Sun Frontier Fudousan Co., Ltd.

Financial Results for the Third Quarter of Fiscal YearEnding March 2022
We are aiming to be the real estate company of theworld’s most loved, trusted and selected by clients.

1) Overview of the 3Q Results of FY 2022

1-92) Growth Strategy

10-253) Initiatives in the Fiscal Year under Review

26-344) Reference Materials

35-47

February 10, 2022
Securities Code : 8934

Overview of the 3Q Results of FY ending
March 2022
Profit is ahead of plan. Real Estate Revitalization Business drives performance.
(Unit: million yen)

Results

Profit Margin Year-on-Year

GrowthRate

Full-Year Forecast

Progression
Rate

Net sales

61,618-+15,175

32.7%

76,00081.1%

Operating Profit

12,151

19.7%+5,11972.8%

12,000101.3%

Ordinary Profit

11,983

19.4%+5,42082.6%

11,500104.2%

Profit*

7,519

12.2%

+3,460

85.3%

7,400

101.6%* ”Profit” represents the profit attributable to owner of parent.

Performance Highlights
1) Large year-on-year increase in Real Estate Revitalization Business,
driving the companywide performance2) Real Estate Service Business expanded to a level higher than before
the pandemic of COVID-19• The number of units sold in RP Business was 18 (18 units year-on-year).
Sales and profit increased significantly compared with the same period of
the previous fiscal year partly due to the reaction from the previous year,
driving the company-wide performance. Segment profit margin in theReal Estate Revitalization Business remained high (29.6%, +3.6% pt yearon-year).
• The Office Division is making a concerted effort in commercialization.
Completed and sold replanning products with high occupancy and highadded value. Maintained high quality even in the pandemic of COVID-19
and made steady progress in sales.

• Despite the prolonged the pandemic of COVID-19, performanceincreased mainly in the brokerage business. Both sales (+ 22.9% yearon-year) and profit (+ 20.7% year-on-year) greatly exceeded theprevious fiscal year's level and expanded well beyond the level before
the pandemic of COVID-19.
• In the field of small and medium-sized office buildings in central
Tokyo, each division brought together the expertise it has cultivatedthrough the creativity and ingenuity of each field, and developed thebusiness while cooperating, which functioned as a foundation for
creating high profitability in RP Business.

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Sun Frontier Fudousan Co., Ltd.

Consolidated Income Statement(Unit: million yen)
FY ending
Mar 2021
Apr-Dec

FY ending
Mar 2022
Apr-Dec

Year-on-year
ChangeComposition
Ratio

Net Sales

46,442

61,61832.7%

100.0%

Real Estate Revitalization Business

29,914

49,677

66.1%

80.1%

Replanning Business
Rental Buildings and Sub-leases
Real Estate Service Business
Hotel and Tourism Business
Other Business
Adjustment
Gross Profit (Loss)

27,974
1,940
4,456
8,994
3,440
-363
12,421

48,084
1,592
5,477
5,637
1,197
-371
17,51971.9%-17.9%
22.9%-37.3%-65.2%
41.0%

77.6%
2.6%
8.8%
9.1%
1.9%
100.0%

Real Estate Revitalization Business

8,433

15,358

82.1%

83.0%

Replanning Business
Rental Buildings and Sub-leases
Real Estate Service Business
Hotel and Tourism Business
Other Business
Adjustment

7,689
744
2,470
1,004
678
-164

14,924
434
2,996
-828
158
-164

94.1%
-41.6%
21.3%-76.7%
-

80.6%
2.3%
16.2%
0.9%
-

Selling, General and
Administrative Expenses

5,389

5,368

-0.4%

Operating Profit (Loss)
Non-operating Income
Non-operating Expenses

7,032
126
596

12,151
253
421

72.8%
100.9%-29.2%

Ordinary Profit (Loss)

6,562

11,983

82.6%

Extraordinary Gain (Loss)
Income Tax
Profit Attributable to Noncontrolling Interests
Profit

-8

-151

-

2,526

4,317

70.9%

-31

-5

-

4,059

7,519

85.3%

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Income Statement Points<Real Estate Revitalization Business>
In the RP Business, sales progressed as commercialization
made progress steadily even during the pandemic of COVID19. As a result for the Real Estate Revitalization Business,sales was 49.6 billion yen (up 66% year-on-year), gross profit
was 15.3 billion yen (up 82% year-on-year), and gross profit
margin was 31%, exceeding full-year forecast margin (27%).
<Real Estate Service Business>
In addition to generating stable income in each businesssegment, profits grew due to the increasing opportunities tosolve problems in the pandemic of COVID-19. As a result, theReal Estate Service Business as a whole posted sales of 5.4
billion yen (up 23% year-on-year) and gross profit of 2.9
billion yen (up 21% year-on-year).
<Hotel and Tourism Business>
The Hotel Operation Business was sluggish due to thepandemic of COVID-19 and start-up expenses. The Hotel
Development Business saw a significant decline in reaction
to the sales and profits from the Okinawa Condominium
Hotel recorded in the previous fiscal year. The Hotel andTourism Business as a whole posted sales of 5.6 billion yen
and a loss of 820 million yen.

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Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Assets <Cash and deposits> Increased 11 billion yen due to progress in the sale of RP projects.
Decreased 14.9 billion yen due to the sale of properties and so on, of which RP projects decreased
14.7 billion yen due to progress in sales. Hotel projects decreased slightly due to progress in sales of
Okinawa Hotel and so on while construction of new hotels progressed.

<Inventories>(Unit: million yen)

FY ending March2020

FY 2022
As of End of
December 2021

FY 2021

Increase/Decrease(compared to the End of
March 2021)

Current assets

113,842

110,785

107,238-3,546

Cash and deposits

18,62721,50832,536+11,028

Inventories

91,76686,087

71,148-14,938

Breakdown) RP

71,35317,0193,395

71,34913,917821

56,615
13,913620-14,734-4-201

Other current assets

3,448

3,189

3,553

+363

Non-current assets

16,45016,70024,039+7,339Property, Plant and Equipment

10,413

10,52817,318+6,790

712

701

645

-55

5,324

5,470

6,075

+605

130,293

127,485

131,278+3,792

Hotel

Overseas, etc.

Intangible Assets

Investments and Other Assets

Total assets

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Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet- Liabilities /Equity <Interest-bearing Debt >Borrowings decreased 2 billion yen from the end of the previous fiscal year to45.4 billion yen due to property sales and so on.

<Net assets> Increased 4.7 billion yen due to Profit (7.5 billion yen) and other factors despite
the payment of year-end dividends payable (-2.0 billion yen) and interim
dividends payable (-1.0 billion yen).

(Unit: million yen)

FY ending March
2020

Changes of Equity Ratio
FY ending ofMarch 2020

FY ending ofMarch 2021

FY 2022 ending of

49.6%

52.3%

54.3%

FY 2022
As of End of
December 2021

FY 2021

December 2021

Increase/Decrease(compared to End of
March 2021)

Current liabilities

18,052

13,35815,144+1,786

Short-term Borrowings, etc.

4,463

5,530

5,420

▲110

Income Taxes Payable, etc.

3,566

901

2,988

+2,087

Other Current liabilities

10,022

6,926

6,735

▲191

Non-current liabilities

47,43144,354

41,632▲2,721Long-term Borrowings and Bonds Payable

44,90641,99140,021▲1,969Other Non-current Liabilities

2,525

2,363

1,611

▲752

Total Liabilities

65,48357,712

56,777▲935

Shareholders' Equity

64,69066,91671,364+4,447

119

2,856

3,136

+279

Total Net Assets

64,80969,77374,500+4,727

Total Liabilities and Net Assets

130,293

127,485

131,278+3,792OthersCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

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Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Real Estate Revitalization Business(Replanning and Rental Buildings)<Replanning Business>◼ The number of properties sold was 18, the same level as the same period of theprevious year (18 units).
(million yen)
◼ Average business period was 719 days (increase 187 days year-on-year). Thiswas due to the sale of mid-to-long term properties. There has been no change 50,000
to our business policy of building in one year period from purchase to sale.
* In addition to the following number of stocks at the end of FY 2022, there are 13 RP
properties that have been purchased by the end of January for 12.4 billion yen.

<Rental Building Business>◼ We will increase rent income in the mid-to-long term to build a stablerevenue base as a stock business.
FY 2022
Apr. to Dec.

Increase/
Decrease

Net Sales

29,914

49,677+66.1%

Replanning Business

27,97448,084+71.9%

Rental Building Business

1,940

1,592

-17.9%

Segment Profit (Note 1)

7,786

14,725+89.1%

Replanning Business

7,045

14,291+102.8%740

434-41.3%

Profit margin

26.0%

29.6%

+3.6%pt

Replanning Business

25.2%

29.7%

+4.5%pt

Rental Building Business

38.2%

27.3%

-10.9% pt

131852 (Note 2)1018
47 (Note 2)-2 cases-5 cases(Unit: million yen)

Rental Building Business

Number of properties purchased
Number of properties soldNumber of stocks at the End of FY

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549,67760%

50%

40,00030,000FY 2021
Apr. to Dec.

Net Sales
売上高
Segment Profit
セグメント利益
Profit Margin
利益率

40%

29,914
29.6%
26.0%

30%

20,00014,725
10,000

20%

7,786
10%

0

0%

2021/3期
FY 2021Apr.
to Dec.
4-12月

2022/3期
FY 2022Apr.
to Dec.
4-12月(Note 1) “Segment Profit” is calculated by deducting specific costs of each segment,
including interest expenses, sales commission and goodwill depreciation expensefrom gross profit.
(Note 2) Projects of land purchase and development are included.

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Real Estate Service Business(Property Management, Building Maintenance, Brokerage, Leasing, Rental Conference Room, Rent Guarantee, etc.)<Property Management / Building Maintenance>◼ In the PM business, sales and profits declined due to the vacancies increasecaused by the pandemic of COVID-19.
◼ Both sales and profit increased in the BM business due to a rebound fromlast year's decline in orders, M&A, and an increase in entrusted properties.
<Brokerage>◼ Sales and profit increased in Brokerage due to steady progress in winningreferrals from other divisions.
◼ Sales and profit increased in Leasing due to rebound from the same periodof the previous year, when office relocation stagnated.
<Rental Conference Room>(million yen)

Net Sales
売上高
Segment Profit
セグメント利益
Profit Margin
利益率

6,000

80%

5,477
5,000

4,456
4,000

60%

55.4%

54.4%

◼ Sales increased by grasping the limited demand from local community- based
businesses, but profits declined slightly due to new site openings, etc.
<Rent Guarantee>

2,982

3,000

◼ Both sales and profit increased due to steady growth in both new and reguarantee volume during the pandemic of COVID-19.

40%

2,470
2,000

FY 2021
Apr. to Dec.

FY 2022
Apr. to Dec.

Increase/
Decrease

Net Sales

4,456

5,477

+22.9%

Segment Profit

2,470

2,982

+20.7%

Profit Margin

55.4%

54.4%

-1.0% pt

(Unit: million yen)

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6

20%
1,000

0

0%

2021/3期
FY 2021Apr.
to Dec.
4-12月

2022/3期
FY 2022Apr.
to Dec.
4-12月
Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Hotel and Tourism Business (Hotel Development, Hotel Operation, etc.)<Hotel Development Business>◼ With sale of HIYORI Ocean Resort Okinawa, 40 lots were delivered(cumulative sales: 199 lots/ total 203 lots in total). Posted Segment
profit of 360 million yen (Profit margin: 15.4%).
<Hotel Operation Business>◼ Occupancy rate and average room rate were sluggish mainly in urban
hotels due to the impact of self-restraint on tourism caused by thestate of emergency declaration declaration. Losses increased due tostart-up expenses for three new hotels opened in the first andsecond quarter of the fiscal year.
FY 2021
Apr. to Dec.

FY 2022
Apr. to Dec.

Increase/
Decrease

Net Sales

8,994

5,637

-37.3%

Hotel Development Business

7,432

2,366

-68.2%

Hotel Operation Business, etc.

1,562

3,271

+109.4%

Segment Profit

508-1,227-

Hotel Development Business

1,553

364

-76.6%

Unit: 1 million yen

Hotel Operation Business-1,045-1,591-

Profit Margin

5.6%

-

-

Hotel Development Business

20.9%

15.4%

-5.5% pt

Hotel Operation Business, etc.

-

-

-

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7(million yen)

10,000Net Sales
売上高
Segment Profit
セグメント利益
Profit Margin
利益率

40%

8,994
8,000

30%

6,000

4,000

5,637

20%

10%

5.6%

2,000

0%

508
0

-10%

-1,227-2,0002021/3期
FY 2021Apr.
to Dec.
4-12月

-20%

2022/3期
FY 2022Apr.
to Dec.
4-12月(Note 1) “Segment Profit” is calculated by deducting specific costs of eachsegment, including interest expenses, sales commission and goodwill
depreciation expense from gross profit.

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Other Business (Construction Business and Overseas Development Business, etc.)<Construction Business>◼ Both sales and profit increased due to the addition of the(million yen)
performance of Communication Development Inc., whose shares
4,000
were acquired through M&A in the previous fiscal year.

◼ Substantial decreasing in both sales and profits from the same
period of the previous fiscal year was recorded due to theabsence of the results of the high-rise condominium project in Da
Nang, Viet Nam (Net sales: 2.38 billion yen, profit: 0.53 billionyen), which was added to the operating results in the same periodof the previous fiscal year.

Net Sales
Segment Profit

40%

3,440

<Overseas Development Business>(Unit: million yen)

Net Sales
売上高
Segment Profit
セグメント利益
Profit Margin
利益率

FY 2021
Apr. to Dec.

FY 2022
Apr. to Dec.

Increase/
Decrease

3,440

1,197

-65.2%

638

106-83.3%

3,000

2,000

30%

18.6%

20%

1,197
8.9%

1,000

638
106
0

Profit Margin

18.6%

8.9%

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-9.7% pt

8

10%

0%
FY 20212021/3期

FY 20222022/3期

4-12月

4-12月

Apr. to Dec.

Apr. to Dec.

Sun Frontier Fudousan Co., Ltd.

Trends in Key Management Indicators■ Changes in Ordinary Profit Margin(百万円）(1 million
yen)(1 million yen)
(百万円）

(Pursuing High-Value-Added Management)

80,00030%

80%
Net Assets (L axis)
純資産（左軸）Equity Ratio (R axis)
自己資本比率（右軸）70,00070,000

24.0%
22.0%

(Building a Stable Financial Base)

80,000

売上高（左軸）Net sales (L axis)
Ordinary Profit (L axis)
経常利益（左軸）
Ordinary Profit Margin (R axis)
経常利益率（右軸）

22.7%■ Changes in Equity Ratio

70%

25%

22.0%
60,000 56.0%

60,00053.2%
50,00060%

19.4%

50,00015%

40,00040%

30,00030%

20,00020%

10,00010%

40,00030,000

52.3%

50.3%

20%

54.3%

50%

49.6%

12.6%
10%

20,0005%
10,00000%
2017/3

18/3

19/3

20/3

21/3

0

22/3

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0%
2017/3

9

18/3

19/3

20/3

21/3

22/3

Sun Frontier Fudousan Co., Ltd.

Growth Strategy

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Sun Frontier Fudousan Co., Ltd.

Business Environment Awareness1. The Japanese economy is in an unpredictable situation due to the re-spread of COVID-19.
◆ After the lifting of the state of emergency declaration there were signs of recovery, but the spread of the
COVID-19 has pushed the situation downward.
◆ With the rapid increase of the number of infected people and priority measures such as preventing the spreadof disease, business environment remains severe, centering on lodging and tourism sectors.
◆ Despite rising prices due to higher crude oil prices and rising long-term interest rates and so forth, the Bank ofJapan is likely to continue its easy monetary policy.

2. In the global economy, amid the continuing spread of COVID-19, there are concerns about monetary
tightening against the background of inflation.
◆ The IMF revised downward its global growth forecast due to COVID-19, inflation, supply constraints andthighter U.S. monetary policy.
◆ There are growing concerns over the accelerating inflation due to the continued high oil prices backed bygeopolitical risks such as the Ukraine crisis.
◆ The U. S. FRB’s monetary policy normalization to curb inflation is expected to proceed quickly, accelerating therise in long-term interest rates.

3. In the central Tokyo office building market, despite the prolonged the pandemic of COVID-19, the hybrid
models have been popular in response to changing needs.
◆ Although the rise in the average vacancy rate for central Tokyo offices has paused, the average rent is likely todecline gradually.
◆ A hybrid work style combining teleworking and coming to the office is required, with an emphasis oncommunication.
◆ Although there is a strong appetite for real estate investment, we need to pay attention to the outlook forinterest rates as we enter a phase of global monetary tightening.
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Sun Frontier Fudousan Co., Ltd.

Trends in Office Vacancy Rates and Rents
In Five Cities of Central Tokyo(%)

Five cities
average rent
(yen/tsubo)

Five cities
average vacancy
rate
(%)

(circle)Peak average rent
In August 2008
22,901 yen

Average rent
In December 2021

20,596 yen(-90 yen MoM)
Average vacancy rate
In December 2021

6.33%(- 0.02% pt MoM)
Peak vacancy rate
June 2012
Vacancy rate: 9.43%

Peak average rent
July 2020
23,014 yen

Peakvacancy rate
August 2003
Vacancy rate:
8.57%
Bottom of average
rent
October 2004
17,526 yen

Bottom of average
rent
December 201316,207 yen

Bottom of vacancy
rate
November 2007
Vacancy rate: 2.49%

Bottom of vacancy
rate
February 2020
Vacancy rate: 1.49%* 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.
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Sun Frontier Fudousan Co., Ltd.

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

(％)

Vacancy rate
空室率
(R axis)(右軸)

Average rent
平均賃料
(L axis)(左軸)50,00045,00010

9.01

44,193

9

8.12

8.08
40,0008

6.33

35,0009 years

9 years

30,0006

25,00022,20622,186

5

20,59620,000

4

16,2073.77

15,0003

3.17
17,577

10,0007

10 years

2.65

2

1.79

5,000

1.55
0.39 4 years

3 years

1

4 years

00

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 2020 and earlier are taken as of December of each year. Figures for 2021 are as of December.

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Sun Frontier Fudousan Co., Ltd.

Age Distribution of Office Buildingsin Tokyo’s 23 Cities
Promoting solutions to social issues through the revitalization and utilization of aging small-to- medium-sized buildings
Tokyo 23 cities 9,378 buildings

Small and medium-sized(Total floor area: 300 to 5,000 tsubo)75

Large-sized

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

65

8,620 buildings

758 buildings

60

Old seismic code:
2,132 buildings (25%)

Old seismic code:
122 buildings (16%)

55

50
45

20 years old or more:

20 years old:40

7,523 buildings

440 buildings

35

（87％）

（58％）

Age of buildings

30
25
20
15

Less than 20 years old:

Less than 20 years old:

10

1,097 buildings (13%)

318 buildings (42%)

5
0

800

600

400

200

00

200

400

600

800

Number of buildings
Source : Created by us based on "Tokyo 23 cities Office Pyramid 2022 (based on the number of buildings)" (Xymax Real Estate Institute)

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Sun Frontier Fudousan Co., Ltd.

Market Size in Tokyo
Number of Corporations and Demographics
Contribute to the development of society and the happiness of people in Tokyo,
a city where people and companies gather.
(Thousand people)

Ratio of Tokyo population to Japanese population (estimate)Tokyo’spopulation
東京都人口Japanese
population
日本人口

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

25.0%

160,000
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
2000年

2005
2005年

2010
2010年

2015
2015年

2020
2020年

2025
2025年

2030
2030年

2035
2035年

2040
2040年

10.0%
5.0%

20,0000

0.0%(Year)
Source: Compiled by the Company based on Tokyo Metropolitan Government statistics - "Population of Tokyo (Estimate).”Top 10 Prefectures in Number of Corporations
Tokyo
東
京
Osaka
大
阪
Kanagawa
神 奈 川
Aichi
愛
知
Saitama埼
玉Hokkaido
北 海 道
Chiba
千
葉
Hyogo
兵
庫
Fukuoka福岡Shizuoka静岡575,234
223,407
184,363

153,694130,108
119,564
107,704
94,01383,562
76,981
Source: Compiled by the Company based on the National Tax Agency‘s “Number of Corporations by Prefecture”.

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15

Sun Frontier Fudousan Co., Ltd.

Population Movement in the Three Major
Metropolitan Areas and Local Areas
In the past economic crisis, the number of people moving into the Tokyo area became the starting point for growth.
（Ten thousand people）

40

First peak of population
inflow (1961)

20

Net Inflow

10Second peak of
population inflow（1987）

Tokyo area

30

Third peak of population
inflow（2007）

Fourth peak of
population inflow（2019）

Osaka area
Nagoya area

0
(10)
(20)
(30)
Oil crisis(40)

Collapse of bubble economy

Local area

Global financial
crisisCOVID-19
crisis

(50)
(60)
(70)

Source: Compiled by the Company based on "Number of people moving in by place of residence before the move and number ofpeople moving out by place of residence after the move" from the Statistics Bureau of the Ministry of Internal Affairs andCommunications.

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16

Sun Frontier Fudousan Co., Ltd.

Growth Strategy-Strengths of Medium-term Management Plan
and Our Business Model-

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17

Sun Frontier Fudousan Co., Ltd.

Basic Policy and Growth Strategy in
Medium-term Management Plan
Basic Policy
Providing "a place where people gather and communicate with each other, and createsocial development and happiness for people"

Growth Strategy
OfficeDeepen and expand the Office Building Business

Hotel

Create services that go beyond satisfaction and excitementwith a sharp concept

Overseas
M&A

Key Points

Expand housing-related business in Vietnam
Invest in peripheral businesses to expand the current
business and invest in start-ups in growth fields
ESG

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Digital18

Cash flow
Sun Frontier Fudousan Co., Ltd.

Medium-term Management PlanFY 2022
Cummulative 3Q results

Net sales
売上高

（億円）

(100 million yen)

1,200

Ordinary profit
経常利益

Net profit
当期純利益

FY 2022
Forecast

FY 2025
TargetNet sales

61.6 billion yen

76.0 billion yen

100.0 billion yen

Ordinary profit

11.9 billion yen

11.5 billion yen

20.0 billion yen

Net profit

7.5 billion yen

7.4 billion yen

14.0 billion yen

Ordinary profit ratio

19.4%

15.1%

20%

Equity ratio

54.3%

50% level

50% level

-

10.8%

10% or more

ROE

1,000

1,000
800
600

760

732
596

533

400
200

0

128

88

2019年3月期
FY 2019161
107
2020年3月期
FY 2020

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

75 44
2021年3月期
FY 2021

19

115

200
140
74

FY 2022年3月期
2022 (forecast)
（予）

・・・

・・・

2025年3月期
FY 2025(forecast)

Sun Frontier Fudousan Co., Ltd.

Strategy in Office Building Business
Provide services to solve every problem in clients, mainly in the five cities of central Tokyo.

RP
12

14

11

*As of the end of December 2021

Leasing
Brokerage

A net work of ten community-based branches

PM

More than 80% of the 413 entrusted
properties are located in the five cities ofcentral Tokyo. *As of the end of December 2021

BM

Of the 200 buildings under comprehensive
management, 85% are located in the five cities
of central Tokyo. *As of the end of December 2021

Rent
Guarantee

Of the 646 new contracts signed, 80% are in thefive cities of central Tokyo.

20
68

Of the total number of RPs over 436
properties, 80% are located in the five cities
of central Tokyo and adjacent cities.

123

41

44
11

Ginza, Kanda, Nihonbashi, Kodemmacho, Kojimachi,
Shinjuku, Shibuya,Gotanda,Hamamatsucho, Yokohama*Results for FY 2021

7

Rental22 of the 23 sites are located in the five cities
Conference of central Tokyo.
Room*As of the end of December 2021/One site in Yokohama* The numbers on the columns in the map are the cumulative number of RPs.
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

20

Sun Frontier Fudousan Co., Ltd.

Strengths in Office Building Business
Solve various problems by in-house manufacturing from purchase to development,
occupancy, sales and support, and by understanding the client’s intentions in detail.

1. Real Estate Utilization
To be a partner to solve difficulties from our client’s point of view

Fundraising Consulting

Asset consulting

Rent guarantee

Construction planning

Property management

Leasing brokerage

Sales brokerage

Property
purchase

2. Real Estate
Revitalization
Building
development ofvalue chain

Property
sales

Clients
1. Real estate utilization: Get close to clients at the site and solve problems. Capture the source of added value
from clients’ voices.
2. Real estate revitalization: Reflect our expertise to increase asset value and the needs we have identified inrevitalized buildings to increase their value and sell them.
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Sun Frontier Fudousan Co., Ltd.

Business Model for Replanning Business
Renovate office buildings in need of large-scale repairs due to declining occupancy rates
into high-value-added real estate that is sought after by society through renovation fromthe “clients’ point of view.”

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

Creativity

Leasing power

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

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

Buying power

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 force

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 © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

22

High-occupancy andhigh-profit buildingssought by owners
・ Full occupancy
・ Improve
income andexpenditure
・ Stable income

Sun Frontier Fudousan Co., Ltd.

Replanning BusinessAccelerate the Growth of Tenant Companies
Set-up offices focusing on the clients' point of view accelerate business growth.
Set-up office

An office that differs from the interior of a normal rental office in that it has a
reception area, reception room, and other facilities, as well as highly designoriented interior construction in the office area, with some facilities and fixtures
already installed.

Set-up office
Four benefits

Save laborNo need tasks such as devising
office interiors or selecting interior
decorators, greatly reducing thetime and effort of managers.

Reducemanagement
burdenImproveproductivity
Office interiors with a high level ofdesign, with a focus on creativity,
functionality, and a variety of usage
scenarios, improve the recruitment of
human resources, employee
motivation, and office productivity.

Immediately
available
after
relocation

Client =Tenant company

Improve
recruitment,
motivation, andproductivity

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Shorten the
periodReducefinancialburden23

No need for any work other thanwiring and moving, significantly
shortening the relocation period
and increasing the net available
period by shortening theconstruction period for interior
finishing and restoration.

ReduceburdenSignificantly reduced costs foroffice interiors and other costs.
Tenants do not have to accountfor interior decoration assets.

Sun Frontier Fudousan Co., Ltd.

Replanning Business

Create both Customer Value and Social ValueContribute to the resolution of social issues through contributions to our clients' businesses.
Contribute to the business growth ofbuilding owners and tenant companies
through Replanning Business.

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

3,991

7,000

40.9% ↓

4,000

Comparison of CO ₂ emissions over 50 years(t-CO ₂)

6,399

19.1% ↓=
Reduce the waste of non-reproducible
resources and contribute to the prosperityof humankind, plants and animals on theearth.

2,357

3,000
2,000

5,179

1,000

5,000

0
Rebuilding
建替
New bldg
新築

Clients’
value

6,000

Renovation
改修

Rebuilding
建替

Renovation
改修

Repair
修繕

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

4,000

3,000

801

49.3% ↓

800

2,000
600

406

400

Economic
value

Social
value

1,000

200
0
Rebuilding
New bldg

新築

建替

Rebuilding

建替

0

Renovation

改修

RepairRenovation

修繕

改修

Demolition

解体

Standard
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 © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

24

Sun Frontier Fudousan Co., Ltd.

Continue High Profitability in Office
Building Business● Replanning Business maintains high segment profit margin
70,000

Despite the impact of market conditions, the Replanning
Business maintains a high profit margin and have the ability torecover and continue to grow.

40.0%

60,000

27.8%

28.2%

30.0%

32.4%

31.2%

50,000

29.7%

30.0%

24.3%

22.1%

35.0%

25.0%

40,00020.0%
30,00015.0%

20,00010.0%

10,000
ＲＰ売上高(左軸)
RP Sales (L axis)
ＲＰセグメント利益(左軸)RP Segment profit (L axis)

5.0%

0

0.0%
'15/3

RP Profit margin (R axis)
ＲＰ利益率(右軸)

’16/3

’17/3

’18/3

● Real Estate Service Business continues to grow steadily

’19/3

3,000

Rent guarantee
滞納賃料保証

2,500

3,206

BM
BM

2,000

PM
PM

2,330

2,491

2,508

’16/3

’17/3

’21/3

‘22/3
’22/3
3Q末
As of end of 3Q
時点

In addition to Sales Brokerage, Leasing Brokerage, and PM, the Company
has added BM, Rent Guarantee, and Rental Conference Room to its
services, steadily increasing its stock business earnings.

3,500
Rental conference
貸会議室
room

’20/3

2,821

2,829

’18/3

’19/3

3,408
2,982

1,500
1,000

Leasing
賃貸仲介
Brokerage
Sales
売買仲介
Brokerage

500
0
'15/3

’20/3

’21/3

‘22/3
’22/3
3Q末
時点

As of end of 3Q

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

25

Sun Frontier Fudousan Co., Ltd.

Initiatives in the Fiscal Year under Review

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Sun Frontier Fudousan Co., Ltd.

Replanning Business Initiatives
The building was marketed as a building with high liquidity and profitability through a revitalization with a
combination of design and legal compliance.

One profitable building in Chuo Ward (33 years old)
BeforeAppearance

Open layout to enhance communication

Removed illegal extension to make room for the evacuation
stair opening.
BeforeNarrow
Completed leasing of 10 lots,
increasing the value of the building
to a highly profitable building.

Set up a teleconference booth that allows
you to focus on your work and is suitablefor web meetings.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

After

After

Wide

Relocated electrical wiring behind the wall to make theentrance wider and more open.

Sun Frontier Fudousan Co., Ltd.

Replanning Business

Flexible Office meeting needs
Choose your office fashionably
Proposing "Rich Working Styles" for a New Eraof Diversification◆ Features of flexible offices
POINT 1

Easy entry and exit under a monthly contract

POINT 2The hidden costs are all inclusive and one price!

POINT 3

Resident community manager! Look forward to networking!

An office that you can rent by the week

◆ Flexible Office Line up+SHIFT NOGIZAKA
1-minute walk from Nogizaka Station,
8-11-26 Akasaka, Minato-ku+SHIFT KANDA
4-minute walk from Akihabara Station,
4-7, Kandaiwamotocho, Chiyoda-ku

A YOTSUYA
6-minute walk from Yotsuya Station,
2-8 Yotsuya Honshiocho, Shinjuku-ku

LIT
2-minute walk from Bakurocho Station
2-24-9 Higashi-Nihonbashi, Chuo-ku
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28

Sun Frontier Fudousan Co., Ltd.

Specified Joint Real Estate Ventures

Strengthen Initiatives for Small-lot Real
Estate Property
Small-Lot property based on the Act on Specified Joint Real Estate Ventures

Commenced sales of the fourth property, “Ota Ward new medical and educational mall“ andmade good progress in primary composition.
◆ Business model for small-lot real estate products① Acquisitionof real estate③ Leasing
Revenue

Voluntary② Co-ownershipinterest investment

Managing Partner④
Investment
Investors
Dividend Building Owners

Appeal
1. Sun Frontier Fudousan Co., Ltd. selects properties suitable for small-lot ownership.
2. Can invent in real estate in small amount and obtain profits (dividends).
3. Expected to reduce the amount of inherited property.

No. 4 Ota Ward new medical and educational mall
2-28-4 Kitamagome, Ota-ku,
2-minute walk from Toei Subway Asakusa Line Magome Station
Total floor area of three floors: 1,327.25 square meters
A new mall with the theme of "medical care and education" in which after-school
childcare, English conversation school, etc. enter as tenants, centered on adrugstore with a large medical corporation and a dispensing pharmacy that has
strengths in hemodialysis.

◆ Ability to design defferentiated products to be selected
selectedAppeal points reflecting clients needs in line with market conditions

We are also promoting the fifth commercialization project!
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

29

Stable income
from long-term
fixed leasetenants

Newly-built
properties thatare safe for longterm ownership

Reliable tenants
who contribute to
the community

Sun Frontier Fudousan Co., Ltd.

Conference Room Rental Business

Reopening of Vision Center Sites
after Renovation
Developing a variety of services to meet the needs of with COVID-19 and post COVID-19.
Fully compatible with web conferencing and online distribution as working styles change
and diversify
January 14, 2022

Vision Center Tamachi Renewed and Reopened

February 25, 2022
Vision Center Yokohama Expanded and Opened
5-minute walk from JR Tokaido Line/Keihin
Tohoku Line/Yokosuka Line/ Sagami Railway
Main Line Yokohama Station (West Exit)

2-minute walk from JR Tamachi Station
1- minute wak from Toei Subway Sanda
StationConvenient location with easy access to
Shinkansen and airport.
Total 26 rooms / 8 – 360 seats

Great access not only from Tokyo but also
from other regions.
Total 15 rooms / 6 – 245 seats

5-31-19 Shiba, Minato-ku, Tokyo 108-0014
Round Cross Tamachi, 2nd and 4th floors(Reception: 4th floor)
https://www.visioncenter.jp/tamachi/

2-5-15 Kitasaiwai, Nishi-ku, Yokohama-shi,
Kanagawa 160-0023
Premier Yokohama West Exit Building, 3rd and4th floor (Reception: 3rd floor)
https://www.visioncenter.jp/yokohama/Nihonbashi

Yurakucho

Tokyo

TamachiHibiya Hamamatsucho

Kanda

Nagatacho

・ Monthly rental offices (Vision Works, Vision Office): 4 sites

ShinagawaShinjuku

Yokohama

・ Weekly / monthly rental Order Made Space: 6 sites

Yotsuya・ Hourly rental Vision Center: 13 sites

Ueno

New Vision Center sites

Total of 23 sites
To Haneda
AirportTo Haneda
airport

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

30

Sun Frontier Fudousan Co., Ltd.

New Business

Promote DX of Building Exterior Wall Survey
Implementing drone surveys of exterior walls. 70% automation of post-survey report preparation.

Conventional exteriorwall survey

Exterior drone inspection② AI automatically marks abnormal areas in the image① The drone's camera
Image shooting

Underdevelopment③ Image analysis

Developing
image analysis
AI tools!

Scaffold
installation
requiredNo scaffolding
requiredInvestigation costs

Research cost
reduction

Life cycle
high cost

Life cycle
cost reduction④ Final confirmationby the analyst

Workload will be
drastically reducedwith an AI tool

⑤ Report delivery

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Sun Frontier Fudousan Co., Ltd.

Hotel and Tourism BusinessBusiness Models for Hotel Business Growth
Increase added value by developing and acquiring some properties in addition to operating revenues, and aim for growth throughsynergies with sales revenues.
<Hotel Business Model Case>

Land・ Hotel development
model case

Land

Management

Sell

Purchase

Owner

Hotel name and location

Development Construction

Company

Company

Sun Frontier
Hotel Management

Sun Frontier
Hotel Management

Number ofrooms

Acquisition andopening

StatusManagement(Room)
3,000

194

2016.4

Acquired

Own

2,500

4 Sky Heart Hotels (excluding Shimonoseki)564

2016.12AcquiredLending and leasing

2,000

Hiyori Hotel Maihama

80

2017.4

Newly constructed

Sold leaseback

1,500

Sado Resort Hotel Azuma

57

2018.4

Acquired

Own

1,000

Tabino Hotel Hida Takayama

80

2018.5

Newly constructed

Own (leased)

500

Sky Heart Hotel Shimonoseki

105

2018.6

Acquired

Own

Tabino Hotel Sado111

2018.7

Newly constructed

Lending and leasing

Hiyori Hotel Osaka Namba Station

224

2019.5

Newly constructed

Lending and leasing

Courtyard by Marriot Osaka Honmachi

193

2019.1

Newly constructed

Lending and leasing

Hiyori Hotel Tokyo Ginza EAST

135

2019.12

Newly constructed

Own

Tabino Hotel Kurashiki Mizushima

155

2020.2

Newly constructed

Lending and leasing

Tabino Hotel Kashima

194

2020.4

Newly constructed

Own (leased)

HIYORI Ocean Resort Okinawa

203

2021.2

Newly constructed

Sold leaseback*Hotel Osado

74

2021.4

Acquired

Own

HIYORI Chapter Kyoto

2032021.6

Newly constructed

Own (leased)

Tabi no Hotel Lit Miyakojima

111

2021.6

Newly constructed

Own

176

2021.7

Newly constructed

Lending and leasing

Sora Niwa Terrace Kyoto / Bettei Kamogawa

1342022.6

Newly constructed

Own

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Purchase

Lease
contract

Owner

Sun Frontier
Hotel Management

Spring Sunny H Nagoya Tokoname Station

Tabi no Hotel Lit Matsumoto

Sell

Company

Number of Operating Hotel Rooms

2,859

Company
Sun Frontier
Hotel Management

2,993

2,295
1,898
1,191
758

838

'17/3

'18/3

0
'19/3

'20/3

'21/3

'22/3 （Forecast） '23/3(Forecast)

The company’s model is to operate the hotel after development, sell it and lease it
back, and 9% of the 2,993 hotel rooms it operates have been achieved.

Percentage of hotel rooms by type9%

（Total number of hotel rooms: 2,993）

27%

Own
保有
保有(借地）Own (leased)
Lending and leasing
賃借リース

48%

16%

Sold leaseback
売却済リースバック（As of February 2022）

32

Sun Frontier Fudousan Co., Ltd.

Hotel and Tourism Business

HIYORI Ocean Resort Okinawa – Sold Out!
Condominium hotel lots were sold out, contributing to earnings in the previous and current
fiscal years.

Of the 203 guest rooms, 199 lots for sale were sold out in December 2021.

All rooms have ocean views
overlooking the Churaumi Sea.

The Infinity pool looks as if it isconnected to the ocean.

Dinner on the terrace with a view ofsunsetA comfortable lobby lounge with abreeze blowing through.

Suite with flat terrace

The resort is lit up to create aresort night.

As a hotel resort where you can spaned your time as you like, comfortably, and as if you were living in
Okinawa, we will sublimate our services into a “heartwarming and enjoyable hotel that will fill with theworld with hapiness.
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

33

Sun Frontier Fudousan Co., Ltd.

Hotel and Tourism Business

Hotel Operation Focuses on Creating
Enthusiastic Fans
Continue efforts to create enthusiastic fans bycreating services that exceed expectations
from the clients’ point of view.

Hotel brand development
Own brand

Joint operation

Shijo Kawaramachi Onsen“Sora Niwa Terrace Kyoto"“Bettei Kamogawa”

Kyoto Shijo

Sado (Chigusa)

Pre-opening scheduled
for June

Sado (Aikawa Oura)
Sado (Aikawa Kabuse)

Upper ClassHIYORI Ocean Resort Okinawa

Courtyard by Marriot Osaka Honmachi

HIYORI Chapter Kyoto

324 Inari-cho, Handa,
Kawaramachi-doriShijo-sagaru 2-chome,
Shimogyo-ku, Kyoto

Co-brand

Sado Resort Hotel Azuma

MatsumotoJapan 600-8022

Hotel Osado

Takayama

Sora Niwa Terrace Kyoto 102 rooms
Bettei Kamogawa 32 rooms

Kashima

Kyoto Nijo

Sora Niwa Terrace Kyoto / Bettei
Kamogawa
Upper Middle Class

Budget Class

MaihamaHiyori Hotel Maihama

Spring Sunny H Nagoya Tokoname
Station

NaritaHiyori Hotel Osaka Namba Station
Hiyori Hotel Tokyo Ginza East

Shimonoseki

Koiwa

Onna, Okinawa

Tokoname
HakataMiyakoIslandUpper Class

Kurashiki
Mizushima

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Osaka
HonmachiOaka Namba

34

Ginza
Kawasaki

Economy Class

Tabino Hotel Hida Takayama

Budget Class

Tabino Hotel Sado

Sky Heart Hotel Narita

Tabino Hotel Kurashiki Mizushima

Sky Heart Hotel Koiwa

Tabino Hotel Kashima

Sky Heart Hotel Kawasaki

Tabi no Hotel Lit Miyakojima

Sky Heart Hotel Hakata

Tabi no Hotel Lit Matsumoto

Sky Heart Hotel Shimonoseki

Sun Frontier Fudousan Co., Ltd.

Reference Materials

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Sun Frontier Fudousan Co., Ltd.

Our ESG Initiatives
Through our initiatives heavily based on the viewpoints of ESG, we will achieve oursustainable growth and a long-term improvement in our corporate value.

Environment

 We revitalize buildings without destroying them. We develop the Real Estate Revitalization Business, which
grows in harmony with the environment (revitalized buildings: 436 buildings.)
 We operate a circulation market of furnished offices with an aim to reduce waste materials generated by
office relocation.
 We promote the reduction of energy consumption at the buildings we manage in Property Management
Business, utilizing the Energy-saving Subsidy and others.
 Introduction of environmentally friendly electric power services in replanning buildings
Cumulative number of installations: 12 renewable energy power plants and 7 forest-based J-credit “Mori no
Denki.”
 Carbon offset by allocating J-credits CO2 generated during the replanning construction.

Social Promotion of management and development of human resources in accordance with social responsibility.
Creation of a system in which diverse human resources can play active roles. (As of the end of December
2021: Female employees 36.4% and Foreign employees 11.9%)
 In our Real Estate Revitalization Business, we promote the revitalization of buildings to meet the social needs(resolving lack of authorized nursery school).
 Under the slogan, “Cheer up Japan!” we develop Regional Revitalization Business from the aspect of tourism.
 We go ahead with the introduction of the drone technology to accelerate the innovation in the real estateindustry.

Governance When we acquire properties, we clarify their possible risks, improve their legal compliance and correct shoddy
workmanship on them through the process of commercialization and then turn the properties into a realestate stock with high social values and sell them.
 We have improved our monitoring function for the corporate management by appointing 4 independent
outside directors out of 11 directors.

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

36

Sun Frontier Fudousan Co., Ltd.

Sustainability Committee Established
Aiming to contribute to the realization of a sustainable society and to increase corporate value over the medium
to long term by vigorously promoting activities that contribute to the resolution of social issues based on
Management Principle and Corporate Philosophy
Board of Directors
Report and presentation

Internal Audit
OfficeInstructions

ReportAppointment and removal

President
Representative Director

Established on October 1, 2021

Sustainability Committee

Supervision and instructions

Internal audit

The Sustainability Committee was established tostrengthen the ESG / SDGs perspective, to enhance
the level of sustainability activities that are integrated
with the realization of the Management Principle andthe practice of Corporate Philosophy, and toincorporate them into the organization as activities
that balance the creation of social and economic value.

Executive Officer
Association

All Divisions
Asset
Management
Division

Entrusted
AssetManagement
Division

Business
Promotion
Division

Select the Prime Market and comply with the revised
Corporate Governance Code, including TCFD-based
disclosure

Administration
Division

Sustainability Promotion Office

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

37

Sun Frontier Fudousan Co., Ltd.

Initiatives to Carbon Neutral [E]Contributing to the realization of carbon neutral by offsetting CO2
emissions from replanning construction with J-credit derived fromrenewable energy resources
カーボン･オフセット
Carbonoffset imageイメージイラスト

What is the J-Credit System?

Carbon Offset

0
CO2 emissions from
RP construction
ＲＰ工事によるCO
2排出量

J-credit
ＪクレジットNet 0 CO2 emissions

Mechanism of carbon offset by J-credit derived from renewable energy
J-credit creator

A system in which the national
government certifies the reduction
or absorption of CO2 and othergreenhouse gases through theintroduction of renewable energy
and forest management as"credits."

What is Carbon Offset?

J-credit buyers
Fund

Offset CO2 emissions
from renewal construction
with J-credit

J-credit

Renewalconstruction
Sun Frontier’s
revitalized building

Biomass power generation at paper mills

An initiative to offset CO2(carbon), which is generated nomatter how much effort is madein daily life and corporate
activities, with the reduction ofother places created by theabsorption of CO2 by forests andthe renewal of energy-saving
facilities.

Promotion of carbon offset for all properties in replanning construction

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38

Sun Frontier Fudousan Co., Ltd.

ESG initiatives

Contributing to the Revitalization of Communities
and Society [S]Promoting recycling for optimal applications that meet social needs
Converting into nursery schools to meet the needs of the rapidly growing population
After

BeforeOriginally was abuilding for office

BeforeAfter

Originally a store
and workshop
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Abundant use of solid wood

39

Equipped with multi-functional toilets

Sun Frontier Fudousan Co., Ltd.

ESG initiatives

Regional Revitalization Business [S] -Project in progress on Sado Island<We will energize Sado Island through tourism!>
When rural areas are energized, so Japan as a whole will be. As the number of visitors to Japan rapidly
increases, spurred by fascination (culture, history, nature, food, hot spring, hospitality and others) thatJapan is proud of, we will take on the challenge of regional revitalization projects that focus on theattractiveness and features unique to regions, in particular the regions that possess the “Wonderfulness ofJapan.” With the addition of Osado in April 2021 and the Sado Outdoor Base in December 2021, the area
will be further revitalized.

Sun Frontier Sado Inc.
Hotel BusinessTransportation Infrastructure
Project

Tabino Hotel Sado

Okesa Kanko Taxi

Highlight Finding Project
Anaguchi-tei(Café & Restaurant)

Tourism and Travel
Business

Web Advertising
Business
Sado Biyori

Happy Sado
TravelKigaruni Rent a Car

New

Hotel AZUMAApril 2021

Hotel Osado

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New
Vacation Rental Le BlueDONDEN Highland Lodge

Sado Outdoor Base

Video "The Sea of Clouds from the
DONDEN Highland Lodge"

Video "Adventure Island SADO"

Sado SAWANE

40

December 2021

Sun Frontier Fudousan Co., Ltd.

ESG initiatives

Our Initiatives for Governance [G]In our Company, we have an idea of “right humanity” as judgement criterion for all of our
executives and employees to execute business assignments. We endeavor to strengthen oursystem of governance to ensure the execution.

Ratio of outside Officers 36.4% ratio of outside Directors 25.0%
Operate an equal Board of Directors where everyone can speak freely. Promote a sound Board of Directors
with broad knowledge, experience, and variety. In addition, they will attend important meetings such as
the Executive Committee to ensure the soundness of management.
* In December 2021, Outside Director Yukitoshi Kubo retired due to health reasons, so the outside Officers ratio has changed.

We have established Nomination and Compensation Committee
We have established the Committee as a voluntary advisory body to the Board of Directors. The majorityof the committee members are outside directors to ensure sound management of the Company.
We have ensured our risk management at the time of acquisition of properties and our compliance withlaws and regulations at the time of their sale
We make a comprehensive business judgement, considering not only their profitability but also their risks,environmental impacts, compliance and others. We have also established a checking system to identify
risks in a broad context not only by our departments in charge but in cooperation with legal and audit
departments. As for sale of the pre-owned buildings which are disqualified, we first make them qualified
enough to meet legal compliance requirements and market them.

We conduct a monthly training on compliance
We give all the employees training on compliance in order to establish an efficient system of legal
compliance. The training has a broad range of themes, such as “prevention of insider trades,” “preventionof trades with antisocial forces,” “information management,” etc. to promote sound business operation.
Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

41

Sun Frontier Fudousan Co., Ltd.

ESG initiatives

Effective Corporate Governance System [G]Outside Directors and Outside Audit & Supervisory Board Members are expected to return their wide-ranging knowledge andexperience to the Board of Directors and play a role in improving corporate value. We promote a balanced corporate management andcorporate governance system based on our expertise and experience in each field.

Expertise and experience (skill matrix) * Up to 5 main items are listed.
Job title

Name
Corporate
management

Real estate

Accounting/
Finance

Legal/Complianc
HR/Labor/HR
e/RiskDevelopment
Mangement

IT/Digital

CSR/ ESG/
Sustainability

M&A

Chairman Representative
Director

Tomoaki Horiguchi●●

President representative
director

Seiichi Saito

●

●

●

Executive Vice President

Izumi Nakamura

●

●

●

●

Senior Managing Director

Yasushi Yamada

●

●

●

●

Director

Mitsuhiro Ninomiya●●

Director

Kenji Honda●●(Outside) Director

Toshio Takahara●●(Outside) Director

Kazutaka Okubo

Full-time Auditor

Kouichi Shinada●(Outside) Auditor

Koichi Moriya●(Outside) Auditor

Hidetaka Tanaka

●

●

●
●

●

●

●
●

●

●

●

●

●

●

●

●

●

●

●

●
●

●

Overseas

●

●

●

●
●

●

●

* In December 2021, Outside Director Yukitoshi Kubo retired due to health reasons.

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42

Sun Frontier Fudousan Co., Ltd.

New Market Segment: Prime Market
We will strive to achieve sustainable growth and enhance corporate value over the
medium- to long-term, while maintaining a high standards of governance and focusing on
constructive dialogue with our investors.
2022/1/11
2020/12/25
Announcement of newmarket segments

2021/4/7
CGC Revsion

2021/12/30
Last day to select a
new market segment

2021/6/30
Transition dateRelease of the list of
new market segments

2022/4/4
SimultaneousTransition date

Selection period 9/1 - 12/30

Listing MaintenanceStandard

Prime Market Standard

Compliance Statusof the Company

Number of shares incirculation

20,000 units or more〇

Market capitalizationof outstanding shares

10 billion yen or more〇

Ratio of outstanding
shares

35% or more〇

Trading value

Average daily trading value

Selected the Prime Market
and submitted Corporate
Governance Report

New market
segment announced
Listing on the Prime
Market decided〇

20 million yen or more

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43

Sun Frontier Fudousan Co., Ltd.

Changes from the Past and Present Location
Grow by changing, challenging and creating new values with the Sun Frontier spiritLong-Term Performance

売上（百万）Net Sales (million yen)

120,000
100,000

18.5%

80,000

24.4%

13.2%

14.0%

47,46440,39527,741 30,626

26,871
16,731
1,771

3,588

5,004

24.0%

25.0%

22.0%

20.0%

53,292

59,632

15.1%
12.6%

4,290

6,924

15.0%
10.0%

17,772

14,469

7,761

30.0%

76,00011.5%

35,25540,000681

22.0% 22.7%

20.2%

19.3%

12.6%

48,15020,00022.9%

73,21815.8%

60,000

Achieved sustained high profits
持続的に高収益を実現

GlobalFinancial
Crisis

23.5%
20.8%

20.6% 21.3%

COVID-19
Crisis

経常利益率
Ordinary Income Ratio

5.0%

10,5810

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 ‘21/3 ‘22/3 ‘25/3

2001 to 20092010 to 20202021 ~

Basic construction of Replanning Business

Evolution and expansion of Replanning Business

Deepening and diversifying of
Replanning Business

Replanning business

Set-up office
Hotel
Rental space
Overseas

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44

Sun Frontier Fudousan Co., Ltd.

Management Principle, Corporate
Philosophy and Vision
Flexibly change plans and strategy looking ahead for life coexisting with COVID-19 and post COVID-19.
Management Principle, Corporate Philosophy, Vision and Major Policy stays unchanged.

Management Principle:
To protect all employees and pursue physical and mental well-being, while the same time contributing to theprosperity of mankind and society with a spirit of symbiosis.

Corporate Philosophy:
We will improve our knowledge, skills, and personality through our work, and by concentrating on theutilization and distribution of real estate stocks, and then reduce the waste of non-renewable resources, andcontribute to the everlasting prosperity of human beings, plants and animals on the earth.

Vision:We aim to become the company loved and chosen by customers the most in the world as real estate
professionals!

Major Policy:“Not for profit, but for trust”.
Change ourselves, solve problems in clients' point of view, and exceed expectations!

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

45

Sun Frontier Fudousan Co., Ltd.

Corporate Profile
Company Name

Sun Frontier Fudosan Co., Ltd.

Location of Head Quarters 2-2, Yurakucho 1-chome, 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 million yen

Representative

Tomoaki Horiguchi, Chairman
Seiichi Saito, President

Number of Consolidated
Employees *Average Age of
Employees*

681 full-time employees (1,261 including part-timers and temporary workers)
35.9 years old

Real estate revitalization
Business Profile

Real estate services

Real estate management, brokerage, construction
planning, non-payment guarantee, operation ofrental buildings, asset consulting

Hotel development and management
Accounting Month
Listed Market

March
Tokyo Stock Exchange, First Section (Code number: 8934)(*As of now, the end of December 2021)

Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

46

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.

We will appreciate your further supports.
◆ 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 cancellation 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