FY 2021 – 1Q
(For the Year Ending March 31, 2021)

IR Presentation

For details of “Long-Term Management Plan 2030”, which began from April 2020, please refer to the following link.
https://www.mec.co.jp/j/investor/plan/pdf/plan200124.pdf

Contents
Summary of FY 2021 Q1 Results2

Summary of FY 2021 Estimates

10

Financial Supplemental Data

17

Overview of “Long-Term Management Plan 2030”

25

Business Overview

35

Commercial Property Business

MITSUBISHI ESTATE CO., LTD.

Office Building

38

Outlet Malls, Retail Properties,
Logistics Facilities, Hotels, and Airports

52

Residential Business

57

International Business62

Other business

65

Investment / Financial Data etc.

67

ESG Initiatives

72
1

Summary of FY 2021 Q1 Results

MITSUBISHI ESTATE CO., LTD.

2

Summary of FY 2021 Q1 Results

1. Summary of Financial Statements＜FY 2021-1Q Financial Results＞• Revenue decreased but profit increased on a year-on-year basis.
• Profits increased mainly due to an increase in profit from office building rentals and an increase in capital gains
despite the hotel and retail property business being heavily impacted by the spread of COVID- 19.
• The decrease in revenue was mainly due to the reduction in the number of condominiums delivered in thedomestic condominium business. (This was caused by the decrease in the number of properties to becompleted in this fiscal year and the suspension of sales activities due to the spread of COVID-19)＜FY 2021 Estimates＞• No change from estimates announced on May 14, 2020

＜Major Topics＞(Current quarter (April to June 2020))• GOTEMBA PREMIUM OUTLETS (Phase 4 expansion) evolved to the largest outlet mall in Japan* (store floorarea of approx. 61,000㎡) and opened on June 1, 2020

• "the ARGYLE aoyama", a mixed-use building, started its operation with full occupancy at completion on the siteof "Aoyama Bell Commons" (June 2020).
*based on store floor area accroding to a survey by MEC
MITSUBISHI ESTATE CO., LTD.

3

Summary of FY 2021 Q1 Results

2. Income Statement Results for FY2020
YoY profits have increased due to an increase in building rental profits and capital gains, despite
Millions of yen (rounded off
the impact of COVID 19.
Millions of yen (rounded down) Capital Gains included in Operating Income
to the nearest billion)<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*1
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*1
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

Extraordinary Income
Extraordinary Loss*2
Profit Attributable to Owners of Parent

FY2021-1Q
257,481
168,030
58,395
19,414
5,449
12,497△ 6,305
54,22853,598
270
7,192
1,404
△ 2,153△ 6,083
4,951
99
7,848
51,331
5,698
29,263

FY2020-1Q
265,883
166,465
69,87918,011
4,467
12,948△ 5,890
46,85044,651
1,344
7,278
689
△ 1,133△ 5,979
5,348
125
8,219
43,97826,420Change△ 8,401
1,564△ 11,484
1,402
982
△ 451
△ 414
7,378
8,947
△ 1,074△ 85
715△ 1,021
△ 103
△ 396
△ 25
△ 370
7,352
5,698
2,843

Total
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other
Eliminations or corporate

Business profits
EBITDA
Interest-bearing debt

Commercial
Property
8,947

Change13,00015,0000△ 2,000-

Residential International△ 85△ 1,074

Others△ 409

Increase in rental profits
Decrease in capital gains
Decrease in condominium profit

46,850Change7,352
5,689
65,199FY2020
-1Q
7,000
2,000
3,000
2,000
-

Major Factors for Changes in
Operating Income by BusinessMillions of yen (rounded down)

FY2021
FY2020-1Q-1Q
54,32846,97577,65871,9692,542,951 2,477,752

FY2021-1Q
20,00017,0003,000
0-FY2020-1Q

54,228

Increase in office rental profits
Increase in capital gain
Decrease in profit in retail properties andhotels due to impact of COVID-19

Commercial
Residential
International
OthersProperty*2 Recorded in extraordinary loss certain costs incurred by retail properties and hotels during the period of closing as loss for COVID-19 (e.g. depreciation cost or rent)

FY2021-1Q*1 Architectural Design & Engineering / Real Estate Service Business and Other businesses

MITSUBISHI ESTATE CO., LTD.

4

Summary of FY 2021 Q1 Results

3. Impacts of COVID-19 (i) (major impacts on Q1)
The impact on Q1 is basically in line compared with estimate at the beginning
Estimated
impact(Full-year )Categories

Capital Gains

Operating profits

Impact on
Q1(Total)--Domestic
Condominiums, etc.*1▲JPY 5 B_*3Retailproperty▲JPY 16B▲JPY 8.8B

Hotels▲JPY 15B▲JPY 5.4B

Offices▲JPY 0.5B-

Others▲JPY 8.5B▲JPY 2.0B

Subtotal▲JPY 40B▲JPY 16.2B

IncomeGain

Total

MITSUBISHI ESTATE CO., LTD.

Major situation and impact

Extraordinary
loss*2-_*3▲JPY 5.5B▲JPY 3.3B▲JPY 3.0B▲JPY 2.4B▲JPY 2.0B▲JPY 45B▲JPY 16.2B-• 65% of full-year forecast has been recorded in Q1• There was almost no new contracts from April to May due to the sales centerswith model units being closed• From June, the sales centers with model units have been reopened with acomplete reservation system, and the number of visitors is gradually recovering• At present, there are no confirmed the condominium projects for this fiscal yearthat will delay to the next fiscal year
• See P6 for detail• Some costs incurred by retail properties and outlet malls that were closed
during this period are recorded in extraordinary loss
• See P7 for detail• Some costs incurred by hotels that were closed or that had suspended newreservations during this period are recorded in extraordinary loss
• No impact• Impact on the brokerage business due to stagnation of the real estate market• Impact on certain businesses of consolidated subsidiaries (exhibition, parking
lot, golf course, etc. )▲JPY 10.5B▲JPY 5.7B▲JPY 10.5B▲JPY 5.7B*1 Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income*2 Some costs incurred by retail properties and hotels that were closed during this period arerecorded in extraordinary loss for COVID-19 (e.g. depreciation cost or rent)*3 Although there was a delay from the initial condominium sales schedule, the impact of this

delay is not reflected in current financial estimate as there is no finalized delay in delivery
for the coming fiscal year.

5Summary of FY 2021 Q1 Results

4. Impacts of COVID-19 (ii) (state of retail properties and outlet malls)
Situation between April and May 2020

【Reference】 Shift of declaration of the state of emergency
April 7The state of emergency was declared to 7
prefectures (Tokyo, Kanagawa, Saitama, Chiba,• Mainly closed during the state of emergency

Osaka, Hyogo and Fukuoka)• Some facilities providing daily necessities andneeded to support offices remained open

April 16 Declaration expanded to all prefectures• Gradually resumed operation after the state of
emergency declaration was lifted• All facilities are in operation after June 1, 2020

May 14 Declaration was lifted in 39 prefectures(excluding initial 7 prefectures and Hokkaido)
May 21 Declaration was lifted in Osaka, Kyoto, Hyogo
May 25 Declaration was lifted in all prefectures

Situation in June 2020
Facility type

Situation

Sales level in June
(YoY basis)

Outlet malls

Domestic sales showed recovery
while inbound sales were still low

Approx. 80%

Urban, mixed-use buildings
Commercial zone

Situation remained severe mainly in restaurants
due to less office workers and refraining from gathering

Approx. 50%

Stand-alone shopping center

Customers came back and goods sales rebounded to the samelevel of the previous year
Restaurants curtailed seats and showed slow recovery

Approx. 90%

MITSUBISHI ESTATE CO., LTD.

6

Summary of FY 2021 Q1 Results

5. Impacts of COVID-19 (iii) (state of hotels)
Operating status of hotels (from April 2020)• Gradually suspended new reservation after April 1 (suspended at all hotels from April 14)• Resumed new reservation from June 1 (resumed from late May at certain hotels)• Average occupancy rate in June was about 10% partially due to restriction of travelling
between prefectures until mid-June. (Average occupancy rate in last June wasabout 75%. Inbound sales accounted for approximately half of it)

Royal Park Hotels/Trend in occupancy rate (Jan-Jun 2020)
80%

74.1%

57.6%

60%

40%
22.2%

20%

10.4%
4.5%

1.4%

0%
Jan.

MITSUBISHI ESTATE CO., LTD.

Feb.

Mar.

Apr.

May

Jun.

7

Summary of FY 2021 Q1 Results

6. Impacts of COVID-19 (iv) (survey for office workers)
While many office workers switched to Work From Home(WFH) and saw its benefits,
it became apparent that there is a continued need for offices.
What's your work situation at your company(during declaration of the state of emergency)?

What percentage of your work do you want
to do in office/through WFH?

What kind of tasks would you liketo do at the office/WFH?
70.8%

Discussion with external parties

19.6%

26.0%

7.2%
◼ Office only
(No experience of WFH)
◼ 50%～90% office

27.0%

27.4%

◼ 60%～90% WFH◼ Only WFHMore than 80% experienced WFH under tha
declaration of the state of emergency

How satisifed are you with
WFH overall?

3.7%

9.3%

21.0%

◼ Satisfied◼ Somewhat satisfied

26.5%◼ Not sure39.5%

◼ Somewhat dissatisfied◼ Dissatisfied

24.1%

22.0%

MITSUBISHI ESTATE CO., LTD.

Preparation and review of documents

41.3%

Paperwork and simple tasks

40.8%◼ 60%～90% WFH

0%50%
Have to do in office (face-to-face)
Want to do in office (face-to-face)
Want to do in office (face-to-face) whenever possible
Want to do through WFH whenever possible
Want to do through WFH◼ 100% WFHApprox. 70% “want to do 50% or more of theirwork in office"100%

Approx. 70% "want to have discussion in office"What are disadvantages of WFH?
Difficult to draw the line between office time and hometime
Difficult to stay focusing

34%
31%

Stress from not going outside the house28%

Not able to have casual discussions with supervisors,collegues or subordinates
Do not have a workspace set up at home0%

Level of satisfaction with WFH is high60.0%Internal information sharing◼ 50%～90% office

46.7%

66.7%

Internal discussion◼ 100% office

28%
22%
5%

10%

15%

20%

25%

30%

35%

40%

Disadvantages of WFH also became clear

8

Summary of FY 2021 Q1 Results

7. Impacts of COVID-19 (v) (looking ahead to post-COVID-19)
Observing the changes in awareness among individuals and corporations towards workstyle and accelerating urban
development looking ahead to post-COVID-19
Marunouchi as center office

Addressing a variety of work stlyes and lifestyles

Towards city where one million people come together,collaborate and create value

Conrehensive value offering which
supports a veriety of work styles

ExpandGoods and services
suitable for flexible
workstyles
Innovation and value

Evolvecreation throughcollaboration amongindividuals andcorporations

Satisfy

CIRCLES Series

WORK × ation Site

Private time anda variety of purposesfor visiting city

Utilize

EnrichProactively changing
lower part of buildings
and public space
into work place

Services andnew technologies
balancingsafety/security
and well being

Marunouchi Street Park

Foundation for a future city

DX × Smart City × Area Management
MITSUBISHI ESTATE CO., LTD.

Telecube

Co-working lounge

Hakonoma9Summary of FY 2021 Estimates*No change from estimates announced on May 14, 2020

MITSUBISHI ESTATE CO., LTD.

10

Summary of FY 2021 Estimates

1. Income Statement Estimates for FY2021*No change from estimates announced on May 14, 2020

Estimated decrease in revenue and profits considering the impact of the Coronavirus.
An increase in domestic and overseas office rental profits is estimated.
Millions of yen (rounded off
Millions of yen (rounded down)

Extraordinary Income
Extraordinary Loss
Profit Attributable to Owners of Parent

FY2021
FY2020ChangeEstimates
Results
1,142,000 1,302,196 △ 160,196
674,000
723,712 △ 49,712
320,000
385,538 △ 65,538
88,000134,175 △ 46,175
20,00021,316△ 1,316
66,00065,871129△ 26,000 △ 28,418
2,418
185,000
240,768 △ 55,768
163,000
187,855 △ 24,855
12,00024,320 △ 12,320
29,00046,156 △ 17,156
4,000
4,467
△ 467
1,000
389
611
△ 24,000 △ 22,420△ 1,580
18,00012,377
5,623
300
229
71
34,00033,574426
169,000
219,572 △ 50,572
15,00026,251 △ 11,251
22,00021,874126
110,000
148,451 △ 38,451

Business profits
EBITDA
Interest-bearing debt

FY2021
FY2020Estimates
Results
185,300
240,998
289,800
336,784
2,610,000 2,429,883<New Segment>
Revenue from Operations
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Elimination
Operating Income
Commercial Property BusinessResidential Business
International Business
Investment Management Business
Other*
Eliminations or corporate
Non-Operating Revenue(of affiliates' equity in earnings)
Non-Operating Expense
Income before Taxes and Special Items

Capital Gains included in Operating Income
FY2021
Estimates
Total
31,000Commercial Property Business
22,000Residential Business
6,000International Business
3,000
Investment Management Business
Other
Eliminations or corporate-

Commercial
Property△ 24,855

240,768

Change*Architectural Design & Engineering / Real Estate Service Business and Other businesses
MITSUBISHI ESTATE CO., LTD.

Change△ 30,000△ 1,000△ 4,000△ 25,000-

Major Factors for Changes in
Operating Income by BusinessMillions of yen (rounded down)△ 55,698△ 46,984
180,117to the nearest billion)

FY2020Results
61,00023,00010,00028,000-

Increase in rental profits
Decrease in capital gains

Residential△ 12,320 International△ 17,156

Others△ 1,436

Decrease in capital gains fromrental apartments
Decrease in condominium profits
from impact of Coronavirus

185,000

Increase in office rental profits;decrease in profits from retail properties andhotels due to the impact of Coronavirus
FY2020ResultCommercial
Property

Residential

International

Others

FY2021
Estimates

11

Summary of FY 2021 Estimates

2. Impact of COVID-19 (i) (impact on FY 2021 estimates)*No change from estimates announced on May 14, 2020

Breakdown of business profits vs FY2020 and estimated impact of Coronavirus
It is assumed that the state of emergency will continue until the end of May, and that business will recovergradually toward the end of September.
Approx. ￥45 billion reduction (business profits) is estimated against income gain and domestic condominiums, etc.
(Billions of Yen)FY2020 results

FY2021 estimates

Business Profits：240.9

Business Profits：185.3
Incorporating①delivered, ②contracted③and highly-saleable properties
into FY2021 estimate

61.0

Capital Gains

＋20.0
14.7
Domestic
Condominiums＋
Income Gain

165.2

FY2020 results

▲1.0

▲5.0
▲40.0

【Major Factors】
・Increase in building rental profits：＋¥ 7 billion
・Increase in overseas income gain：＋¥ 5 billion
・Increase in Asia condominium business profits：＋¥ 3 billion
・Others：＋¥ 5 billion

Fluctuation before factoringin the impact of Coronavirus

31.0

Estimated impact ofCoronavirus

Further details
on P108.7

145.6

FY2021 estimates■Income Gain ■Domestic Condominiums ■Capital Gains* Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income
MITSUBISHI ESTATE CO., LTD.

12

Summary of FY 2021 Estimates

3. Impact of COVID-19 (ii) (basis of preliminary calculations of FY 2021 estimates) (as of the end of June)*No change from estimates announced on May 14, 2020

Assuming that the state of emergency will continue until the end of May,business is expected to recover gradually toward the end of September
Categories
Capital Gains-

Domestic Condominiums,
etc.*

Income Gain

Total

Estimated Impact(Business profit)▲￥5 billion

Key assumptions for FY2021 estimates and Coronavirus impact• Budgeted from delivered, contracted, and highly-saleable properties(60%+ of the planned properties for this fiscal year have already been delivered)• Approximately 60% of the condominiums estimated to be sold before including the impact ofCoronavirus have been contracted• No new contracts assumed during the state of emergency (assuming it lasts until the end of May)
• A decline in new contracts after June is expected considering the anti-Coronavirus measures that limit
visitor numbers• Incorporating the risk of delivery delays for some of the residential units due to construction delay etc.

RetailProperty▲￥16 billion• Incorporating the general closure of most facility/stores, with some exceptions, during the state of
emergency (assuming it lasts until the end of May)
• Business environment recovery is assumed for the end of the first half of FY2021

Hotels▲￥15 billion• The impact on the hotel management business is assumed to continue until the end of the fiscal year

Offices▲￥0.5 billion• A set vacancy period for all vacant floors is incorporated (no contracting tenant; including futurevacancies)

Others▲￥8.5 billion• Partial revision of residential sales schedule for international business• Incorporating the risk of market stagnation in the investment management and real estate service
businesses• Slowdown in project orders received in architectural design & engineering businesses

Subtotal▲ ¥ 40 billion▲ ¥ 45 billion* Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income

MITSUBISHI ESTATE CO., LTD.

13

Summary of FY 2021 Estimates

4. Changes in ROA / ROE / EPS*No change from estimates announced on May 14, 2020

Continued efficiency improvements resulted in ROA: 4.1%, ROE: 8.5%, EPS: ¥ 108
All indicators are forecast to fall in FY2021 due to the impact of Coronavirus
10%

10.0%

(Yen)

200

200

9.0%

8.5%
7.8%

8.0%

7.3%

7.0%

150

6.6%
6.2%

6.0%

5.6%

108.64

5.2%

96.97

5.0%

86.78
74.00

4.0%

3.3%

3.3%

FY2015FY2016

100

82.18
4.1%

4.0%

3.8%

60.13

52.85
3.0%

5%

3.1%

3.6%

50

2.0%

1.0%

0
FY2017FY2018FY2019EPS(right axis)

FY2020ROA

FY2021(E)2030 Target

ROE* ROA=Business Profit / Total assets (average)

MITSUBISHI ESTATE CO., LTD.

14

Summary of FY 2021 Estimates

5. Cashflow forecast for FY2021*No change from estimates announced on May 14, 2020

Decrease in profits due to Coronavirus and decrease in cash-in due to selection of timing of asset sales
Cash-out will tend to increase due to steady acquisition of new investment opportunities
Cash-in
730.0～780.0

Soundness level for new investments(Considering possibility to expand investment
opportunities)

Decrease in collected amount compared tothe previous year due to the impact ofCoronavirus

Decrease in profit due to the impact ofCoronavirus

Cash-out
730.0～780.0

Financing arrangement(Increase in liabilities)
190.0～240.0

Return*1
370.0

Operatingcashflow*2
170.0*1 Collected amount (in book value) from asset sales

MITSUBISHI ESTATE CO., LTD.

Strategic
allocation
100.0～150.0

Plannedinvestments
600.0

Dividends
30.0(Billions of Yen)

Continue plans of seeking strategic
investment opportunities, mainly overseas(especially in Asia) (Considering possibility to
expand investment opportunities)

Recently, investment opportunities weresteadily obtained【Breakdown】
Marunouchi

60.0

Outlet Mall, etc.

50.0

Domestic condominium

170.0

Domestic capital recycling and others

200.0

Overseas

120.0

Payout ratio: Approx. 30％*² Cash flows from operating activities, excluding change in inventories and change in equity investment

15

Summary of FY 2021 Estimates

6. Shareholder returns*No change from estimates announced on May 14, 2020

Policy for increasing dividends continues with support of a strong real estate market. ¥ 100 billion sharebuyback was executed during FY2020. Dividends are planned based on a payout ratio of approx. 30% during
FY2021. Preparation for financial risks and expansion of investment opportunities.
(Yen)

40

45.0%

35

43.0%

33.00

41.0%

30.00

30
26.00

25.00

25

37.0%

20.00

20

35.0%

16.00
15

39.0%

33.0%

14.00
12.00

30.0%

30.9%

30.4%

30.4%

31.0%

10
5

25.9%

26.5%

26.6%

FY2015FY2016

29.0%

27.0%

27.0%

0

25.0%
FY2014FY2017FY2018FY2019Amount of
Share
Buyback

FY2021(E)¥ 100 billion
Dividends per share

MITSUBISHI ESTATE CO., LTD.

FY2020

Payout ratio (right axis)
16Financial Supplemental Data

MITSUBISHI ESTATE CO., LTD.

17

Financial Supplemental Data

1. Management Indicator

Previous management
plan period
FY2018FY2019Current management
plan period

FY2020

FY2021(Estimates)2030 Target¥ 213.4
billion¥ 229.4
billion¥ 240.9billion¥ 185.3
billion¥ 350-400
billion

ROA*2

3.8%

4.0%

4.1%

3.1%

5％

ROE

7.3%

7.8%

8.5%

6.2%

10％

EPS

¥ 86.78¥ 96.97¥ 108.64¥ 82.18¥ 200

Business Profit*1*1 Business Profit = Operating Income + Equity in earnings (loss), unconsolidated subsidiaries and affiliates*2 ROA = Business Profit / Total Asset (average of opening / closing balances)

MITSUBISHI ESTATE CO., LTD.

18

Financial Supplemental Data

2. Balance Sheet
Millions of yen (rounded down)

Current assets
Cash
Notes and accounts receivable-trade
Property for sale
Property for sale in progress
Property for development
Equity investments
Other
Fixed assets
Tangible assets
Intangible assets

Investment securities
Other
Total assets

At June 30,
2020
1,105,409
208,973
45,05356,302
248,624975
445,187
100,289
4,792,880
4,126,188
98,172
255,808

At March 31,
2020
1,115,634
207,896
50,34072,256247,677975
450,52085,966
4,742,602
4,107,252
96,767
236,969

312,709
5,898,289

301,6115,858,236

Millions of yen (rounded down)

Change△ 10,225
1,077△ 5,287△ 15,953
947△0△ 5,332
14,32050,27818,935
1,405
18,838
11,09740,052

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term debt
Commercial Papers
Bonds due within one year
Other
Long-term liabilities
Bonds
Long-term debt
Other
Net assets
Shareholders’ equity
Other accumulated comprehensive income

Stock acquisition rights
Non-controlling interests
Total liabilities and net assets

Total Assets(as of June, 2020)
International
Business
877,241
Residential
Business
567,876

Other
315,161

Commercial
Property Business
4,138,011

MITSUBISHI ESTATE CO., LTD.

Change51,253△ 14,065△ 33,892
12,363
15,84628,000△ 5,000△ 31,382
65,31850,00011,9103,409△ 11,200
5,495△ 12,682△ 19△ 3,993
40,052

Consolidated interest-bearing debt Consolidated interest-bearing debt Consolidated interest-bearing debt
(as of March, 2020)
Fixed / Floating rate ratio
Long-term / Short-term ratio
Commercial Papers
50,000

Lease obligations
1,985(as of March, 2020)

2,429,883
Loans
1,550,764(as of March, 2020)
Short-term
6.8%

Floating
23.6%

Bonds
827,134

5,898,289

At June 30,
At March 31,
2020
2020
3,968,283
3,917,030
649,936
664,001
32,476
66,368
127,669
115,306
172,624
156,778
78,00050,00046,55051,550
192,614
223,998
3,318,347
3,253,028
825,584775,584
1,290,589
1,278,678
1,202,169
1,198,762
1,930,005
1,941,206
1,169,241
1,163,746
558,034
570,716
269
288
202,460
206,454
5,898,289
5,858,236

2,429,883
Fixed
76.4%

2,429,883

Long-term
93.2%

19

Financial Supplemental Data

3. Asset composition(End of June 2020)

Inventory

Equity investment

14%

17%
32%

¥

Tangible fixed asset

316.2 billion

9%
8%

¥

445.1 billion

2%
3%
2%
3%

¥

5%

4,126.1 billion

7%

Domestic Condominiums

76%

39%

83%

OthersDomestic (office buildings)
Domestic (others)
US
EuropeAsia

Office Buildings

Outlet Malls

Logistics Facilities

Retail Properties*

Rental Apartments

Overseas

Others* Excluding outlet malls

MITSUBISHI ESTATE CO., LTD.

20

Financial Supplemental Data

4. Consolidated Cash FlowMillions of yen (rounded down)①FY2020-1Q ②FY2021-1Q
Results
Results
Cash flows fromoperating activities

55,979Change(②－①)③FY2020
Results△ 15,384 △ 71,363

341,766④FY2021
Estimates

Change(④－③)

42,000 △ 299,766

Depreciation and amortization

20,623

21,407784

84,94187,0002,058

Change in Inventories

12,787

16,3883,601

148,161

18,000△ 130,161

Change in Equity Investment

9,879△ 2,041△ 11,920△ 43,217△ 146,000△ 102,783△ 277,440 △ 299,000△ 21,560

Cash flows frominvesting activities
Proceeds from sales ofinvestment securities△ 52,064△ 75,648 △ 23,584

403

8,388

7,984

5,275

12,0006,725

Capital Investment△ 52,733△ 71,345△ 18,612△ 331,857△ 350,000△ 18,143

Cash flow fromfinancing activities

114,657

95,080 △ 19,577△ 28,886

194,000

222,886

Cash and cash equivalents
at end of year

298,698

215,014 △ 83,684

213,008

147,000△ 66,008

3,914△ 91,032 △ 94,947

64,326 △ 257,000 △ 321,326

Free cash flow

MITSUBISHI ESTATE CO., LTD.

21

Financial Supplemental Data

5. Investment Data
Major Breakdown of Capital Investment
350.0(Billions of Yen)

331.8

350.0

300.0

275.3

250.0

27.6

289.5
2.4

285.0

11.8
7.1

2.7

25.1
200.0

93.4

13.0

10.7
12.3

6.5

17.2
15.2

126.1

50.0

4.3

9.0

350.0

8.0
300.0
250.0

113.8

40.0

74.7

200.0
22.1
36.0

39.9

38.4
6.5

15.9

100.0

14.0

(Billions of Yen)

87.0

58.6

150.0

Major Breakdown of Equity Investments

96.3

36.9

47.8

16.8
21.3

15.6
23.9

68.4

63.5

91.0

150.0

20.0

100.0

168.0

99.4

90.0

FY2017FY2018FY2019FY2020

FY2021(E)*

2.3
167.0

75.1

50.0

8.8
13.2

0.0

0.0

1.0

FY2017FY2018FY2019FY2020

FY2021(E)**Classifications have been changed below from FY2021<Legend for FY2021><Legend for FY2017 - FY2020>
Office Building(MEC: New/Redevelopment)

Office Building(MEC: Refurbishment)

Office Building(Subsidiaries)

Office(MEC: New / Redevelopment)

Office(MEC: Refurbishment)

Lifestyle Property

Commercial Property(excluding MEC office)

Residential

Residential

International

International

Special Purpose Vehicle

Hotel & Airport

Special Purpose Vehicle

Others(including consolidated eliminations)

Other(including consolidated eliminations)

MITSUBISHI ESTATE CO., LTD.

22

Financial Supplemental Data

6. Income Generating Assets Unrealized Gain : Current Status ①
Unrealized gain rose approx. ¥300 billion (y-y), supported by declines in cap rates andcash flow improvement
Income Generating Assets Unrealized Gain
Book value(Billions of Yen)
9,000

Unrealized gain

6,791.9

5,395.6

5,498.9
2,963.5

5,000
4,000

2,096.4

2,180.7

3,800
3,432
3,241
2,950

3,422.8

3,898.4

4,222.5

2,643

2,800
2,384

2,569.0

2,300

3,000
2,000

Adjusted BPS

3,300

6,079.0
6,000

8,270.8

7,383.4

7,000

BPS

(Yen)
7,941.1

8,000

BPS and Adjusted BPS*

2,178
2,015

1,800

3,299.2

3,318.1

3,509.9

3,828.4

3,960.5

4,042.7

4,048.3
1,300

1,000

958

0
FY2014FY2015FY2016FY2017FY2018FY2019FY2020

1,078

1,088

FY2015FY2016

1,148

1,224

1,276

1,269

FY2018FY2019FY2020800

FY2014FY2017＊ BPS including unrealized gain (after tax)

MITSUBISHI ESTATE CO., LTD.

23

Financial Supplemental Data

7. Income Generating Assets Unrealized Gain : Current Status ②

Unrealized Gain Breakdown

Rental Profits(Billions of Yen)
190

International
9%

180.5

180

174.8
168.3

170

Domestic(Outside of Marunouchi)
17%

160.7

160

Marunouchi
New Building*
44%

150
140

131.7

136.2

130

Marunouchi
Existing Building
30%

120

116.9

110
100
FY2014FY2015FY2016FY2017FY2018FY2019FY2020*Redeveloped properties after the completion of Marunouchi Building
FY2020 Results

MITSUBISHI ESTATE CO., LTD.

24

Overview of“Long-Term Management Plan 2030”

MITSUBISHI ESTATE CO., LTD.

25

Overview of Long-Term Management Plan

1. New Management Plan: Objective*Repost from “Long-Term Management Plan 2030”

Mitsubishi Estate Group’s Mission:
Creation of a truly meaningful society through urban development

2030 Target
Address Four key themes*
to realize a sustainable
society*「Environment」「Diversity & Inclusion」「Innovation」「Resilience」

Fundamental Approach

Increasing
Socialvalue

Increasing
Shareholder
value

Create value for every
stakeholder including visitorsand employees

2030 Target

A pair of driving wheels

Synergy

ROA

ROE

5%

10%

EPS

200

¥

Fundamental Approach
Transformational
improvements to thebusiness portfolio's efficiency
and market resilience

Realize our mission and sustainable growthby increasing both social value and shareholder value
MITSUBISHI ESTATE CO., LTD.

26

Overview of Long-Term Management Plan

2. Quantitative Target – 2030 Target*Repost from “Long-Term Management Plan 2030”

2030 Target
ROA*1

ROE

EPS

5％

10％

¥200

*1 ROA＝Business Profit*2 / Total Asset (average of opening/closing balances)

Key Assumptions

Profit Growth

Shareholders Return

Financial Stability

Current framework *Maintain

Business Profit*2• Payout ratio:
Approx. 30%

current level ofcredit ratings¥350–400 bn+• Share buybacks【Reference】
R＆I：AAS＆P：A＋
Moody‘s：A2(when determined to be
optimal use of funds)* Will adjust to business conditions*2 Business Profit= Operating Income + Equity in earnings (loss) unconsolidated subsidiaries and affiliates

MITSUBISHI ESTATE CO., LTD.

27

Overview of Long-Term Management Plan

3. 2030 Targets: Realization Plan (ROA・ROE・EPS)
Current (FY20)*Repost from “Long-Term
Management Plan 2030”

2030 Target

Business Profit

Increase of ¥120–170 bn¥350-400 bn¥230.5 bn

Approx. ¥50bn growth from each of: domestic
asset, international asset, non-asset business(EPS: ¥200)<Assumption of total asset changes >(EPS: ¥100.2)【 Flexible capital policy 】

Total Asset

Optimize investments, assets sales, shareholder

Business Profit

Total Asset

return and financing according to market¥5.9 tn

conditions

Approx. ¥7-8 tn
Expected net increase: ¥1-2tn＝

Increase Net investment: Approx. ¥2–3 tn

ROA : 3.9%

ROA : 5%
With current leverage

ROE : 7.8％
MITSUBISHI ESTATE CO., LTD.

Decrease Depreciation: Approx. ¥1 tn

ROE : 10％28

Overview of Long-Term Management Plan

4. Capital Policy – Responsive to market conditions*Repost from “Long-Term
Management Plan 2030”

Flexible capital policy – Responsive to market conditions(Value creation through BS management)
Optimize mix of investment, asset sales, shareholders returns
and financing in response to the market
Sellers' market
Asset Sales:

Profits:

Shareholder return :Buyers' market

To maximize mid-to-long value, we combine:⚫ stable CF from long-term development PJs and asset holdings⚫ capital recycling business in response to the market

MITSUBISHI ESTATE CO., LTD.

Active acquisition/investment:

Capital gain:

Shareholders return :29

Overview of Long-Term Management Plan

5. Value creation through BS management*Repost from “Long-Term Management Plan 2030”

Flexible Capital Policy – Responsive to market conditions(Value creation through BS management)
Asset

Shareholders’ Equity and Liability

Capital recycling business optimized for market
conditions

Maintaining Financial Stability◆ In seller's market: expedite asset sales◆ Financial reserves for seizing buyer's market opportunities◆ Investment in promising PJs to enhance corporate value◆ High credit rating enables long-term and low-cost financing

Long-term development and asset holdings(core focus: Marunouchi redevelopment)◆ In sellers' market, use asset sale proceeds for shareholder
returns and to maintain financial stability◆ Steady capital investment in core business enables stable,
cycle-proof rental cashflow◆ Timely asset sales judged by expected yields and external

environment

Sale of underperforming properties andstrategic-holding stocks◆ Disposal of underperforming assets, including core asset◆ Ongoing disposal of strategic-holding stocks

Expansion of Non-asset Business

MITSUBISHI ESTATE CO., LTD.

Capital Efficiency Improvement◆ Targets: ROA 5%, ROE 10%, EPS ¥200
◆ Increase numerator (net income) and decrease denominator(shareholders’ equity)◆ Choose measures to manage shareholders’ equity according
to market conditions

30

Overview of Long-Term Management Plan

6. Capital Allocation Policy
Cash inFinancialcapacity*Repost from “Long-Term Management Plan 2030”

Cash out
Strategic
Allocation
investment/
shareholders
return/suppression ofdebt

Strategic allocation to improve medium- to longterm capital efficiency⚫ Allocate capitals based on market conditions⚫ Select projects which help to increase the shareholder value

Capital recycling business expected returns (pre-tax IRR)

Domestic: 6～8％
International (developed countries) : 8～10％
International (developing countries) : 10+％
*Expected return from total investment in each business

Cash flowfromoperatingactivities

Plannedinvestment &return* Including undetermined projects. See p.34 for the next three-year forecastBaseshareholders
returnMITSUBISHI ESTATE CO., LTD.

Planned projects – return through asset sale (book value)

Payout ratio: Approx. 30％* Shareholder returns method and scale will be adjustedwith real estate and financial market conditions, stock price and ROE/EPS

31

Overview of Long-Term Management Plan

7. Profit Growth Strategy - 2030 Vision

Growth Strategy

Profit changes vs FY2020*① Domestic AssetBusiness
Approx. +¥50 bn(FY20E * : Approx. ¥ 201.0 bn)② International AssetBusiness
Approx. +¥50 bn(FY20E * : Approx. ¥ 36 bn)③ Non-asset BusinessApprox. +¥50 bn(FY20E * : Approx. ¥ 16 bn)④ Fluctuation Factors
Approx. ±¥20–30 bn*Repost from “Long-Term Management Plan 2030”① Advance “Marunouchi NEXT Stage” project② Increase NOI with development projects③ Optimize capital recycling business to market conditions④ Optimize residential business profit structure① Expand development business in Asia
② Enhance development business and revenue base in Europe③ Enhance and diversify US capital recycling business① Steady profit growth in existing businesses② Utilization of technology③ Provision of service contents focusing on B2C/B2B2C・Asset sales control in response to market conditions
・Capital gain and rental profit fluctuation due to investment opportunities* Composition of FY20 Business Profit= ① Domestic Asset + ② International Asset + ③ Non-asset Business + Eliminations or corporate(Round number)
MITSUBISHI ESTATE CO., LTD.

(¥ 201.0 bn)(¥ 36 bn)(¥ 16 bn)(▲ ¥ 23 bn)

32

Overview of Long-Term Management Plan

8. Roadmap for Profit Growth
Early stage

Domestic
Asset
Business*Repost from “Long-Term Management Plan 2030”

Middle stage

Advance
Redevelopment projects• Complete Tokiwabashi A Bldg.
• Open & expand outlet mall
• Asset sales and reconstruction of existing buildings (willlower rental profit)• Temporary decline in the condominium units soldProfits scale with asset accumulation

International
Asset
Business• 1271 Ave. of the Americas renewal, 8 Bishopsgate
completion• Stabilize Asia condominium business• Expand assets in Asia capital recycling business

Promoting commercialization in new domains

Non-asset
Business

MITSUBISHI ESTATE CO., LTD.

• Stable growth in existing businesses• Promoting commercialization in new domains

Late stage

Redevelopment Projects' Contribution• Long-term developments, e.g. Tokiwabashi B Bldg.
• Residential redevelopments

Stabilize profit via capital recycling• Shift from asset expansion to recycling• Stabilize capital recycling business in Asia

Accelerate profits in new domains• Stable growth in existing businesses• Accelerate profits in new domains

33Overview of Long-Term Management Plan

9. Three Year Investment Return Plan (FY2021-FY2023)*Repost from “Long-Term
Management Plan 2030”(Billions of Yen)

3-year Total

Composition
Planned Investments and Return
Domestic Asset

International Asset

Strategic Allocation
600(investment/shareholders return/suppression of debt)
Investment

Outlet mall,
Capital Recycling asset,
And Others

150
0

600

Europe and
US
Asia

100

200
Aim for international profit
growth

500
300
100

Asset sales plan assumes
market conditions of previous
three years

MITSUBISHI ESTATE CO., LTD.

Vary investment allocation
for medium- to long-term
capital efficiency

500

Return1,100

100～200

Disposeunderperforming assets
for capital efficiency

Condominium
Marunouchi
area

Strategic Return

Strategic
Allocation

550

Plannedinvestments

1,500

ReturnStrategic
ReturnNet
Invest
ment

150

0

250

0

200

100～200

0-100～-200

～600

34

Business Overview

MITSUBISHI ESTATE CO., LTD.

35

Business Overview

1. Mitsubishi Estate Group’s Business Segment
Commercial Property Business＜Office Buildings＞
Engages in the development,
leasing, and operation
management of office buildings,
mainly in Marunouchi area andother major Japanese cities.

＜Retail Properties＞
Developing retail properties andoutlet malls nationwide, mainly inthe major metropolitan areas.

Residential Business

International Business＜Domestic Residential＞
Operating residential condominium
business under “The Parkhouse”
brand and rental apartments
business under “The Parkhabio”
brand.

Undertaking office building
development and leasing
businesses in the United States andthe United Kingdom, as well as
projects in Asia.

＜Logistics Facilities＞
Development, leasing, andmanagement of the “Logicross”
series as a foundation of logistics
facilities.

＜Hotels / Airports＞
Undertaking hotel management
nationwide as the Royal Park Hotels
group. Begun private airport
management business.

Investment Management
Business

Architectural Design &Engineering and Real Estate
Service Business

Providing a wide range of services
regarding real estate investment
for investors.

＜Architectural Design &Engineering Business＞
Mitsubishi Jisho Sekkei Inc.
provides architectural design andengineering services of construction
and civil engineering.
＜Real Estate Services Business＞
Mitsubishi Real Estate Services Co.,
Ltd. offers real estate brokerage,parking lot management support,
and other services.

MITSUBISHI ESTATE CO., LTD.

36

Business Overview

2. Business Scale

Other*
5%

Investment
Management
Business
2%

Revenue fromOperations

Operating Income

Approx.

Residential
Business
9%¥1,302.1
billionCommercial
Property
Business
54%

Other*
2%

Investment
Management
Business
1%
International
Business
15%

International
Business
18%

International
Business
10%

Residential
Business
29%

Other*
0%Investment
Management
Business
2%

Approx.

¥240.7billionTotal Assets
Residential
Business
10%

Commercial
Property
Business
71%

Approx.

¥5,858.2
billionCommercial
Property
Business
72%*Hotel / Airport Business, Architectural Design & Engineering, Real Estate Services, Other Business(FY2020 Results)

MITSUBISHI ESTATE CO., LTD.

37

Commercial Property Business
Office Buildings

MITSUBISHI ESTATE CO., LTD.

38

Commercial Property Business (Office Buildings)

1. Marunouchi Area Map

MITSUBISHI ESTATE CO., LTD.

39

Commercial Property Business (Office Buildings)

2. Pipeline
Marunouchi 1-3
Project

Tokiwabashi Project
Building A

Uchikanda 1-chome
Project

Tokiwabashi Project
Building B

Total Floor Area: 174,100㎡
Completion: Oct. 2018

Total Floor Area: 181,000㎡
Completion: Sep. 2020

Total Floor Area: 146,000㎡
Completion: Jun. 2021

Total Floor Area: 84,500㎡
Completion: Around 2025

Total Floor Area: 490,000㎡
Completion: FY2028

Yurakucho
Redevelopment(TBD)

Marunouchi Area

Marunouchi
Nijubashi Building

FY2019FY2020Tokyo(Outside of Marunouchi)

msb Tamachi(musubu Tamachi)

Total Floor Area: 138,300㎡*
Partial Completion: May 2018*

FY2021

FY2022

FY2023

FY2024

Link Square Shinjuku

CO･MO･RE YOTSUYA

the ARGYLE aoyama

Total Floor Area: 43,800㎡
Completion: Aug. 2019

Total Floor Area: 139,600㎡
Completion: Jan. 2020

Total Floor Area: 23,100㎡
Completion: Jun. 2020

FY2028*Tower S
MITSUBISHI ESTATE CO., LTD.

40

Commercial Property Business (Office Buildings)

3. Earnings Related Data: Total operating floor space (Unconsolidated)
Total (Domestic) / Marunouchi / Marunouchi Redevelopment Buildings(Thousand ㎡)

6,500
6,000
5,444

5,500
5,000

4,660

4,500
4,000

3,825 3,907 3,769
3,684 3,696

4,175

4,896

5,580 5,670
5,174

5,038

5,385

5,570

5,745

5,869

6,031

4,347

3,500
2,727 2,784
2,687 2,758 2,755 2,583
2,565 2,565
2,531

3,000
2,500
2,000

1,677

1,946 2,024 1,897
1,798

2,195 2,258
1,705 1,705

1,500

1,022 1,022

1,000
500

256

256

355

03/3

04/3

05/3

489

489

06/3

07/3

2,915 2,915

743

743

08/3

09/3

1,174

1,836 1,836

1,383 1,365 1,360 1,345

0

Total (Domestic)

10/3

11/3

Marunouchi

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3 21/3(E)Marunouchi Redeveloped Buildings*Excluding floor space in Lifestyle Property Business from 16/3

MITSUBISHI ESTATE CO., LTD.

41

Commercial Property Business (Office Buildings)

4. Earnings Related Data: Vacancy Rates / Average Rents (Unconsolidated)
Vacancy Rates (Marunouchi offices / All uses in Japan) /Average Rents (All uses in Japan)(yen / tsubo-month)

29,00028,000Vacancy rate(Marunouchi offices)27,000Vacancy rate(All uses in Japan)
25,842Average rent(All uses in Japan)

26,00024,86425,00024,00023,00022,00021,00020,00019,0005.64%

27,361

23,974 23,850 23,861

8%

23,587

7%

22,602
21,902 21,711 21,733

6%

5.29%

4.82%

5%

4.36%

18,000

3.59%

3.40%

2.77%

3.98%
3.58% 3.58%

2.42%
1.68%2.06%

16,000

2.26%

2.77%

15,000

4%

4.32%
3.66%

2.86%

17,00014,00013,000

2.80%

2.93%

2.22%
2.42%

1.87%

1.82%
0.55%

0.19%

1.65%

1.37%

1.09%

3%

2.19%

2.42%

1.74%

1.80%

2.0%

2%

1.07% 1.13%

1%0.69% 0.66%

12,00003/3

04/3

MITSUBISHI ESTATE CO., LTD.

10%

9%

25,234
24,42323,56022,817
6.06% 22,213

26,193

26,70227,177

28,000

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

20/6

0%
21/3
(E)

42

Commercial Property Business (Office Buildings)

5. Earnings Related Data: Office Building*¹ Business, Revenue Breakdown(Unconsolidated)(Billions of Yen)FY2020-1Q(Results)

FY2020(Results)

FY2021-1Q(Results)

FY2021(Estimates)

Rent revenue from office building*¹

99.8

406.6

102.7

418.6

Changes from Previous Period+ 4.4+ 17.9+ 2.8+ 11.9Rent revenue from new buildings+ 3.5+ 10.8+ 2.0+ 11.9Rent revenue from existing buildings

+ 1.5

+ 6.8

+ 3.5

+ 6.1

Termination of master lease,closure of building for redevelopment

+ 0.1

+ 0.3

△ 0.0

△ 1.3

Moving in/out of tenants,
Rent revisions at lease renewal

+ 1.3

+ 6.5

+ 3.6

+ 7.5

Impact ofCoronavirus

Offices-△ 0.5

Mixed-use
retail*2

△ 2.3

△ 5.0

+ 0.0

△ 0.4

△ 0.6

Supplementary Revenue, including common
area charge△ 0.6*1 Office buildings, including those with retail areas, etc.
*2 Retail properties in office buildings

MITSUBISHI ESTATE CO., LTD.

43

Commercial Property Business (Office Buildings)

6. Earnings Related Data: Trends in rent revenue from office building*1(Unconsolidated)
Increase / decrease of rent revenue from office building*1(from the previous fiscal year)(Billions of Yen)

30
25

■New buildings■Existing buildings (Moving in/out of tenants, Rent revisions at lease renewal)■Existing Buildings (Termination of master lease, closure of building for redevelopment)■Impact of Coronavirus (Office building, Mixed-use retail*2)

+0.3

20

+0.3

15

+15.3

+14.7
+23.9

10

0

+6.0

+4.3

-2.5

-4.9
-10.7

+12.5

+7.3

+8.7
-3.9

-5

+15.3

+13.0

5

-1.1
-5.9

+1.9

+27.2

-1.5

+7.3
-1.5

-10.5

-4.0

-4.6
-5.6

-10

-3.4

-7.5

-6.0

+2.4
-9.0

+4.9

-10.5

+11.9

+9.8

+4.0

+4.7

+5.9

+6.5

-8.1

+7.5

+2.0

-1.3

-2.3

-5.5

-0.0

+3.6

-8.3

-5.0

-15

Total

-5.2

-0.7

+10.8

+18.5 +13.2

+6.6

-2.5

-5.4

-20

+9.5

+22.6 +0.7 +17.9*1 Office buildings, including those with retail areas, etc.
*2 Retail properties in office buildings

03/3

04/3

05/3

06/3

07/3

-2.1

-2.7

-1.6

+8.3

-1.3

MITSUBISHI ESTATE CO., LTD.

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(E)

21/3-1Q+19.8 +20.5 +17.4

+2.3

-1.7

-5.1

+19.0 +11.9+7.6+18.5 +15.2 +24.1 +17.6 +12.6

+3.3

44

Commercial Property Business (Office Buildings)

7. Office Building Market Data: New Supply of Large-Scale Office Buildings(23 Wards of Tokyo)(Millions of ㎡)

2.5
2.16
2

1.87
1.75
1.54

1.5

1.25

1

0.99

1.19

1.17

Average estimate supply
for next 5 years
1.03 million ㎡/year

1.09
0.97

0.91
0.72

0.5

1.21

1.43

1.41

Past average supply
approx. 1.04 million ㎡/year(1998～2019)

0.87

0.86 0.85

0.77
0.65

0.85

0.77

0.69
0.58

0.54 0.54

0.36

0*Estimate※Research subject buildings: Buildings with total office floor area exceeding 10,000㎡
Source: Mori Building
MITSUBISHI ESTATE CO., LTD.

45

Commercial Property Business (Office Buildings)

8. Office Building Market Data: Average Rents / Vacancy Rates(5 Central Wards of Tokyo)(yen / tsubo-month)

30,00012%
Average Rent

Vacancy Rate

28,00026,0008.75%

20,000

10%
8.56%

7.98%

24,00022,0009.19% 9.04%

22,59422,880 8%

22,574
8.18%

5.51%

19,175

21,13420,064
6.05%

19,6995.30%

6%18,73018,264
17,973
17,495
17,195
16,71616,504
16,325
3.60%
4.34%

18,09517,75817,593

18,0006.70%

21,29516,0004%

3.41%

14,0002.72% 2.89%

1.97%

2.80%

12,000

2%
1.78%

1.50%

10,000

0%
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

20/6

Source: Miki Shoji Co., Ltd.
MITSUBISHI ESTATE CO., LTD.

46

Commercial Property Business (Office Buildings)

9. Competitive Edge of Marunouchi: Vacancy Rates
5 Central Wards of Tokyo(Market) vs. Marunouchi(Unconsolidated)
10%
9%

8.75%
8.18%

9.19% 9.04%
8.56%

7.98%

8%
6.70%

7%
6.06%
6.05%

6%
5.51%

5.30%

5%
4%

4.32%
4.36%

3.66%

4.34%
3.41%

3%

3.60%
2.80%

2.72%

2.42%

2.77%

2.42%

2.19%

2.89%

2%

2.26% 2.42%
1.82%

1.74%

1%

0.19%

0.55%

1.65% 1.78%

1.37%

1.09%

0.69% 0.66%

0%
03/3

04/3

05/3

06/3

07/3

08/3

09/3

1.97%
1.50%

10/3

11/3

5 Central Wards of Tokyo(Market)

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

20/6

Marunouchi(Unconsolidated)
Source: Miki Shoji Co., Ltd.

MITSUBISHI ESTATE CO., LTD.

47

Commercial Property Business (Office Buildings)

10. Competitive Edge of Marunouchi: Area / number of railway lines

Marunouchi

Nihonbashi

ShinagawaShibuya

Toranomon

2,400m
1,500m

Area:

123ha

Area:

76ha

Area:

49ha

Area:

86ha

Area:

58ha

Railway lines:

28 lines

Railway lines:

5 lines

Railway lines:

9 lines

Railway lines:

8 lines

Railway lines:

2 lines©Open Street Map

MITSUBISHI ESTATE CO., LTD.

48

Commercial Property Business (Office Buildings)

11. Competitive Edge of Marunouchi: Number of headquarters and offices(as of March, 2020)① Fortune Global 500 company headquarters③ Top 100 law firm headquarters and offices

32

MARUNOUCHI18

MARUNOUCHI3SHINAGAWA

1NIHONBASHI

0SHIBUYA

05

TORANOMONNIHONBASHI

1SHIBUYA1TORANOMONSHINAGAWA② Top 50 company headquarters in terms ofmarket capitalization

0④ Foreign financial company offices

71

MARUNOUCHI14

MARUNOUCHI

32NIHONBASHISHINAGAWA

1TORANOMON0SHIBUYANIHONBASHI12SHIBUYA

4SHINAGAWA

MITSUBISHI ESTATE CO., LTD.

17

TORANOMON

049

Commercial Property Business (Office Buildings)

12. Marunouchi Data: Marunouchi Tenant Mix (Unconsolidated)
March 2000

Type of Business

Area ratio

March 2020

Type of Business

Area ratio

1

Manufacturing

42.5%

1

Finance22.4%

2

Finance22.2%

2

Manufacturing

20.1%

3

Trading

10.4%

3

Professional Firm

19.5%

4

Information

6.3%

4

Trading

10.7%

5

Professional Firm

4.4%

5

Information

6.4%

Others

14.2%

Others

20.9%

Professional Firm
4.4%

Others14.2%

Information
6.3%
Trading
10.4%

Manufacturing
42.5%

Manufacturing
20.1%

Information
6.4%

Trading
10.7%
Finance
22.2%

MITSUBISHI ESTATE CO., LTD.

Others
20.9%

Finance
22.4%

Professional Firm
19.5%

50

Commercial Property Business (Office Buildings)

13. Marunouchi Data: Approaches for Marunouchi Area Development
Improvement of floor-area-ratio
Improving plot ratio in Marunouchi area by reviewing the use
area

1,000% → 1,300% (June, 2004)*1,200% for limited areas

Transfer of plot ratio:
Exceptional plot ratio district system
Possible to transfer floor area among several areas meeting acertain conditions“Exceptional floor-arearatio district” Area

Relaxation of plot ratio regulation: Special
Urban Renaissance Districts
Possible to be permitted for relaxation of floor-area ratio
regulation depending on levels of contribution to city
regeneration as an exception of urban planning
Example: International business bases (Global Business Hub Tokyo etc.)
Development of fine urban environment (improvement on water quality ofditch around the Imperial Palace etc.)
BCP function(self-reliant of electric power and water supply, etc.)

Change of building uses:
Consolidation of non-office use
Possible to consolidate and allocate mandated non-officeuse floor-areas when running several projects
simultaneously◆Example: Consolidation between offices and hotels
Non-office ─◆Example: Transfer unused floor-area at Tokyo station to other buildings
around the station

Office ─Consolidate non-office uses in
offices into hotels to expand
office areas in office buildings
Offices
MITSUBISHI ESTATE CO., LTD.

Hotels51

Commercial Property Business
Outlet Malls, Retail Properties, Logistics
Facilities, Hotels, and Airports

MITSUBISHI ESTATE CO., LTD.

52

Commercial Property Business (Outlet Malls)

1. Outlet Mall BusinessChange in Store Area, Revenue fromOperations, and Operating Income(Millions of yen)

Average of all facilities Sales-linked &fixed ratio (Rent revenue basis)(㎡)

50,000320,000

45,000

FY2020Results

53%

47%

315,000
Fixed rent

40,000310,000

35,000305,000

30,000300,000

25,000295,000
Tosu

Sendai-Izumi
KYOTO JOYOHANAZONO Sano
Kobe-Sanda
Rinku

20,000290,000

15,000285,000

Sales-linked rent

Ami

Toki

Gotemba Shisui

GOTEMBA PREMIUM OUTLETS®

10,000

15/3

16/3

17/3

18/3

19/3

20/3

280,000

Name

Open

Store Floor Area

Gotemba (Phase 4)

Jun. 2020

Currently: Approx. 44,600㎡
After expansion: Approx. 61,000㎡ (+37%)

Rinku (Phase 5)

Aug. 2020

Currently: Approx. 39,400㎡
After expansion: Approx. 50,100㎡ (+27%)
Approx. 25,000㎡

Store area

294,700 308,500 308,500 308,500 314,600 315,300

Revenue fromOperation

39,95443,946

43,642

45,462

46,65946,393

Fukaya Hanazono (New)Fall, 2022

Operating Income 14,292

16,301

17,35918,94019,673

18,963

Kyoto Joyo (New)

Spring, 2024

MITSUBISHI ESTATE CO., LTD.

53

Commercial Property Business (Logistics Facilities)

2. Logistics Facility Business
Trends in gain on sale

Total assets
Approx. ¥(Billions of Yen)

Operational logistics facilities

27 billion

Total number of developed facilities

assets in operation
36%

Number of facilities in operation

13

8.0

8.0
6.0

(2 buildings)
4.0

4.0

assets under development
64%

2.0

0.0

0.0
17/3

18/3

19/3

Tokyo Ryutsu Center Distribution Building B
MITSUBISHI ESTATE CO., LTD.

Total floor area of facilities in operation

51,000㎡(8 buildings)

2.0
20/3

(End of March 2020)*Ratio by value*Excluding Tokyo Ryutsu Center

Logicross Yokohama Kohoku

2

Logicross AtsugiⅡ(End of March 2020)*Excluding Tokyo Ryutsu Center

Logista・Logicross Ibaraki Saito

54

Commercial Property Business (Retail Properties / Logistics Facilities)

3. Outlet Malls and Logistics Facility Pipelines
RINKU PREMIUM
OUTLETS® Expansion
Phase 5FUKAYA HANAZONOPREMIUM OUTLETS®

KYOTO JOYOPREMIUM OUTLETS®

Floor Area Expanded: +16,400㎡
Open: Jun. 2020

Floor Area Expanded: +10,700㎡
Open: Aug. 2020

Store floor area: 25,000㎡
Open: Fall 2022

Open: Spring 2024

Outlet Malls

GOTEMBA PREMIUM
OUTLETS® Expansion Phase 4

Logistics Facility

FY2020

FY2021

FY2022LOGIPORT Kawasaki Bay

Logicross Hasuda

Total Floor Area: 296,800㎡
Completion: May 2019

Total Floor Area: 79,100㎡
Completion: Mar. 2021

FY2023
Logista・LogicrossIbaraki Saito

Total Floor Area: 157,000㎡ (2 Blocks)
Block B Completion: Apr. 2021
Block A Completion: May 2021

FY2024
Logicross Zama

Total Floor Area: 183,900㎡
Completion: Jun. 2023

Logicross
Yokohama Kohoku

Logicross AtsugiⅡ

Logicross Ebina

Logicross Kasukabe

Logicross Funabashi

Total Floor Area: 16,000㎡
Completion: Jun. 2019

Total Floor Area: 34,700㎡
Completion: Jul. 2019

Total Floor Area: 62,200㎡
Completion: Nov. 2020

Total Floor Area: 38,000㎡
Completion: May. 2021

Total Floor Area: 23,600㎡
Completion: Nov. 2021

MITSUBISHI ESTATE CO., LTD.

55

Commercial Property Business (Hotels)

4. Hotel (Development / Operation) Business
Hotel Management Business
Name

The Royal Park Hotel Iconic Osaka Midosuji

Number of Rooms

Open

Royal Park HotelChuo, Tokyo

Location

419

Jun. 1989

Yokohama Royal Park Hotel

Yokohama, Kanagawa

603

Sep. 1993

Sendai Royal Park Hotel

Sendai, Miyagi

110

Apr. 1995

The Royal Park Hotel Tokyo Shiodome

Minato, Tokyo

490

Jul. 2003

Marunouchi Hotel

Chiyoda, Tokyo205

Oct.2004

The Royal Park Hotel Kyoto Sanjo

Kyoto, Kyoto

172

Jul. 2011

The Royal Park Hotel Fukuoka

Fukuoka, Fukuoka

174

Oct. 2011

The Royal Park Canvas Nagoya

Nagoya, Aichi

153

Nov. 2013

The Royal Park Hotel Tokyo Haneda

Ota, Tokyo

313

Sep. 2014

The Royal Park Hotel Kyoto Shijo

Kyoto, Kyoto

127

Apr. 2018

The Royal Park Hotel Hiroshima Riverside

Hiroshima, Hiroshima

127

Oct. 2018

The Royal Park Canvas Ginza 8

Chuo, Tokyo

121

Mar. 2019

The Royal Park Canvas Osaka Kitahama

Osaka, Osaka

238

Jun. 2019

The Royal Park Hotel Osaka Iconic Midosuji

Osaka, Osaka

352

Mar. 2020

The Royal Park Hotel Kyoto Umekoji

Kyoto, Kyoto

250

Fall 2020

The Royal Park Canvas Kobe Sannomiya

Kobe, Hyogo

170

Beginning of 2021

The Royal Park Canvas Kyoto Nijo

Kyoto, Kyoto

180

Spring 2021

Odori Nishi 1-chome Project

Sapporo, Hokkaido

130

Fall 2021

The Royal Park Hotel Kyoto Karasumaoike

Kyoto, Kyoto

200

Spring 2022

Ginza 6-chome Hotel ProjectChuo, Tokyo

160

Fall 2022

Nagoya Sakae Hotel Project

Nagoya, Aichi

250

FY2024

Hotel Development Business
Name

Odori Nishi 1-chome Project

MITSUBISHI ESTATE CO., LTD.

Number of Rooms

Construction Begins

Open

The Royal Park Hotel Kyoto Shijo

Kyoto, Kyoto

Location

127-

Apr. 2018

MJ HOTEL Asakusa

Taito, Tokyo

166

Mar. 2017

To be determined

The Royal Park Hotel Kyoto Umekoji

Kyoto, Kyoto

250

Jun. 2019

Fall 2020

The Royal Park Canvas Kobe Sannomiya

Kobe, Hyogo

170

Sep. 2019

Beginning of
2021

Asakusa Kaminarimon 2-chome Hotel Project

Taito, Tokyo

51

Dec. 2019

Spring 2021

Kyoto Okazaki Hotel Project

Kyoto, Kyoto

60

Feb. 2020

Fall 2021

Odori Nishi 1-chome Project

Sapporo, Hokkaido

130Mar. 2020

Fall 2021

Hilton Okinawa Miyakojima Resort

Miyakojima, Okinawa

329-

FY202456

Residential Business

MITSUBISHI ESTATE CO., LTD.

57

Residential Business1. Condominium Business Data

FY2020-1Q(Results)

FY2020(Results)

Condominiums Sold(millions of yen)

31,736

202,876

20,841-

Condominiums Sold
(units)

546

3,214

312

-

16.5%

17.8%

19.0%

-

Gross margin

FY2021-1Q
FY2021(Results) (Estimates)

Land Bank
Breakdown in reporting term(as of March, 2020)

6,200

6,500

4,200
Inventory (units)

585

373

348

-

Total: 16,900 units
New Supply of
Condominiums(units)MITSUBISHI ESTATE CO., LTD.

977

2,924

76

-

FY2021 - FY2022
FY2023 - FY2025

FY2026 -58

Residential Business

2. Condominium Business Data②
Quarterly Distribution of Sales by Agreement Date
(Millions of yen)

254,140

260,000
240,000
220,000

238,924
215,762200,000

95.8%

180,000

89.3%

160,000

79.4%

223,266

96.5%

94.8%
88.7%

77.9%

89.3%

93.0%

80.7%

84.7%

66.1%

60.6%

63.0%

94.8%

73.1%

85.0%

59.2%

70.7%

140,000
120,000

202,876

100,000

51.4%

80,00060,00040,00020,000
0
16/3

17/3

Full-year sales

MITSUBISHI ESTATE CO., LTD.

18/3

End of 3Q

End of 2Q

19/3

End of 1Q

20/3

Beginning of FY

59

Residential Business3. Condominium Market Data
Number of New Supply / Average Prices (the Greater Tokyo Area)(Unit)(Average price / Millions of yen)

120,000

60
59.8

100,000

50

80,00040

60,00030

32,00031,23840,00020,000

20

10

0

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(E)
Number of new supply

Average priceSource: Real Estate Economic Institute Co., Ltd.

MITSUBISHI ESTATE CO., LTD.

60

Residential Business

4. Redevelopment Projects andLarge-scale Development Projects

5. Rental Apartment Business

Redevelopment Projects and Large-scale Development Projects

Trends in gain on sale

Scheduled
Delivery

Location

Project Name

Total Units(Billions of Yen)FY2021

Narashino, Chiba

Tsudanuma The Tower

759

FY2021Adachi,Tokyo

Senju The Tower

184

FY2021

Atsugi, Kanagawa

The Parkhouse Hon-Atsugi Tower

163

10.0

FY2021

Kawaguchi,
Saitama

The Parkhouse Kawaguchi Honcho

162

8.0

FY2021

Chiba, Chiba

Makuhari Bay Park Sky Grand Tower

826

Kagoshima,
Kagoshima

6.0

FY2021The Parkhouse Kagoshima Chuo Tower

210

4.0

FY2021

Shinjuku, Tokyo

The Residence Yotsuya Avenue/Garden

60

FY2021

Shinagawa, Tokyo

Crevia Tower Oimachi THE RESIDENCE

136

FY2022

Bunkyo, Tokyo

Park Court Bunkyo Koishikawa The Tower

571

FY2022

Koto, Tokyo

Proud Tower Kameido Cross

934

FY2023

Nagasaki, Nagasaki

Shin-daikumachi District Redevelopment Project

240

FY2023

Yokohama,
Kanagawa

Land Readjustment Project (H block) in West District
around Kawawa-cho Station

183

FY2024

Shinagawa, Tokyo

Togoshi 5-chome, 19 District Redevelopment Project

241

The Greater Tokyo
From FY2025
Area
Outside of theGreater Tokyo Area

Hamamatsucho 2-chome District Redevelopment
Project, etc.*¹

Total 18,550*2

Minatomachi 3-chome C Block District Area
Redevelopment Project, etc.*¹

Total 3,380*2

Approx. ¥

12.0

11.0
9.0

10.0

88 billion

assets under development
33%(25 buildings)
assets in operation

2.0
0.0

Total assets

67%(28 buildings)

1.0
17/3

18/3

19/3

20/3

(End of March 2020)*Ratio by value*1 There are approx. 25 ongoing projects scheduled

for delivery in FY2024 onward*2 Total of several planned projects

The Parkhouse Hon-Atsugi Tower
MITSUBISHI ESTATE CO., LTD.

The Parkhabio Kiba

Parkhabio Akasaka Tower

61

International Business

MITSUBISHI ESTATE CO., LTD.

62

International Business1. International Business Strategy
FY2020

Asia

7%

30%

Total Asset:¥887.1 bn

2030 Target

US

Towards 2030 Target

Business Profit:¥46.1 bn49%
44%

Europe48%

22%◆ Expand Asia development business◆ Annual investment: approx. ¥200–250

bn◆ 1st half of 2020s : Profit increase withasset accumulation

Business Profit:
Approx. ¥90 bn

35%

40%
45%
45% Total Asset:
Approx. ¥1.5 tn(2030 target)(2030 forecast)◆ 2nd half of 2020s:

15%
20%

Balance investment and return

ROA：Approx. 5%

ROA：Approx. 6%
Strategy①Asia②Europe◆ Increase investment, build capital recycling
portfolio◆ Two approaches:①Development with major stake②Joint businesses with local partners＜Expected Return from Investment＞
IRR

Developed countries 8～10%
Developing countries
10+%

MITSUBISHI ESTATE CO., LTD.

③US

◆ Investment and return to optimize profit
stability and capital efficiency◆ Advance mainly large-scale** 8 Bishopsgate, 60-72 Upper Ground＜Expected Return from Investment＞
IRR

8～10%

◆ Strengthen capital recycling business,making the most of RGII* know-how◆ Joint venture with local partners* Rockefeller Group International, Inc.

＜Expected Return from Investment＞
IRR

8～10%

63

International Business2. International Asset/Ongoing Projects
Many ongoing developments (rentals and condos) are expected to make early profit contribution
International Asset

Major Ongoing Projects(Mar. 2020)

Book Value*:¥750 bn

Property Name
Phase 3 of Singapore-Hangzhou
Science & Technology Park
CapitaSpring

18%

32%

Asia

22%

Completion

Area / Units*1

China (Hangzhou)

Office2020

172,300㎡

Singapore
China (Hangzhou)
Daswin ProjectIndonesia (Jakarta)
Yoma Central (4 buildings total)
Myanmar (Yangon)
Savya Financial Center North Tower The Philippines (Manila)
180 George Street
Australia (Sydney)
One City Centre
Thailand (Bangkok)
8 Bishopsgate

US (Other)

Use

Mixed Use Development in Hangzhou

28%

US (Manhattan)

Location

EuropeAsia

Europe*Inventories + Equity Investments + Tangible Fixed Assets

US

Nine Elms Park

UK (London)

OfficeUK (London)

Rentalapartment

60-72 Upper Ground (ITV The
London Television Centre)

UK (London)

1271 Avenue of the Americas
Edison
Lehigh Valley (4 buildings total)

US (Pennsylvania)

2021 93,400㎡*2
2021
69,800㎡
2021
75,000㎡
2021 212,700㎡*2
2021 24,600㎡*3
2022
55,000㎡
2022
66,000㎡

Multi-use
OfficeOfficeMulti-use
OfficeOfficeOffice2022

53,000㎡

2022

196 units

TBD

2020s 2nd
half

TBD

US (Manhattan)

OfficeDec. 2019

195,000㎡

US (New Jersey)

Logistics
facilities
Logistics
facilities

2020

87,200㎡

2021*1 Leasable area or # of units *2 Total floor area

325,200㎡*3 Area for saleLand Bank in Asia
1271 Avenue of the Americas(Condominiums)

Daswin Project

200

100

400

Total: 10,900 units

400
500

1,900

7,400
8 Bishopsgate project

Yoma Central

Thailand

China

Australia

Malaysia

Philippines

VietnamIndonesia(as of March, 2020)* # of unit MEC owns

MITSUBISHI ESTATE CO., LTD.

64

Other business

MITSUBISHI ESTATE CO., LTD.

65

Other business1. Investment Management Business: Global Platform
Globally, we have combined assets under management of approximately ¥ 3.6 trillion.

AuM Area Breakdown(Billions of Yen)

Asia & Oceania
120

Europe450

Carry out marketing and research and establish funds worldwide
Overseas

Provide global opportunities to worldwide investors
Japan Real Estate AssetManagement Co., Ltd.

Group-wide
Synergy

Mitsubishi Jisho
Investment Advisors, Inc.

Mitsubishi Estate Group’s network
for investment & development and management & services
MITSUBISHI ESTATE CO., LTD.

JREA
1,050

Total:
approximately¥ 3.6 trillion.

United States
1,200

Domestic

MJIA
840(end of March 2020)

Goal: reach ¥ 5 trillion in
the mid-2020s
66

Investment / Financial Data etc.

MITSUBISHI ESTATE CO., LTD.

67

Investment / Financial Data etc.

1. Net Interest-bearing debt/EBITDA Ratio(Billions of Yen)

(Times)2,500.0

10.0
8.5

2,000.0

7.7

9.0
8.0

7.3
6.7

6.6

6.1

6.1

7.9

7.0

7.1
6.7

1,500.0

1,000.0

2,153.6
1,978.6

2,194.8
2,019.8

6.0

2,140.2
1,965.2

2,216.8
2,041.8

2,460.0
2,285.0

5.0
4.0
3.0

500.0

2.0
1.0

0.0

0.0
FY2017FY2018Net Interest-bearing debt
Debt/EBITDA Ratio (right axis)

MITSUBISHI ESTATE CO., LTD.

FY2019FY2020

FY2021(E)Net Interest-bearing debt
*after hybrid debt deductions
Debt/EBITDA Ratio (right axis)*after hybrid debt deductions
68

Investment / Financial Data etc.

2. Interest-Bearing Debt Breakdown(Billions of Yen)

3,000

95.0%

95.0%

96.1%

93.7%

96.4%

95.1%

93.4%

95.4%

93.6%

93.2%

100%
90%

2,500
6.8

10.2

2,000

35.0

53.1%

1,500

1,292.9
1,065.4

28.0
60.1%

1,261.9

69.7%

5.6

100.0

73.2%

100.0
76.2%

1.9
100.0

76.4%

1,381.2

1,428.5

1,523.0

1,406.0

1,450.7

1,208.8

70%

50%
40%

1,072.3

30%
250.0

250.0

250.0

250.0

250.0

558.9

577.1

500
566.3

636.2

747.2

701.5

685.2

653.0

612.7

603.8

0

Total

80%

60%

64.1%

54.0%

8.3

100.0

7.2

9.5

61.8%

61.7%
7.2

1,000

50.0
4.5

4.7

20%
10%
0%

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY20201,693.0

1,716.8

2,085.4

1,973.0

1,929.3

2,291.0

2,396.9

2,481.6

2,319.5

2,429.8

Straight BondMITSUBISHI ESTATE CO., LTD.

Subordinated bondBank Loan

Subordinated loan

CP

Lease liability

Fixed ratio

Long-term ratio

69

Investment / Financial Data etc.

3. Interest-bearing debt: Procurement Interest rates /Average Duration of Interest-bearing debt (Unconsolidated)(Year)

10

2.5%

9
8
1.90%
7
6

6.20
1.58%

1.88%

5

5.45

5.55

5.58

5.45

1.54%

1.55%

1.05%

1.07%

1.01%

0.70%

1

2.0%

1.32%

1.5%
1.24%
1.14%

0.96%
0.72%

1.38%

1.52%

0.96%

0.87%

2

6.36

6.69

5.71
1.41%

1.27%

4
1.05%

6.18

1.40%

1.29%

3

6.79
1.72%

5.91
1.42%

7.23

1.88%

0.95%

0.97%
0.75%

0.62%

0.61%

FY2015FY2016

0.66%

0.92%

0.84%

0.71%

0.68%

FY2019FY2020

0

1.0%

0.5%
FY2009FY2010FY2011FY2012Average Duration of Interest-bearing debt

MITSUBISHI ESTATE CO., LTD.

FY2013

FY2014

Bonds/Average interest

FY2017FY2018Bank Loans/Average interest

Total/Average interest

70

Investment / Financial Data etc.

4. Segmentation Change from April 1, 2020
Current Segments①:Integration of
three businesses

Office Building Business
Lifestyle Property
Business②:Integration of international
residential business into
International BusinessResidential Business

Hotel & Airport BusinessArchitectural Design &Engineering Business

Commercial Property
Business
Residential Business③:Integration of disclosure
segments

Commercial Property
Business Group
Office Building Business

Outlet Mall Business
Retail Facility Business

International Business

International Business
Investment Management
Business

From FY2021

Investment Management
Business
Architectural Design &Engineering Business andReal Estate Services
Business
Other Businesses

Logistics Facility Business
Hotel Development Business
Hotel Operation BusinessAirport Operation Business

International
Business Group

Real Estate Services
Business

International Commercial Property

Other Businesses

International Residential BusinessBusiness<Purpose of Change>① The Office Building, Lifestyle Property, and Hotel & Airport business units will be merged to strengthen capabilities for increasing cross-segment
projects.
② International Residential business will move from the Residential Business segment to the International Business segment to consolidate
international project expertise.
③ Architectural Design & Engineering Business, and Real Estate Services Business are integrated as Other Businesses for simplified disclosure.

MITSUBISHI ESTATE CO., LTD.

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ESG Initiatives

For details of ESG initiatives in "Long-term Management Plan 2030“, please refer to the following link.
https://www.mec.co.jp/e/investor/plan/pdf/plan200124_e.pdf
MITSUBISHI ESTATE CO., LTD.

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ESG Initiatives

1. Materialities (Important Issues for Sustainable Management)
Identifying 7 Materialities’ Opportunities and Risks

Opportunities

Materialities

Real estate with lower environmental impact and natural

Environmental regulations' impact on development

disaster resilience

opportunities

Response to foreign workers and foreign visitors needs

Increased country, compliance, and supply chain risks

Real estate / development that protects against terrorism
and crime

Aging and vacant buildings causing security issues

Growing demand for facilities or services which meet

New work styles (e.g. telecommuting) reducing demandvarious styles of life, work and consumption

for fixed offices

Facilities that best serve the aging population

Redevelopment and renovation of existing stock in major
citiesSmart-city/home/office technology

MITSUBISHI ESTATE CO., LTD.

Risks

Working age population decline changes demand for
fixed offices

New condominium needs changing

Reduced demand for physical facilities

73

ESG Initiatives

2. Initiatives to Protect Environment (ESG's "E")Key KPIs and Targets■ CO₂ emissions ■ Waste disposal ■ Renewable energy rate ■ Waste recycle rate
■ Water recycle rate ■ # of renovated buildings and condos ■ Domestic lumber usage rate

CO₂ Emissions⁃ Increase electricity storage facilities⁃ Optimize thermal circulation⁃ Employ demand response system

2030 Target

35％ reduction (vs. FY2018)

2050 Target

Waste Recycle Ratetenants, visitors, and guests⁃ System/measures to facilitate waste
separation⚫

⚫

2030 Target

87％ reduction (vs. FY2018)*These targets were approved by
SBT Initiative in April 2019

CO2 Reduction
Case Study⁃ Raise awareness and distribute information for

90％⚫

Use of a fuel cell system manufactured by
Mitsubishi Hitachi Power Systems

Installed in the Marunouchi Building
Mar. 2019
CO2 emission reduced by 50% vs grid
power【Actual : 45.5％ (FY2019)】【Actual: 3,336,000t (FY2018)】

Renewable Energy Rate
2030 Target
2050 Target

25％
100％

【Actual : 1.3％ (FY2019)】

MITSUBISHI ESTATE CO., LTD.

Waste Disposal
2030 Target

20％ reduction(vs. FY2020)【Referential figures: 0.01t/sq m. (FY2019)】

Marunouchi Bldg.

Fuel Cell System installed74

ESG Initiatives

3. Initiatives to Human Resources and Resilience (ESG's “S”)
＜Human Resource＞Key KPIs and Targets＜Resilience＞Key KPIs and Targets■ PTO utilization■ Rate of buildings that are to take in stranded commuters■ Paternity leave utilization■ Rate of people with first aid training course qualifications■ Retention post-parental-leave
Rate of Buildings That are
to Take in Stranded Commuters

PTO Utilization
FY2021 Goal

5％ increase

Actual (FY2019)(VS FY2018)

Rate of such facilities*3【Actual*1：66.0％ (FY2018)】

Paternity Leave Utilization
FY2030 Goal

Rate of People with First Aid
Training Course Qqualifications

FY2030 Goal

100％

【 Actual*2：12.6％ (FY2019)

100％【Actual*4 ：64.0％ (FY2019)】

Retention Post-parental-Leave
FY2030 Goal

100％

*2 Average of 5 companies (Mitsubishi Estate, Mitsubishi Estate Residence,

Mitsubishi Jisho Property Management, Mitsubishi Jisho Sekkei, Mitsubishi Real Estate Services)
MITSUBISHI ESTATE CO., LTD.

Seismic Performance of New
Building (Marunouchi Area)

1.5×of a standard skyscraper(=withstand a level 7 earthquake)

Emergency Generator for BCP in
New Buildings (Marunouchi Area)

72 hr【Actual*2：96.7％ (FY2019)*1 Mitsubishi Estate only

92％

*5

*3 Office building: Large buildings completed in 2002 onward. Retail properties: Large facilities completed in 2008 onward*4 Average of 3 companies (Mitsubishi Estate, Mitsubishi Jisho Property Management, Mitsubishi Jisho Retail Property

Management)*5 There are certain exceptions

75

ESG Initiatives

4. Corporate Governance (ESG’s “G”) -1
Establish effective governance that ensures long-term enhancement of corporate value(as of Jan 2020)

Corporate Structure• Transitioned to a “Company with Nominating Committee, etc.” in June 2016

Structure of the Board of Directors

Committee Members• 15 directors: 8 company directors and 7 independent outside
directors (10 of which are non-executive directors)• Chairpersons of all committees are independent outside directors• Remuneration and Nominating Committees comprised ofindependent outside directors only
Nominating Committee
Exclusively outside directors• 6 of 7 independent outside directors are male and 1 is female.

Board Structure

Composition of male/female
1

5

7
3

Company Director(Executive)
Company Director(Non-executive)
Independent/Outside Director (Non-executive)

MITSUBISHI ESTATE CO., LTD.

Audit Committee
Chairperson is outside director

Remuneration Committee
Exclusively outside directors

14
Male

Femal
: Outside Director: Company Director(Non-executive): Chairperson

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ESG Initiatives

5. Corporate Governance (ESG’s “G”) -2
Non-Renewal of Anti-takeover Measure• The Board of Directors did not renew the anti-takeover program which would provide countermeasures against hostile
takeover attempts. It expired in June 2019.

The Executive Compensation Plan Aims to Align Shareholders and Executives’ Interests
Composition of Compensation
Base Salary50％
Fixed Component

Short-term Incentive

Singe-year
Performance-based
Incentive

25％

Medium- to
Long-term Incentive

RS
Incentive

PS
Incentive

12.5％

12.5％

Variable Component<Single-year Performance-based Incentive>
・Form : cash
・Calculation: "KPIs" : Operating Profit, ROE etc. of previous year
<New Long-term Performance-based Incentive Plan (PS Incentive) >・Form : cash
・Performance evaluation period: 3 years
・Calculation: Based on stock price and total shareholder returns relative to peer companies*<Restricted Stock Plan (RS Incentive) >・Form : stock
・Lock-up period: 3 years* Nomura Real Estate Holdings, Inc., Tokyu Fudosan Holdings Corporation, Mitsui Fudosan Co., Ltd., Tokyo Tatemono Co., Ltd., and Sumitomo Realty & Development Co., Ltd

Strategic-holding Stock Policies• Sold 28 entities* with total value of approx. ￥31.5 bn in the past four years (FY16–19).
• Current market value of the holdings is approx. ￥230 bn; routinely review strategic objectives and dispose of stocks asnecessary as of January 2020.
* Including partial sale

MITSUBISHI ESTATE CO., LTD.

77

ESG Initiatives

6. External Evaluation
As of January 2020, reputations or ratings below have been given.
• FTSE4Good Global Index (18 years in a row)
• FTSE Blossom Japan Index (Adopted by GPIF)(3 years in a row)
• MSCI Japan ESG Select Leaders Index (Adopted by GPIF) (3 years in a row)
• MSCI Japan Empowering Women Select Index (Adopted by GPIF)• S&P/JPX Carbon Efficient Index (Adopted by GPIF)• SNAM Sustainability Index (8 years in a row)
• GRESB Public Disclosure (3 years in a row)
• GRESB Real Estate 2019: Three Stars/Green Star
• CDP Climate Change 2019 Questionnaire: A- rating

MITSUBISHI ESTATE CO., LTD.

78

Contact Information
Investor Relations Office,Corporate Communications Department
Mitsubishi Estate Co., LTD.

+81-3-3287-5200
https://www.mec.co.jp/<Disclaimer>
Regarding information on the properties of this material, it is based on judgment obtained from information available at thepresentation date of this material.
Please be aware that actual information can result in different results depending on various factors.

MITSUBISHI ESTATE CO., LTD.