Sun Frontier Fudousan Co., Ltd.

Consolidated Financial Statements for the
Fiscal Year ended March 31, 2018
Our goal is to be the real estate company
that customers love and choose over any other worldwide.

1) Executive Summary Results for the
Fiscal Year Ended March 31, 2018

1-11

2) Financial Forecasts for the Fiscal YearEnding March 31, 201912-14

3) Medium term 5-year Management Plantill the Fiscal Year Ending March 31, 2023

15-34

4) Company Overview

35-435) Reference

44-46

May 9, 2018
Stock Code：8934

Highlights of the Whole Fiscal Year
Summary for the Fiscal Year Ended March 31, 2018
Sales and ordinary income increased for the 7th consecutive term. Operating and ordinary income aswell as dividend marked a record high.
(¥ Million, except for per share figures. )Year on Year
ChangeResults

Rate of
ChangeForecast of
FY2018/3

Achievement
Rate

Sales

47,463+7,069+17.5%

50,00094.9%

Operating income

11,239+1,859+19.8%

10,500107.0%

Ordinary income

10,755+1,861+20.9%

10,000107.6%Net income*

7,420

+967

+15.0%

7,000

106.0%

Dividend per share

33.5

+3.5

+11.7%

32.0

104.7%*Net income attributable to owners of parent

Highlights
1) The replanning business remained at a high profit rate.

2) The operation business showed steady growth.

• The replanning business remained at a high profit rate.
(Segment profit rate: Previous term 27.6% → Current term 29.7%)• We have evolved our unique business model in which each department
consolidates expertise and maximizes the attractiveness of buildings by
repeatedly devising ingenuity to increase added value from thecustomer's point of view in all processes composed of procurement,commercialization, and sales.
• Procurement for properties to sell in this FY has been completed. We
will focus on procurement for properties to sell in the next FY andmedium-to long term projects aimed at increasing rent income.

• The space rental business will grow from 6 locations at the end of theprevious FY to 12 locations at the end of the current FY. A new coworking space will be opened in Yurakucho in May 2018.
• In the hotel management business, both sales and profit have greatly
increased due to the year-round contribution of Hotel Sky Court
compared with 3 months contribution in the previous FY and operationof new hotels. As of the end of the current FY, there were 1,105 rooms
operating in 8 buildings in Japan. We opened "Tabino Hotel Hida Takayama" on May 2 this year and will open "Tabino Hotel Sado" in July.

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

1

Sun Frontier Fudousan Co., Ltd.

Changes of the Consolidated Results
Operating income and ordinary income marked a record high for 2 consecutive terms.
Dividend increased for 6 consecutive terms. Ordinary income ratio remained at over 20%.
(¥ 1 Million yen, except for per share figures. )FY Ended
March, 2018

Profit margin
on salesFY Ended
March, 2014

FY Ended
March, 2015

FY Ended
March, 2016

FY Ended
March, 2017

Sales

17,772

27,741

30,62540,39447,463－Operating income

4,531

5,850

7,387

9,380

11,23923.7%

Ordinary income

4,341

5,593

7,024

8,894

(ordinary income ratio)(24.4%)(20.2%5)(22.9％)(22.0％)

10,75522.7%

Net income*

4,020

5,053

8,157

6,452

7,420

15.6%

Net income per
share

94.03

118.18190.78150.92167.62

－

13.50

16.50

25.00

30.00

33.50

Dividend per share(Plan)*Net income means profit attributable to owners of parent

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2

Sun Frontier Fudousan Co., Ltd.

Revenue/Profit Summary(¥ million)

FY Ended
March, 2017

FY Ended
March, 2018

40,39447,46335,63640,997

33,63538,642

Rental Building, Sublease

2,000

2,355

Real Estate Service Business

3,141

3,225

Operation Business

1,330

2,898

689

931

Adjustment

(403)

(589)

Gross Profit

13,70016,264

11,026

13,334

10,012

12,324

Rental Building, Sublease

1,013

1,010

Real Estate Service Business

1,900

1,993

Operation Business

203

387

Other Business

533

586

36

(37)

4,319

5,024

Sales
Real Estate Revitalization Business
Replanning Business(including Hotel Development)

Other Business

Real Estate Revitalization Business
Replanning Business(including Hotel Development)

Adjustment

Selling and general administrative
expenses
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3

FY Ended
March, 2017

FY Ended
March, 2018

9,380

11,239Non-operating income

1516

Non-operating expenses

501

500

8,894

10,755Extraordinary loss/income

10

Corporate income tax, etc.

2,444

3,344

(2)

(9)

6,452

7,420

Operating income

Ordinary income

Profit or loss of Non-controllinginterest

Net income• Gross profit ratio of the replanning business (including Hoteldevelopment) is 31.9% (gross profit ratio of last fiscal year
was 29.8%).

• The operation business and other business are expandingsmoothly. Total sales grew 1.9 times year on year to ¥3.82
billion. Gross profit increased 1.3 times year on year to ¥970
million.

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet-Assets(¥ million)
Increase/Decrease(Compared to theend of Mar. 2017)

FY Ended
March, 2016

FY Ended
March, 2017

Current assets

51,36555,19580,893+25,698

Cash and deposits

15,413

16,24623,892+7,646Inventory assets

32,71436,18654,593+18,407

Breakdown)

27,1895,525－

26,0397,254
2,892

45,525
5,291
3,775+19,486(1,963)
+883

3,237

2,762

2,407

(355)

2,718
1,919
278
520
54,084

8,458
7,288
562
608
63,654

10,867+2,410

8,565
474
1,827

+1,277(87)
1,218

91,761+28,106

RP
Hotel
Overseas, etc.

Other current assets

Noncurrent assets
Property, plant, and equipment
Intangible assets
Investments and other assets

Total assets

FY Ended
March, 2018

The balance of inventory assets grew ¥18.4 billion, among which ¥19.4 billion was attributed to the replanning business projects. Since two hotels
were sold, the hotel inventory assets of the hotel business dropped ¥1.9 billion.
Property, plant, and equipment increased about ¥1.3 billion as a result of acquisition of a hotel aiming at increasing rent income and progress inconstruction of “Tabino Hotel Hida-Takayama”, etc. Investments and other assets increased ¥1.2 billion due to the guarantee money deposited forhotel development.
Cash and deposits increased ¥7.6 billion through a public offering, etc.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

4

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet-Liabilities/Equity(¥ million)

FY Ended
March, 2016

FY Ended
March, 2017

7,641
3,353
973
3,314
16,29815,055
1,242
23,93930,144(0)30,14454,084

8,281
3,438
802
4,040
19,686
18,626
1,059
27,96835,528157
35,68663,654Current liabilities
Short-term loans payable, etc.
Income taxes payable, etc.
Other current liabilities

Noncurrent liabilities
Long-term loans and bonds
payableOther noncurrent liabilities

Total liabilities
Shareholders’ equity
OthersTotal net assets
Total liabilities and capital
Transition of Equity Ratio
End of Mar. 2016

End of Mar. 2017

End of Mar. 2018

55.7%

56.0%

53.2%

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Increase/Decrease(Compared to theend of Mar. 2017)

FY Ended
March, 2018

10,155
2,716
3,178
4,260
32,75630,865
1,890
42,912
48,75099
48,84991,761+1,873(721)+2,375+220+13,069+12,238+831+14,943+13,221(58)+13,163+28,106

Because of the progress of procurement of the properties for the replanning business,loans payable increased about ¥11.5 billion compared with the end of the previous FY
and balance of interest-bearing debt became ¥33.5 billion.
Shareholders’ equity increased ¥13.2 billion due to recording of net income (¥7.42 billion),
dividend payment of the previous term (negative ¥1.28 billion) and a public offering (¥7.15
billion).

5

Sun Frontier Fudousan Co., Ltd.

Performance ofReplanning Business(Replanning (RP)/ Hotel Development)(¥ million)

FY Ended
FY Ended
March 31, 2017 March 31, 2018

Increase/decrease

33,63538,642+14.9%

Segment income (Note1)

9,271

11,483+23.9%

Profit margin

27.6%

29.7%

+2.1%pt

No. of procured
properties

31

49

+18

No. of sold properties

30

35

+5

No. of properties in stock
as of the end Mar.

39

53(注2)+14Sales

 Sales and profit grew.
 As we are keeping on making ingenious efforts towards procurement,commercialization and sales, as well as direct sales to our customers,
segment margins remained at a high level of 29.7%.
 The average business period for selling revitalized properties is 344
days. (Hotel development excluded)
 Procurement progressed steadily, and the number of properties ininventory is 53. (49 for the replanning business and 4 for the hotelbusiness.)
 Balance of inventory assets is ¥50.8 billion (¥45.5 billion of which is
replanning business and ¥5.2 billion of which is the hotel business.)※ Overseas business is excluded.
※ We have also procured or contracted 10 replaning properties worth ¥ 6.47 billion as of the endof April.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

6(¥ million)

50,000

Sales
Segment Income
Profit Margin50%

38,64240,00040%

33,63530,000

27.6%

29.7%

20%

20,00010,00030%

9,271

11,48310%0%0FY2017/3

FY2018/3(Note1) “Segment income” is calculated by subtracting various expenses ofrespective businesses from gross profit on sales. Various expenses
include interest paid, sales commission and goodwill amortization, etc.
(Note2) Land procurement and development cases are also included in theinventory of replanning business.

Sun Frontier Fudousan Co., Ltd.

Performance ofRental Building Business(Rental Building / Sublease)(¥ million)

FY Ended
FY Ended
March 31, 2017 March 31, 2018

Increase/decrease(¥ million)

Sales

2,000

2,355

+17.7% 2,500

Segment
income

1,013

1,010

(0.3%)

Profit margin

50.7%

42.9%

(7.8%pt) As procurement of replanning properties progressed, andincome from rents from inventories increased. Sales grew as
the rents from hotel properties is added.
 On the other hand, the ratio of buildings that have many vacant
units suited for the replanning business is high. As the ratio ofcost, including depreciation, to sales increased, profit remain
on a plateau and profit margin dropped.
 In August 2017, we acquired an existing hotel in front of
Toyama Station as fixed assets, for the purpose of increasing
the revenue from rents.
 We will focus on procurement med-to-long-term replanning
properties, aiming at increasing rent income.

2,000

1,500

1,000

Sales
Segment Income
Profit Margin

2,003

80%

60%

50.7%
1,016

7

43.1%

1,019

40%

500

20%

0

0%

FY2017/3

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

100%

2,365

FY2018/3

Sun Frontier Fudousan Co., Ltd.

Performance ofReal Estate Service Business(Property Management(PM) / Building Maintenance(BM) / Sales Brokerage / Rental Brokerage)(¥ million)

FY Ended
FY Ended
March 31, 2017 March 31, 2018

Increase/decrease

Sales

3,141

3,225

+2.7%

Segment
income

1,900

1,993

+4.9%

Profit margin

60.5%

61.8%

(¥ million)

4,000

3,200

+1.3%pt＜PM Business/BM Business＞
 In the PM and BM businesses, we offered services with highadded value by providing meticulous tenant management andsolving our customers’ troubles as well as working on revenue
improvement by modifying conditions for fair rents. As a result,
we contributed to expanding the customer base and businessbase of the entire group.

2,400＜Sales Brokerage Business/Rental Brokerage Business ＞
 Sales and profit of the brokerage business declined, but it served
as the driver for the creation of high added value from theviewpoint of our customers in the processes of procurement,commercialization, and sale of RP real estate, and contributed to
the revenue of the entire corporate group.

8

100%
3,225

3,141

60.5%
1,900

【Variations in the number of managing properties buildings for PM andoccupancy rate】
No. of managing properties Occupancy rate
End of Mar. 2016
333
95.5%
End of Mar. 2017
362
96.6%
End of Mar. 2018
372
95.7%

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Sales
Segment Income
Profit Margin

80%

61.8%
60%
1,993

1,600

40%

800

20%

0

0%

FY2017/3

FY2018/3

Sun Frontier Fudousan Co., Ltd.

Performance ofOperation Business(Hotel Management / Space Rental)(¥ million)

Sales
Segment
incomeProfit margin

FY Ended
FY Ended
March 31, 2017 March 31, 2018

Increase/decrease(¥ million)

1,330

2,898

+117.8%

3,500

189

326

+72.9%

3,000

14.2%

11.3%

(2.9%pt)

35%
2,898

30%

2,500

 Both sales and profit grew significantly.
 Both hotel management business and space rental business were
2,000
healthy, as occupancy rate and average daily rate per room grew,
while the number of newly opened facilities also increased.
 We will accelerate the opening up of new facilities. Although theprofit rate may not rise for a while due to expenses to open up new 1,500
facilities, we will improve the profit rate by increasing the operating
facilities drastically and expanding the businesses in the future.
＜Hotel Management Business＞
 “Hotel Sky Court” made the year round compared with 3 months
contribution in the previous FY. Also for “SPRINGSUNNY Hotel” and“Hiyori Hotel Maihama”, both occupancy rate and average daily rate
per room were healthy.
 In April this year, “Hotel Azuma” was renewed and opened. We
opened “Tabino Hotel Hida Takayama” on May 2nd and will open
“Tabino Hotel Sado” in July.
＜Space Rental (Rental Conference Room) Business＞
 As of the end of March 2018, we have a total of 12 facilities (double
the number in a year). On May 14, we will open a new co-working
space, “Vision Works Yurakucho”.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Sales
Segment Income
Profit Margin

9

25%
20%
14.2%

15%

1,330
11.3%

1,000
500

10%

189

326

0

5%
0%

FY2017/3

FY2018/3
Sun Frontier Fudousan Co., Ltd.

Performance of

Other Business(Rent Guarantee / Overseas Business, etc.)(¥ million)

FY Ended
FY Ended
March 31, 2017 March 31, 2018

Increase/decrease(¥ million)

Sales

689

931

+35.1%

Segment
income

533

566

+6.3%

Profit margin

77.4%

1000

60.8% (16.6%pt)＜Rent guarantee business＞
 We have achieved the results by consistently supporting building owners
through rent guarantee, lawsuit, tenant vacation and tenant recruitment at
the time of delinquent payment. As a result, cases of new guarantee andguarantee renewal are increasing steadily. Both sales and income
increased significantly.
 With the most significant and comprehensive revision(enforcement in2020) of claims related articles in Civil Code since its enactment of 1896,
demand for the guarantee business is expected to increase. Therefore, wewill strengthen seminar activities targeting building owners and create
opportunities for new added values.
＜Overseas Business＞
 By supplying excellent housing with high quality and plans made in Japan,
we will respond to the growing housing and accommodation needs of thelocal areas and contribute to economic development.
1) Danang, the Biggest City in Central Vietnam
 Owning and operating our first overseas hotel “The Blossom City”
 Construction for “HIYORI Garden Tower”, high-rise urban apartment
house of 28 floors (306 units) has started in June, 20172) Jakarta, Capital of Indonesia
・Promotion of construction of urban condominiums
・Owning and operating Serviced Apartment “Kyo Serviced Apartment”
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

800

10

Sales
Segment Income
Profit Margin

100%

931
77.4%

80%

689
600

60.8%
533

566

60%

400

40%

200

20%

0

0%

FY2017/3

FY2018/3

Sun Frontier Fudousan Co., Ltd.

Variation of Key Performance Indicators◆Transition of ordinary income ratio(We are promoting high added value management.)¥ million

50,000◆Transition of Equity ratio(We are building a stable financial base.)¥ million

売上高
Sales

30%

50,000

純資産
Net Assets
Equity Ratio
自己資本比率

経常利益
Ordinary Income
45,00040,000◆Transition of ROE(We are using funds effectively.)

Ordinary Income Ratio
経常利益率

24.4%

22.9%
20.2%

22.0%

45,00022.7%

35,000

80%

40%

70%

35%

ROE
ROE
ROE
(Effective tax conversion rate
ROE(実効税率換算シミュレーション※）
simulation*)

25%

30.9%
40,00020%

53.7%

56.2% 55.7% 56.0% 53.2% 60%

24.5% 24.7%
50%

35,00030,000

30%

25%

19.6%
25,00015%

20,00030,00040%

20%

25,00030%

15%

20,00020%

10%15,00010%

5%10,000

0%

0%

10%

15,00010,000

17.6%

21.0%
16.3%

17.2%

17.2%

5%

5,000
0

0%
2018/3
2014/3 2015/3 2016/3 2017/3 2018/3

2018/3
2014/3 2015/3 2016/3 2017/3 2018/3

2014/3 2015/3 2016/3 2017/3 2018/3※After effective tax rate conversion･･･ It is calculated assuming that the effective tax rate for each business year (30.86% in the FY ended March 2017) was imposed,
excluding the impact of tax burden reduction from tax loss carryforwards.
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11

Sun Frontier Fudousan Co., Ltd.

2) Financial Forecasts
for the Fiscal Year Ending March 31, 2019

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12

Sun Frontier Fudousan Co., Ltd.

Financial Forecasts
for the Fiscal Year Ending March 31, 2019
FY 2018/3

Forecast of
FY 2019/3

Rate of
Change・The core business is the office building business

47,46358,000+22.2%

40,99747,734+16.4%

Replanning Business(Including Hotel Development)

38,64245,015+16.5%

Rental Building Business

2,355

2,719

+15.4%(2) Real Estate Service Business

3,225

3,972

+23.1%(3) Operation Business

2,898

3,801

+31.1%(4) Other Business

931

2,951

+216.7%

Adjustment

(589)

(458)

－

Gross Profit

16,264

18,566+14.2%

13,334

14,784+10.9%

Replanning Business(Including Hotel Development)

12,324

13,543+9.9%

Rental Building Business

1,010

1,241

+22.8%

1,993

2,464

+23.6%(3) Operation Business

387

438

+13.1%(4) Other Business

586

880

+50.0%

Adjustment

(37)

－

－

SGA Expenses

5,024

6,266

+24.7%

Operating income

11,23912,300+9.4%

Ordinary income

10,755

11,800+9.7%

Net income

7,420

8,200

+10.5%Cash Dividends per Share (Yen)

33.50

34.50

+3.0%

Sales
(1) Real Estate Revitalization Business(1) Real Estate Revitalization Business(2) Real Estate Service Business

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

13

in central Tokyo.
・We will steadily grow the revitalization businessto which the entire company’s capacities areconsolidated.
・Thereafter, we will strengthen the stock-typebusiness including rental buildings. We will build
a stable revenue structure.
・We will grow the operation business and otherbusiness.
・The gross profit ratio of the Replanning Businessis based on the assumption that the rent willremain the same and the current market
situation will not change.
FY ended March 2017: 29.8%
FY ended March 2018: 31.9%→FY ending March 2019：30.0%
・Sales fee of ¥1.11 billion is estimated.
(¥0.5 billion in the FY ended March 2018)
・The company is expecting to have about 60 new
employees.
・The dividend is expected to be ¥34.5, up ¥1.0
year on year.
Sun Frontier Fudousan Co., Ltd.

Basic Policy for Profit Distribution
Our basic policy for shareholders is to comprehensively contribute to the benefit of shareholders by (1) striving to stably
return profits to the shareholders on a long-term basis, (2) securing investment funds for actively conducting the hotel andoverseas businesses for future growth, and (3) improving the stability of finance.
Net income per share for the fiscal year ending March 2019 is estimated to be ¥168.38, an increase for the 2 consecutive
term, and the dividend per share is estimated to be ¥34.50, an increase for the 7 consecutive term.
2015/3

2016/32017/3

2019/3(Forecast)

2018/3

Net income per share¥118.18¥190.78¥150.92¥167.62¥168.38

Dividends per share¥16.50¥25.00¥30.00¥33.50¥34.50

payout ratio

14.0%

13.1%

19.9%

20.0%

20.5%

Payout ratio for reference

19.7%

19.3%

20.9%

－

－

(after considering effective tax rate)(Dividends per share)

¥40
¥30
¥20

Changes in Earnings and dividends per share

Dividends per share
Earnings per share¥118.18(Plan)¥190.78¥25.00¥33.50¥30.00¥150.92(Plan)(Net income per share)¥34.50¥168.38¥240¥180¥167.62¥120¥16.50¥10¥0¥60

2015/3

2016/3Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

2017/314

2018/3

2019/3(Forecast)¥0

Sun Frontier Fudousan Co., Ltd.

3) Mid-term 5-year Management Plan till
the Fiscal Year Ending March 2023
Our goal is“To become the company that is basedon the businesses that contribute tonational interests.”

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15

Sun Frontier Fudousan Co., Ltd.

Outline of the medium-term management plan
Basic policy: Expansion of the businesses that are specialized incentral Tokyo and growth market< 3 strategies >1. To grow our core “Urban office building business” by focusing
central Tokyo where we can demonstrate strengths and strong
influence and creating distinctive added values.
2. To focus on “hotels” and “Asia”, which are the growing markets andproactively and aggressively conduct businesses.
3. To actively use “M&A” to accelerate the growth.

As a result, we will build a revenue structure of “standing on
the flow and stock feet” to achieve medium to long-term
stable growth.
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16

Sun Frontier Fudousan Co., Ltd.

Changes in the most recent 5 years andtargets for the FY ending March 2023(¥
Million)(百万円)
100,000

Sales
売上高

Ordinary
経常利益
incomeNet
当期純利益
income100,000

80,00060,00047,46340,39440,00027,741
20,000030,62520,00017,772
4,341
4,020
2014年3月期
FY
2014/3

5,593
5,053
2015年3月期
FY
2015/3Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

7,024

8,157

2016年3月期
FY
2016/38,894
6,452
2017年3月期
FY
2017/317

14,00010,7557,420
FY2018年3月期
2018/3・・・

2023年3月期
FY
2023/3

Sun Frontier Fudousan Co., Ltd.

Quantitative Goals of FY ending March 2023
FY 2018/3
Results【Profit estimates】

FY 2023/3
Goals【Profit estimates】

Sales¥47,463 million¥100,000 million

Ordinary income¥10,755 million¥20,000 million

Net income¥7,420 million¥14,000 million【Management indexes】【Management indexes】

Equity ratio

53.2%

Over 50.0%

Ordinary income ratio

22.7%

Over 20.0%

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18

Sun Frontier Fudousan Co., Ltd.

Four-pronged Strategy for Future Growth
1) Existing

Deepening and expansion of
Office Building BusinessBusiness Expansion2) Hotel Business

Accommodation-focused hotels
for tourism and business3) Overseas
Business Development4) M&A

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Vietnam & Indonesia

Stock Acquisition,
Capital Participation, Business Alliance19

Sun Frontier Fudousan Co., Ltd.

1) Expansion of the Current Businesses- Deepening and expansion of the office building business -Sales target of the office building business for the FY ending March 2023:¥80 billion(Approximately twice as much as the FY ended March 2018)＜Replanning business ＞

We will focus on medium and small office buildings in central Tokyo, aiming to deepenand expand our revitalization and development businesses.

＜Real estate service business (LM・PM, etc.)＞

By offering professional services that are not provided by other companies in thesame industry, we will contribute to the building owners, establish deeper ties by
repeatedly solving small troubles, and become a “real estate partner/ consulting
company” that the customers can consult with anything. We will expand the range ofcustomers and make them the customer base of office building business.

＜Space rental business＞

We will rapidly expand the sharing business such as rental conference rooms and coworking spaces, making full use of our experiences to enhance added value of officebuildings.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

20

Sun Frontier Fudousan Co., Ltd.

To produce differentiated added values.

Business Structure of Office Buildings Business1. In vertical real estate utilization business, we survey and solve difficulties by listening to customers’ concerns.
2. In horizontal real estate revitalization business, first, we put together the know-how and customer needs
learned from the process above. Then we apply this knowledge to renovate used buildings we purchased andtransform them into high value-added products. After this, we sell the products to customers.

②

Fund –Raising
Consulting

Asset Consulting

Rent Guarantee

Construction
Planning

Building
Management

Rental Brokerage

Sales Brokerage

Acquisition of
Property

Real estate
revitalization
Added value
linked products① Real Estate Utilization

To be a partner to solve troubles from the customers’
perspectives

Customers (Building owners, asset owners, and wealthy people)
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Sun Frontier Fudousan Co., Ltd.

- Higashi-Nihombashi A building for investment -Example of real estate revitalization

Creating added value through persistent ingenuity
Appearance After【Points】◆ The semi-underground and first floor office areas which used to be parking lot before wereconverted to restaurant spaces.
◆The slope to the parking lot was renovated to a deck exclusive the restaurant and the entrancewith staircase.
◆The semi-underground parking lot was renovated to a store space under 100 square meters
without changing the purpose of use. We secured natural smoke exhaust, arranged green andcreated a stylish BBQ restaurant.

StairsElevator

1FL _【Property overview】■Location ： Higashi-Nihonbashi,
Chuo-ward, Tokyo

B1FL _

StairsElevator

OfficeOfficePremium office

Office (existing)

OfficePremium office

OfficePremium office

OfficePremium office

OfficePremium office

OfficeParking lot

Road

1FL _
B1FL _

Restaurant
Restaurant[Deck]Road

Deck exclusive
to the restaurant■Structure ： Steel-reinforced concrete,
Deck roof, 7 floors and 1 basement■Completion of construction: 1991 (27 years old)
■Purpose: Shops, offices■Land area： 169.51㎡ (51.27 tsubo)■Gross floor area: 822.61㎡ (248.83 tsubo)
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Set-up office space (meeting space, office space) at upper floors.

22

Sun Frontier Fudousan Co., Ltd.

Setup offices that foresee the time
“Setup offices” that respond to the changes of needs of the tenants and offer a comfortable
and high-quality space.
BeforeBeforeBefore

After

After

After

Given the regional nature where many craftsmen
live, we created a space based on the concept of"handmade", and "warmth", "brightness”.

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

We created an open office space, withthe ceiling height of over 5m.

23

We created a space that is calm andeasy to use with excellent design.
Sun Frontier Fudousan Co., Ltd.

Expanding the sharing business using space
Our company, which is full of spirit of hospitality, uses our strengths in central Tokyo where we are influential to rapidly increase
the number of rental conference rooms.
【Purpose of rental conference rooms 】
Various purposes including conference, seminar, lecture,
exhibition, test, training, briefing, and party, etc.

Rental conference rooms (Vision Center)・・・ 8 locations (3,650 seats)
Rental offices (Vision Office)・・・3 locations (19 rooms)●Vision Office Kanda●Vision Office Kanda ANNEX

Kanda

Co-working (Vision Works) ・・・ 1 location

Nihonbashi

To strengthen the
sharing business●Vision Center Nagatacho
Nagatacho●Vision Office
Shinjuku

Shinjuku

Tokyo

NEW
●Vision Center Tokyo Nihonbashi●Vision Works Tokyo●Vision Center Yaesu Minamiguchi●Vision Center Yaesu Chuoguchi

YurakuchoNEW●Vision Works
Tokyo Yurakucho

Hamamatsucho
Shinagawa●Vision Center Yokohama

Yokohama

Tamachi

To be opened
in May 2018

●Vision Center Hamamatsucho●Vision Center Tamachi●Vision CenterTokyo Yurakucho

The newly opened “Vision Center Tokyo Nihonbashi” and “Vision Center Tokyo Yurakucho” became black in the first month.
A new co-working facility will be opened in Yurakucho in May 2018.
We will increase the number of locations to 45 by the end of March 2023.

※ The number of seats in a conference room is calculated according to the school seating arrangement (three-person seat). For the rooms where school type is not possible, the number ofseats in the quadrilateral arrangement was added.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

24

Sun Frontier Fudousan Co., Ltd.

2) Hotel business- Accommodation-specialized hotels for sightseeing and business. -Target of operated rooms of the hotel business for the FY ending March 2023:
5,000 guest rooms(Approximately 4.5 times as many as the fiscal year ended March 2018)<Theme: “warm-hearted hotels”>
1. Hotels that are grown by the employees
2. Hotels that are grown by the customers’ voices
3. Hotels that grow with the community
High-quality, comfortable, and personalized hotels offeredby warm-hearted workers from the customers’ point of view

We will grow on adaily basiswith 3 types ofpower<The number of rooms will increase in various ways to achieve 5,000 guest rooms>••

To develop higher brand hotels for our core hotel brand “HIYORI HOTELS & RESORTS”
from the ground.
We will offer 4 brands (HIYORI, SPRINGSUNNY, Sky Court, others) and increase thenumber of rooms through various ways such as own-development, rental, revitalizationand M&A, and etc.

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

25

Sun Frontier Fudousan Co., Ltd.

Brand structure of hotels we operate
Our hotel brand “HIYORI HOTELS & RESORTS”

Collaborative hotel brand“SPRINGSUNNY Hotels & Resorts”
Collaborative brand with the Spring Groupin China
Spring Sunny Hotel Nagoya Tokoname

Established in
December 2017

Sky Court Hotel
Acquired the existing hotel chain through
M&A.

Hotel Sky Court(Kawasaki, Narita, Koiwa, Hakata)

Shijoukawaramachi, Kyoto※ Building a high brand.

Maihama / Ginza-higashi /Osaka-honmachi / Osaka-Namba

Takayama and Sado

Upper

Upper middle

EconomyBudget¥25,000-50,000¥15,000-25,000¥8,000-12,000

Up to ¥10,000

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Sun Frontier Fudousan Co., Ltd.

List of domestic hotels of ourGroup companies
We are aiming to have 5,000 guest rooms by the FY ending March
2023. The business will be conducted strategically with a focus on
Tokyo, Kyoto, Osaka, Fukuoka and Okinawa.
We will then develop our business in other tourist/business cities.

Under construction
In plan & preparation
Total No. of Rooms

Open (Plan)

Brand

In
operation

Apr. 2016

Collabora
Tokoname
tive

194

In
operation―

Original Kawasaki

200

In
operation―

Original Koiwa

105

In
operation―

Original Narita

100

In
operation―

Original Hakata

159

Sado (Chigusa)

In
operation

Apr. 2017

Original Maihama

80

Sado (Azuma)

Rented―Other
Company Toyama

210

ToyamaIn
operation―

Original

Sado (Azuma)

57

In
operation

May 2018

Original

Hida-Takayama

80

Under
Construction

Jul. 2018

Original

Sado (Chigusa)

111

Under
Construction

Jun. 2019

Original Nanba, Osaka

224

Under
Construction

Nov. 2019

Original Ginza-higashi

135

Under
Construction

Sep. 2019

Original Honmachi, Osaka

193

In planFeb. 2022

Original Shijo Kawaramachi,

Kyoto

146

In plan

TBD

Narita Airport

210

1,185
663
356

2,204

※ As of May 7, 2018
※ Hotels “in service” include hotels “in operation,”“rented,” and “being renovated” in the redframe of the right table.

Hida-Takayama

Maihama

Shijo Kawaramachi, Kyoto
Narita Airport

Honmachi, Osaka
Nanba, Osaka

NaritaKoiwa
Ginza-higashi

HakataNo. ofRooms

Status＜Domestic Hotel＞
In operation＜List of Domestic Hotels＞

Tokoname

Kawasaki(Note) Schedule & scale are still being planned, may change in future.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

TBD

Hotel Name Location…In addition, we are deliberating to open in Shimonoseki (105 rooms),
Okinawa (205 rooms) and Kyoto (200 rooms).

Sun Frontier Fudousan Co., Ltd.

Proactive development in the growing “hotel” market. ①

Introduction of hotels to be opened in 2018
Tabino Hotel Sado

Tabino Hotel Hida-Takayama

Lobby with a wall designed bya plasterer, Syuhei Hasado【Property Outline】■ Location: Takayama-shi, Gifu Prefecture■ Structure: 2-story wooden building witha zinc-coated steel roof
■ Opened in May 2, 2018
■ Number of guest rooms： 80■ Land area: 2,421.34㎡ (732.45 tsubo)■ Gross floor area: 1,848.11㎡ (559.05 tsubo)

Appearance

Open-air bath

Big bath【Property Outline】■ Location: Chigusa, Sado-shi, Niigata Prefecture■ Structure: 5-story steel-framed building with a flat roof
■ To be opened in July 2018
■ Number of guest rooms： 111■ Land area: 3,010.07㎡ (910.54 tsubo)■ Gross floor area: 2,998.00㎡ (907.11 tsubo)

GRAND OPEN
on May 2, 2018

“Tabino Hotels" aim to be a region-vitalization type hotel business under the theme of each region’s attractive
features, with a focus on the regions with cultural, historic and natural hidden charm of Japan.
As a base for a trip to fully enjoy all over Japan, we are aiming for new accommodation-specialized hotels with alarge public bath, where the guests can easily stay for consecutive nights without hesitation. And as hotels to cocreate with the region, we will utilize local specialties and resources, evolve the attractiveness through discussions
with local people, and carry out the hotel business that is loved by customers and contributes to the local
community with warm-hearted atmosphere.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

28

Sun Frontier Fudousan Co., Ltd.

Proactive development in the growing “hotel” market. ②

Introduction of hotels under development
Ginza-Higashi
Appearance

Shijo Kawaramachi,
Kyoto

Our first hotel in Ginza【Property Outline】

Appearance【Property Outline】
 Location: Naniwa-ku, Osaka-shi, Oska Structure: 11-story reinforced concretebuilding
 To be opened in Nov. 2019

 Structure: (Northern premises) 10-story steelframed building with one basement,(Southern premises) 9-story steel-framed building
with one basement

 Number of guest rooms： 135 rooms

 To be opened in Jun. 2019 Land area: 551.38 ㎡ (166.79 tsubo) Number of guest rooms： 224 rooms Gross floor area: 3,725.00 ㎡ (1,126.81
tsubo)
An open-air bath and a large bath fromwhich Ginza and the Skytree can beviewed are equipped on the top floor.

 Land area: 1,281.4㎡ (387.62 tsubo) Gross floor area: 6,784.41㎡ (2,052.28 tsubo)
There are various types of restaurants andcool café-type bar in the Twin Tower.

Urban tourist hotel at a good
location along the Kawaramachi Street

Honmachi, Osaka Overseas-brand hotel in the heart of Osaka.
Appearance【Property Outline】

 Location: Shimogyo-ku, Kyoto-shi, Kyoto

 Location: Chuo-ku, Osaka-shi, Osaka Structure: 9-story reinforced concretebuilding with one basement

 Structure: a 17-story steel-framed (partiallyreinforced concrete) building with one
basement

 To be opened in Feb. 2022

Guest room with an open-air bathTwin-tower hotel 1 min. on foot from “Namba
Station” of the Nankai Line Location: Chuo-ku, Tokyo【Property Outline】

Rooftop terrace for enjoying
the landscape of Kamogawa

Namba, Osaka To be opened in Sep. 2019

 Number of guest rooms： 146 rooms Number of guest rooms： 193 rooms Land area: 871.70㎡ (263.68 tsubo) Land area: 754.75㎡ (228.31 tsubo) Gross floor area: 6,617.83㎡ (2,001.89
tsubo)

 Gross floor area: 8,194.32㎡ (2,478.78 tsubo)

An open-air bath and a large bath, from which
Kamo-river, Gion and Higashi-yama can beviewed, are equipped on the top floor.

A restaurant with a famous chef, gym, largebath and open-air bath are equipped.

※ The photos, schedule, scale, etc. are based on the current plan, and they may be changed.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

Sun Frontier Fudousan Co., Ltd.

3) Overseas development- Projects in Vietnam are underway. -Concept "To Realize the Happiness of Everyone in Asia with People who Share theSame Values.”
By supplying excellent housing with high quality and plans made in Japan, we will respondto the growing housing and accommodation needs of the local areas and contribute toeconomic development.

We will make priority investments in the housing
projects in Vietnam and Indonesia (¥20 billion
investment) and establish a brand that will besupported by the local people.
Projects in Vietnam
StatusOpen

Location /Use

Scale

In
operation

Aug. 2016

Danang Hotel“The Blossom City”

45 rooms

DanangCondominium Residence“Hiyori Garden Tower”

306 houses

Under
1st half of 2019
construction
In planUndecided

Danangcommercial complex

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Hotel・SA 156 rooms+Residence 229
houses+Shop

30

Sun Frontier Fudousan Co., Ltd.

Danang, Vietnam, Project No.2
- High-rise Urban Apartment House Project Bldg. No. 2
High-rise urban apartment house

Mockup (Bedroom)“HIYORI Garden Tower"
Effect Drawing (Appearance)
High-rise urban apartment
house with 28 floors

Construction for 306 units
started in June, 2017

Direct flights from Narita/Kansai Airport toDanang went into service (Narita: 1 flight per day/ Kansai: 4 flights per week.)
60 direct flights per week from China.
134 direct flights per week from Korea.
Danang is an area that many companies want tohelp develop, while gathering worldwide
attention as a fascinating resort area.
It is only a 10-minute drive from Danang Airport
to the city center, and a 15-minute drive to abeautiful beach where there are many hotels.

Mockup (Living Room)
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Located at an optimal place with very
convenient access.

Sun Frontier Fudousan Co., Ltd.

4) M&A
In order to accelerate growth, we will actively utilize “M&A” of theperipheral businesses and implement “M&A” projects using more than
¥20 billion in 5 years.
<Accelerating the growth of existing and new

Rentalconference roomsbusinesses>

We will incorporate human resources,
technologies and platforms into ourGroup companies in a short period oftime, expand the optimum services
accordingtochangesintheenvironment and expand peripheralbusinesses.

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

Facility

Revitalization/
development,
construction,and management ofreal estate properties

Housingmanagement

Hotelsoperation

Construction

Sun Frontier Fudousan Co., Ltd.

To build a revenue structure of standing on
the flow and stock feet.
Sales growth image of the stock-type business in 5 years
FY March 2018
Space rental, rent guarantee, etc.
¥ 1.19 billion

Flow-type¥ 39.7 billion

Total sales¥47.4 billion

Stock-type¥ 7.7 billion

Hotel operation¥ 2.17 billion

Rental building¥ 2.36 billion

Stock-type¥7.7 billion

PM/BM¥ 1.98 billion

FY March 2023

Flow-type¥ 73.0 billion

Space rental, rent guarantee, etc. ¥4 billion
About 3.4 times larger

Total sales¥100 billion
About 2.1 times
largerCopyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Stock-type¥ 27.0 billion

33

Hotel operation¥ 14 billion
About 6.5 times
largerRental building

Stock-type¥27 billion
About 3.5 times
larger¥ 5 billion

PM/BM¥ 4 billion

Sun Frontier Fudousan Co., Ltd.

Investment plan in the next 5 years
We will invest a total of ¥350 billion in the next 5 years.
Office building
business

Hotel operation
business

Overseas business

Total

Investment amount¥295 billion¥35 billion¥20 billion¥350 billion

Capital recovery amount¥230 billion―¥18 billion¥248 billion

Net investment amount¥65 billion¥35 billion¥2 billion¥102 billion

Investment recovery rate

78.0%

―

90.0%

70.9%

【Office building business：¥295 billion】
RP business: ¥ 255 billion, Rentalbuilding: ¥40 billion
In addition to investing in the core RP
business, we will actively invest inpurchasing rental buildings, aiming tobuild a stable revenue structure.

【Hotel operation business：¥35 billion】
Hotel operation business: ¥ 28 billion, Rental:¥ 7 billion
We will use the funds to achieve 5,000 guest
rooms by various forms such as in-housedevelopment, rental, revitalization and M&A.

【Overseas business： ¥ 20 billion】
Priority investment in the housingbusiness: ¥ 20 billion
We will invest in the housing business
in Vietnam and Indonesia and aim toestablish a brand that will besupported by local people by supplying
high quality housing.

※ 1. The investment amount will gradually increase from the first year (FY ending March 2019), and it will be the largest amount in the final year (FY ending
March 2023). The capital recovery amount is the total of 5 years, and the investment recovery rate will be calculated based on this figure. The difference
between the investment amount and the capital recovery amount will be the business asset after the following fiscal year.
※ 2. The cumulative sales of the investment is estimated to be ¥400 billion for 5 years, and we will recover funds in correspondence with each investment.
※ 3. The investment recovery period of the main replanning business among the office building business is estimated to be within 12 months per project.
※ 4. The investment amount of the hotel operation business will be recovered over the long term from operating revenue.
※ 5. Investment amount and recovery amount for hotel development are included in the office building business.

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Sun Frontier Fudousan Co., Ltd.

4) Company Overview

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Sun Frontier Fudousan Co., Ltd.

Company Overview
Name

Sun Frontier Fudousan Co., Ltd.

Head Office

1-2-2 Yurakucho, Chiyoda-ku Tokyo

Established

April 8, 1999

Date of listing

November 19, 2004 (JASDAQ Securities Exchange)
February 26, 2007 (The first section of the Tokyo Stock Exchange)

Capital*Representative¥11,965 million
President: Tomoaki Horiguchi

Employees*

Full-time employees: 410 (Including part-time employees: 769)

Average Age*33.2 years old(*As of the end of April, 2018)

Revitalization of real estateBusiness

Real Estate Service

Management, brokerage, construction planningfor real estate, compensation for rent in arrears
Rental building operation, consultancy for assets

Hotel Development and operation

Settlement Month March
Listed in

The first section of the Tokyo Stock Exchange (Code Number: 8934)

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

36

Sun Frontier Fudousan Co., Ltd.

Company History
1999

Established Sun Frontier Co., Ltd. (It has been 19 years since then)

2000

Changed the Trade Name to Sun Frontier Fudousan Co., Ltd.

2001

Started replanning business* (real estate revitalization)

2004

Got listed on JASDAQ Securities Exchange (5 years and 7 months after establishment)2007

Got listed on the first section of the Tokyo Stock Exchange (2 years and 3 months after the listing in
JASDAQ)

2012

Made Yubi Co., Ltd. (current SF Building Maintenance Co., Ltd.) a consolidated subsidiary by M&A

2013

Established local subsidiary “Sun Frontier Fudousan Taiwan Co., Ltd.”Started space rental business (managing rental conference room/rental office)2015

Established Sun Frontier Hotel Management Inc. and started hotel management business
Made a business alliance on hotel business in Japan with Spring Group of China

Origin of our corporate name

The corporate name “SunFrontier” is infused with thehopes of “emitting love toeveryone like solar energy for thehappiness of humankind andsociety,” “living strongly andbrightly,” and “becoming acompany that can keep taking onchallenges like a frontier settler
with ambition and dream.”

Established local subsidiary "SUN FRONTIER VIETNAM CO., LTD.“ in Vietnam
Established local subsidiary “PT. SUN FRONTIER INDONESIA” in Indonesia
Opened our first domestic hotel “SPRINGSUNNY Hotel Nagoya Tokoname” in Tokoname, Aichi
2016

Opened our first overseas hotel “The Blossom City” in the biggest city Danang of central Vietnam
Made Sky Court Hotel Co., Ltd. a consolidated subsidiary by M&A
Started operating serviced apartment “Kyo Serviced Apartment" in Jakarta, Capital of Indonesia
Selected as a stock that constitutes “JPX-Nikkei Mid and Small Cap Index”“Hiyori Hotel Maihama”, the first hotel under our original brand began full operation

2017

Construction for “Hiyori Garden Tower”, the high-rise urban apartment house in Danang
Established San Frontier Sado Co., Ltd. (Regional revitalization)

2018

Opened “Tabino Hotel Hida-Takayama”

Representative Director and President
Tomoaki Horiguchi* “Replanning” is the registered trademark of Sun Frontier Fudousan Co., Ltd.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

37

Sun Frontier Fudousan Co., Ltd.

SUN FRONTIER that implements
visionary management
Corporate motto
Altruism
Management policy
With a vision to protect all employees and pursue mental and material
happiness, we will contribute to prosperity of human kinds and society witha mindset of cohabitation.
<Management policy handbook>

3 major principles
1. Altruism rather than selfishness
2. To follow the right things.
3. Absolute proactivity.

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38

Sun Frontier Fudousan Co., Ltd.

Sun Frontier’s Vision and Policies
VisionAs professionals in real estate utilization, our goal is to be “thecompany that customers love and choose the most in theworld.”

Customers Building owners, asset holders, and wealthy individualCore
Business

Real estate revitalization and utilization

Policies Not for profit, but for trust.

To focus on people rather than property
Solve any real estate related difficulties from the perspective of
our customers

Strategies

CentralTokyo

OfficeStrength

Tenant Finding
Capability

Real Estate
Revitalization
Capability

Operation Capability
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

Sun Frontier Fudousan Co., Ltd.

Business Contents
Office Buildings
Real Estate Revitalization Business
Re-planning (RP)
Building Rental
Real Estate Securitization

Real Estate Services Business
Rental Brokerage / Sales Brokerage
Property Management (PM) / Building
Maintenance (BM)Construction Planning / Interior Design
Asset Consulting
Rent Guarantee
Rental Conference Room and Small OfficeHotel Business

Overseas development

Hotel Possession and Operation
Hotel Development, Revitalizationand Sales

Hotel Management and Housing Developments
in Vietnam
Hotel Management and Detached House
Developments in Indonesia
Attract investment from Taiwan to Tokyo

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

40

Sun Frontier Fudousan Co., Ltd.

Three roles of the branch network
specializing in the urban center
Target regions

1. To specialize in the introduction of tenants to the ownersof small to medium-sized office buildings in the urban

Ueno

centerAkihabara

We are operating 10 branches in Chiyoda, Chuo, Minato,

Ikebukuro

Shinjuku, Shibuya, and Shinagawa Wards and Yokohama. 84
members of the rental team and 105 members of theKoujimachi

administration team* finds tenants by utilizing their familiarity

Kanda

Kudan

Nihonbashi

with local information while specializing in the introduction andmanagement of tenants for owners. (*Fixed-term, part-time, andImperial
Palacetemporary workers)

2. To deal with the needs for solving troubles from theviewpoint of owners

Shinjuku
AoyamaIn addition to introducing tenants, we offer consulting services
for solving troubles for owners, and meet a variety of needs
related to real estate by marshalling our sections.

Tokyo

HibiyaHeadquarters

Toranomon
Shimbashi

Shibuya

3. To procure real estate for Real Estate Revitalization

Ginza

Akasaka
Ebisu

Business

GotandaThrough discussions with owners, we rent their buildings in a

Hamamatsu-choShinagawalump. Or We directly buy buildings when owners encounter
inheritance, their buildings deterioration or they become tired of

Yokohama

management of buildings.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

41

represents the major area coveredby a branch

Sun Frontier Fudousan Co., Ltd.

Variations of Sales / Ordinary Income /Number of Employees
Both sales and income remain strong. The number of employees are also growing steadily.
(People)(¥ million)
50,00048,150

売上⾼
Sales

47,463

Ordinary Income
経常利益40,00040,394

Number of Employees
従業員

30,625 329
27,741276

26,87020,0000400

35,25430,00010,00016,730

70

84

500

96
7,760

134

52
5,003
3,474
24 1,771 3,588
1,437
791
2 0 681140 377 501
1

14,469141 142 139

152
125
8,289

181

6,346

4,289

199 223
206
17,772

10,580
6,923

541

799

381

2,039

4,341

5,593

300

200
8,894 10,755
100
7,024

2000/3 2001/3 2002/3 2003/3 2004/3 2005/3 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3 2018/3

0(3,776)(100)(10,000)(20,000)(17,794)

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

42

(200)
Sun Frontier Fudousan Co., Ltd.

Variations in the occupancy rate and area ofbuildings managed by PM
Area managed by PM

100%

PM受託面積（右軸）(right axis)

Occupancy rate of real estate(㎡)

Occupancy rate of medium-sized buildings

PM受託物件の稼働率（左軸）managed by PM (left axis)

東京23区中型ビルの稼働率（左軸）in 23 wards of Tokyo (left axis)

800,000

97.1%(as of the end of Mar. 2018)98%

700,000

Occupancy rate of real estate
managed by PM

96%

600,000

94%

500,000

95.7%

Average occupancy rate of mediumsized buildings in 23 wards of Tokyo92%(as of the end of Mar. 2018)

400,000

90%

300,000

88%

200,000

86%

As about 75% of real estate managed by PM are over 20 years
old, we received inquiries about repair and replacement ofassets, meaning we are exerting the comprehensive capability ofsolving problems, which is our strength.

100,000

84%

0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2009/3期
FY2009/3

2010/3期
FY2010/3

2011/3期
FY2011/3

2012/3期
FY2012/3

2013/3期
FY2013/3

2014/3期
FY2014/3

2015/3期
FY2015/3

2016/3期
FY2016/3

2017/3期
FY2017/3

2018/3期
FY2018/3※Source: The average occupancy rate of medium-sized buildings in 23 wards of Tokyo was calculated by our company with reference to “Monthly Report on Office Market Surveys” by Sanko Estate.
※Occupancy rate: Total Area Occupied / Total Area for Rental; Occupancy rate and managed area include those of real estate subject to our RP.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

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Sun Frontier Fudousan Co., Ltd.

5) Reference

Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

44

Sun Frontier Fudousan Co., Ltd.

Changes in office rent and vacancy rate
in 5 wards of central Tokyo
Average rent [¥/tsubo](％)

Average vacancy rate [%](¥)

Average rent in Mar., 2018¥19,699

increased for 4 years and 3
months (+21.5 % fromthe bottom value)
Peak of vacancy rate
Jun. 2012
Vacancy rate: 9.43%

Peak of average rent
Aug. 2008¥22,901 yen

Peak of vacancy rate
Aug. 2003
Vacancy rate: 8.57%

Bottom average rent
Dec. 2013¥16,207

Bottom average rent
Oct. 2004¥17,526 yen

2002

2003

2004

2005

Bottom vacancy rate
Nov. 2007
Vacancy rate: 2.49%
2006

2007

2008

2009

Vacancy rate in Mar., 2018

2.80%

Improved 6.63% by 5 years
and 9 months
2010

2011

2012

2013

2014

2015

2016

2017

2018

※Source: Created based on Miki Shoji’s “Office Report.” Graph reflects office buildings within the 5 wards of Tokyo of which have a standard floor area of
100 tsubo (roughly 331 square meters) or larger.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

45

Sun Frontier Fudousan Co., Ltd.

Variations in the number of foreign visitors toJapan and their consumption amountThe number of foreign visitors to Japan in 2017 increased by 19.3% from the previous year to 28.69 million people, marking arecord high. Travel consumption amount also increased by 17.8% from the previous year to ¥4.4 trillion, which is making arecord high for the fifth consecutive year, exceeding ¥4 trillion for the first time.
The government of Japan set the goals of increasing the number of foreign visitors to Japan to 40 million by 2020 and 60
million by 2030, and boosting their consumption amount to ¥8 trillion by 2020 and ¥15 trillion by 2030. How to increase thenumber of visitors from Europe and the US that are few compared to Asia is said to be a challenge to achieve these goals.

No. of foreign visitors to Japan and their consumption amount(10,000 visitors)

7,000
6,000

(¥ billion)

15,000Consumption amountNo. of foreign visitors to Japan

14,000

6,000

12,000

5,000
4,000

4,000
3,000

1,973

2,000
1,000
0

16,000

621

835

1,036

1,341

813

1,084

1,416

2,027

2011

2012

2013

2014

3,477

2,403

2,869

8,000

8,000

6,000

4,416

4,000

3,747

2,000
0

2015

2016

2017

・・・

※Source: Produced by our company with reference to the documents released by Japan National Tourism Organization※The dotted line represents an estimate.
Copyright © 2018 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

10,000

46

2020

・・・

2030

Sun Frontier Fudousan Co., Ltd.

Disclaimer

Sun Frontier Fudousan Co., Ltd.

This reference material is intended for providing information, not for soliciting or promoting you
to purchase a specific product. When you invest, please do so based on your own judgment
and responsibility. If you want to purchase the shares of our company, please contact securities
companies.
The information included in this material may not follow the Financial Instruments andExchange Act, the Building Lots and Buildings Transaction Business Act, the regulations for thecompanies listed in Tokyo Stock Exchange, etc.
This reference material mentions our future business performance, but it does not guarantee
the performance.
This reference material was produced carefully, but we do not guarantee the accuracy andcertainty of its contents. In addition, the contents may be changed or deleted without notice.
We appreciate your understanding.

<Inquiries about this document>
Sun Frontier Fudousan Co., Ltd. IR Desk
Phone:+81-3-5521-1551
URL:http://www.sunfrt.co.jp/en/
Mail: ir-contact@sunfrt.co.jp