Sun Frontier Fudousan Co., Ltd

Financial Results for the Third Quarter of
Fiscal year ending March 31, 2023
We are aiming to be the most appreciatedvisionary company in the world.

1) Overview of the Results for FY2023

1-122) Business Environment Awareness and Business Initiatives

13-253) Company Philosophy, ESG

26-304) Business Model

31-385) Medium-term Management Plan

39-42

6) Reference Materials

43-50

February 10, 2023
Securities Code : 8934

Overview of 3Q Results for FY2023
Office building business posted solid growth. Hotel operation business recovered as well.
Performance compared to the same period of the previous year grew significantly.
Revised forecast for consolidated financial results for FY2023.
(Unit: million yen)
Results

ProfitmarginYear-on-year

Growthrate

Full-year
Forecast * 2

Progressrate

Net sales

75,328－+13,710+22.3%

82,00091.9%

Operating profit

14,69619.5%+2,544+20.9%

14,80099.3%

Ordinary profit

14,401

19.1%+2,418+20.2%

14,50099.3%

Profit * 1

10,354

13.7%+2,835+37.7%

10,40099.6%* 1 “Profit” represents profit attributable to owners of parent.

* 2 This is the revised forecast released on 2 10, 2023.

Performance Highlights
1) Gains on the sale of office buildings and hotel properties
significantly contributed to the growth of earnings

2) Real Estate Service Business is steady,Hotel Operation Business is recovering• In Replanning Business, the sale of five large-scale properties was
settled in the third quarter ahead of schedule, resulting in asignificant improvement in performance.
• In Hotel and Tourism Business, two hotels contracted for sale inthe second quarter were settled in the third quarter, contributing
to results.
• Settlement of large-scale properties sales for both office buildings
and hotel properties significantly contributed to earnings in thefiscal year under review. Strengthening purchase activities in
preparation for the next fiscal year and beyond.

• In Real Estate Service Business, all businesses posted solid growth.
The operation of the Conference Room Rental Business improved
since the behavioral restrictions were eased, and the expansion ofsites and floor space contributed to the business performance.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

• In Hotel Operation Business, both OCC (occupancy rate) and ADR(average daily rate) improved due to the recovery in demandfollowing the Nationwide Travel Subsidy Program and the lifting of
ban on individual foreign tourists.

1

Sun Frontier Fudousan Co., Ltd

Revision to Financial Results Forecast
Profit margin for property sales exceed initial plan.
Performance for Real Estate Service Business and Hotel Operation Business exceed initial planand grew significantly as well.
Profitattributableto owners ofparentProfit per
share

Net sales

OperatingprofitOrdinary
profitPrevious forecast (A)84,00013,30012,8008,300

170.76 yen

Revised forecast (B)82,00014,80014,50010,400213.99 yen

Increase/decrease(B-A)(2,000)

1,500

1,700

2,100

－

Rate of change (%)(2.4%)

11.3%

13.3 %

25.3% *－

(Reference)
Results of FY2022

71,251

12,127

12,215

7,415

152.26 yen(Unit: millions yen)

*The revision of net income is expected to have the effect of reducing taxable income due to loss carryforwards in the hotel management business.
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2

Sun Frontier Fudousan Co., Ltd

Breakdown for the Revised Forecast(Unit: millions yen)

Revised Forecast for
FY ending March 2023

FY ending March 2023
3Q Results

Progress rate

Net sales

82,00075,32891.9%(1) Real Estate Revitalization Business

50,00047,55095.1%

48,0002,000

46,0271,523(2) Real Estate Service Business(3) Hotel and Tourism Business(4) Others
Adjustments

8,300
23,0001,900-1,200

6,505
20,680
1,228
-636

95.9%
76.2%
78.4%
89.9%
64.6%
-

Gross profit

22,50020,48391.0%(1) Real Estate Revitalization Business

15,90015,28696.1%

15,600300

15,003282(2) Real Estate Service Business(3) Hotel and Tourism Business(4) Others
Adjustments

4,500
1,850
350

3,653
1,622
219

-100

-297

96.2%
94.0%
81.2%
87.7%
62.6%
-

Selling, general and administrative
expenses

7,800

5,787

74.2%

Operating profit

14,80014,696

99.3%

Ordinary profit

14,50014,401

99.3%

Profit10,40010,35499.6%

213.99 yen

213.05 yen

99.6%

Replanning
Rental Buildings

Replanning
Rental Buildings

EPS (Profit per share)
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3

Sun Frontier Fudousan Co., Ltd

Cash Dividend (Increase)
The year-end dividend per share will increase by 2 yen to 25 yen (forecast).
Basic policy for the profit returns to shareholders
1. Strive to provide long-term and stable profit returns to shareholders
2. Secure investment funds to aggressively take on challenges for future growth
3. Maintain the stability of financial baseTrends in Profit per Share and Dividends per Share

(yen)

50
40

Initial forecast

38.5

Increased dividend

42.0

Commemorative dividend

42.0

2.5

Profit per share(R axis)

44.0

48.0 yen (forecast)Year-end dividend 25.0 yen
Total

250.0023.0

219.03200.00213.99(forecast)

21.0

30
180.35

20

34.5

39.5

42.0

87.77

10

150.00152.26

Interimdividend

300.00

2.0

2.0

2.0

2.0

(yen)

Interimdividend

100.00

23.0

21.0

50.00

0

0.00

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3* Interim dividend started from FY2022

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4

Sun Frontier Fudousan Co., Ltd

Consolidated Income Statement(Unit: million yen)
FY ending
FY ending March FY ending
March
March 2023
2022 3Q Results 2023 3Q Results
Apr - Dec

YoY change

Composition
Ratio

22.2%

100.0%

▲4.3%

62.6%

▲4.3%

60.6%

▲4.3%

2.0%

18.8%

8.6%

266.9%

27.2%

2.6%

1.6%

―

―

16.9%

108.5%

▲0.5%

79.8%

0.5%

78.3%

▲35.0%

1.5%

21.9%

19.1%

―

8.5%

38.6%

1.1%

―

―

61,618
Real Estate Revitalization Business49,677
Replanning Business
48,084
Rental Buildings Business
1,592Real Estate Service Business
5,477
Hotel and Tourism Business
5,637
Other Business
1,197
Adjustments▲371
Gross Profit (Loss)
17,519Real Estate Revitalization Business15,358
Replanning Business
14,924
Rental Buildings Business
434
Real Estate Service Business
2,996
Hotel and Tourism Business▲828
Other Business
158
Adjustments▲164

75,32847,55046,027
1,523
6,505
20,6801,228▲636
20,483
15,28615,003
282
3,653
1,622
219
▲297

Selling, General and
Administrative Expenses

5,368

5,787

7.8%

0

12,151
253
421
11,983
7,519

14,696196
490
14,401
10,35420.9%

0▲22.5%

0.0%

16.4%

0.0%

20.2%

0

37.7%

0

19.4%

19.1%

0.0%

0

Net Sales

Operating Profit (Loss)
Non-operating Income
Non-operating Expenses
Ordinary Profit (Loss)
ProfitOrdinary Profit Margin

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5

Points<Real Estate Revitalization Business>
The number of properties for sale increased to 22,
including two in New York. Profit margin was high(gross profit margin 31.5%), and sales targets wereahead of schedule. The formation of small-lot realestate property is also progressing steadily.
<Real Estate Service Business>
Sales in brokerage continued to be strong. Performanceof Conference Room Rental Business grew due to thedemand recovering and sites expansion. Number ofmanaging buildings increases in PM and BM also
contributed to earnings. Sales and profits increased in all
businesses.

<Hotel and Tourism Business>
The settlement of the sale of two hotels contracted
in the second quarter was recorded in the third
quarter. Occupancy rate and average daily rate rose
thanks to a recovery in travel demand, while grossprofit in hotel operation turned a profit.

Sun Frontier Fudousan Co., Ltd

Consolidated Balance Sheet- Assets -<Cash and deposits> Up 14.8 billion yen from the end of the previous fiscal year, due to the sale of Replanning and hotel properties.
<Inventories> Despite Inventory in Hotel properties decrease due to sales of two hotels, inventory in Replanning properties increased
due to progress both sales and purchases.

<Investments and other assets>
Investments and other assets decreased because long-term guarantee deposits were returned with sales of hotels.

(Unit: million yen)

As of End of
March 2021

As of End of
March 2022

As of End of
December 2022

Increase/decrease(compared to the end of
March 2022)

110,785
21,50886,087110,92030,05377,340121,090
44,91373,544+10,170+14,860-3,795

Breakdown) RP
Hotel
Overseas, etc.

71,34813,916821

63,424
13,516399

63,841
9,342
354

+416
-4,173-44

Other current assets
Non-current assets

3,189
16,7003,527
25,591

2,632
24,863-894-728

Property, plant and equipment

10,52818,796

20,229+1,433

701

572

715

+143

5,470

6,222

3,917

-2,305

127,485

136,512145,954+9,441

Current assets
Cash and deposits
Inventory assets

Intangible assets
Investments and other assets
Total assets

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6

Sun Frontier Fudousan Co., Ltd

Consolidated Balance Sheet- liabilities/equity -<Interest-bearing debt> Repayment due to sale of properties and borrowing due to purchase<Net assets>

are almost balanced, and interest-bearing debt balance is 51.5
billion yen.
Increased by 8.8 billion yen mainly due to profit increase (10.2 billion yen), etc.
despite the payment of interim dividends in addition to dividends at the end of
the previous fiscal year.
(Unit: million yen)

As of End of
March 2021

As of End of
March 2022

Changes of Equity Ratio
End of March
2021

End of March2022

End ofDecember 2022

52.3%

52.2%

54.8%

As of End of
December 2022

Increase/decrease(compared to the end of
March 2022)

Current liabilities

13,358

16,21013,027-3,183

Short-term borrowings, etc.

5,530

6,904

3,742

-3,161

Income taxes payableNon-current liabilities

901
6,926
44,354

3,528
5,777
45,8491,521
7,762
49,639-2,006+1,985+3,789Long-term borrowings and bonds payable

41,991

44,16947,807+3,638Other Noncurrent Liabilities

2,363
57,712
66,916
2,856
69,773
127,485

1,680
62,06071,2603,191
74,452
136,512

1,831
62,666
79,261
4,025
83,287
145,954+151+606+8,001+833+8,835+9,441Other current liabilities

Total liabilities
Shareholders' equity

Other
Total net assets
Total liabilities and net assets
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Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Real Estate Revitalization Business (Replanning and Rental Buildings)<Replanning Business>(million yen)
◼ Number of sales was 22 including 2 in New York. Profit margin
was kept in high level. Sales and profits were flat compared to the 60,000
same period of the previous year. The formation of small-lot realestate property is also progressing steadily.
50,000◼ Average business period was 662 days (down 45 days YoY). The
business period was longer than the end of the 2nd quarter (587days) due to the sale of mid to long-term properties in the 3rd
40,000quarter, but shorter than the previous fiscal year (707 days).
FY ended
March 2022
Apr – Dec

FY endingMarch 2023
April - Dec

Increase/decrease

Net sales

49,67747,550-4.3%

Replanning Business

48,08446,027-4.3%

Rental Building Business

1,592

1,523

-4.3%

Segment profit (Note 1)

14,725

14,638-0.6%

Replanning Business

14,291

14,355

+0.5%

434

282

-34.9%

Profit margin

29.6%

30.8%

+1.1%pt

Replanning Business

29.7%

31.2%

+1.5%pt

Rental Building Business

27.3%

18.6%

-8.7% pt

18 cases
47 cases

22 cases48 cases+4 cases(Note 2)

(Note 2)

(Unit: million yen)

Rental Building Business

Number of properties soldNumber of stocks at the end of FY

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+1 case8

Net sales
Segment profit
Profit margin

50%

49,67747,550

30.8%

29.6%

40%

30%

30,00020%
20,00014,725

14,63810%

10,0000

0%
FY ended March 2022 FY ending March 2023
Apr - Dec
Apr - Dec
(Note 1) "Segment profit" is calculated by deducting specific costs of eachsegment, including interest expenses, sales commission and amortization of
goodwill from gross profit.
(Note 2) Projects of land purchase and development, the formation of smalllot real estate property and properties in NY are included.

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Real Estate Revitalization Business<Purchase in Replanning properties>
Purchase in RP properties was 30.6 billion yen(including contracted but unsettled properties),
up 12.6 billion yen from the previous fiscal year.
We are strengthening purchase activities to thelevel before the pandemic of COVID-19.

(Unit: million yen)

FY ended
March 2022
Apr - Dec

FY endingMarch 2023
Apr - Dec

Increase/decrease

Number of properties purchased

13 cases

21 cases+8 cases(of which, contracted and unsettled)

0 case4 cases+4 cases

Purchase amount18,06030,690+12,630

0

4,520+4,520(of which, contracted and unsettled)(million yen)

40,00036,82236,281

38,28630,69030,000

As of end of 3Q
FY2019/3

30,37620,00027,600

As of end of 3Q
FY2020/3

As of end of 3Q
FY2023/3

29,359As of end of 3Q
FY2018/3(21 cases)

15,03622,051

As of end of 3Q
FY2022/3

Contracted properties
scheduled to be settled
in the next fiscal year
3 cases 2.47 billion yen

18,060(13 cases)

10,000
As of end of 3Q
FY2021/3

2,470

9,634

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

FY2024/3

Note: Non-current assets, investment products in sub-divided real estate and NY properties are included.

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9

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Real Estate Services Business(Property Management, Building Maintenance, Sales Brokerage, Leasing Brokerage, Rental Conference Room, Rent Guarantee, etc.)<Property Management/Building Maintenance>◼ Both PM and BM businesses increased sales and profits due to anincrease in the number of entrusted buildings.

<Brokerage>◼ Sales and profits increased in Sales Brokerage due to the steadyconclusion of transactions introduced from other divisions.
◼ Sales and profits increased in Leasing Brokerage due to market
recovery.

(million yen)

<Rent Guarantee>◼ Sales and profits increased due to an increase in the number of newcontracts from the previous year.

Segment profit

7,000
6,000

<Rental Conference Room>◼ Sales and profits increased due to recovery in demand, improvementin occupancy rate, large-scale projects, and performance contribution
from new sites and floor expansion sites.

Net sales

5,000

80%

6,505

5,477
54.4%

4,000
3,000

Profit margin

56.0%

3,646
40%

2,982

2,000

(Unit: million yen)

Net sales

FY ended
March 2022
April - Dec

FY endingMarch 2023
April - Dec

Increase/decrease

5,477

6,505

+18.8%

Segment profit

2,982

3,646

+22.3%

Profit margin

54.4%

56.0%

+1.6%pt

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10

60%

20%

1,000
0

0%
FY ended March 2022
Apr - Dec

FY ending March 2023
Apr - Dec

(Note) "Segment profit" is calculated by deducting specific costs of each segment,
including interest expenses, sales commission, and amortization of goodwill fromgross profit.

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Hotel and Tourism Business (Hotel Development, Hotel Operation, etc.)<Hotel Development Business>◼ At the end of October, we completed the sale and handoverof two of the three hotel properties already contracted in thesecond quarter. The handover of the other one is scheduled
in April of the next fiscal year.

Net sales

25,000FY endingMarch 2023
April – Dec

Increase/
Decrease

5,637

20,680+266.9%Hotel Development Business

2,450

13,597+455.0%Hotel Operation Business, etc.

3,186

7,082

+122.3%-1,227

1,459-

Hotel Development Business

349

1,281

+267.0%Hotel Operation Business, etc.

-1,576

177

-

-

7.1%

-

Hotel Development Business

15.4%

9.4%

-4.8%pt

Hotel Operation Business, etc.

-

2.5%

-

Segment profit

Profit margin

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25%
20,680FY ended
March 2022
April - Dec

Net sales

Profit margin(million yen)

<Hotel Operation Business>◼ Both OCC (occupancy rate) and ADR (average daily rate)
improved due to the recovery of domestic tourism demandin line with relaxation of behavioral restrictions.

(Unit: million yen)Segment profit

11

20,00020%

15,00015%

10,000

10%
7.1%
5,637

5,000

5%
1,459

0

0%
▲ 1,227-5,000-5%
FY ended March 2022 FY ending March 2023
Apr - Dec
Apr - Dec
(Note) “Segment Profit” is calculated by deducting specific costs of each segment,
including interest expenses, sales commission and amortization of goodwill fromgross profit.

Sun Frontier Fudousan Co., Ltd

Operating Results by Business Segment

Other Business (Construction Business, Overseas Development Business, etc.)<Construction Business>◼ Both sales and profits increased due to the earlier
completion of construction at Group companies andthe early booking of construction sales.

(Million yen)

Net sales<Overseas Development Business>◼ Sales decreased compared to previous year due to thesale of properties in both Vietnam and Indonesia lastyear. Profit increased in Vietnam due to sale of 1 roomand condominium management.

(Unit: million yen)

FY endingMarch 2023
Apr - Dec

Profit margin

1,500

30%
1,228

1,197

FY ended
March 2022
Apr - Dec

Segment profit

1,000

20%
14.6%

Increase/decrease

500

8.9%

10%

179

1,197

1,228

+2.6%

Segment profit

106

179

+69.0%

Profit margin

8.9%

14.6%

+5.7%pt(Note) "Segment profit" is calculated by deducting specific costs of each segment,
including interest expenses, sales commission, and amortization of goodwill fromgross profit.

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12

Sun Frontier Fudousan Co., Ltd

Net sales

106

0

0%
FY ended March 2022 FY ending March 2023
Apr - Dec
Apr - Dec

Business Environment AwarenessandBusiness Initiatives

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13

Sun Frontier Fudousan Co., Ltd

Business Environment Awareness1. The global economy is becoming more aware of the normalization of the Chinese economy and the avoidance ofrecession in Europe and the United States, but future is uncertain.
◆ The IMF raised its forecast for global economic growth in 2023 to 2.9 percent, but the situation remains
unpredictable.
◆ The U.S. Federal Reserve has indicated that it will continue to raise interest rates to avoid a recession, while it
reduced the range of rate hikes at the FOMC meeting.
2. The Japanese economy continues to recover as constraints are eased amid the transition to Coexisting with COVID-19.
◆ With the spread of COVID-19 vaccine, restrictions have been eased and economic activities have been normalized.
◆ The Bank of Japan has revised its monetary easing policy and raised the upper limit of long-term interest rates.
3. In the central Tokyo office building market, hybrid working styles are spreading, and roles expected of offices arechanging.
◆ Due in part to the impact of rising prices, vacancy rate is flat. While rent is gradually decreasing, attention should be
paid to an increase in new construction.
◆ Although investment in real estate is generally strong, attention should be paid to trends in interest rates during
the period of monetary tightening.
4. In the hotel and tourism markets, travel demand has recovered due to the Nationwide Travel Subsidy Program andrelaxation of immigration restrictions.
◆ Both hotel occupancy rate and average room unit price have improved thanks to the Nationwide Travel Subsidy
Program and relaxation of ban on individual foreign tourists.
◆ In addition to the recovery of domestic travel to rural areas, urban areas also recovered due to an increase in
inbound tourists due to the relaxation of ban on individual foreign tourists.
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14

Sun Frontier Fudousan Co., LtdReplanning Business, Examples of Initiatives (1)Value-added building with highly visible appearance and highly functional floor

BeforeAfterThin and dark
entrance passage

Replanned to wide andbright entrance hall.

Mainentrance

1st floor store

Store on the first floor is
wider toward the road,
improving visibility.

Entrance

1st floor store
expansion
Entrance hall

Entrance
expansionEV

Main
entrance waschanged.

EV[Building appearance (After replanning)] Shiba, Minato-ku, Tokyo
One building profit building
Steel-reinforced concrete structure, flat roof, 8 story building with 1 basement floor
Built in 1991

Purchase
Management

RP
Leasing

Sale Warranty

A lounge space that can be used not only for businessnegotiations, meetings, and breaks, but also for eventsand seminars, etc.

Easy to layout according to your needs, functional andhighly versatile, and bright office space with windows
on three sides.

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15

The rooftop terrace has a panoramic view ofTokyo Tower and is a space of relaxation.

Leasing after replanning andentrusted management after sale

Sun Frontier Fudousan Co., LtdReplanning Business, Examples of Initiatives (2)Value-added building that Improves profitability and accommodates diverse working styles

BeforeA dark basement floor used as a storeroom

After
Increased profitability by converting the 1st basement
floor into an office

Spiral staircase connecting 1st floor and 1st basement[Building appearance (after replanning)] Tsukiji, Chuo-ku, Tokyo
One building profit building
Reinforced concrete structure with flat roof, seven story building with one basement floor
Built in 1996

Spacious office on the 1st basement floor

Purchase
Management

Sale

Common lounge entrance directly connectedto the street, with a sense of freedom

Lounge space suitable for both businessand private

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16

Set up multiple telephone conference booths tofocus on online meetings

RP
Leasing
Warranty

Leasing after replanning andentrusted management after sale

Sun Frontier Fudousan Co., LtdReplanning Business

Set-up Office Share"Set-up Office" is an office set up in an office building replanned by the Company. Unlike regular office interiors, the officehas reception and reception room, etc. set up, highly designed interior work in the office area, which is rented out withsome equipment and fixtures pre-installed.

◆Four benefits for tenant companies
Merit 1) Reduced burden on management
No need for unfamiliar tasks such as designing office interiors andselecting interior decorators, significantly reducing management’s
effort.

Merit 2) Immediately available after moving
Increase the net estimated internal useful life due to no work other than wirerelated work and moving, a significant reduction in the relocation period and ashorter construction period for interior finishing and restoration.

Merit 3) Reduced financial burden
Significant cost reduction for office interiors, etc., and no interior assets
recorded by tenants.

Merit 4) Employment, motivation and productivity improvement
Improve employment of human resources, employee motivation, and officeproductivity by the office interior that pursues a high level of design, focusing
on design, functionality, and various usage scenes.

The share of Set-up Office in 23 wards of Tokyo
Based on rental area

Based on the number of rental rooms

Company C
2.5%

Other
20.6%

Company B
5.5%
Company A
6.4%

Company C
2.6%

Sun Frontier
Fudousan

Other
20.9%

Company A
9.2%

65.0%

Company B
9.8%

Sun Frontier
Fudousan

57.5%
Survey conducted in September 2022
Survey planning: Sun Frontier Fudousan Co., Ltd.
Survey conducted: H. M. Marketing Research

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17

Sun Frontier Fudousan Co., Ltd

BELS Certification for 6 Entrusted Properties
The Energy conservation of Replanning Business, which suppresses waste of irreproducible resources, is highly rated.

BELS stands for "Building-Housing Energy-efficiency Labeling System."
Building-Housing Energy-efficiency Labeling System started by the Association for Evaluating and Labeling Housing
Performance in 2014. Since the evaluation and rating are carried out by a third-party organization in accordancewith the energy conservation performance indication guidelines for buildings based on article 7 of the building
energy conservation law, the evaluation is highly reliable compared with the manufacturer's own evaluation. The
GRESB is an annual benchmark for measuring environmental, social and governance (ESG) considerations by realestate companies and funds. It is attracting attention that BELS certification is given additional points.

● BELS Certified Six Properties

One profit building, Shiba, Minato-ku, Tokyo

One profit building, Higashi-Nihonbashi, Chuo-ku, Tokyo

One profit building,Taito-ku, Tokyo

One profit building, Kandasakumacho, Chiyoda-ku, Tokyo

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

18

One profit building, Tsukiji, Chuo-ku,Tokyo

One profit building, Nihonbashihakozakicho, Chuo-ku, TokyoSun Frontier Fudousan Co., Ltd

Open Shared Office for Start-ups
Supporting Start-up companies in the seed stage due to manage "Hive Shibuya" withventure capital. We aim to become the best startup-friendly office partner in Japan.
Venture capital

The Company

Investment &support for
management

Support for offices

Joint
operation

Start-up companies

GrowthMove-in

Flapping from ashare office

Shared officeGreat location near the scramble crossing in front of
Shibuya Station.

Facilities to work as soon as you move in

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

19

Layout with various seats

Highly artistic office that stimulatessensitivity

Sun Frontier Fudousan Co., Ltd

Specified Joint Real Estate Ventures

Promote Sales of Small-lot Real Estate Property
Sales of a nursery school, and a medical and educational mall that contribute to the lives of local
communities as small-lot productsCompass Ueno

Compass Magome

A newly built licensed nursery school, Ueno,Tokyo

Ota Ward new medical and educational mall

3-45 Taito, Taito-ku, Tokyo
2-minute walk from Naka-okachimachi Station on
Tokyo Metro Hibiya Line
6-minute walk from Okachimachi Station on JR
Yamanote and Keihin-Tohoku Lines
4-story building with a total floor area of 546.77
square meters

2-28-4 Kitamagome, Ota-ku, Tokyo
2-minute walk from Magome Station on Toei Subway
Asakusa Line
3-story building with a total floor area of 1,274.89
square meters

Fully sold on November 1!

(persons)
250

A new mall with the theme of “medical care andeducation”, in which after-school childcare,
English conversation school, etc. enter as tenants,
centered on a drugstore with a large medical
corporation and a dispensing pharmacy that has
strengths in hemodialysis

Application sold out, scheduled
for composition in March

Number of Investors in Small-Lot Real Estate Property

200

Sales network(tax accountants and financial institutions)

167

150
100
50

A newly built licensed nursery school that is inline with SDGs and ESG investments, including
eliminating the problems of children waiting
for admission and promoting women’s
activities

Over 180 companies

66
29

0

FY2020/3
20/3期

FY2021/3
21/3期

FY2022/3
22/3期

FY2023/3(Forecast)
23/3期

Expanding, aiming to reach over 200
companies

An increasing number of clients are investing in small-lot products to meet real estate investment needs

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

20

Sun Frontier Fudousan Co., Ltd

Real Estate Service Business Continues to Expand
Its Customer Base
Real Estate Service Business, which specializes in the central Tokyo area, increases clients and strengthens
its operating base（棟）

The Number of Entrusted Buildings in Property Management500(buildings)
400
300

333

362

372

373

392

397

421

[Property Management entrusted property
distribution]

457

Shinjulu-ku

Chiyoda-ku

276

200

Chuo-ku
ChuokuShibuya-ku

100
Minato-ku
District

0
15/3期
FY2015/3

16/3期
FY2016/3

17/3期
FY2017/3

18/3期
FY2018/3

19/3期
FY2019/3

20/3期
FY2020/3

21/3期
FY2021/3

22/3期 Q2
23/3期1Q
FY2022/3
FY 2023/3
P(cases)（件）

Changes in the Number of Rent Guarantee Contracts

4,000
3,000

2,035
2,000

1,290

2,370

2,658

2,989

3,099

3,261

【Rent Guarantee Percentage of new contracts * by area】

3,521

OthersIn Tokyo9%

4%
16%

1,642

Chuo-ku
17%

Shinjuku-ku
8%
Shibuya-ku Minato-ku
14%
12%

0
16/3期
FY2016/3

17/3期
FY2017/3

18/3期
FY2018/3■ 5 cities of central
Tokyo 71%

Chiyoda-ku
20%

Other 23 wards

1,000

15/3期
FY2015/3

Entrusted properties of the Company

19/3期
FY2019/3

20/3期
FY2020/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21/3期
22/3期 Q2
23/3期1Q
FY2021/3 FY2022/3
FY 2023/3

21■ Other Tokyo 20%
Total of 91% in Tokyo* As of March 31, 2022 : 652 new contracts

Sun Frontier Fudousan Co., LtdConference Room Rental Business

Site Development to Meet Diverse Needs
While responding to the diversification of working styles online, we are also responding tomeeting needs by increasing site capacity, and both sales and profits are reaching record highs.
September 1, 2022

Vision Center Tokyo Kyobashi Open
Nihonbashi

Tokyo

With a large hall that can

Tamachi•

Shinagawa

2,000 square meters

Shinjuku

Large facility with a total area of

Yokohama•

YotsuyaStationKanda Yurakucho
Hibiya Hamamatsucho

3 minutes walk from Shinagawa

Nagatacho•

Ueno

Vision Center Shinagawa Open

November 1, 2022

◆ Vision Center Site Network•

Best location of direct connection
from Kyobashi Station•

With a large hall that canaccommodate 600 people

accommodate 500 people

To Haneda airport◆Changes in sales in Conference Room Rental Business, Vision Center operating area
Net sales (L axis)(million yen)

Working area (R axis)(tsubo)The pandemic of
COVID-19

1,600

1,279

1,162

1,200

1,289

720
410

400

1,200

8,000

Exceeded the full-year
results for the previous
fiscal year at the end of 3Q.

6,000

917
800

1,370

4,400
3,400

3,000

3,400

4,000

1,500

2,000

600
0

0
FY2017/3

FY2018/3

FY2019/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

FY2020/3

FY2021/3

22

FY2022/3

FY2023/3 3Q

Sun Frontier Fudousan Co., Ltd

Continue High Profitability in Office Building Business● Replanning Business maintains high profit margin

Replanning Business contributed as high profit business withthe highest level of the profit margin in the past(million yen)

70,000

40.0%

32.4%

60,000
27.8%

28.2%

30.0%

31.2%

50,000

31.2%

29.2%

46,027

24.3%

22.1%

35.0%
30.0%
25.0%

40,000

20.0%

Net sales

30,000

15.0%

Segment profit

14,35520,000

Segment margin

10,000

10.0%

5.0%

0

0.0%
FY2015/3

FY2016/3

FY2017/3

FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3 3Q

Rental conference room operations are improving. Sales Brokerage, Leasing
Brokerage and PM are also strong. Real Estate Service Business is growing steadily.

● Steady Growth in Real Estate Service Business
Segment profit(million yen)
Rental conference room

4,000
3,206

Rent gurantee

3,000

BM
PM
Leasing brokerage

2,330

2,491

2,508

FY2016/3

FY2017/3

2,821

2,829

FY2018/3

FY2019/3

3,803

3,646

FY2022/3

FY2023/3 3Q

3,490

2,000
1,000

Sales brokerage
Sub-leases referral fee

0
FY2015/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

23

FY2020/3

FY2021/3

Sun Frontier Fudousan Co., Ltd

Hotel Operation Business

Recovery of Travel Demand and Increase in Occupancy Rates

Go To TRAVELFirst wave of COVID-

100.0%

80.0%

Seventh wave of COVID-

OCC（L axis）

Sixth wave of COVID-

ADR（R axis）

Nationwide travel support
Relaxation of entry
restrictions

We continue to open new hotels even in the pandemic of COVID-19, improving our services to become thehotel of choice for our clients, and our performance is improving.

19

16,000

19

19

60.0%

(yen)

20,00012,000

40.0%

8,000

20.0%

4,000

0.0%

0
FY2020/3 FY2020/3 FY2020/3 FY2020/3 FY2021/3 FY2021/3 FY2021/3 FY2021/3 FY2022/3 FY2022/3 FY2022/3 FY2022/3 FY2023/3 FY2023/3 FY2023/3
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q

◆ Newly opened hotels
Eight hotels opened in two and a halfyears in the pandemic of COVID-19.

February' 20
Tabino Hotel Kurashiki
Mizushima

April' 20
Tabino Hotel Kashima

February' 21
HIYORI Ocean Resort Okinawa

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

June' 21
HIYORI Chapter Kyoto

24June' 21
Tabino Hotel Lit
Miyakojima

July' 21
Tabino Hotel Lit
MatsumotoJune' 22
Sora Niwa Terrace Kyoto
Bettei Kamogawa

Sun Frontier Fudousan Co., Ltd

Hotel Development Business

Planned and Aggressive Hotel Development
Collected development funds through the sale of two hotels in 3Q
for the fiscal year under review and one in 1Q for the next fiscal
year. Going forward, we will develop and operate mainly “Tabino
Hotels” brand and small luxury hotels, and also focus on M&A.

Hotel name and location● "Tabino Hotel" Brand Case Study

NumberAcquisition and openingof rooms

Spring Sunny H Nagoya Tokoname Station

194

2016.44 Sky Heart Hotels (excluding Shimonoseki)

564

HIYORI Hotel Maihama
Sado Resort Hotel AZUMA

StatusAcquiredOwn

2016.12AcquiredLending and leasing

80

2017.4

Newly constructed

Sold leaseback

57

2018.4

Acquired

Own

Tabino Hotel Hida-Takayama

80

2018.5

Newly constructed

Own (leased)

SKY HEART Hotel Shimonoseki

105

2018.6

Acquired

Own

Tabino Hotel Sado111

2018.7

Newly constructed

Lending and leasing

HIYORI Hotel Osaka Namba Ekimae224

2019.5

Newly constructed

Lending and leasing

Hiyori Hotel Tokyo Ginza East

135

2019.12

Newly constructed

Scheduled to be
sold in April 2023

【Tabino Hotel lit Matsumoto】 Rooms with kitchen and washing machines suitable for long-term stays anda large public bath are handled for both sightseeing and business needs.

Tabino Hotel Kurashiki Mizushima

155

2020.2

Newly constructed

Lending and leasing

DONDEN Highland Lodge

112020.4

Entrusted

Lending and leasing● Condominium Hotel Case Study

Tabino Hotel Kashima

194

2020.4

Newly constructed

Own (leased)

Hiyori Ocean Resort Okinawa

203

2021.2

Newly constructed

Sold leaseback

Hotel Oosado

742021.4

Acquired

Own

Tabino Hotel lit Miyakojima

111

2021.6

Newly constructed

Own

Tabino Hotel lit Matsumoto

176

2021.7

Newly constructed

Lending and leasing

Sora Niwa Terrace Kyoto ・Bettei Kamogawa

1342022.6

Newly constructed

Own

Tabino Hotel Villa Miyakojima

42022.11

Entrusted

Lending and leasing【HIYORI OCEAN RESORT OKINAWA】 Luxury hotel which all guest rooms are ocean view and sweet rooms
with the flat terrace.

22 hotels 2,612 rooms as of Dec 31, 2022

<Hotel Business Model Case>
Land

Land
Operation
Sell

Owner

Purchase

Development

The Company
Sun Frontier
Hotel Management

Construction

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Operation
The Company
Sun Frontier
Hotel Management

25

Sell
The Company
Sun Frontier
Hotel Management

Purchase
Owner

Lease
Contract

The Company
Sun Frontier
Hotel Management

Sun Frontier Fudousan Co., Ltd

Company Philosophy, ESG

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Sun Frontier Fudousan Co., Ltd

Philosophy
Systematize and further promote the Sun Frontier Philosophy

Top-level concept
Credo (Company policy)

MissionVisionValue

What for?
How youwant to be

Course of
ActionCopyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Altruism
We believe in helping others, as many as we can,throughout our lives.
Our mission is to co-create a rich and sustainable
society as we look after every employee and pursue
the happiness of both mind and matter.
Our vision is to become the most appreciatedvisionary company that fully utilizes limited resources
and continues the challenges to create new values.
1. Work For Your colleagues

5. Be GENBA-Centric

2. Stay Humble, Thankful, And
Respectful

6. Always Work Creatively

3. Do The Right Thing

7. Be Open-Minded Cheerful and
Wonderful

4. Absolute Proactiveness27

Sun Frontier Fudousan Co., Ltd

Business area
Solving social issues through our core business,
Real Estate Utilization.
Realization of Sustainable Society

Environmental
Protection

Office Business

Human Resource
Development

Hotel Business

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Shima Yume Business28

Region
Revitalization

Overseas Business

Sun Frontier Fudousan Co., Ltd

Sustainability Issues and Targets
Sustainability Vision

We will contribute to the realization of a sustainable society through business activities
while respecting the heart of altruism, the Company policy.
IImportant Issues

Environmental
protection

Social issues to be solved

PolicySmall and medium-sized buildingsthat can still be used withincreased value are being
demolished.
= Waste of resources■ Extend the life and health ofreal estate■ Energy conservation andreduction of environmental
impact by the Real Estate
Revitalization Business

•
•
•

•
•

Revitalizationof regional economies

Regional
revitalization
Response to massive natural
disasters

Humanresource
development

Elimination of the decline in theworking-age population due to lowbirthrate and aging population (realdecrease in labor force) and thegender gap■ Create buildings, offices, andspaces with “job satisfaction”
and “creativity” that
contribute to economic growth■ Prevent and mitigate disasterthrough regional cooperation■ Respect and utilize diversity■ Create workplaces with job
satisfaction, creativity andgrowth opportunities

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

SDGs
icon

Goal (KPI)

29

•
•
•

Extend economic estimated useful lives by at least 30%
Occupancy rate of buildings over 30 years old to be 90% or
moreRetention of management after sale of replanning property
to be 90% or more
Reduce carbon dioxide emissions by an average of at least
12% compared to a building reconstruction project
100% carbon offset
Establish internal standards by the end of FY2022
Percentage of new supply of replanning properties thatexceed the established internal standards to be 30% ormore in FY2023
Implement tenant satisfaction surveys (for Companyowned properties)••

At least five lots by FY2023
Post disaster prevention information on the dedicatedwebsite 100% in FY2023 (for Company-owned properties)•

Ratio of female management to be 12% or more by April
2025 (Sun Frontier Fudousan Co., Ltd.)
Training hours as a percentage of prescribed working hours
to be 10% or more
Increase hourly recurring profit in FY ending March 2023
year-on-year (per regular employee of Sun Frontier
Fudousan Co., Ltd.)••Sun Frontier Fudousan Co., Ltd

ESG Data
Environment

SocialGovernance

As of Dec 31, 2022

Actual number ofRP buildings

Carbon Offset
Cumulative total
2,640 tons

As of Dec 31, 2022

Ratio of male and female employees inmanagerial positions(person)■ Male ■ Female

400
300

Total 459 buildings

200
Establishment of
SF Ocean Power
Generation Co., Ltd.

RE100
12 buildings
2,113 tons

100
0386 people
253
people62.7%
14people37.3%(person)100

NEW
Capital and businessalliance
Promoting the use ofelectricity storage systems

80 people
73
people91.2％

50

7 people
8.8%

0Human resource
development

Utilization rate 100%

Ratio of Outside
Officers
1/3 or more

As of June 30, 2022

Board of Directors
Audit & Supervisory
Committee

Female Directors
1 out of 11

Training at least 10%of set working hours

Returnto-work
ratio
92.1%

RP construction
15 buildings
399 tons

Transition to acompany with
Audit & Supervisory
Committee

External
36.4%

Full-time
63.6%

管理職
Management

Employee
社員Childcare leave
Mori no Denki
7 buildings
128 tons

Target ratio of female
managers at least 12%

As of Dec 31, 2022

Nomination andCompensation Committee(optional)
2 out of 4 Outside Officers

Full-time Full-time

11.5%

Outside Outside

From childcare leave
92.1% return to work

■ Male ■ Female

Ensuring transparency
and soundness

・ RE100 ・ ・ ・ ・ Carbon offset using J-credit derived from renewable energy. Initiatives to become the first in Japan to introduce this system on each floor. Achieve zero Co2 emissions per tenant company.
・ "Mori no Denki" ・ ・ ・ Carbon offset using J-credit derived from forests. We can feel that we are supporting forests side-by-side and moving into the building will contribute to the environment.

For more information, please refer to our sustainability website →https://www.sunfrt.co.jp/en/sustainability/

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Sun Frontier Fudousan Co., Ltd

Business Model

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Sun Frontier Fudousan Co., Ltd

Strategy in Office Business
Solving client’s various problems, mainly in the five cities of central Tokyo.

RP
12

14

11

*As of the end of December 2022

LM
21
73

Of the total number of RP buildings,
459buildings, 80% are in the five cities ofcentral Tokyo and adjacent cities.

133

PM

41

Community-based 10 branches
Ginza, Kanda, Nihonbashi, Kodemmacho, Kojimachi,
Shinjuku, Shibuya,Gotanda,Hamamatsucho, Yokohama

Of the 457 entrusted properties, over 80% arein the five cities of central Tokyo.
*As of the end of December 2022

47

BM

11

Of the 220 buildings under comprehensive
management, 85% are in the five cities ofcentral Tokyo.
*As of the end of December 2022

Rent
Guarantee

Of the 652 new contracts signed, 90% are in thefive cities of central Tokyo.
*As of the end of March 2022

8

20 of the 21 sites are in the five cities ofRentalConference central Tokyo.
*As of the end of December 2022.
Room* The numbers on the columns in the map are
the cumulative number of RP buildings.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

The rest of one is in Yokohama

32

Sun Frontier Fudousan Co., Ltd

Strengths in Office BusinessWith in-house manufacturing from purchase, development, leasing to sales andconsulting, we solve various problems by getting client’s needs correctly.

① Real Estate Utilization
To be a partner for solving various problems from clients’ point of view

Fundraising Consulting

Asset consulting

Rent guarantee

Construction planning

Property management

Leasing brokerage

Sales brokerage

Property
purchasing② Real Estate
Revitalization
Building
development ofvalue chain

Property
sales

Clients
1. Real estate utilization: Get close to our clients and solve various problems. Capture the source of added value
from clients’ voices.
2. Real estate revitalization: Utilize the needs we earned and the know-how for improving the valuation to conduct
sales activities.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Sun Frontier Fudousan Co., Ltd

Business Model for Replanning Business
Renovating the office buildings with low occupancy and in need of large-scale repairs
into high-value-added properties demanded by society using “clients’ point of view.”

Low-occupancy
low-profit buildings
・ Aging degradation
・ Earthquake
resistance anxiety
・ Violation of legal
compliance, etc.

Creativity

Leasing

Design offices in clients'
point of view and carryout renovation and repair
work in pursuit of safety
and security.

A community-based sites
network keep the building inhigh occupancy and becomesthe closest contact point for
any kind of consultation.

High-occupancy
high-profit buildingssought by owners

Value-up

Purchasing

Rent Guarantee

Purchase of lowoccupancy and nonoccupancy buildings
using various routes andmethods.

Encourage tenants tomove into the building andguarantee stable income
for the owner in the eventof rent arrears.

Clients =Building owners

Sales

Management

Stay close to clients of asset
holders and meet needs
with high levels of difficulty
beyond expectation.

Provide high-quality
services, maintain highoccupancy rate, andstabilize building
revenues.

・ Asset management, inheritancemeasures, etc.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

・ Full occupancy
・ Improve
income andexpenditure
・ Stable income

Sun Frontier Fudousan Co., LtdReplanning Business

Create both Customer Value and Social Value
Solving social issues through supporting our clients' business.
Supporting the business growth forbuilding owners and tenants throughour Replanning Business.

Comparison of resource input over 50 years(kg / ㎡)

3,991

(t-CO₂)

40.9% ↓

4,000

Comparison of CO₂ emissions over 50 years

7,000

=
Reducing non-reproducible resources
to prosper humankind, plants andanimals on the earth.

3,000

6,399

19.1% ↓

2,357
6,000

2,000

5,179
1,000

5,000

0
Rebuilding
建替
New bldg
新築

Clients’value

Renovation
改修

Rebuilding
建替

Renovation 4,000
改修

Repair
修繕

Comparison of waste generation over 50 years(kg / ㎡)

3,000

801

49.3% ↓

800

2,000
600

406

400

Economic
value

Social
value

1,000

200
0
Rebuilding

Renovation

建替

New bldg

新築

Rebuilding

建替

改修

RepairRenovation

修繕

改修

Demolition

解体

0Standard
標準
New新築
bldg
Maintenance

維持管理

Renovation
改修

Repair
修繕 Renovation改修
Disposal
Energy

廃棄エネルギー<Assumptions and rationale> Assuming a 30-year-old office building of approximately 3,000 square meters, the environmental contribution over a 50-year period (the service life of SRC office buildings) was
estimated based on the Architectural Institute of Japan's LCA Tool (*).
・ Rebuilding: “In the case of rebuilding every 35 years” ・ Renovation: "Regeneration without destroying old buildings (long-life buildings)" ・ Standard: "Assuming a 30-year-old unrenovated building"*Architectural I "LCA Tool for Buildings Ver5.0 - Evaluation Tool for Global Warming, Resource Consumption and Waste Management”, estimated with the cooperation of Engineering Research Institute of Japan.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Sun Frontier Fudousan Co., Ltd

Hotel and Tourism Business

Focus on Creating Enthusiastic Fans
With the theme of “a heartwarming and fun hotel”, we are aiming to be the mostappreciated hotel in the world.
Our Hotel Brand

Sado (Chigusa)
Sado (Aikawa Oura)
Sado (Aikawa Kabuse)

Luxury Class

Upper Middle Class

Bettei Kamogawa

HIYORI Hotel Tokyo Ginza East

Hiyori Ocean Resort Okinawa

HIYORI Hotel Maihama
HIYORI Hotel HIYORI Hotel Osaka
Namba Station

MatsumotoOnna-son,
Okinawa
Kyoto Shijo(Scheduled for sale in April 2023)

Takayama

KashimaMiyakojima

MaihamaUpper Class

Tabino Hotel lit Matsumoto

Hotel Osado

Tabino Hotel lit Miyakojima

Sado Resort Hotel AZUMATabino Hotel Villa Miyakojima

Soraniwa Terrace Kyoto

Spring Sunny Hotel Nagoya Tokoname
StationEconomy Class

Budget ClassDONDEN Highland

SKY HEART Hotel Narita

Tabino Hotel Sado

SKY HEART Hotel Koiwa

Tabino Hotel Hida Takayama

SKY HEART Hotel Kawasaki

Tabino Hotel Kashima

SKY HEART Hotel Hakata

Tabino Hotel Kurashiki Mizushima

SKY HEART Hotel Shimonoseki

NaritaKoiwa

Shimonoseki
Tokoname
HakataKurashiki
Mizushima

Osaka Namba

Ginza
Kawasaki(As of November 2022)

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

36

Sun Frontier Fudousan Co., Ltd

Business Model of Overseas Business
Developing local communities through creating clients' joy and happiness.
Our business includes land acquisition, development, construction, Handover after completion,
property management and brokerage.

Landacquisition

Completion
HandoverDevelopment
Construction

Management

Urban
Development

Contribute to future performance through systematic andcontinuous development efforts
China
Hanoi

Land
acquisition

Laos

Development
Land
acquisition

Hai PhongCompletion
HandoverDevelopment

Land
acquisition

Hue
ThailandCompletion
HandoverCambodia

Development

Completion
HandoverDa Nang City
Hoi AnVietnamHo Chi Minh

Rooted in the local community in Vietnam, we work together with local partners to ensure high construction quality,a safe, organized, and beautiful construction site.

Next project in progress!
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

36

Sun Frontier Fudousan Co., Ltd

Region Revitalization Business--Shima Yume Business-We will energize the islands throughtourism business!

When region becomes energized, Japan will be as well. As the number of visitors
spurred by fascination (culture, history, nature, food, hot spring, hospitality andothers) that Japan is proud of is rapidly increase, we challenge of region
revitalization business that focuses on the attractiveness and features unique to theregions to spread the “Wonderfulness of Japan.”

SADO
Sado Island,
Niigata Prefecture
Tabino Hotel Sado

Donden Kogen Lodge
Miyako Shimojishima Airport
Restaurant - Coral Port

Port of Ryotsu

Operation starts on October 1, 2022

Tabino Hotel lit
Miyakojima
Miyako Shimojishima
AirportHotel Osado
Sado Outdoor BaseMIYAKO
Miyakojima, Okinawa

Hotel AZUMATabino Hotel Villa Miyakojima

LE BLUESADO SAWANE

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Operation starts on November 3, 2022.

38

Sun Frontier Fudousan Co., Ltd

Medium-term Management Plan

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

Sun Frontier Fudousan Co., Ltd

Basic Policy and Growth Strategies ofMedium-term Management Plan
Basic Policy
Providing “a place where people gather and communicate with each other, andcreate social development and happiness for people"

Growth strategy
OfficeDeepen and expand the Office Business

Hotel

Provide satisfaction and excitement going beyond
Expectation with a sharp concept

Overseas

Expand residential-related business in Vietnam

M&A

Invest in start-ups and peripheral businesses
to expand current business

Key Points

ESG

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Digital40

Cash flow

Marketing
Sun Frontier Fudousan Co., Ltd

Medium-term Management Plan
FY2023/3
Revised Forecast

FY2023/3 3Q(100 millionss yen)

1,200
1,000

Net Sales
Ordinary profit

FY2025/3
TargetNet sales

75.3 billions yen

82.0 billions yen

100 billions yen

Ordinary profit

14.4 billions yen

14.5 billions yen

20 billions yen

Net profit

10.3 billions yen

10.4 billions yen

14 billions yen

Ordinary profit ratio

19.1％

17.7％

20%

Equity ratio

54.8％

Around 50%

Around 50%-

More than 10%

More than 10%

ROE

1,000

Net profit

820

800

732

712
753

600

As of end of 3Q
FY2023/3

596
533

400
144
As of end of 3Q
FY2023/3

200

128

161
107

88

75

122
74

44

0
19/3

20/3

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

145

21/3

22/3

41

104

200
140

103
As of end of 3Q
FY2023/3

23/3 （Forecast）

・・・

25/3 （Forecast）
Sun Frontier Fudousan Co., Ltd

Medium-term Investment Plan(FY ended March 31, 2022 to FY ending March 31, 2025)

Hotel Business

Office Business

Overseas Business

Balance at the end of
FY2021/3

72.8 billions yen

Balance at the end of
FY2021/3

21.8 billions yen

Balance at the end of
FY2021/3

0.6 billions yen

Amount of Investment

200 billions yen

Amount of Investment

7 billions yen

Amount of Investment

8 billions yen

Amount of return
Balance at the end of
FY2025/3

182.8 billions yen
90 billions yen

Plan procurement and development to achieve business growth
while recovering investments at a constant turnover rate.
Refocus on purchasing properties while holding back during the
confusion caused by the pandemic of COVID-19.
Make sound investments in short-term, medium- to long-term,
and new construction development.

Amount of return

5.8 billions yen

Amount of return

2.5 billions yen

Balance at the end of
FY2025/3

23 billions yen

Balance at the end of
FY2025/3

6.1 billions yen

Complete the hotels under construction. Aim to achieve
profitability in operating existing hotels. Collect funds
through the sale of land and buildings, operating themeffectively.
Planned hotel completed. Sell, collect, and reinvest.

Continuously and systematically invest in
condominium development projects for the future.
Land acquisition procedure is in progress for the
next development projects.

Digitalization 3 billions yen
Invest in digitalization to legalize Data Driven management

M&A 5 billions yen
Invest in start-ups and peripheral businesses to expand current business systematically

Establishing databases
Developing AI for analyzing
drone images

Create business synergies.
Diversification and customer
expansion.

Improve free cash flow
Ensuring positive free cash flow through systematic investment and return
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

42

Sun Frontier Fudousan Co., LtdReference Materials

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

43

Sun Frontier Fudousan Co., Ltd

Office Vacancy Rates and Rents in Five Cities ofCentral Tokyo（％）

Peak of vacancy rate
August 2003
Vacancy rate: 8.57%

Average rent as ofDecember 2022

Peak of average rent
August 2008
22,901 yen

20,059 yen( 22 yen ↓MoM )（yen）

Average vacancy rate in
December 2022

6.47%
( 0.09%pt ↑ MoM )Peak of vacancy rate
June 2012
Vacancy rate:
Peak average rent
July 2020
23,014 yen

Bottom of average rent
October 2004
17,526 yen

Bottom of vacancy rate
November 2007
Vacancy rate: 2.49%

Five cities average rent (yen/tsubo)

Bottom of average rent
December 201316,207 yen
Bottom of vacancy rate
February 2020
Vacancy rate: 1.49%

Five cities average vacancy rate (%)* Source: Compiled by the Company based on Miki Shoji's "Office Report”. Office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered.
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

44

Sun Frontier Fudousan Co., Ltd

Long-term Trends in Office Vacancy Rate and Rent
(yen)

(％)

50,00045,000

Average rent
平均賃料

44,193

9.01

Vacancy rate
空室率

8.08
8.12

40,000

Average vacancy rate in
December 2022

10

6.47%

9

Average rent in
December 2022

20,059 yen

35,000

8

6.47
6.33

30,0007

6

25,0005

22,18621,99920,05920,0004

17,577

16,2073.77
15,000

3

3.17
2.65

10,000

2

1.79
1.55

5,000

1

0.39
0

0

Source: Compiled by the Company based on Miki Shoji's "Office Report"
Target office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered. Figures for 2021 and earlier are taken as of December of each year.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

45

Sun Frontier Fudousan Co., Ltd

Age Distribution of Office Buildings in Tokyo’s 23 Cities
Solving social issues through revitalizing and utilizing Aging Small-to-Medium-Sized Buildings
Tokyo 23 cities with 9,400 buildings

Small-to-Medium-Sized Buildings(Total floor area: 300 to 5,000 tsubo)

8,642 buildings

75

Large-sized Buildings

70(Total floor area: Over 5,000 tsubo)

65758 buildings

60

Old Seismic Building Codes:
2,072 buildings (24%)

55

Old Seismic Building Codes:
109 buildings (14%)

50
45
40
35

Age of buildings

30
25

Buildings built for more than 20 years :20

460 buildings（61％）

15

Buildings built for less than 20 years :10

Buildings built for less than 20 years :1,108 buildings (13%)

5298 buildings (39%)

0
800

600

400

200

0

200

400

600

800

Number of buildings
Source : Created by us based on "Tokyo 23 cities Office Pyramid 2023 (based on the number of buildings)" (Xymax Real Estate Institute)

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

46

Sun Frontier Fudousan Co., Ltd

Market Size and Number of Corporations in Tokyo
Provide happiness and improve society development in Tokyo which people and corporations
gathering.
Ratio of Tokyo population to Japanese population (estimate)(Thousand people)

Population in
東京都人口
Tokyo

160,000

Population
日本人口of Japan

Population of Tokyo as a percentage of the
東京人口が日本人口に占める割合
population of Japan

25.0%

140,000
20.0%

120,000
100,000

15.0%

80,00060,00040,000

10.6%

10.3%

11.1%

11.4%

11.7%

11.9%

12.6%

9.5%

9.8%

12,064

12,577

13,15913,515

13,85013,97913,93813,754

13,458

2000

2005

2010

2015

2020

2025

2030

2035

2040

10.0%
5.0%

20,0000

0.0%

Source: Compiled by the Company based on Tokyo Metropolitan Government statistics - "Population of Tokyo (Estimate).”Top 10 Prefectures in Number of Corporations
Tokyo 京東575,234

Osaka 阪大223,407

Kanagawa神奈 川

184,363

Aichi 知愛

153,694

Saitama埼
玉130,108

Hokkaido
北海 道
Chiba 葉千兵Hyogo庫119,564
107,704

94,013

福岡Fukuoka

83,562静岡Shizuoka

76,981
Source: Compiled by the Company based on the National Tax Agency‘s “Number of Corporations by Prefecture”.

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

47

Sun Frontier Fudousan Co., Ltd

Population Movements in the Three Major
Metropolitan Areas and Local Areas
In 2022, the number of people moving into the Tokyo area started to increase again, and thetrend of population concentration remains unchanged.
40First peak of
population inflow(1961)

30

Tokyo Area

（Ten thousand people）

20

Excess transfer

10

Second peak of
population inflow(1987)

Third peak of
population inflow(2007)

Fourth peak of
population inflow(2019)

Osaka area

Nagoya area

0
(10)
(20)
(30)

Local area

Collapse of
bubble economy

Oil crisis(40)

Global financial
crisisCOVID-19
crisis

(50)
(60)
(70)

Source: Prepared by the Company based on Statistics Bureau, Ministry of Internal Affairs and Communications, "Number of New Residents by Address Before and After"

Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

48

Sun Frontier Fudousan Co., LtdTransition and Present
Change, challenge and create new value with the Sun Frontier Spirit

100,000

Ordinary
Profit Margin

Net
Sales

売上高

120,000

経常利益率

23.5%
20.6%21.3%

20.8%
18.5%

80,000

15.8%
14.0%

60,00019.3%

681 1,771 3,588

24.0%
22.9%
22.0%
22.0%22.7%
20.2%
73,21825.0%
82,000

12.6%
11.5%

16,731
7,761
5,004

53,292
47,46440,39530,626
27,741

20.0%

71,251
20.0%

59,63213.2%
48,15026,871

20,000100,000

24.4%

LehmanShock

35,25540,00030.0%

Covid-19

15.0%

17.1%
12.6%

10.0%

17,772
10,581
6,924
4,290

14,469

5.0%

0

0.0%
01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3 24/3 25/3
(Forecast)(Forecast)2001 to 20092010 to 2020

2021～

Basic construction of Replanning Business

Evolution and expansion of Replanning Business

Deepening and ​diversification of
Replanning Business

Replanning Business
Set-up office
Hotel
Rental Conference Room
Overseas

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49

Sun Frontier Fudousan Co., Ltd

Company Profile
Company Name

Sun Frontier Fudosan Co., Ltd.

Location of Head
Quarters

1-2-2, Yurakucho, Chiyoda-ku, Tokyo

Date of Foundation

April 8, 1999

Date of Listing

February 26, 2007 (First Section of Tokyo Stock Exchange)

Capital Stock *11,965 millions yen

Representative

Tomoaki Horiguchi, Chairman Representative Director
Seiichi Saito, President Representative Director

Number of Consolidated
701 employees (1,282 including part-timers and temporary workers)
Employees *Average Age of
Employees*

36.2 years old
Real Estate Revitalization

Business Profile

Real Estate Service Properties Management, Brokerage, Construction Planning,
Rent Guarantee, Building Operations, Asset Consultation

Hotel Development and Operation
Accounting Month
Listed Market

March
Tokyo Stock Exchange Prime (Code number: 8934)* As of the end of December 2022
Copyright © 2023 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

50

Full-time directors
From the left in the front row : Seiichi Saito, President and Representative Director ; Tomoaki
Horiguchi, Chairman and Representative Director.
From the left in the back row: Mitsuhiro Ninomiya, Director; Yasushi Yamada, Senior Managing
Director; Izumi Nakamura, Executive Vice President; Kenji Honda, Director.

Sun Frontier Fudousan Co., Ltd

Sun Frontier Fudousan Co., Ltd

Thank you for your continued support.
◆ The purpose of this document is to provide information that can be used as a reference, not for soliciting or promoting you

to purchase a specific product. Please make your decision by your own discretion and responsibility when you make an
investment. If you want to purchase shares of our Company, please contact securities companies.
◆ The information provided in this document is not necessarily in compliance with the Financial Instruments and ExchangeAct, the Building Lots and Buildings Transaction Business Act, the Listing Rules for the Tokyo Stock Exchange and otherrelated laws and regulations.
◆ Forward-looking statements included in this document do not guarantee future performance.
◆ Although we have made every effort to ensure the contents of this document, we can not guarantee their accuracy or
certainty. Please note that they are subject to change or removal without notice.

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