Annual Report 2017 MITSUBISHI ESTATE CO., LTD
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Otemachi Building, 6-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8133, Japan http://www.mec.co.jp/index_e.html Annual Report 2017 MITSUBISHI ESTATE CO., LTD. Annual Report 2017 CO., LTD. MITSUBISHI ESTATE In Motion for Tomorrow’s This report is printed using paper that contains This report has been prepared using raw materials certified by the Forest 100% vegetable ink. Every effort is made Opportunities Stewardship Council (FSC)®. FSC® certification to contain the incidence of volatile ensures that materials have been harvested organic compounds (VOCs) and to from properly managed forests. preserve petroleum resources. Printed in Japan WorldReginfo - e1fa031d-f1f0-44c7-8001-9972d3cc183f MEC_AR17E_CV_0818_1st.indd 1-2 2017/08/19 0:56 CONTENTS 2 15 35 47 About the Mitsubishi Estate Group Corporate Governance Financial Section Business Review 36 Message from the Chairman of the Board 48 Eleven-Year Summary of Selected Financial Data 16 Office Building Business 1 50 Fiscal 2017 Business Environment 4 20 Office Building Business 2 51 Financial Review 22 Lifestyle Property Business 56 Consolidated Balance Sheets To Our Stakeholders 24 Residential Business 58 Consolidated Statements of Income The mission of the Mitsubishi Estate Group is “to contribute to Consolidated Statements of society through urban development.” In line with that mission, 26 International Business 37 Overview of Corporate Governance System we are embracing innovation with an eye to the future from global 58 Comprehensive Income and long-term perspectives. We are seeking to achieve sustainable Directors value creation by sharpening our competitive edge and venturing 38 Consolidated Statements of wider and deeper with our management capital. 59 Changes in Net Assets 40 Outside Directors / 28 Overview of Activities in Fiscal 2017 61 Consolidated Statements of Cash Flows Remuneration / Evaluation of 62 Notes to Consolidated Financial Statements Summary of Management 42 the Effectiveness of the Board of Directors & Services Business Group 85 Independent Auditor’s Report Corporate Executive Officers, Executive 43 Officers, and Group Executive Officers 28 Investment Management Business 29 Architectural Design & Engineering Business 86 30 Hotel Business Corporate Data 31 Real Estate Services Business 44 Risk Management 86 Principal Mitsubishi Estate Group Companies 32 Business Creation Department 88 Corporate History Business Development, Consulting 33 & Solutions Group 46 89 Organization 34 Financial Highlights by Segment Human Resource Management 90 Corporate Information A Word about Annual Report 2017 In addition to discussions on management direction and the business environment, this annual report includes extensive non-financial information to explain the Mitsubishi Estate Group’s business and corporate activities. We hope this helps shareholders, investors, and all other stakeholders gain a good understanding of the position and direction of the Group as a whole. Definition of Term “Fiscal 2017” refers to the Group’s fiscal year ended March 31, 2017, and other fiscal years are referred to in a corresponding manner. Caution Concerning Forward-Looking Statements This annual report contains forward-looking statements concerning Mitsubishi Estate Co., Ltd., and its future Asset Book CSR Report strategies and earnings outlook, including forecasts, planning, and decisions based on information available http://www.mec.co.jp/ http://www.mec.co.jp/ at the time of publication. As with any forecast, plan, or decision, forward-looking statements are inherently e/investor/irlibrary/ e/csr/csrreport/ susceptible to potential risks, uncertainties, and assumptions. The Company’s actual results may vary materially annual/index.html index.html from those expressed or implied in its forward-looking statements. Annual Report 2017 1 WorldReginfo - e1fa031d-f1f0-44c7-8001-9972d3cc183f ABOUT THE MITSUBISHI ESTATE GROUP The Mitsubishi Estate Group is a leading creator of urban change through the development of Office Building Business Lifestyle Property Business real estate including office buildings, residential properties, and retail properties. As part of our ongoing commitment to achieve sustainable growth, we strive to create new This is Mitsubishi Estate’s core business, The Mitsubishi Estate Group operates the which engages in the development, PREMIUM OUTLETS®, MARK IS, and other value in Japan and overseas under the brand slogan “A Love for People, a Love for the City.” leasing, and property management of retail facilities using a comprehensive office buildings, mainly in Tokyo and other system where it remains continuously major Japanese cities. We promote urban involved with the retail property from the development that contributes to increased planning stage to ongoing operations. appeal of cities while maintaining a balance Under the Logicross brand, Mitsubishi between management property and Estate is pursuing logistics facility business property for sale in our asset portfolio. opportunities nationwide. The Company is also expanding the variety of its properties. Operating Income ¥192,495 million Residential Business International Business U.S.$1,715 million* We offer services to meet a variety of The Mitsubishi Estate Group has pursued needs for condominiums, custom-built business overseas since the 1970s, under- Revenue from Operations housing, purchase and sales, leasing, taking real estate leasing and development brokerage areas, renovations, and manage- businesses in the United States and the ¥1,125,405 million ment. As the circulation of existing homes United Kingdom. In recent years, we have U.S.$10,031 million* expands and people’s lifestyles grow also been actively developing our office increasingly diverse, we are strengthening building, residential, commercial facility, Total Assets our remodeling, construction, and renova- and other real estate businesses in rapidly tion business to seize upon such changes. expanding Asian markets and advancing ¥5,484,115 million into continental Europe. U.S.$48,882 million* Investment Management Business Architectural Design & Engineering Business For investors seeking real estate asset Making use of the knowledge, ability, and management, we provide a wide range of cutting-edge technologies accumulated services based on our specialized expertise, over the 120 years since our founding in * The above amounts were translated into U.S. dollars at ¥112.19 = U.S.$1.00, the approximate prevailing exchange rate on March 31, 2017. utilizing collaboration among our operating the Meiji period, this full-service architec- bases in Japan, the United States, Europe, tural design and engineering business and Asia ex-Japan. These services include meets societal needs through construction, Millions of yen real estate investment trusts (REITs) to meet civil engineering, and urban and regional Revenue from Operating Total Assets Fiscal year ended March 31, 2017 (consolidated) Operations Income management needs for long-term stability development planning and consulting. Office Building Business 484,238 133,570 3,445,008 as well as private placement funds to meet the specific management needs of institu- Lifestyle Property Business 88,955 25,807 484,292 tional investors. Residential Business 407,850 19,253 634,219 International Business 66,556 26,313 541,888 Hotel Business Real Estate Services Business Investment Management Business 21,323 4,520 106,990 This business maintains a network of eight This business provides one-stop real estate Architectural Design & Engineering Business 19,309 445 27,358 hotels under the Royal Park Hotels brand in problem-solving solutions for corporations Hotel Business 33,512 1,932 28,842 Sendai, Tokyo (Nihonbashi, Shiodome, and and high net worth individuals to maximize Haneda), Yokohama, Nagoya, Kyoto, and the value of real estate and optimize its use. Real Estate Services Business 24,243 2,157 25,702 Fukuoka. We are promoting the expansion Its services include real estate brokerage, Other 4,237 289 12,649 of business and improved brand value with condominium and office building leasing Eliminations or Corporate (24,820) (21,793) 177,163 a management foundation focused on management support, parking lot manage- customer satisfaction. ment support, and real estate appraisal. Total 1,125,405 192,495 5,484,115 2 MITSUBISHI ESTATE CO., LTD. Annual Report 2017 3 WorldReginfo - e1fa031d-f1f0-44c7-8001-9972d3cc183f TO OUR STAKEHOLDERS The Future of the Mitsubishi Estate Group As a company, we are looking to become a new breed of real estate developer—one offering added value well beyond just supplying physical spaces. To achieve this, we must draw out the power of our people, our most important management capital, in order to keep our finger on the pulse of the changing times and to pursue new value in the spaces in which people live and work. I assumed the office of president & chief executive officer of customer needs are evolving and to envisage new needs Mitsubishi Estate Co., Ltd., on April 1, 2017. In my roles in before they reach the light. Land and buildings cannot do human resource management over the past 15 years or so, that for us. I have thought constantly about how the Mitsubishi Estate We have been taking various initiatives with a view to Group can make best use of its most important management future growth and I believe that we have come a long way capital—its people. To begin, I would like to discuss just how in preparing the groundwork. But for us to realize further important our people have