Sun Frontier Fudousan Co., Ltd.

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

1) Overview of the 1Q Results of FY Ending March 2022

1-122) Business Environment

13-183) Growth Strategy and Initiatives

19-384) Reference Materials

39-50

August 10, 2021
Securities Code :8934

Overview of the 1Q Results of FY Ending March 2022
Sales, profit, and profit margin increased significantly from the previous year,
which was affected by COVID-19 pandemic.
(Unit: 1 million yen)
Results

Profit Margin

Year-on-Year

Growth Rate

Full-Year Forecast

Progression Rate

Net Sales

31,213-+17,540

128.3%

76,00041.1%

Operating Profit

7,340

23.5%

+5,245250.3%

12,00061.2%

Ordinary Profit

7,277

23.3%

+5,325272.8%

11,50063.3%

Profit *

4,802

15.4%

+3,563287.7%

7,400

64.9%

* ”Profit” represents net income attributable to shareholders of the parent company.

Topics1) Large year-on-year increase in RP Business, driving the companywide
performance2) Real Estate Service Business expanded to a level higher than before COVID-19
pandemic• The number of units sold in RP Business was eight (+3 year-on-year).
Sales and profit increased significantly compared with the same periodof the previous fiscal year partly due to the reaction from the previous
year, driving the growth of the companywide performance. The
segment profit margin remained high (30.1%, +2.0% pt year-on-year).
• The needs and changes of tenants that we gained through the realestate service sites have been reflected in the optimal use of officespace and commercialized. Tenants attraction progressed steadily,
turning the properties into high-occupancy, high-quality real estate.

• Despite the prolonged COVID-19 pandemic, performance increased
mainly in the Brokerage Business. Both sales (+42.9% year-on-year) andprofit (+ 56.7% year-on-year) greatly exceeded the previous fiscal year's
level and expanded well beyond the level before COVID-19 pandemic.
• In the field of small and medium-sized office buildings in central Tokyo,
each division brought together the expertise they had 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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1

Sun Frontier Fudousan Co., Ltd.

Consolidated Income Statement
Income Statement Points<Real Estate Revitalization Business>
In RP Business, commercialization made steady progressdespite COVID-19 pandemic, and sales progressed favorably.
As a result, The Real Estate Revitalization Business posted
sales of 26.9 billion yen (up 185% year-on-year) and grossprofit of 8.3 billion yen (up 185% year-on-year), with a grossprofit margin of 30.3%, exceeding the full-year forecast margin(26.7%). This became a major driver of growth incompanywide performance.
<Real Estate Service Business>
In addition to generating stable income in each businesssegment, profits grew significantly due to the increasing
opportunities to solve problems in COVID-19 pandemic. As aresult, the Real Estate Service Business as a whole posted
sales of 2.0 billion yen (up 43% year-on-year) and gross profitof 1.2 billion yen (up 57% year-on-year). The profit margin
was secured at a high level of 60%.
<Hotel and Tourism Business>
Hotel Operation Business was sluggish due to the reissuanceof the state of emergency in 1Q. The Hotel and Tourism
Business as a whole posted a loss of approximately 0.4 billion
yen despite an increase of 1.3 billion yen (up 363% year-onyear) in sales.
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2

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Assets <Inventories>

Decreased by 11.5 billion yen due mainly to the sale of properties. Of this amount, RP projects decreased by 12.8
billion yen due to the progress in sales. Hotel projects increased by 1.4 billion yen due mainly to progress inconstruction of newly opened hotels.

<Cash and time deposits>

Increased by 8.9 billion yen due mainly to progress in sales of RP projects.

(Unit: 1 million yen)

FY ended March
2020

FY ended March
2021

FY ending March 2022
As of End of June
2021

Increase/Decrease(compared to End of
March 2021)

Current Assets

113,842

110,785

107,258-3,526

Cash and Deposits

18,62721,50830,461+8,952Inventories

91,76686,08774,568-11,518

Breakdown) RP

71,353

71,34958,505-12,844Hotel

17,01913,917

15,379

+1,462

Overseas, etc.

3,395

822

682

-140

Other Current Assets

3,448

3,189

2,228

-961

Non-current Assets

16,45016,70019,283+2,582

Property, Plant and Equipment

10,413

10,52812,702+2,173

712

701

672

-29

5,324

5,470

5,908

+438

130,293

127,485

126,541-944

Intangible Assets
Investments and Other Assets

Total Assets

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3

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Liabilities/Equity <Interest-bearing Debt>
Borrowings decreased by approximately 4.7 billion yen from the end of theprevious fiscal year to 42.7 billion yen due mainly to property sales.
<Net Assets> Despite dividend payments in the previous fiscal year (-2.0 billion yen), net assets
increased by approximately 2.8 billion yen compared to the end of last fiscal year due
to Profit (4.8 billion yen) and other factors.

Changes of Equity Ratio
End of March
2020

End of March
2021

End of June
2021

49.6%

52.3%

54.9%

FY ending MarchFY ended MarchFY ended March

2022

2020

2021

As of End of June

(Unit: 1 million yen)

2021

Increase/Decrease(compared to End of
March 2021)

Current Liabilities

18,052

13,35815,720+2,362

Short-term Borrowings, etc.

4,463

5,530

6,492

+961

Income Taxes Payable

3,566

901

2,597

+1,696

Other Current Liabilities

10,022

6,926

6,631

-295

Non-current Liabilities

47,43144,35438,192-6,162Long-term Borrowings and Bonds Payable

44,90641,991

36,277-5,713

Other Noncurrent Liabilities

2,525

2,363

1,914

-448

Total Liabilities

65,48357,71253,913-3,799

Shareholders' Equity

64,69066,916

69,671+2,754

119

2,856

2,957

+100

Total Net Assets

64,80969,77372,628+2,855

Total Liabilities and Net Assets

130,293

127,485

126,541-944

OthersCopyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

4

Sun Frontier Fudousan Co., Ltd.

Changes in Segment Classification and Name
<Major Changes><Reason for the Changes>

Real Estate
Estate Revitalization
Revitalization BusinessBusiness
RealReplanning
Preplanning
Rentaldevelopmentbuildings/RP
Hotel
Rental buildings/RP
Leasing/Fixed
assets
Leasing/Fixed assets
Leasing/Hotels
Sub-leases

Real Estate Revitalization Business
Replanning
Rental buildings/RP
Leasing/Fixed assets

RealReal Estate
Estate Service
Service BusinessBusiness
Brokerage
Leasing
Property management
Building maintenanceSub-leases
Rental conference room
Rent guarantee

Real Estate Service Business
Brokerage
Leasing
Property management
Building maintenanceSub-leases
Rental conference room
Rent guarantee

Operation
BusinessBusiness
Hotel and Tourism
Hoteldevelopment
operation
Hotel
Rentalconference room
Leasing/Hotels
Hotel operation

Hotel and Tourism Business
Hotel development
Leasing/Hotels
Hotel operation

Other
Other BusinessBusiness
Rent guarantee
Overseasdevelopment
Overseas
Construction
Construction

Other Business
Overseas development
Construction➢ The Company restructured its business within the groupin November 2020 with the aim of applying theoperational know-how of the hotel operation business tothe hotel development business, promoting the businessin an integrated manner and strengthening profitability.
The Company changed the business segment to reflect
this change and changed the name of the reporting
segment to “Hotel and Tourism Business.”➢ The Company also changed the reporting segmentclassification as shown on the left from the perspectiveof further cooperation, creation of added value, andexpansion of services among various businesses in the

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

real estate service field, which the Company is mainly
developing in small and medium-sized office buildings.
➢ The figures for the same period of the previous year inthis report are reclassified to reflect the new
segmentation for comparison.

5

Sun Frontier Fudousan Co., Ltd.

Fiscal Year ended March 2022 Forecast (after segment
adjustment)
FY ended
March 2021

FY ending March2022 Forecast(revised)

Increase/
Decrease

Net Sales

59,63276,000+27.4%(1) Real Estate Revitalization Business

36,45258,300+59.9%

33,791
2,661

56,1002,200+66.0%-17.3%

6,461
13,360
4,227

6,450
9,800
1,750

-0.2%
-26.6%-58.6%

-869

-300

-

Gross Profit (Loss)

15,083

19,600+29.9%(1) Real Estate Revitalization Business

10,06515,850+57.5%

9,206
859

15,000850+62.9%
-1.0%

3,392
1,425
611

3,510
-30
370

+3.5%
-39.4%

-412

-100

-

Selling, general and administrative expenses

7,170

7,600

+6.0%

Operating Profit (Loss)

7,912
7,524
4,274
42.00

12,00011,5007,400
42.00+51.7%+52.8%+73.1%+0.0%(Unit: 1 million yen)

Replanning Business
Rental Building Business(2) Real Estate Service Business(3) Hotel and Tourism Business(4) Other
Adjustment

Replanning Business
Rental Building Business(2) Real Estate Service Business(3) Hotel and Tourism Business(4) Other
Adjustment

Ordinary Profit (Loss)
ProfitDividends per Share (yen)Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

6

・The core business is the office building business incentral Tokyo (Real Estate Revitalization Businessand Real Estate Service Business).
・ We plan to record stable sales in the
Revitalization Business, which will mobilize thecompanywide strength.

・ Gross profit margin in RP Business was set basedon the current market environment. While setting
a conservative profit margin, we expect togenerate steady profits. FY ended March 2021:
27.2% → FY ending March 2022: 26.7%

・ In the Hotel Development Business, theremaining units (44 units) of the hotel for sale in
Okinawa are expected to be booked in the fiscal
year under review.
・ In the Hotel Operation Business, losses are
expected due to the impact of COVID-19
pandemic.

・ In Other businesses, we forecast approximately
40% decrease from the previous fiscal year in
Gross profit due to the reaction to thedevelopment projects in overseas business bookedin the previous fiscal year.

・ SG&A expenses are expected to increase fromthe previous fiscal year due to an increase inpersonnel expenses, despite continuing efforts to
reduce expenses from the previous fiscal year.

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Real Estate Revitalization Business(Replanning and Rental Buildings)<Replanning Business>◼ The number of units sold was eight, an increase from the same period of theprevious year (five units).
(Millions(1 million ofyen)◼ The average business period was 765 days (plus 233 days year-on-year),yen)which was affected by the sales of three cases of medium- to long-term
30,000properties. Excluding this, it was 472 days (minus 60 days year-on-year). Our
business policy remains unchanged, building in a period of approximately
one year from purchase to sales.
25,000◼ Inventory related to RP Business as of the end of 1Q was 48 cases.

Net Sales
売上高
Segment Profit
セグメント利益
Profit Margin
利益率
60%

27,45050%(In addition to the above, there were five projects with purchase settlements andcontracts already signed by the end of July, amounting to 4.6 billion yen.)<Rental Building Business>◼ We will strive to increase rent income in the medium- tolong-term to build a stable revenue base as a stock business.
FY ended
FY ended
March 2021
March 2022
Apr. to June Apr. to June
(Unit: 1 million yen)
Net Sales
10,14527,450Replanning Business

20,000

Increase/
Decrease+170.6%

9,437

26,924+185.3%

Rental Building Business

708

526

-25.7%

Segment Profit (Note 1)

2,911

8,235

+182.9%Replanning Business

2,650

8,104

+205.7%260130-49.9%

Profit Margin

28.7%

30.0%

+1.3%pt

Replanning Business

28.1%

30.1%

+2.0%pt

Rental Building Business

36.8%

24.8%

-12.0% pt

8 cases
5 cases
62 cases

2 cases
8 cases48 cases-6 cases+3 cases(Note 2)

(Note 2)

Rental Building Business

Number of Properties Purchased
Number of Properties Sold
Number of Stocks at the End of FY

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

-14 cases

7

15,00010,000

5,000

40%

30.0%

28.7%
10,145

8,235

30%

20%

10%

2,911

0

0%

FY2021/3期
ended March 2021
Apr. to June

4-6月

2022/3期
FY endingMarch 2022
Apr. to June
4-6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.
(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, Sales Brokerage, Leasing Brokerage, Rental conference room, Rent guarantee, etc.)<PM/ BM>◼ The PM business saw a slight decrease in sales and profit due to an increasein vacancies caused by COVID-19 pandemic.
◼ Sales and profit of BM business increased due to the rebound from theprevious year, M&A, and increase in number of entrusted buildings.

(Millions(1millionyen)of yen)

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

2,500

80%

<Sales Brokerage / Leasing Brokerage>◼ Sales and profit increased in Sales Brokerage due to steady progress in winningreferrals from other divisions.

2,000◼ Sales and profit increased in Leasing Brokerage due to the rebound from thesame period of the previous year, when office relocations were sluggish.

55.4%<Rental Conference Room>◼ Sales and profit increased despite the limited demand for COVID-19 pandemic
by proactively making proposals that are close to clients and so on.

1,500

2,060
60.8%

60%

1,441
1,252

40%

<Rent Guarantee>◼ Inquiries increased due to an increase in vacancies for COVID-19 pandemic andtenant credit concerns. Sales and profit increased due to steady growth in new
and re-guarantee transaction volume.

(Unit: 1 million yen)

Net Sales

1,000

799
20%

FY ended
March 2021
Apr. to June

FY ended
March 2022
Apr. to June

Increase/
Decrease

1,441

2,060

+42.9%

500

0Segment Profit

799

1,252

+56.7%

Profit Margin

55.4%

60.8%

+5.4%pt

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80%2022/3期
FY 2021/3期
ended March 2021 FY ending
March 2022
Apr. to June
Apr. to June
4-6月

4-6月

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Hotel and Tourism Business(Hotel Development and Hotel Operation, etc.)<Hotel Development Business>◼ Sales of HIYORI Ocean Resort Okinawa progressed, and the delivery of 11
lots was completed (Cumulative sales: 170 lots / 203 lots in total).
Segment Profit of 0.12 billion yen (Profit margin: 20.1%) was posted.

(Millions(1 million of
yen)
yen)

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

1,500<Hotel Operation Business>

40%

1,346

◼ Opened two new hotels. During the fiscal year under review, occupancy
rates and room rates were sluggish, particularly for urban hotels, due tothe disappearance of inbound demand for COVID-19 pandemic and the 1,000
self-restraint in tourism following the declaration of a state of
emergency. Losses were recorded due to preparation expenses for the
opening of new hotels.

30%

20%

500

FY ended
March 2021
Apr. to June

FY ended
March 2022
Apr. to June

Increase/
Decrease

290

1,346

+363.4%

Hotel Development Business

0

604

-

Hotel Operation Business, etc.

290

742

+155.6%

-512

-584

-

Hotel Development Business

-32

122

-

Hotel Operation Business, etc.

-480

-707

-

Profit Margin

-

-

-

Hotel Development Business

-

20.3%

-

Hotel Operation Business, etc.

-

-

-

(Unit: 1 million yen)

Net Sales

Segment Profit

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9

290
10%
0
0%

-500

-512

-10%

-584

-1,000-20%

2022/3期
March 2022
FY2021/3期
ended March 2021 FY ending
Apr. to June
Apr. to June
4-6月期

4-6月期

Sun Frontier Fudousan Co., Ltd.

Operating Results by Business Segment

Other (Construction Business and Overseas Development Business, etc. )<Construction Business>◼ Both sales and profits increased due to the addition of the(1 million ofoperating results of Communication Development Inc., whose (Millions
yen)
yen)
shares were acquired through an M&A in February. Sales
2,500
increased by 0.232 billion yen in the fiscal year under review
from the same period of the last fiscal year due mainly to theadoption of accounting standards for revenue recognition.
<Overseas Development Business>

2,000◼ Substantial decrease 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: approximately 1.86 billion yen,profit: 0.45 billion yen), which was added to the operating
results in the same period of the previous fiscal year.

FY ended
March 2021
Apr. to June

FY ended
March 2022
Apr. to June

Increase/
Decrease

1,969

469

-76.2%

Segment Profit

456

15

-96.6%

Profit Margin

23.2%

3.3%

-19.9% pt

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10(Unit: 1 million yen)

Net Sales

Net Sales
売上高
Segment Profit
セグメント利益
Profit Margin
利益率
60%

50%

1,969

40%
1,500
30%

23.2%
1,000
20%

500

456

469

10%

3.3%
15

0

FY ended March 2021
2021/3期…
Apr. to June0%

FY ending March 2022
2022/3期…
Apr. to June

Sun Frontier Fudousan Co., Ltd.

Trends in Key Management Indicators■ Changes in Ordinary Profit Margin(百万円）(1 million
yen）■ Changes in Equity Ratio(百万円）(1 million
yen）(Pursuing High-Value-Added Management)

80,000(Building a Stable Financial Base)

80,00030%80%

売上高（左軸）Net
Sales (L axis)

純資産（左軸）Net Assets (L axis)

Ordinary
Profit (L axis)
経常利益（左軸）

自己資本比率（右軸）Equity Ratio (R axis)

Ordinary
Profit Margin (R axis)
経常利益率（右軸）70,000

24.0%
22.0%

22.7%

23.3%

22.0%

70%

70,00025%

60,00060,000

56.0%
53.2%

52.3%

50.3%

20%

54.9%

60%

50%

50,00049.6%

50,00040,00015%

40%
40,00030,000

30%

12.6%
10%
30,00020,00020%
5%20,00010,00000%
2017/3

18/3

19/3

20/3

21/3

10,0002022/3Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

10%0%
2017/3

11

18/3

19/3

20/3

21/3

2022/3

Sun Frontier Fudousan Co., Ltd.

Implementation of Interim DividendInterim dividends will be paid to meet the expectations of shareholders and enhance
opportunities for profit returns.
The Company has been paying a lump-sum dividend of surplus once a year at the end of each fiscal year, but has
decided to pay an interim dividend from the fiscal year under review (ending March 31, 2022) to enhance
opportunities for profit returns to shareholders.
Cash Dividends per Share (forecast)

After

FY ending March 2022

End of 2Q

End of FY

Yearly21.0 yen

21.0 yen42.0 yen* Annual dividend forecast unchanged

Cash Dividends per Share (forecast)

BeforeFY ending March 2022

End of 2Q

End of FY

Yearly-42.0 yen42.0 yen

Based on Article 459, Paragraph 1 of Companies Act of Japan, the Company’s Articles of Incorporation stipulate that the Company may
pay interim dividends from surplus by resolution of the Board of Directors.
The record date for interim dividends is September 30.

Basic Policy on Shareholder Returns
1.

Strive for providing long-term and stable profit returns to shareholders

2.

Secure investment funds to aggressively take on the challenge for future growth3.

Maintain the stability of financial base

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12

Sun Frontier Fudousan Co., Ltd.

Business Environment

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

13

Sun Frontier Fudousan Co., Ltd.

Business Environment Awareness1. Japanese economy suffers prolonged stagnation due to COVID-19 pandemic and is expected to go back to normal
with vaccination.
Despite the progress of vaccinations, the number of people infected with COVID-19 reached a record high and the state of
emergency was extended.
The number of infections with new variant of COVID-19 is increasing, and the areas subject to the declaration of a state of
emergency and semi-emergency measures are expanding.
There are signs of recovery in tourism demand in some areas, particularly those outside the scope of the declaration of astate of emergency, but the recovery is not yet complete.

2. While vaccination is progressing, the future of the global economy is unpredictable due to the spread of the Delta
variant.
The IMF predicts that the global economy will grow by 6.0 percent in 2021. The economic outlook for developed countries,
where vaccinations are progressed, has been revised upward.
Some developed countries, such as the United States, have revised their economic growth rates upward through fiscal
stimulus and expanded vaccination.
Emerging and developing countries are lagging behind in economic recovery due to the delay in spread of vaccines and theweak financial resources.

3. The office building market in central Tokyo has been in a gradual downward phase after peaking out due to
COVID-19 pandemic.
Due to the economic recession and changes in work styles, the office vacancy rate has been deteriorating for 16 consecutive
months.
While telework is spreading, office needs are also changing, and innovation through gathering is expected.
With low interest rates continuing, institutional investors appear to be eager to invest in real estate.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

14

Sun Frontier Fudousan Co., Ltd.

Trends in Office Vacancy Rates and Rents in Five Central Wardsof Tokyo
(%)

(yen)

Average rent
in June 2021
Average rent
(yen/tsubo)

21,160 yen

Average vacancy rate(%)(- 89 yen MoM)

Average vacancy ratein June 2021

6.19%(+ 0.29% pt MoM)
Peak Vacancy rate
June 2012
Vacancy rate: 9.43%

Peak vacancy rate
August 2003
Vacancy rate:
8.57%

Peak average rent
August 2008
22,901 yen

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%* For office buildings with a standard floor area of 100
tsubo or more in five central wards of Tokyo

Source : Compiled by the Company based on Miki
Shoji's "Office Report"

Peak average rent
July 2020
23,014 yen

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 wards of Tokyo are covered.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

15

Sun Frontier Fudousan Co., Ltd.

Long-term Trends in Average Office Rent and Average Vacancy Rate
(1990-2021)
(％)
(yen)

Averagerent
平均賃料

Vacancy rate
空室率

Average rent
in June 2021

50,00045,0009.01

44,193

8.12

8.08

Average vacancy ratein June 2021

9

6.19%

40,000835,000

6.19
９years

30,0008 years

25,00010 years

22,20622,1867

620,0005

21,160
4

16,2073.77

15,00010,00010

21,160 yen

3.17

3

17,577

2.65

2

1.79

5,000

1.55

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 wards of Tokyo are covered.
Figures for 2020 and earlier are taken as of December of each year. Figures for 2021 are as of June.
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16

Sun Frontier Fudousan Co., Ltd.

TSE REIT Expected Distribution Yield and Long-Term Interest Rate
(Yield Gap)(%)

Yield gap

TSE REIT
Expected
dividend yield

Latest value: 3.379%
on August 10
COVID-19 Crisis

Long-term interest rate
(10-year government
bond yield)

2008

2009

2010

2011

2012

2013

The yield gap is back to the level
before COVID-19 pandemic.

2014

2015

2016

2017

2018

2019

2020

2021

Source : QUICK

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17

Sun Frontier Fudousan Co., Ltd.

Number of Small and Medium-sized Office Buildings and Large-sized
Office Buildings by Age in Tokyo 23 Wards
Tokyo 23 wards 9,318 buildings
Small and medium-sized

Large-sized(Total floor area: 300 to 5,000 tsubo)(Total floor area: Over 5,000 tsubo)

8,563 buildings

755 buildings
Old seismic code:
2,167 buildings (25%)

Old seismic code:

128 buildings (17%)

Over 20 years old:

Over 20 years old:

425 buildings

(87%)

(56%)

Age of buildings

7,486 buildings

Less than
20 years old:

Less than
20 years old:

1,077 buildings

330 buildings

(13%)

(44%)

Number of buildings
Source: Compiled by the Company based on "Tokyo 23 Wards Office Pyramid 2021 (based on number of buildings)" (Xymax Real Estate Institute)

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

18

Sun Frontier Fudousan Co., Ltd.

Growth Strategy and Initiatives

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

19

Sun Frontier Fudousan Co., Ltd.

Progress in Medium-term Management Plan
The fiscal year under review is
off to a good start toward the
mid-term plan for the fiscal
year ending March 2025.

（億円）
1,200

(100 million yen)

1,000

FY ending March 2022
Forecast

FY ending March 2025
TargetNet sales

31.2 billion yen

76 billion yen

100 billion yen

Ordinary profit

7.2 billion yen

11.5 billion yen

20 billion yen

Profit

4.8 billion yen

7.4 billion yen

14 bilion yen

Net sales
売上高

Ordinary profit ratio

23.3%

15.1%

20%

Equity Ratio

54.9%

50% level

50% level

Ordinary profit
経常利益

ROE

-

10.8%

10% or more

1,000

Net profit
当期純利益

800
600

FY ending March 2022
1Q Result

760

732
596

533

400
200

128
88

161
107

75 44

115

200
140
74

0
FY2019年3月期
ended Mar 2019 FY2020年3月期
ended Mar 2020 FY2021年3月期
ended Mar 2021
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

20

FY2022年3月期
ending Mar 2022

・・・

・・・

FY2025年3月期
ending Mar 2025

Sun Frontier Fudousan Co., Ltd.

Basic Policy of the Medium-term Management Plan
Providing "places where people gather and communicate with each other, and createsocial development and happiness for people"

Office Business◼ Contribute to carbon neutrality by helping to reduce the waste from non-renewable resources through“Revitalization”◼ Focus on "Central Tokyo," "Small and Medium size," and "Office Building," and capture diversifying needsfrom a clients' point of view that is on-site consistent◼ Contribute to creating prosperous towns for the future by utilizing new fields including digital technology

Hotel Business◼ Provide safe and soothing time and space, creating the best smiles and making people's minds healthy
and rich

Overseas Business◼ Provide comfort to the people in Asia, together with our partners◼ Improve the quality of housing for local residents and contribute to the urban development byspecializing in development, sales, management and mediation of housing (condominiums)
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

21

Sun Frontier Fudousan Co., Ltd.

Growth Strategy of the Medium-term Management Plan
Deepen and Expand the Office Building Business
OfficeHotel◼ With a focus on central Tokyo, small and medium-sized offices, revitalization, and Replanning Business with aproject period of one year, we are committed to high added-value utilization of real estate. We will also work on
medium- to long-term ownership, low-rise store development, and new buildings.
◼ By utilizing not only our planning and proposal capabilities from the clients’ point of view, architectural technology,
design capabilities, and space utilization technology, which have been refined through consistent on-site problem
solving, but also our ability to attract tenants as our strength, we increase the added value of office buildings.
◼ Provide “offices that accelerate tenant growth” that anticipate changing and diversifying needs by utilizing new
fields such as digital technology, clean energy and art, strengthening office peripheral businesses.

Service that Goes beyond Satisfaction and Excitementwith a Sharp Concept◼ To be the hotel of choice through warm-hearted hotel management◼ Create enthusiastic fans through clients-oriented services that go beyond satisfaction and excitement

Expand Housing-related Business in Vietnam
Overseas

M&A◼ Growth rooted in the local community through integrated development, sales, management andmediation of condominiums

Invest in peripheral businesses to expand the current business and invest in start-ups
in growth fields

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

22

Sun Frontier Fudousan Co., Ltd.

Key Points in Medium-term Management Plan
Points to be Strengthened to Capture the Changing Times and Upgrade Business andManagement

ESG

Based on our corporate philosophy of “contributing to the lasting prosperity ofhumankind, plants and animals on the earth, by reducing the waste of non-renewable resources,” we willtake into account the perspectives that contribute to the resolution of social and environmental issues morethan ever before in our business development and conduct corporate governance to become a modelcompany for society.

Digital

In addition to the Information Systems Department, which is
responsible for enhancing operational efficiency, reducing costs, and strengthening
internal controls, the Digitization Promotion Office has been established to utilize newtechnologies and rapidly respond to changes, focusing on business model transformation.

Cash flow

One of our policies is to maintain financial stability even in theevent of COVID-19 pandemic. We manage our business with a focus on cash and deposits,
increase cash generation through systematic collection of funds, and effectively invest
funds in our business.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

23

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.
Listing MaintenanceStandard

Prime Market Standard

Compliance Status of
the Company

Number of shares incirculation

20,000 units or more

Market capitalization ofoutstanding shares

10 billion yen or more○

35% or more○

Average daily trading value
20 million yen or more○

Ratio of outstanding shares
Trading value
2020/12/25
Announcement of newmarket segments

2021/4/7
CGC Revsion○

2021/6/30
Transition date

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

As of the transition record
date (June 30), theCompany met the listing
maintenance standard for
the Prime Market.
2022/1/11
Release of the list of
new market segments

2022/4/4
SimultaneousTransition date

Selection period 9/1 - 12/30

Prime Market
Concept◆ Market capitalization suitable for investment by many institutional investors (liquidity)◆ Constructive dialogue with investors with a higher level of governance◆ Proactive efforts to achieve sustainable growth and enhance corporate value over the medium- to long-term

In response to the revised Corporate Governance Code, we will work on enhancing corporate value in linewith the Prime Market Concept, focusing on constructive dialogue with global investors.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

24

Sun Frontier Fudousan Co., Ltd.

Initiatives in the Fiscal Year under Review

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

25

Sun Frontier Fudousan Co., Ltd.

- Real Estate Revitalization Business: Replanning Business -Progress in Sales of High-occupancy, High-profit Properties despite
COVID-19 Pandemic
The leasing brokerage division, which has 12 offices in central Tokyo, filled vacancies in officebuildings and added value to turn them into high-occupancy, high-profit properties, despite
COVID-19 pandemic.
Our strength in tenant leasing contributes to the sale of replanned properties
with high occupancy.
1. Acquire lowoccupancy
building

2. Increase
added value withreplanning

3. Build highoccupancybuildings withleasing capabilities

4. Sell at highoccupancy forhigh profit◆ Actively exchange information through an in-house system with 80 sales staff in 12
locationsCapture the needs of clients◆ Solve problems with flexible and attractive proposals and plans from clients' perspective
Create fans

◆ Firmly respond to office relocation needs in line with corporate growth and changes
in work styles

Despite COVID-19 pandemic, set-up offices withfunctionality, convenience, and design maintained
high occupancy rates thanks to our tenant leasing
capabilities.
The sale of several profitable properties, amedium- to long-term initiative, contributed
significantly to the 1Q performance.

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

26

Sun Frontier Fudousan Co., Ltd.

- Real Estate Revitalization Business : Replanning Business -The Company's Excellent Problem-Solving Abilities Contribute to Our
Performance
Replanned and sold building with excess volume as a profitable building that complies with laws and regulations.

[Before]Excess volume

Located just a minute's walk from
Suidobashi Station in Kanda, Chiyoda
Ward, Tokyo, but the building holds
illegality with excess capacity.

Compliance with laws
and regulations[After]

The parking lot is used as a retail store.

Liquidity

Old building with low
profitability that is difficult to
distribute

Replanning

OfficeOfficeOfficeOfficeOfficeOfficeOfficeBalcony

OfficeOffice▼ GL

Reduced office space of the building by
creating balconies and warehouses tosatisfy the need of compliance with laws
and regulations for keeping a retail store in
the building.

Parking lot

OfficeOfficeOfficeFront
Road

WholesalestoresRetail store

Compliance with laws
and regulations

Liquidity

Storages etc.

Increase profitability ↑Highly profitable and liquidbuildings where growing
companies reside

Set up construction to accelerate the growth of tenant companies that will be moving in. Excellent tenants will move in at an early stage due to high competitivenessin leasing. This will create an attractive building that meets the needs of investors.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

27

Sun Frontier Fudousan Co., Ltd.

- Real Estate Revitalization Business : Replanning Business -Developing a New Office Brand that Pursues a Rich Working
Environment
Based on the concept of "choose your office like fashion", we are developing three brands,"+ SHIFT", "A YOTSUYA" and "LIT", as a brand of "rich working style" required in the new era.

Office brand that realizes a rich working environment+ SHIFT NOGIZAKA
Newly opened in April 2021. The interior ismade of carefully selected materials. It is
made of solid wood flooring without using
any of the polyvinyl-chloride tile that isoften used in offices. This is an office that
focuses on the real thing with various ideas
to stimulate the five senses.

+ SHIFT KANDA+SHIFT NOGIZAKA

Opened in August 2021 as the second
new building under the "+ SHIFT"
brand. An office that offers a varietyof free and rich working styles withthe theme of a rich space and diverse
functions that can be found in acompact building.

A YOTSUYA

LIT

With 22 rooms, this is the only mural art
share office in the world. With the themeof "Brooklyn×Art×Coffee", the barista
grinds the coffee beans and drips thecoffee with an authentic machine in thisartistic office.

In a place where you can build afriendly relationship with yourcoworkers, you can create a space
where you can enjoy your work bycreating teamwork and ideas from a
conversation that seems like an idle
talk. This office is characterized by areception that looks like a cafe.

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

A YOTSUYA

28+SHIFT KANDA

LIT

Sun Frontier Fudousan Co., Ltd.

- Real Estate Revitalization Business : Replanning Business -Developing a New Office Brand that Pursues a Rich Working
Environment+ SHIFT goes beyond the traditional concept of an office andprovides a rich and sophisticated workplace that seeks a rich way ofworking in a new age.
[Completion and opening of 2 new buildings]"+ SHIFT KANDA" opened in August 2021.

"+ SHIFT NOGIZAKA" opened in April 2021.

An office that stimulates creativity that you can rent by the week

For startups, projects, satellites. Can be used from 1 person from 1 month and ispossible to register as a corporation too.

Launched a “Personal Desk Plan""+ SHIFT", "A YOTSUYA" and "LIT" are all
possible to rent by the "WEEK""Personal Desk Plan" service is available starting from one person to use thefour full-service set-up office facilities where work can be started immediately
just with one computer.

Supporting the growth of the company by providing a space for
employees to gather to create new ideas and business innovation

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

[Free Rent Campaign]
A month’s usage fee is free for clients who sign up by the end of September 2021.

29

Sun Frontier Fudousan Co., Ltd.

- Real Estate Revitalization Business : Replanning Business -Developing a New Office Brand that Pursues a Rich Working
Environment
LIT proposes a community workplace that goes beyond the traditional office as a space tosupport "innovation created by gathering"

Driving
dreams.
We will provide the office forfree for 1 year.
Sign up starts June 23rd.

We will invite individuals and groups who want to moveinto LIT and have them present their dreams they want torealize. We will exam their future dreams and plan toprovide an office for free for one year to those with highgoals, who do not yet have the financial resources, andconnections.

Property name : LIT
Address : Higashi-Nihonbashi,
Chuo-ku
Structure : steel structure 10F* Monthly usage fee includes thefollowing fees
Rent/ Common area management
fees/ Furniture and equipment usage
fees/ Cleaning fees/ Waste disposal
fees/ Utilities fees/ Wi-fi
communication fees/ Printing fees

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Driving dreams and innovation

30

Sun Frontier Fudousan Co., Ltd.

- Specified Joint Real Estate Ventures -Completed Sales of our Third Small-lot Real Estate Property
Completed sales of "Tokyo Setagaya newly-built licensed nursery school," a small-lot
real estate property owned by Act on Specified Joint Real Estate Ventures
Carefully selected high-quality real estate in central Tokyo and offer new "value" and "peace of mind" as "Sun Frontier's
small-lot real estate products." We will continue to promote the spread of nursery school and kindergartens as part of oursocial infrastructure and as an ESG business that support the advancement of women.
Appeal 1. Sun Frontier Fudousan Co., Ltd. selects properties suitable for small-lot ownership

2. Can invest in real estate from a small amount and obtain profits (dividends)
3. Expected to reduce the amount of inherited property
1. Acquisition of realestateVoluntary
partnership2. Co-ownershipinterest investment

3. Leasing
RevenueManaging Partner

4. Investment
Investor
Dividend
Building owners

As a professional in real estate utilization, we will continue to develop attractive small-lot realestate products by combining our know-how in the revitalization and utilization of real estate that
we have cultivated over 20 years. Currently dedicated to establishing our fourth small-lot realestate property.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

31

Sun Frontier Fudousan Co., Ltd.

- Real Estate Service Business : Property Management Business -Improve Forecasting and Problem-Solving Capabilities by Building Data
Infrastructure
Using data to realize high level proposals of added value in clients' point of view

Property data

Occupancy
rate data

Introduction of a new system
Data infrastructure construction

PM
ReportCancellation
reportConstruction
purchaseorder

Contract data

To the formof
informationthat youwant toknow

DataBusiness negotiation
history

To explore therelationship of property,
tenant, and owner
information and use for
proposals

For rapid retrieval of
the corresponding
information clientscontacted us forConstruction data
Prepare materials forsuggestions for review
and proposals using avariety of data

Client data

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

32

Sun Frontier Fudousan Co., Ltd.

- Real Estate Service Business : Conference Room Rental Business -Actively Developing Customized Spaces Jointly Operated with Building Owners
Realize conversion with planning and operational capabilities
Turned a hotel
into an office

June 1, 2021

Opened Order Made Space in Nishi Shinjuku!
Up until last year, the hotel was operated as a hotel, but due to the impact of COVID-19
pandemic, the operator withdrew. After consulting with the building owner, weconverted the hotel into an office space.
Available on a one-week span at the shortest, it can be used not only as a remote work
site, but also as a distributed office for projects and a video streaming room for online
seminars.

Setup done based on client’s order (online
meeting set example)● Conference Room Rental Business Service
Menu
Service Name

is a…
Jointly managed idle space with building owners
space utilization of profit sharing business model
tailored for all purposes, not limited to offices andconference rooms

Order Made Space

FeatureAvailable from a weekly basis
Space

Vision Center

Rent on an hourly basis
Conference room

Available from 1 week

Ready to move inReasonable

The duration
can be set freely

Necessary furniture andfixtures prepared

No security deposit anddeposit caution money

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Appearance

33

Rent on a monthly basis
Vision Office

OfficeFlexibly choose the right service forclients
Sun Frontier Fudousan Co., Ltd.

-M&A and New Businesses -Expansion of Existing Businesses and Start-up Investments
We will welcome human resources, technologies, and platforms in our business to the Group to
expand and optimize services in response to the changing environment and accelerate the growthof peripheral businesses.

<Achievements of M&A and Capital Alliances>Year

Company Name and Business NameBusiness Overview

1

2010

Sonomanma Office!

Website Specializing in Set-up Offices

2

2012

Yubi (Currently SF Building Maintenance)

Building MaintenanceVision Center and Vision OfficeRental Conference Rooms and Rental Offices

34Hotel AU Tokoname

2016

5

(Currently Spring Sunny Hotel Nagoya Tokoname Station)

Hotel

Sky Court Hotel(Currently Sky Heart Hotel)

HotelJapanese-style Inn with a long History (Sado

Sado Resort Hotel Azuma

6
7

2018

8
9
10

2019

Island)VIP Nangoku (Currently Sky Heart Hotel Shimonoseki)

Hotel

Okesa Kanko Taxi

Taxi and Tourist Bus (Sado Island)

Kouwa Corporation (Currently SF Engineering)Interior Finishing Work for Offices, etc.

Sado Biyori

Sado Island Information Website

11

SKY ESTATE

Drone Business

12

Nihon System Service

Building MaintenanceCommunication Development

Communication infrastructure construction

Hotel Oosado

Hotel

13
14

2021

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

34

Real Estate
Revitalization,
Development,
Construction, andOperation

Sun Frontier Fudousan Co., Ltd.

-M&A and New Businesses -Focusing on the Central Tokyo area and Small and Medium-Sized Office
Buildings, Finding New Work Styles
We specialize in business areas where we can exert our influence, continue to pursue and refine theexpertise of existing businesses based on client feedback, and maximize real estate value.
Expand, strengthen, and differentiate high-profit businesses through cross-business collaborationand chain initiatives.
Communica-tion
Infrastructure
5G
construction
Securitiza

Replanning

Construc-tion of Real
EstateSecuritiza

Early stage ofestablishment

Brokerage

Office Building
RentalBusiness in Central
buildings
Tokyo

Replanning

Rentalbuildings

PM

Brokerage

Brokerage

Conference
room

Central Tokyo

Sub

Rent
guarantee

PM

Business inPMLeasing

Leasing

Rental

Order
Made
Space

Office Building-tion

Office Building
Business inCentral TokyoSub
Leasing

Construc-tion ofReal Estate-tion

RentalBuildings

OfficeBM

Leasing
Assetsconsulting

FlexibleArt
Rent
guarantee

Leasing

OfficeDrone
External wall
inspection⇒ We will expand our existing business further and will challenge new fields of business by utilizing M&A, the IT. We will…

expand our business area of small and medium sized office buildings in central Tokyo.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

35

Sun Frontier Fudousan Co., Ltd.

-M&A: Network construction and communication infrastructure construction business -Expansion of Services through M&A
Communication Development Inc. provides solutions for office network environments
Communication Development Inc.
1. Network construction
2. Business phone and main equipment
3. Security measures
4. Office interior

Joined the Company
February 2021

5. Communication infrastructure equipment

SynergyAP
AP

Base station
installation
Investigate office communications, modify access points, improve
communications, and maximize communication speeds

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Proposed 5G base station to building owners
Contributing to innovation with 5G

36

Sun Frontier Fudousan Co., Ltd.

Hotel Business - List of hotels under operation and development -Three New Hotels Open as Planned in Anticipation of Post COVID-19
As planned, three hotels were completed and opened: two in Juneand one in July. Pause to launch new development plans and focus
on improving services and operations to create enthusiastic fansafter the convergence of COVID-19 through the spread of thevaccine.
In operation

20 hotels

Under construction

1 hotelStatusHotel name and location

Number of
guest
rooms

In operation

SSH Nagoya Tokoname

194

In operation

Hiyori Hotel Maihama

80

In operation

Hiyori Hotel Osaka Namba Station

224

In operation

Hiyori Hotel Tokyo Ginza EAST

135

In operation

HIYORI Ocean Resort Okinawa

203

Running

In operation

HIYORI Chapter Kyoto

203

Under construction

In operation

Tabino Hotel Hida Takayama

80

In operation

Tabino Hotel Sado

111

In operation

Tabino Hotel Kurashiki Mizushima

155

In operation

Tabino Hotel Kashima

194

In operation

Tabino Hotel lit Miyakojima

111

In operation

Tabino Hotel lit Matsumoto176

In operation

Sky Heart Hotel Kawasaki

200

In operation

Sky Heart Hotel Koiwa

105

In operation

Sky Heart Hotel Narita

100

In operation

Sky Heart Hotel Hakata

159

In operation

Sky Heart Hotel Shimonoseki

105

In operation

Courtyard by Marriott Osaka Honmachi

193

In operation

Sado Resort Hotel Azuma

57

In operation

Hotel Oosado

74

Under
construction

Kyoto Shijo Kawaramachi

134

Total number of rooms 2,993 rooms* As of August 10, 2021

Sado (Chigusa)

Tabino Hotel lit Matsumoto
Opened on July 15, 2021

Sado (Aikawaoura)
Sado (Aikawakabuse)

HIYORI Chapter Kyoto
Tribute portfolio
Hotel opened on June 18,
2021

Matsumoto

ToyamaKashimaTakayama
Onna, Okinawa

Kyoto Nijo

Maihama

Kyoto Shijo
MiyakoIslandNaritaKoiwa

Shimonoseki
Tokoname
HakataKurashiki
Mizushima

Tabino Hotel lit
Miyakojima
Opened on June 25, 2021

Ginza

Osaka Honmachi
Osaka Namba

Kawasaki*The schedule, hotel scale and others are based on the current plan, which may change in the future.

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

37

Sun Frontier Fudousan Co., Ltd.

Hotel Business - Hotel Operation Business -Focus on Creating Enthusiastic Fans
Pursuing a warm-hearted hotel in the clients' point of view, providing services that transcend satisfaction andexcitement, and dedicated to creating enthusiastic fans through hospitality.

Morning yoga at Infinity Pool
(HIYORI Ocean Resort Okinawa)

Chef's Original Japanese Rolled
Omelet(Tabino Hotel lit Matsumoto)

Sweets to celebrate joining
the company

Star-filled sky

Sunset over the sea

Senba de Marche(Tabino Hotel Sado / Donden Plateau
Lodge)(Tabino Hotel Sado / Donden Plateau
Lodge)

Courtyard By Marriott Osaka Honmachi

Highly transparent sea (Ikizu beach)Birthday decorations

Special Obanzai Plate(Tabino Hotel lit Miyakojima)(Hiyori Hotel Osaka Namba Station)(HIYORI Chapter Kyoto)(HIYORI Ocean Resort Okinawa)

Wedding while watching thesunset(HIYORI Ocean Resort Okinawa)

Posting little pleasantservices and appeals ofeach season on SNS
View of the Seto Inland Sea over theGreat Seto Bridge

Cherry trees in Katori-jingu
Shrine"Welcome Baby Accommodation
Plan"

Takayama Spring Festival(Sanno Matsuri)(Tabino Hotel Kurashiki Mizushima)(Tabino Hotel Kashima)(Hiyori Hotel Maihama)(Tabino Hotel HidaTakayama)

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

38(Facebook and Instagram)
Sun Frontier Fudousan Co., Ltd.

Reference Materials

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

39

Sun Frontier Fudousan Co., Ltd.

Outlines of 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.
 We revitalize buildings without destroying them. We develop the Real Estate Revitalization Business, which
grows in harmony with the environment (revitalized buildings: 427 buildings.)

Environment

 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.
 We have introduced the renewable electric power service to 13 buildings we own.
 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 June 2021:

SocialFemale employees 35% and Foreign employees 7%)
 In our Real Estate Revitalization Business, we promote the revitalization of buildings to meet the social needs.
 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.
 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 real

Governanceestate stock with high social values and sell them.
 We have improved our monitoring function for the corporate management by appointing 5 independent
outside directors out of 12 directors.

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

40

Sun Frontier Fudousan Co., Ltd.

Estimation of Environmental
Contribution

ESG initiatives

Real Estate Revitalization Business that Conserves Limited Resources and Coexists
with the Environment [E]● Comparison of resource input over 50 years

40.9% reduction

Renovation
Plan
改修案

2,104

Rebuilding
建替案
Plan

2,030
0

500

156

97
150

1,725

1,000

1,500

2,000

2,500

3,000

3,500

85

4,000

Kg / ㎡● Comparison of waste generation over 50 years

49.3% reduction

Renovation
Plan
改修案

162

50

Rebuilding
建替案
Plan

84

0

100

89

246

200

New
Building
新築

300

400

Rebuilding
建替

Renovation

893

Standard*
標準※

480

1,711

703

500

Repair
修繕

458

463

600

Renovation
改修

700
Demolition
解体

800

kg/㎡

19.1% reduction
2,592

47
249

89

Estimated with the help of ERC, Inc.

● Comparison of CO ₂ emissions over 50 years

改修案
Plan

53

412

3,520

48

0

1,000

2,000

3,000

New
新築
Building

Repair修繕

Renovation
改修

Maintenance
維持管理

4,000

5,000

Abandonment
廃棄

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Rebuilding: If the building is to be rebuilt every 35
years
Renovation: Revitalization of aging buildings without
demolishing them (long life buildings)
Standard: Assuming a 30-year-old unrenovatedbuilding*Architectural Institute of Japan, “LCA Tool for
Buildings Ver.5.0 - Assessment Tool for Measuresagainst Global Warming, Resource Consumption andWaste” (Japanese only)

110

323

＜Prerequisites and Basis＞
Assuming a 30-year-old, approximately 3,000 square
meter office building. Estimating environmental
contribution over 50 years (the service life of an SRC
building) based on the Architectural Institute of Japan
LCA tool (*).

6,000
Energyエネルギー

41Compared to the proposed reconstruction andstandard building◼Resource input:◼Amount of waste
generated:

1,182t reduction◼CO₂ emissions:3,660t-CO₂ reduction

4,899t reduction

7,000

kg-CO2/㎡

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 a building
for office

BeforeAfter

Originally a store andworkshop

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Abundant use of solid wood

42

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) that Japan is proud of, wewill take on the challenge of regional revitalization projects that focus on the attractiveness and features unique toregions, in particular the regions that possess the “Wonderfulness of Japan.” The first will be Sado, where we arefamiliar with. Moreover, Oosado was included starting April 2021 and will even revitalize the community more.

Sun Frontier Sado Inc.
Hotel Business
Tabino Hotel Sado

Hotel AZUMATransportation Infrastructure
Project

Okesa Kanko Taxi

Hotel Oosado

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Highlight Finding Project
Anaguchi-tei(Café & Restaurant)

Kigaruni Rent aCar

43

Tourism and Travel
Business
Happy Sado
TravelWeb Advertising
Business

Sado Biyori

DONDEN
Highland Lodge

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 41.7% ratio of outside Directors 33.3%
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 thesoundness of management.

We have established Nomination and Compensation Committee
We have established the Committee as a voluntary advisory body to the Board of Directors. The majority of 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 ourcompliance with laws 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 ourdepartments in charge but in cooperation with legal and audit departments. As for sale of the pre-owned buildings which aredisqualified, 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 abroad range of themes, such as “prevention of insider trades,” “prevention of trades with antisocial forces,” “information
management,” etc. to promote sound business operation.
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

44

Sun Frontier Fudousan Co., Ltd.

ESG initiatives

Effective Corporate Governance System [G]Outside Directors and Outside Audit & Supervisory Board Members are expected to return theirwide-ranging knowledge and experience to the Board of Directors and play a role in improving
corporate value. We promote a balanced corporate management and corporate 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

Yukitoshi Kubo●●

(Outside) Director

Kazutaka Okubo●●

Full-time Auditor

Kouichi Shinada

●

●

●

●

●

(Outside) Auditor

Koichi Moriya

●

●

●

●

(Outside) Auditor

Hidetaka Tanaka

●

●

●

●
●

●

45

●

●
●

●

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

●●●

Overseas

●

●
●

●
●

●

●

●

●

●

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%
76,00011.5%

35,25540,000681

22.0% 22.7%

20.2%

19.3%

12.6%

48,15020,000

22.9%

30.0%

20.0%

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

59,632

15.0%

15.1%
12.6%

10.0%

17,772

14,4697,761

53,292

4,290

6,924

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‘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 businessOver the years, our business has grown in depth.
Each time we overcame a recession, we have seized theopportunity to grow through new challenges.
We will continue to aim high with the Sun Frontier Spirit.

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

Set-up office
Hotel
Rental space
Overseas

46

Sun Frontier Fudousan Co., Ltd.

- Real Estate Service Business: Property Management Business -Despite the Impact of the COVID-19 Pandemic Focus on Sustaining
Occupancy Rate
(㎡)
100%

98%

900,000

Entrusted floor area (R Axis)
Occupancy rate of entrusted assets (L Axis)
Occupancy rate in 23 wards of Tokyo (L Axis)

Operating rate of our PM
entrusted properties*Note1

800,000

700,000

96%

94.6%

94%

600,000(As of July 1, 2021)

93.5%(As of the end of June

92%

500,000

2021)

400,000

Average occupancy rate of
medium-sized buildings in 23
wards in Tokyo *Note 290%300,000

88%

200,000
Aiming to be the most loved, selected and trusted PM, we are promoting quality improvement by86%

adding ESG and digitalization to management and planning operations based on human resource
development and system building to reach entrusted area of 1 million square meters by the end of

100,000

March 2025.

84%

0
1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q

March 2009 March 2010 March 2011 March 2012 March 2013March 2014 March 2015March 2016 March 2017March 2018 March 2019 March 2020 March 2021
*Note1: Operating rate: (Total operating area)/(Total lent available area).
*Note2: Our research based on “Monthly Office Market Research Report” by Sanko Estate Co., Ltd.,
Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

47

Sun Frontier Fudousan Co., Ltd.

Management Principle, Corporate Philosophy
and Vision
Even if plans and strategies changes due to the COVID-19 outbreak,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 © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

48

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*

641 full-time employees (1,144 including part-timers and temporary workers)
36.2 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 June 2021)

Copyright © 2021 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.

49

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