FY2021
Current
Estimates

Commercial
Property

Residential

International

Others

FY2021
Estimates

12

Revision of FY 2021 Estimates

2. Income Statement Estimates for FY 2021 (vs Previous FY Results)
Estimated decrease in revenue and profits on a YoY basis considering the impact of COVID-19
while rental profits of domestic and overseas offices will increase on a YoY basis.
Millions of yen (rounded off
Millions of yen (rounded down)<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

FY 2021
FY 2020
Current
ChangeResults
Estimates
1,200,000 1,302,196 △ 102,196
678,000
723,712 △ 45,712
362,000
385,538 △ 23,538
100,000
134,175 △ 34,175△ 1,316
20,00021,31666,00065,871129△ 26,000 △ 28,418
2,418
217,000
240,768 △ 23,768△ 9,855
178,000
187,855△ 3,320
21,00024,320△ 8,156
38,00046,156
△ 467
4,000
4,467
△ 389
0
389
△ 24,000 △ 22,420△ 1,580
22,00012,377
9,623
300
229
71
34,00033,574426
205,000
219,572 △ 14,572
16,00026,251 △ 10,251
26,00021,8744,126
130,000
148,451 △ 18,451

Capital Gains included in Operating Income
FY 2021
Current
Estimates
Total
48,000Commercial Property Business
31,000Residential Business
7,000International Business
10,000Investment Management Business
Other
Eliminations or corporate-

Business profits
EBITDA
Interest-bearing debt

Commercial
Property△ 9,855*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

61,00023,00010,00028,000-Change△ 13,000
8,000△ 3,000△ 18,000-

Residential△ 3,320 International△ 8,156

Others△ 2,436

Increase in rental profits
Decrease in capital gains

240,768

Decrease in capital gains fromrental apartments
Increase in condominium profits

217,000

Increase in capital gains
Increase in office rental profits
Decrease in profits from retail properties andhotels due to the impact of COVID-19

Change△ 23,698△ 12,884
190,117

FY 2020
Results

Major Factors for Changes in
Operating Income by BusinessMillions of yen (rounded down)

FY 2021
FY 2020
Current
Results
Estimates
217,300
240,998
323,900
336,784
2,620,000 2,429,883

to the nearest billion)

FY2020Results

Commercial
Property

Residential

International

Others

FY2021
Current
Estimates

13

Revision of FY 2021 Estimates

3. Breakdown of FY 2021 Estimates Revisions
Upward revision of full-year estimates due to the accumulation of capital gains andstrong domestic condominium sales

FY 2021 Revised Estimates

FY 2021 Previous Estimates

Business Profits：191.3▲5.0
CapitalGains
Domestic
Condominiums,
etc.*1

IncomeGain(Billions of Yen)

Business Profits：217.3

Strong sales
Improved profit margins

COVID-19
Impact

＋5.0

＋17.0
+7.0

＋2.0

48.0

31.0
8.7

151.6

Reissued state of
emergency・Hotel：▲¥3.0B
・Retail：▲¥2.0B

Strong sales(No financial
impact）

Total financial impact of COVID-19(▲¥45.0B; unchanged fromprevious estimates)

Accumulation of capital gains
・Commercial: +￥9.0B
・International: ＋￥7.0B
・Rental apartment: ＋￥1.0B

15.7

Improved profits
from building rental business(cost reductions, etc.)

153.6
Comparison toprevious estimates＋¥26.0B

FY 2021
Previous Estimatesdifferences■Income Gain ■Domestic Condominiums* ■Capital Gains

FY 2021
Revised Estimates*1 Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income

MITSUBISHI ESTATE CO., LTD.

14

Revision of FY 2021 Estimates

4. Impact of COVID-19 (revision of financial impact for FY 2021 estimates)
The full-year impact of COVID-19 remains at ￥45 billion, while there may be changes in the breakdown.
While there has been further impacts on retail properties and hotels, there is no impact on the domestic
condominiums businesses.
Categories

Capital Gains

Current
Estimated
ImpactPrevious
Estimated
ImpactMajor causes of differences

Change(amount of
extraordinary loss*2)(amount of
extraordinary loss*2)

-

-

-

• Increased accumulation of capital gains than initially estimated from JPY 31B to
JPY 48B

Domestic
Condominiums, etc.*1-▲JPY 5B+JPY 5B• Sales recovered swiftly, and demand continues to exceed initial estimates• Sales volume is expected to be approximately the same as the previous FY• Gross margin is expected to increase by 1.1 points compared to previously
announced numbers from 17.5% to 18.6%

RetailProperty▲JPY 18B▲JPY 16B(▲JPY 3.3B)(▲JPY 3.3B)▲JPY 2B• Factor in the impact of the re-spread of COVID-19 and the second declarationof a state of emergency• Details of our response to the state of emergency is listed on P9

Hotels▲JPY 18B▲JPY 15B(▲JPY 2.4B)(▲JPY 2.4B)▲JPY 3B• Factor in the impact of the re-spread of COVID-19 and the second declarationof a state of emergency• Details of our response to the state of emergency is listed on P9

Offices▲JPY 0.5B▲JPY 0.5B

IncomeGain-• As expected at the beginning of the FY, the leasing activities of vacancies istaking longer than usual• A portion of overseas residential businesses is more stable than expected• Financial impact on brokerages and parking lot businesses is larger than initial
estimates• Other financial impacts remain unchanged from initial estimates

Others▲JPY 8.5B▲JPY 8.5B-

Subtotal▲ JPY 45B

▲ JPY 40B(▲JPY 5.7B)(▲JPY 5.7B)▲JPY 5B▲ JPY 45B

▲ JPY 45B(▲JPY 5.7B)(▲JPY 5.7B)

Total

-

*1 Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income*2 Some costs incurred by retail properties and hotels that were closed during this period arerecorded in extraordinary loss for COVID-19 (e.g. depreciation cost or rent)

MITSUBISHI ESTATE CO., LTD.

15

Revision of FY 2021 Estimates

5. Shareholder returns
Due to revisions in FY 2021 estimates, dividends for FY 2021 are estimated toincrease by ￥5, from ￥25 to ￥30.
(Yen)

40

45.0%

35

43.0%

33.00
30.00

30

30.00

26.00

39.0%

25.00

25

37.0%
20.00

20

35.0%

16.00
15

41.0%

33.0%

14.00

12.00

30.0%

30.9%

30.4%

30.4%

30.9%
31.0%

10
5
0

25.9%

FY2014

26.5%

26.6%

FY2015FY201627.0%
FY2017

Amount of
Share
Buyback

FY2018FY2019FY2020

FY2021(Previous
Estimates)

FY2021(Current
Estimates)

25.0%¥ 100 billion
Dividends per share

MITSUBISHI ESTATE CO., LTD.

29.0%

27.0%

Payout ratio (right axis)
16

Revision of FY 2021 Estimates

6. Changes in ROA / ROE / EPS
Due to upward revisions in FY 2021 estimates, all indicators are estimated to largely improvecompared to previous estimates.
10%

10.0%

(Yen)

200
200

9.0%

8.5%
7.8%

8.0%

7.4%

7.3%

7.0%

6.6%

6.0%

6.2％(Previous)

5.6%

108.64

5.2%
86.78
74.00

3.3%

3.3%

FY2015FY20165%100

82.18(Previous)

4.1%

4.0%

3.8%

3.7%

60.13
52.85

3.0%

97.12

96.97

5.0%

4.0%

150

3.6%

50

3.2％(Previous)

2.0%

1.0%

0
FY2017FY2018FY2019EPS(right axis)

ROA

FY2020

FY2021(E)2030 Target

ROE* ROA=Business Profit / Total assets (average)

MITSUBISHI ESTATE CO., LTD.

17

Revision of FY 2021 Estimates

7. Cashflow forecast for FY 2021
Decrease in profits due to COVID-19 and decrease in cash-in due to the selection of timing of asset sales.
Cash-out will tend to increase due to steady acquisition of new investment opportunities.
Cash-in
740.0～790.0

Soundness level for new investments(Considering possibility to expand investment
opportunities)

Decrease in collected amount compared tothe previous year due to the impact of
COVID-19

Decrease in profit due to the impact of
COVID-19

Cash-out
740.0～790.0

Financing arrangement(Increase in liabilities)
170.0～220.0

Return*1
390.0

Operatingcashflow*2
180.0*1 Collected amount (in book value) from asset sales

MITSUBISHI ESTATE CO., LTD.

Strategic
allocation
100.0～150.0

Plannedinvestments
600.0

Dividends
40.0(Billions of Yen)

Continue plans of seeking strategic
investment opportunities, mainly overseas(especially in Asia) (Considering possibility to
expand investment opportunities)

Recently, investment opportunities weresteadily obtained【Breakdown】
Marunouchi

60.0

Outlet Mall, etc.

50.0

Domestic condominium

170.0

Domestic capital recycling and others

240.0

Overseas

80.0

Payout ratio: Approx. 30％*² Cash flows from operating activities, excluding change in inventories and change in equity investment

18

Financial Supplemental Data

MITSUBISHI ESTATE CO., LTD.

19

Financial Supplemental Data

1. Management Indicator

Previous management
plan period
FY2018FY2019Current management
plan period

FY2020

FY2021(Estimate)2030 Target¥ 213.4
billion¥ 229.4
billion¥ 240.9billion¥ 217.3
billion¥ 350-400
billion

ROA*2

3.8%

4.0%

4.1%

3.7%

5％

ROE

7.3%

7.8%

8.5%

7.4%

10％

EPS

¥ 86.78¥ 96.97¥ 108.64¥ 97.12¥ 200

Business Profit*1*1 Business Profit = Operating Income + Equity in earnings (loss), unconsolidated subsidiaries and affiliates*2 ROA = Business Profit / Total Asset (average of opening / closing balances)

MITSUBISHI ESTATE CO., LTD.

20

Financial Supplemental Data

2. Balance Sheet
Millions of yen (rounded down)

Current assets
Cash
Notes and accounts receivable-trade
Property for sale
Property for sale in progress
Property for development
Equity investments
Other
Fixed assets
Tangible assets
Intangible assets

Investment securities
Other
Total assets

At December
31, 2020
1,292,478
370,470
42,206
79,386257,916
975
436,490105,030
4,885,503
4,190,621
101,062
260,737

At March 31,
2020
1,115,634
207,896
50,34072,256247,677975
450,52085,966
4,742,602
4,107,252
96,767
236,969

333,080
6,177,981

301,6115,858,236

Millions of yen (rounded down)

Change176,843
162,573△ 8,134
7,129
10,239△0△ 14,029
19,064142,901
83,3694,295
23,767
31,468319,744

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term debt
Commercial Papers
Bonds due within one year
Other
Long-term liabilities
Bonds
Long-term debt
Other
Net assets
Shareholders’ equity
Other accumulated comprehensive income

Stock acquisition rights
Non-controlling interests
Total liabilities and net assets

Total Assets(as of December, 2020)

International
Business
935,683
Residential
Business
609,884

Other
431,281Commercial
Property Business
4,201,133

MITSUBISHI ESTATE CO., LTD.

Change268,140
282,182△ 30,066
36,491△ 10,925
150,000
158,450△ 21,766△ 14,042△ 130,000
105,731
10,226
51,604
49,173
3,075
△ 19
△ 625
319,744

Consolidated interest-bearing debt Consolidated interest-bearing debt Consolidated interest-bearing debt
(as of September, 2020)
Fixed / Floating rate ratio
Long-term / Short-term ratio
Commercial Papers
86,000

Lease obligations
2,017(as of September, 2020)

2,591,971

2,591,971
Loans
1,633,370(as of September, 2020)
Short-term
8.9%

Floating
22.4%

Bonds
870,584
6,177,981

At December At March 31,
31, 2020
2020
4,185,171
3,917,030
946,184
664,001
36,302
66,368
151,797
115,306
145,852
156,778
200,000
50,000210,000
51,550202,231
223,998
3,238,986
3,253,028
645,584775,584
1,384,410
1,278,678
1,208,989
1,198,762
1,992,810
1,941,206
1,212,919
1,163,746
573,792
570,716269
288
205,829
206,454
6,177,981
5,858,236

Fixed
77.6%

2,591,971

Long-term
91.1%

21

Financial Supplemental Data

3. Asset composition(End of December 2020)

Inventories

Equity investments¥

350.9 billion¥

73%

Domestic Condominiums
US
EuropeOthers

9%
7%

33%

3%

5%

13%

20%

4%

Tangible fixed assets

7%436.4 billion

3%
3%
2%
3%

¥

4,190.6 billion
75%

40%

Domestic (office buildings)
Domestic (others)
US
EuropeAsia

Office Buildings

Outlet Malls

Logistics Facilities

Retail Properties*

Rental Apartments

Overseas

Others* Excluding outlet malls

MITSUBISHI ESTATE CO., LTD.

22

Financial Supplemental Data

4. Consolidated Cash FlowMillions of yen (rounded down)①FY2020-3Q ②FY2021-3Q
Results
Results
Cash flows fromoperating activities

Change(②－①)③FY2020
Results④FY2021
Estimates

Change(④－③)

97,000 △ 244,766

97,006

98,0491,043

341,766

Depreciation and amortization

62,737

66,372

3,634

84,94189,000

4,059

Change in Inventories

31,402

23,630△ 7,772

148,161

61,000△ 87,161△ 44,128

13,57457,702△ 43,217△ 143,000△ 99,783△ 241,345△ 207,570

33,775△ 277,440 △ 317,000△ 39,560

3,257

12,813

9,555

5,275

14,0008,725

Capital Investment△ 221,279△ 231,284△ 10,004△ 331,857△ 350,000△ 18,143

Cash flow fromfinancing activities

177,862

273,629

95,766△ 28,886

143,000

171,886

Cash and cash equivalents
at end of year

210,368

373,948

163,579

213,008

135,000△ 78,008△ 144,339△ 109,520

34,81864,326 △ 220,000 △ 284,326

Change in Equity Investment

Cash flows frominvesting activities
Proceeds from sales ofinvestment securities

Free cash flow

MITSUBISHI ESTATE CO., LTD.

23

Financial Supplemental Data

5. Investment Data
Major Breakdown of Capital Investment(Billions of Yen)

300.0

275.3

250.0

27.6

289.5
2.4

285.0

6.5

13.0

9.0

11.8
7.1

2.7

25.1
200.0

93.4

10.7
12.3

17.2
15.2

74.7

126.1

50.0

2.0 (Billions of Yen)
350.0
8.0

72.0

300.0
250.0

72.0
200.0

22.1
36.0

6.5

96.3

167.0

39.9

38.4

15.9

100.0

4.3

113.8

58.6

150.0

350.0
331.8

350.0

Major Breakdown of Equity Investments

92.0

36.9

47.8

16.8
21.3

15.6
23.9

68.4

63.5

150.0
99.4

20.0

84.0

100.0

FY2017FY2018FY2019FY2020

FY2021(E)*

2.3

143.0

75.1

50.0
0.0

0.0

1.0

FY2017FY2018FY2019

8.8
13.2

23.0

FY2020

FY2021(E)**Classifications have been changed below from FY2021<Legend for FY2021><Legend for FY2017 - FY2020>
Office Building(MEC: New/Redevelopment)

Office Building(MEC: Refurbishment)

Office Building(Subsidiaries)

Office(MEC: New / Redevelopment)

Office(MEC: Refurbishment)

Lifestyle Property

Commercial Property(excluding MEC office)

Residential

Residential

International

International

Special Purpose Vehicle

Hotel & Airport

Special Purpose Vehicle

Others(including consolidated eliminations)

Other(including consolidated eliminations)

MITSUBISHI ESTATE CO., LTD.

24

Financial Supplemental Data

6. Income Generating Assets Unrealized Gain : Current Status ①
Unrealized gain rose approx. ¥300 billion (y-y), supported by declines in cap rates andcash flow improvement.
Income Generating Assets Unrealized Gain
Book value(Billions of Yen)
9,000

Unrealized gain

6,791.9

5,395.6

5,498.9
2,963.5

5,000
4,000

2,096.4

2,180.7

3,800
3,432
3,241
2,950

3,422.8

3,898.4

4,222.5

2,643

2,800
2,384

2,569.0

2,300

3,000
2,000

Adjusted BPS

3,300

6,079.0
6,000

8,270.8

7,383.4

7,000

BPS

(Yen)
7,941.1

8,000

BPS and Adjusted BPS*

2,178
2,015

1,800

3,299.2

3,318.1

3,509.9

3,828.4

3,960.5

4,042.7

4,048.3
1,300

1,000

958

0
FY2014FY2015FY2016FY2017FY2018FY2019FY2020

1,078

1,088

FY2015FY2016

1,148

1,224

1,276

1,269

FY2018FY2019FY2020800

FY2014FY2017＊ BPS including unrealized gain (after tax)

MITSUBISHI ESTATE CO., LTD.

25

Financial Supplemental Data

7. Income Generating Assets Unrealized Gain : Current Status ②

Unrealized Gain Breakdown

Rental Profits(Billions of Yen)
190

International
9%

180.5

180

174.8
168.3

170

Domestic(Outside of Marunouchi)
17%

160.7

160

Marunouchi
New Building*
44%

150
140

131.7

136.2

130

Marunouchi
Existing Building
30%

120

116.9

110
100
FY2014FY2015FY2016FY2017FY2018FY2019FY2020*Redeveloped properties after the completion of Marunouchi Building
FY2020 Results

MITSUBISHI ESTATE CO., LTD.

26

Overview of“Long-Term Management Plan 2030”

MITSUBISHI ESTATE CO., LTD.

27

Overview of Long-Term Management Plan

1. New Management Plan: Objective*Repost from “Long-Term Management Plan 2030”

Mitsubishi Estate Group’s Mission:
Creation of a truly meaningful society through urban development

2030 Target
Address Four key themes*
to realize a sustainable
society*「Environment」「Diversity & Inclusion」「Innovation」「Resilience」

Fundamental Approach

Increasing
Socialvalue

Increasing
Shareholder
value

Create value for every
stakeholder including visitorsand employees

2030 Target

A pair of driving wheels

Synergy

ROA

ROE

5%

10%

EPS

200

¥

Fundamental Approach
Transformational
improvements to thebusiness portfolio's efficiency
and market resilience

Realize our mission and sustainable growthby increasing both social value and shareholder value
MITSUBISHI ESTATE CO., LTD.

28

Overview of Long-Term Management Plan

2. Quantitative Target – 2030 Target*Repost from “Long-Term Management Plan 2030”

2030 Target
ROA*1

ROE

EPS

5％

10％

¥200

*1 ROA＝Business Profit*2 / Total Asset (average of opening/closing balances)

Key Assumptions

Profit Growth

Shareholders Return

Financial Stability

Current framework *Maintain

Business Profit*2• Payout ratio:
Approx. 30%

current level ofcredit ratings¥350–400 bn+• Share buybacks【Reference】
R＆I：AAS＆P：A＋
Moody‘s：A2(when determined to be
optimal use of funds)* Will adjust to business conditions*2 Business Profit= Operating Income + Equity in earnings (loss) unconsolidated subsidiaries and affiliates

MITSUBISHI ESTATE CO., LTD.

29

Overview of Long-Term Management Plan

3. 2030 Targets: Realization Plan (ROA・ROE・EPS)
Current (FY20)*Repost from “Long-Term
Management Plan 2030”

2030 Target

Business Profit

Increase of ¥120–170 bn¥350-400 bn¥230.5 bn

Approx. ¥50bn growth from each of: domestic
asset, international asset, non-asset business(EPS: ¥200)<Assumption of total asset changes >(EPS: ¥100.2)【 Flexible capital policy 】

Total Asset

Optimize investments, assets sales, shareholder

Business Profit

Total Asset

return and financing according to market¥5.9 tn

conditions

Approx. ¥7-8 tn
Expected net increase: ¥1-2tn＝

Increase Net investment: Approx. ¥2–3 tn

ROA : 3.9%

ROA : 5%
With current leverage

ROE : 7.8％
MITSUBISHI ESTATE CO., LTD.

Decrease Depreciation: Approx. ¥1 tn

ROE : 10％30

Overview of Long-Term Management Plan

4. Capital Policy – Responsive to market conditions*Repost from “Long-Term
Management Plan 2030”

Flexible capital policy – Responsive to market conditions(Value creation through BS management)
Optimize mix of investment, asset sales, shareholders returns
and financing in response to the market
Sellers' market
Asset Sales:

Profits:

Shareholder return :Buyers' market

To maximize mid-to-long value, we combine:⚫ stable CF from long-term development PJs and asset holdings⚫ capital recycling business in response to the market

MITSUBISHI ESTATE CO., LTD.

Active acquisition/investment:

Capital gain:

Shareholders return :31

Overview of Long-Term Management Plan

5. Value creation through BS management*Repost from “Long-Term Management Plan 2030”

Flexible Capital Policy – Responsive to market conditions(Value creation through BS management)
Asset

Shareholders’ Equity and Liability

Capital recycling business optimized for market
conditions

Maintaining Financial Stability◆ In seller's market: expedite asset sales◆ Financial reserves for seizing buyer's market opportunities◆ Investment in promising PJs to enhance corporate value◆ High credit rating enables long-term and low-cost financing

Long-term development and asset holdings(core focus: Marunouchi redevelopment)◆ In sellers' market, use asset sale proceeds for shareholder
returns and to maintain financial stability◆ Steady capital investment in core business enables stable,
cycle-proof rental cashflow◆ Timely asset sales judged by expected yields and external

environment

Sale of underperforming properties andstrategic-holding stocks◆ Disposal of underperforming assets, including core asset◆ Ongoing disposal of strategic-holding stocks

Expansion of Non-asset Business

MITSUBISHI ESTATE CO., LTD.

Capital Efficiency Improvement◆ Targets: ROA 5%, ROE 10%, EPS ¥200
◆ Increase numerator (net income) and decrease denominator(shareholders’ equity)◆ Choose measures to manage shareholders’ equity according
to market conditions

32

Overview of Long-Term Management Plan

6. Capital Allocation Policy
Cash inFinancialcapacity*Repost from “Long-Term Management Plan 2030”

Cash out
Strategic
Allocation
investment/
shareholders
return/suppression ofdebt

Strategic allocation to improve medium- to longterm capital efficiency⚫ Allocate capitals based on market conditions⚫ Select projects which help to increase the shareholder value

Capital recycling business expected returns (pre-tax IRR)

Domestic: 6～8％
International (developed countries) : 8～10％
International (developing countries) : 10+％
*Expected return from total investment in each business

Cash flowfromoperatingactivities

Plannedinvestment &return* Including undetermined projects. See p.40 for the next three-year forecastBaseshareholders
returnMITSUBISHI ESTATE CO., LTD.

Planned projects – return through asset sale (book value)

Payout ratio: Approx. 30％* Shareholder returns method and scale will be adjustedwith real estate and financial market conditions, stock price and ROE/EPS

33

Overview of Long-Term Management Plan

7. Profit Growth Strategy - 2030 Vision

Growth Strategy

Profit changes vs FY2020*① Domestic AssetBusiness
Approx. +¥50 bn(FY20E * : Approx. ¥ 201.0 bn)② International AssetBusiness
Approx. +¥50 bn(FY20E * : Approx. ¥ 36 bn)③ Non-asset BusinessApprox. +¥50 bn(FY20E * : Approx. ¥ 16 bn)④ Fluctuation Factors
Approx. ±¥20–30 bn*Repost from “Long-Term Management Plan 2030”① Advance “Marunouchi NEXT Stage” project② Increase NOI with development projects③ Optimize capital recycling business to market conditions④ Optimize residential business profit structure① Expand development business in Asia
② Enhance development business and revenue base in Europe③ Enhance and diversify US capital recycling business① Steady profit growth in existing businesses② Utilization of technology③ Provision of service contents focusing on B2C/B2B2C・Asset sales control in response to market conditions
・Capital gain and rental profit fluctuation due to investment opportunities* Composition of FY20 Business Profit= ① Domestic Asset + ② International Asset + ③ Non-asset Business + Eliminations or corporate(Round number)
MITSUBISHI ESTATE CO., LTD.

(¥ 201.0 bn)(¥ 36 bn)(¥ 16 bn)(▲ ¥ 23 bn)

34

Overview of Long-Term Management Plan

8. Roadmap for Profit Growth
Early stage

Domestic
Asset
Business*Repost from “Long-Term Management Plan 2030”

Middle stage

Advance
Redevelopment projects• Complete Tokiwabashi A Bldg.
• Open & expand outlet mall
• Asset sales and reconstruction of existing buildings (willlower rental profit)• Temporary decline in the condominium units soldProfits scale with asset accumulation

International
Asset
Business• 1271 Ave. of the Americas renewal, 8 Bishopsgate
completion• Stabilize Asia condominium business• Expand assets in Asia capital recycling business

Promoting commercialization in new domains

Non-asset
Business

MITSUBISHI ESTATE CO., LTD.

• Stable growth in existing businesses• Promoting commercialization in new domains

Late stage

Redevelopment Projects' Contribution• Long-term developments, e.g. Tokiwabashi B Bldg.
• Residential redevelopments

Stabilize profit via capital recycling• Shift from asset expansion to recycling• Stabilize capital recycling business in Asia

Accelerate profits in new domains• Stable growth in existing businesses• Accelerate profits in new domains

35Overview of Long-Term Management Plan

9. Three Year Investment Return Plan (FY2021-FY2023)*Repost from “Long-Term
Management Plan 2030”(Billions of Yen)

3-year Total

Composition
Planned Investments and Return
Domestic Asset

International Asset

Strategic Allocation
600(investment/shareholders return/suppression of debt)
Investment

Outlet mall,
Capital Recycling asset,
And Others

150
0

600

Europe and
US
Asia

100

200
Aim for international profit
growth

500
300
100

Asset sales plan assumes
market conditions of previous
three years

MITSUBISHI ESTATE CO., LTD.

Vary investment allocation
for medium- to long-term
capital efficiency

500

Return1,100

100～200

Disposeunderperforming assets
for capital efficiency

Condominium
Marunouchi
area

Strategic Return

Strategic
Allocation

550

Plannedinvestments

1,500

ReturnStrategic
ReturnNet
Invest
ment

150

0

250

0

200

100～200

0-100～-200

～600

36

Business Overview

MITSUBISHI ESTATE CO., LTD.

37

Business Overview

1. Mitsubishi Estate Group’s Business Segment
Commercial Property Business＜Office Buildings＞
Engages in the development,
leasing, and operation
management of office buildings,
mainly in Marunouchi area andother major Japanese cities.

＜Retail Properties＞
Developing retail properties andoutlet malls nationwide, mainly inthe major metropolitan areas.

Residential Business

International Business＜Domestic Residential＞
Operating residential condominium
business under “The Parkhouse”
brand and rental apartments
business under “The Parkhabio”
brand.

Undertaking office building
development and leasing
businesses in the United States andthe United Kingdom, as well as
projects in Asia.

＜Logistics Facilities＞
Development, leasing, andmanagement of the “Logicross”
series as a foundation of logistics
facilities.

＜Hotels / Airports＞
Undertaking hotel management
nationwide as the Royal Park Hotels
group. Begun private airport
management business.

Investment Management
Business

Architectural Design &Engineering and Real Estate
Service Business

Providing a wide range of services
regarding real estate investment
for investors.

＜Architectural Design &Engineering Business＞
Mitsubishi Jisho Sekkei Inc.
provides architectural design andengineering services of construction
and civil engineering.
＜Real Estate Services Business＞
Mitsubishi Real Estate Services Co.,
Ltd. offers real estate brokerage,parking lot management support,
and other services.

MITSUBISHI ESTATE CO., LTD.

38

Business Overview

2. Business Scale

Other*
5%

Investment
Management
Business
2%

Revenue fromOperations

Operating Income

Approx.

Residential
Business
9%¥1,302.1
billionCommercial
Property
Business
54%

Other*
2%

Investment
Management
Business
1%
International
Business
15%

International
Business
18%

International
Business
10%

Residential
Business
29%

Other*
0%Investment
Management
Business
2%

Approx.

¥240.7billionTotal Assets
Residential
Business
10%

Commercial
Property
Business
71%

Approx.

¥5,858.2
billionCommercial
Property
Business
72%*Architectural Design & Engineering Business and Real Estate Services Business, Other Business(FY2020 Results)

MITSUBISHI ESTATE CO., LTD.

39

Commercial Property Business
Office Buildings

MITSUBISHI ESTATE CO., LTD.

40

Commercial Property Business (Office Buildings)

1. Marunouchi Area Map

MITSUBISHI ESTATE CO., LTD.

41

Commercial Property Business (Office Buildings)

2. Pipeline
Mizuho Marunouchi Tower,
Ginko Kaikan,Marunouchi
Terrace(Marunouchi 1-3 Project)

Tokiwabashi
Tower(Bldg.A)

Uchikanda 1-chome
Project

Torch
Tower(Bldg.B)

Total Floor Area: 174,100㎡
Completion: Oct. 2018

Total Floor Area: 181,000㎡
Completion: Sep. 2020

Total Floor Area: 146,000㎡
Completion: Jun. 2021

Total Floor Area: 84,500㎡
Completion: Around 2025

Total Floor Area: 544,000㎡
Completion: FY2028

Yurakucho
Redevelopment(TBD)

Marunouchi Area

Marunouchi
Nijubashi Building

FY2019FY2020Tokyo(Outside of Marunouchi)

msb Tamachi(musubu Tamachi)

Total Floor Area: 138,300㎡*
Partial Completion: May 2018*

FY2021

FY2022

FY2023

FY2024

Link Square Shinjuku

CO･MO･RE YOTSUYA

the ARGYLE aoyama

Total Floor Area: 43,800㎡
Completion: Aug. 2019

Total Floor Area: 139,600㎡
Completion: Jan. 2020

Total Floor Area: 23,100㎡
Completion: Jun. 2020

FY2028*Tower S
MITSUBISHI ESTATE CO., LTD.

42

Commercial Property Business (Office Buildings)

3. Earnings Related Data: Total operating floor space (Unconsolidated)
Total (Domestic) / Marunouchi / Marunouchi Redevelopment Buildings(Thousand ㎡)

6,500
6,000
5,444

5,500
5,000

4,660

4,500
4,000

3,825 3,907 3,769
3,684 3,696

4,175

4,896

5,580 5,670
5,174

5,038

5,385

5,570

5,745

5,869

6,048

4,347

3,500
2,727 2,784
2,687 2,758 2,755 2,583
2,565 2,565
2,531

3,000
2,500
2,000

1,677

1,946 2,024 1,897
1,798

2,195 2,258
1,705 1,705

1,500

1,022 1,022

1,000
500

256

256

355

03/3

04/3

05/3

489

489

06/3

07/3

2,915 2,915

743

743

08/3

09/3

1,174

1,836 1,836

1,383 1,365 1,360 1,345

0

Total (Domestic)

10/3

11/3

Marunouchi

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3 21/3(E)Marunouchi Redeveloped Buildings*Excluding floor space in Lifestyle Property Business from 16/3

MITSUBISHI ESTATE CO., LTD.

43

Commercial Property Business (Office Buildings)

4. Earnings Related Data: Vacancy Rates / Average Rents (Unconsolidated)
Vacancy Rates (Marunouchi offices / All uses in Japan) /Average Rents (All uses in Japan)(yen / tsubo-month)

29,00028,000Vacancy rate(Marunouchi offices)27,000Vacancy rate(All uses in Japan)

27,777 28,000

25,842Average rent(All uses in Japan)

26,00024,86425,00024,00023,00022,817
6.06% 22,213

22,00021,00020,00019,0005.64%

26,193

26,702

27,177

9%25,234
24,42323,56023,97423,85023,861

8%

23,587

7%

22,602
21,902

21,711

21,733

6%

5.29%

4.82%

5%

4.36%

18,000

3.59%

3.40%

2.77%

3.98%
3.58% 3.58%

2.42%
1.68%2.06%

16,000

2.26%

2.77%

15,000

4%

4.32%
3.66%

2.86%

17,00014,00013,000

2.80%

2.93%

2.22%
2.42%

1.87%

1.82%
0.55%

0.19%

1.65%

1.37%

1.09%

2.5%

2.19%

2.42%

1.74%

1.80%

1.86%

04/3

MITSUBISHI ESTATE CO., LTD.

05/3

06/3

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

3%
2%

1.07%
1.73%
0.69%

12,000
03/3

10%

1%
0%

20/3 20/12 21/3
(E)

44

Commercial Property Business (Office Buildings)

5. Earnings Related Data: Office Building*¹ Business, Revenue Breakdown(Unconsolidated)(Billions of Yen)FY2020-3Q(Results)

FY2020(Results)

FY2021-3Q(Results)

FY2021(Estimates)

Rent revenue from office building*¹

301.7

406.6

313.8

418.6

Changes from Previous Period+ 11.2+ 17.9+ 12.1+ 11.9Rent revenue from new buildings+ 9.0+ 10.8+ 8.4+ 11.9Rent revenue from existing buildings

+ 4.2

+ 6.8

+ 7.6

+ 6.1

Termination of master lease,closure of building for redevelopment

+ 0.2

+ 0.3

△ 0.3

△ 1.3

Moving in/out of tenants,
Rent revisions at lease renewal

+ 4.0

+ 6.5

+ 8.0

+ 7.5

Impact of
COVID-19

Offices-△ 0.5

Mixed-use
retail*2

△ 4.0

△ 5.0

+ 0.0

+ 0.1

△ 0.6

Supplementary Revenue, including common
area charge△ 2.0*1 Office buildings, including those with retail areas, etc.
*2 Retail properties in office buildings

MITSUBISHI ESTATE CO., LTD.

45

Commercial Property Business (Office Buildings)

6. Earnings Related Data: Trends in rent revenue from office building*1(Unconsolidated)
Increase / decrease of rent revenue from office building*1(from the previous fiscal year)(Billions of Yen)

30
25

■New buildings■Existing buildings (Moving in/out of tenants, Rent revisions at lease renewal)■Existing Buildings (Termination of master lease, closure of building for redevelopment)■Impact of COVID-19 (Office building, Mixed-use retail*2)

+0.3

20

+0.3

15

+15.3

+14.7
+23.9

10

0

+4.3

-2.5

-4.9
-10.7

+12.5

+7.3

+8.7
-3.9

-5

+15.3

+13.0

5

-1.1
-5.9

+1.9

+27.2

+6.0

+7.3

-1.5

-1.5

-10.5

-4.0

-4.6
-5.6

-10

-3.4

-7.5

-6.0

+2.4
-9.0

+4.9

-10.5

+11.9

+8.4

+9.8

+4.0

+4.7

+5.9

+6.5

-8.1

+7.5

+8.0

-1.3

-0.3

-5.5

-4.0

-8.3

-5.0

-15

Total

-5.2

-0.7

+10.8

+18.5 +13.2

+6.6

-2.5

-5.4

-20

+9.5

+22.6 +0.7 +17.9*1 Office buildings, including those with retail areas, etc.
*2 Retail properties in office buildings

03/3

04/3

05/3

06/3

07/3

-2.1

-2.7

-1.6

+8.3

-1.3

MITSUBISHI ESTATE CO., LTD.

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3(E)

21/3-3Q+19.8 +20.5 +17.4

+2.3

-1.7

-5.1

+19.0 +11.9+7.6+18.5 +15.2 +24.1 +17.6 +12.6 +12.1

46

Commercial Property Business (Office Buildings)

7. Office Building Market Data: New Supply of Large-Scale Office Buildings(23 Wards of Tokyo)(Millions of ㎡)

2.5
2.16
2

1.87
1.75
1.54

1.5

1.25

1

0.99

1.19

1.17

Average estimate supply
for next 5 years
1.03 million ㎡/year

1.09
0.97

0.91
0.72

0.5

1.21

1.43

1.41

Past average supply
approx. 1.04 million ㎡/year(1998～2019)

0.87

0.86 0.85

0.77
0.65

0.85

0.77

0.69
0.58

0.54 0.54

0.36

0*Estimate※Research subject buildings: Buildings with total office floor area exceeding 10,000㎡
Source: Mori Building
MITSUBISHI ESTATE CO., LTD.

47

Commercial Property Business (Office Buildings)

8. Office Building Market Data: Average Rents / Vacancy Rates(5 Central Wards of Tokyo)(yen / tsubo-month)

30,00012%
Average Rent

Vacancy Rate

28,00026,0008.75%

20,000

10%
8.56%

7.98%

24,00022,0009.19% 9.04%

8%22,594
21,99921,134

22,574
8.18%

5.51%

19,17520,064
6.05%

19,6995.30%

6%18,73018,264
17,973
17,495
17,195
16,71616,504
16,325
3.60%
4.34%

18,09517,75817,593

18,0006.70%

21,29516,000

4.49%
4%

3.41%

14,0002.72% 2.89%

2.80%

12,000

2%
1.78%

1.50%

10,000

0%
03/3

04/3

05/3

06/3

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

20/12

Source: Miki Shoji Co., Ltd.
MITSUBISHI ESTATE CO., LTD.

48

Commercial Property Business (Office Buildings)

9. Competitive Edge of Marunouchi: Vacancy Rates
5 Central Wards of Tokyo(Market) vs. Marunouchi(Unconsolidated)
10%
9%

8.75%
8.18%

9.19% 9.04%
8.56%

7.98%

8%
6.70%

7%
6.06%
6.05%

6%
5.51%

5.30%

5%
4%

4.49%

4.32%
4.36%

3.66%

4.34%
3.41%

3%

3.60%
2.80%

2.72%

2.42%

2.77%

2.42%

2.19%

2.89%

2%

1.50%

2.26% 2.42%
1.82%

1.74%

1%

0.19%

0.55%

1.65% 1.78%

1.37%

1.09%

0.69%

0%
03/3

04/3

05/3

06/3

07/3

08/3

09/3

1.73%

10/3

11/3

5 Central Wards of Tokyo(Market)

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

20/12

Marunouchi(Unconsolidated)
Source: Miki Shoji Co., Ltd.

MITSUBISHI ESTATE CO., LTD.

49

Commercial Property Business (Office Buildings)

10. Competitive Edge of Marunouchi: Area / number of railway lines

Marunouchi

Nihonbashi

ShinagawaShibuya

Toranomon

2,400m
1,500m

Area:

123ha

Area:

76ha

Area:

49ha

Area:

86ha

Area:

58ha

Railway lines:

28 lines

Railway lines:

5 lines

Railway lines:

9 lines

Railway lines:

8 lines

Railway lines:

2 lines©Open Street Map

MITSUBISHI ESTATE CO., LTD.

50

Commercial Property Business (Office Buildings)

11. Competitive Edge of Marunouchi: Number of headquarters and offices(as of March, 2020)① Fortune Global 500 company headquarters③ Top 100 law firm headquarters and offices

32

MARUNOUCHI18

MARUNOUCHI3SHINAGAWA

1NIHONBASHI

0SHIBUYA

05

TORANOMONNIHONBASHI

1SHIBUYA1TORANOMONSHINAGAWA② Top 50 company headquarters in terms ofmarket capitalization

0④ Foreign financial company offices

71

MARUNOUCHI14

MARUNOUCHI

32NIHONBASHISHINAGAWA

1TORANOMON0SHIBUYANIHONBASHI12SHIBUYA

4SHINAGAWA

MITSUBISHI ESTATE CO., LTD.

17

TORANOMON

051

Commercial Property Business (Office Buildings)

12. Marunouchi Data: Marunouchi Tenant Mix (Unconsolidated)
March 2000

Type of Business

Area ratio

March 2020

Type of Business

Area ratio

1

Manufacturing

42.5%

1

Finance22.4%

2

Finance22.2%

2

Manufacturing

20.1%

3

Trading

10.4%

3

Professional Firm

19.5%

4

Information

6.3%

4

Trading

10.7%

5

Professional Firm

4.4%

5

Information

6.4%

Others

14.2%

Others

20.9%

Professional Firm
4.4%

Others14.2%

Information
6.3%
Trading
10.4%

Manufacturing
42.5%

Manufacturing
20.1%

Information
6.4%

Trading
10.7%
Finance
22.2%

MITSUBISHI ESTATE CO., LTD.

Others
20.9%

Finance
22.4%

Professional Firm
19.5%

52

Commercial Property Business (Office Buildings)

13. Marunouchi Data: Approaches for Marunouchi Area Development
Improvement of floor-area-ratio
Improving plot ratio in Marunouchi area by reviewing the use
area

1,000% → 1,300% (June, 2004)*1,200% for limited areas

Transfer of plot ratio:
Exceptional plot ratio district system
Possible to transfer floor area among several areas meeting acertain conditions“Exceptional floor-arearatio district” Area

Relaxation of plot ratio regulation: Special
Urban Renaissance Districts
Possible to be permitted for relaxation of floor-area ratio
regulation depending on levels of contribution to city
regeneration as an exception of urban planning
Example: International business bases (Global Business Hub Tokyo etc.)
Development of fine urban environment (improvement on water quality ofditch around the Imperial Palace etc.)
BCP function(self-reliant of electric power and water supply, etc.)

Change of building uses:
Consolidation of non-office use
Possible to consolidate and allocate mandated non-officeuse floor-areas when running several projects
simultaneously◆Example: Consolidation between offices and hotels
Non-office ─◆Example: Transfer unused floor-area at Tokyo station to other buildings
around the station

Office ─Consolidate non-office uses in
offices into hotels to expand
office areas in office buildings
Offices
MITSUBISHI ESTATE CO., LTD.

Hotels53

Commercial Property Business
Outlet Malls, Retail Properties, Logistics
Facilities, Hotels, and Airports

MITSUBISHI ESTATE CO., LTD.

54

Commercial Property Business (Outlet Malls)

1. Outlet Mall BusinessChange in Store Area, Revenue fromOperations, and Operating Income(Millions of yen)

Average of all facilities Sales-linked &fixed ratio (Rent revenue basis)(㎡)

50,000320,000

45,000

FY2020Results

53%

47%

315,000
Fixed rent

40,000310,000

35,000305,000

30,000300,000

25,000295,000
Tosu

Sendai-Izumi
KYOTO JOYOHANAZONO Sano
Kobe-Sanda
Rinku

20,000290,000

15,000285,000

Sales-linked rent

Ami

Toki

Gotemba Shisui

GOTEMBA PREMIUM OUTLETS®

10,000

15/3

16/3

17/3

18/3

19/3

20/3

280,000

Name

Open

Gotemba (Phase 4)

Jun. 2020

Before expansion: Approx. 44,600㎡
Currently: Approx. 61,000㎡ (+37%)

Rinku (Phase 5)

Aug. 2020

Before expansion: Approx. 39,400㎡
Currently: Approx. 50,100㎡ (+27%)
Approx. 25,000㎡

Store area

294,700 308,500 308,500 308,500 314,600 315,300

Revenue fromOperation

39,95443,946

43,642

45,462

46,65946,393

Fukaya Hanazono (New)Fall, 2022

Operating Income 14,292

16,301

17,35918,94019,673

18,963

Kyoto Joyo (New)

Spring, 2024

MITSUBISHI ESTATE CO., LTD.

Store Floor Area

55

Commercial Property Business (Logistics Facilities)

2. Logistics Facility Business
Trends in gain on sale

Total assets
Approx. ¥(Billions of Yen)

Operational logistics facilities

27 billion

Total number of developed facilities

assets in operation
36%

Number of facilities in operation

13

8.0

8.0
6.0

(2 buildings)
4.0

4.0

assets under development
64%

2.0

0.0

0.0
17/3

18/3

19/3

Tokyo Ryutsu Center Distribution Building B
MITSUBISHI ESTATE CO., LTD.

Total floor area of facilities in operation

51,000㎡(8 buildings)

2.0
20/3

(End of March 2020)*Ratio by value*Excluding Tokyo Ryutsu Center

Logicross Yokohama Kohoku

2

Logicross AtsugiⅡ(End of March 2020)*Excluding Tokyo Ryutsu Center

Logista・Logicross Ibaraki Saito

56

Commercial Property Business (Retail Properties / Logistics Facilities)

3. Outlet Malls and Logistics Facility Pipelines
RINKU PREMIUM
OUTLETS® Expansion
Phase 5FUKAYA HANAZONOPREMIUM OUTLETS®

KYOTO JOYOPREMIUM OUTLETS®

Floor Area Expanded: +16,400㎡
Open: Jun. 2020

Floor Area Expanded: +10,700㎡
Open: Aug. 2020

Store floor area: 25,000㎡
Open: Fall 2022

Open: Spring 2024

Outlet Malls

GOTEMBA PREMIUM
OUTLETS® Expansion Phase 4

Logistics Facility

FY2020

FY2021

FY2022LOGIPORT Kawasaki Bay

Logicross Hasuda

Total Floor Area: 296,800㎡
Completion: May 2019

Total Floor Area: 79,100㎡
Completion: Mar. 2021

FY2023
Logista・LogicrossIbaraki Saito

Total Floor Area: 157,000㎡ (2 Blocks)
Block B Completion: Apr. 2021
Block A Completion: May 2021

FY2024
Logicross Zama

Total Floor Area: 183,900㎡
Completion: Jun. 2023

Logicross
Yokohama Kohoku

Logicross AtsugiⅡ

Logicross Ebina

Logicross Kasukabe

Logicross Funabashi

Total Floor Area: 16,400㎡
Completion: Jun. 2019

Total Floor Area: 35,100㎡
Completion: Jul. 2019

Total Floor Area: 62,200㎡
Completion: Nov. 2020

Total Floor Area: 38,000㎡
Completion: May. 2021

Total Floor Area: 23,600㎡
Completion: Nov. 2021

MITSUBISHI ESTATE CO., LTD.

57

Commercial Property Business (Hotels)

4. Hotel (Development / Operation) Business
Hotel Management Business
Name

The Royal Park Hotel Iconic Osaka Midosuji

Number of Rooms

Open

Royal Park HotelChuo, Tokyo

Location

419

Jun. 1989

Yokohama Royal Park Hotel

Yokohama, Kanagawa

603

Sep. 1993

Sendai Royal Park Hotel

Sendai, Miyagi

110

Apr. 1995

The Royal Park Hotel Tokyo Shiodome

Minato, Tokyo

490

Jul. 2003

Marunouchi Hotel

Chiyoda, Tokyo205

Oct.2004

The Royal Park Hotel Kyoto Sanjo

Kyoto, Kyoto

172

Jul. 2011

The Royal Park Hotel Fukuoka

Fukuoka, Fukuoka

174

Oct. 2011

The Royal Park Canvas Nagoya

Nagoya, Aichi

153

Nov. 2013

The Royal Park Hotel Tokyo Haneda

Ota, Tokyo

313

Sep. 2014

The Royal Park Hotel Kyoto Shijo

Kyoto, Kyoto

127

Apr. 2018

The Royal Park Hotel Hiroshima Riverside

Hiroshima, Hiroshima

127

Oct. 2018

The Royal Park Canvas Ginza 8

Chuo, Tokyo

121

Mar. 2019

The Royal Park Canvas Osaka Kitahama

Osaka, Osaka

238

Jun. 2019

The Royal Park Hotel Iconic Osaka Midosuji

Osaka, Osaka

352

Mar. 2020

The Royal Park Canvas Kobe Sannomiya

Kobe, Hyogo

170

Jan. 2021

The Royal Park Hotel Kyoto Umekoji

Kyoto, Kyoto

246

Mar. 2021

The Royal Park Canvas Kyoto Nijo

Kyoto, Kyoto

180

Spring 2021

Odori Nishi 1-chome Project

Sapporo, Hokkaido

130

Fall 2021

The Royal Park Hotel Kyoto Karasumaoike

Kyoto, Kyoto

200

Spring 2022

Ginza 6-chome Hotel ProjectChuo, Tokyo

160

Fall 2022

Nagoya Sakae Hotel Project

Nagoya, Aichi

250

FY2024

Hotel Development Business
Number of Rooms

Construction Begins

Open

The Royal Park Hotel Kyoto Shijo

Name

Kyoto, Kyoto

Location

127-

Apr. 2018

MJ HOTEL Asakusa

Taito, Tokyo

166

Mar. 2017

To be determined

The Royal Park Canvas Kobe Sannomiya

Kobe, Hyogo

170

Sep. 2019

Jan. 2021

The Royal Park Hotel Kyoto Umekoji

Kyoto, Kyoto

246

Jun. 2019

Mar. 2021

Asakusa Kaminarimon 2-chome Hotel Project

Taito, Tokyo

51

Dec. 2019

Spring 2021

Kyoto Okazaki Hotel Project

Kyoto, Kyoto

60

Feb. 2020

Spring 2022

Odori Nishi 1-chome Project

Sapporo, Hokkaido

130Mar. 2020

Fall 2021

Hilton Okinawa Miyakojima Resort

Miyakojima, Okinawa

329-

FY2024

Odori Nishi 1-chome Project

MITSUBISHI ESTATE CO., LTD.

58

Residential Business

MITSUBISHI ESTATE CO., LTD.

59

Residential Business1. Condominium Business Data

FY2020-3Q(Results)

FY2020(Results)

FY2021-3Q
FY2021(Results) (Estimates)

Condominiums Sold(millions of yen)

97,057

202,876

95,822201,000

Condominiums Sold
(units)

1,515

3,214

1,624

3,400

Gross margin

16.8%

17.8%

19.2%

18.6%

Land Bank
Breakdown in reporting term(as of September 2020)

5,700
8,100

4,000
Inventory (units)

441

373

240

-

Total: 17,800 units
New Supply of
Condominiums(units)MITSUBISHI ESTATE CO., LTD.

2,463

2,924

1,655

2,100

FY2021 - FY2023
FY2024 - FY2026

FY2027 -60

Residential Business

2. Condominium Business Data②
Quarterly Distribution of Sales by Agreement Date
(Millions of yen)

254,140

260,000
240,000

238,924
223,266

220,000
200,000
180,000
160,000

94.8%
88.7%

77.9%

96.5%
89.3%

93.0%

80.7%

84.7%

202,876
94.8%

73.1%

66.1%

85.0%

140,000
120,000

70.7%

59.2%

63.0%

201,000 (E)
93.8%
82.2%
70.8%
64.8%

100,000

51.4%

80,00060,00040,00020,000
0
17/3

18/3

Full-year sales

MITSUBISHI ESTATE CO., LTD.

19/3

End of 3Q

End of 2Q

20/3

End of 1Q

21/3

Beginning of FY

61

Residential Business3. Condominium Market Data
Number of New Supply / Average Prices (the Greater Tokyo Area)(Unit)(Average price / Millions of yen)

120,000

60
59.8

100,000

50

80,00040

60,00030

32,00031,23840,00020,000

20

10

0

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(E)
Number of new supply

Average priceSource: Real Estate Economic Institute Co., Ltd.

MITSUBISHI ESTATE CO., LTD.

62

Residential Business

4. Redevelopment Projects andLarge-scale Development Projects

5. Rental Apartment Business

Redevelopment Projects and Large-scale Development Projects

Trends in gain on sale

Scheduled
Delivery

Location

Project Name

Total Units(Billions of Yen)FY2021

Narashino, Chiba

Tsudanuma The Tower

759

FY2021Adachi,Tokyo

Senju The Tower

184

FY2021

Atsugi, Kanagawa

The Parkhouse Hon-Atsugi Tower

163

10.0

FY2021

Kawaguchi,
Saitama

The Parkhouse Kawaguchi Honcho

162

8.0

FY2021

Chiba, Chiba

Makuhari Bay Park Sky Grand Tower

826

Kagoshima,
Kagoshima

6.0

FY2021The Parkhouse Kagoshima Chuo Tower

210

4.0

FY2021

Shinjuku, Tokyo

The Residence Yotsuya Avenue/Garden

60

FY2021

Shinagawa, Tokyo

Crevia Tower Oimachi THE RESIDENCE

136

FY2022

Bunkyo, Tokyo

Park Court Bunkyo Koishikawa The Tower

571

FY2022

Koto, Tokyo

Proud Tower Kameido Cross

934

FY2023

Nagasaki, Nagasaki

Shin-daikumachi District Redevelopment Project

240

FY2023

Yokohama,
Kanagawa

Land Readjustment Project (H block) in West District
around Kawawa-cho Station

183

FY2024

Shinagawa, Tokyo

Togoshi 5-chome, 19 District Redevelopment Project

241

The Greater Tokyo
From FY2025
Area
Outside of theGreater Tokyo Area

Hamamatsucho 2-chome District Redevelopment
Project, etc.*¹

Total 18,550*2

Minatomachi 3-chome C Block District Area
Redevelopment Project, etc.*¹

Total 3,380*2

Approx. ¥

12.0

11.0
9.0

10.0

88 billion

assets under development
33%(25 buildings)
assets in operation

2.0
0.0

Total assets

67%(28 buildings)

1.0
17/3

18/3

19/3

20/3

(End of March 2020)*Ratio by value*1 There are approx. 25 ongoing projects scheduled

for delivery in FY2024 onward*2 Total of several planned projects

The Parkhouse Hon-Atsugi Tower
MITSUBISHI ESTATE CO., LTD.

The Parkhabio Kiba

Parkhabio Akasaka Tower

63

International Business

MITSUBISHI ESTATE CO., LTD.

64

International Business1. International Business Strategy
FY2020

Asia

7%

30%

Total Asset:¥887.1 bn

2030 Target

US

Towards 2030 Target

Business Profit:¥46.1 bn49%
44%

Europe48%

22%◆ Expand Asia development business◆ Annual investment: approx. ¥200–250

bn◆ 1st half of 2020s : Profit increase withasset accumulation

Business Profit:
Approx. ¥90 bn

35%

40%
45%
45% Total Asset:
Approx. ¥1.5 tn(2030 target)(2030 forecast)◆ 2nd half of 2020s:

15%
20%

Balance investment and return

ROA：Approx. 5%

ROA：Approx. 6%
Strategy①Asia②Europe◆ Increase investment, build capital recycling
portfolio◆ Two approaches:①Development with major stake②Joint businesses with local partners＜Expected Return from Investment＞
IRR

Developed countries 8～10%
Developing countries
10+%

MITSUBISHI ESTATE CO., LTD.

③US

◆ Investment and return to optimize profit
stability and capital efficiency◆ Advance mainly large-scale** 8 Bishopsgate, 60-72 Upper Ground＜Expected Return from Investment＞
IRR

8～10%

◆ Strengthen capital recycling business,making the most of RGII* know-how◆ Joint venture with local partners* Rockefeller Group International, Inc.

＜Expected Return from Investment＞
IRR

8～10%

65

International Business2. International Asset/Ongoing Projects
Many ongoing developments (rentals and condos) are expected to make early profit contribution.
International Asset

Major Ongoing Projects(Mar. 2020)

Book Value*:¥750 bn

Property Name
Mixed Use Development in Hangzhou

18%

32%

Location

Asia

28%
22%

CapitaSpring
Phase 3 of Singapore-Hangzhou
Science & Technology Park
Daswin Project
Yoma Central (4 buildings total)
Savya Financial Center North Tower
180 George Street
One City Centre
8 Bishopsgate

US (Manhattan)

US (Other)

EuropeAsia

Europe*Inventories + Equity Investments + Tangible Fixed Assets

US

Nine Elms Park

China (Hangzhou)
Singapore

Use
OfficeMulti-use

China (Hangzhou)

OfficeIndonesia (Jakarta)
Myanmar (Yangon)
The Philippines (Manila)
Australia (Sydney)
Thailand (Bangkok)

OfficeUK (London)

Rentalapartment

UK (London)

1271 Avenue of the Americas
Edison
Lehigh Valley (4 buildings total)

US (Pennsylvania)

2021

OfficeMulti-use
OfficeOfficeOfficeUK (London)60-72 Upper Ground (ITV The
London Television Centre)

Completion Area / Units*1
2020
69,800㎡
2021 93,400㎡*2
172,300㎡

2021
75,000㎡
2021 212,700㎡*2
2021 24,600㎡*3
2022
55,000㎡
2022
66,000㎡
2022

53,000㎡

2022

196 units

TBD

2020s 2nd
half

TBD

US (Manhattan)

OfficeDec. 2019

195,000㎡

US (New Jersey)

Logistics
facilities
Logistics
facilities

2020

87,200㎡

2021*1 Leasable area or # of units *2 Total floor area

325,200㎡*3 Area for saleLand Bank in Asia
1271 Avenue of the Americas(Condominiums)

Daswin Project

200

100

400

Total: 10,900 units

400
500

1,900

7,400
8 Bishopsgate project

Yoma Central

Thailand

China

Australia

Malaysia

Philippines

VietnamIndonesia(as of March, 2020)* # of unit MEC owns

MITSUBISHI ESTATE CO., LTD.

66

Other business

MITSUBISHI ESTATE CO., LTD.

67

Other business1. Investment Management Business: Global Platform
Globally, we have combined assets under management of approximately ¥ 3.6 trillion.

AuM Area Breakdown(Billions of Yen)

Asia & Oceania
120

Europe450

Carry out marketing and research and establish funds worldwide
Overseas

Provide global opportunities to worldwide investors
Japan Real Estate AssetManagement Co., Ltd.

Group-wide
Synergy

Mitsubishi Jisho
Investment Advisors, Inc.

Mitsubishi Estate Group’s network
for investment & development and management & services
MITSUBISHI ESTATE CO., LTD.

JREA
1,050

Total:
approximately¥ 3.6 trillion.

United States
1,200

Domestic

MJIA
840(end of March 2020)

Goal: reach ¥ 5 trillion in
the mid-2020s
68Investment / Financial Data etc.

MITSUBISHI ESTATE CO., LTD.

69

Investment / Financial Data etc.

1. Net Interest-bearing debt/EBITDA Ratio(Billions of Yen)

(Times)2,500.0

11.0
10.0
9.0

2,000.0

7.7

7.7

7.3
6.7

1,500.0

1,000.0

6.6

8.0
7.0

7.2

7.1

6.7

2,153.6
1,978.6

2,194.8
2,019.8

6.0
6.1

6.1

2,140.2
1,965.2

2,216.8
2,041.8

2,490.0
2,332.5

5.0
4.0
3.0

500.0

2.0
1.0

0.0

0.0
FY2017FY2018Net Interest-bearing debt
Debt/EBITDA Ratio (right axis)

MITSUBISHI ESTATE CO., LTD.

FY2019FY2020

FY2021(E)Net Interest-bearing debt
*after hybrid debt deductions
Debt/EBITDA Ratio (right axis)*after hybrid debt deductions
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Investment / Financial Data etc.

2. Interest-Bearing Debt Breakdown(Billions of Yen)

3,000

95.0%

95.0%

96.1%

93.7%

96.4%

95.1%

93.4%

95.4%

93.6%

93.2%

100%
90%

2,500
6.8

10.2

2,000

35.0

53.1%

1,500

1,292.9
1,065.4

28.0
60.1%

1,261.9

69.7%

5.6

100.0

73.2%

100.0
76.2%

1.9
100.0

76.4%

1,381.2

1,428.5

1,523.0

1,406.0

1,450.7

1,208.8

70%

50%
40%

1,072.3

30%
250.0

250.0

250.0

250.0

250.0

558.9

577.1

500
566.3

636.2

747.2

701.5

685.2

653.0

612.7

603.8

0

Total

80%

60%

64.1%

54.0%

8.3

100.0

7.2

9.5

61.8%

61.7%
7.2

1,000

50.0
4.5

4.7

20%
10%
0%

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY20201,693.0

1,716.8

2,085.4

1,973.0

1,929.3

2,291.0

2,396.9

2,481.6

2,319.5

2,429.8

Straight BondMITSUBISHI ESTATE CO., LTD.

Subordinated bondBank Loan

Subordinated loan

CP

Lease liability

Fixed ratio

Long-term ratio

71

Investment / Financial Data etc.

3. Interest-bearing debt: Procurement Interest rates /Average Duration of Interest-bearing debt (Unconsolidated)(Year)

10

2.5%

9
8
1.90%
7
6

6.20
1.58%

1.88%

5

5.45

5.55

5.58

5.45

1.54%

1.55%

1.05%

1.07%

1.01%

0.70%

1

2.0%

1.32%

1.5%
1.24%
1.14%

0.96%
0.72%

1.38%

1.52%

0.96%

0.87%

2

6.36

6.69

5.71
1.41%

1.27%

4
1.05%

6.18

1.40%

1.29%

3

6.79
1.72%

5.91
1.42%

7.23

1.88%

0.95%

0.97%
0.75%

0.62%

0.61%

FY2015FY2016

0.66%

0.92%

0.84%

0.71%

0.68%

FY2019FY2020

0

1.0%

0.5%
FY2009FY2010FY2011FY2012Average Duration of Interest-bearing debt

MITSUBISHI ESTATE CO., LTD.

FY2013

FY2014

Bonds/Average interest

FY2017FY2018Bank Loans/Average interest

Total/Average interest

72

Investment / Financial Data etc.

4. Segmentation Change from April 1, 2020
Current Segments①:Integration of
three businesses

Office Building Business
Lifestyle Property
Business②:Integration of international
residential business into
International BusinessResidential Business

Hotel & Airport BusinessArchitectural Design &Engineering Business

Commercial Property
Business
Residential Business③:Integration of disclosure
segments

Commercial Property
Business Group
Office Building Business

Outlet Mall Business
Retail Facility Business

International Business

International Business
Investment Management
Business

From FY2021

Investment Management
Business
Architectural Design &Engineering Business andReal Estate Services
Business
Other Businesses

Logistics Facility Business
Hotel Development Business
Hotel Operation BusinessAirport Operation Business

International
Business Group

Real Estate Services
Business

International Commercial Property

Other Businesses

International Residential BusinessBusiness<Purpose of Change>① The Office Building, Lifestyle Property, and Hotel & Airport business units will be merged to strengthen capabilities for increasing cross-segment
projects.
② International Residential business will move from the Residential Business segment to the International Business segment to consolidate
international project expertise.
③ Architectural Design & Engineering Business, and Real Estate Services Business are integrated as Other Businesses for simplified disclosure.

MITSUBISHI ESTATE CO., LTD.

73

ESG Initiatives

For details of ESG initiatives in "Long-term Management Plan 2030“, please refer to the following link.
https://www.mec.co.jp/e/investor/plan/pdf/plan200124_e.pdf
MITSUBISHI ESTATE CO., LTD.

74

ESG Initiatives

1. Materialities (Important Issues for Sustainable Management)
Identifying 7 Materialities’ Opportunities and Risks
Materialities

Opportunities
Increasing need for acquisition and leasing ofreal estate with low environmental impact

Expanding demand for facilities and services

Rising countermeasure expenses due tostrengthening of environmental regulations
and stricter renovation standards

that address the needs of international visitors

Increased country, compliance, and supply
chain risks

Heightening need for acquisition and leasing of

Falling asset value and rising expenses forreal estate highly resilient to disasters such as
Earthquakes

Maintenance and countermeasures due todisasters such as earthquakes

Rising demand for facilities and services

Declining demand for facilities and services

tailored to diverse living and working styles

where the promotion of diversity is insufficient

Increasing demand for facilities and services
tailored to new needs due to demographic
Changes

Contracting demand for facilities and services

Reduction in waste as a result of lengthening

Decreasing need for expensive, newly built

the time span of demolition and rebuilding
work by making effective use of existing stock

real estate in comparison with pre-owned andolder properties

Improvements in the efficiency andconvenience of facility operations byleveraging IT and robots

MITSUBISHI ESTATE CO., LTD.

Risks

due to demographic changes (including
decrease in working population)

Declining demand for facilities and services due

to late response to IT and digital innovation

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ESG Initiatives

2. Initiatives to Protect Environment (ESG's "E")Key KPIs and Targets■ CO₂ emissions ■ Waste disposal ■ Renewable energy rate ■ Waste recycle rate
■ Water recycle rate ■ # of renovated buildings and condos ■ Domestic lumber usage rate

CO₂ Emissions⁃ Increase electricity storage facilities⁃ Optimize thermal circulation⁃ Employ demand response system

2030 Target

35％ reduction (vs. FY2018)

2050 Target

Waste Recycle Rate
⁃ Raise awareness and distribute information fortenants, visitors, and guests⁃ System/measures to facilitate waste
separation【Actual: 4,038,thousand t (FY2020)】

From the fiscal year 2022 ending in March, 19
buildings in the Marunouchi and Yokohama

2030 Target

87％ reduction (vs. FY2018)*These targets were approved by
SBT Initiative in April 2019

Examples of initiatives taken
towards CO₂ emission
reduction and renewableenergy rates

area will draw power from a renewable90％

energy power source. From this initiative, anestimated 180,000 tons if CO₂ will be saved.

【Actual : 55.2％ (FY2020)】

Reference value: 3,336 thousand t (FY2018)

Renewable Energy Rate
2030 Target
2050 Target

25％
100％

【Actual : 1.1％ (FY2020)】

MITSUBISHI ESTATE CO., LTD.

Waste Disposal
2030 Target

20％ reduction(vs. FY2020)【Actual value (reference value):
7.1kg/sq m. (FY2020)】

Marunouchi Bldg.

Yokohama Landmark Tower

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ESG Initiatives

3. Initiatives to Human Resources and Resilience (ESG's “S”)
＜Human Resource＞Key KPIs and Targets＜Resilience＞Key KPIs and Targets■ PTO utilization■ Rate of buildings that are to take in stranded commuters■ Paternity leave utilization■ Rate of people with first aid training course qualifications■ Retention post-parental-leave

PTO Utilization

Rate of Buildings That are
to Take in Stranded Commuters

FY2021 Goal

Actual (FY2020)

5％ increase

Rate of such facilities*3(Reference value: 66.0%(FY2018)）

92.3％【Actual*1：68.0％ (FY2020)】

Paternity Leave Utilization
FY2030 Goal

Rate of People with First Aid
Training Course Qqualifications

FY2030 Goal

100％

【 Actual*2：17.1％ (FY2020)】

100％【Actual*4 ：61.0％ (FY2020)】

Retention Post-parental-Leave
FY2030 Goal

100％

*2 Average of 5 companies (Mitsubishi Estate, Mitsubishi Estate Residence,

Mitsubishi Jisho Property Management, Mitsubishi Jisho Sekkei, Mitsubishi Real Estate Services)
MITSUBISHI ESTATE CO., LTD.

1.5×of a standard skyscraper(=withstand a level 7 earthquake)

Emergency Generator for BCP in
New Buildings (Marunouchi Area)

72 hr【Actual*2：93.8％ (FY2020)】*1 Mitsubishi Estate only

Seismic Performance of New
Building (Marunouchi Area)*5*3 Covering large-scale properties completed in or after 2002
*4 Average of 3 companies (Mitsubishi Estate, Mitsubishi Jisho Property Management, Mitsubishi Jisho Retail Property

Management)*5 There are certain exceptions

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ESG Initiatives

4. Corporate Governance (ESG’s “G”) -1
Establish effective governance that ensures long-term enhancement of corporate value.
(as of Sep. 2020)

Corporate Structure• Transitioned to a “Company with Nominating Committee, etc.” in June 2016

Structure of the Board of Directors

Committee Members• 15 directors: 8 company directors and 7 independent outside
directors (10 of which are non-executive directors)• Chairpersons of all committees are independent outside directors• 6 of 7 independent outside directors are male and 1 is female.

Board Structure

Composition of male/female
1

5

7
3

Company Director(Executive)
Company Director(Non-executive)
Independent/Outside Director (Non-executive)

MITSUBISHI ESTATE CO., LTD.

• Remuneration and Nominating Committees comprised ofindependent outside directors only
• With regard to the Audit Committee, two non-executive internal
directors, who are familiar with the company's business, wereappointed to ensure the effectiveness of audits.
Audit
Committee

Nominating
Committee

Remuneration
Committee

Chairperson is
outside director

Exclusively
outside directors

Exclusively
outside directors

14
Male

Femal
: Outside Director: Company Director(Non-executive): Chairperson

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ESG Initiatives

5. Corporate Governance (ESG’s “G”) -2
Non-Renewal of Anti-takeover Measure• In 2019, the Company did not renew its anti-takeover measure (the Board of Directors adopted a resolution not torenew the measure due to talks with its shareholders and investors, as well as other factors).

The Executive Compensation Plan Aims to Align Shareholders and Executives’ Interests
Composition of Compensation
Base Salary50％
Fixed Component

Medium- to
Long-term Incentive

Short-term Incentive

Singe-year
Performance-based
Incentive

25％

RS
Incentive

PS
Incentive

12.5％

12.5％

Variable Component<Single-year Performance-based Incentive>
・Form : cash
・Calculation: "KPIs" : Operating Profit, ROE etc. of previous year (quantitative evaluation) as wellas levels of contributions to medium- to long-term business results, efforts on ESG and otherelements (qualitative evaluation)<New Long-term Performance-based Incentive Plan (PS Incentive) >・Form : cash
・Performance evaluation period: 3 years
・Calculation: Based on stock price and total shareholder returns(TSR)relative to peer companies*<Restricted Stock Plan (RS Incentive) >・Form : stock
・Lock-up period: 3 years* Nomura Real Estate Holdings, Inc., Tokyu Fudosan Holdings Corporation, Mitsui Fudosan Co., Ltd., Tokyo Tatemono Co., Ltd., and Sumitomo Realty & Development Co., Ltd

Strategic-holding Stock Policies• Sold 30 entities* with total value of approx. ￥35.7 bn in the past five years (FY16–20).

• Current market value of the holdings is approx. ￥184.6 bn; routinely review strategic objectives and dispose of stocks asnecessary as of March 2020.
* Stocks of listed companies only. Including partial sale

MITSUBISHI ESTATE CO., LTD.

79

ESG Initiatives

6. External Evaluation
As of February 2021, reputations or ratings below have been given.
• FTSE4Good Global Index (19 years in a row)
• FTSE Blossom Japan Index (Adopted by GPIF)(4 years in a row)
• MSCI Japan ESG Select Leaders Index (Adopted by GPIF) (4 years in a row)
• MSCI Japan Empowering Women Select Index (Adopted by GPIF) (3 years in a row)

• S&P/JPX Carbon Efficient Index (Adopted by GPIF) (3 years in a row)
• SOMPO Sustainability Index (9 years in a row)
• GRESB Public Disclosure (4 years in a row)
• GRESB Real Estate 2020:- GRESB Standing Investment Benchmark (received 5 stars for existing property portfolios)- GRESB Development Benchmark (received 4 stars for innovation and large-scale rennovation portfolios)• CDP Climate Change 2020 Assesment: A- rating

MITSUBISHI ESTATE CO., LTD.

80

Contact Information
Investor Relations Office,Corporate Communications Department
Mitsubishi Estate Co., LTD.

+81-3-3287-5200
https://www.mec.co.jp/<Disclaimer>
Regarding information on the properties of this material, it is based on judgment obtained from information available at thepresentation date of this material.
Please be aware that actual information can result in different results depending on various factors.

MITSUBISHI ESTATE CO., LTD.