Ending December 31, 2021)

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Ending December 31, 2021) Presentation Material for the First Two Quarters of FY2021 (Ending December 31, 2021) Aug. 13, 2021 Contents ■ Summary p.3 ■ Appendix p.34 ■ Business Results for the First Two Quarters of p.4 Long-Term Vision and Medium-Term Business p.35 FY2021 and Full-Year Earnings Forecast for Plan FY2021 Progress of Investment Plans p.41 ■ Main Impacts of the COVID-19 Pandemic p.5 Medium-Term Business Plan Progress Report p.42 ■ Assessment of the Market Environment and p.6 Future Policies Fair Value of Rental Properties p.43 ■ ESG Report: Recent Initiatives p.7 Major Development Projects p.44 ■ Shareholder Returns p.8 Features of the Yaesu-Nihonbashi-Kyobashi p.45 ■ Financials p.9 Area Shibuya 2-Chome West Area p.48 Consolidated Statement of Income for p.10 (Shibuya 2-Chome Project) (provisional name) the First Two Quarters of FY2021 Acquisition of Shares of Expert Office Co., Ltd. p.49 Consolidated Balance Sheet for p.11 the First Two Quarters of FY2021 Revision of Materiality p.50 Balance of Real Estate for Sale p.13 ESG Report: Recent Initiatives p.51 Consolidated Statement of Cash Flows for p.14 the First Two Quarters of FY2021 Quarterly Segment Data p.53 Investment Plan for FY2021 p.15 List of Facilities p.54 Full-Year Earnings Forecast for FY2021 p.16 Market Data p.55 ■ Business Results by Segment p.17 (1) Commercial Properties Business p.18 (2) Residential Business p.22 (3) Asset Service Business p.28 (4) Other p.30 2 Copyright © Tokyo Tatemono Co., Ltd. All Rights Reserved. Summary Business Results for the First Two Quarters of FY2021 • Although the hotel, retail facilities and parking business continued to be affected by the spread of COVID-19, the mainstay leasing business of office buildings remained strong and the for-sale condominiums business performed well, and both revenue and profit increased due to factors such as an increase in property sales to investors. (Amount of property sales to investors: ¥26.7 billion, gross profit therefrom: ¥8.9 billion) Full-Year Earnings Forecast for FY2021 • Full-year earnings forecasts are unchanged in the company-wide operating revenue and each profit item, but the breakdown of operating revenue in the residential business and asset services segments has been revised. (See pages 22 and 28 for details) Topics • Established “Tokyo Tatemono Group Human Rights Policy” and “Sustainable Procurement Standards” (May/see page 51) • Set medium- to long-term targets for reducing greenhouse gas emissions (June/see page 8) • Acquisition of shares of Expert Office Co., Ltd. (consolidated subsidiary) (July/see page 49) • Issued sustainability bonds for individual investors (July/see page 52) • Integrated report released (July/see page 50) 3 Copyright © Tokyo Tatemono Co., Ltd. All Rights Reserved. Business Results for the First Two Quarters of FY2021 and Full-Year Earnings Forecast for FY2021 • Although the hotel, retail facilities and parking business continued to be affected by the spread of COVID-19, the mainstay leasing business of office buildings remained strong and for-sale condominiums business performed well, and both revenue and profit increased due to factors such as an increase in property sales to investors. • (Amount of property sales to investors: ¥26.7 billion, gross profit therefrom: ¥8.9 billion) 2021/12 2020/6 2021/6 Increase/ Unit: ¥ billion Full-year Achievement rate Actual Actual Decrease forecasts Operating revenue 152.4 162.5 10.1 355.0 46% PL Operating profit 18.5 30.3 11.7 54.0 56% Business profit*1 18.9 30.2 11.2 53.0 57% Profit attributable to owners of parent 10.8 20.1 9.3 33.0 61% Increase/ 2021/12-end Unit: ¥ billion 2020/12-end 2021/6-end Decrease Forecasts Total assets 1,624.6 1,648.6 24.0 - BS Interest-bearing debt 976.8 986.0 9.1 1,020.0 Debt equity ratio (times)*2 2.5 2.4 (0.1) - Interest-bearing debt / EBITDA multiple 13.4 - - - (times)*3 *1: Business profit = Operating profit + Share of profit (loss) of entities accounted for using equity method *2: Debt equity ratio = Interest-bearing debt / Equity capital *3: Interest-bearing debt / EBITDA multiple = Interest-bearing debt / (Operating profit + Interest & dividend income + Share of profit (loss) of entities accounted for using equity method + Depreciation expense + Goodwill amortization expense) 4 Copyright © Tokyo Tatemono Co., Ltd. All Rights Reserved. Main Impacts of the COVID-19 Pandemic • The leasing business of hotels and retail facilities, the parking lot business, and the leisure business have continued to be particularly affected by the COVID-19 outbreak. • On the other hand, the commercial properties leasing business as a whole has been stable. The for-sale condominiums business and property sales to investors continued to perform well. Main Items Anticipated Impacts of COVID-19 in FY2021 Impacts of COVID-19 in the Second Quarter of FY2021 Affected • In the leasing of hotels and retail facilities, sales will not recover to the level prior to the spread of COVID-19, and revenues are Commercial anticipated to decrease somewhat as a result of anticipating • Although hotels and retail facilities continued to be affected, the Properties the replacement of some tenants and operators. commercial property leasing business as a whole progressed (Leasing) • However, the volume of assets affected is limited, and an without any substantial changes from the initial plans. increase in revenues and earnings is expected in the commercial property leasing business as a whole. • In the sales of condominiums, show houses and sales centers • Although the number of visitors during the same time period is Residential will only operate on a reservation basis, and it is anticipated limited in model rooms and sales centers, the number of (Sales) that sales will be conducted as planned while ensuring visitors has been steady. Sales have progressed strongly due measures to prevent infection are implemented. to the increased willingness of customers to purchase housing. • Although the operation is difficult in the parking business, it is • In the parking business, as a result of the demands to refrain Asset Service anticipated that the situation will gradually recover from spring, from going out, parking lot occupancy remained low, especially (Parking and generally return to the same level as other years by the for park and ride lots in front of major regional train stations and business) end of this year. However, it is anticipated that the recovery of parking lots attached to large retail facilities. some large parking lots will take until the next fiscal year. • Dog-friendly hotels (Regina Resort) are expected to recover from spring, and earnings are expected to increase year on • All dog-friendly hotels (Regina Resort) and spa facilities (Ofuro Other year. no Osama) continued to be affected. (Leisure • Operation of spa facilities (Ofuro no Osama) is forecast to • At golf courses, although sales of food and beverage services business) recover to pre-COVID-19 levels next fiscal year or later. remained low, operating rates remained strong. • Recovery of visitors to golf courses. Income expected to increase compared with the previous year’s results. • Sales of properties will continue centered on offices and for- Property sales • By the second quarter, sales of commercial facilities and for- rent condominiums in good locations with strong investment to investors rent condominiums were implemented. demand. 5 Copyright © Tokyo Tatemono Co., Ltd. All Rights Reserved. Assessment of the Market Environment and Future Policies • There is a limited direct impact of the spread of COVID-19 on the Company. • We are promoting new product planning with the intention to diversify work and housing in the post-COVID-19 era. • In the real estate trading market, investors are eager to invest in real estate, mainly in logistics properties and for-rent condominiums where stable cash flow is expected. We will proactively promote investments to secure new projects. Assessment of the Future Market Environment and Tokyo Tatemono’s Initiatives • Although the Company's portfolio has not had a significant impact on rent and Specific initiatives vacancy rates, the market vacancy rate is on an upward trend, and attention We have developed a “setup should be paid to the prolonged leasing period. office” that can be rented out • However, the likelihood of vacancy rates and rent levels significantly deteriorating while interior construction is expected to be low because the Company will not complete any major projects such as fixtures and meeting Offices until 2025, there is little new supply in the market in 2021 and 2022, and the rooms has been completed. Company has a superior portfolio (in terms of size and location). It is well received by • The major trend of preferring good locations and high specifications remains unchanged, but with the spread of remote work, etc., product planning for offices companies due to the with higher productivity and responding to the needs of customers who desire for advantage of lower moving flexible workplaces are necessary. in and restoring cost to the original state costs. Setup Office Image Perspective • Demand for for-sale condominiums remains excellent among real consumers. Specific initiatives In addition to convenient locations in highly convenient central Tokyo, properties in suburban areas are also expected to perform well. Implementation of • Stable demand is also expected in for-rent condominiums with no major changes product planning with Residential in the business environment. consideration for working • However, due to the spread of telework, there is an increasing demand for from home and sanitation balancing a comfortable working environment with a relaxing living environment, at Brillia Oshima and we will promote new product development such as securing co-working Parkside. spaces in common areas and workspaces in residences.
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