サンフロンティア不動産（8934） – [Dalayed]Financial Results for the Fiscal Year Ended March 31, 2022

Financial Results for the Fiscal Year Ended March 31, 2022We are aiming to be the real estate company of the world’s most loved, trusted and selected by clients.1) Overview of the FY ended March 2022 2) Earnings Forecast and Growth Strategy3) Medium-term Management Plan, Business Progress and New Initiatives4) Corporate Philosophy, Sustainability and Business Model5) Reference Materials1-1112-1516-2728-4243-50May 13, 2022Securities Code : 8934Overview of Full-Year Results for the FY ended March 2022Real Estate Revitalization Business drove performance. Profits exceeded plan.(Unit: million yen)ResultsProfit MarginYear-on-Year Growth RateFull-Year ForecastProgression RateNet SalesOperating ProfitOrdinary ProfitNet Profit*71,25112,12712,2157,415-+11,61817.0%17.1%10.4%+4,214+4,691+3,14019.5%53.3%62.3%73.5%76,00012,00011,5007,40093.8%101.1%106.2%100.2%* ”Net Profit” represents the profit attributable to owner of parent.Performance Highlights1) Year-on-year increase in Real Estate Revitalization Business contributed to achieving the profit targets2) Real Estate Service Business grew steadily despite the prolongedpandemic of COVID-19• The number of units sold in RP Business was 21 (23 in the previous fiscal year). Sales of four relatively large-scale mid- to long-term properties in high profit margin drove earnings (segment profit margin 29.2%, +4.9%pt year-on-year).• The Office Division was working hard in commercialization. Sold as a high-occupancy, high-added-value replanning product. Maintained high quality and generated high profits even in the pandemic of COVID-19.•• Despite the prolonged period of the pandemic of COVID-19, business performance grew mainly in the brokerage business. Both sales (+15.7% year-on-year) and profit (+9.0% year-on-year) increased from the previous fiscal year. That was partly due to the earningscontribution from the acquired subsidiary.In the field of small and medium-sized office buildings in central Tokyo, each division brought together the expertise cultivated through creativity and ingenuity of each field and developed the business while cooperating. Despite the prolonged pandemic of COVID-19, we have accumulated achievements that are useful to clients by solving problems.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.1Trends in Consolidated ResultsOperating profit, ordinary profit, and net profit saw a V-shaped recovery from the pandemic of COVID-19. Ordinary profit margin improved to 17.1%. Increased year-end dividend by 2 yen.(Unit: Million yen)FY endedMarch 2018FY ended March 2019 FY endedMarch 2020FY ended March 2021FY ended March 2022Net Sales47,46353,29173,21859,63271,251Operating Profit11,23913,30516,5717,91212,127Ordinary Profit(Ordinary Profit Margin)10,755(22.7%)12,813(24.0%)16,127(22.0%)7,524(12.6%)12,215(17.1%)Net Profit*7,4208,78310,6664,2747,415Earnings per share167.62 yen180.35 yen219.03 yen87.77 yen152.26 yenDividend per share33.50 yen38.50 yen42.00 yen42.00 yen44.00 yen(Forecast) * 2* 2 See page 15 for details.* “Net Profit” represents the profit attributable to owner of parent.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.2Trends in Achievement Rate of Disclosed BudgetOrdinary profit continues to steadily achieve the budget at the beginning of the fiscal year.(million yen)25,00020,00015,00010,0005,0000115.2%115.8%108.5%107.6%108.6%16,127 12,813 15,500 14,000 10,755 11,800 8,894 10,700 10,000 8,200 106.2%12,215 11,500 7,524 7,100 6,500 17/318/319/320/321/322/3Disclosed budget (L axis)Upward revision (L axis)Result (L axis)Achievement ratio (R axis)rate120.0%110.0%100.0%90.0%80.0%70.0%Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.3Trends in Key Management Indicators■ Changes in Ordinary Profit Margin(Pursuing High-Value-Added Management)■ Changes in Equity Ratio(Building a Stable Financial Base)■ ROE(Striving to improve capital efficiency)売上高（左軸）Net Sales (L axis)Ordinary Profit (L axis)経常利益（左軸）Ordinary Profit Margin (R axis)経常利益率（右軸）(million yen)80,000(million yen)30%80,000純資産（左軸）Net Assets (L axis)自己資本比率（右軸）Equity Ratio (R axis)ROE80%20.0%17.6%17.7%16.8%24.0%22.7%22.0%17.1%50,00012.6%15%40,00053.2%50.3% 49.6%52.3% 52.2%60%15.0%40%10.0%10.8%70%50%30%10%20%5.0%6.5%70,00060,00030,00020,00010,000025%20%10%5%0%70,00060,00050,00040,00030,00020,00010,000018/319/320/321/322/318/319/320/321/322/318/319/320/321/322/30%0.0%Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.4Consolidated Income StatementNet SalesReal Estate Revitalization BusinessReplanning BusinessRental Buildings BusinessReal Estate Service BusinessHotel and Tourism BusinessOther BusinessAdjustmentsGross Profit (Loss)Real Estate Revitalization BusinessReplanning BusinessRental Buildings and Sub-leasesReal Estate Service BusinessHotel and Tourism BusinessOther BusinessAdjustmentsSelling, General and Administrative ExpensesOperating Profit (Loss)Non-operating IncomeNon-operating ExpensesOrdinary Profit (Loss)Extraordinary Income and LossIncome TaxProfit Attributable to Non-controllingInterestsProfit Attributable to Owners of ParentFY ended Mar 202159,63236,28433,791FY ended Mar 202271,25155,95853,8342,4926,18213,4194,221-47515,0839,8808,9719083,4931,343611-2457,9122706587,524-613,224-362,1247,1546,9111,695-46719,34417,05316,5175353,822-1,503171-19912,12761452612,215-804,726-67,1707,216(Unit: million yen)Year-on-year Change CompositionRatioIncome Statement Points100.0%78.0%75.1%3.0%10.0%9.6%2.4%-100.0%81.0%78.5%2.5%18.2%-0.8%-19.5%54.2%59.3%-14.8%15.7%-48.5%-59.8%-28.3%72.6%84.1%-41.1%9.4%–72.0%-0.6%53.3%127.2%-20.1%62.3%-46.6%-In the RP Business, we sold four relatively large-scale medium- to long-term properties. Although the number of sales decreased from the previous fiscal year, both sales and profits increased significantly from the previous fiscal year. Gross profit margin was 30.7%, the same level as before the pandemic of COVID-19.Both sales and profits increased in each business due to increased opportunities to respond to clients’ changing needs and solve their problems in the pandemic of COVID-19.The Hotel Operation Business posted a loss due to the opening costs associated with opening three new hotels and the prolonged pandemic of COVID-19. Sales of properties contributed to the performance in the previous fiscal year, resulting in the large reactionary decline.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.54,2747,41573.5%Consolidated Balance Sheet – Assets – Increased 8.5 billion yen due to progress in conversion to cash, mainly through sales of medium- to long-term RP properties.Decreased 8.7 billion yen due to sale, etc., of which, the number of RP projects decreased 7.9 billion yen due to sales exceeded purchase. The number of hotel projects decreased slightly due to sales progress in HIYORI OCEAN RESORT OKINAWA, etc. Increased 8.2 billion yen due to the purchase of properties for rent income and the progress of hotel property construction.(Unit: million yen)Current assetsCash and depositsInventoriesBreakdown) RPHotelOverseas, etc.Other Current assetsNon-current assetsProperty, Plant and EquipmentIntangible assetsInvestments and Other assetsTotal assetsFY 2020 As of March 31, 2020113,84218,62791,76671,35317,0193,3953,44816,450FY 2021As of March 31, 2021110,78521,50886,08771,34913,9178213,18916,700FY 2022As of March 31, 2022110,92030,05377,34063,42413,5162203,52725,59110,4137125,324130,29310,5287015,470127,48518,7965726,222136,512Increase/decrease(compared toMarch 31, 2021)+135+8,545-8,747-7,925-401-601+337+8,891+8,268-128+752+9,026Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.6Consolidated Balance Sheet – Liabilities /Equity –Increased 3.5 billion yen due to borrowing associated with purchase and construction progress. Interest-bearing debt balance was 51 billion yen.Increased 4.6 billion yen mainly due to profit (7.4 billion yen) despite the payment of year-end dividend (2 billion yen) and interim dividend (1 billion yen).(Unit: million yen)FY 2020As of March 31, 202018,052FY 2021As of March 31, 202113,358Changes of Equity RatioEnd of FY March 2020End of FY March 2021End of FY March 202249.6%52.3%52.2%FY 2022As of March31, 2022Increase/decrease(compared to March 31, 2021)Long-term borrowings and Bonds payableCurrent liabilitiesShort-term borrowings, etc.Income Taxes payable, etc.Other Current liabilitiesNon-current liabilitiesOther Non-current LiabilitiesTotal LiabilitiesShareholders’ equityOthersTotal Net assets5,5309016,92644,35441,9912,36357,71266,9162,85669,7734,4633,56610,02247,43144,9062,52565,48364,69011964,809130,293716,2106,8743,5285,80745,84944,1691,68062,06071,2603,19174,452+2,852+1,344+2,627-1,119+1,495+2,178-683+4,347+4,343+335+4,679+9,026Total Liabilities and Net assets127,485136,512Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.◼ Although the number of sales decreased to 21 units from the same period of the previous fiscal year (23 units), the profit increased due to the sales ofmedium- to long-term properties with high-profit margins.◼ The average business period was 671 days (up 139 days year-on-year). The policy of the one-year business period (one-year holding period) of ordinary RP properties remains unchanged.* In addition to the number of stocks at the end of FY2021 as shown below, there are 8 properties (11.8 billion yen) that have already been contracted for purchase by the endof March,2022.◼ In the Rental Building Business, sales decreased due to the sale of medium- to long-term properties that had been generating rent income.New properties were purchased for rent income.(million yen)60,00050,000(unit: million yen)FY ended March 2021FY ended March 2022Increase/Decrease30,00040,00036,284 Net SalesSegment ProfitProfit Margin55,958 Net SalesReplanning BusinessRental Building BusinessSegment Profit (Note 1)Replanning BusinessRental Building BusinessProfit MarginReplanning BusinessRental Building BusinessNumber of properties purchasedNumber of properties sold36,28433,7912,4929,1118,20290825.1%24.3%36.4%2123Number of stocks at the end of FY54 (Note 2)54 (Note 2)Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.20,00010,000055,95853,8342,12416,26215,72753529.1%29.2%2121+54.2%+59.3%-14.8%+78.5%+91.7%-41.1%+4.0%pt+4.9%pt-2 cases–825.2%-11.2%pt29.1%16,262 25.1%9,111 FY ended MarchFY ended March 20212021FY ended MarchFY ended March 20222022(Note 1) “Segment Profit” is calculated by deducting specific costs of each segment, including interest expenses, sales commission and amortization of goodwill from gross profit.(Note 2) Projects of land purchase and development are included.60%50%40%30%20%10%0%(Property Management, Building Maintenance, Brokerage, Leasing, Rental Conference Room, Rent Guarantee, etc.)◼ The PM business saw a slight decrease in sales and profit partly due toincreased vacancies affected by the pandemic of COVID-19.◼ Both sales and profit increased in the BM business due to M&A and anincrease in entrusted properties.◼ Sales and profit increased in Brokerage due to steady progress in winning referrals from other divisions.◼ Sales and profit increased in Leasing due to a rebound from the same period of the previous fiscal year, when office relocation stagnated.◼ Sales increased due to enhanced services, but profit decreased slightly due to increased costs for new store openings and floor expansion.(million yen)Net SalesSegment ProfitProfit Margin7,154 6,182 56.5%◼ Profit Increased due to a decrease in number of delinquent payments in the 4,000pandemic of COVID-19 and an improvement in profit margins.3,490 (Unit: million yen)Net SalesSegment ProfitFY ended March 2021FY ended March 2022Increase/Decrease6,1823,4907,154+15.7%3,803+9.0%Profit Margin56.5%53.2%-3.3%ptCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.9FY ended March 20212021/3期FY ended March 20222022/3期53.2%3,803 40%80%60%20%0%8,0007,0006,0005,0003,0002,0001,0000Operating Results by Business SegmentHotel and Tourism Business (Hotel Development, Hotel Operation, etc.) Net SalesSegment ProfitProfit Margin13,419 6,911 5.3%710◼ In HIYORI OCEAN RESORT OKINAWA sales, 43 rooms were delivered (cumulative sales: 202 rooms / total 203 rooms). Posted segment profit of 230 million yen (Profit margin 9.3%).◼ As tourism demand did not recover, occupancy rates and room rates were sluggish mainly in urban hotels. Start-up expenses were recorded for three new hotels in the first and second quarter of the fiscal year. The fourth quarter also suffered a large loss due to the impact of Omicron variant.(Unit: million yen)FY ended March 2021FY ended March 2022Increase/DecreaseNet SalesHotel Development BusinessHotel Operation BusinessSegment ProfitHotel Development BusinessHotel Operation BusinessProfit MarginHotel Development BusinessHotel Operation Business, etc.13,41911,3782,0417102,216-1,5065.3%19.5%-6,9112,5484,363-1,950-2,188—48.5%-77.6%+113.8%—-10238- 89.3%9.3%- 10.2%ptCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.(million yen)16,00012,0008,0004,0000-4,000▲ 1,950FY ended March 2021FY 2021FY ended March 2022FY 2022(Note 1) “Segment Profit” is calculated by deducting specific costs of each segment, including interest expenses, sales commission and amortization of goodwill from gross profit.40%30%20%10%0%-10%-20%Operating Results by Business SegmentOther Business (Construction Business and Overseas Development Business, etc.) ◼ Profit increased due to the performance of Communication (million yen)Development Inc., whose shares were acquired through M&A in 5,000the previous fiscal year. Profit margin also improved.Net SalesSegment ProfitProfit Margin4,221 ◼ Both sales and profits declined due to the previous year’s rebound from the high-rise condominium project in Da Nang, Viet Nam (Net sales: 2.57 billion yen, Profit: 0.62 billion yen).(Unit: million yen)FY ended Mar 2021FY ended Mar 2022Increase/DecreaseNet Sales4,2211,695-59.8%1,000Segment Profit562101-81.9%Profit Margin13.3%6.0%-7.3%pt13.3%1,695 562 6.0%101 FY ended MarchFY ended March 20212021FY ended MarchFY ended March 20222022Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.114,0003,0002,000040%30%20%10%0%Earnings Forecast and Growth StrategyCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.12Business Environment Awareness1. In the global economy, the situation in Ukraine, China’s Zero-COVID-19 Policy, and monetary tightening weigh on the economy.◆Rising food and energy prices are accelerating inflation due to the situation in Ukraine.◆Interest rates will rise due to the quantitative monetary tightening by raising interest rates and absorbing funds in Europe and the United States to counter inflation.2. The Japanese economy is being affected by the Russia-Ukraine crisis while the economic recovery within coexisting with COVID-19 is being pursued.◆The Bank of Japan continues to ease its monetary policy despite signs of rising prices such as energy prices.◆The depreciation of yen is progressing. This is due to the worsening trade balance caused by high crude oil prices, rising distribution prices, and the widening of the interest rate differentials between Japan and other countries in Europe and the United States.3. In the central Tokyo office market, needs diversify due to the spread of hybrid work styles within coexisting with COVID-19.◆Although the average vacancy rate for central Tokyo offices has been flat and the average rent has continued to decline, demand has been improving in some areas.◆Investors’ demand for real estate has been strong, but we need to pay attention to the outlook for interest rates as global monetary tightening is taking place.4. In the hotel and tourism market, coexisting with COVID-19 has brought back the movement of people. Travel demand is recovering.◆In the tourism market, hotel occupancy rates rose as domestic travel recovered. Inbound travel recovery is yet to come.◆There is also a strong willingness to invest in hotels mainly by overseas investors. This is to recover the future travel demand.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.13Forecast for the Fiscal Year ending March 31, 2023(Unit: million yen)FY ended March 2022FY ending March 2023 ForecastIncrease/DecreaseKey Points in Earnings ForecastNet sales(1) Real Estate Revitalization BusinessReplanningRental buildings(2) Real Estate Service Business(3) Hotel and Tourism Business(4) OthersAdjustmentsGross profit(1) Real Estate Revitalization BusinessReplanningRental buildings(2) Real Estate Service Business(3) Hotel and Tourism Business(4) OthersAdjustmentsOperating profitOrdinary profitProfitSelling General and Administrative Expenses71,25155,95853,8342,1247,1546,9111,695-46719,34417,05316,5175353,822-1,503171-1997,21612,12712,2157,41584,00056,70054,7002,0007,30018,6001,900-50022,00016,00015,5005003,9001,80030008,70013,30012,8008,300+17.9%+1.3%+1.6%-5.8%+2.0%+169.1%+12.1%-+13.7%-6.2%-6.2%-6.5%+2.0%-+75.4%-+20.6%+9.7%+4.8%+11.9%+11.9%・ Sales and profits are almost unchanged from the previous fiscal year. The purchased properties accumulated toward the end of FY2021 are being developed for sale in or after the next fiscal year.・ Plan to sell hotel properties and expect profit growth.・ Hotel operations expect occupancy rates to improve as demand for accommodation recovers.・ Expect an increase in SG & A expenses based on investment plans of growth strategy including human resources, DX and marketing.EPS (Earnings per share)152.26 yen170.44 yenCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.14Dividend Forecast for the Fiscal Year ending March 2023Following our basic policy for profit sharing, we are working to benefit our shareholders comprehensively. In this fiscal year, we have to seek business growth to achieve our financial target while coexisting with COVID-19 and keeping a close attention to rising interest rates. At the same time, in order to meet the expectations of shareholders who support us while securing internal reserves to maintain financial stability, we are going to maintain the year-end dividend of 23.0 yen per share. We expect an interim dividend of 23.0 yen and a year-end dividend of 23.0 yen, for a total of 46.0 yen. Basic Policy for Profit Sharing1) Strive to provide long-term and stable shareholder return2) Secure investment funds for future growth 3) Maintain the stability of financial baseWe are working to contribute to the overall benefit of our shareholders.FY ended March 2020 FY ended March 2021 FY ended March 2022FY ending March 2023 (Forecast)Earnings per Share219.03 yen87.77 yen152.26 yen170.44 yenDividend per Share42.00 yen42.00 yen44.00 yen46.00 yenDividend Payout Ratio19.2%47.9%28.9%27.0%Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.15Medium-term Management PlanCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.16Basic Policy and Growth Strategy in Medium-term Management PlanBasic policyProviding “a place where people gather and communicate with each other, and create social development and happiness for people”Growth strategyOfficeHotelM&AKey PointsDeepen and expand the Office BusinessCreate a Services that go beyond satisfaction and excitementwith a sharp conceptOverseasExpand housing-related business in Viet NamInvest in peripheral businesses to expand the current business and invest in start-ups in growth fieldsESGDigitalCash flowMarketingCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.17Medium-term Management Plan Net salesOrdinary profitNet ProfitOrdinary profitmargin Equity ratioROE(100 million yen)Net SalesOrdinary ProfitNet ProfitNet ProfitFY ended March 2022ResultsFY ending March 2023ForecastFY ending March 2025Target71.2 billion yen12.2 billion yen7.4 billion yen17.1%52.2%10.8%84084 billion yen100 billion yen12.8 billion yen8.3 billion yen15.2%20 billion yen14 billion yen20%50% level50% level10% or more10% or more1,0007327125966005331288816110775441227412883200140FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 21/323/322/320/319/3(Forecast)FY 202525/3(Forecast)Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.181,2001,0008004002000Medium-term Investment Plan (FY ended March 2022 – FY ending March 2025)Office BusinessBalance at the end of March 202172.8 billion yen21.8 billion yenHotel BusinessBalance at the end of March 2021Overseas BusinessBalance at the end of March 20210.6 billion yenInvestment amount200 billion yenInvestment amount7 billion yenInvestment amount8 billion yenAmount collected182.8 billion yenAmount collected5.8 billion yenAmount collected2.5 billion yenBalance at the end of March 202590 billion yenBalance at the end of March 202523 billion yenBalance at the end of March 20256.1 billion yenPlan procurement and development to achieve business growth while recovering investments at a constant turnover rate.Refocus on purchasing properties while holding back during the confusion caused by the pandemic of COVID-19.Make sound investments in short-term, medium- to long-term, and new construction development.Complete the hotels under construction. Aim to achieve profitability in operating existing hotels. Collect funds through the sale of land and buildings, operating them effectively.Planned hotel completed. Sell, collect, and reinvest.Continuously and systematically invest in condominium development projects for the future.Land acquisition procedure is in progress for the next development projects.Digitalization 3 billion yenContinue to actively invest in data-driven managementBuilding databaseDeveloping drone image analysis AISystematically invest in peripheral businesses and growth areas to expand existing businessesM&A 5 billion yenDiversification and customer expansion to create business synergiesGenerate free cash flowEnsuring positive free cash flow through systematic investment and recoveryCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.19Business Progress and New InitiativesCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.20Replanning BusinessCreate High Added Value and Contribute to Business Growth The sale of four buildings, which we have worked on over the mid- to long-term, contributed to our business performance.Purchased five new mid- to long-term buildings for the future.”Creativity,” which has captured the new needs for the pandemic of COVID-19, offers replanning to a high added value building.Even in the pandemic of COVID-19, we take advantage of “leasing power” to sell our properties as high-occupancy and high-profit buildings.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.21Sources of “leasing power”Local branch network to flexibly respond to clients’ problemsReplanning BusinessCompleted New Office BuildingsCompleted new buildings of “+ SHIFT”, a refined brand that transcends conventional concepts and seeks a rich work style for a new era”+ SHIFT NOGIZAKA” opened in April 2021.”+ SHIFT KANDA” opened in August 2021.8-11-26 Akasaka, Minato-ku, Tokyo1-minute walk from Nogizaka Station on Tokyo Metro Chiyoda Line13-story building with a total floor area of 1,308.40 square meters4-7 Kandaiwamoto-cho, Chiyoda-ku, Tokyo2-minute walk from Iwamoto-cho Station on Toei Subway Shinjuku Line 8 floors above ground and 1 basement floor building with a total floor area of 1,045.67 square metersCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.22Specified Joint Real Estate VenturesStrengthen Initiatives for Small-lot Real Estate Property Sell a nursery school, a medical and educational mall that contribute to the lives of local communities as small-lot products.Thanks for the saleNow on saleNo. 3 Setagaya Ward New Authorized Nursery School5-52-11 Matsubara, Setagaya-ku, Tokyo5-minute walk from Higashi-matsubara Station onKeio Inokashira Line8-minute walk from Meidaimae Station on Keio Line and Keio Inokashira Line3-story building with a total floor area of 524.86 square metersAttractive as an ESG investment that contributes to solving the shortage of authorized nursery schoolContributing to the development of Setagaya Ward, an easy-to-care townNo. 4 Ota Ward New Medical and Educational Mall2-28-4 Kitamagome, Ota-ku, Tokyo2-minute walk from Magome Station on Toei Subway Asakusa Line3-story building with a total floor area of 1,327.25 square metersA new mall with the theme of “medical care and education” in which after-school childcare, English conversation school, etc. enter as tenants, centered on a drugstore with a large medical corporation and a dispensing pharmacy that has strengths in hemodialysis.◆ Business model for small-lot real estate products① Acquisition ofReal EstateVoluntary partnership② Co-ownershipInterest Investment③ LeasingRevenueManaging Partner④ InvestmentDividendInvestorsBuilding OwnersAttractiveness to investors (building owners)① Sun Frontier Fudousan Co., Ltd. selects properties suitable for small-lot ownership② Can make small investments in real estate and earn profits (dividends)◆ Ability to design defferentiated products to be selectedAppeal points reflecting clients’ needs in line with market conditionsStable income from long-term fixed lease tenantsNewly-built properties that are safe for long-term ownershipReliable tenants who contribute to the communityWe are also promoting the fifth commercialization project!Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.23Conference Room Rental BusinessOpening New Stores and Expanding Floor Space to Meet Customer NeedsDeveloping various services to meet the needs of Coexist with COVID-19 and post COVID-19.Fully compatible with web conferencing and online distribution as work styles change and diversify.August 18, 2021Vision Center Nishi Shinjuku OpenedOn January 14, 2022, floor space in the building increased.Due to popular demand, the floor space will be expandedagain in May 2022.January 14, 2022February 25, 2022Vision Center Tamachi Opened with Additional Floor SpaceVision Center Yokohama Expanded and Opened5-minute walk from the south exit and west exit of JR Shinjuku Station, and 1-minute walk from Exit 7 of the underground passage of Shinjuku Station on Tokyo Metro and Toei Subway Great access not only from Tokyo but also from other regions. Total 7 rooms / 24 to 288 seats2-minute walk from JR TamachiStation1-minute walk from Toei Subway Mita StationConvenient location with easyaccess to Shinkansen and airportTotal 26 rooms / 8 to 360 seats5-minute walk from JR Tokaido Line/Keihin Tohoku Line/Yokosuka Line/Sagami Railway Main Line Yokohama Station (West Exit)Great access not only from Tokyo but also from other regions.Total 15 rooms / 6 to 245 seats1-22-2 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023Shinjuku Sanei Building, 1st, 2nd and 7th floors (Reception: 1st floor)https://www.visioncenter.jp/nishishinjuku/5-31-19 Shiba, Minato-ku, Tokyo 108-0014Round Cross Tamachi, 2nd and 4th floors(Reception: 4th floor)https://www.visioncenter.jp/tamachi/・ Hourly rental Vision Center: 9 sites・ Weekly / monthly rental Order Made Space: 6 sites・ Monthly rental offices (Vision Works, Vision Office): 4 sitesTotal of 19 sites in operationCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.242-5-15 Kitasaiwai, Nishi-ku, Yokohama-shi, Kanagawa 160-0023Premier Yokohama Nishiguchi Building, 3rd and 4th floors (Reception: 3rd floor)https://www.visioncenter.jp/yokohama/◆Vision Center NetworkYokohama iShnukujYotsuya iShnagawa Tokyo iNhonbashi UenoNagatacho TamachiKanda Yurakucho iHbiya HamamatsuchoTo Haneda airportHotel and Tourism BusinessFour New Hotels Completed as PlannedJune 2021OPENHIYORI Chapter KyotoTribute Portfolio HotelJune 2021OPENTabi no Hotel Lit MiyakojimaJuly 2021OPENTabi no Hotel Lit Matsumoto341 Shimizu-cho, Kawaramachi-dori Nijo-agaru, Nakagyo-ku, Kyoto-shi, Kyoto4-minute walk from Kyoto Municipal Subway Tozai LineKyoto Shiyakusho StationTotal 203 guest rooms596 Hirara Nishizato, Miyakojima, OkinawaAbout 14 minutes from MiyakoAirport by car4-minute walk from NishisatodoriIriguchi.Total 111 guest rooms1-4-5 Fukashi, Matsumoto-shi, Nagano4-minute walk from Ojoguchi Exit of Matsumoto Station by train1-minute walk from Matsumoto Bus Terminal by bus11 minutes from Nagano Expressway Matsumoto Interchange by carTotal 176 guest roomsCompleted in February 2022Pre-opening scheduled for June 2022Shijo Kawaramachi Onsen Sora Niwa Terrace Kyoto / Bettei KamogawaHighly convenient for both business and leisureWe will strengthen the development of “Tabino Hotel” series.“Bettei Kamogawa” Delux Twin“Sora Niwa Terrace Kyoto” Double RoomTabino Hotel SadoTabino Hotel Hida-TakayamaTabino Hotel Kashima324 Inari-cho, Kawaramachi-dori Shijo-sagaru 2-chome, Shimogyo-ku, Kyoto-shi, Kyoto1-minute walk from Hankyu Dentetsu Kyoto Kawaramachi StationSora Niwa Terrace Kyoto 102 rooms / BetteiKamogawa 32 roomsRooftop “Sora Niwa Terrace” with a panoramic view of HigashiyamaTabino Hotel Kurashiki MizushimaCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.25New businessImplementing drone surveys of exterior walls. Greatly reduced survey time. Conventional exterior wall surveyExterior drone inspection② AI automatically marks abnormal areas in the image① The drone’s cameraImage shootingScaffold installation requiredInvestigation costsLife cycleHigh costNo scaffolding requiredUp to 80% reductionin research cost*Life cyclecost reductionCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.26* Comparison with Consultative Survey③ Image analysis④ Final confirmation by the analystUnder developmentDeveloping image analysisAI tools!Workload will be drastically reduced with an AI tool⑤ Report deliveryStrengthen DX and MarketingAccelerate aggressive investment in DX, support operational efficiency and strategy, and create businessOperational efficiency and strategic support using data infrastructure Build the master databaseCreate new businesses using digital technology (Drone business is the first.)Research on emerging technologies related to real estate* Emerging technologies: local 5G, metaverse / NFT, STO / blockchain, BCP-DX, etc.Data-driven managementDX, a combination of ourexpertise and digitalStrengthen marketing and enhance the social recognition and value of the corporate brandStrengthen owned media (web and blog) and eventsCollaboration between Office Business, Hotel and Tourism Business, and Overseas Business Strengthen adopted brand and ensure active employee participationStrengthen and foster group-wide marketingIntegrated marketingBuild awareness and understanding of the corporate brandEnhance organizational and brand power through marketing and human resourcedevelopmentContribute to solving social issues through sustainable growth by raising awareness and expanding the customer baseCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.27Corporate Philosophy and SustainabilityCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.28Ideal SystemCompany policyAltruismManagement principleWe contribute to the prosperity of humankind and society with the aim of protecting all employees and pursuing both material and spiritual happiness in a spirit of coexistence.Corporate philosophyWe improve our knowledge, skills, and personality with enthusiasmthrough our work. By concentrating on utilizing and distributing real estate stocks, we reduce the waste of non-renewable resources. That leads to the lasting prosperity of humankind and flora and fauna on the earth.VisionWe aim to be the real estate company of the world’s most loved and selected by clients as a professional in real estate utilization!Major policyPursue trust, not profit.Change yourself, solve problems in clients’ point of view, and exceed expectations!Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.29SustainabilitySustainability VisionWe will contribute to the realization of a sustainable society through business activities while respecting the heart of altruism, the Company policy.Materiality (Important Issues)Important issuesVisionPolicyMainly relevant SDGsEnvironmental protectionIncrease environmental sustainability by significantly reducing waste and greenhouse gas emissions, as a frontier of Real Estate Revitalization Business■ Extend the life and health of real estate■ Energy conservation and reduction of environmental impact by Real Estate Revitalization Business■ Expanded use of renewable energyRegional revitalizationCreate sustainable growth of regional economies through offices, hotels, and tourism, as a frontier for sustainable regional revitalizationHuman resource developmentSpread the concept of “altruism” that is indispensable for realizing a sustainable society, as a frontier of philosophy management■Create buildings, offices, and spaces with “job satisfaction” and “creativity” that contribute to economic growth■ Prevent and mitigate disaster through regionalcooperation■ Solve regional issues through community activation and creation■Createworkplaces with job satisfaction, creativity and growth opportunities■ Respect and utilize diversity■ Disseminate information on philosophy management to foster next-generation managersAFFORDABLE AND CLEAN ENERGYCLIMATE ACTIONRESPONSIBLE CONSUMPTION AND PRODUCTIONDECENT WORK AND ECONOMIC GROWTHINDUSTRY INNOVATION AND INFRASTRUCTURESUSTAINABLE CITIES AND COMMUNITIEQUALITY EDUCATIONGENDER EQUALITYPARTNERSHIPS FOR THE GOALSCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.30Business areaContribute to solving social issues through real estate utilization, the core businessRealization of A Sustainable SocietyEnvironmental ProtectionHuman Resource DevelopmentRegional RevitalizationOffice BusinessHotel BusinessShima Yume ProjectOverseas BusinessCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.31Business ModelCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.32Strategy in Office Business Provide services to solve every problem in clients, mainly in the five cities of central Tokyo.12111469124464111207R POf the total number of RPs over 440properties, 80% are located in the five wards of central Tokyo and adjacent wards. *As of the end of March 2022LeasingBrokerageA community-based network ten branchesGinza, Kanda, Nihonbashi, Kodemmacho, Kojimachi, Shinjuku, Shibuya,Gotanda,Hamamatsucho, YokohamaP MB MMore than 80% of the 421 entrusted properties are located in the five cities of central Tokyo. *As of the end of March 2022Of the 203 buildings under comprehensive management, 85% are located in the five cities of central Tokyo. *As of the end of March 2022Rent GuaranteeOf the 652 new contracts signed, 90% are in the five wards of central Tokyo.*Results for FY 2022Rental Conference Room18 of the 19 sites are located in the five cities of central Tokyo.*As of the end of March 2022/One site in Yokohama* The numbers on the columns in the map are the cumulative number of RPs.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.33Strengths in Office Business Solve various problems by in-house manufacturing from purchase to development, occupancy, sales and support, and by understanding our clients’ intentions in detail.lSaes brokerage Leasingbrokerage PropertymanagementConstructionpannngil Rent guaranteeAsset consultingFundraisingConsulting Property purchase1. Real Estate UtilizationTo be a partner to solve difficulties from our client’s point of view2. Real Estate Revitalization Building development of value chainProperty salesOur clients1. Real estate utilization: Get close to our clients at the site and solve problems. Capture the source of added value from clients’ voices.2. Real estate revitalization: Reflect our expertise to increase asset value and the needs we have identified in revitalized buildings to increase their value and sell them.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.34Business Model for Replanning Business Renovate those office buildings with declining occupancy rates and in need of large-scale repairs into high-value-added real estate that is sought after by society through the renovation from the “clients’ point of view.”CreativityDesign offices in clients’ point of view and carry out renovation and repair work in pursuit of safety and security.Leasing powerA community-based branch network keep the building inhigh occupancy and becomes the closest contact point for any kind of consultation.Buying powerPurchase of low-occupancy and non-occupancy buildings using various routes and methods.Clients =Building ownersRent guaranteeEncourage tenants to move into the building and guarantee stable income for the owner in the event of rent arrears.High-occupancy and high-profit buildings sought by owners・ Full occupancy・ Improve income and expenditure・ Stable incomeLow-occupancy and low-profit buildings・ Aging degradation・ Earthquake resistance anxiety・ Violation of legal compliance, etc.Sales forceStay close to clients of asset holders and meet needs with high levels of difficultybeyond expectation. ・ Asset management, inheritance measures, etc.Management Provide high-quality services, maintain high occupancy rate, and stabilize building revenues.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.35Replanning Business Accelerate the Growth of Tenant Companies Set-up offices focusing on the clients’ point of view accelerate business growth.Set-up officeAn office that differs from the interior of a normal rental office in that it has a reception area, reception room, and other facilities, as well as highly design-oriented interior construction in the office area, with some facilities and fixtures already installed.Save laborNo need for tasks such as devising office interiors or selecting interior decorators, greatly reducing the time and effort of managers.Set-up officeFour benefitsReduce managementburdenavailablejustafter relocationImprove productivityOffice interiors with a high level of design, with a focus on creativity, functionality, and a variety of usage scenarios, improve the recruitment of human resources, employee motivation, and office productivity.Client =Tenant companyImproverecruitment,motivation, andproductivityReduce financial burdenShorten the periodNo need for any work other than wiring and moving, significantly shortening the relocation period and increasing the net available period by shortening the construction period for interior finishing and restoration.Reduce burdenSignificantly reduced costs for office interiors and others. Tenants do not have to account for interior decoration assets.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.36Replanning Business Create both Customer Value and Social Value Contribute to the resolution of social issues through contributions to our clients’ businesses.Comparison of resource input over 50 yearsComparison of CO ₂ emissions over 50 years3,991 40.9% ↓(t-CO ₂)7,0002,357 6,399 19.1% ↓5,179 Contribute to the business growth of building owners and tenant companies through Replanning Business.=Reduce the waste of non-reproducible resources and contribute to the prosperity of humankind, plants and animals on the earth.Clients’valueEconomic valueSocial value(kg / ㎡)4,0003,0002,0001,00008006004002000Rebuilding Renovation改修建替New bldg新築建替Rebuilding修繕RepairRenovation改修Comparison of waste generation over 50 years(kg / ㎡)801 49.3% ↓406 6,0005,0004,0003,0002,0001,0000New bldgRebuilding Repair Renovation DemolitionRebuilding Renovation改修建替新築 建替 修繕 改修 解体Standard標準Renovation改修Repair RenovationDisposal Energy修繕廃棄改修エネルギーNew bldg新築Maintenance維持管理 Assuming a 30-year-old office building of approximately 3,000 square meters, the environmental contribution over a 50-year period (the service life of SRC office buildings) was estimated based on the Architectural Institute of Japan’s LCA Tool (*).・ Rebuilding: “In the case of rebuilding every 35 years” ・ Renovation: “Regeneration without destroying old buildings (long-life buildings)” ・ Standard: “Assuming a 30-year-old unrenovated building”*Architectural I “LCA Tool for Buildings Ver5.0 – Evaluation Tool for Global Warming, Resource Consumption and Waste Management”, estimated with the cooperation of Engineering Research Institute of Japan.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.37Continue High Profitability in Office Building Business● Replanning Business maintains high segment profit marginDespite the impact of market conditions, the Replanning Business maintains a high profit margin and have the ability to recover and continue to grow.27.8%28.2%22.1%30.0%32.4%31.2%29.2%24.3%40.0%35.0%30.0%25.0%20.0%15.0%10.0%5.0%0.0%’18/3● Real Estate Service Business continues to grow steadily’17/3’16/3’15/3’19/3’20/3’21/3’22/3In addition to Sales Brokerage, Leasing Brokerage, and PM, the Company has added BM, Rent Guarantee, and Rental Conference Room to its services, steadily increasing its stock business earnings. 2,3302,4912,5082,8212,8293,2063,4083,80370,00060,00050,00040,00030,00020,00010,0000Net sales売上高Segment セグメント利益profitProfit marginセグメント利益率4,000Rental 貸会議室conference roomRent 滞納賃料保証guarantee3,000BMBMPMPM2,0001,0000Leasing 賃貸仲介BrokerageSales 売買仲介BrokerageSub leases サブリースreferral fees, etc.紹介手数料他’15/3’16/3’17/3’18/3’19/3’20/3’21/3’22/3Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.38Business Models for Hotel Business GrowthIncrease added value by developing and acquiring some properties in addition to operating revenues, and aim for growth through synergies with sales revenues.Sell PurchaseDevelopment ConstructionManagementSell PurchaseOwnerCompanySun FrontierHotel ManagementCompanySun FrontierHotel ManagementLandLand・ Hotel development model case(Room)3,0002,5002,0001,5001,0005000CompanySun FrontierHotel ManagementNumber of roomsHotel name and locationAcquisition and openingStatusSpring Sunny H Nagoya Tokoname Station2016.4AcquiredOwn4 Sky Heart Hotels (excluding Shimonoseki)2016.12AcquiredLending and leasingHiyori Hotel Maihama2017.4Newly constructedSold leasebackSado Resort Hotel Azuma2018.4AcquiredOwnTabino Hotel Hida Takayama2018.5Newly constructedOwn (leased)Sky Heart Hotel Shimonoseki2018.6AcquiredOwnTabino Hotel Sado2018.7Newly constructedLending and leasingHiyori Hotel Osaka Namba Station2019.5Newly constructedLending and leasingCourtyard by Marriot Osaka Honmachi2019.1Newly constructedLending and leasingHiyori Hotel Tokyo Ginza EAST2019.12 Newly constructedOwnTabino Hotel Kurashiki Mizushima2020.2Newly constructedLending and leasingTabino Hotel Kashima2020.4Newly constructedOwn (leased)HIYORI Ocean Resort Okinawa2021.2Newly constructedSold leaseback*Hotel OsadoHIYORI Chapter Kyoto2021.4AcquiredOwn2021.6Newly constructedOwn (leased)Tabi no Hotel Lit Miyakojima2021.6Newly constructedOwnTabi no Hotel Lit Matsumoto2021.7Newly constructedLending and leasingSora Niwa Terrace Kyoto / Bettei Kamogawa2022.6Newly constructedOwn19456480578010511122419313515519420374203111176134Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.39ManagementOwnerLeasecontractCompanySun FrontierHotel ManagementNumber of Operating Hotel Rooms2,859 2,993 2,295 1,898 758 838 1,191 ’17/3’18/3’19/3’20/3’21/3’22/3(Forecast)’23/3The company’s model is to operate the hotel after development, sell it and lease it back, and 9% of the 2,993 hotel rooms have been achieved.Percentage of hotel rooms by type（Total number of hotel rooms: 2,993）9%Own保有保有(借地）Own (leased)賃借リースLending and leasing 48%Sold leaseback売却済リースバック27%16%（As of May 2022）Hotel and Tourism Business Focus on Creating Enthusiastic FansContinue efforts to create enthusiastic fans by creating services that exceed expectations from the clients’ point of view.Brand developmentSado (Chigusa)Sado (Aikawa Oura)Sado (Aikawa Kabuse)Onna, OkinawaMiyakoIslandMatsumotoKyoto ShijoTakayamaKyoto NijoShimonosekiHakataKurashiki MizushimaTokonameOsaka HonmachiOsaka NambaCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.40Luxury ClassShijo Kawaramachi Onsen BetteiKamogawaHIYORI OCEAN RESORT OKINAWAUpper ClassUpper Middle ClassKasugazaki Onsen Hotel OsadoHIYORI Hotel Tokyo Ginza EastSado Resort Hotel AZUMAHIYORI Chapter KyotoShijo Kawaramachi Onsen SoraniwaTerrace KyotoCOURTYARD BY MARRIOTT Osaka HonmachiHIYORI Hotel MaihamaHIYORI Hotel HIYORI Hotel Osaka Namba EkimaeTabi no Hotel Lit MatsumotoTabi no Hotel Lit MiyakojimaSpring Sunny H Nagoya TokonameEkimaeEconomy ClassBudget ClassDONDEN Highland Lodge Natural Resort SadoSKY HEART Hotel NaritaTabino Hotel SadoSKY HEART Hotel KoiwaTabino Hotel Hida-TakayamaSKY HEART Hotel KawasakiKashimaMaihamaNaritaKoiwaGinzaKawasakiTabino Hotel KashimaSKY HEART Hotel HakataTabino Hotel Kurashiki MizushimaSKY HEART Hotel ShimonosekiBusiness Model of Overseas BusinessContributing to the development of local communities by creating client’s joy and happiness through the creation of new businesses.A total business that includes acquisition of land, development and construction, delivery after completion, and management and mediation.AcquirelandDevelopmentConstructionCompletionDeliveryManageUrbanDevelopmentContribute to future performance through systematic and continuous development effortsLand acquisitionDevelopmentCompletion deliveryLand acquisitionDevelopmentCompletion deliveryLandacquisitionDevelopmentCompletion deliveryChinaHanoiLaosHai PhongHueDa Nang CityThailandHoi AnCambodiaVietnamHo Chi MinhRooted in the local community in Vietnam, we work together with local partners to ensure high construction quality, a safe, organized, and beautiful construction site.Next project in progress!Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.41Regional Revitalization Business “Island Dream Project”When rural areas are energized, so Japan as a whole will be. As the number of visitors to Japan rapidly increases, spurred by fascination (culture, history, nature, food, hot spring, hospitality and others) thatJapan is proud of, we will take on the challenge of regional revitalization projects that focus on the attractiveness and features unique to regions, in particular the regions that possess the “Wonderfulness of Japan.” With the addition of Osado in April 2021 and the Sado Outdoor Base in December 2021, the area will be further revitalized.SADO OUTDOOR BASESado Outdoor Base・ Tap roomSun Frontier Sado Inc.・ Cafe・ Item rental・ Rental bicyclesHotel BusinessTransportation Infrastructure ProjectHighlight Finding ProjectTourism and Travel BusinessWeb Advertising BusinessTabino Hotel SadoOkesa Kanko TaxiKigaruni Rent a CarAnaguchi-tei(Café & Restaurant)Happy SadoTravelSado BiyoriNew April 2021New December 2021Hotel AZUMAHotel OsadoVacation Rental Le BlueSado SAWANEDONDEN Highland LodgeSado Outdoor BaseCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.42Video “The Sea of Clouds from the DONDEN Highland Lodge”Video “Adventure Island SADO”Reference MaterialsCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.43Trends in Office Vacancy Rates and Rents In Five Wards of Central Tokyo(%)Five wards average rent (yen/tsubo)Five wards average vacancy rate (%) Peak average rentIn August 200822,901 yen(Yen)Average rent In March 202220,366 yen(down 52 yen MoM)Average vacancy rate In March 20226.37%(down 0.04% pt MoM)Peak vacancy rate June 2012Vacancy rate: 9.43%Peak average rentJuly 202023,014 yenPeak vacancy rate August 2003Vacancy rate: 8.57%Bottom of average rentOctober 200417,526 yenBottom of vacancy rate November 2007Vacancy rate: 2.49%Bottom of average rentDecember 201316,207 yenBottom of vacancy rateFebruary 2020Vacancy rate: 1.49%* Source: Compiled by the Company based on Miki Shoji’s “Office Report.” Office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered.Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.44Long-term Trends in Office Vacancy Rate and Rent45,00044,1938.08Average rent平均賃料(L axis)(左軸)9.01Vacancy rate空室率(R axis)(右軸)8.1217,57716,2073.773.1722,1862.65(Yen)50,00040,00035,00030,00025,00020,00015,00010,0005,00001.790.39(％)109876532106.376.3321,99920,36641.55Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.45Source: Compiled by the Company based on Miki Shoji’s “Office Report”Target office buildings with a standard floor area of 100 tsubo or more in five central cities of Tokyo are covered.Figures for 2021 and earlier are taken as of December of each year. Age Distribution of Office Buildings in Tokyo’s 23 WardsSolving social issues through the revitalization and utilization of aging small-to- medium-sized buildingsTokyo 23 wards 9,378 buildingsSmall and medium-sized (Total floor area: 300 to 5,000 tsubo)8,620 buildingsLarge-sized(Total floor area: Over 5,000 tsubo)758 buildingsOld seismic code:2,132 buildings (25%)Old seismic code:122 buildings (16%)20 years old or more:7,523 buildings （87％）Age of buildings20 years old:440 buildings（58％）Less than 20 years old:1,097 buildings (13%)Less than 20 years old:318 buildings (42%)80060040020020040060080000Number of buildingsSource : Created by us based on “Tokyo 23 cities Office Pyramid 2022 (based on the number of buildings)” (Xymax Real Estate Institute)Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.46757065605550454035302520151050Market Size and Number of Corporations in TokyoContributing to the development of society and the happiness of people in Tokyo, a city where people and companies gather(Thousand people)Ratio of Tokyo population to Japanese population (estimate)東京都人口Tokyo’s population日本人口Japanese population東京人口が日本人口に占める割合Tokyo’s population as a percentage of the Japanese population160,000140,000120,000100,00080,00060,00040,00020,00009.5%9.8%10.3%10.6%11.1%11.4%11.7%11.9%12.6%10.0%12,06412,57713,15913,51513,85013,97913,93813,75413,4582000年2000 2005 2010 2015 2020 2025 2005年2025年2015年2020年2010年2030年2030 2035 2040 2035年2040年(Year)Source: Compiled by the Company based on Tokyo Metropolitan Government statistics – “Population of Tokyo (Estimate).”Top 10 Prefectures in Number of Corporations575,234 25.0%20.0%15.0%5.0%0.0%京Tokyo東Osaka大阪Kanagawa神 奈 川Aichi愛知Saitama埼 玉Hokkaido北 海 道Chiba千Hyogo兵庫Fukuoka福岡Shizuoka静岡葉223,407 184,363 153,694 130,108 119,564 107,704 94,013 83,562 76,981 Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.47Source: Compiled by the Company based on the National Tax Agency‘s “Number of Corporations by Prefecture”.Population Movement in the Three Major Metropolitan Areas and Local AreasThe past economic crisis was the starting point for the number of people moving into the Tokyo area to increase.（Ten thousand people）First peak of population inflow (1961)Osaka areaNagoya areaTokyo areaSecond peak of population inflow（1987）Third peak of population inflow（2007）Fourth peak of population inflow（2019）Local areaOil crisisCollapse of bubble economyGlobal financial crisisCOVID-19 crisisNet Inflow403020100(10)(20)(30)(40)(50)(60)(70)Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.48Source: Compiled by the Company based on “Number of people moving in by place of residence before the move and number of people moving out by place of residence after the move” from the Statistics Bureau of the Ministry of Internal Affairs and Communications.Transition and PresentChange, challenge and create new value with the Sun Frontier Spirit20.6% 21.3%23.5%Global Financial Crisis20.8%18.5%24.4%22.9%22.0% 22.7%22.0%24.0%19.3%20.2%Net 売上高SalesOrdinary 経常利益率Income Ratio15.8%14.0%13.2%48,150 12.6%11.5%35,255 26,871 16,731 27,741 30,626 14,469 4,290 6,924 10,581 17,772 681 1,771 3,588 5,004 7,761 COVID-19 Crisis84,000 100,000 20.0%73,218 71,251 59,632 12.6%17.1%53,292 47,464 40,395 30.0%25.0%20.0%15.0%10.0%5.0%0.0%01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3 24/3 25/3(Forecast)(Forecast)2001 to 20092010 to 2020Basic construction of Replanning BusinessEvolution and expansion of Replanning Business2021～Deepening and diversifying the Replanning Business120,000100,00080,00060,00040,00020,0000Replanning businessSet-up officeHotelRental spaceOverseasCopyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.49Corporate ProfileCompany NameSun Frontier Fudosan Co., Ltd.Location of Head Quarters 2-2, Yurakucho 1-chome, Chiyoda-ku, TokyoDate of FoundationApril 8, 1999Date of ListingFebruary 26, 2007 (First Section of Tokyo Stock Exchange)Capital Stock *11,965 million yenRepresentativeTomoaki Horiguchi, Chairman Seiichi Saito, President Number of Consolidated Employees *Average Age of Employees*36.2 years oldReal estate revitalizationBusiness ProfileReal estate serviceHotel and tourismAccounting MonthMarch696 full-time employees (1,228 including part-timers and temporary workers)Real estate management, brokerage, construction planning, non-payment guarantee, operation of rental buildings, asset consultingListed MarketTokyo Stock Exchange Prime (Code number: 8934)(*As of the end of March 2022)Copyright © 2022 Sun Frontier Fudousan Co., Ltd. All Rights Reserved.50Full-time directorsFrom the left in the front row : Seiichi Saito, President and Representative Director ; TomoakiHoriguchi, 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.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 Exchange Act, the Building Lots and Buildings Transaction Business Act, the Listing Rules for the Tokyo Stock Exchange and other related 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.Sun Frontier Fudousan Co., Ltd. IR DeskPhone : +81-3-5521-1551URL : https://www.sunfrt.co.jp/Mail : ir-contact@sunfrt.co.jp