Tokyu Fudosan Holdings Corp. · TSE:3289

Tokyu Fudosan — Q3 FY2019 Earnings Presentation

44 slides from Tokyu Fudosan's earnings presentation, February 2020

1. Slide 1: Financial Highlights FY2019 Third Quarter (First Nine Months)

   Financial Highlights FY2019 Third Quarter (First Nine Months) Ended December 31, 2019 TOKYU FUDOSAN HOLDINGS CORPORATION Code：3289

2. Slide 2: Forward-looking statements

   The forecasts and other forward-looking statements in this report are based on currently available information and certain assumptions determined as rational. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual performance may significantl

3. Slide 3: Contents

   Contents • Overview of Results Fiscal Year 2019 Third Quarter ・・・・・ 3 • Medium-Term Management Plan 2017-2020 ・・・・・ 27 • Reference ・・・・・ 33 2 Copyright © TOKYU FUDOSAN HOLDINGS CORPORATION All rights reserved.

4. Slide 4: FY2019 Q3 (First Nine Months) Operating Results

   FY2019 Q3 (First Nine Months) Operating Results Profit decreased, mainly due to a fall in the number of properties sold overseas, despite higher revenue due to an increase in the number of condominium units posted. Q3 First Nine Months Full-year (ended Dec-31) (ended March-31) Compared to the same p

5. Slide 5: FY2019 Q3 (First Nine Months) Segment performance

   FY2019 Q3 (First Nine Months) Segment performance Progress was made in line with the full-year forecast. Q3 First Nine Months Full-year (ended Dec-31) (ended Mar-31) Compared to the same period （\ billion） Progress FY2019 last year FY2018 FY2019 Comparison FY2018 Forecast Operating revenue 584.4 601

6. Slide 6: Summary of balance sheets

   Summary of balance sheets Assets and liabilities increased, mainly due to an increase in Real estate for sale and Property and equipment, Intangible assets. FY2018 FY2019 （\ billion） As of Mar-31, As of Dec-31, Compared to the end of the previous fiscal year 2019 2019 Comparison Cash and deposits 18

7. Slide 7: Trends in equity and interest-bearing debt

   Trends in equity and interest-bearing debt Rating Institution: Japan Credit Rating Agency, Ltd. Long-term：A (Stable) Short-term：J-1 Medium-Term Management Plan 2017-2020 ¥billion Equity Interest-bearing Debt Debt Equity ratiio Debt/EBITDA ratio 1,400 14.0× 12.8 EBITDA 11.7 11.7 12.0 multiple 1,200 1

8. Slide 8: Issuance of green bonds

   Issuance of green bonds Issuance of the Green Bond to spread awareness of our group's environmental initiatives 〈Issuance Overview〉 Use of proceeds Term 5-year Total amount of issue JPY 10,000 million ・Shibuya Solasta Interest rate 0.190％ ・ReENE Matsumae Wind Pricing Date Power Plant January 17, 202

9. Slide 9: Urban Development(1) FY2019 Q3(First Nine Months)

   Urban Development(1) FY2019 Q3(First Nine Months) Q3: Decrease in revenue and Increase in profit FY2019: Increases in both revenue and profit Third Quarter FY2018 FY2019 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 1

10. Slide 10: Urban Development(2) Vacancy Rate and Rent

    Urban Development(2)Vacancy Rate and Rent As of December 31, 2019 Vacancy rate 0.4% (Tenants actually moving in and out, Office buildings and commercial facilities) (¥/Month/Tsubo) 12% ¥30,000 Tsubo ≅ 3.3㎡ 29,220 27,730 26,090 10% 26,610 ¥25,000 25,310 25,180 23,850 23,77024,210 24,500 23,270 22,480

11. Slide 11: Urban Development(3) Major projects

    Urban Development(3)Major projects Floor space ： thousand ㎡ Kudanminami Namba Motomachi Q Plaza Ikebukuro Jimbocho North Asakusa 2-chome Tokyo PortCity Takeshiba 1-chome Project ** 1-chome Place Toshima-ku Tokyu Building Hotel Project** Chiyoda-ku Chayamachi B-2 Block Minato-ku Osaka Commercial/Cine

12. Slide 12: Urban Development(4) Major projects in the Greater Shibuya area

    Urban Development(4)Major projects in the Greater Shibuya area Shibuya Fukuras was completed in October 2019. In addition, construction started in October in the Shibuya Sakuragaoka Block Redevelopment Plan. Shibuya 渋谷駅sta. Project led by Tokyu Land Corporation Project led by Tokyu Corporation SHIBU

13. Slide 13: Urban Development(5) Major projects <Shibuya Solasta>

    Urban Development(5)Major projects <Shibuya Solasta> Completed in March 2019 as a smart office that uses IoT and became a new base of the Group. 〈Smart office that uses IoT〉 Visualizes the occupancy Checks the locations of level of bathrooms. workers in real time. Registers the information of Air-co

14. Slide 14: Urban Development(6) Major projects <Shibuya Fukuras>

    Urban Development(6)Major projects <Shibuya Fukuras> The building was completed in October 2019. Equipped with a bus terminal and tourism support facility on the first floor, it is expected to function as a new gateway to Shibuya. Floor space ： thousand ㎡ Tokyu Plaza Shibuya Rooftop 〈CÉ LA VI〉 place

15. Slide 15: Urban Development(7) Major projects <Tokyo PortCity Takeshiba>

    Urban Development(7)Major projects <Tokyo PortCity Takeshiba> Facilitate the conversion of Takeshiba into a smart city in cooperation with SoftBank Corporation that will use the facility as an office tenant. Office tower Office/Commercial Floor space : about 180 Complete : May, 2020 (Plan) Office to

16. Slide 16: Urban Development(8) Renewable energy business

    Urban Development(8)Renewable energy business Investment in the renewable energy business, including investment in solar power and wind power generation plants, made progress. Projects acquired (As of December 31, 2019) Properties in operation: 22 solar power plant in operation Hokkaido Projects und

17. Slide 17: Residential(1) FY2019 Q3(First Nine Months)

    Residential(1) FY2019 Q3(First Nine Months) Q3: Increases in both revenue and profit FY2019: Increases in both revenue and profit Third Quarter FY2018 FY2019 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 45.0 70.1 25.

18. Slide 18: Residential(2) Change in the indexes for condominium sales

    Residential(2)Change in the indexes for condominium sales In the fiscal year ending March 31, 2020, the number of units sold will increase, and the percentage of contracts secured has made a steady progress. FY FY2017 FY2018 FY2019 Forecast FY2020 Forecast No. of units sold Total 1,627units Total 1,

19. Slide 19: Property Management(1) FY2019 Q3(First Nine Months)

    Property Management(1) FY2019 Q3(First Nine Months) Q3: Increases in both revenue and profit FY2019: Increases in both revenue and profit Third Quarter FY2018 FY2019 Compared to the same Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) period last year Operating revenue 123.3

20. Slide 20: Property Management(2) Stock of properties

    Property Management(2)Stock of properties Condominiums and buildings under management steadily increased to expand stock under management. 〈Trend in stock of comprehensive condominium management and facility management in number of units〉 Comprehensive management Facility management 800,000 301,841

21. Slide 21: Real Estate Agents(1) FY2019 Q3(First Nine Months)

    Real Estate Agents(1) FY2019 Q3(First Nine Months) Q3: Increase in revenue and Decrease in profit FY2019: Increases in both revenue and profit Third Quarter FY2018 FY2019 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue

22. Slide 22: Real Estate Agents(2) Performance indicators in sales agency operations

    Real Estate Agents(2)Performance indicators in sales agency operations The number of transactions and the average handling price increased in both retail and wholesale sales. FY2019 Q3 Highlights Retail Wholesale Total No. of transactions 18,322 719 19,041 □Retail (Result) ・The number of transaction

23. Slide 23: Wellness(1) FY2019 Q3(First Nine Months)

    Wellness(1) FY2019 Q3(First Nine Months) Q3: Decreases in both revenue and profit FY2019: Decreases in both revenue and profit Third Quarter FY2018 FY2019 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 88.3 81.7 (6.6)

24. Slide 24: Wellness(2) Major projects

    Wellness(2)Major projects Tokyu Stay, which maintained high occupancy, opened hotels one after another, and senior housing is also due to open multiple facilities. New Tokyu Stay hotels scheduled to open Opening date ＜Number of Tokyu Stay hotels and their guest rooms＞ Tokyu Stay Kanazawa February 20

25. Slide 25: Tokyu Hands FY2019 Q3(First Nine Months)

    Tokyu Hands FY2019 Q3(First Nine Months) Q3: Increases in both revenue and profit FY2019: Increases in both revenue and profit Third Quarter FY2018 FY2019 Compared to the same Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) period last year New stores +1.0, Operating revenue

26. Slide 26: Innovation Business(1) FY2019 Q3(First Nine Months)

    Innovation Business(1) FY2019 Q3(First Nine Months) Q3: Decreases in both revenue and profit FY2019: Decreases in both revenue and profit Third Quarter FY2018 FY2019 Compared to the same Comparison Progress First Nine Months (\ billion) Q3(Apr-Dec) Q3(Apr-Dec) period last year Operating revenue 26.8

27. Slide 27: Innovation Business(2) Overseas operations

    Innovation Business(2)Overseas operations Business expansion mainly in Indonesia and America 〈Indonesia〉 〈America〉 BRANZ BSD Puri Botanical project 425 Park Avenue Condominiums, Total number of units: Condominium, Total number of units: about 3,000 units scheduled about 600 units scheduled Completed

28. Slide 28: Medium-Term Management Plan 2017-2020

    Medium-Term Management Plan 2017-2020 27 Copyright © TOKYU FUDOSAN HOLDINGS CORPORATION All rights reserved.

29. Slide 29: Progress of Medium-Term Management Plan 2017-2020

    Progress of Medium-Term Management Plan 2017-2020 （The revised version was announced in May 2019） Revised the targets set in the Medium-Term Management Plan in consideration of the current business environment and the capital increase through public stock offering made in October 2018 and added ROE

30. Slide 30: Progress in the Medium-term Management Plan (Operating profit/Net profit)

    Progress in the Medium-term Management Plan (Operating profit/Net profit*) Operating Profit Net profit* Residential Medium-term Management Plan 2017-2020 Real-Estate Agents Innovation business 120 ¥billion Tokyu Hands Wellness 95.0 Property Management 100 Urban Development 82.0 9.0 Elimination 77.5

31. Slide 31: Basic Policy for Increasing Shareholder Value and Corporate Value (1)

    Basic Policy for Increasing Shareholder Value and Corporate Value (1) Aim to increase EPS and ROE in an effort to increase shareholder value by growing earning power while maintaining financial discipline. Business portfolio strategy Increase Increase Asset Utilization Type Business shareholder valu

32. Slide 32: Basic Policy for Increasing Shareholder Value and Corporate Value (2)

    Basic Policy for Increasing Shareholder Value and Corporate Value (2) Current status and basic policy on business portfolio strategy BS for FY2018 Ended Mar-2019 Breakdown of assets by segment Total assets Property Management Real Estate Agents ¥2,405.2 billion ¥102.5 billion ¥104.9 billion Tokyu Ha

33. Slide 33: Basic Policy for Increasing Shareholder Value and Corporate Value (3)

    Basic Policy for Increasing Shareholder Value and Corporate Value (3) Basic policy regarding financial and capital policies BS for FY2018 D/E ratio and EBITDA multiple Ended Mar-2019 •For the time being, control the D/E ratio at 2.3 or below, aim for the 10 times-level of EBITDA Total assets ¥2,405.

34. Slide 34: Reference

    Reference 33 Copyright © TOKYU FUDOSAN HOLDINGS CORPORATION All rights reserved.

35. Slide 35: Return to Shareholders

    Return to Shareholders Annual dividend for the fiscal year ending March 31, 2020, will be raised to 16.0 yen, representing the 7th consecutive increase. 16.0 16Yen Dividend*（Year-end） 15.5 14.5 14Yen Dividend*（Interim） 13.0 12.0 12Yen 8.0 8.0 10.0 7.5 10Yen 6.5 8.0 6.5 8Yen 7.0 5.0 6Yen 4.5 3.5 4Yen

36. Slide 36: ESG management

    ESG management ESG management to realize sustainable growth and the enhancement of corporate value Environment Corporate governance 〈FY2020 KPI〉 Selected as global ESG index 〈FY2020 KPI〉 Rate of attendance at the board of CO2 emissions：▲25% reduction directors' meeting ：100％ CASBEE/DBJ environmental

37. Slide 37: Market value appraisal for leased properties

    Market value appraisal for leased properties ＊As of Mar-31, 2019 Unrealized profit of leased properties increased thanks to the active real estate market and the inclusion of large redevelopment projects. FY2017 FY2018 （\ billion） Comparison Remarks Mar-2018 Mar-2019 Carrying Value 791.4 816.1 24.8

38. Slide 38: Transition in total floor area and AUM transition

    Transition in total floor area and AUM transition 〈Transition in total floor area〉 〈AUM transition〉 Thousand ㎡ ¥billion 2,000 Commercial facilities 1,400 API** 1,311.0 Office building CRR*** 1,251.9 1,200 Private REITs, etc. 1,580 1,549 1,458 1,438 1,427 1,500 988.6 1,000 583.7 527.2 787.3 934 850 8

39. Slide 39: Distribution of Office Buildings (Urban Development segment)

    Distribution of Office Buildings (Urban Development segment) For the portfolios, office buildings are concentrated in four wards in the Tokyo Metropolitan area (As of Dec-31, 2019) 〈Area〉 〈Completed year〉 Metropolitan 4districts After 2001 593thousand ㎡（85%） 53buildings 463thousand ㎡（66%） 28building

40. Slide 40: The superiority of Shibuya

    The superiority of Shibuya The vacancy rate continued to remain low, and rents are steadily on the rise in the 5 wards of central Tokyo as an office area. 〈Falling vacancy rate〉 〈Increasing average rent〉 （2012 figures = 100） （%） Chiyoda-ku Chiyoda-ku 12.0 150.0 Chuo-ku Chuo-ku Minato-ku Minato-ku 14

41. Slide 41: Major office buildings (Urban Development segment)

    Major office buildings(Urban Development segment) As of the end of December 2019, the Company holds 65 buildings, located mainly in four wards in central Tokyo. No. of Total floor Area Major properties[Building] Year built notes buildings space * Shibuya Dogenzaka Tokyu 1983 13 Unosawa Tokyu 1984 15

42. Slide 42: Major commercial facilities (Urban Development segment)

    Major commercial facilities(Urban Development segment） As of the end of December 2019, the Company operates 24 locations in the Tokyo area and 8 locations in Kansai and other regions. No. of Major properties Total floor Area Year built notes facilities [Commercial facilities] space * Tokyu Plaza Kam

43. Slide 43: Major facilities (Wellness business)

    Major facilities (Wellness business) ＊As of Dec-31, 2019 Manage diverse resort facilities throughout the country Number of Number of facilities rooms Name of facilities Teteshina Hakone Myojindai Urabandai Grandeco Kyoto Takagamine Katsuura Madarao Nasu VIALA annex Kyoto Hamanako Tateshina Annex Kyu

44. Slide 44: Tokyu Fudosan Holdings

    & TOKYU FUDOSAN HOLDINGS

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