Sumitomo Realty & Development Co., Ltd.
Integrated Report 2022

Shinjuku NS Building, 4-1, Nishi-shinjuku 2-chome,
Shinjuku-ku, Tokyo 163-0820, Japan
https://www.sumitomo-rd.co.jp/english/

Integrated Report

2022

Printed in Japan

Integrity and Innovation

Pick UpA Message from theManagement

05

P.

Corporate Philosophy
Our new growth strategies

Contents

03 Business Structure
05 A Message from the Management
09 Overview of the Ninth Management Plan
15 The Sumitomo Realty Group’s Value Creation(From Fiscal 2022 to Fiscal 2024)

Monjuin Shiigaki (Founder’s Precepts) owned by
Sumitomo Historical Archives

The Sumitomo Realty Group is a comprehensive real estate enterprise of the Sumitomo Group with a history of over 430 years. Inheriting
Sumitomo’s business philosophy, with its origins in the Monjuin Shiigaki (Founder’s Precepts), a document written by the founder ofthe House of Sumitomo, Masatomo (Monjuin), and given to its family members to offer guidance on how a merchant should
conduct business, we have developed our business by placing top priority on integrity and pursuing creation of new value with
innovative and challenging spirit.
Reflecting this business philosophy, we have set forth our fundamental mission as to “Create even better social assets for the
next generation” with our corporate slogan, “Integrity and Innovation.”

P.09
The Ninth Mediumterm Management Plan

Overview of new Medium-termManagement Plan fromfiscal 2022

29 Business Review
Financial Results for Fiscal 2021 and Progress of theEighth Management Plan

Business
Philosophy- Under no circumstances, shall it pursue easy gains or act imprudently- Placing prime importance on integrity and sound management in the conduct ofits business- Benefit self and benefit others, private and public interests are one and the same
The business philosophy inherited by the Sumitomo Group strongly demands that we, as people, act ingood faith toward all things, not chase easy gains, refine our humanity and develop a well-roundedcharacter, and seek “harmony with the common good” that generates not only our own benefits but
also those for society in an integrated manner.

SloganFundamental Mission

Integrity and Innovation

Create even better social assets
for the next generation
Through our businesses closely associated with people’s
daily lives, such as office building leasing, condominium
sales, custom home construction and remodeling, it is our
mission to create assets that live on to the next generation
and we strive for sustainable urban development that is“Disaster Resistant,” “Environmentally Friendly,”“Together with the Community” and “People Friendly.”

Code of Conduct
1. Open Culture ..............................Opportunity

6. Trust with our stakeholders

2. Higher Goals .................................Innovation

7. Environmental Protection

3. New Approaches ...........................Pioneering

Protecting the global environment through efforts such as resource saving,

4. Complianceenergy saving, resource recycling, and CO2 reduction

5. Rejection of antisocial forces

1

Integrated Report 2022

Business Segments

The Sumitomo Realty
Group’s Value Creation

15

P.

The sources and processes of value
creation to enable the Company’ssustainable growth

Overview of Consolidated Results,
Outlook for Next Fiscal Year and
29 Progress of the EighthManagement Plan

30
33 Leasing
39 Sales41 Construction
45 Brokerage
46 Group Companies

Overview of Each Segment

Inheriting Sumitomo’s Business Philosophy witha history of 430 years

Placing top priority on “integrity,” we go beyond simple
development with innovative and challenging spirit,relentlessly pursuing value creation without pursuing easy
gains. This corporate stance as a developer is expressed inour slogan, “Integrity and Innovation.”

About The Sumitomo Realty Group’s Value Creation
15
History of Value Creation and Our Strengths
17
Solving Social Issues through Redevelopment
19
Enhancement of Corporate Value through Four Mainstay
23
Businesses
Example: Shinchiku Sokkurisan Remodeling25
Value Creation Process
27

47 ESG Management
Promotion of ESG and Contributions to SDGs
Environment
Society
Governance

47
49
53
57

Financial and Non-financial Data /67 Consolidated
Company Information
Key Non-financial Data
Eleven-year Financial Summary
Management’s Discussion and Analysis
Corporate Data / Investor Information
History

67
69
71
73
74

Editorial Policy
This report was compiled based on the disclosure framework of the International Integrated Reporting Council (IIRC). This report has been compiled to deepen theunderstanding among our stakeholders on the ESG management of the Sumitomo Realty Group, which has developed its business inheriting the Sumitomo’s businessphilosophy with a history of 430 years. For details of the initiatives for ESG and the SDGs, please refer to the Sustainability/ESG page on the Company website.
https://www.sumitomo-rd.co.jp/english/sustainability/
Caution Concerning Forward-looking Statements
Forward-looking statements including business forecasts contained in this integrated report represent management’s assumptions and beliefs based on the information
currently available to the Company and contain risks and uncertainties. Furthermore, they do not represent the Company’s guarantee of future performance. Therefore,
stakeholders are warned not to solely rely on these statements in making investment decisions. Actual results may differ from these business forecasts due to a variety ofimportant factors.
Important factors that could affect actual results include, but are not limited to, the environment surrounding the Group’s business areas, such as macroeconomic conditions, thereal estate market, and interest rate trends.
Period Covered: April 1, 2021 to March 31, 2022 (Some descriptions on activities and outlook in this report refer to those prior to or after this period.)
Definition of Term: “FY2021,” “FY ’21,” “fiscal 2021” or “fiscal year under review” refer to the fiscal year ended March 31, 2022, and other fiscal years are referred
to in a corresponding manner unless otherwise indicated.
Scope of Report: Sumitomo Realty & Development Co., Ltd. and its Group companies
Published: October 2022 (Japanese edition)
Cover Photo: Shinjuku Sumitomo Building (Completion in March 1974, renovations completed in June 2020)

Sumitomo Realty & Development Co., Ltd.

2

Business Structure

The Sumitomo Realty Group comprises the four mainstay segments: Leasing, the core earnings driver that generates nearly 70% of
the operating income overall, owning more than 230 office buildings in central Tokyo; Sales, generating stable profits every year as one of
the industry’s top suppliers of condominium units; Construction, providing Shinchiku Sokkurisan, the industry’s No. 1 full-remodelingbusiness, and custom home construction; and Brokerage, having one of the highest number of transactions in the industry, primarily forexisting homes.
Each business has been steadily increasing their performance with a high level of profitability, and contributing to improving thecorporate value of the Group.

Sumitomo Realty Group

Property
management

Four Highly-profitable Mainstay Segments

A Message from the Management

Four Mainstay Businesses Centered on Office Building Leasing

Condominium
management

Results for the fiscal 2021

Breakdown of revenue from operations Breakdown of operating income

1% 1%(Billion yen)

• Condominium Sales

939.4

Operating income

233.8

Ordinary profit

225.1

Profit

150.4

0% 0%
7% 7%
8% 8%

8% 8%
21% 21%

Leasing
Sales
Construction
Brokerage
Others939.4
9,394 45% 45% 20% 20% 2,338
233.8
Billion yen 億円

億円 Billion yen

65% 65%25% 25%The Sumitomo Realty Group’s
Value Creation

Sales

Revenue fromoperations

Overview of the NinthManagement Plan

Sumitomo Fudosan
Tatemono Service Co., Ltd.

Note: Percentage is calculated from figures before elimination and/or corporate for the fiscal year ended March 31, 2022.

Revenue from operations
FY2021YoY

FY2022 (F)YoY

Leasing

425.0+ 26.8

430.0

+ 4.9

Sales

233.7

(29.6)

220.0

Construction

204.3+ 15.6

Brokerage

73.4

+ 7.6

Operating income(Billion yen)

FY2021YoY

FY2022 (F)YoY

Leasing

162.6

+ 7.4

165.0

+ 2.3

(13.7)

Sales

50.4

(3.4)

50.0

(0.4)

220.0

+15.6

Construction

18.5

+ 2.9

21.0

+ 2.4

78.0

+4.5

Brokerage

18.0

+ 6.5

20.0

+ 1.9

Business Review

Sumitomo Realty &Development Co., Ltd.

(Billion yen)

Construction
Operating income by segment

ESG Management• Shinchiku Sokkurisan Remodeling• Custom Homes■ Leasing ■ Sales ■ Construction ■ Brokerage

LeasingSumitomo Fudosan Syscon Co., Ltd.

• Office Buildings • Rental Apartments • Hotels• Multipurpose Halls • Retail Facilities

Brokerage

160

Sumitomo Fudosan Villa Fontaine Co., Ltd.
Sumitomo Fudosan Bellesalle Co., Ltd.
Sumitomo Fudosan Retail Management Co., Ltd.

• Real Estate Brokerage

140S umitomo Real Estate
Sales Co., Ltd.

120
180

Consolidated Financial and Nonfinancial Data / Company Information

100
80

Others• Fitness

60

Sumitomo Fudosan Esforta Co., Ltd.

• General Insurance and Life Insurance Agency• Restaurant / Catering

Izumi Insurance Service Co., Ltd.

Izumi Restaurant Co., Ltd.

etc.

40
20
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
(Years ended / ending March 31)(Forecast)3

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

4

A Message from the Management

Kojun Nishima

Management philosophy that inherits “Sumitomo’s Business
Philosophy” with a history of 430 years

Together with
the Community

Community

Creating new value and achieving sustainable growth together
with the city
We have established a sustainable and stable earnings base by steadily developing the real estate leasing businessprimarily involving office buildings in central Tokyo. We have developed numerous office buildings throughredevelopment under the Urban Renewal Act, etc. over roughly half a century since the early 1970s. By keeping theownership of these buildings, rather than selling them off, we have accumulated stable revenues. With gross floorarea of over 1.7 million tsubo (one tsubo is roughly 3.3m2) as of March 31, 2022, the leasing business has been asolid business platform that accounts for approximately 70% of our overall operating income of over ¥200 billion.
In order to secure a stable supply of land in central Tokyo, where large parcels of land are rare, we, as a “LandMaker,” have been engaged in urban development including redevelopment together with numerous landowners.
Through our redevelopment business to date, in addition to creating an earnings base, we have contributed tosolving various issues of the community. By redeveloping the remaining densely built-up areas with low-rise wooden
houses in various areas of central Tokyo, which pose high disaster risks, we have realized effective use of land,
improvement of disaster preparedness and revitalization of the community. By upgrading urban function throughredevelopment, the Company contributes to enhancing the value of not only the redevelopment area but alsointernational metropolis Tokyo overall.
Our strength is the capability of “Land Innovation,” or the capability of development, which we have cultivatedover the years as one of Japan’s leading comprehensive developers. By taking advantage of this strength, we willcontinue to promote sustainable urban development that generates both economic and social value, as well as toachieve sustainable growth and maximize corporate value.

The Company is a comprehensive real estate enterprise of the Sumitomo Group, which succeeded the Sumitomo
Honsha Ltd. and inherits “Sumitomo’s Business Philosophy” which has a history of 430 years. The Sumitomo Groupis one of the longest-lasting corporate groups in the world, and its business philosophy — “Placing prime importanceon integrity,” “Under no circumstances, shall it pursue easy gains,” “Benefit self and benefit others, private andpublic interests are one and the same,” etc. — has been handed down as a guiding principle throughout its history.
In light of the wisdom of its predecessors, the Sumitomo Realty Group has developed its business based on aphilosophy of placing top priority on integrity, not pursuing easy gains, and creating not only economic value throughthe pursuit of self-interest, but also lasting social value that will be needed for future generations.

Growth strategies with a view to a new stage

Our corporate slogan “Integrity and Innovation” expresses such corporate stance. With this corporate slogan, we
have set our code of conduct to create new values by placing top priority on relationships of trust with stakeholders,always setting higher goals, and pioneering with new approaches. Under this slogan, we have set forth ourfundamental mission as to “Create even better social assets for the next generation,” and our basic management
policy aims to address various social issues including environmental ones through each business while maximizing
corporate value.
The real estate business has great social significance with a mission of enriching people’s daily lives by formingbases where people work, live and interact, as well as providing related services. As such, we have identified “Disaster
Resistant,” “Environmentally Friendly,” “Together with the Community” and “People Friendly” as our four material
issues and have been practicing “Sustainability Management” offering sustainable social assets for future
generations.

Steadily achieving objectives of the medium-term management plans and maintaining the revenue andprofit growth trajectoryWith top priority placed on achieving the objectives of the medium-term management plans we have formulated
every three years, we have increased our corporate value as a result of having steadily implemented the plans. Overthe past 25 years, we have executed eight management plans, and have achieved increases in ordinary profit in 22
fiscal years, excluding the three fiscal years under the global financial crisis and the COVID-19 pandemic.
In the first ten fiscal years (three medium-term management plan periods), we focused on restoring our asset base,which had been damaged by the bursting of Japan’s bubble economy, and reducing interest-bearing debt. In thelatter 15 fiscal years (five medium-term management plan periods), we doubled our leasing assets, strengthened
management foundations by further solidifying the four segments of Leasing, Sales, Construction and Brokerage, as
well as enhanced shareholders’ equity, lifting the credit rating to the AA zone.

Integrated Report 2022

The Sumitomo
Realty Group’s
Value Creation▶ P.15

Sumitomo Realty & Development Co., Ltd.

Consolidated Financial and Nonfinancial Data / Company Information5

PeopleESG Management

Corporate
Philosophy▶ P.01

Even bettersocial assets

Business Review

President

Environmentally
FriendlyEnvironment

People Friendly

The Sumitomo Realty Group’s
Value Creation

Creating “New Value”
That Will Be Needed for
Future Generations

Disasterprevention

Disaster Resistant

Overview of the NinthManagement Plan

Striving for “Sustainable
Growth andDevelopment” Together
with the CityA Message from the Management■ Our Material Issues (Materiality)

6

A Message from the Management

Over the next three medium-term management plan periods through fiscal 2030, the Company will maintain its
policy to prioritize the allocation of funds to further investment to expand leasing assets and take steps forsustainable profit growth, while aiming for a resilient management foundation and sustainable growth, based on thehigh level of social contribution of the Company’s businesses themselves, and increasing investment capability andthe level of flexibility in capital strategy. At present, there are various issues in the management environment such as
the COVID-19 pandemic, geopolitical risks, and instability in resource procurement, but as the Company expects toachieve ordinary profit of 300 billion yen for fiscal 2030, it positions the “Ninth Management Plan (fiscal year ending
March 31, 2023 to the fiscal year ending March 31, 2025)” that started in April 2022 as the first step to achievingthat target, and exert every effort to continue enhancing corporate value.

300

9th - 11th Plan(‘08 - ‘22)(‘23 - ‘31)

●Restore asset basedamaged by the bursting ofJapan’s bubble economy●Reduce interest-bearing
debt●Double our leasing assets●Strengthen the foundation of each segment●Enhance shareholders’ equity; lifting the credit
rating to the AA zone

Promotion of diversity as part of our human capital utilization(Thousand tsubo)

3,000

Ordinary Profit¥300 billion

2,500

2,000

Ordinary
profit150

More than
+700

1,500

Thousand tsubo

Gross floorarea (Owned)

1,000

50

0
‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23(Years ended / ending March 31)
(F)

500

‘31

Sustainability management contributing to the SDGs
For many years, we have practiced Sustainability Management, inheriting “Sumitomo’s business philosophy.”
In our redevelopment business centered on office buildings and condominiums, which is our main development
approach, we have promoted urban development that contributes to solving issues facing the community. For
example, in areas with high disaster risks, such as an area where wooden houses are densely built up, we integrate
those houses into a robust fire-resistant building to greatly improve local disaster preparedness. In addition, by
promoting projects jointly with landowners, we create hubs for community building and revitalization. In the
Shinchiku Sokkurisan remodeling business, we have greatly reduced the amount of waste generated and the use of
new materials compared to rebuilding, and by adopting seismic reinforcement as a standard specification, we haveactively worked to extend the useful lives of houses as well as promoted safe and secure housing since its launch in
1996.
Further, as mentioned above, we pursue initiatives for decarbonization with an interim target by fiscal 2030,
established in May this year.
Under our fundamental mission to “Create even better social assets for the next generation,” we will continue toaddress various social issues including environmental issues through our business activities, as well as contribute to
the achievement of the Sustainable Development Goals (SDGs) of the United Nations.

Consolidated Financial and Nonfinancial Data / Company Information

Sumitomo Realty & Development Co., Ltd.

ESG Management“Ninth Management Plan” aiming to further strengthen foundations
For the new medium-term management plan, the Company has set earnings targets of “consecutive record profit forthe period covered” and “achieve cumulative ordinary profit of 750 billion yen and profit of 500 billion yen over thethree-year period,” while maintaining the pace of growth attained through the Eighth Management Plan.
We aim to achieve our goals by leveraging the “comprehensive strength” of the Group by maintaining a stable earnings
base in the office building leasing business in central Tokyo and in the condominium sales business, as well as by realizing
high growth in the housing business including the Shinchiku Sokkurisan remodeling, and the brokerage business.
In the office building leasing, although the COVID-19 pandemic has triggered diversified workstyles and thewidespread utilization of remote work, it also brought with a reevaluation of the importance of offices in central
Tokyo. From the Ninth Management Plan onward, we will continue to steadily promote the development plans of
new buildings in central Tokyo with a total gross floor area of more than 700 thousand tsubo, which is equivalent tomore than 40% of the total gross floor area of 1.7 million tsubo of all buildings we own for leasing as of March 31,
2022, and aim to further expand our earnings base by completing and bringing such buildings into operation.
Under the fundamental mission to “Create even better social assets for the next generation,” we have introduced
green financing and set CO2 emissions reduction targets by 2030 to strive to solve social issues while promoting ourIntegrated Report 2022

Promotion ofDiversity for
ActiveParticipationof Diverse
Personnel▶ P.540(F)business.
Although the future outlook remains uncertain, we will make further efforts to achieve the targets for the NinthManagement Plan by utilizing the comprehensive strengths of the Group as a whole, aiming for sustainable growthand enhancing corporate value thereafter.

7

We have been actively promoting diversity since before, based on the recognition that the presence of diverse
perspectives and values reflecting a variety of experiences, skills and attributes within the Company is an advantagethat ensures the sustainable growth of the Company.
For more than 20 years, we have been actively hiring people with diverse career backgrounds as individuals who
can be immediately effective in the Company. Today, mid-career hires with work experience at other companies
account for 90% of our employees and are the source of the Company’s growth.
In addition, we believe that equal opportunity is the most important factor in promoting employees tomanagement positions, so we promote employees based solely on their enthusiasm, ability, and achievements,
regardless of gender or whether they were hired as new graduates or as mid-career workers. As a result, today, midcareer hires account for more than 60% of managerial personnel, thus ensuring diversity at the management level.
These initiatives have increased employee morale and led to developing human resource that can be the candidates
responsible for sustainable growth.
Regarding the promotion of female participation and career advancement, we are working on their further
improvement by setting and announcing numerical targets every five years for the ratio of female employees in sales
and engineering positions that support our front line operations, to increase the number of female employees for
future promotion. We will continue to promote diversity as one of our strengths by hiring and promoting a diverse
workforce.

Business Review(right scale)

Overview of
the NinthManagement
Plan▶ P.09promote initiatives to create benefits for all stakeholders; not only benefits for customers but also for business
partners and suppliers, as well as solutions to issues faced by national and local governments.

* 1 tsubo≈3.3m2

200

100

compared with fiscal 2014, immediately prior to the Paris Agreement. As a comprehensive developer that provides
social infrastructure closely related to people’s daily lives, in each of our mainstay businesses including office building
leasing, condominium sales, remodeling, and custom home construction, we will promote the delivery of products
and services appealing to consumers for the promotion of widespread energy saving and energy creation, and strive
to achieve our CO2 emissions reduction targets while expanding our business. As concrete initiatives, we will actively

Decarbonization
Targets▶ P.13The Sumitomo Realty Group’s
Value Creation

250

4th - 8th Plan(‘98 - ‘07)

In terms of initiatives for decarbonization, which is a global social challenge, we have expressed our support for 2050
carbon neutrality, and established an interim target by fiscal 2030, a target to reduce CO2 emissions by 50%

Overview of the NinthManagement Plan

(Billion yen)

1st - 3rd Plan

Initiatives toward 2050 carbon neutrality

A Message from the Management

Positioning of the Ninth Medium-term Management Plan

8

Overview of the Ninth Management Plan
(From Fiscal 2022 to Fiscal 2024)
Capital Investment Plans (Non-current asset investment excluding sales assets, such as condominiums for sale)

Consecutive record profit for the period covered
Achieve cumulative ordinary profit of 750 billion yen and profit of 500 billion yen over the three-year period
Aim to achieve record profits for the fourth consecutive plan since the Sixth Management Plan by maintaining the paceof growth attained through the Eighth Management PlanThree-year
cumulative
earnings targets

Comparison of management plan results(Fiscal year ended/ending March 31)

Development pace of gross floor area for leasing(1) We will invest 700 billion yen in concrete
development projects for over 700 thousand tsubo(one tsubo is roughly 3.3 m2) of gross floor area,
mainly comprising redevelopment projects(2) We will ensure that we take advantage ofopportunities that arise by securing 300 billion yen
for investments in new projects(Billion yen)

6th Plan

7th Plan

8th Plan

9th Plan

2014-20162017-20192020-2022

2023-2025

2,442.1

2,885.8

2,870.4

3,000.0

Operating income

500.6

613.2

687.5

770.0

Ordinary profit

418.0

557.8

655.6

750.0

Profit

238.1

353.3

432.8

500.0

Revenue from operations

Further investment in leasing office assets in central Tokyo, strengthening our earnings base
Expect to invest 1 trillion yen over the three years of the Ninth Management Plan

+272.0

+88.9

+74.1

+112.6+139.8+115.3(15.3)

+74.3

+97.8

+79.5

+129.6Grossfloor area

thousand
tsubo

210

180

190

10th Plan

1,000

onward

520

500

+82.5

0

2001
2004
2007
2010
2013
2016
2019
2022
2025
20281st Plan 2nd Plan 3rd Plan 4th Plan 5th Plan 6th Plan 7th Plan 8th Plan 9th Plan 10th Plan(Years ended / ending March 31)

+94.4

+67.2

Performance Targets and Strategies by Segment
We will maintain the position of office building leasing in Tokyo as a solid foundation, and will aim to utilize thecomprehensive strengths of the Group as a whole to achieve our targets

Principal new building development projects during the Ninth Plan

■Sales

Revenue fromoperations■Construction■Brokerage■SalesOperating income■Construction■Brokerage

6th Plan

7th Plan

8th Plan

9th Plan

2014-20162017-20192020-2022

2023-2025

886.2
773.1
589.3
177.2

1,073.1
957.2
634.7
207.7

1,218.9
822.1
612.0
210.5

1,300.0
750.0
700.0
250.0

2,442.1

2,885.8

2,870.4

3,000.0

313.7
127.2
47.0
40.6

415.5
140.1
50.4
47.4

487.3
150.9
54.7
44.1

520.0
150.0
75.0
68.0

500.6

613.2

687.5

770.0

Gross floor area (tsubo)* 1 tsubo≈3.3m2

Completion(Expected)

Tokyo Mita Redevelopment Project (Mita 3- and 4-chome Project)

Minato Ward

60,400Feb 2023

Nishi-shinjuku 5-chome Kita Project

Shinjuku Ward

41,300Mar 2023

Sumitomo Fudosan Akihabara East Building

Taito Ward

3,000

Jan 2024

Sumitomo Fudosan Shinjuku Minamiguchi Building (Shinjuku Minamiguchi Project)

Shibuya Ward

7,200

Feb 2024

Nakano 2-chome Project

Nakano Ward

30,000Feb 2024

Roppongi Ekimae Project

Minato Ward

9,700

Oct 2024

Sumitomo Fudosan Osaki Twin Building West

Shinagawa Ward8,800

Oct 2024

Others33,900

9th Plan Total

194,300

ESG Management■Leasing(Billion yen)

Location(Tokyo)Business Review■Leasing+190

thousand
tsubo

1,500

Project name(Fiscal year ended/ending March 31)

1,700

2,000

Note: All figures are cumulative totals within the period of the plan.

Performance targets by segment+700

thousandtsubo(Thousand tsubo)

6th Plan 7th Plan 8th Plan 9th Plan
110

More than

2,500

The Sumitomo Realty Group’s
Value Creation+63.3+443.7

Pace of development■ Gross floor area
(Thousand tsubo) * 1 tsubo≈3.3m2

Overview of the NinthManagement Plan

¥ 3 trillion ( Vs. Eighth Management Plan: + ¥ 129.6 billion, + 5% )“+ ¥ 82.5 billion, + 12% )¥ 770.0 billion ((“+ ¥ 94.4 billion, + 14% )¥ 750.0 billion“+ ¥ 67.2 billion, + 16% )¥ 500.0 billion (Revenue from operations
Operating income
Ordinary profit
ProfitA Message from the Management

Earnings Targets

Note: All figures are cumulative totals within the period of the plan.

Consolidated Financial and Nonfinancial Data / Company Information

Strategies• In office building leasing, we will strive to maintain the profitability of existing buildings, while also securing

Leasing9earnings with the full-year contribution of buildings completed in the Eighth Management Plan (180 thousand
Aim to maintain the earnings foundation built
tsubo of gross floor area) and by starting operation of new buildings to be completed in the Ninththrough the Eighth Management Plan, and achieve
Management Plan (190 thousand tsubo of gross floor area)
profit growth for the fourth consecutive plan period • In the operation of commercial facilities, such as hotels, event halls, and retail facilities, we will recover the
profitability to pre-COVID-19 levels and anticipate a return to growth from the Tenth Management Plan onward• We will maintain our policy of controlling the pace of sales, pursuing profit rather than volume• Rising construction costs will need to be addressed, but the impact will be limited as construction has been
started on all projects to be delivered during the Ninth Management Plan
• We will maintain our policy of securing prime sites steadily amid continuing intensified competition for landacquisition

Sales

High level of profit of the Eighth Management Plan
to be maintained

Construction

In both remodeling (Shinchiku Sokkurisan) andcustom home construction, we will focus on• We will expand orders by proposing products that accurately respond to customer needs, such as a high level
controlling costs while enhancing quality, and aim to of environmental performance and disaster preparedness• We will appropriately address spikes in prices of wood and materials, and minimize the impact
achieve consecutive record profits by expandingordersBrokerage

We will further strengthen profitability as we aim to• We will strengthen Group collaboration and further pursue customer-oriented services to expand our market
achieve record profit in a management plan with asharesignificant increase

Integrated Report 2022

Tokyo Mita Redevelopment Project(Mita 3- and 4-chome Project)

Nishi-shinjuku 5-chome Kita Project

Nakano 2-chome Project

Sumitomo Realty & Development Co., Ltd.

10

Overview of the Ninth Management Plan (From Fiscal 2022 to Fiscal 2024)

Policy for Shareholder Returns *Revised on November 11, 2022

(1) We expect to be able to cover the additional investment of 700 billion yen in properties that are in process withincreases in cash flows from the leasing business*

Increase the pace of the annual dividend increase from 5 yen to 7 yen, due to the brightening outlook of the businessperformance

Capital investment and cash flows fromthe leasing business

Maintaining policy of prioritizing investment in leasing office assets, and “sustainable dividend increase” policy in line with profit
growthInterest-bearing debt and gross floor area for leasing(Billion yen)

6th Plan

7th Plan

8th Plan

9th Plan(422.3)(663.5)(805.3)(1,000.0)

Cash flows
from theleasingbusiness

409.8

534.6

644.5

700.0

Interestbearing debt

3,158.9

3,342.8

3,560.03,800.0

Gloss floor area
(Thousand tsubo)

Interest-bearing debt
(Billion yen)

* 1 tsubo≈3.3m2

2,000

5,000

Gross floorarea forleasing

4,000

3,000

Dividends and earnings per share
7th Plan

1,500Interestbearingdebt* Cash flows from the leasing business:
Operating income of the leasing business + Depreciation

Cash dividend per share and profit(Yen)Profit(Billion yen)

8th Plan

2017

2018

2019

2020

2021

2022

Dividends

24

27

30

35

40

45

Earnings per
share

218

253

275

298

298

317

Cash dividend per share
(Yen)

200

80

Profit reachingrecord highs+ 7 yenDividend increasing forthe 9th consecutive year

150

(Fiscal year ended March 31)

1,000
100

Profit
500

50

1,000

6
0

2001
2004
2007
2010
2013
2016
2019
2022
2025 (F)
1st Plan 2nd Plan 3rd Plan 4th Plan 5th Plan 6th Plan 7th Plan 8th Plan 9th Plan
(Years ended / ending March 31)

10

9

14

40

40

35
21 22

18 20

45

24

27

30
20

0

0

‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23(F)(Years ended / ending March 31)0(2) Introduction of green financing

Introduction of Numerical Targets regarding Strategic Shareholdings⃝ Obtain assessment of conformity with green finance from
JCR and R&I

Reduce the ratio of the book value of shares held to 10% or less of shareholders’ equity by fiscal 2030

Property name

Rank

Sumitomo Fudosan Shinjuku Grand Tower
Sumitomo Fudosan Osaki Garden Tower
Sumitomo Fudosan Shinjuku Garden Tower
Tokyo Nihombashi Tower
Sumitomo Fudosan Azabujuban Building
Sumitomo Fudosan Roppongi Grand Tower*
Sumitomo Fudosan Shinjuku Oak Tower
Sumitomo Fudosan Shinjuku Central Park Building
Shiodome Sumitomo Building
Sumitomo Fudosan Iidabashi First Tower
Sumitomo Fudosan Shibakoen First Building
Sumitomo Fudosan Shinjuku Central Park Tower
12 properties TOTAL

★★★★★
★★★★★
★★★★★
★★★★★
★★★★★
★★★★
★★★★
★★★★
★★★★
★★★★
★★★★
★★★★

Gross floor area
(Thousand tsubo)* 1 tsubo≈3.3m2

54
54
43
41
14
64
49
46
30
24
19
18
458

*Upgraded to five stars in July 2022.

The Company maintains that it can acquire and hold shares of business partners, etc., if it is deemed to contribute to the Company’s sustainable growth andmedium- to long-term enhancement of corporate value primarily from the standpoint of establishing and strengthening stable and long-standing business
relationships with them.
In this new management plan, the Company has decided to establish a numerical target for the amount of strategic shareholdings held, and certain rules. Asof the end of the previous fiscal year, the book value of listed shares held of 271.9 billion yen was approximately 18% of shareholders’ equity of 1,479.2 billion
yen (after subtracting net unrealized holding gains on securities, etc., from net assets). Going forward, we will reduce this ratio each year to 10% or less by fiscal
2030.

Book value of listed shares and shareholders’ equity■Book value of shares■Shareholders’ equity(Billion yen)

1,600
1,400

(Billion yen)Book valueof shares
Shareholders’equity

Ratio

1,200

6th Plan

7th Plan

8th Plan

2016

2019

2022

190.3 255.5 271.9
821.0 1,099.3 1,479.2
23%
23%
18%

Fiscal 2030
target40
35

10% or less

23%

1,000

●ratio
(%)

30

23%

25

18%

800

20

600

15

400

10%
or less200

11Integrated Report 2022

0
Sumitomo Fudosan
Shinjuku Grand Tower

Sumitomo Fudosan
Osaki Garden Tower

Sumitomo Fudosan
Shinjuku Garden Tower

Tokyo Nihombashi Tower

Sumitomo Fudosan
Azabujuban Building

Consolidated Financial and Nonfinancial Data / Company Information

Properties that have acquired ★5

ESG Management⃝ Principles for target properties during financing period• Disclose environmental performance information, including CO2
emissions and energy consumption• Maintain at least three stars in the DBJ Green Building
Certification• Prohibit the sale of the target properties since this financing
contributes to addressing social issues such as environmental
improvement (retain to maintain performance)

Target properties (As of March 31, 2022)

Business Review⃝ Procure ¥1 trillion in funds from green financing for 12
buildings, out of 35 buildings owned by the Company thathave already acquired a rating of three stars or above in DBJ
Green Building Certification (as of August 31, 2022)

Note: DBJ Green Building Certification is a certification
system established by the Development Bank ofJapan to evaluate real estate for its performance andinitiatives regarding “environmental and social
awareness” beyond its “profitability.”

The Sumitomo Realty Group’s
Value Creation

2,000

60

52
Cash dividend
per share

Overview of the NinthManagement Plan

Capitalinvestment

A Message from the Management

Financing Plans

‘14

‘15
6th Plan

‘16

‘17

‘18
7th Plan

‘19

‘20

‘21
8th Plan

‘22

‘31
(F)

10
5
0

(As of March 31)

Sumitomo Realty & Development Co., Ltd.

12

Overview of the Ninth Management Plan (From Fiscal 2022 to Fiscal 2024)

50% reduction in CO2 emissions (Scope 1, 2 and 3) by fiscal 2030 *Compared with fiscal 2014, immediately prior to the Paris Agreement

Our Initiatives for the Decarbonization Targets

Expressed support for 2050 carbon neutrality

Sumitomo Realty’s Green Power Plan

ZEH-M Oriented Design

Aim to achieve the target by linking decarbonization initiatives with business expansion

A system for offering three optimal green power plans to meetthe needs of each individual tenant company

First in industry to adopt ZEH-M Oriented as standard
while maintaining a high level of living comfort
In October 2021, as the first in theindustry, we announced to adopt “ZEH-M
Oriented” energy saving performance as
the standard specification for all
condominiums we design and develop
from that date forward, without reducing
the quality and living comfort.
With the improvement of thermal
insulation performance and theinstallation of energy-efficient equipment,
we realize both comfortable living for
Decarbonization design forresidents and contributions to
newly-built condominiums
decarbonization.
We also actively request cooperationfrom our partner construction companies“ZEH-M Oriented” as theto use green power at the construction
standard specification for newsites, and promote decarbonization
condominiums
across the entire value chain, that
extends from upstream to downstream,in our new condominium sales business.

⃝Further pursue the introduction of highly efficient facilities for new constructions and renovations, and reduce the Company’s CO2
emissions from energy consumption, etc., by 50% per unit of floor area
⃝Continue awareness-raising activities for energy saving towards tenants
2. Promote measures to reduce emissions in both upstream and downstream parts of main businesses⃝Support tenant companies to introduce green power for their office spaces in a building⃝Support to curb energy consumption during construction⃝Enhance high-performance designs (adopting ZEH*-M Oriented as the standard specification for condominiums)*ZEH=Net Zero Energy House⃝Promote provision of the new solar power generation service, “SUMIFU × ENEKARI,” which will contribute to decarbonization for
detached houses⃝Promote provision of Shinchiku Sokkurisan high thermal remodeling products⃝Support to promote spread of automobile charging stations
3. Aim to reduce total emissions by 10% in the Ninth Management Plan
⃝Reductions in the condominium business, which accounts for approximately 60% of total emissions, will contribute from the TenthManagement Plan onward, when the construction of properties with new design standards will be completed

CO2 emissions reduction targets for the Ninth Management Plan
Fiscal 2014
emissions(Thousand tons of CO2)

Custom homes and Shinchiku Sokkurisan remodeling
Office buildings
Other (head office and Group companies)
Non-condominium
Total

3,605

61%

1,591
689
55
2,336
5,940

27%
12%
1%
39%
100%

(Reference)
Fiscal 2019 emissions(Thousand tons of CO2)

—

3,540

(25)%
(10)%

1,565
1,366
66
2,997
6,537

Custom Homes

Shinchiku Sokkurisan Remodeling

Sumitomo-Fudosan-no-SUMICA, adopted ZEH as standard

High Thermal Insulation Remodeling Plan

Realizing both environmental performance that exceeds the latest
ZEH standards and high product quality
In April 2022, we launched the sale of“Sumitomo-Fudosan-no-SUMICA,” which
has high environmental performance as astandard specification, exceeding the ZEHlevel of “thermal insulation performance
grade 5” and “primary-energy consumption
grade 6,” newly established by the Ministryof Land, Infrastructure, Transport andTourism.
ZEH as a standard specification
By supplying environmentally friendly
Premium design
housing with high disaster prevention
High-grade equipment
capabilities, we continue to deliverHigh resiliencesustainable houses that meet the new
demands of the times.

Achieving thermal insulation performance equivalent to the energy
conservation standards for newly-built houses to suit customers’ lifestyles
In December 2021, we began offering
our high thermal insulation remodelingplan nationwide. The plan is available tothe entire house or even to individualrooms, enabling an increase in thethermal insulation performance only
where it is necessary.
Extending the useful lives by seismic
While 90% of existing housing stock
reinforcement and renovation
does not meet the current energy-saving
Reducing the environmental load bystandards, we promote thermal insulationhigh thermal insulation remodeling
improvements that suit customers’
lifestyles and deliver energy-saving and highly insulated housing where residents
can live in health and comfort.

Custom Homes and Shinchiku Sokkurisan Remodeling

SUMIFU × ENEKARI, solar power generation service
Providing environmentally friendly housing that also offers peace of mind at times of disaster,with solar power generation equipment and storage batteries at “zero initial cost”

SUMIFU × ENEKARI(1) Percentage of tenant office spaces to introduce green power

30%(2) Percentage of condominiums to be ZEH-M Oriented designs

100%

Solar power generation equipment and storage battery
installation service for new detached houses(3) Percentage of custom home orders to be ZEH homes (already standardized)

60%

Simply with a fixed monthly service fee ...

(4) Percentage of Shinchiku Sokkurisan remodeling orders to be high thermal insulation remodeling products (already introduced)

20%

Incur no initial costs for installing solar power
generation equipment and storage batteries

All of electric power used in the Group’s own offices to be green by obtaining environmental value generated by solar power
through “SUMIFU × ENEKARI”

100%

Receive support for equipment repairs andupgrades for the entire period of residency(5)

An industry-first service of offering thebenefits of solar power generation services
with peace of mind

Consolidated Financial and Nonfinancial Data / Company Information

Main numerical targets in each business*Z EH-M Oriented is an energy saving standard that requires to reduce annual
energy consumption of the entire residential building by 20% or more in total incomparison to current energy saving standards

ESG Management

Condominiums

Proportion

9th Planreduction target

Plan 1. Non-fossil fuel energy certificate
Issues non-fossil fuel energy certificate to treat as green power usage／
Achieve decarbonization with no hassle
Plan 2. Raw green power from newly-built power plant
Uses raw green power from newly-built power plant according to thecontract／Contribute directly to decarbonization in Japan
Plan 3. Green power from tenant-owned power plant
Issues non-fossil fuel energy certificate, which certifies the use of green
power generated at tenant-owned power plants／Use self-generated power

Business Review⃝Aim to reduce emissions by 25% except for condominiums

Given the situation in which eachcompany has different approaches tothe use of green power, first in Japan,
we have developed “Sumitomo Realty’s
Green Power Plan” for each individual
tenant, offering green power plans fortheir exclusively-owned areas to suit
their needs. This plan has been wellaccepted for accommodating a wide
range of needs, and it is making major
contributions to tenants’ decarbonization
efforts.

The Sumitomo Realty Group’s
Value Creation

Condominiums

Overview of the NinthManagement Plan

Office Buildings

1. Promote energy-saving in leasing business centered on office buildings and facility management businesses

A Message from the Management

Decarbonization Targets - Establishment of CO2 Emissions Reduction Targets (Scope 1, 2, and 3)

In cooperation with TEPCO Energy Partner, Inc., we provide the“SUMIFU x ENEKARI” service that installs solar power generationequipment and storage batteries with no burden on the customers incustom home construction and Shinchiku Sokkurisan remodelingbusinesses. Solar panels and storage batteries are installed at zero
initial cost, with support including equipment repairs and upgrades,
provided for the entire period of residency through a call center that
operates 24 hours a day, 365 days a year without any charge.
Through this service, we provide and promote environmentallyfriendly houses that enable the use of electricity even at times ofdisaster.
At the same time, by aggregating and utilizing part of theenvironmental value of the electricity generated by customers, thisservice contributes to the realization of a decarbonized society.

*For details of individual initiatives, please refer to the news releases and ESG reports on the Company website. https://www.sumitomo-rd.co.jp/english/sustainability/

13

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

14

The Sumitomo Realty Group’s Value Creation

About The Sumitomo Realty Group’s Value Creation
Four Material Issues (Materiality)

A Message from the Management

Disasterprevention
Environment

Even bettersocial assets

PeopleOverview of the NinthManagement Plan

The Sumitomo Realty Group has promoted business activities with its fundamental mission of “Create even better social assets for the
next generation,” based on Sumitomo’s business philosophy with a history of 430 years.
From the early 1970s, Sumitomo Realty has built up its portfolio of assets in the office building business, which is the foundation for its
growth. Along the way, in central Tokyo, where it is difficult to acquire large parcels of land, we have cultivated the capability of “LandInnovation,” which has enabled us to continue our business, primarily through redevelopment. At the same time, we have also built up
expertise in urban development that contributes to solving regional issues through our business. With these strengths as the source, we
aim to maximize our corporate value that creates both economic and social value.
As a comprehensive developer that provides such social assets, we have identified “Disaster Resistant,” “Environmentally Friendly,”“Together with the Community,” and “People Friendly” as our materiality in value creation and ESG management. In addition to officebuilding leasing, in each of our businesses including condominium sales, custom home construction, remodeling and brokerage, we have
employed our own ingenuity, built competitive business portfolios, and expanded our businesses.
By promoting business considering materiality, the Sumitomo Realty Group will continue to provide “New Value” to people’s daily lives
and aim to realize sustainable growth and development together with the city.

Community

Capability of“Land Innovation”

Competitive
Business
Portfolio

Value Creation
Process➡︎P.27

Enhancement ofCorporate Value throughFour Mainstay Businesses➡︎P.17➡︎P.23

Example:Shinchiku Sokkurisan
Remodeling➡︎P.19➡︎P.25

DisasterResistant
Environment
Environmentally
Friendly
Community
Together with
the Community

PeoplePeople Friendly

15

Integrated Report 2022

Create bases for a safe andsecure living environment
by developing disaster
resistant buildings andcitiesE liminating densely built-up area with wooden housesWidening narrow streets and separating pedestrians and vehicles
Adoption of seismic isolation and damping systems
Installation of emergency power generators
Providing a disaster-prevention base (e.g. shelter for stranded
commuters in the event of disaster)Create buildings and cities
that are comfortable andhave lower environmental
impact doption of highly-efficient energy-saving and water-savingAequipment
Promoting and preserving greenery in cities to ensurebiodiversity
Reducing waste emission
Requesting for supplier cooperation

Create and operatebuildings and cities aiming
for sustainable
development together withthe community

 rban development that coexists with the communityUAttracting a new population (community revitalization)
Creating liveliness through town management
Support for the formation of communities including mutual
assistance

Create buildings and cities
that are comfortable foreveryone
Develop human resources
to increase corporate value

 rban development based on universal designUPromoting barrier-free housingProtection of human rights
Promoting open and vigorous workplaceFostering diverse human resources

Sumitomo Realty & Development Co., Ltd.

Consolidated Financial and Nonfinancial Data / Company Information

Solving Social Issues
through Redevelopment

Disasterprevention

Examples of Initiatives

ESG Management

History of Value
Creation and Our
Strengths

Materiality

Business Review

Business Expansion

The Sumitomo Realty Group’s
Value Creation

Source of Value Creation

16

The Sumitomo Realty Group’s Value Creation

History of Value Creation and Our Strengths

Major Building Development Projects

1998
Shibuya Infoss Tower

1998
Chiyoda First Building
East

2000
Sumitomo Fudosan
Iidabashi First Building

2000
Sumitomo Fudosan
Shibakoen First Building

2002
Izumi Garden Tower

2003
Sumitomo Fudosan
Shinjuku Oak Tower

A comparison of the office stock of the world’s business centers indicates thatTokyo, with approximately 18 million tsubo in gross floor area, boasts the largest
office market, compared to London with approximately 6 million tsubo and New
York with approximately 13 million tsubo. Additionally, Tokyo’s market is uniqueamong the world’s market in that the major domestic companies of all industries
are headquartered in Tokyo and that it is backed by a pool of diverse tenants. We
have consistently expanded our office building leasing business for the past 50
years, achieving sustainable growth, and establishing a competitive advantage
with a wide-ranging portfolio of over 230 buildings in the major business areasof central Tokyo.

Gross
Floor Area

Ordinary
Profit(1,000 m2)(Billion yen)

5,000

300

250

Overview of the NinthManagement Plan

1974
Shinjuku Sumitomo
Building

The Tokyo office building market: the world’s largest
market backed by a pool of diverse tenants

A Message from the Management

The real estate leasing business primarily involving office buildings in central Tokyo has been the driving force of our growth to date. Accounting for nearly
70% of the Company’s operating income overall, the leasing business is clearly the main pillar of the Company’s operation and the core of its corporate value.
We have been expanding our business platform by promoting the development of office buildings with a specific focus on central Tokyo over roughly
half a century since the early 1970s. Despite various changes in the business environment, we have consistently persisted with respect to unwaveringly
adhering to the management policies based on a long-term perspective, namely that the Company does not pursue temporary gains by selling assets; theCompany holds ownerships of the buildings constructed on sites it has developed; and that the Company generates stable leasing over the long term byowning and leasing such buildings. As a result, we have established a solid earnings base that is resistant to the fluctuation of economic trends.

4,000

200

2004
Chiyoda First BuildingWest

The Sumitomo Realty Group’s
Value Creation

3,000

150

2004
Shiodome Sumitomo
Building

2005
Tokyo Shiodome
Building

2006
Sumitomo
FudosanMita Twin
Building West

2009
Sumitomo
FudosanAobadai Tower

2010
Shinjuku Central Park
City

2010
Sumitomo Fudosan
Iidabashi First Tower

2011
Sumitomo Fudosan
Shinjuku Grand Tower

2012
Sumitomo Fudosan
Shibuya Garden Tower

2,000

Business Review

100

2015
Tokyo Nihombashi
Tower

2016
Sumitomo Fudosan
Shinjuku Garden Tower

2018
Sumitomo Fudosan
Osaki Garden Tower

2019
Sumitomo Fudosan
Shinjuku Central Park
Tower

2019
Sumitomo Fudosan
Akihabara First
Building

2020
Sumitomo Fudosan
Kojimachi Garden
Tower

1,000
50

ESG Management

2016
Sumitomo Fudosan
Roppongi Grand
Tower

Ordinary Profit / Gross Floor Area
Ordinary Profit

Gross Floor Area

(Years ended / ending March 31)*Non-consolidated figures until 1977

17

9th Plan
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
(Forecast)

0

0

2030

The source of our corporate value creation

The basis for our value creation model

Capability of “Land Innovation”“Redevelopment” for the Community

Acquisition of development sites is the most important aspect of the development of buildings. We have been redeveloping sites by purchasing and assemblingsmall parcels of subdivided land in central Tokyo where large parcels of land are rare, and coordinating the rights and interests of landowners. Today, thecapability of “Land Innovation” have become our greatest strength and the source of corporate value creation. Capitalizing on the capability of “LandInnovation” as well as the management foundation and other strengths we have cultivated so far, we intend to further expand our profitability and increase
corporate value.

Through redevelopment, we have been addressing issues facing the community by improving the disaster preparedness of areas that are at risk such as densely
built-up areas with wooden houses still seen in Tokyo’s urban areas and providing safe transportation infrastructure. Our track record of development has
resulted in deepened relationship of trust with landowners and local government officials, ensuring our constant participation in redevelopment projects. Thus,
redevelopment is the basis of our value creation model that expands profits and increases our corporate value.

Integrated Report 2022

Consolidated Financial and Nonfinancial Data / Company Information

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Sumitomo Realty & Development Co., Ltd.

18

The Sumitomo Realty Group’s Value Creation

Solving Social Issues through Redevelopment
Sustainable urban development to improve disaster preparedness andrevitalize the community
A Message from the Management

1. Intensive land use of areas with densely built-up wooden houses in central Tokyo
Example｜Iidabashi Area

19

Integrated Report 2022

Building

X

Building

A
D
B

C
C

B
Land

A

D
B

D

Land

C
A

B

C

D

Before redevelopment

After redevelopment

ABCD: Rights holders

X: DeveloperX* There are two types of urban-redevelopment projects: The Type 1 Urban-Redevelopment Project based on the right conversion method
without land acquisition and the Type 2 Urban-Redevelopment Project that involves land acquisition. Type 2 Urban-Redevelopment Projects
are permitted in urgent situations such as for areas where disasters are imminent and are executed by local governments, rather than
individuals or associations, over a relatively short period of time.

March 2000

April 2010

Gross floor area
(approx.)

62,900m2

78,400m2

Purposes

Office, residence, retail

Office, residence, retail, multipurpose hall

Before development of Sumitomo Fudosan Iidabashi First Building

Before development of Sumitomo Fudosan Iidabashi First Tower

Two sites after development

Redevelopment under the Urban Renewal Act - Major projects completed and planned
Project area

Main building

Location

Shukugawa Station Front No.1
Nishi-kanda 3-chome North-east
Nakanosakaue Chuo 1-chome West
Koraku 2-chome East
Roppongi 1-chome West
Nishi-shinjuku 6-chome South
Nishi-kanda 3-chome North-west
Mita Koyamacho East
Osaki Station West Gate Central
Nishi-shinjuku 6-chome West No.6
Kakyoin 1-chome No.1
Koraku 2-chome West
Hachioji Station South Gate
Nishi-shinjuku 8-chome Naruko
Ageo Nakasendo East
Asahi-dori 4-chome
Hiroshima Station South Gate B Block
Roppongi 3-chome East
Kokubunji Station North Gate
Nishi-shinagawa 1-chomeOi 1-chome South No.1
Kanda-neribeicho
Tokorozawa Station West Gate North
Musashi-koyama Ekimae-dori
Mita 3- and 4-chome
Nishi-shinjuku 5-chome North
Nakano 2-chome

Shukugawa Green Town
Chiyoda First Building East
Sumitomo Nakanosakaue Building
Sumitomo Fudosan Iidabashi First Building
Izumi Garden Tower
Sumitomo Fudosan Shinjuku Oak Tower
Chiyoda First Building West
City Tower Azabujuban
Osaki West City Towers
Central Park Tower La Tour Shinjuku
City Tower Sendai Kakyoin
Sumitomo Fudosan Iidabashi First Tower
Southern Sky Tower Hachioji
Sumitomo Fudosan Shinjuku Grand Tower
City Tower Ageo Ekimae
City Tower Kobe Sannomiya
City Tower Hiroshima
Sumitomo Fudosan Roppongi Grand Tower
City Tower Kokubunji The Twin
Sumitomo Fudosan Osaki Garden Tower
City Tower Oimachi
Sumitomo Fudosan Akihabara Ekimae Building
City Tower Tokorozawa Classy
City Tower Musashi-koyama(Tentative name) Tokyo Mita Redevelopment Project(Tentative name) Nishi-shinjuku 5-chome Kita Project(Tentative name) Nakano 2-chome Project

Nishinomiya, Hyogo
Chiyoda Ward, Tokyo
Nakano Ward, Tokyo
Bunkyo Ward, Tokyo
Minato Ward, Tokyo
Shinjuku Ward, Tokyo
Chiyoda Ward, Tokyo
Minato Ward, Tokyo
Shinagawa Ward, Tokyo
Shinjuku Ward, Tokyo
Sendai, Miyagi
Bunkyo Ward, Tokyo
Hachioji, Tokyo
Shinjuku Ward, Tokyo
Ageo, Saitama
Kobe, Hyogo
Hiroshima, Hiroshima
Minato Ward, Tokyo
Kokubunji, Tokyo
Shinagawa Ward, Tokyo
Shinagawa Ward, Tokyo
Chiyoda Ward, Tokyo
Tokorozawa, Saitama
Shinagawa Ward, Tokyo
Minato Ward, Tokyo
Shinjuku Ward, Tokyo
Nakano Ward, Tokyo

Gross floor area
m2 (approx.)

33,40038,80036,60062,900208,400
163,100
63,40064,600129,100
153,500
25,40078,40099,800179,800
39,90092,900125,500
210,500
93,200222,000
60,60030,80038,50053,500228,800
136,600
99,000(As of March 31, 2022)
Main purposes

Completion

Residence・Retail・Office
Office・Residence・Retail
Office・Residence・Retail
Office・Residence・Retail
Office・Residence・Retail
Office・Residence・Retail
Office・Residence・RetailResidence
Residence・Office・RetailResidence・Office・Retail・Multipurpose hall
Residence・Retail・Office
Office・Residence・Retail・Multipurpose hall
Residence・Office・Retail
Office・Residence・Retail・Multipurpose hall
Residence・Office・RetailResidence・Hotel・RetailResidence・Retail・Office
Office・Residence・Retail・Multipurpose hall
Residence・Retail・Office
Office・Residence・RetailResidence・Retail
Office・Residence・RetailResidence・RetailResidence・Retail
Office・Residence・RetailResidence・Office・Retail
Office・Residence・RetailNov 1977
Oct 1998
Apr 1999
Mar 2000
Oct 2002
Nov 2002
Jan 2004
May 2009
Aug 2009
Mar 2010
Mar 2010
Apr 2010
Nov 2010
Dec 2011
Dec 2012
Mar 2013
Aug 2016
Oct 2016
Mar 2018
Aug 2018
Jul 2019
Aug 2019
May 2021
Jun 2021
Feb 2023 (expected)
Mar 2023 (expected)
Feb 2024 (expected)

Sumitomo Realty & Development Co., Ltd.

Consolidated Financial and Nonfinancial Data / Company Information

The Urban Renewal Act of Japan was enacted in1969 to ensure the effective utilization of landthrough the improvement of the densely populated
urban areas in an integrated and comprehensive
manner. Through the communal use of small parcelsof land and the development of public facilities suchas parks and roads, it enables buildings to be rebuilt
into high-rise structures, significantly increasing thefloor area. The landowners acquire floor space in theredeveloped building commensurate with the valueof the land or building prior to redevelopment andthe developer (the Company) covers the projectfunds including the construction costs and acquires
the remaining floor space.

Completion

ESG Management

Redevelopment under the Urban Renewal Act

Sumitomo Fudosan
Iidabashi First Tower

Business Review

We have been working on redevelopment pursuant to the Urban Renewal Act that requires the formation of a consensus among multiple landowners
and consultations with the authorities, in the areas of central Tokyo that had high potential but had issues such as low utilization and high disaster risks.
In the redevelopment, we have improved the city infrastructure including disaster-prevention functions through joint projects aiming at intensive land use
encompassing the area, as well as eliminating densely built-up areas with wooden houses and widening narrow streets. In addition, we have promoted
the creation of new value by sustainable urban development, contributing to the revitalization of the community.

Sumitomo Fudosan
Iidabashi First Building

The Sumitomo Realty Group’s
Value Creation

Unlike other major developers in Japan, we started with a mere three buildings in 1949 following the breakup of the conglomerates and it was only fromthe 1970s that we made our full entry into the business of developing office buildings in central Tokyo. Therefore, instead of reconstructing buildings
we owned or purchasing sites through competitive bidding, we focused on a redevelopment method by integrating multiple small parcels of land into alarger scale through persistent efforts, to maximize the site value. In this way, we continued developing superior assets, expanding our business platform
and increasing our corporate value.

Main building

Overview of the NinthManagement Plan

In some areas of central Tokyo where old wooden houses are densely built, underutilized, and at risk of disasters such as the spread of fire, we are promoting
urban redevelopment that takes advantage of their potential for advanced use, improves disaster preparedness by making buildings fireproof and earthquake
resistant, and revitalizes the community.
In the case of the Iidabashi area, where wooden houses were densely built-up in central Tokyo, we promoted a successive redevelopment project in theneighboring block, following the momentum created by the revitalization of the preceding project. Each project has been designed to take advantage of its
location as the city center, to create a mixed-use complex consisting of offices at its core, residences, retail facilities and multipurpose halls, as well as to improvedisaster preparedness by widening and improving surrounding roads, thereby widely attracting newworkers, residents and visitors, making communities lively day and night.

20

The Sumitomo Realty Group’s Value Creation

3. Striving for continuous community revitalization

Example｜Osaki Area

Example｜Roppongi Area

Most redevelopment sites have their own particular set of challenges. We work to build a consensus with landowners, residents in the vicinity, and the local
authorities to solve those challenges with the local characteristics in mind and to develop functions of the redevelopment sites in line with the area growth.
In the case of the Osaki area, we built an office building and a condominium as well as created spacious green open public spaces covering some 8,000m2,
in order to formulate a complex of urban area and develop urban functions around the station.
The redevelopment project improved the disaster preparedness of the community by eliminating a densely built-up area with wooden houses, integrating thosehouses into a large fire-resistant building, and developing the surrounding area such as widening narrow roads. In addition, it has also contributed to promoting
universal design of the area by eliminating a large difference in elevation, and providing open spaces for community building and as a disaster-prevention base.

In addition to solving local challenges by developing robust buildings and improving the surrounding roads, we believe that continuously revitalizing thecommunity and maintaining the connections with surrounding communities are also important in urban development. With this in mind, we also focus on area
management such as holding events at its public open spaces for the community to interact.
In the Roppongi area, at the IZUMI GARDEN large urban block covering an area of approximately 6 hectares lying across both sides of the Roppongi-itchome
Station, we promote area management that contributes to the sustainable value creation of the cities, including seasonal entertainment that creates liveliness, aswell as events aimed at raising awareness of disaster preparation and fostering a sense of mutual aid in collaboration with the local communities, tenantcompanies, fire departments, and others.

A Message from the Management

2. Solving various challenges the community faces

Overview of the NinthManagement Plan

Sumitomo Fudosan Osaki Garden Tower
Office, retail, etc.

Main building

Izumi Garden Tower

Site area(30,080m2)

19,927m2

Completion

October 2002

Gross floor area
(219,565m2)

178,141m2

Gross floor area
(approx.)

208,400m2

Floor area ratio

Approx. 780％

PurposesNo. of floors

24 above ground, 2 below ground,2 rooftop floors

Office, residence, hotel, retail, museum,multipurpose hall

Sumitomo Fudosan
Roppongi Grand Tower

The Sumitomo Realty Group’s
Value Creation

Principal purpose

Before development of Izumi Garden Tower

Principal purpose

Residence (423 units), office, etc.

Completion

October 2016

Site area(30,080m2)

10,153m2

210,500m2

Gross floor area
(219,565m2)

Gross floor area
(approx.)

41,424m

Purposes

Office, residence, retail, multipurpose hallFloor area ratio

Approx. 250％

No. of floors

22 above ground, 2 below ground,1 rooftop floor

2

1

After development

City development to tackle the challenges facing
the community
1 Enhancement of disaster preparedness by eliminating the densely

Before development of Sumitomo
Fudosan Roppongi Grand Tower

After development

Examples of area management to promote revitalization of local community formation
Events held in the pastbuilt-up area with wooden houses and narrow streets
The site used to be a densely built-up area with wooden houses exposed to highrisk of fire and the streets were narrow, making it difficult for emergency vehicles
to enter the area. The redevelopment realized a safe and secure community
through improvement of roads around the site to ensure safety for thepedestrians and to allow the smooth flow of vehicles as well as fireproofing thebuildings.

ESG Management

2

Before development ofOsaki Garden City

Business Review

Osaki Garden Residence

Main building

3

difference in elevation
The site used to have a difference in elevation as large as eight meters andexperienced land collapse. The project created a landscape design with gentle
undulations and eliminated the large difference in elevation. It also built stairs
and installed elevators connecting the area with the surrounding downtown area
and the station to allow everyone to move easily.

Cherry Blossom Festival

Cherry Blossom Festival - Cherry Trees IlluminatedChristmas Illumination

Disaster-Prevention Fair

Summer Festival

Marche’ Event

Consolidated Financial and Nonfinancial Data / Company Information

2 Promotion of universal design of the area by eliminating a large

3 Creating open space for interaction among the community and as adisaster-prevention base
The area used to be an industrial area with little greenery and lacked places forpeople to gather due to a densely built-up area with housing. Through thisredevelopment, spacious green open public spaces covering some 8,000m2 werecreated, encouraging interaction among the people and bringing liveliness in thecommunity, as well as serving as a disaster-prevention base in the event of an
emergency.

21

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

22

The Sumitomo Realty Group’s Value Creation

Enhancement of Corporate Value through Four
Mainstay Businesses

1997

Opened Hotel Villa Fontaine
Developed with the concept of “high-grade economy,” challenging thenorms of business hotels of the time2000

Launched “La Tour” series of premium residence

2002

Opened Izumi Garden Gallery
Began full-scale operation of event hall business

2020

Fully opened Ariake Garden, a large-scale complex

BeforeHotel “Villa Fontaine”

1976

Completed Yono House, the first high-rise condominium that adopted
integrated design in Japan

2007

Completed the World City Towers, large-scale condominiums for inner-city
living (over 2,000 units, the largest in Japan at the time)

2011

Opened “Grand Mansion Gallery”

2014 - 2019

Number of condominium units brought to market over the full year was
the highest in Japan for the sixth consecutive year

Integrated Report 2022

1995

Commenced American Comfort custom home construction business

Commenced Shinchiku Sokkurisan condominium remodeling business

2003

Launched J·URBAN urban-style housing series

2000

Expanded its business to 46 prefectures throughout Japan (excluding Okinawa)2021

Launched “SUMIFU x ENEKARI,” new solar power generation service

2021

Achieved cumulative total of 150,000 units contracted in
Shinchiku Sokkurisan remodeling business

2022

Launched “Sumitomo-Fudosan-no-SUMICA,” adopted ZEH as thestandard specification

Premium residence “La Tour”▶ P.45

Izumi Garden Tower▶ P.39Sumitomo Real Estate Sales entered the existing housing brokeragebusiness in 1979. Committed to store development of the directly operated
brokerage offices, we havebuilt up a finely tuned andcommunity-based sales
structure under the
principle of “CustomerFirst.” Our brokeragebusiness has continued to

grow while responding to the needs of the times, including opening
brokerage offices dedicated to condominiums, and the introduction of ahighly transparent and fair brokerage system that incorporates digitaltechnologies.
1975

Established Sumitomo Real Estate Sales Co., Ltd.

2001

The number of STEP brokerage offices exceeded 200

2019

Opened “Mansion Plaza” brokerage offices

2021

Launched real estate DX service “STEP Auctions”

Historical operating income(Billion yen)
250

200
The Global
Financial Crisis

150

City Towers Tokyo Bay

The COVID-19
Pandemic

Sales
Construction
Brokerage
OthersConsolidated Financial and Nonfinancial Data / Company Information

23

Commenced Shinchiku Sokkurisan remodeling business

1998

ESG Management

Since its Launch in the 1960s, we have established a reputation as apioneer in condominium sales and leveraged our expertise developed in theoffice building leasing business by integrating multiple small parcels of land
into a larger scale. Since the 2000s, we have increased our share of supply
in industry and expanded our business.
We have increased our competitiveness in this market with a sales policythat is not insistent on selling out all the units on the sale-date, our unique“Dynamic Panorama Windows” that enable residents to enjoy the view,which is an appeal of high-rise condominiums, Grand Mansion Gallery, ageneral exhibition hall, that introduces all of our available properties in
one place, Remote Condominium Sales service that offers online property
showings, and other customer-first unique plans and services.

Introduced “Remote Condominium Sales”

1996

Brokerage — Sumitomo Real Estate Sales Co., Ltd.

Sales — Condominium sales

2020

After

Business Review(As of March 2022)

After housing development in the United States in the 1970s, we started
full-scale operation in Japan in 1982. We have increased our market shareespecially in metropolitan areas with the competitiveness of the productline-up which stands out for the urban modern exterior design and highgrade facilities. In May 2022, we have launched a new product with thelatest ZEH standard as its standard specification, and are focusing ourefforts on the promotion of decarbonization, which is a social challenge.

▶ P.33

Multipurpose hall “Bellesalle”• Rental Apartments	Owning and operating a total of over 5,400 units
Operating a total of 18 hotels / 3,493 rooms• Hotels• Multipurpose Halls
Operating over 30 facilities• Retail Facilities	Sumitomo Fudosan Shopping City Ariake Garden withover 200 shops▶ P.43The Sumitomo Realty Group’s
Value Creation

In our leasing business, since the early 1970s, we have built up our portfolio
centered on office buildings in Tokyo, and have pursued urban development
by positioning office buildings at its core. In the urban development, we havedeveloped rental apartments, hotels, multipurpose halls, retail facilities, andother facilities in addition to office buildings, for multi-purpose use with theaim of revitalization of local communities through improved convenience andcreation of liveliness, reflecting the characteristics of the areas. By directly
managing and operating these businesses, it has contributed to enhancing
the value of the area and to the expansion of the Company’s earnings base.

The Shinchiku Sokkurisan remodeling business was launched a year
after the Great Hanshin-Awaji Earthquake, the devastating earthquake
which happened in 1995. It has been well-received by customers witha groundbreaking business model such as seismic reinforcement as astandard specification and clear fixed-price system, providing safe andsecure housing at 50-70% of the price for rebuilding. Having expanded
the business nationwide, a cumulative total of units contracted exceeded
150,000 over a period of 25 years.

Construction — Custom homes

Overview of the NinthManagement Plan

Leasing — Affiliated businesses (Rental apartments, hotels, multipurpose halls, etc.)

Construction — Shinchiku Sokkurisan remodeling ▶ P.41

A Message from the Management

With our capability of “Land Innovation” as the driving force, in addition to establishing the foundations for sustained growth centered on the revenue
from our office building leasing business, we operate leasing-related businesses such as rental apartments and hotels, and the real estate-related
businesses such as condominium sales, custom home construction, remodeling and brokerage, which contribute to solving local and social issues as acomprehensive developer.
Not only in office building business but also in these other businesses, we have expanded our business by creating new and highly competitive
products and services based on unique innovations we developed with new ideas, not bound by industry customs and common sense.
Launched as a new business in 1996 after the bursting of the bubble economy, Shinchiku Sokkurisan full remodeling system instead of rebuilding
became a cutting-edge business model never seen in the industry before. Shinchiku Sokkurisan has been supported by many customers for not only the
improvement of disaster preparedness but also its clear fixed-price system and environmental performance, and has grown into a leading brand in theindustry.

100

Leasing500World City Towers

City Towers Tokyo Bay
Entrance hall

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
(Forecast)(Years ended / ending March 31)
1st Plan

2nd Plan

3rd Plan

4th Plan

5th Plan

6th Plan

7th Plan

8th Plan

9th Plan

Sumitomo Realty & Development Co., Ltd.

24

The Sumitomo Realty Group’s Value Creation

Example: Shinchiku Sokkurisan Remodeling
Extending useful life and reducing environmental burden by improving
functionality through renovation❶ Insufficient earthquake resistance andthermal insulation❷ Environmental impact from waste
generated when rebuilding❸ Insufficient thermal insulation causing increased
energy consumption

Throughthe Shinchiku
Sokkurisan
remodeling●

Realizing extended useful life
Earthquake-proofing and seismic retrofitting
Revised floor plans to suit lifestyles●

Reduced environmental impact

Reduction of materials used and waste generated
	Installation of solar power generator and reduction of energy
consumption by improving thermal insulation performance

78.8

80

55.9

60
40

38.2

20
0

Japan

US

UK

Source: H ousing Economics Data: International
Comparison of Average Age of Houses
Deregistered (2021) , Ministry of Land,
Infrastructure, Transport and Tourism.

Social issues concerning houses in Japan

Shinchiku Sokkurisan initiatives

1 Earthquake-resistance of housing stock

1 Extending the useful lives of houses through seismic reinforcement
and revision of floor plans*Approx.

From 1982
onwardWith earthquake
resistance
6.1 million units*

With earthquake
resistance
40.5 million units*1981 or earlier

2 E nergy-saving standards (thermal insulation performance)of housing stock (about 50 million units)

11%

30%

Not meetingthe 1980
standards*2(no thermal
insulation, etc.)

50
million 22%
units

Current
standards

only 11%1992
standards *1

37%1980 standards

Shinchiku Sokkurisan offers proposals mainly for seismic reinforcement work that meets thegovernment’s safety standards, based on earthquake resistance diagnosis. Moreover, in preparation
for increasingly severe earthquakes, we have developed a new proprietary method and provide
optimal seismic reinforcement and damping plans for houses of all ages.
In addition to functional improvements, we offer solutions reflecting customers’ lifestyles
such as changes in family structure and aging by layout changes, extensions, downsizing
and transforming the house into a two-family house. In this way, we are promoting
extended useful lives of houses without rebuilding.

2 Improvement of thermal insulation of existing houses andpromotion of installation of solar power generation systems
We began accepting orders for a high thermal insulation remodeling plan that enables
existing houses with low thermal insulation performance to achieve a thermal insulation
performance equivalent to the energy conservation standards for newly-built houses. This planis available to the entire house or even to just individual rooms, enabling an increase in thethermal insulation performance only where it is necessary. In addition, we have begun offering“SUMIFU x ENEKARI” to install solar power generation equipment at zero initial cost,
together with seismic reinforcement. Through these new services, we will further contribute to
the realization of a carbon neutral society by reducing CO2 emissions from housing.

ESG Management

Many houses were destroyed and many precious lives were lost in
the Great Hanshin-Awaji Earthquake of 1995. Subsequent research
revealed that many old houses were left without rebuilding, despite
having structural problems, due to various reasons including costs.
The Shinchiku Sokkurisan remodeling was born from the desire to“find a way to make such houses earthquake-resistant at areasonable price without rebuilding in order to save
precious lives.” As such, it offers a full lineup mainly from “fullremodeling” which transforms a house into a safe/secure andearthquake-resistant one while utilizing the existing structuralelements, to “partial reform,” according to the customers’ various
needs and budget.

100

Business Review

The desire for safe and secure housing(Years)The Sumitomo Realty Group’s
Value Creation

The Shinchiku Sokkurisan remodeling business was launched after theGreat Hanshin-Awaji Earthquake of 1995 with the desire to renovate
existing houses to make them earthquake resistant without the high costof rebuilding. Based on our concept of safe and secure housing, it boasts
the industry’s foremost track record for large-scale remodeling, featuring
seismic reinforcement work and a clear fixed-price system. It marked its
25th anniversary this year, since its launch in 1996, and the cumulative
total of units contracted exceeded 150,000 units (as of June 30, 2021).
Today, Shinchiku Sokkurisan has become so popular across the nationthat it is a brand synonymous with full remodeling. By leaving main
structural components intact and improving housing functionality
without rebuilding, the Shinchiku Sokkurisan remodeling contributes tonot only extending the useful lives of existing houses, but also toaddressing the social issues concerning houses in Japan by being
environmentally friendly, i.e., minimizing industrial waste, CO2 emissions,and waste of resources.

International comparison of the averageage of houses

Overview of the NinthManagement Plan

Although the penetration rate of earthquake resistant houses in Japan is increasing every year, there arestill many housing stocks with low earthquake resistance. In addition, the rebuilding cycle in Japan is shortcompared with that in Europe and the U.S., and waste from the demolition of houses accounts for a large
share of waste discharged by the construction industry. There are growing calls for shifting to a stock-type
society by extending the useful life of housing.
Moreover, although discussions have been carried out on various topics for newly constructed detachedhouses, such as improving their environmental performance toward the realization of carbon neutrality
in 2050, little progress has been made toward promoting energy savings or decarbonization for existinghouses, which far outnumber new houses (there are currently roughly 50 million existing houses). As such,dealing with existing detached houses, which account for a large percentage of Japanese housing stock,
will be essential for Japan’s decarbonization.

Without
earthquake
resistance
7.0 million units*

A Message from the Management

Social issues concerning houses in Japan

3 Reduction of environmental load through waste reduction*1: Standard established in 1992, pursuant to the Act on
Rationalizing Energy Use*2: Standard established in 1980, pursuant to the Act on
Rationalizing Energy Use
3 Breakdown of construction waste

Consolidated Financial and Nonfinancial Data / Company Information

Shinchiku Sokkurisan remodeling contributes to the reduction of the environmental burden
through seismic reinforcement while the principal structural elements of the house areretained, thus minimizing industrial waste discharge, CO2 emission, and waste of resources,
compared to the demolition involved in building a new house.
(Thousand tons)

Demolition

570

15,120

Repair

7,370
7,750

House demolition

Total:(51% of the demolition)

Building work/
Renovation
Private sector civilengineering

After
A house destroyed in the Great Hanshin-Awaji Earthquake, photographedby Professor Kenji Miyazawa

Before25

Integrated Report 2022

Other demolition

12,95072,700 40,540

3,520

Public sector
civil engineering

Release of results of joint research on the
decarbonization effect of building renovation
Reducing CO2 emissions by 47% compared with rebuilding
while improving the building performanceWith the aim of establishing a new environmental evaluation method forbuilding renovation, we started a joint research with The University ofTokyo and Musashino University in December 2021. The research results found that for detached houses
in which full renovation was performed and significantly improved building performance (earthquake
resistance, thermal insulation performance, etc.), the reuse of foundations, main frames, etc. dramaticallyreduced the amount of new materials used compared to rebuilding the entire building, and cut CO2
emissions by 47%. We will continue this research with the aim of further contributing to decarbonization
and realization of a stock-type society.

Sources: 1. Progress of Earthquake Proofing of Houses (2018) , Ministry of Land, Infrastructure, Transport and Tourism.
2. Housing Economics Data: Performance of Housing Stock (Barrier-Free and Energy-Saving) (2021) , Ministry of Land, Infrastructure, Transport and Tourism.
3. S tatus of Industrial Waste Associated with Demolition of Houses (36th Meeting of the Housing and Building Land Committee of the Panel on Infrastructure Development) ,Ministry of Land, Infrastructure, Transport and Tourism.

Sumitomo Realty & Development Co., Ltd.

26

The Sumitomo Realty Group’s Value Creation

Value Creation Process

Disaster ResistantEnvironmentally Friendly

Create bases for a safe and secure living
environment by developing disaster resistantbuildings and cities

Create buildings and cities that are
comfortable and have lower
environmental impact

Together with theCommunity

A Message from the Management

Four material issues (Materiality) to “Create even better social assets for the next generation”
People Friendly

Create and operate buildings and cities
aiming for sustainable development
together with the community

Create buildings and cities that are
comfortable for everyone
Develop human resources to increase corporate value

Va l u e c re a t i o n t h ro u g h o u r b u s i n e s sOverview of the NinthManagement Plan

Condominiums

Shinchiku Sokkurisan Remodeling

Custom Homes

Real Estate Brokerage

The Sumitomo Realty Group’s
Value Creation

Redevelopment

OUTPUT◦ Sustainable urban development◦ P roduct planning with long-lasting appeal (long-selling products)◦ Supply of disaster-resistant office and housing◦ High level of energy-saving performance and operation
with external certifications◦ Promotion of widespread use of green power◦ Sustained growth and record-high profits◦ Sustainable dividend increase and shareholder returns

INPUT

Major Management Resources

Social value

Creation ofhigh value-added assets

Creation of “New Value”

Expansion of a profitable, stable, andsustainable earnings baseCreation of sustainable assets

Solving social issues

OUTCOMEetc.

◦ Revitalization and development of the community◦ Improvement of working and living environments◦ Extension of the life of stocks, and resource saving/recycling◦ Contribution to SDGs

Social Issues◦ Climate Change◦ Natural disasters◦ Population decline◦ Declining birthrate and aging population◦ Diversification of stakeholder needs
etc.

Consolidated Financial and Nonfinancial Data / Company Information◦ Improvement of functionality and resilience of cities◦ Promotion of decarbonization◦ Promotion of urban greening◦ Promotion of universal design in cities

Retail Facilities
Multipurpose Halls
HotelsESG Management◦ Sumitomo’s Business Philosophy andManagement Philosophy◦ Capability of “Land Innovation” forsecuring land
◦ Over 230 office buildings in Tokyo◦ Stable and high-earnings base◦ Well-balanced business structure◦ Workforce with diverse experiences andskills◦ Extensive customer base

Economic value

Business Review

Office Buildings

Achieve sustainable growth together with the city

27

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

28

Business Review
Overview of Each Segment

1｜ Overview of Consolidated Results

Revenue from operations

Return to record-high ordinary profit, and record-high profit for the ninth consecutive year
The financial results for the fiscal year under review are as shown in the table below. Revenue from operations, operating income, ordinary profit and profit all
increased from the previous year. Ordinary profit returned to a record high as the decline in profit caused by COVID-19 pandemic only lasted for one year, while
profit attributable to owners of parent achieved a record high for the ninth consecutive year.

YoY

FY2022 (F)Leasing

425.0

+26.8

430.0

+4.9

Sales

233.7

(29.6)

220.0

Construction

204.3

+15.6

Brokerage

73.4

+7.6

FY2021YoY

FY2022 (F)Leasing

162.6

+7.4

165.0

+2.3

(13.7)

Sales

50.4

(3.4)

50.0

(0.4)

220.0

+15.6

Construction

18.5

+2.9

21.0

+2.4

78.0

+4.5

Brokerage

18.0

+6.5

20.0

+1.9

Percentage of
operating income

FY2021(Apr 1, 2021 Mar 31, 2022)

Revenue from operations

917.4

939.4

+21.9

Operating income

219.2

233.8

+14.6

Ordinary profit

209.9

225.1

+15.1

Profit attributable to owners of parent

141.3

150.4

+9.0

45%

YoY
change65%(Apr 1, 2022 –Mar 31, 2023)

Revenue from operations

939.4

950.0

+10.5

Operating income

233.8

240.0

+6.1

Ordinary profit

225.1

235.0

+9.8

Profit attributable to owners of parent

150.4

160.0

+9.5

YoY
change3｜ Progress of the Eighth Management Plan

(Billion yen)
8th Plan Results

Vs.
7th Plan

FY2020

FY2021(Three-year cumulative)

2,885.8

1,013.5

917.4

939.4

2,870.4(15.3)

3,100.0

Operating income

613.2

234.3

219.2

233.8

687.5

+ 74.3740.0

Ordinary profit

557.8

220.5

209.9

225.1

655.6

+ 97.8700.0

Revenue from operations

29

Integrated Report 2022

160
120

200

80

100

40
0

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22
(F)

139.3

149.9

155.2

162.6

165.0

80
60

39.4

39.3

42.8

39.0

38.4

38.3

40
20

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22

0

(F)

Sales
Percentage ofrevenue from operations

Percentage of
operating income

25%

20%

Operating income/Operating margin

Revenue from operations(Billion yen)

400

311.1



331.7

(Billion yen)

263.3



233.7

220.0


100



53.9
46.8

47.1

46.4

60

50.4

50.0
40

40

20
15.1
0

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22

(%)

60

324.9

200

0

(F)

14.2

14.3

20.5

22.7 20

21.6

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22

0(F)

Construction
Percentage ofrevenue from operations

21%

Percentage of
operating income

8%

Revenue from operations

Operating income/Operating margin(Billion yen)(Billion yen)

300

200

209.3

(%)

30

30

221.6

218.9
188.7

204.3

220.0
20

100

20.4

10

0

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22
(F)

20.5

16.1

7.7
0

18.5

21.0

20

15.5

9.2

9.4

8.2

9.5

9.1

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22

10

0

(F)

Brokerage
Percentage ofrevenue from operations

Percentage of
operating income

Operating income/Operating margin

Revenue from operations(Billion yen)

80

69.1

71.8

71.1

73.4

78.0

（億円）

(Billion yen)

24

65.7

(%)

21.4

60

20.9
18.0

60

(Apr 1, 2019 – Mar 31, 2022)*Announced on May 16, 2019

398.2

300

8th Plan Targets*

FY2019(Apr 1, 2016 – Mar 31, 2019)

395.5

169.4

Consolidated Financial and Nonfinancial Data / Company Information

The fiscal year under review marked the end of the “Eighth Management Plan,” which the Company has been operating since April 2019. In the second yearof the plan, declines in revenue and profit were unavoidable due to the impact of COVID-19, but in the fiscal year under review, the final fiscal year of theplan, revenue and profit increased, and ordinary profit recovered to a record-high in one year, as described in the above “Overview of Consolidated Results.”
Three-year cumulative performance is as shown in the table below. Although we did not achieve our initial targets formulated before the COVID-19
pandemic, we achieved record-high operating income and ordinary profit for the third consecutive management plan from the Sixth Management Plan.

381.7

100

430.0

ESG Management

FY2022 Forecast

353.8

(%)

200

425.0

Business Review

FY2021(Apr 1, 2021 –Mar 31, 2022)

7th Plan Results

500

300

(Billion yen)(Billion yen)(Billion yen)02｜ Outlook for Next Fiscal Year (Announced on May 12, 2022)
Forecasts for the next fiscal year are as shown to the right. Revenue fromoperations, operating income, ordinary profit and profit attributable toowners of parent will all increase from the previous year. We intend toachieve a record-high ordinary profit for the second consecutive year, andthe tenth consecutive year of record-high in profit attributable to ownersof parent.
The real estate leasing business will maintain an increase in bothrevenue and profit, and a high level of business performance is expected
for each of the housing-related businesses.

Operating income/Operating margin

Revenue from operations

400(Billion yen)
FY2020

YoY

Leasing
Percentage ofrevenue from operations(Apr 1, 2020 Mar 31, 2021)

YoY

The Sumitomo Realty Group’s
Value Creation

Non-operating loss recorded 8.7 billion yen (an improvement of 0.5 billion
yen year-on-year). Extraordinary loss recorded 6.4 billion yen (down 6.8
billion yen year-on-year), owing to the absence of 11.8 billion yen in gains
on the transfer of equity interest in the condominium development joint
venture company in Dalian City, China, which the Company recorded in theprevious year.
As a result, revenue from operations for the fiscal year was 939.4 billion
yen (up 2.4% year-on-year), operating income was 233.8 billion yen (up6.7% year-on-year), ordinary profit was 225.1 billion yen (up 7.2% year-onyear) and profit attributable to owners of parent reached 150.4 billion yen(up 6.4% year-on-year).

FY2021(Billion yen)

Overview of the NinthManagement Plan

Increased revenue and profit in office building business, significant increase in brokerage profit
By segment, the mainstay office building business recorded increases in both revenue and profit, and the decline in commercial facilities such as hotels and event
halls shrank compared with the previous year, resulting in increased revenue and profit in the leasing business. In addition, there was a contribution to overall
performance from increased revenue and profit in the construction business including Shinchiku Sokkurisan remodeling, as well as the brokerage business, owing togood performance from brokerage of existing homes. In the sales business, focusing on condominium sales, revenue and profits decreased owing to a decline in thenumber of units delivered, but it achieved a high level of operating income and performed well.

Operating income(Billion yen)

A Message from the Management

Financial Results for Fiscal 2021 and Progress of the Eighth Management Plan

8%

7%

16
40
20
0

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22
(F)

0

40

14.5
11.4

31.0
8

20.0

25.6

24.5

29.2
20.5

17.4

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22

20

0

(F)

Sumitomo Realty & Development Co., Ltd.

30

Business Review

Overview of Each Segment

Achieved high level of operating income, in line with initial plans
In the fiscal year under review, a total of 3,604 condominium units, detached houses, and land lots were delivered (down 560 units year-on-year), owing tosteady progress on deliveries from condominiums including the large-scale properties such as City Towers Tokyo Bay and City Tower Ginza East, which werecompleted through the previous year, as well as the start of deliveries of City Tower Musashi-koyama and City Terrace Kanamachi, etc.
Although the segment’s revenue and profit decreased due to the decline in the number of units delivered compared with the previous year, operating income
achieved a high level at 50.4 billion yen, in line with the initial plan (50.0 billion yen).
Steady progress in condominium contracting, with 80% of units to be delivered in the next fiscal year already sold
The number of condominium units sold made good progress as planned, at 3,047 units, unchanged from the previous year, and at the beginning of the fiscal
year, approximately 80% of the 3,000 units planned to be delivered in the next fiscal year were sold (approximately 80% in the previous year).

Sumitomo Fudosan Osaki Twin Building East
(Completion: Jan 2022)
Shinagawa Ward, Tokyo
No. of floors: 19 above / 2 below ground
Gross floor area: 47,203m2

City Tower Musashi-koyama(Delivery start: Aug 2021)
Shinagawa Ward, Tokyo
No. of floors: 41 above / 2 below groundNo. of units for sale: 320

The Sumitomo Realty Group’s
Value Creation

Full-year contribution from office buildings, resulting in higher revenue and profit
In the fiscal year under review, revenue and profit in the mainstay office building business increased due to the full-year operation of Sumitomo Fudosan
Kojimachi Garden Tower, Sumitomo Fudosan Ochanomizu Building and other buildings completed in the previous fiscal year, as well as the absence ofacquisition expenses for large properties, which the Company acquired in the previous year.
In addition the decline in the commercial facilities such as hotels and event halls shrank compared with the previous year as a result of the full-year operationof Ariake Garden and temporary contribution to revenue related to the Olympics, etc., despite the ongoing impact of COVID-19.
As a result for this segment, both revenue and profit increased.
Seesawing market, vacancy rate is 5.8% in existing buildings
Although the vacancy rate in existing buildings rose in the first half of the year, it remained flat with 5.8% in the second half of the year. As the tenant needs
grow increasingly diverse, the market conditions continue to move back and forth.
In addition, in terms of tenant-seeking activities for new buildings, contracts have almost been completed for Sumitomo Fudosan Tamachi Building East andSumitomo Fudosan Kanda Izumicho Building, which were completed in the first half of the year, and the Company is focusing on tenant-seeking activities forproperties such as Sumitomo Fudosan Osaki Twin Building East, which was completed in the fourth quarter, as well as the Tokyo Mita Redevelopment Project
and the Nishi-shinjuku 5-chome Kita Project, which are large-scale buildings to be completed in the next fiscal year.

Overview of the NinthManagement PlanSales

A Message from the Management

Leasing

Business Review

Nishi-shinjuku 5-chome Kita Project(Expected completion: Mar 2023)
Shinjuku Ward, Tokyo
No. of floors: 35 above / 2 below ground
Gross floor area:136,565m2

Construction

Grand Hills Minami Aoyama(Delivery start: Apr 2022)
Minato Ward, Tokyo
No. of floors: 18 above / 2 below groundNo. of units for sale: 100

Brokerage
Number of units contracted■ Shinchiku Sokkurisan remodeling■ Custom Homes(Units)(Units)

12,0006,000
10,44910,000

9,350

8,362
8,000

6,000

4,000

7,534

7,506
3,077

2,990

5,000

9,000

2,527

2,619

2,800

3,000

2,160
4,000

2,000

2,000

1,000

0

FY ’17

FY ’18

FY ’19FY ’20

FY ’21

FY ’220

Record-high number of transactions, revenue, and operating income
In the fiscal year under review, the number of transactions recorded record-high forthe first time in two years, at 38,144 transactions (up 3,022 year-on-year), primarily
for existing condominiums. The number of transactions increased compared with theprevious year when the Company practiced self-restraint in sales activities under thestate-of-emergency declarations, and “STEP Auctions,” a new service introduced in
September also contributed to the result of the record-high number of transactions.
As a result for this segment, both revenue and profit increased significantly withrecord-high revenue and operating income (after reflecting segment changes
implemented in the previous fiscal year in past results).

Number of transactions and brokerage revenues■ Number of transactions

Integrated Report 2022

‘15/3

‘16/3

‘17/3

(Billion yen)

50,00010000010,00037,0586,631.0

37,6436,858.3

37,715
6,706.3

30,00040,00035,122

38,144
7,127.8

6,235.8

8,000
7,600.0
6,000

20,0004,000

10,0002,000

0(Forecast)

31■ Brokerage revenues(Transactions)

40,000Consolidated Financial and Nonfinancial Data / Company Information

Orders increased, resulting in increase of revenue and profit
In the fiscal year under review, the number of units contracted increased with 8,362
units in the Shinchiku Sokkurisan remodeling business (up 828 units year-on-year)and 2,619 units in the custom home construction business (up 92 units year-onyear), compared with the previous year, when the Company restricted sales activities
under the state-of-emergency declarations. In the fiscal year under review, theCompany introduced new environmentally-friendly products, such as the new solar
power generation service “SUMIFU × ENEKARI” and high thermal insulation
remodeling plans, contributing to increased orders.
As a result for this segment, both revenue and profit increased as the number ofunits delivered increased, despite the impact of rising prices of timber and othermaterials.

City Terrace Kanamachi(Delivery start: Oct 2021)
Katsushika Ward, Tokyo
No. of floors: 19 above groundNo. of units for sale: 610

ESG Management

Tokyo Mita Redevelopment Project(Expected completion: Feb 2023)
Minato Ward, Tokyo
No. of floors: 42 above / 4 below ground
Gross floor area: 199,709m2

FY ’17

FY ’18

FY ’19FY ’20

FY ’21

FY ’220(Forecast)■仲介件数

Sumitomo Realty & Development Co., Ltd.

32

■取扱高

Business Review

Business Segments｜Leasing
Office Buildings/Rental Apartments/Hotels/Multipurpose Halls/Retail Facilities

A Message from the Management

Portfolio of office buildings in central Tokyo

Ikebukuro

Ueno

Takadanobaba

NakanoIidabashi

Overview of the NinthManagement Plan

Akihabara
Nihombashi

Kojimachi

ShinjukuTokyo

Roppongi emand for office buildings with better locations andDfunctionsIncrease in demand for office buildings with high level ofdisaster preparedness and environmental performance

Competitive advantages
1 An extensive line-up of buildings in various locations and scales to meet diverse needs, primarily in central Tokyo
3 Seismic isolation/damping systems and high level of disaster-preparedness for enhanced BCP compliance19%

Chiyoda

11%

Chuo

8%

Mita

Shibuya7%

Tokyo 23 Wards 95%

Shinagawa7%

CBD 7 Wards* 84%

Bunkyo4%

Other wards
in Tokyo

11%

Others5%

Major flagshipbuildings
over 50,000m2

ShinagawaOtherbuildings
less than
10,000m2

Osaki

Large-scalebuildings
10,000m2 50,000m2
Buildings
developmentin progress*	Only office buildings owned by the Company
are shown on this map.
(As of March 31, 2022)* CBD 7 Wards: Chiyoda, Minato,Chuo, Shinjuku, Shibuya, Shinagawa
and Bunkyo

High degree of functionality and comfort for office spaces
The standard floors of our buildings feature large spaces free of pillars or columns,
providing highly efficient office spaces with layout flexibility to meet the needs of eachtenant company such as consolidating multiple offices onto a single floor or creating
an open space that facilitates internal communication and generates creative ideas,
and building remote conferencing booths.

ESG Management

2 State-of-the-art facilities, offering high degree of functionality, comfort and environmental performance

Shinjuku

Shiodome

ShibuyaBusiness Review

Response to increasingly diverse office needs
Compliance with increasingly high environmental
performance standards
Strengthening disaster countermeasures in preparation forsevere natural disasters

Opportunities

28%

The Sumitomo Realty Group’s
Value Creation

Challenges

MinatoOffice floor image

Portfolio of office buildings catering to diverse needs
Tenant comment“Office will evolve into a special place for communication in the times ahead”
The COVID-19 pandemic made us realize that it is possible to get work done even remotely.
However, looking at it in another way, having an office will give companies a competitive
advantage. The more companies move away from offices and away from the CBD, having an officein the CBD will be more special in a way. In fact, I actually believe that now is exactly the right timeto invest in offices.
In the era of coexisting with COVID-19, the office will no longer be just a place for working. It
will become a special place for precious and heartwarming communication whether business or
personal. How to design offices with the notion that they are community spaces will likely become
the key to office strategy going forward.

Voice
Consolidated Financial and Nonfinancial Data / Company Information

Tokyo is Japan’s economic center, where companies from all industry sectors congregate, creating a superior market with stability overthe long term. In the office building leasing business, which is the core of our real estate leasing business, our leasing portfolio
emphasizes locations in central Tokyo; 95% of our portfolio is in Tokyo’s 23 wards, and 84% is in the seven wards of the Tokyo CBD(Central Business District). Many of our buildings are located in proximity of major railway and subway stations, offering excellent
accessibility favored for a business base.
The functionality of our buildings gives us a major competitive advantage in the market. In preparation for a large-scale earthquake ofthe kind that have occurred to date, we have actively adopted seismic isolation/damping systems for our buildings, enhanced BCP
compliance with uninterrupted power supply specifications, including the installation of emergency power generators. In addition, we
also have adopted a high level of environmental performance that enables our buildings to acquire Green Building certification byintroducing highly efficient equipment and energy-saving specifications.
The Company will continue to build a stable earnings base through continuously supplying highly competitive office buildings, mainlyin the Tokyo CBD, where demand is expected to remain stable into the future.

Akiyuki Minami
Chairperson
coconala Inc.
(Tenant at Shibuya Infoss Tower)* Pleases refer to the Company website for the entire interview (Japanese only). https://office-b.sumitomo-rd.co.jp/office/case_01/

33

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

34

Business Review
Business Segments｜ Leasing*The diagram below is for illustrative purposes only. Not all features are available in all Sumitomo Realty buildings.

Environmental technologies for office buildings

The Company strives to create office buildings that continue to function and secure the safety and peace of mind of our tenants even at times of disaster.
Our entire portfolio meets or exceeds the new earthquake resistance standards adopted in 1981, and approximately 80% of the buildings we own are
structured with a seismic isolation and/or damping system, while enhancing BCP compliance with measures for uninterrupted power supply including
installation of emergency power generators in about 70% of our buildings (100% of those completed in or after 2001). We directly manage the buildings
24 hours a day, 365 days a year, making it possible to respond swiftly to emergencies.

In the construction of new office buildings and when upgrading equipment in existing buildings, we actively install the state-of-the-art
and highly energy-efficient equipment in promoting the development of environmentally friendly, sustainable office buildings. Ourbuildings’ performance and initiatives regarding “environmental and social awareness” have been highly evaluated, and 35 buildings
with a total gross floor area of 840,000 tsubo (1 tsubo ≈ 3.3m2) acquired DBJ Green Building Certification. This is the largest gross floorarea held among the owners of buildings in the Office Building Category. (As of August 2022, researched by the Company)

BCP｜Uninterrupted power supply / elevator restoration & flooding countermeasures*The diagram below is for illustrative purposes only. Not all features areavailable in all Sumitomo Realty buildings.

Uninterrupted power supply
A. In the event of an accidental
power outage: Ensure business
continuity with up to triple backup

72-hour power supplyPowerreceivingequipment
Substation

Disaster-resistant medium-pressure gas pipes

10 days
City gasEV

72 hours

Oil tank forgenerator
Within building premises

EnergyefficientGreening

Automatic faucets
Water-saving equipment
Long-life design witheasy maintenanceGreen power
Greening of premises

Using eco building materials

Power supply car required
Dual fuel gas
turbine[Emergency power
generator]

Common3. Heavy oil
power
generation

LED lights with motion detector

Buildings with
Inspection
uninterrupted power supply
PrivateRestroom sinks

Minimal power supply
Power outlets

Planting of
local native species
Recycling

Air conditioning

Power outlets

Heavy oil power
generation Power supply possible to a certain extent

Sustainable

Lighting

Lighting Air conditioning

Lighting Toilet flushing

EV/PHV charging stations

WatersavingThe Sumitomo Realty Group’s
Value Creation

2. City gas power
generation

Decentralized HVAC system

Transmission
suspendedPower transmission secured
even when one line breaks

RenewableenergyTotal heat exchange system

Floor vents

No power supply

Utilizing rain water,
reclaimed water,
and waste waterElectric blinds

Low-e double glazing glass

Inspection

Break in power transmission

1. Multi-line power
reception

Roofgreening

LED lights with brightness sensor

General buildings

Uninterrupted power supply

Solar power generation

Overview of the NinthManagement Plan

Multi-line power
reception system

B. At legal inspections: Two power transmission
systems inside building enable minimal power
supply during annual inspections

Efficientair
conditioning

A Message from the Management

Disaster Prevention for Office Buildings

Co-generation system

Power transmission continued

DBJ Green Building Certification

Flood countermeasures for equipment

Avoid people being trapped in elevators and long period of noelevator service in the event of an earthquake

Electrical equipment and parking allocated above
ground level

General buildings

Service suspended

Keep suspended until technician arrives★★★★★

Properties with the best class environmental & social awareness

Mitigation of
Sumitomo
Mitigation
Realty buildings
flood damage
riskofSumitomo

General buildings

General buildings

Properties that have acquired five stars

Business Review

Provisional automatic restoration of elevators

Realtybuildings flood damage risk
Electricalequipment
Electricalequipment

Inspection
byFulltechnician operation

Earthquake

Parking

Flooding

Parking

Flooding
Parking
Parking

Electrical equipment

Servicesuspended

Sumitomo
Realty buildings

Electrical equipment

Rapid provisional
restoration

Other disastercountermeasures

Manhole toilets

Prepared for disaster

Temporary evacuation center

Emergency wells

Entrances, etc. opened up toprovide shelter for
stranded commuters

Stops atnearest floor

Automatic
Inspection
machine ProvisionalbyServiceFulldiagnosis
suspended
restoration technician operationof services

STRUCTURE｜Seismic isolation system
Seismic isolation devices are installedat the bottom of and on mid-level
floors of buildings to absorb theshaking. Structures that suppress the
direct transmission of seismic energy
to the building mitigate the risk tohuman life, as well as the risk offurniture toppling.

Dissemination ofdisaster information, etc.

SERVICE｜Direct management 24 hours a day

Shaking of seismic
isolation layers

Seismic-isolationbuilding

Emergency supply
storeroom

Digital signage

Shaking of seismicisolation building
Shaking of building
without seismic isolation

Layered rubber isolator
Supports the building’s
weight and slowly moves
horizontally during anearthquake. A lead plug
placed inside absorbs theenergy of earthquakes.

Prepared for watersupply disruption

Earthquake
shaking

Prepared for emergency

Seismic
isolation
Sumitomo Realty
buildings
Seismic
damping

Integrated Report 2022

Seismic isolation/
damping system

New earthquake
resistance standard*As of August 2022 (including buildings under construction)

24-hour, year-round management by Sumitomo Realty employees enables swift responses even in times of trouble.

35

Adoption rate ofseismic isolation in
new buildings
completed in/after 2014

Tokyo Nihombashi
Tower

Sumitomo Fudosan
Osaki Garden Tower

Sumitomo Fudosan
Shinjuku Grand Tower

Sumitomo Fudosan
Sumitomo Fudosan
Shinjuku Garden Tower Azabujuban Building

Sumitomo Fudosan
Roppongi Grand Tower

Offer a choice of green power plans for tenants to their exclusively-owned areas- A first in the industry to offer separate green power plans to individual tenants! As an initiative for decarbonization in office building leasing toachieve carbon neutrality by 2050, we have developed a scheme
in which tenants can select the best plan from multiple green
power introduction methods to meet their diverse needs,
depending on the individual company’s approach.
Sumitomo Realty has actively promoted energy conservation in
its office building development and operations, resulting in
gaining S-class (excellent business operator) certification, which is
the highest ranking given for efforts taken to conserve energy,
for five consecutive years. Through this green power introduction
initiative, we will strive to make offices even more decarbonizedalongside our tenants, and contribute to the achievement of thedecarbonization targets set forth by the government.

Sumitomo Fudosan Shopping City Ariake Garden(Certified in Retail category in 2021)

TopicsConsolidated Financial and Nonfinancial Data / Company Information

Earthquake

ESG Management

Stops atnearest floor

Three plans and their advantages
Plan 1. Non-fossil fuel energy certificate
Issues non-fossil fuel energy certificate to treat as green power usage／
Achieve decarbonization with no hassle
Plan 2. Raw green power from newly-built power plant
Uses raw green power from newly-built power plant according to
the contract／Contribute directly to decarbonization in Japan
Plan 3. Green power from tenant-owned power plant
Issues non-fossil fuel energy certificate, which certifies the use ofgreen power generated at tenant-owned power plants ／ Use selfgenerated power

Sumitomo Realty & Development Co., Ltd.

36

Business Review
Business Segments｜ Leasing

La Tour Series

We own and operate over 5,400

Sumitomo Fudosan Bellesalle Co., Ltd.

condominium units for leasing primarily

operates over 30 facilities with multipurpose

in major metropolitan areas. Of these, thehalls and conference rooms mainly in centralof equipment and fixtures, our venues areresidences with great views, high-gradeused for a wide range of events, including

specifications and facilities, hotel-styleexhibitions, large-scale entertainment events,

bilingual concierge services and advanced

and seminars. The Company also operates

we operate 25 La Tour buildings withshared office spaces “Bellesalle Lounges,”

approx. 3,500 units in areas such asoffering well-equipped private rooms andDaikanyama, Roppongi, Shibuya andsmall meeting rooms suitable for remote work

Shinjuku, as well as Kyoto and Sapporo.

and web conferences. (As of March 31, 2022)

Sumitomo Fudosan Villa Fontaine Co., Ltd.

Retail Facilities

The Villa Fontaine series is our high grade

Sumitomo Fudosan Retail Management Co.,business hotels at prime locations that

Ltd. manages Ariake Garden, which wasoffer larger guest rooms with spacious

completed on a vast 10.7 hectare tract inbeds and bathrooms, and stylish interiors.

March 2020, and Haneda Airport Garden,

We operate a total of 18 hotels / 3,493

which is connected directly to Haneda Airport.
Ariake Garden is a commercial complex

in central Tokyo and one in Kobe, twofeaturing a wide variety of shops catering toVillage series hotels in Izukogen anddiverse needs both for every day and special

Kyoto targeting resort customers andoccasions. It has been well-received as it

tourists, and “inumo Shibakoen,” where

proposes a new lifestyle for Tokyo bay area

guests can enjoy staying with their dogs.

while contributing to the revitalization of the(As of March 31, 2022)

community.

Topics“inumo Shibakoen by Villa Fontaine”

Sumitomo Fudosan Shopping City Ariake Garden

ESG Management

Opened a full-service hotel for guests with dogs,

Sumitomo Fudosan Retail Management Co., Ltd.

Business Review

rooms, including 14 Villa Fontaine hotels

The Sumitomo Realty Group’s
Value Creation

HotelsOverview of the NinthManagement Plan

family sales, academic conferences, lectures,

security systems. As of March 31, 2022,

TopicsAcquired Highest Rating in DBJ Green Building Certification
Consolidated Financial and Nonfinancial Data / Company Information

We have launched a new hotel brand, “inumo” (meaning “dogs,
too” in Japanese), for dogs and their families to enjoy their trips
and comfortable stays. Opened in February 2022, “inumo
Shibakoen by Villa Fontaine” (Minato-ku, Tokyo) is dog-friendly
throughout the building with a dog run, grooming, dog-sitting
services, and an Italian restaurant where guests can enjoy themeals with their dogs by their side.
inumo Shibakoen offers a new kind of hotel stay as a hub forsightseeing in Tokyo for guests with dog in tow or as a place tocasually refresh themselves with their dogs.

Integrated Report 2022

Sumitomo Fudosan Bellesalle Co., Ltd.

Tokyo. Easily accessible and featuring an array“La Tour” series at its core offer premium

37

Multipurpose Halls

A Message from the Management

Condominium Leasing

Sumitomo Fudosan Shopping City Ariake Garden, the core facilityof the Ariake Garden, completed in March 2020, has received thehighest (five-star) rating in the Retail category of DBJ Green
Building Certification.
The certification not only takes into account energy saving
performance, but also facility performance aspects such asproviding EV charging spaces, contributions to the local
community, disaster preparedness including the stockpiling ofadequate emergency provisions, and considerations for user
diversity such as the installation of a prayer room and multi-lingual(Japanese, English and Chinese) facility announcements.

Sumitomo Realty & Development Co., Ltd.

38

Business Review

Business Segments｜Sales
Condominiums/Residential Lots
* Facilities and equipment may differ by property.

A Message from the Management

Examples of our unique customer-first products and services
Dynamic Panorama Windows
In high-rise units, the residents can enjoy a dynamic view (a direct
sky view) with an exceptionally wide range of vision, experiencing a
sense of release that brings a feeling of being part of the sky, evenwhile remaining seated.
(Conceptual drawing)

Enhanced common areas
Taking advantage of large-scale condominiums, we have increased our
product appeal by enhancing the common areas. As well as spacious
entrance halls with a two-story atrium, our condominiums provide
extensive facilities for community interaction, including kids’ rooms, party
rooms, lounges, guest rooms, fitness rooms and remote work rooms,
which residents can readily use, offering an attractive residence.
We have also introduced “Smart lock with payment system*” thatallows residents to book and pay for these common facilities on their
computer or smartphone, and then unlock the door to the booked room
using a PIN. In addition to enabling access to common facilities with nonface-to-face contact, we are also enhancing the common facilities of small
and medium-sized properties to increase convenience and asset value.

Opportunities* Scheduled for installation in 75 properties as of March 31, 2022

 ustained housing demand in convenient locations both in the cityS
center and the suburbs
Increased demand for housing with a high level of environmental
performance

Competitive advantages
1 Exteriors, common area design, functions and equipment that retain their asset value for the future
3 Unique services and equipment designed for customers’ convenience and comfort(As of March 31, 2022)

Condominiums that retain their asset value for the future
Display corner for hands-on
One-stop support from consultation
Detailed information available for all
experience of housing equipment
to property introduction by ourof our properties on the market,
knowledgeable and professional staff enabling comparison and consideration and specificationsof multiple properties simultaneously

Consolidated Financial and Nonfinancial Data / Company Information

We provide condominiums that will retain their asset value and appeal as time passes. They are characterized by enhanced productplanning with stylish exteriors that make them landmarks, elegant entrances, extensive common areas, disaster-resilient and high-spec
basic performance, latest housing equipment, etc. A number of our condominiums have garnered the Good Design Award sponsored by
the Japan Institute of Design Promotion.

Online sales service
We are pioneers in the industry in offering a service
that enables customers to consult and deliberate
both in person and online. For all newly built
condominiums* nationwide, we introduce electronic
contracts and the “Remote Condominium Sales”
service, which permits customers to complete theentire process—from information gathering todelivery—without the need for meeting in person,
while our “Online Tours” allow customers to obtainproperty descriptions, tour model rooms and discuss
housing loans online. With these and other services,such as online applications and IT-based briefing onimportant matters, we strive toimprove customer convenienceby meeting a wide range ofneeds.

ESG Management

2 Operating mainly in major cities throughout Japan — stable supply with 80% of the portfolio in the Tokyo metropolitan area

Grand Mansion Gallery
With the concept of enhancing customer convenience and satisfaction, weoffer a one-stop service with sections for consultation, selection andexperience, providing necessary information depending on the customers’
respective purposes. The facilities are located close to 10 conveniently
accessible terminal stations mainly in the Tokyo metropolitan area.

Business Review

 esponding to changes in housing demand with diversifyingRlifestyles
Securing land that will enable new supply

Unit with Dynamic Panorama Windows

The Sumitomo Realty Group’s
Value Creation

Challenges

Overview of the NinthManagement Plan

Unit with a balcony*Excluding joint-venture properties, etc.

Promoting Decarbonization in the Development of New Condominiums

Topics■ “ZEH-M Oriented” energy-saving performance as the standard specification for all new condominiums
Requesting green power usage at the construction site
In October 2021, as the first in the industry*1, we have decided to adopt “ZEH-M Oriented” energy saving performance as thestandard specification for all condominiums*2 we design and develop from that date forward, without reducing the quality and living
comfort. We also actively request cooperation from our partner construction companies to use green power at the construction sites.
For construction companies without measures to do so, we request their collaboration by providing a framework that enables theintroduction of green power. Through these efforts, we promote decarbonization across the entire value chain that extends fromupstream to downstream, in our new condominium sales business.
*1: Based on research by Sumitomo Realty, using public information. *2: Excluding joint-venture properties, etc.

39

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

40

Business Review

Business Segments｜Construction

Shinchiku Sokkurisan Remodeling
Detached House Remodeling/Condominium Remodeling
Shinchiku Sokkurisan remodeling realizes housing renovation forabout 50-70% of cost of rebuilding, responding to customers’various needs, lifestyles and budgets. In addition to conventional“partial reform,” it offers “full-remodeling,” which transforms
the house into an earthquake resistant one while utilizing theexisting structural elements and “renovation,” which completely
refurbishes both the interior and exterior and enables flexible
layout changes.

50%

60%

A Message from the Management

Lower cost than rebuilding

70%

Renovation
Full
remodeling

Rebuilding

100%

Partial reform

0%

Types of remodeling Shinchiku Sokkurisan covers

Condominium remodeling — No.1* in theindustry for eight consecutive years* Researched by The Japan Journal of Remodeling, FY2013–2020

Opportunities

Challenges
 ising costs due to increases in prices of construction
Rmaterials, etc.
Responding to diversifying needs for remodeling, and theneed of disaster countermeasures ising demand for large-scale remodeling, utilizing theRexisting houses
Rising demand for environmentally friendly and safe/secure
housing in times of disaster

Competitive advantages*2021 rankings for number of large-scale remodeling (contracted units) and sales for condominium remodeling, researched by The Japan Journal of Remodeling

Shinchiku Sokkurisan Remodeling
Conventional remodeling

After

Before41

Integrated Report 2022

New system: neither conventional
remodeling nor rebuilding

Principally remodeling certain
parts of the house

Full remodeling with a price50-70% of rebuilding

Seismic reinforcement byremodeling not considered

Seismic reinforcement forpeace of mind

Estimates are based on a cost estimation
system and prices are unclear

Clear fixed-price system

Additional charges incurred due
to unforeseen circumstances

No additional charges afterwork commences

Complete renovation of both the interior
and the exterior with great flexibility interms of change of the layout

BeforeAfter

Skeleton image

Cumulative total of units contracted for Shinchiku Sokkurisan(Thousand units)

150

100

June 2021 Contracts exceeded 150,000 units

September 2015 Contracts exceeded 100,000 units

50

0‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22(Years ended / ending March 31)“Shinchiku Sokkurisan” high thermal insulation remodeling and SUMIFU x ENEKARI

TopicsPromotion of decarbonization through renovation to safe, secure and energy-efficient housing

Consolidated Financial and Nonfinancial Data / Company Information

Making use of the foundations and pillars of the old houses, the Shinchiku Sokkurisan remodeling system involves renovating the entire
house, improving its earthquake resistance, performing thermal insulation works, and renewing the kitchen and bathroom, floor plans,interiors, and exteriors depending on the customer’s needs. Since its launch in 1996, the number of units contracted has steadily grown
to exceed a cumulative total of 150,000 (as of June 30, 2021). As a pioneer in the full remodeling business, in addition to detachedhouses, we have also engaged ourselves in the full remodeling of condominium units nationwide, establishing a new genre in anindustry that until then had offered only complete rebuilding or partial remodeling.

Renovation

Transform the house into an
earthquake-resistant one with peace ofmind while utilizing the existing structuralelements as much as possible

ESG Management

Shinchiku Sokkurisan remodeling — No. 1 in the industry

The Sumitomo Realty Group’s remodeling business provides
remodeling including Shinchiku Sokkurisan full remodeling,skeleton renovations for condominium units, and partial
remodeling, meeting customers’ wide-ranging needs andconditions. Through our involvement in many different housing
renovations over 25 years, we have amassed a wealth ofexpertise and experience in areas such as layout changes, seismic
reinforcement, and handling of different structures, which hasenabled us to offer proposal- and consulting-based remodeling.
Revenue from the remodeling business topped ¥100 billion for
the first time in the remodeling industry in fiscal 2014, and wehave established our position as the top brand in the industry.
The cumulative total of units contracted exceeds 150,000 (as ofJune 30, 2021), and we have built a track record of solid
reliability.

Full remodelingBusiness Review

1 No. 1* in the industry for both detached houses and condominium units with new “full remodeling” system
2 Seismic reinforcement applicable to houses of all ages
3 Worry-free fixed pricing system at 50-70% of the rebuilding cost
4 Established a system to propose ideal homes by remodeling existing houses purchased through brokerage
network of our group company

Number of units contracted for Shinchiku
SokkurisanYour dream comes true as if building
a custom-built house

The Sumitomo Realty Group’s
Value Creation

Since 1998, we have pioneered the industry’s skeletonrenovation business for condominium units. The entire
exclusively-owned area is dismantled and removed, leaving only
the structural frame. Everything else—from the equipment,interior, base materials to the wiring to the plumbing—iscompletely renewed to allow flexible layout change and makethe exclusively-owned area look like new.

Overview of the NinthManagement Plan

Resolve all your problems
with your current house

In our Shinchiku Sokkurisan remodeling business, in addition to seismic reinforcement for thepeace of mind, we promote the extension of the useful life of existing houses by renovatingthem into environmentally friendly and comfortable houses with excellent energy-saving
performance. We have also begun providing the following new services that contribute to thedecarbonization of the housing stock of over 50 million units in Japan, which the Japanese
government has recognized as an issue.
High Thermal Insulation Remodeling Plan (Began accepting orders in December, 2021)
Remodeling plan available to the entire house or even to individual rooms, ensuring thethermal insulation performance equivalent to the energy conservation standards* for newlybuilt houses*Compliant with 2016 energy-saving standards

Shinchiku Sokkurisan and SUMIFU x ENEKARI (Began accepting orders in April, 2022)
Seismic reinforcement (Shinchiku Sokkurisan) for the peace of mind, combining a new solar power
generation service (SUMIFU x ENEKARI) which enables installation of solar panels and storage
batteries at zero initial cost
We will continue to promote the provision of housing that contributes to the decarbonization with a safe and comfortable living
environment.
Sumitomo Realty & Development Co., Ltd.

42

Business Review

Business Segments｜Construction

Custom Homes
LED lighting

Solar power generation system

High efficiency
air-conditioning

Making net zero energy use in the home the future standard for living
We propose smart, high-quality living by our long-life house inconsideration of energy saving and the environment as Net Zero
Energy House (ZEH), which is friendly to both the residents and theenvironment, while maintaining living comfort.
HEMS(Home energy
management
system)Sumitomo Realty’s

Net Zero Energy House

Balance of energy consumption

High Thermal Insulation
Comfortable living withless energy consumption

Energy Saving
Visualizing energy consumption

100

High
ThermalInsulation

Daily Energy
Consumption
Heating andcooling, Hot-watersupply, Ventilation,
Lighting

HEMS

EnergySavingBalance of Energy
Consumption

Eco Cute≒

EnergyCreation

Primary-energy consumption Reduction in primary-energy use
Clean electricity generation for home use

Energy Creation

0

High thermal
insulation
structure

Breathable,
waterproof,
thermal-shielding
sheet

Eco Jozu
Low-E double glazing glass(with argon gas)
Aluminum resin composite
thermal-insulating window frame

Hybrid water heaters
ENE-FARM

The Sumitomo Realty Group’s
Value Creation

Disaster countermeasures for safety and security
Disaster countermeasures for safety and security in addition to superior design and high-quality fixtures and specifications

Opportunities

Challenges

 ising demand for comfortable, safe/secure andRenvironmentally friendly houses
Rising demand for houses that offer a high level of disaster
preparedness ising costs due to increases in prices of construction
Rmaterials, etc.
Need for environmental considerations and disastercountermeasures in line with the times

Competitive advantages⃝ Power Panel — Strong bearing walls withhigh magnification
Outstanding strength, able to withstanddeformation and distortion from earthquakes, etc.

⃝ Potable water storage system
Fresh drinking water stored in the water pipes underfloor, andeasily withdrawn in the event of water outage⃝ Rainwater tank
Approximately 100 litersof rainwater stored for use
in the event of water
outageBusiness Review

1 Custom homes that combine innovativeness and functionality with attractive design
2 High-grade interiors as a standard specification at reasonable prices
3 Proprietary earthquake-proofing technology, and product planning for enhanced safety and environmental
performance
4 A one-stop support system to build a house from searching for suitable land by brokerage network of our groupcompany⃝ Seismic Control System
Seismic damping devices absorb seismicenergy and reduce shaking by
approximately 50%

A number of Good Design Awards (Products awarded for Good Design Awards 2021)
Our product line-up has won a number of Good Design Awards* and been highly evaluated for product planning

ESG Management

Innovative exterior design and specifications that only a developer can provide
Leveraging our expertise gained in developing numerous office buildings and condominiums, we have incorporated innovative designs
and specifications that only a developer can provide, including the “J∙URBAN” urban-style housing series which feature distinctive,
modern exteriors characterized by the extensive use of glass, and houses with housing equipment designed for luxury condominiums.

Verandah terrace encourages
interaction
PREMIUM.J Kyotogojo - Reconstruction of traditional Japanese housing

Kitchen

Adopted an original high-end kitchen made of a new ceramic material that offers optimal functionality for kitchens,
including scratch resistance, stain resistance and heat resistance, alongside expressive and beautiful design

Bathroom

Enhanced functions, including a heat-retaining bathtub made of artificial marble and a bathroom dryer with heaterand ventilation functions

Topics“Sumitomo-Fudosan-no-SUMICA”— Ensuring thermal insulation and energy-saving performance that exceeds the latest ZEH standards
Future homes with a sophisticated design that are friendly to people and the environment
In April 2022, we launched “Sumitomo-Fudosan-no-SUMICA” with thermal insulationand energy-saving performance that exceed the ones of the latest ZEH standards, uniquesolar power generation service*, and sophisticated design and functions. By proposing
the sustainable housing and peace of mind for living demanded in the “new normal” era,
we strive to expand our business andcontribute to the promotion of
decarbonization of detached houses.
* S UMIFU X ENEKARI provided as a standard
specification

43

Integrated Report 2022

Kitchen

NEW J·URBAN COURT Futamatagawa - House embraces light and breeze

Consolidated Financial and Nonfinancial Data / Company Information

We have adopted high-grade room interiors and facilities found in condominiums as standard for detached houses at a reasonable price.

Interior image

Front balcony*Sponsored by the Japan Institute of Design Promotion

High-grade housing fixtures with interiors for luxury condominiums

PREMIUM.J Yokohama No.1

Overview of the NinthManagement Plan

4 Features

Making the most of heating andcooling energy without waste

A Message from the Management

Zero Energy House friendly to both the residents
and the environment

Advanced Energy

Premium Design

High Grade Equipment

High Resilience

Bathroom

Sumitomo Realty & Development Co., Ltd.

44

Business Review

Business Segments｜BrokerageGroup Companies

Sumitomo Fudosan Tatemono Service Co., Ltd. conducts property
management for about 170,000 condominium units nationwide centeringon Sumitomo Realty’s condominiums after delivery. In pursuit ofcomfortable, safe and secure living environments for customers, it offers
services ranging from daily building management to concierge services(consultancy for minor repair of rooms and equipment replacement,
introduction of special benefits available from the Sumitomo Group’sbusinesses, etc.) to respond to various customers’ needs based on abundantknow-how and solid technological capabilities. Its service includes provisionof useful lifestyle-related services such as professional housecleaning.

Sumitomo Fudosan Syscon Co., Ltd. sells interiors to mainly Sumitomo
Realty’s customers of their condominiums, custom homes and remodeling.
The company’s interior concierges propose interiors according to customers’
requests from among the products of over 300 manufacturers in Japan andoverseas. The company also carries out the construction work contract
business, which engages in the construction of Mansion Gallery, as well as
offers proposals for effective land use, such as car park operation.

Opportunities
Izumi Restaurant Co., Ltd.

 ontinuing expansion of the brokerage market with furtherC
increase in superior housing stockIncreased awareness of housing for new styles of living, anddiversified lifestyles

Competitive advantages
Sumitomo Fudosan Esforta Co., Ltd.

1 Industry-leading network of directly operated brokerage offices in 256 locations nationwide
2 High customer-satisfaction ratings
3 Prompt response to varying customer needs through coordination among Group companies

directly operated brokerage offices across Japan, focusing on the brokerage ofexisting condominiums, detached houses, and land lots.
The business has built up a community-based sales structure under a principleof “Customer-First,” recording some 38,000 transactions in fiscal 2021, which
Further, to meet the brisk demand for condominiums in central Tokyo, we arealso operating Mansion Plaza brokerage offices, specializing in premium
condominiums that have high asset value.

256 directly operated brokerage offices(As of March 31, 2022)• Sapporo area
• Sendai area
• Capital area
• Tokai area
• Kansai area
• Hiroshima,
Okayama area
• Fukuoka area
45

Integrated Report 2022

9 offices (1 office)5 offices
139 offices (14 offices)
18 offices
72 offices (3 offices)
7 offices
6 offices

Operation of six ésforta fitness clubs and13 other facilities (as of March 31, 2022)•ésforta (6 locations)		
•Prime Gym (1 location)•My Golf Style (8 locations)•Prime Golf (1 location)•Bay Rhythm (3 locations)•Contracted operation and management of public facilities (8 organizations)

Izumi Kaihatsu Sangyo Co., Ltd. (Izumi Country Club)
Izumi Country Club is a golf club with convenient access, located about 50
km, or a one-hour drive, away from central Tokyo. Taking advantage of theflat landscape, the refined layout with effectively placed ponds and greens
as well as the scenery replete with seasonal plants and flowers are enjoyedby players.

Consolidated Financial and Nonfinancial Data / Company Information(including Mansion Plaza)In the autumn of 2021, we launched “STEP
Auctions,” a new service that enables us tomake fairer and best proposals with a“Customer First” approach, nationwide.
Whereas previously, it was most common
for each brokerage office to deal withseveral dozen companies in the area, under
this new service, property information issent out at once to over 5,700 registeredreal estate brokers* nationwide that meet
our standards, and all applications arereceived by the head office. This allows the
speedier introduction of prospective buyers
with more favorable conditions. This service
has already been well-accepted by many
sellers.

ESG Management

makes it one of the leading companies in the industry.

TopicsSTEP Auctions

Izumi Restaurant Co., Ltd. provides catering services for social gatheringsand various parties, and also runs several restaurants such as a Japanesedining restaurant, “Azabu Tansumachi Tenryoan” and a café dining
restaurant, “DELTAZURE.”
In addition, it runs Rieven House convenience stores within Sumitomo
Realty’s office buildings in Tokyo, offering a product mix geared to the needsof office workers.

Business Review

As one of the leading brands in the industry, we have built a network of 256

Sumitomo Fudosan Esforta Co., Ltd. marked its 35th anniversary in
September 2021. It operates “ésforta,” high-end urban fitness clubs locatedprimarily in Tokyo. Based on the concept of “assigned instructor system,”
instructors propose comprehensive fitness menus according to the members’
individual needs by combining gym, pool, studio and nutritional programs,
and provide support. The company also operates a wide range of facilities
such as a golf academy and fitness studios, primarily offering yoga anddance programs. In addition, utilizing the know-how cultivated throughdirect operation of facilities, the company is contracted with organizations
including municipalities to operate and manage their sports facilities.

The Sumitomo Realty Group’s
Value Creation

 eeping up with further developing and deepening digitalK
technology in real estate brokerageExpanding provision of services to the growing senior
population

Azabu Mansion Plaza

Overview of the NinthManagement Plan

Sumitomo Fudosan Syscon Co., Ltd.

A Message from the Management

Challenges

Sumitomo Fudosan Tatemono Service Co., Ltd.

*As of April 1, 2022

Sumitomo Realty & Development CA., Inc.
Hotel ownership and management

Izumi Insurance Service Co., Ltd.

General insurance and life insurance agency

Sumitomo Fudosan Villa Fontaine Co., Ltd.

P.37

Sumitomo Fudosan Bellesalle Co., Ltd.

P.38

Sumitomo Fudosan Retail Management Co., Ltd.

P.38

(1 office)

Sumitomo Realty & Development Co., Ltd.

46

ESG Management

Promotion of ESG andContributions to SDGs
A Message from the Management

Major ESG Initiatives (April 2021 – June 2022)
For details about the Company’s sustainability and ESG initiatives, please refer to the Company website.
https://www.sumitomo-rd.co.jp/english/sustainability/
ESG Initiatives
2021

Apr Held the 2nd event for the “Kanosei Art Project,” a joint project involving artists with disabilities
May Established an association for the reconstruction of Tamagawa Housing, a large-scale housing complex completed in 1968

Shinjuku Sumitomo Building Renovation Project won the “Award of Excellence” for the Renovation Category of CTBUH Awards 2021
Jun Held the 108th STEP Concert, a classic concert for families to enjoy (registration required, free invitation)

Held “Ariake Minna no KOMOGOMO Concert 2021,” a classical music concert for people of all ages, including babies less than one year old

Overview of the NinthManagement Plan

The Sumitomo Realty Group has been practicing
Sustainability Management that inherits Sumitomo’s Business
Philosophy. We have set forth four material issues inpromoting ESG as “Disaster Resistant,” “Environmentally
Friendly,” “Together with the Community” and “People
Friendly.” We aim to contribute to solving community andsocial issues through our business activities while maximizing
our corporate value. We will also contribute to theachievement of UN’s Sustainable Development Goals (SDGs).

Jul 25th anniversary of Shinchiku Sokkurisan full remodeling business - Achieved cumulative total of 150,000 units contracted

The STEP Concert, a classic concert for families to enjoy, certified under the “THIS IS MECENAT 2021” Mecenat activity certification program
Higashi-Ginza Area Management Project: Hoarding Fence Art Exhibition Project in Tsukiji 1-chome demolition site
Sep Conducted Remote Fire Prevention Drill, a new fire prevention drill involving remote workers

Sumitomo Realty and TEPCO Energy Partner concluded “Decarbonization Lead Project” agreement
Launched SUMIFU × ENEKARI, an industry-first service of new residential solar power generation

Disasterprevention
Even bettersocial assets

The Sumitomo Realty Group’s
Value Creation

Environment

Launched “Sumitomo-Fudosan-no-Miraino-Ie” (Sumitomo Realty’s next generation home), which ensures efficient energy use and secures lifelines
for disasters
Became the first in the industry to standardize the ZEH-M Oriented energy-saving standard for condominiums

PeopleStarted promoting and requesting the use of green power at condominium construction sites
Oct Supported “Operation Gundam R (Recycle)” at Sankaku Hiroba in Shinjuku Sumitomo Building and Ariake Garden, etc.

Decarbonized the SEGA SAMMY Group headquarters with raw green electricity from newly established power plants

Community

Nov Began offering a set of plans to introduce green power to leased office spaces of individual tenants
Dec Launched “High Thermal Insulation Remodeling Plan” by Shinchiku Sokkurisan, which meets energy-saving standards for newly-built houses

Held the 109th and 110th STEP Concerts, classic concerts for families to enjoy (registration required, free invitation)
2022

Sustainability Promotion System

Feb Shinchiku Sokkurisan launched industry-academia collaboration research to establish an environmental evaluation method for the renovation ofexisting houses

Mar Started recycling and awareness-raising initiatives in collaboration with Suntory Group to facilitate the sustainable recycling of PET bottles in officebuildings

Sustainability Committee chaired by the Company’s President to manage status of progress
towards the targets regarding sustainability.

Planted a tree descended from an ancient cherry tree at Daigoji Temple as a symbol of “sustainable community development” that will continue
into the future

Business Review

In order to promote sustainability across the Group, Sumitomo Realty has established theHigashi-Ginza Area Management Project: Held an event to display traffic-safety posters painted by elementary school students
Apr Shinchiku Sokkurisan started offering SUMIFU × ENEKARI, a new solar power generation service through renovating existing detached houses

In addition, its subordinate organizations, the Sustainability Promotion Council, the BCP
Council and Internal Control Meeting chaired by the Head of Corporate Planning Division,
work to identify and solve issues related to corresponding sustainability issues.
Important issues are conferred with the Sustainability Committee, and reported to theParticipated in the “30by30 Alliance for Biodiversity” and strengthened biodiversity conservation activities
Launched “Sumitomo-Fudosan-no-SUMICA,” ensuring thermal insulation and energy-saving performance exceeding the latest ZEH standards
May Established and announced CO2 emissions reduction targets by fiscal 2030

Signed a comprehensive collaboration agreement on forest cultivation with Susono City
Jun Shinjuku Sumitomo Building won the “Award of Minister of Land, Infrastructure, Transport and Tourism” for Achievement award of Japan

Board of Directors as necessary.

ESG Management

Association for Real Estate Sciences

Released the result of joint research with The University of Tokyo and Musashino University on “Shinchiku Sokkurisan” building renovation Cutting CO2 emissions by 47% compared to rebuilding

System Diagram (As of September 2022)

Signed a comprehensive collaboration agreement with Daikin for decarbonization of air conditioning systems (Phase 1: Regeneration and reuse ofrecovered refrigerants)

Sustainability Committee

Recognition from external organizations and endorsement of international initiatives, etc.

Chairman: President

BCP Council

Sustainability
Promotion Council

Internal Control Meeting

Chairman: Head of Corporate
Planning Division

Chairman: Head of Corporate
Planning Division

Chairman: Head of Corporate
Planning Division

Administrative Office:General Affairs Department

Administrative Office:Corporate Planning Department

Administrative Office:Internal Audit Department

Consolidated Financial and Nonfinancial Data / Company Information

The Sumitomo Realty Group has received high recognition from external organizations for its initiatives todate, and has also endorsed international initiatives, etc. We continue to contribute to the realization of asustainable society.

Administrative Office:Corporate Planning Department

ESG indexes

International initiatives, etc.

Recognition from external organizations

Departments, Divisions, etc.

47

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

48

ESG Management

EnvironmentPOINT

A Message from the Management

Joint research on “Shinchiku Sokkurisan”“Housing regeneration” attracting attention as an effective approach to the decarbonization of existing houses,
which is essential to the decarbonization of the household sector
Quantifying decarbonization effects with The University of Tokyo and Musashino University, and contributing todecarbonization in Japan with an environmental appeal to customers

From December 2021 to March 2022, The University of Tokyo, Musashino University, and Sumitomo Realty carried out the first phase of joint research toestablish an environmental evaluation method for the renovations of existing detached houses.
In its efforts aimed at achieving carbon neutrality by 2050, the Japanese government has set an interim target of a reduction of CO2 emissions from theOverview of the NinthManagement Plan

household sector by 66% by 2030, compared to the FY2013. Achieving this target will require immediate action. Although discussions have been carried out onvarious topics for newly constructed detached houses, such as improving their environmental performance, little progress has been made toward promoting
energy savings or decarbonization for existing houses, which far outnumber new houses (there are currently roughly 50 million existing houses). This research,which quantifies the decarbonizing effects of remodeling, is expected to bring effective approaches to the decarbonization of existing houses.
In the first phase of this research, we performed a building LCA (Life Cycle Assessment) evaluation, using digital technologies such as BIM (Building Information
Modeling) and 3D modeling to assess the amount of the building components reused, both before and during renovation of existing detached houses. The amountof new materials used was also determined based on order statements, etc. The results of evaluation performed at renovation worksites found that for detachedhouses in which full renovation was performed and significantly improved building performance (earthquake resistance, thermal insulation performance, etc.), thereuse of foundations, main frames, etc. dramatically reduced the amount of new materials used compared to rebuilding the entire building, and cut CO2 emissions

The Sumitomo Realty Group’s
Value Creation

during renovation by 47%.
Existing
house

Rebuilding

View of virgin forest from the entrance lobby of La Tour Sapporo Ito Garden

2030 compared with fiscal 2014, immediately prior to the Paris Agreement.

Scenario
Category
Subcategory
Event
1.5 to 2°C Transition risk Policies and Regulations Increasing demand for ZEB*1 and ZEH*2
1.5 to 2°C Transition risk Policies and Regulations Introduction of a carbon tax
1.5 to 2°C Opportunity Products and Services Lower prices of high environmental performance products due to their spread
1.5 to 2°C Opportunity Products and Services Increasing interest in environmental performance
4°C
Physical risk
AcuteIncreasing occurrence of natural disasters due to extreme weather
4°C
Opportunity Products and Services Increasing interest in disaster prevention features

49

Integrated Report 2022

*1 ZEB: Net Zero Energy Building*2 ZEH: Net Zero Energy House

ImpactPeriodMedium to Large Short term
Medium to Large Medium term
SmallLong term
MediumShort term
MediumShort term
MediumMedium term

CO2 emissions
from waste

CO2 emissions
from materials

30.0Interiors, equipment, etc.

Foundation, structural
materials, external walls, etc.
Demolition andwaste disposal

10.0

0.0

Demolition completed(reusing the foundationand main frames)

House after
renovation

Rebuilding

Full renovation

In one case constructed by Sumitomo Realty, reusing foundations and structural
materials made it possible to reduce the amount of CO2 emissions from the manufactureof construction materials by 47%, or approximately 22 t-CO2, per house omprehensive collaboration agreement signed for the decarbonization of air conditioning systems
C(Phase 1: Regeneration and reuse of recovered refrigerants)

POINT

Comprehensive collaboration agreement signed for the decarbonization of air conditioning systems, which accountfor nearly half of energy consumed in office buildings
Further development of office buildings with a high environmental performance that also contributes to tenants’decarbonization

For the decarbonization of air conditioning systems, which account fornearly half of energy consumption in office buildings, we concluded acomprehensive collaboration agreement for the decarbonization of air
conditioning systems with Daikin Industries, Ltd. in June 2022.
Regarding greenhouse gases emitted from air conditioners, the amount is
the greatest when air conditioners are in operation. Refrigerants have thesecond-greatest impact on the emission amount. Under this agreement, we will
jointly promote a variety of initiatives to examine and optimize the energysaving effects of air conditioning systems and to recycle and reuse air
conditioning refrigerants.
As the first project under this agreement, we work with the Daikin groupand other business partners to regenerate and reuse all refrigerants in principle
recovered from air conditioners in the office buildings we operate and turn them

Consolidated Financial and Nonfinancial Data / Company Information(Reference) Assumed risks and opportunities by the Company

CO2 emissions
from materials

ESG Management

Disclosure based on TCFD recommendations
Please refer to the Sustainability page (Environment page) on the Company website.
https://english.sumitomo-rd.co.jp/sustainability/environment

CO2 emissions
from waste

Construction, etc.

20.0

Risks and opportunities associated with climate change
In order to address the physical risks associated with climate change, various schemes to curb it, and transition risks such as changes in the businessenvironment, the Sumitomo Realty Group has organized and analyzed the financial impacts brought by climate change and responses to those impacts fromthe four perspectives of governance, strategy, risks, and targets, based on the TCFD Framework, and is promoting a variety of initiatives. Important issues
among the identified risks are conferred with the Sustainability Committee, chaired by the President, and reported to the Board of Directors as necessary,
thereby establishing a supervisory system by the Board of Directors. *For details, please refer to the following information.

(47%)

50.0
40.0

*For details of our initiatives, please refer to “Decarbonization Targets” and “Our Initiatives for the Decarbonization Targets” on pages 13-14.

Climate Change(ton-CO2)

60.0

Demolition completed(creating a completely
empty lot)

Existinghouse

We will continue to promote a variety of initiatives for environmental protection as we expand our business activities.

CO2 emissions38.2

Business Review

In recent years, countries around the world have been working together against various environmental issues, including climatechange. In Japan, momentum toward reducing greenhouse gas emissions has been rising, and carbon neutrality by 2050 has been
declared. In addition, public-private initiatives taken for the conservation of water resources, preservation of biodiversity, reduction ofwaste, and others, are also moving into even higher gear. As well as supporting the targets set forth by the national and the local
governments and administrative organizations, the Sumitomo Realty Group is putting its efforts into various initiatives in cooperation
with respective stakeholders through its business operations.
In our Ninth Management Plan announced in May 2022, we established our own target of a 50% reduction in CO2 emissions by fiscal

House after
rebuilding

Full renovation

Addressing Environmental Issues

Demolition andfoundation removal

Multi air conditioner compressor units for building at Sumitomo Fudosan Roppongi Grand Tower

into recycled products. In this way, it is expected to reduce CO2 emissions bygreatly reducing the amount of refrigerant production.
Sumitomo Realty & Development Co., Ltd.

50

ESG Management

EnvironmentSusono City and Sumitomo Realty signed a comprehensive collaboration agreement on forest cultivation

POINT

Under the slogan of “Forest cultivation starts here as we work together for the next generations,” with thecooperation of the city, promote and disseminate initiatives for sustainable reforestation and conservation of theforest with biodiversity and other multifaceted functions

Facilitating the sustainable recycling of PET bottles in office buildings

POINT

Against the background of ocean pollution, environment for plastic recycling is developed in response to strong
demand in Japan
Collaborative project realizes the semi-perpetual recycling of PET bottles, discharged in large volumes from officebuildings

In March 2022, in collaboration with Suntory Foods International Limited, we started a PET bottle horizontal recycling initiative for three of Sumitomo Realty

we own in the city’s Chabatake district, with the aims of promoting sustainable and wide-area forest development and multifunctional enhancement ofbuildings.

Overview of the NinthManagement Plan

In May 2022, we signed a comprehensive collaboration agreement with Susono City on forest cultivation centered on the approximately 185 ha of the forest
forests in Susono City.

A Message from the Management

Resource Circulation

Biodiversity

PET bottles are conventionally recycled into food trays and textile products. In this horizontal PET bottle recycling, an advanced recycling method, properly

Under the slogan of “Forest cultivation starts here as we work together for the next generations,” we actively promote the regeneration and conservationof the forest, which has diverse value indispensable to the area, such as biodiversity, watershed conservation, prevention of landslides, and CO2 absorption.
Further, by widely disseminating this initiative, we aim to promote similar activities in many other forests including ones in Susono City.
In addition to forest regeneration through final cutting and reforestation in accordance with a forest management plan, we will utilize the wood assorted PET bottles are recycled and turned back into raw materials for PET bottles. It allows resources to be used semi-perpetually, and so is attracting attention
as a method that meets the demands for a resource-circulating society.
We operate more than 230 office buildings, and over 1,000 tons of PET bottles (equivalent to approximately 50 million PET bottles for 500ml) are collectedfrom these buildings annually. In addition to environmental initiatives including 3R activities (Reduce, Reuse, Recycle) which we have been conducting, westarted this horizontal PET bottle recycling to realize a sound material-cycle society, in line with the growing momentum to promote recycling across the wholepromote other multifaceted initiatives.

nation, including the enforcement of the Act on Promotion of Resource Circulation for Plastics, against the background of marine plastic problems.

Used PET bottles

Recycling

The Sumitomo Realty Group’s
Value Creation

construction material in our housing business taking advantage of the forest’s location close to urban cities, provide wood education for children, and

New PET bottles

Bottle to bottle“Sumitomo Fudosan no Mori” (Sumitomo Realty Forest)
70-year-old cypress trees

Business Review

Drinking/
consumption
Susono City: Mayor Harukaze Murata,
Sumitomo Realty: Deputy President Yoshiyuki Odai*”Bottles are resources!
Towards a Sustainable Bottle”

Other initiatives for preserving biodiversity
Greenery in cities

Other initiatives for resource recycling and water conservation

Not only protecting and making use of natural surroundings, our development business greatly contributes to the creation of green space which is lacking inOsaki Garden City is a redevelopment project of a former driving school site and a densely built-up district with wooden housing on the west side. This areaused to be an industrial area with little greenery and narrow streets which posed challenges with respect to disaster response. By the completion of Osaki Garden
City, the overall location’s green coverage increased from 0.01% to 35% including its roof greening, and it also helped revitalization of the community, utilizing thevast open space on the site to hold various events.
La Tour Sapporo Ito Garden has been developed on the former site of Kairakuen, one of the first municipal parks in Japan, by taking advantage of theenvironment that brings residents a sense of affinity.

At Sumitomo Realty’s office buildings, we carry out activities to reduce waste discharge and promote recycling across our entire portfolio. In addition todisplaying posters to raise awareness of waste reduction and recycling among tenants, we promote waste separation by providing waste separation bins totenants at our own expense when they move in. We also have concluded contracts with waste disposal companies for each building to ensure the appropriate
recycling of recyclable waste, such as dry cell batteries, fluorescent lamps, styrofoam, metal, PET bottles, cans, jars and used paper.
Risk analysis and initiatives for water resource and conservation
Sumitomo Realty has not earned any revenue from its business activities in areas where water stress is a concern, based on the Aqueduct Survey conducted

Consolidated Financial and Nonfinancial Data / Company Information

valuable old trees growing wild in the premise. While carefully preserving these trees, the entrance lobby is designed with a view of them, creating an

3R initiatives
ESG Management

urban areas by working on greening areas that have poor green coverage, and maintaining biodiversity in those areas as a result.

by the World Resource Institute (WRI). Even though Japan, where our business activities are mainly based, has been certified as a “Low-Medium” water risk
area, and water stress is relatively low and is considered less likely to be directly affected by water resource depletion and other related issues, we willcontinue to closely monitor risks related to water resources in our supply chain, including the depletion of water resources in the major countries of origin ofmaterials and other supplies.
For conservation of water resource, the Company actively promotes installation of water saving
equipment at all properties it develops by adopting design standards specifying use of ultra-water-saving
toilets, flush volume of 6 liters or less significantly less compared with 13 liters used by previous model,
installing them to all new buildings as well as existing properties through renovation.
In addition, we have been substantially reducing water consumption by setting up sewage andrainwater reclamation facilities that purify the water, and using the greywater to flush toilets and water

Osaki Garden City

51

Integrated Report 2022

La Tour Sapporo Ito Garden

plants, mainly in large office buildings.

Standard recycling stations provided free of charge to our
tenants for the promotion of waste separation

Sumitomo Realty & Development Co., Ltd.

52

ESG Management

Society
A Message from the Management

Identification of Risks through Human Rights Due Diligence
Sumitomo Realty Group conducts human rights due diligence to prevent negative impacts on human rights through our business activities. By assessing thehuman rights risks that exist in the value chain of its business activities, the Group has identified the following challenges on which we need to focus oureffort. We will conduct appropriate reviews regarding these challenges as necessary, through continuous monitoring.
We maintain an environment where employees can work in a healthy and safe condition, under strict

1. Working environment for employees standards that exceed legal requirements.

3. Working environment for suppliers

We protect the health and safety of our suppliers’ employees through training and other means, andrequest our suppliers to maintain an appropriate working environment.

4. Customers’ health and safety

We conduct thorough quality control of the products and services we provide, so that customers canuse them in a healthy and safe condition.

5. P
 rotection of the human rights offoreign technical interns

For foreign technical interns working for a Group company engaged in hotel management, we haveconfirmed that the contractors who are their direct employers maintain a good working environment,
including the payment of appropriate wages and the provision of a consultation desk in the interns’
native languages, and will continue to confirm them.
Further, in collaboration with the contractors, we hold local gatherings with the families of the foreigntechnical interns, where we provide explanations of their work and video messages from the interns,
in an effort to create an environment where they can work with peace of mind.

The Sumitomo Realty Group’s
Value Creation

We thoroughly implement measures to prevent any kind of discrimination and harassment inworkplace.

Overview of the NinthManagement Plan

2. Prohibition of discrimination orharassment in workplaces

Promotion of Diversity for Active Participation of Diverse Personnel
As mentioned in A Message from the Management, we have long been promoting diversity based on the recognition that diverse perspectives and values arean advantage for the sustainable growth of a company. We have been working on the improvement of the work environment and implementation of training
programs for a diverse workforce, as follows.

Response to Social Issues

Female participation and career advancement

Respect for Human Rights and Response to Risks of Violations

Please refer to Society Report on the Company website for details.
https://english.sumitomo-rd.co.jp/sustainability/society

Applied to all employees of the Sumitomo Realty Group⃝Compliance with norms and decrees related to human rights⃝Respect for human rights and prevention of discrimination, etc. in the whole business⃝Human rights due diligence to identify and address issues⃝Appropriate education and awareness raising through human rights training⃝Appropriate remedies and corrective actions for victims⃝Review of human rights risks and issues as appropriate through dialogue with stakeholders

53

Integrated Report 2022

Childcare, nursing care support
In order to create a comfortable work environment for those with particular needs such as childcare and nursing care, we offer various support programs
including a childcare and nursing care leave system and a shorter working hour system.

Employment of people with disabilities
We conduct hiring without discriminating age, gender or region, and 2.4% of employees of Sumitomo Realty are people with disabilities, exceeding the 2.2%
required under the system on employment rate of persons with disabilities. In order to make workplaces comfortable for people with disabilities, we haveinstalled multipurpose bathrooms and barrier-free elevators.

Consolidated Financial and Nonfinancial Data / Company Information

Outline of Basic Policy (Initiatives) on Human Rights* Target ratio of female employees in new hires: Increasing to 25% in sales and 13% inengineering positions by the end of fiscal 2025. (As of fiscal 2021, 23.8% in sales and12.3% in engineering positions)

ESG Management

Recognizing that respect for human rights is one of the most important issues in conducting its businesses, the Sumitomo Realty Group has set forth a basic
policy on human rights that applies to all employees of the Group, and undertakes thorough prevention and response to risks of human rights violations
through employee training and other measures. In addition, we request our suppliers to support our human rights policy through our “Sustainable
Procurement Guidelines,” which describes this policy.
In fiscal 2021, we undertook a review of our human rights policy and conducted human rights due diligence, etc. to identify current risks. In order topromote further initiatives, we will keep monitoring our major suppliers on a regular basis and continue to undertake initiatives for the identification,
prevention, and mitigation of the risks.

Business Review

The Sumitomo Realty Group operates businesses that are closely related to people’s lives, providing social infrastructure and related
services that compose cities, including office buildings, condominiums, detached houses, remodeling, and real estate brokerages.
In those business activities, we are continuously engaged in addressing diverse social issues such as disaster prevention, respect forhuman rights, health and safety, promotion of diversity, and human resource development, which involve many of our stakeholders
including employees, customers, business partners and local communities, as well as contributing to local communities and society.

We have announced a numerical target for the ratio of female employees
newly hired in sales and engineering positions that support our front line
operations. By further increasing the ratio of female at the workplace andworking on their career development, we intend to expand the pool of ourhuman resources for future promotion and gradually promote them tomanagerial positions.

Expanding opportunities for elderly employees
We are expanding opportunities for elderly employees to put their rich experience to work by hiring new employees aged 60 or older and rehiring retirees.

Various training programs
We work to expand the knowledge of employees by various training programs, and inform them of the code of conduct suitable for employees of theSumitomo Realty Group and ensure their compliance.
Human resource
Occupational safety, harassment
training
Managerial
Harassment, labor management, compliance
position training
Occupational
Technical guidance, risk assessment methods
safety training

New employee
training

Company history, business manners, human rights,
complianceTechnical guidance, risk assessment methods,
Engineer training
construction methods
Certification
Encouraging to acquire certifications
training

Sumitomo Realty & Development Co., Ltd.

54

ESG Management

Society

Promotion of Community Revitalization and Contribution to Local Communities

Japan is one of the countries in the world with the greatest earthquake risk, and we recognize that improvement of resilience is one of the extremely
important themes for our business activities. As a supplier of social assets that form the foundations of people’s lives such as office buildings andcondominiums, the Sumitomo Realty Group promotes initiatives to increase the resilience of the properties supplied in each business and to improve disaster
preparedness in the operation of them.

In order to achieve the sustained revitalization of development areas, we have strived to create a lively atmosphere by holding entertainment events not onlyin the redevelopment area but also at buildings that serve as local hubs. We also emphasize contributions to the development of community and society
through our business activities, and are engaged in various social contribution activities through our business activities in cooperation with stakeholders.

Bringing liveliness to communities through area management

Disaster prevention for office buildings

TOPIC

high magnification

Remote disaster drills at Shibuya Garden Tower“Shibuya Challenge!” training by
Shibuya Fire Station

Video training for tenants

Disaster prevention for condominiums
In our condominium business, we have adopted seismic isolation/damping
structures that prevent deformation of buildings and alleviate shaking during
an earthquake in order to realize safe and secure housing. In addition, various
disaster countermeasures are implemented, such as installation of emergency
power generators, elevator safety functions, storerooms for emergency
supplies and emergency wells.

Basic structure
Seismic energy absorbed
Conventional structure

The Company is participating in the Kanosei Art Project, which Toppan
Printing Co., Ltd. has carried out since 2018. It aims to showcase works byartists with disabilities in various products. This project is being promoted asa new attempt to combine self-support for people with disabilities andcorporate human resource development. As we endorse the approach of“Going beyond offering support for people with disabilities to create
sustainable initiatives with them as business partners,” we areparticipating in this project and displaying artists’ works in our buildings
for the aesthetics of the buildings.

As a symbol of the sustainable community development that we havepromoted under our slogan of “Create even better social assets for the
next generation,” we have planted descendants of the Taiko Shidarezakura(Taiko Weeping Cherry) in our development sites.
The Taiko Shidarezakura is a weeping cherry tree that has been carefully
preserved at Daigoji Temple, a World Heritage Site in Kyoto, and has
entwined the history with the temple. This tree was loved by Hideyoshi
Toyotomi (1537-1598), and is said to be “the cherry tree with a heart thatseeks to benefit others,” which is also in line with our business philosophy.
With this ”heart” that seeks to benefit others and society, we willcontinue to promote business activities that contribute to the community.

Artworks displayed on temporary enclosuresat construction sites

Temple cherry tree in full blossom

Art exhibition in an office building entrance
lobby

Taiko Chiyo Shidare cherry tree
planted at Shinjuku Sumitomo
Building

City Towers Tokyo Bay

SlowshakingLighting equipment
tends to fall
Glass tends toshatter and fall

Deformation ofdoor frames tends
not to occur

Concrete tends
to fracture andfall
Deformation ofdoor frames
tends to occur

Crackingof pillars
and beams

Sashes tend
to come off

Earthquake motion(horizontal vibration)

Furnituretends not totopple overLighting
equipment
shakes less
Frame tends
not tofracture

Seismic
isolation
devices

As part of our social contribution activities, for 34 years from 1987, wehave held “STEP Concerts,” full-scale classical concerts for all ages toenjoy side by side, for which all are invited for free, with the aim ofcreating opportunities for people to appreciate art and culture.
Since 1996, the concerts have been designated as a child welfare
cultural asset recommended by the Social Security Council of the Ministryof Health, Labour and Welfare, and more recently, they were certified as
an outstanding mécénat activity in the “This is MECENAT 2021”
certification system, which is run by Association for Corporate Support of
the Arts sponsored by Agency for Cultural Affairs.
We will continue to contribute to local communities through the supportand dissemination of cultural and artistic activities.

Consolidated Financial and Nonfinancial Data / Company Information

Integrated Report 2022

The Daigo Cherry Tree, a symbol of “Sustainablecommunity development”“STEP Concert” certified as Mecenat Activity

Violent horizontal vibration
is caused. Higher floors shake
more strongly.

55

Dinosaur exhibition held in Sankaku Hiroba

Key disaster countermeasures (City Towers Tokyo Bay)

Strongshaking

Seismic reinforcement work

Shinjuku Sumitomo Building after renovation

Participating in the Kanosei Art Project

Disaster prevention of Shinchiku Sokkurisan remodeling
In order to improve functionality to makeexisting houses earthquake resistant without
rebuilding, Shinchiku Sokkurisan offers
seismic reinforcement work that meets thegovernment’s safety standards, based onearthquake resistance diagnosis.
We are promoting a variety of initiatives
to realize further safety, such as thedevelopment of our original earthquakeresistant construction method.

Event held at Shinjuku Sumitomo Building when first completed

ESG Management

In our custom home business, we are researching and developing various
specifications with earthquake resistant countermeasures while
incorporating earthquakeresistant technologies forbuildings and condominiums. We
also offer new types of disasterprevention that meet the needsof the times, such as packaged
products, including solar power
generation equipment and water”Power Panel” — Strong bearing walls withstorage facilities.

With many workers not yet returning to their offices due to the
COVID-19 pandemic, to prepare for disasters in line with thetimes, we conducted disaster drills remotely in conjunction withfire departments, as well as new disaster drills for individual
tenants.

Business Review

Disaster prevention for custom homes

Disaster drills for the new normal

The Sumitomo Realty Group’s
Value Creation

AED practice area

Sumitomo Fudosan Iidabashi First Tower

We are promoting various activities to revitalize the communities at our buildings as local hubs. Since its completion in 1974, the Shinjuku Sumitomo Building,nicknamed “Sankaku Biru” (triangular building), has been the center of the lively atmosphere. After a large-scale renovation, it was renewed in June 2020
with the “Sankaku Hiroba” (triangular plaza), a large space with a capacity of about 2,000 people. Its all-weather atrium has the feel of an outdoor venue
while protecting the plaza from the effects of the weather and temperature. This large-scale renovation is not just a building renewal, but also contributes tothe further revitalization of Shinjuku with the event space which accommodates a range of activities, as a hub of the city.

Overview of the NinthManagement Plan

In the office building leasing business, to meet the needs for BCP, for which greater emphasis has been placed after the Great East Japan Earthquake, wehave been actively adopting seismic isolation and damping systems, and developing buildings with specifications such as uninterruptible power supply.
(Please refer to “Business Segments: Leasing” on page 35.)
Further, in the large-scale development sites we manage, in order to contribute to the community’s disaster preparedness as a hub, we hold joint disaster
drills with not only workers in our office buildings but also local residents, volunteer fire corps, and fire stations at times. We also confirm the system offacilities for stranded commuters, which we prepare in multiple buildings with local governments. Through these, we make efforts to improve disaster
preparedness of the community as a whole in preparation for emergencies.

Fire hose demonstrations with amachikado disaster drill vehicle

A Message from the Management

Disaster Countermeasures

The 108th STEP Concert“This is MECENAT” is certification system founded in 2014 by Association for Corporate
Support of the Arts in order to demonstrate the social significance and presence of diverse
activities implemented in all regions around the country by corporations for the purposeof promoting social creativity through arts and culture. (Sponsored by Agency for Cultural
Affairs)
Reference: About “This is MECENAT” (JP) https://mecenat-mark.org/outline/

Because seismic isolation devices absorb
seismic energy, the building shakes
slowly and less deformation occurs.

Sumitomo Realty & Development Co., Ltd.

56

ESG Management

GovernanceOutside Director

Hisatoshi Katayama

Yozo Izuhara

Apr 1985 Joined the Company
Sep 2016 Head of Urban Property Development
Division (present)
Jun 2018 Director (present)
Apr 2020 Senior Managing Executive Officer(present)

Apr
Jun
Jun
Jun
Jun
Jun
Jun

A Message from the Management

Director/Senior Managing Executive Officer

1962 Joined Nippon Sheet Glass Co., Ltd.
1998 Representative Director - President
2004 Representative Director - Chairman
2010 Executive Advisor
2012 Honorary Senior Advisor (present)2014 Corporate Auditor of the Company
2019 Director of the Company (present)

Overview of the NinthManagement Plan

Outside Director

Nobumasa Kemori

Board of Directors and Corporate Auditors (As of September 30, 2022)

*Representative Director

Corporate Auditors

Directors
President

Kenichi Onodera

Kojun Nishima*

Apr
Jun
Jun
Jun
Sep

Apr 1984 Joined the Company
Jun 2009 Director
Jun 2010 Representative Director (present)
Jun 2013 Director - President (present)
May 2017 Head of Building Development
Division (present)

1970 Joined the Company
1998 Director
2005 Representative Director
2007 Director - President
2019 Director - Chairman of the Board(present)

Deputy President

Masato Kobayashi*

Yoshiyuki Odai*

Apr
Jun
Jun
Jun
Nov

Apr 1985 Joined the Company
Jun 2011 Director
Nov 2019 Head of Corporate Planning
Division (present)
Apr 2022 Representative Director – Deputy
President (present)

1983 Joined the Company
2009 Director
2010 Representative Director (present)2013 Director - Deputy President (present)2017 Head of Residential Business Division(present)

Director/Senior Managing Executive Officer

Nobuaki Takemura

Hiroshi Kato

Apr
Jun
Jun
Jun
Apr

Apr 1984 Joined the Company
Jun 2013 Director (present)
Sep 2016 Head of Shinchiku Sokkurisan
Remodeling Division (present)
Apr 2020 Senior Managing Executive Officer(present)
Apr 2022 In charge of Custom Home
Construction Business (present)

1981 Joined the Company
2008 Director (present)2010 Representative Director
2013 Director - Deputy President
2022 Senior Managing Executive Officer(present)		Group Compliance Supervisor (present)		
Representative Director - President of
Sumitomo Real Estate Sales Co., Ltd.
(present)

57

Integrated Report 2022

Yoshifumi Nakamura

Toshikazu Tanaka

Apr
Jun
Jun
Jun

Apr 1983 Joined the Company
Jun 2013 Director		
Representative Director - President of
Sumitomo Real Estate Sales Co., Ltd.
Jun 2019 Corporate Auditor of the Company(present)

1973 Joined the Company
2002 Director
2007 Representative Director
2011 Corporate Auditor (present)

Outside Corporate Auditor

Outside Corporate Auditor

Yoshiyuki Norihisa

Chiyono Terada

Apr 1969 Joined Sumitomo Construction Co., Ltd.
Apr 2003 Managing Director of Sumitomo
Mitsui Construction Co., Ltd.
Apr 2010 Representative Director - President & CEO
Apr 2015 Representative Director - Chairman
Jun 2018 Executive Advisor
Jun 2019 Corporate Auditor of the Company(present)
Jul 2022 Honorary Advisor of Sumitomo Mitsui
Construction Co., Ltd. (present)

Jun 1976 Founded Art Hikkoshi Center
Jun 1977 Established Art Hikkoshi Center
Co., Ltd.
President and CEO
Apr 2018 President and CEO of Art Group
Holdings, Inc. (present)
Dec 2019 Chairperson Emeritus of Art
Corporation (Changed corporatename into Art Moving Company Co.,
Ltd. in January, 2022) (present)
Jun 2020 Corporate Auditor of the Company(present)

Consolidated Financial and Nonfinancial Data / Company Information

Director/Senior Managing Executive Officer

Corporate Auditor

ESG Management

Deputy President

Corporate Auditor

Business Review

Chairman of the Board

The Sumitomo Realty Group’s
Value Creation

Sep 1980 Joined Sumitomo Metal Mining Co.,Ltd.
Jun 2007 Representative Director - President
Jun 2013 Representative Director - Chairman
Jun 2017 Executive Advisor
Jun 2019 Director of the Company (present)
Jun 2021 Honorable Advisor of Sumitomo Metal
Mining Co., Ltd. (present)

Executive Officers
Senior Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Ryuzo Amemiya

Ichiro Wada

Hiroyuki Hashizume

Executive Officer

Executive Officer

Executive Officer

Makoto Nakano

Takuji Iba

Kenichi Kawai

Executive Officer

Executive Officer

Executive Officer

Dai Miyamoto

Tokiyuki Okada

Takeo Kojima

Sumitomo Realty & Development Co., Ltd.

58

ESG Management

GovernanceThis fundamental mission also includes a reminder “Do notrest on seniors’ laurels and make the best efforts for a better
company for the next generation.” At this point in time, we
believe that the management of the Company should continue
to be carried out by people mainly from within the Company
who have inherited the strong will to sow the seeds of growth
for the sake of the next generation. In doing so, we believe that
employees will be able to maintain a high level of motivation to
eventually participate in management.
In consideration of this basic stance, we are working to further
strengthen and enhance corporate governance so as tocontribute to the enhancement of the Company’s corporate
value over the medium- to long-term, by working on
collaboration and dialogue with all stakeholders including
shareholders, improving the efficiency of decision-making,appropriate supervision of execution, and proper disclosure of
information.

Executive Officer System
Due to the limited number of directors, we have introduced an executive
officer system comparable with directors so that we can appoint officers
necessary for business expansion, and we have appointed nine executive
officers who do not concurrently serve as directors. Compensation for
executive officers who are non-concurrent directors is not an employee
salary, but is to be paid from the total compensation for directors, which isclearly based on the Company’s performance set at 1% of consolidated
ordinary profit for the previous fiscal year, because they are considered tobe comparable with directors.

Role and Structure of the Board of Corporate Auditors
Corporate auditors are responsible to supervise whether directors are
performing their duties properly by using the powerful authority endorsedby law. The Board of Corporate Auditors consists of four corporate
auditors, half of whom are the two outside corporate auditors.
	Cooperation among Internal Audit Department, Independent
Auditor, and Corporate Auditors
We have established the Internal Audit Department to check the businessexecution status of each Department of the Group and the operational
status of internal controls, to prevent fraud and errors, and to makeproposals for operational improvement. The Internal Audit Department
reports the results of its internal audits to, and exchanges views as
appropriate with, corporate auditors and the independent auditor in aneffort to forge closer collaboration between the three parties and increase
the quality and efficiency of individual audits.

The Sumitomo Realty Group’s
Value Creation

Corporate Governance System

The maximum number of directors in the Board stipulated in the Articles ofIncorporation is 12. The Board of Directors is comprised of seven directors
from within the Company who are in charge of business execution as they are
deeply familiar with the significance of always looking resolutely forward andcontinuing to invest for sustainable growth, and two outside directors withexperience as chairman and president of listed companies, who have superior
character and insight and understand the Company’s management principles.

Overview of the NinthManagement Plan

Basic Views of Corporate Governance
Sumitomo Realty is a comprehensive real estate enterprise of theSumitomo Group which has a history of 430 years and inherits
Sumitomo’s business philosophy of “Placing prime importanceon integrity,” and “Under no circumstances, shall it pursue easy
gains.” The Company’s slogan, “Integrity and Innovation”
expresses its corporate stance to all stakeholders including its
employees, customers, business partners, creditors andshareholders. This includes the pride as a developer which values“Integrity” above all, and creates new corporate value with apioneering spirit, without pursuing easy gains under any
circumstances.
Under this slogan, we have set forth our fundamental mission
as to “Create even better social assets for the next generation,”and our basic management policy aims to contribute to addressing
various social issues such as the environment, while maximizing
corporate value through each business.

A Message from the Management

Overview of Corporate GovernanceInitiatives to Strengthen Corporate Governance
General Meeting of Shareholders

Steps Taken to Strengthen Corporate Governance
Board of Directors

Board of Corporate Auditors
AdviseExecutive Committee

Briefing for Outside Directors
Share
information

Committee of
Outside Directors
and Auditors

Share information

Whistleblowing report

Independent Auditors
Cooperate

Sustainability CommitteeJun2015 Appointed two outside directors
Established a Committee of Outside Directors and Auditors
and began holding briefings for outside directors on a regularbasis, to strengthen the supervision function of outside
directors and outside corporate auditors
Apr2020 Introduced an executive officer system
Jun2020 Appointed one female corporate officer (outside corporate
auditor)Business Review

PresidentJun2002 Appointed two outside corporate auditors, making half of thefour corporate auditors outside members
Apr2004 Reformed the management system, reducing the number of
directors from 23 to nineJun2004 Introduced a fully performance-based compensation systemfor directors
Abolished the retirement benefit and bonus system fordirectors

Chairman: President

BCP Council
Control

Business risks

Administrative Office:General Affairs Department

Sustainability Promotion Council Internal Control Meeting
Administrative Office:Corporate Planning Department

Control

Disaster risks

Control

Administrative Office:Internal Audit Department
Control

Environment, Biodiversity
Human rights, Diversity

Host

Internal Audit Department
Audit

Audit

Legal compliance
Compliance

59

Integrated Report 2022

where the Board of Directors bears responsibility for execution and corporate
auditors take on the management supervision function.
Seven directors from within the Company, who are deeply familiar withthe business content, are in charge of management and execution, while
two outside directors and four corporate auditors for a total of six persons,which accounts for over 40% of the 13 attendees of the Board of Directors
meeting, are responsible for the management supervision function. In orderto fully demonstrate the supervisory function, we have built a system toaccurately grasp the management condition and issues and to cooperatewith each other as follows. We believe that the Company’s corporate
governance is sufficiently functioning, as its effectiveness is reflected in ourbusiness results.
Role and Structure of the Board of Directors
The Board of Directors promotes the sustainable growth of the Company
and the enhancement of corporate value over the medium- to long-term,
improves profitability and business efficiency, and prevents fraud before it
occurs. In order to do so, it is responsible for deliberating and deciding
important matters for the Company such as basic management policy andmanagement strategy, as well as supervising the execution of duties by
each director.

Sumitomo Realty & Development Co., Ltd.

Consolidated Financial and Nonfinancial Data / Company Information

Overview of Corporate Governance System and Reasons for its
Adoption
Under the Companies Act of Japan, companies may adopt one of thefollowing three forms of organizational structure: (i) a company withcorporate auditors, in which the Board of Directors assumes executive
responsibility, while corporate auditors are in charge of the monitoring ofmanagement; (ii) a company with a nominating committee, etc., wherein
the Board of Directors is tasked with the management monitoring function
and the Board of Executive Officers assumes executive responsibility; and (iii)
a company with an audit and supervisory committee, in which the
management monitoring function of corporate auditors is incorporated
into the functions of the Board of Directors. In this way, companies may
select the optimum governance structure that best suits theircircumstances.
As stated in the Basic Views above, in order for the Company to continue
growing, we believe that people from within the Company who are deeply
familiar with the significance of continuing to invest, always looking resolutely
forward even in difficult times, should be the core members of management
and execution, and the motivation of juniors, who will acquire experience inthe real estate business and eventually join the management team, should bemaintained; hence we have a structure as a company with corporate auditors,

Efforts to Strengthen the Supervision Function
The Company has two outside directors and four corporate
auditors for a total of six persons, which accounts for over 40%of the 13 attendees of the Board of Directors meeting,responsible for the management supervision function. In orderto ensure that outside directors and outside corporate auditors
can fully perform their roles, in the fiscal year under review the
Company (i) held eight briefings for outside directors in which
they were briefed on the agendas for the Board of Directors
meetings, the content of discussions of the Executive Committee,
and other issues; and (ii) convened 14 meetings of the Board of
Corporate Auditors wherein they received reports from theindependent auditor and the Internal Audit Department andconducted interviews about the operating situation with theheads of each department.
In addition, (iii) we have established a Committee of Outside
Directors and Auditors with only four members, comprised ofoutside directors and outside corporate auditors. The Committeeof Outside Directors and Auditors directly hears from each officer
about the execution status of the duties of which he or she is incharge and the issues they are aware of, as well as giving
appropriate advice. In the event of whistleblowing report toward
officers, outside corporate auditors receive a report directly fromthe internal reporting desk that received the report and share theinformation at the Committee of Outside Directors and Auditors.
Through these initiatives, we believe that the Company’s
corporate governance has achieved a certain level of quality, andits effectiveness is reflected in our business results.

ESG Management

Executive Department

Roles of Outside Directors and Outside Corporate Auditors
As part of its initiatives to strengthen corporate governance, theCompany appointed two outside corporate auditors in 2002 andtwo outside directors in 2015.
Corporate auditor is a system that has taken root in Japan fora long time. Corporate auditors use the strong investigative
power granted by the law to audit whether the directors are
conducting their duties appropriately. Although full-time
corporate auditors from within the Company are familiar with
the Company’s internal affairs and have excellent informationgathering skills, they might become somewhat lenient, albeit
unconsciously, when it comes to auditing their colleagues.
Therefore, the Company ensures that at least half of thecorporate auditors are outside members to add an objective
perspective and thereby ensure the effectiveness of audits.
Likewise, it is undeniable that the Board of Directors may
become narrow-minded if it consists only of people from within
the Company, and it is possible that the Board may find itself left
behind by the changes in the world. Therefore, the Company
has appointed outside directors who have excellent characterand insight, who understand its management philosophy, andwho have experience as a chairman or president of listedcompanies, in order to have them advise the management teamand monitor the directors by utilizing their wide range ofknowledge and insight based on their experience in corporate
management.

60

ESG Management

GovernancePosition

Name

Main activities

Director

Yozo
IzuharaMr. Izuhara attended all meetings of the Board of Directors held during the fiscal year under review and expressed his
opinions necessary for the deliberation of agenda, etc. as appropriate. He also provided advice from an independent
standpoint in terms of the supervision of the Group’s management and the medium- to long-term improvement of its
corporate value not only in the Board of Directors meetings but also through such forums as briefings for outside directors
and meetings of the Committee of Outside Directors and Auditors.

Nobumasa
Kemori

Director

Yoshiyuki
Norihisa

ChiyonoTeradaMs. Terada attended all except one of the meetings of the Board of Directors and all meetings of the Board of Corporate
Auditors and Committee of Outside Directors and Auditors held during the fiscal year under review, and expressed her
opinions necessary for the deliberation of agenda, etc. as appropriate.

Evaluation of Effectiveness of the Board of Directors
Every year, the Company analyzes and evaluates the effectivenessof the Board of Directors to further improve its functions.
A survey to all of our directors and corporate auditors forevaluating the composition, operations, deliberations, and otheraspects of the Board of Directors, showed improvements

compared to the last survey with high evaluation. Based on thisresult, at the meeting of the Board of Directors held on March
25, 2022, analysis and evaluation of the structure and theoperational status of the Board of Directors were performed, andit was confirmed that the effectiveness of the Board of Directors
was secured appropriately.

Basic Policy
Regarding nomination of candidates for directors, as well as theappointment of executive officers, persons with a wealth ofexperience, high-level insight and sophisticated expertise who willcontribute to the Company’s sustainable growth and medium- tolong-term enhancement of corporate value are narrowed down tocandidates through multiple meetings of Executive Committee. The
final decision is then made by the Board of Directors based on

thorough deliberation, reflecting independent and objective
opinions of independent outside directors and outside corporate
auditors. Independent outside directors and outside corporate
auditors have opportunities to know relevant information such as
the background, insights and achievements of internal directors andexecutive officers at several occasions including meetings of theCommittee of Outside Directors and Auditors, briefings for outside
directors, and meetings of the Board of Corporate Auditors.

Leasing

Sales

Construction

Brokerage

Redevelopment

Planning andfinanceCompliance

Kenichi Onodera

○

○

○

○

○

○

○

○

Kojun Nishima

○

○

○

○

○

○

○

○

Masato Kobayashi○

Yoshiyuki Odai

○

○

○

Nobuaki Takemura○

Hiroshi Kato○

Hisatoshi Katayama○

Yozo Izuhara

○

○

○

○

Outside (independent)

Nobumasa Kemori
Outside (independent)

61

Integrated Report 2022

○

○

○

○

○
○

ChiyonoTerada○Mr. Izuhara has a background at Nippon Sheet Glass Co., Ltd.,
with which the Company has some transactions etc.
Considering the scale and nature of such transactions, theCompany judges it is unlikely the relationship would have any
impact on decisions of shareholders and investors.

Mr. Izuhara had served as President and Chairman of Nippon
Sheet Glass Co., Ltd., and he has extensive knowledge on
overseas business and M&A as a manager. The Company
deems him to be suitable as an outside director, and therefore
appointed him to that position.

○

Mr. Kemori has a background at Sumitomo Metal Mining Co.,
Ltd., with which the Company has some transactions etc.
Considering the scale and nature of such transactions, theCompany judges it is unlikely the relationship would have any
impact on decisions of shareholders and investors.

Mr. Kemori had served as President and Chairman of Sumitomo
Metal Mining Co., Ltd., and he has extensive knowledge of themining industry from a long-term perspective and overseas
business as a manager. The Company deems him to be suitable as
an outside director, and therefore appointed him to that position.

○

Mr. Norihisa has a background at Sumitomo Mitsui Construction
Co., Ltd., with which the Company has some transactions etc.
Considering the scale and nature of such transactions, theCompany judges it is unlikely the relationship would have any
impact on decisions of shareholders and investors.

Mr. Norihisa has a wealth of managerial experience atanother company. In view of his personality, insight,
experience, etc., the Company judges he is suitable andqualified to serve as an outside corporate auditor and has
appointed him to that position.

○

Ms. Terada has a background at Art Moving Company Co.,
Ltd., with which the Company has some transactions etc.
Considering the scale and nature of such transactions, theCompany judges it is unlikely the relationship would have any
impact on decisions of shareholders and investors.

Ms. Terada has a wealth of managerial experience at anothercompany. In view of her personality, insight, experience, etc.,
the Company judges she is suitable and qualified to serve as
an outside corporate auditor and has appointed her to that
position.

Officers’ CompensationR esolutions of the General Meeting of Shareholders concerning
Officers’ Compensation, etc.
At the Ordinary General Meeting of Shareholders held on June 29,
2004, a resolution was passed to set the total annual compensation
for directors at just 1% of consolidated ordinary profit for theprevious consolidated fiscal year. (The number of directors at thetime of resolution was 12.)On April 1, 2020, the Company introduced an executive officer
system, which enables the appointment of officers comparable todirectors necessary for business expansion, with the aim of thefurther broadening the scope of business and enhancing employee
morale. Accordingly, with the agreement of all directors, thecompensation of executive officers is also to be paid from theaforementioned total amount of compensation for directors.
(Hereinafter, directors and executive officers are collectively referred
to as “directors, etc.”)
The monetary compensation for corporate auditors is determined
to be within 6.5 million yen per month, in accordance with theresolution made at the Ordinary General Meeting of Shareholders
held on June 29, 1999. (The number of corporate auditors at thetime of resolution was five.)	Policies related to the Determination of the Content of Compensation,etc., for Individual Directors, etc., and Authorization for theDetermination Thereof
The policy for the determination of the content of compensation,etc. for individual directors, etc. (hereinafter referred to as the“determination policy”) is established by resolution of the Board of
Directors. Under the determination policy, compensation for eachdirector, etc., consists only of fixed compensation, and the specificcontent (payment amount, timing of payment, payment method,etc.) of the compensation for individual directors is determined byagreement between the Chairman of the Board and Representative
Directors, based on a resolution of authorization by the Board of

Directors. When making this agreement, each director’s duties andlevel of contribution to performance are considered.
Whereas the total annual amount of directors’ compensation isset at 1% of consolidated ordinary profit for the previous fiscal
year, the full amount is not paid to the individual directors, etc., in
the current fiscal year, and part of directors’ compensation isretained without fixing the amount per director, etc., for future use
as retirement benefits for directors, etc., and supplementation of
declines in the compensation of directors, etc., due to downturns inbusiness performance, etc.
With regard to compensation for directors, etc., in the fiscal year
under review, based on authority resolved by the Board of Directors
at a meeting held on June 29, 2021, the specific content (payment
amount, timing of payment, payment method, etc.) of thecompensation for individual directors was determined by agreement
between Mr. Kenichi Onodera (Director - Chairman of the Board/
Chairman of the Board), Mr. Kojun Nishima (Representative Director
and President/Head of Building Development Division), Mr. Nobuaki
Takemura (Representative Director and Deputy President/Head ofManagement Division), and Mr. Masato Kobayashi (Representative
Director and Deputy President/Head of Residential Business
Division).
These four directors are, respectively, the Chairman of the Board,
Representative Director and President, Representative Director and
Deputy President in charge of the Management Division, andRepresentative Director and Deputy President in charge of theBusiness Division, and as these persons received this authorization
based on the judgment that they would be able to agree upon andcomprehensively examine and appropriately assess the duties andcontributions to performance of each director from their respective
viewpoints, the Board of Directors has judged that the content of
the compensation of individual directors, etc., for the fiscal year
under review is in line with the determination policy.

Sumitomo Realty & Development Co., Ltd.

Consolidated Financial and Nonfinancial Data / Company Information

Corporate
management

Name

Yoshiyuki
Norihisa

Reasons of appointment

ESG Management

Skill Matrix (Abilities Expected of Each Director)

Nobumasa
Kemori

Supplementary explanation of the relationship

Business Review

Policies for Appointment of Officers

Yozo
IzuharaIndependence

The Sumitomo Realty Group’s
Value Creation

Corporate
AuditorMr. Norihisa attended all meetings of the Board of Directors, the Board of Corporate Auditors, and the Committee of Outside
Directors and Auditors held during the fiscal year under review, and expressed his opinions necessary for the deliberation of
agenda, etc. as appropriate.

Name

Overview of the NinthManagement Plan

Corporate
AuditorMr. Kemori attended all meetings of the Board of Directors held during the fiscal year under review and expressed his opinions
necessary for the deliberation of agenda, etc. as appropriate. He also provided advice from an independent standpoint interms of the supervision of the Group’s management and the medium- to long-term improvement of its corporate value not
only in the Board of Directors meetings but also through such forums as briefings for outside directors and meetings of theCommittee of Outside Directors and Auditors.

Compliance with the Independence Criteria of Outside Directors and Outside Corporate Auditors and Reasons for Appointment Thereof
Regarding appointment of outside directors and outside corporate auditors, the Company has adopted the requirements for outside
directors and outside corporate auditors prescribed in the Companies Act and the independence criteria set by the Tokyo Stock Exchange.

A Message from the Management

The Status of Main Activities of Outside Officers

62

ESG Management

GovernanceCategory

Directors

Amount by type of compensation (Million yen)Amount paid
(Million yen)

Basic compensation

Stock options

Bonus

Retirement benefit

Number of officers
eligible (Persons)

786

786

—

—

—

8

Executive Officers

278

278

—

—

—

6

Outside Directors

46

46

—

—

—

2

1,111

1,111

—

—

—

16

(excluding Outside Directors)

Total

Total Amount of Compensation etc. for Each Category of Corporate Officers and Number of Officers Eligible
Category

Total amount ofcompensation(Million yen)

Directors(excluding Outside Directors)(excluding Outside Corporate Auditors)

Outside Directors/
Outside Corporate Auditors
Total

Stock options

Bonus

Retirement benefit

Number of officers
eligible (Persons)

2,079

2,079

—

—

—

8

30

30

—

—

—

2

72

72

—

—

—

4

2,182

2,182

—

—

—

14

Notes: 1. With the agreement of all directors, a portion of the amount of directors’ compensation has been allocated to the six executive officers.
2. The breakdown of total amount of compensation etc. for outside directors and outside corporate auditors is 46 million yen for outside directors and 26 million yen for outside corporate auditors.

Total Amount of Compensation of Persons with Total Compensation of 100 Million Yen or MoreAmount by type of compensation (Million yen)

Total compensation

Category

Kenichi Onodera

Director

142

142

—

—

—

Kojun Nishima

Director

142

142

—

—

—

Nobuaki Takemura

Director

114

114

—

—

—

Masato Kobayashi

Director

114

114

—

—

—

(Million yen)

Basic compensation

Stock options

Bonus

Retirement benefit* C ompliance promotion activities refer to activities to prevent all types ofcorruption including bribery and money laundering, as well as activities to comply
with various laws and regulations concerning the environment and society.

Management Structure
In order to address various business risks, the Company establishedthe Sustainability Committee chaired by the Company’s President.
For monitoring and addressing the risks associated with thebusiness, such as investment risk and market risk, the executive
officers in charge of and responsible for respective departments
and subsidiaries report them to the President and the Board of
Directors. The President and the Board of Directors then discuss

63

Integrated Report 2022

and respond to these risks. With the process above, we haveestablished a system that the Board of Directors monitors the risk
management and reviews the operational status as appropriate.
We have also established a system whereby the BCP Council
responsible for the risks of large-scale disasters, etc. affecting
business continuity, and the Sustainability Promotion Council
responsible for issues and risks affecting corporate activities,
including environmental problems, climate change, and humancapital problems, discuss policies for the Group, monitor the status,
and report the results to the Sustainability Committee.
	Examples of Risks that the Company Recognizes and the Boardof Directors Supervises• Risk related to force majeure events, including disasters• Risk related to compliance • Risk related to climate change• Risk related to suppliers • Risk related to information security• Risk related to finance • Risk related to the spread of COVID-19
For details of each risks, please refer to our Governance Report on the
Company website.
https://english.sumitomo-rd.co.jp/sustainability/governance

Whistleblowing System
The Sumitomo Realty Group has established a whistleblowing
system for the employees and their families of the entire Group,
which aims to enable early detection of compliance violations
and appropriate corrective action. In order to encourage active
consultation and reporting, we have designed the system toHandling Compliance Violations
When compliance violations are discovered, the Company
conducts prompt investigations and takes strict disciplinary
actions as well as measures to prevent the reoccurrence of such
violations. At the same time, all officers and employees arewarned.

Consolidated Financial and Nonfinancial Data / Company Information

Issue Awareness and Action Plans
The Sumitomo Realty Group recognizes that it is important forcorporate management to take measures to prevent, mitigate andavoid various business risks, as well as respond to emergencies thatare expected to have a significant impact on corporate activities,
based on an understanding of the various risks involved in business.
In addition to risk management by each business department, theGroup strives to stabilize its business activities and sustainably enhance
corporate value by understanding, analyzing and appropriately dealing
with risks associated with management and businesses through theestablishment of cross-sectional organizations.

Compliance Handbook
The Compliance Handbook, which describes appropriate
behavior in terms of compliance in given situations, is distributed
to all officers and employees to be thoroughly acquainted withlegal compliance. It is used to check the status of compliancewith the code of ethics and to identify compliance violations
whenever necessary. Its contents are updated as required basedon opinions from the work sites after confirming effectiveness.

ESG Management

Risk Management

Compliance Training
Employees are educated on implementation of compliance as
Sumitomo Realty Group employees through various training
programs including new employee training, compliance training
for all employees and managerial position training.

Business Review

NameManagement Structure
The Group has established the Sustainability Committee chaired by
the President, and its subordinate organization, the Internal Control
Meeting (hosted by the Company’s Internal Audit Department),
monitors compliance promotion activities* of the Group andreports the result to the Sustainability Committee. The Internal
Audit Department performs internal audits to check the businessexecution status of each department of the Group and theoperational status of internal controls, prevent any illegal acts or
misconduct, and provide suggestions for business improvement.
Moreover, the department and the independent auditor report theresults of their audits to the corporate auditors and exchanges
opinions in an appropriate manner. These activities help to improve
the quality and efficiency of the audit work of the corporate
auditors, the independent auditor and the Internal Audit
Department. The Group has a system in which the Board of
Directors supervises the compliance promotion activities. Of thematters examined by respective department and subsidiaries,
important matters are reported to the Board of Directors.

The Sumitomo Realty Group’s
Value Creation

Corporate Auditors

Amount by type of compensation (Million yen)
Basic compensation

provide strict legal protection for those who report violations aswell as to allow them the option of anonymous reporting. In
this system, we respond to not only clear compliance violations
but also potential violations.
We have established two points of contact for reporting; theInternal Audit Department, which is independent of businessdivisions or other internal organizations, serves as the internal
point of contact, and an external law firm, which is independentof the management, serves as the external point of contact.
In addition, we have established a consultation hotline in eachGroup company’s Human Resources Department to provide
consultation on harassment and other issues related to theworking environment.
T he p er s onal information of w his tleblower s is kept
confidential with strict legal protections, so they do not suffer
any negative consequences by contacting the consultation
hotline.
Should a compliance violation be identified, we takeappropriate action and then work to prevent a similar situationfrom reoccurring by providing instructions on our website toemployees and other measures. In addition, remedial measures
are provided for victims.

Overview of the NinthManagement Plan

Note: Whereas the total annual amount of compensation for directors including outside directors for fiscal year ended March 31, 2022 is fixed at 2,125 million yen, the full amount has not been paid to the individual
directors and executive officers in the same fiscal year, and 1,014 million yen, the difference from the above-mentioned amount paid, has been retained as provision for future use such as their retirement benefits
and supplementation of declines in their compensation due to future downturns in business performance, etc. Regarding the retained amount, the timing of payment and the amount for individual officers cannot
be determined, and thus, the retained amount will become subject to calculation of compensation etc. of individual officers upon payment in the future or upon confirmation of future payment.

Issue Awareness and Action Plans
The Sumitomo Realty Group has set forth its fundamental mission
which is based on Sumitomo’s business philosophy, and it
established the Code of Conduct as guidelines to govern all ourofficers and employees in order to fulfill this fundamental mission.
The Code of Conduct upholds the concept of implementationof compliance and promotes compliance activities based on theunderstanding that compliance is an important management
issue.
The Company defines implementation of compliance as not
only complying with laws and regulations, but also sensitively
responding and adapting to social demands that underlie laws
and regulations. We promote our business activities by
responding to laws, regulations, internal rules, social common
sense, corporate ethics and social demands that underlie them.

A Message from the Management

Compliance

Amount Paid to Each Director and Executive Officer

Whistleblowing System
The Sumitomo Realty Group

Group consultation hotline
Complianceviolations, etc.
Anonymous reporting

All employees of theSumitomo Realty
Group

Corresponding

Reporting to board members

Internal Audit Department
External attorney-at-law

ReportingOutside Corporate Auditors
Sharing information

Harassment, etc.
Consultation
Corresponding

HR Department ofeach company

The Committee of
Outside Directors
and Auditors

Consultation hotline of each company

Sumitomo Realty & Development Co., Ltd.

64

ESG Management

Governance

The Policy for Takeover Defense Measures Against Purchase Proposals That Undermine the
Corporate Value of the Company (Policy on Large-Scale Purchase of Shares of the Company)

ESG Management

Timely and Appropriate Information Disclosure and Communication with Shareholders and Investors
System for Information Disclosure
The Company considers that it is important to ensure soundness andtransparency of management by means of timely and appropriate
information disclosure. In accordance with this basic policy, theCompany has put in place systems that enable swift reporting to the
responsible department at the head office and implementation of
appropriate information management measures, if a material fact that
may have an impact on investors’ investment decisions arises at theCompany’s departments or at subsidiaries.
Upon emergence of a material fact and reporting thereof, theresponsible department, the General Affairs Department, Corporate
Planning Department, and other relevant departments, discuss whether
there is need for timely disclosure, and if it is judged that disclosure isnecessary, timely disclosure is performed without delay following thenecessary internal procedures. Subsequently, the disclosure materials areposted on the Company website for thorough information disclosure.

Consolidated Financial and Nonfinancial Data / Company Information

Integrated Report 2022

*For detail, please refer to “Notice of convocation of the 89th ordinary general meeting ofshareholders.” (Available on the Company website: https://english.sumitomo-rd.co.jp/ir/)

Business Review

65	The Policy on Measures to a Large-Scale Purchase of Shares of
the Company and the Board’s Stance
The Company believes that if a large-scale purchase of the Company
shares (“Large-Scale Purchase”) is initiated, the shareholders should

The Sumitomo Realty Group’s
Value Creation(2) Growth underpinned by central Tokyo office building leasing
business and corporate value
The real estate leasing business primarily involving office buildings incentral Tokyo has been a driving force underpinning the Company’s
growth thus far. Given that this business accounts for nearly 70% of
the Company’s operating income overall, it clearly forms the core
aspect of its corporate value acting as a major pillar of operations.
The Company has been expanding its business platform bypromoting development of office buildings with a specific focus on
central Tokyo over roughly half a century since the early 1970s, an era
that ushered in completion of the Shinjuku Sumitomo Building, often
referred to as “the Triangle Building.” The Company has experienced
unprecedented economic crises such as the bursting of Japan’s bubble
economy and the 2008 global financial crisis in wake of the Lehman
Brothers collapse, and various changes in the business environment
such as Japan’s bubble economy and business conditions under
Abenomics policies. Still, the Company has consistently persisted withrespect to unwaveringly implementing its management policies suchthat: (i) the Company will not pursue temporary gains by selling assets;(ii) the Company will develop sites and construct buildings; and (iii) the
Company will hold ownership of the buildings constructed on sites it
has developed to generate stable leasing income over the long-term byowning and leasing such buildings. The Company has consequently
grown to become a building owner with a diverse portfolio of morethan 230 buildings located in central Tokyo, and cash flows from theleasing business exceeded 220 billion yen in the fiscal year ended(3) The necessity for the takeover defense measures
In the Ninth Management Plan, the Company has set forth the continuationand promotion of investment in leasing office assets in central Tokyo as its
third target, and it aims to further expand its earnings base, increase its
corporate value, and augment shareholder returns by successively
completing concrete development plans, centered on redevelopment, witha gross floor area of over 700,000 tsubo (one tsubo is roughly 3.3 m2),
which constitutes more than 40% of the 1,700,000 tsubo in gross floorarea for leasing as of March 31, 2022, and putting these buildings into
operation. Such large-scale development plans involve ultimately
generating revenues from the substantial amount of cumulative upfront
investment made thus far. The Company has long managed tocontinuously expand its business platform by developing lease buildings
while avoiding exposure to vicissitudes of the real estate market andeconomic conditions, given that it has always been buoyed by cash
flows from the leasing business which have been a stable source ofrevenues. As such, the Company needs to maintain and further expand
its cash flows from the leasing business, which have grown to exceed
200 billion yen, in order to confidently carry out such upfront
investment without having to continually resort to interest-bearing
debt. Moreover, it is likely to take another two or three medium-term
management plan periods before the Company achieves full
profit abilit y gi ven that the fo cus has b e en on larg e - s c al eredevelopment.
On the other hand, amid large-scale financial easing, appetite forinvestment in top-class domestic revenue-generating real estate has
increased, and it cannot be denied that there is a risk that a large-scaleacquisition will be forcefully conducted in a one-sided manner in
relation to shares of the Company, which holds many top-classbuildings in Tokyo. If the management policies of the Company, which
aim to sustainably enhance corporate value through the steady
accumulation of leasing assets that the Company has continued tobuild up over the past half a century, are rejected and a short-term
management policy is adopted to seek temporary earnings and realizes
latent gains by selling real estate holdings prior to having accomplishedthe objectives of the development plans formulated to contribute tohigher corporate value in the future, cash flows from the leasing
business that act as a stable revenue source will decrease as a result,
thereby exposing the development plans to financial risk. As such, theOverview of the NinthManagement Plan

(1) Steadily achieving objectives of the medium-term management
plans and maintaining the revenue and profit growth trajectoryWith top priority placed on achieving objectives of the medium-term
management plans it draws up every three years, the Company has
increased its corporate value as a result of having steadily carried out
such initiatives. Over the past 25 years, the Company has executed
eight management plans, and has achieved increases in ordinary profit
in 22 fiscal years, excluding the three fiscal years of the global financial
crisis and the COVID-19 pandemic.
In the first 10 fiscal years (three medium-term management plan
periods), the Company focused on restoring its asset base, which had
been damaged by the bursting of Japan’s bubble economy, andreducing interest-bearing debt. In the latter 15 fiscal years (fivemedium-term management plan periods), the Company doubledl easing as s et s, s treng then e d manag em ent foundati o ns byfurther solidifying the four segments of leasing, sales, construction andbrokerage, and enhanced shareholders’ equity, lifting the credit rating
to the AA zone.
Over the next three medium-term management plan periods
through fiscal 2030, the Company will maintain an approach thatprioritizes the allocation of funds to further investment to increaseleasing assets and take steps for sustainable profit growth, while also
aiming to create a resilient management foundation and achievesustainable growth, based on the high level of social contribution of
the Company’s businesses themselves, and increasing investment
capability and the level of flexibility in capital strategy. At present, there
are various issues in the management environment such as the COVID19 pandemic, geopolitical risk and instability in resource procurement,
but as the Company expects to achieve ordinary profit of 300 billion
yen for fiscal 2030, it positions the new medium-term management
plan announced in May 2022, the “Ninth Management Plan (fiscal year
ending March 31, 2023 to the fiscal year ending March 31, 2025),” asthe first step to achieving that target, and exert every effort to continueenhancing corporate value.

March 31, 2022 (operating income of the real estate leasing business +depreciation).
The office building leasing business calls for comprehensive strengths
for carrying out business encompassing everything from acquisition ofdevelopment sites to operations that include planning projects,
marketing tenants, providing services for tenants and managing
buildings. Given that acquiring development sites is the most importantof these operations, the Company has been developing sites forbuildings as if it were a manufacturer in terms of the approach it takes
to redevelopment in terms of purchasing multiple small parcels of land
to integrate them into a larger scale and coordinating rights andinterests of landowners. In addition, the Company attaches importanceto performing building management, tenant marketing, etc. directly,
thus grasping the actual condition of clients and sites appropriately andalways eagerly working on the improvement of project planning andmaking operations more efficient. As a result, we have realized highprofitability, and have increased the value of the property possessed aswell as of the corporation. As of March 31, 2022, unrealized gains fromrental and other investment properties, as disclosed in Consolidated
Financial Results for Fiscal 2021 (Year ended March 31, 2022),
amounted to approximately 3.5 trillion yen having accumulated over
the years.

decide to accept or reject the Large-Scale Purchase. In order for theshareholders to correctly recognize the effect on the corporate value
and common interests of shareholders, however, it is necessary thatboth the party making the Large-Scale Purchase (the “Large-Scale
Purchaser”) and the Board of Directors provide to the shareholders
necessary and sufficient information, opinions, alternative proposals,etc., and necessary and sufficient time to consider them.
The Policy sets out rules on Large-Scale Purchases (“Large-Scale
Purchase Rules”) and requests the Large-Scale Purchaser to comply with
the Large-Scale Purchase Rules. The Large-Scale Purchase Rules statethat the Large-Scale Purchaser provides the Board of Directors necessary
and sufficient information regarding the Large-Scale Purchase inadvance, and commence the Large-Scale Purchase after a certain periodof evaluation by the Board of Directors has elapsed. The Board of
Directors shall take measures that it deems necessary if the Large-Scale
Purchaser does not comply with the Large-Scale Purchase Rules, or eventhough the Large-Scale Purchaser complies with the Large-Scale
Purchase Rules, if it is clear that the Large-Scale Purchase will cause
unrecoverable damages to the Company or if the Large-Scale Purchasesignificantly damages the corporate value and common interests ofshareholders.
Additionally, the Board of Directors shall consult with a Special
Committee consisting of outside directors, outside corporate auditors,
persons with corporate management experience, lawyers, certified
public accountants, etc., and shall receive the recommendations of theCommittee when taking decisions as to whether or not the Large-Scale
Purchaser complies with the Large-Scale Purchase Rules, whether or not
it is clear that the Large-Scale Purchase will cause unrecoverable
damages to the Company, whether or not the Large-Scale Purchase will
significantly damage the corporate value and common interests ofshareholders, and whether or not countermeasures should be taken.
The Board of Directors shall take the Special Committee’s
recommendations into the fullest account.
As stated above, the Policy stipulates rules to secure the necessary
information and time for shareholders to deliberate on the Large-Scale
Purchase, as well as countermeasures if the Large-Scale Purchaser does
not comply with the Large-Scale Purchase Rules or if it is clear that theLarge-Scale Purchase will cause unrecoverable damages to theCompany. The purpose of the Policy is not to maintain the status of theCompany’s officers but to contribute to the Company’s corporate value
and the common interests of its shareholders.

A Message from the Management

Basic Policy and Initiatives to Ensure It

Company is unable to rule out a possible threat of damage to thefoundations of the Company’s corporate value. The Company’s
management policy aims to steadily increase corporate value based ona medium- to long-term outlook, and is consequently incompatible
with such short-term management policies. As such, until there is a
general timeline for the generation of revenues from development
plans covering over 700,000 tsubo, which is equivalent to over 40% of
the current gross floor area in operation, and development plans thatare not reflected in corporate value have decreased to a certain
propor tion, the Company needs to seek a mandate from its
shareholders upon having ensured sufficient information and time forcompleting discussions in case an investor seeking to orchestrate atakeover emerges.
In addition, under the Financial Instruments and Exchange Act ofJapan, there is a tender offer system in place as a process for ensuringtransparency and fairness for share transactions that affect the control
of companies, and it is thus ensured that shareholders will haveinformation and time to make an assessment. The tender offer period
is however short, at 30 business days, and thus cannot be said toprovide sufficient time for consideration. In addition, the Company
believes issues remain in relation to the legal system, such as the factthat high-handed purchases and other abusive purchases cannot
necessarily be eliminated because partial tender offers are permitted,
and the fact that the tender offer system will not be applied in the firstplace if the purchaser only purchases shares through market
transactions.
Based on the above, the Company deems that in order to continue
to sustainably enhance the corporate value of the Company in the
future, the provision of procedures through the “Policy for Takeover
Defense Measures Against Purchase Proposals That Undermine the
Corporate Value of the Company (Policy on Large-Scale Purchase of
Shares of the Company)” (hereinafter referred to as “The Policy”),
continues to align with the common interests of shareholders. The
Policy was adopted based on the decision of the meeting of its Boardof Directors dated May 17, 2007. It was continued based on the
resolution of shareholders’ meeting of the 74th fiscal year dated June
2007, and was continued or renewed upon receiving approval fromshareholders at the 77th, the 8 0th, the 83rd, the 86th and the 89th
ordinary general meetings of shareholders. The term of the Policy will
expire upon the conclusion of the 92nd ordinary general meeting ofshareholders scheduled to be held in June 2025.

Constructive Dialogue with Shareholders
The Company strives to give an account of the Company’s corporate
management and business activities through General Meetings ofShareholders, financial results briefing sessions, individual meetings, andother opportunities for communication with shareholders and investors.
If a shareholder requests a dialogue, the Company’s policy is that the ESG
Promotion Office responds to such request appropriately under thesupervision of the responsible director, etc. depending on the objective ofthe dialogue, the method of communication, the number of shares held, theattributes, etc.
Regarding dialogues with shareholders, the Company exercises due care
concerning the handling of insider information, and notifies, as necessary,important meetings such as meetings of Executive Committee attended bydirectors and executive officers, of the details of the dialogues.

Sumitomo Realty & Development Co., Ltd.

66

Consolidated Financial and Non-financial Data / Company Information

Key Non-financial Data

FY2019Unit

FY2020

FY2021Unit

FY2019FY2020

FY2021

Water withdrawal

Thousand L

2,735,440

1,983,409

1,841,173

Water Withdrawal*

Total Greenhouse Gas (GHG) Emissions (Scope 1 + Scope 2 + Scope 3)
6,536,935

4,917,485

4,844,900

Scope 1 (Direct emissions)t-CO2

42,44541,447

43,205

Covered area

Thousand m

2

3,730,958

3,850,618

3,796,918

Scope 2 (Indirect emissions from energy use)

t-CO2

125,352

122,376

119,984

Water withdrawal coefficientThousand L/m

0.733

0.515

0.485

Scope 3 (Other indirect emissions)t-CO2

6,369,139

4,753,662

4,681,711

1. Purchased goods and services

t-CO2

1,145,396

807,278

1,129,914

Wastewater*

2. Capital goods

t-CO2

755,070

461,984

289,359

Wastewater

Thousand L

2,657,153

1,843,172

1,719,615

3. Fuel and energy-related activities (not included in Scope 1 or Scope 2)

t-CO2

27,13828,04527,642

Covered area

Thousand m

2

3,730,958

3,850,618

3,796,918

4. Upstream transportation and distribution

t-CO2

0

0

0

Wastewater coefficientThousand L/m

0.712

0.479

0.453

5. Waste generated in operations

t-CO2

21,231

21,811

23,757

6. Business travel

t-CO2

1,782

1,776

1,695

7. Employee commuting

t-CO2

3,376

3,364

3,211

Total waste volumet

17,272

13,843

17,346

8. Upstream leased assets

t-CO2

22,656

19,977

18,826

Total recycled waste volumet

10,965

8,722

10,874

9. Downstream transportation and distribution

t-CO2

70,51870,518

106,767

10. Processing of sold products

t-CO2

0

0

0

11. Use of sold products

t-CO2

4,037,977

3,082,599

2,825,782

12. End-of-life treatment of sold products

t-CO2

45,98836,23032,968

13. Downstream leased assets

t-CO2

238,006

220,082

221,791

14. Franchises

t-CO2

0

0

0

15. Investments

t-CO2

0

0

0

2

Waste Discharge and Recycled Waste Volumes** The calculation of water withdrawal, wastewater, waste discharge and recycled waste boundary consists of office buildings owned and managed by Sumitomo Realty for which reporting is required under the Act on
Rationalizing Energy Use, and for which data can be acquired.

Unit

FY2019FY2020

FY2021

Persons

13,676

13,53013,040Male

Persons

9,581

9,445

9,042

FemalePersons

4,095

4,085

3,998

Employee
Total number of employees

3,215,822

3,229,045

3,201,463

Percentage of employees who received health checkup

%

100

100

100

Covered aream

4,977,705

5,300,737

5,513,815

Percentage of nonregular employees

%

24.3

24.0

25.4

Energy consumption coefficient

GJ/m

0.646

0.609

0.581

Average length of service

Years

7.4

7.8

8.4

Green Building Certification

Diversity Indicator
Properties

1

26

27

Number of employees who took maternity leave

Persons

161

151

161

Gross floor area of certified propertiesm2

210,4942,543,308

2,630,933

Number of employees who took childcare leave

Persons

177

189

209

Gross floor area of leasing assets owned by the Company

m2

4,633,047

4,772,670

4,856,078

Number of employees working shorter hours

Persons

164

203

256

Percentage of certified area to total gross floor area

%

5

53

54

Employment rate of persons with disabilities

%

2.38

2.53

2.38

Certification acquisition rate for large-scale new buildings

%

0

100

100

Percentage of female managers

%

4.4

4.5

4.7

Integrated Report 2022

Sumitomo Realty & Development Co., Ltd.

Consolidated Financial and Nonfinancial Data / Company Information

Number of certified properties

ESG Management

GJ

2Business Review

Social Indicator

Energy consumption

2

The Sumitomo Realty Group’s
Value Creation

Energy Consumption

2

Overview of the NinthManagement Plan

t-CO2

Total GHG emissions

67

Environmental Indicator

A Message from the Management

Environmental Indicator

68Consolidated Financial and Non-financial Data / Company Information

Eleven-year Financial Summary

FY2016FY2017FY2018FY2019FY2020

FY2021  688,662
271,811
198,153
165,995
49,396  736,652
278,316
232,149
171,081
50,957  780,273
283,729
234,093
201,190
57,210  806,835
289,117264,207
188,994
58,486  854,964
313,340
274,760
199,115
61,496  925,151
337,465
314,299
203,623
66,714  948,402
353,880
311,192
209,355
69,1681,012,198
381,763
331,751
221,693
71,867

1,013,512
395,592
324,928
218,930
71,199  917,472
398,237
263,394
188,70765,792  939,430
425,081
233,788
204,361
73,484

Cost of revenue from operations

490,436

529,913558,986

579,964

614,190

664,183

664,015

711,050

691,832

629,564

636,987

SG&A expenses% of revenue from operations

50,760
7.4%

55,394
7.5%

60,815
7.8%

60,976
7.6%

66,532
7.8%

72,796
7.9%

78,7498.3%

81,7588.1%

87,348
8.6%

68,663
7.5%

68,560
7.3%

Operating income% of revenue from operations

147,46521.4%

151,345
20.5%

160,47120.6%

165,89420.6%

174,240
20.4%

188,17120.3%

205,637
21.7%

219,38921.7%

234,332
23.1%

219,24423.9%

233,882
24.9%

Ordinary profit*1

107,912

114,916

130,536

139,055

148,424

167,697

186,870

203,227

220,520

209,949

225,115

Profit attributable to owners of parent

53,23659,82569,69780,566

87,797

103,488

119,731130,102140,997

141,389

150,452

Depreciation and amortization

36,04937,76135,311

33,51934,57439,445

41,62746,312

48,97457,81260,645At Year-end
Total assets
Shareholders’ equity*2
Net interest-bearing debt
Unrealized gains on investment and rental properties

3,859,698
553,843
2,407,640
976,000

4,105,500
627,0112,424,932
1,001,547

4,220,428
707,947
2,652,929
1,132,644

4,523,804
832,462
2,875,660
1,290,144

4,675,914
888,099
2,971,668
1,697,562

4,980,039
1,007,347
3,101,162
1,996,441

5,167,198
1,114,975
3,210,303
2,328,140

5,130,118
1,202,103
3,170,595
2,703,263

5,317,623
1,294,998
3,245,548
3,176,151

5,673,666
1,503,021
3,372,953
3,432,632

5,806,040
1,634,049
3,408,601
3,494,974

Per Share Amounts (Yen)Profit attributable to owners of parent
Shareholders’ equity
Cash dividend applicable to the year   112.28
1,168.11
20.00   126.18
1,322.52
20.00   147.02
1,493.48
20.00   169.97
1,756.25
21.00   185.23
1,873.71
22.00   218.34
2,125.36
24.00   252.62
2,352.53
27.00   274.51
2,536.40
30.00   297.50
2,732.41
35.00   298.33
3,171.34
40.00   317.45
3,447.81
45.00

14.3
9.9
4.3
5.3
93
80
4.3
4.2

15.3
10.1
3.9
4.8
93
80
3.9
4.9

16.8
10.4
4.0
4.7
95
82
3.7
6.1

18.4
10.5
3.9
4.7
97
87
3.5
6.5

19.0
10.2
3.9
4.8
98
94
3.3
7.3

20.2
10.9
4.0
5.3
98
95
3.1
9.0

21.6
11.3
4.2
5.5
98
94
2.9
10.5

23.4
11.2
4.5
5.6
99
96
2.6
11.4

24.4
11.3
4.7
6.0
96
95
2.5
12.8

26.5
10.1
4.2
5.5
96
94
2.2
12.6

28.1
9.6
4.3
5.5
98
96
2.1
13.7

For the Year
Revenue from operations
Leasing
Sales
Construction
Brokerage

Key Ratios
Equity ratio (%)
ROE (%)ROA (%)
Return on leasing business*3 (%)
Long-term debt ratio (%)
Fixed-interest rate debt ratio (%)
ND/E ratio*4 (Times)
Interest coverage ratio*5 (Times)

ESG Management

FY2015Business Review

FY2014The Sumitomo Realty Group’s
Value Creation

FY2013

Overview of the NinthManagement Plan

FY2012Integrated Report 2022

Consolidated Financial and Nonfinancial Data / Company Information*1. Ordinary profit, which equals operating income after adjustment for non-operating gains/losses, is a management index that is widely used in Japan.
Due to differences in accounting standards, ordinary profit is not referred to in the Company’s English-language financial statements but is included here because it plays an important role in thecalculation of compensation for directors.
*2. Shareholders’ equity = Net assets – Profit attributable to non-controlling interests*3. Return on leasing business = Cash flows from leasing business / Net investments of leasing business*4. ND/E ratio = Net interest-bearing debt / Shareholders' equity*5. Interest coverage ratio = (Operating income + Interest and dividend income) / Interest expense
Notes: 1. The Company changed its accounting policy (revenue recognition standards of Sumitomo Real Estate Sales) from the beginning of FY2019. The figures provided for FY2018 are those after
retroactive application.
2. From the beginning of FY2020, the business segments for revenue and income from Sumitomo Real Estate Sales have been changed, from the allocation to “Sales,” “Brokerage” and “Adjustments(not presented in the document),” to be consolidated into “Brokerage.” Financial results for FY2019 have been adjusted retroactively.

69

A Message from the Management

Million yen

FY2011

Sumitomo Realty & Development Co., Ltd.

70

Consolidated Financial and Non-financial Data / Company Information

Management’s Discussion and Analysis

Integrated Report 2022

Liabilities
Total liabilities amounted to ¥4,171.9 billion (¥1.3 billion increase
year on year). Consolidated interest-bearing debt was ¥3,559.9
billion, remaining at the same level as the end of the previous fiscal
year (¥1.3 billion decrease year on year). ND/E ratio improved from
2.2 times at the previous fiscal year to 2.1 times.
Net assets
Total net assets amounted to ¥1,634.0 billion (¥131.0 billion increase
year on year). Profit attributable to owners of parent stood at ¥150.4
billion, and retained earnings increased. As a result, the equity ratio
improved from 26.5% at the end of the previous fiscal year to 28.1%,
and ROE was 9.6% (10.1% at the end of the previous fiscal year).

240

948.4

205.6

917.4 939.4 950.0

800

21.7

160

219.3

21.7

233.8 240.0

219.2

24.9

23.9

23.1

%

Billion yen

30

240

220.5
186.8

25.3
20

203.2

160
130.1

119.7
400

80

0

0

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22

10

80

0

0

Operating income

209.9

140.9

225.1

141.3

235.0

150.4

160.0

FY ’17 FY ’18 FY ’19 FY ’20 FY ’21 FY ’22(Forecast)(Forecast)(Forecast)

Operating margin (right scale)

Ordinary profit

Profit attributable to owners of parent* Please refer to note *1 on page 69.

Total Assets

Shareholders’ Equity and Equity Ratio

Billion yen

6,000

5,167.1

5,130.1

5,317.6

1,800

1,503.0
1,200

1,114.9

1,202.1

2,000

1,634.0

FY ’18

FY ’19FY ’200

FY ’21

FY ’17

FY ’18

%

15

30

10

15

5

11.3

24.4

26.5

28.1

600

FY ’17%45

1,294.9

23.4

21.6

0

ROE and ROA

Billion yen

5,673.6 5,806.0

4,000

FY ’19FY ’20

FY ’21

0

11.2

11.3
10.1

0

4.2

4.5

4.7

4.2

FY ’17

FY ’18

FY ’19FY ’20

9.6

4.3

FY ’21

ROE (Net income / Shareholders’ equity)
ROA ((Operating income + Interest and dividend income) / Total assets)

Shareholders’ equity(Net assets – Profit attributable to non-controlling interests)
Equity ratio (right scale) (Shareholder’s equity / Total assets)

Net Interest-bearing Debt and ND/E Ratio
Billion yen

3,600

3,210.3

3,170.5

3,245.5

3,372.9

3,408.6

Long-term Debt Ratio and
Fixed-interest Rate Debt Ratio
Times

%

6

100

98

99
94

4

2,400

96
96

Cash Flows from Leasing Business andReturn on Leasing Business
96

95

94

98
96

Billion yen

%

250

10

214.8

80

200

60

150

178.3

5.5
2.9
1,200

As of the end of the fiscal year under review, long-term debt
accounted for 98% of consolidated interest-bearing debt, and fixedinterest rate debt for 96% (those numbers were 96% and 94%,
respectively, at the end of the previous fiscal year).

1,012.1 1,013.5

234.3

0

FY ’17

2.6

FY ’18

2.5

FY ’192.2

FY ’20Net interest-bearing debt
ND/E ratio (right scale)(Net interest-bearing debt / Shareholders’ equity)

2.1

FY ’21

2

0

193.1

5.6

209.5

220.0

8

6.0

5.5

5.5

6

40

100

4

20

50

2

0

FY ’17

FY ’18

FY ’19FY ’20

Short-term debt and commercial paper
Long-term debt and bonds
Fixed-interest rate debt ratio

FY ’21

0

FY ’17

FY ’18

Consolidated Financial and Nonfinancial Data / Company Information

71

Financial resources for capital and liquidity of funds
AssetsTotal assets as of the end of the fiscal year under review amounted to¥5,806.0 billion (¥132.3 billion increase year on year). Property andequipment increased to ¥4,114.3 billion (¥102.1 billion increase year
on year) due to investment in buildings for leasing.

Billion yen

1,200

ESG Management

Cash flows
Cash flows for the fiscal year under review were as follows:
Cash flows from operating activities: ¥192.9 billion (¥32.9 billion
decrease year on year)
Cash flows from investing activities: ¥(209.9) billion (¥126.6
billion increase year on year)<Cash flows from financing activities>
Issuance of bonds and long-term loans payable amounted to ¥304.5
billion (including non-recourse debt) to further promote long-term
stabilization of fund raising, while redemption of bonds andrepayments of long-term loans payable at maturity totaled ¥227.7
billion (including non-recourse debt). With redemption of ¥80.0
billion in commercial paper, net cash used in financing activities
amounted to ¥21.9 billion.

Billion yen

Ordinary Profit* andProfit Attributable to Owners of Parent

Business Review

Extraordinary income/loss
In the fiscal year under review, owing to the absence of ¥11.8 billion
in gains on the transfer of equity interest in the condominium
development joint venture company in Dalian City, China, which theCompany recorded in the previous fiscal year, extraordinary income
recorded ¥2.5 billion (¥11.1 billion decrease year on year), while
extraordinary loss recorded ¥8.9 billion (¥4.2 billion decrease year onyear), mainly due to loss on disposal of property and equipment. As aresult, extraordinary income/loss deteriorated by ¥6.8 billion from theprevious fiscal year, recording a loss of ¥6.4 billion.

<Cash flows from investing activities>
As the result of investments in property and equipment totaling¥179.5 billion mainly for the purpose of augmenting the leasing
business, net cash used in investing activities amounted to ¥209.9
billion.

Operating Income and Operating Margin

The Sumitomo Realty Group’s
Value Creation

Non-operating income/loss
Non-operating income recorded ¥14.2 billion (¥0.3 billion increase
year on year), mainly due to an increase in dividend income.
Non-operating expenses decreased to ¥23.0 billion (¥0.1 billion
decrease year on year), mainly due to decreases in interest expense.
As a result, non-operating loss recorded ¥8.7 billion (an improvementof ¥0.5 billion year on year).

<Cash flows from operating activities>
Ordinary profit for the fiscal year under review recorded ¥225.1
billion. With a ¥48.3 billion increase in inventories, net cash provided
by operating activities amounted to ¥192.9 billion.

Revenue from Operations

Overview of the NinthManagement Plan

Revenue from operations and operating income
In the fiscal year under review, the mainstay office building businessrecorded increases in both revenue and profit, and the decline incommercial facilities such as hotels and event halls shrank comparedwith the previous fiscal year, resulting in increased revenue and profit
in the leasing business. In addition, there was a contribution to overall
performance from increased revenue and profit in the construction
business including Shinchiku Sokkurisan remodeling, as well as thebrokerage business, owing to good performance from brokerage ofexisting homes.
In the sales business, focusing on condominium sales, revenue andprofits decreased owing to a decline in the number of units delivered,but it achieved a high level of operating income and performed well.
For details of individual business segments, please refer to“Overview of Each Segment” on page 30.

Cash flows from financing activities: ¥(21.9) billion (¥124.0 billion
decrease year on year)
Cash and cash equivalents decreased to ¥150.3 billion (¥36.9
billion decrease year on year).

A Message from the Management

Overview
The financial results for the fiscal year under review were as follows:
revenue from operations recorded ¥939.4 billion (¥21.9 billion
increase year on year), operating income ¥233.8 billion (¥14.6 billion
increase year on year), ordinary profit ¥225.1 billion (¥15.1 billion
increase year on year), and profit attributable to owners of parent¥150.4 billion (¥9.0 billion increase year on year). Revenue fromoperations, operating income, ordinary profit and profit all increased
from the previous fiscal year. Ordinary profit returned to a record highas the decline in profit caused by COVID-19 pandemic only lasted for
one year, while profit attributable to owners of parent achieved arecord high for the ninth consecutive year.

FY ’19FY ’20

FY ’210Cash flows from leasing business
Return on leasing business (right scale)(Cash flows from leasing business / Net investments of leasing business)

Sumitomo Realty & Development Co., Ltd.

72

Consolidated Financial and Non-financial Data / Company Information

History

Corporate Data

1949

• Izumi Real Estate Co., Ltd. established to succeed real estate business of the Sumitomo Honsha Ltd. following the breakup of the conglomerate.

1957• Izumi Real Estate Co., Ltd. changed its name to Sumitomo Realty & Development Co., Ltd.

1963

• Merged with the holding company of the former Sumitomo zaibatsu during its liquidation.

Investor Information

Corporate Name Sumitomo Realty & Development Co., Ltd.
Head Office

Shinjuku NS Building, 4-1,
Nishi-shinjuku 2-chome
Shinjuku-ku, Tokyo 163-0820, Japan

Number of Common Stock
Authorized: 1,900,000,000 shares
Issued:476,085,978 shares
Number of Shareholders: 12,666

Breakdown ofshareholders(of which 11,662 holding share unit)

Date of Establishment December 1, 1949
Paid-in Capital

1964¥122,805 million
Trust Accounts

28.79%

Corporate Website https://www.sumitomo-rd.co.jp/english/

Financial Institutions

9.11%

Other Companies

39.37%

Foreign Companies

19.49%

Individuals and Others

3.24%

Major Consolidated Subsidiaries

Name• Listed on the Tokyo Stock Exchange and Osaka Securities Exchange.

1972• Established Sumitomo Realty & Development CA., Inc., a consolidated subsidiary.

1973• Established Sumitomo Fudosan Tatemono Service Co., Ltd., a consolidated subsidiary.

1974• Completed construction of Shinjuku Sumitomo Building in Shinjuku Ward, Tokyo (in March); moved Company headquarters there from Tokyo Sumitomo Buildingin Marunouchi, Tokyo (in June).

1975• Established Sumitomo Real Estate Sales Co., Ltd., a consolidated subsidiary.

1978• Established Biwako Resort Club Co., Ltd. (currently Sumitomo Fudosan Villa Fontaine Co., Ltd.), a consolidated subsidiary.

1980• Established Sumitomo Fudosan Syscon Co., Ltd., a consolidated subsidiary.

1982

Number of shares held(Thousands)

The Master Trust Bank of Japan, Ltd. (Trust account)

1984• Established Sumitomo Fudosan Finance Co., Ltd., (Absorbed in March, 2022).

1986• Established Sumitomo Fudosan Fitness Co., Ltd. (currently Sumitomo Fudosan Esforta Co., Ltd.), a consolidated subsidiary.
• Commenced American Comfort custom home construction business.

Custody Bank of Japan, Ltd. (Trust account)

24,883

5.25

1995

Sumitomo Mitsui Banking Corporation

11,9902.53

1996• Commenced Shinchiku Sokkurisan remodeling business.

Custody Bank of Japan, Ltd. (Trust account 4)

11,073

2.34

1998• Sumitomo Real Estate Sales Co., Ltd., a consolidated subsidiary, listed on the Tokyo Stock Exchange.

Taisei Corporation

9,550

2.02

Daikin Industries, Ltd.

8,367

1.77

Obayashi Corporation

8,090

1.71

Shimizu Corporation

7,500

1.58

Maeda Corporation

7,244

1.53

Takenaka Corporation

7,100

1.50

1999

• The number of STEP brokerage offices managed by Sumitomo Real Estate Sales Co., Ltd. exceeded 200.
• Completed construction of Izumi Garden Tower in Minato Ward, Tokyo.

2003• Launched J·URBAN urban-style housing series.

2011

2,500

5,000

2014

2,000

4,000

3,000

1,000

2,000

2017

2018

2019

2020

2021

• Completed construction of Sumitomo Fudosan Shinjuku Grand Tower in Shinjuku Ward, Tokyo.
• Number of condominium units brought to market over full year was the highest in Japan for the first time (the sixth consecutive year from 2014 to 2019).
• Completed construction of Tokyo Nihombashi Tower in Chuo Ward, Tokyo.
• Achieved cumulative total of 100,000 units contracted in Shinchiku Sokkurisan remodeling business.
• Completed construction of Sumitomo Fudosan Roppongi Grand Tower in Minato Ward, Tokyo.

2017• Sumitomo Real Estate Sales Co., Ltd. delisted as it became a wholly owned subsidiary.

2020

2021
0

• Completed construction of Shinjuku Central Park City in Shinjuku Ward, Tokyo.
• Opened “Grand Mansion Gallery” in Tokyo metropolitan areas (Akihabara, Shinjuku, Shibuya, Ikebukuro, Tamachi).

2016

1,000

7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6• Started sales of City Towers Toyosu The Twin in Koto Ward, Tokyo.

• Completed renovation of Shinjuku Sumitomo Building / Completed “Sankaku Hiroba,” an all-weather atrium in Shinjuku Ward, Tokyo.
• Fully opened Ariake Garden, a large-scale complex in Koto Ward, Tokyo.
• 25th anniversary of Shinchiku Sokkurisan remodeling business - Achieved cumulative total of 150,000 units contracted.

Consolidated Financial and Nonfinancial Data / Company Information

500

2015

• Completed construction of Shiodome Sumitomo Building in Minato Ward, Tokyo.
• Established Sumitomo Fudosan Bellesalle Co., Ltd., a consolidated subsidiary.

ESG Management

6,000• Started sales of World City Towers in Minato Ward, Tokyo.

Business Review

2010

1,500

• The Samquest bond issuance, which was the first public offering of commercial real estate securitization in Japan.

2001

Yen

Stock Price (right)
TOPIX (left)• Commenced real estate joint investment trust fund. Launched Sumitomo Realty & Development Fund (SURF) series.

2002

2004

Stock Price and Trading Volume on Tokyo Stock Exchange0• Started sales of Hiroo Garden Hills in Shibuya Ward, Tokyo (a joint project).

16.19

76,750

2008

3,000

• Completed construction of Shinjuku NS Building in Shinjuku Ward, Tokyo (in September); moved Company headquarters there from Shinjuku Sumitomo Building (in October).

Percentage ofshares held

Notes: 1. Numbers of shares have been rounded down to the nearest thousand shares.
2. Percentage of shares held has been calculated by excluding treasury stock.

Yen• Entered condominium sales business with Hama-Ashiya Mansion in Kobe, Hyogo Prefecture.

1970

The Sumitomo Realty Group’s
Value Creation

Sumitomo Real Estate Sales Co., Ltd.
Sumitomo Fudosan Tatemono Service Co., Ltd.
Sumitomo Fudosan Syscon Co., Ltd.
Sumitomo Fudosan Villa Fontaine Co., Ltd.
Sumitomo Fudosan Bellesalle Co., Ltd.
Sumitomo Fudosan Retail Management Co., Ltd.
Sumitomo Fudosan Esforta Co., Ltd.

Major Shareholders• Opened Osaka Branch.

Overview of the NinthManagement Plan

Number of Employees 13,040 (Consolidated)

A Message from the Management

Corporate Data / Investor Information (As of March 31, 2022)• Launched “STEP Auctions,” new real estate brokerage service of Sumitomo Real Estate Sales Co., Ltd.

2022

Trading Volume

Million shares

100
75
50
25
0

7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

2017

73

Integrated Report 2022

2018

2019

2020

2021

2022

Sumitomo Realty & Development Co., Ltd.

74

Sumitomo Realty & Development Co., Ltd.
Integrated Report 2022

Shinjuku NS Building, 4-1, Nishi-shinjuku 2-chome,
Shinjuku-ku, Tokyo 163-0820, Japan
https://www.sumitomo-rd.co.jp/english/

Integrated Report

2022

Printed in Japan