Tokyu Fudosan Holdings Corp. · TSE:3289

Tokyu Fudosan — Q3 FY2018 Earnings Presentation

36 slides from Tokyu Fudosan's earnings presentation, February 2019

1. Slide 1: Financial Highlights FY2018 Third Quarter (First Nine Months)

   Financial Highlights FY2018 Third Quarter (First Nine Months) Ended December 31, 2018 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: FY2018 Q3 (First Nine Months) Operating Results

   FY2018 Q3 (First Nine Months) Operating Results Respective businesses remained firm, although revenue and profit decreased due to a decrease in profit on sales of buildings for investors. Q3 First Nine Months Full-year (ended Dec-31) (ended March-31) Compared to the same period （\ billion） FY2018 Pr

4. Slide 4: FY2018 Q3 (First Nine Months) Segment performance

   FY2018 Q3 (First Nine Months) Segment performance Progress was basically made in line with the full-year forecast, although the rate of progress was low in a number of segments. Q3 First Nine Months Full-year (ended Dec-31) (ended March-31) Compared to the same period （\ billion） Progress FY2018 las

5. Slide 5: Summary of balance sheets

   Summary of balance sheets Equity increased substantially due to the implementation of the capital increase through public stock offering conducted in October 2018. FY2017 FY2018 （\ billion） As of Mar-31, As of Dec-31, Compared to the end of the previous fiscal year 2018 2018 Comparison Cash and depo

6. Slide 6: 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 Equity ¥billion Interest-bearing Debt 1,400 Debt Equity ratiio 15.0× Debt/EBITDA ratio 12.8 1,200 11.7 11.7 11.4 12.0 11.2 12.0× 1

7. Slide 7: Urban Development(1) FY2018 Q3(First Nine Months)

   Urban Development(1) FY2018 Q3(First Nine Months) Q3: Decrease in both revenue and profit FY2018: Decrease in both revenue and profit Third Quarter FY2017 FY2018 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 192.3 166

8. Slide 8: Urban Development(2) Vacancy Rate and Rent

   Urban Development(2)Vacancy Rate and Rent As of December 31, 2018 Vacancy rate 0.8% (Tenants actually moving in and out, Office buildings and commercial facilities) (¥/Month/Tsubo) 12% ¥30,000 Tsubo ≅ 3.3㎡ 29,220 27,730 26,610 10% 26,090 24,330 ¥25,000 24,320 24,510 23,850 23,770 24,410 23,270 22,48

9. Slide 9: Urban Development(3) Major projects

   Urban Development(3)Major projects Floor space ： thousand ㎡ Osakashi Naniwaku Takeshiba District Kudanminami motomachi Hotel Chayamachi B-2 Block Development Plan ** 1-chome Project ** Project ** Q Plaza Ikebukuro Urban Redevelopment Shibuya Solasta Chiyoda-ku Shibuya-ku Osaka Toshima-ku Minato-ku O

10. Slide 10: Urban Development(4) Major projects around Shibuya Station

    Urban Development(4)Major projects around Shibuya Station Under the Shibuya Sakuragaoka Block Redevelopment Plan, demolition will start in January 2019 with the aim of commencing operation in FY2023. Project led by Tokyu Land Corporation Project led by Tokyu Corporation SHIBUYA CAST. SHIBUYA Shibuya

11. Slide 11: Urban Development(5) Major projects <Takeshiba>

    Urban Development(5)Major projects <Takeshiba> Both construction and leasing made steady progress toward opening in FY2020. Hamarikyu Gardens (Cultural property/Special scenic spot) Daimon Pedestrian deck (To be built) Hamamatsuchō Kyu Shiba Rikyu Garden (Cultural property/Scenic spot) Office buildi

12. Slide 12: Urban Development(6) Renewable energy business

    Urban Development(6)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, 2018) Hokkaido solar power plant：1PJ wind power plant：2PJ Properties in operation: 14

13. Slide 13: Residential(1) FY2018 Q3(First Nine Months)

    Residential(1) FY2018 Q3(First Nine Months) Q3: Decrease in both revenue and profit FY2018: Increase in revenue and Decrease in profit Third Quarter FY2017 FY2018 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 77.1 45.

14. Slide 14: Residential(2) Change in the indexes for condominium sales

    Residential(2)Change in the indexes for condominium sales For the fiscal year ending March 31, 2019, high-end properties will increase, although the number of units estimated will decrease. FY FY2016 FY2017 FY2018 Forecast FY2019 Forecast No. of units sold Total 1,560units Total 1,627units Total 1,2

15. Slide 15: Property Management(1) FY2018 Q3(First Nine Months)

    Property Management(1) FY2018 Q3(First Nine Months) Q3: Increase in both revenue and profit FY2018: Increase in both revenue and profit Third Quarter FY2017 FY2018 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 114.3 1

16. Slide 16: 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 Facility 800,000 management management 301,841

17. Slide 17: Real Estate Agents(1) FY2018 Q3(First Nine Months)

    Real Estate Agents(1) FY2018 Q3(First Nine Months) Q3: Increase in both revenue and profit FY2018: Increase in both revenue and profit Third Quarter FY2017 FY2018 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 66.9 83.

18. Slide 18: Real Estate Agents(2) Performance indicators in sales agency operations

    Real Estate Agents(2)Performance indicators in sales agency operations Although both the number of real-estate agents’ transactions and the average transaction prices decreased in wholesale activities, revenue increased due to an increase in retail activities. FY2018 Q3 Highlights Retail Wholesale T

19. Slide 19: Wellness(1) FY2018 Q3(First Nine Months)

    Wellness(1) FY2018 Q3(First Nine Months) Q3: Increase in both revenue and profit FY2018: Increase in both revenue and profit Third Quarter FY2017 FY2018 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue 69.2 88.3 19.1 70.

20. Slide 20: Wellness(2) Major projects

    Wellness(2)Major projects Plan new facilities mainly for hotel business such as Tokyu Stay Type Major project Usage Open Tokyu Stay Sapporo April 2018 Tokyu Stay Hakata June 2018 Tokyu Stay Sapporo Odori November 2018 Tokyu Stay Kyoto Shin-Kyogoku Dori December 2018 Tokyu Stay Kyoto Rryogaemachi-Dor

21. Slide 21: Tokyu Hands FY2018 Q3(First Nine Months)

    Tokyu Hands FY2018 Q3(First Nine Months) Q3: Increase in both revenue and profit FY2018: Increase in both revenue and profit Third Quarter FY2017 FY2018 Compared to the same period Comparison Progress First Nine Months（\ billion） Q3(Apr-Dec) Q3(Apr-Dec) last year New stores+1.3, Operating revenue 74

22. Slide 22: Innovation Business(1) FY2018 Q3(First Nine Months)

    Innovation Business(1) FY2018 Q3(First Nine Months) Q3: Decrease in revenue and Increase in profit FY2018: Increase in both revenue and profit Third Quarter FY2017 FY2018 Compared to the same period Comparison Progress First Nine Months (\ billion) Q3(Apr-Dec) Q3(Apr-Dec) last year Operating revenue

23. Slide 23: 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 December

24. Slide 24: Reference

    Reference 23 Copyright © TOKYU FUDOSAN HOLDINGS CORPORATION All rights reserved.

25. Slide 25: Reference① Progress in the Medium-term Management Plan

    Reference① Progress in the Medium-term Management Plan (Operating profit/Net profit*) Operating Profit Net income* Medium-term Management Plan 2017-2020 Residential Real-Estate Agents 120 Innovation business ¥billion Tokyu Hands Wellness 93.0 100 Property Management 8.5 Urban Development 77.5 80.0 7

26. Slide 26: Reference② Public stock offering

    Reference② Public stock offering The public stock offering was resolved on October 3, and its conditions were determined on October 22. *Total of new shares issued by public offering No. of shares and third-party allotment, and disposal of for subscription 110 million Capital increase ¥66.8 billion

27. Slide 27: Reference③ Return to Shareholders

    Reference③ Return to Shareholders Annual dividend for the fiscal year ending March 31, 2019, will be raised to 15.5 yen, representing the sixth consecutive increase. 16Yen Dividend*（Year-end） 14Yen Dividend*（Interim） 12Yen 8.0 7.5 10Yen 6.5 6.5 8Yen 5.0 6Yen 4.5 3.5 3.5 4Yen 7.5 6.5 7.0 5.0 5.5 2Yen

28. Slide 28: Reference④ ESG management

    Reference④ 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 en

29. Slide 29: Reference⑤ Market value appraisal for leased properties

    Reference⑤ Market value appraisal for leased properties ＊As of Mar-31, 2018 On the back of a brisk real estate market, unrealized profit of leased properties increased. FY2016 FY2017 （\ billion） Comparison Remarks Mar-2017 Mar-2018 Carrying Value 797.5 791.4 (6.1) ■Market value at the end of the fis

30. Slide 30: Reference⑥ Transition in total floor area and AUM transition

    Reference⑥ Transition in total floor area and AUM transition ＊As of Sep-30, 2018 〈Transition in total floor area〉 〈AUM transition〉 Thousand ㎡ ¥billion 2,000 Commercial facilities 1,009.5 988.6 Office building 1,000 1,548 1,580 1,458 1,438 1,426 1,500 787.3 371.7 800 355.4 644.1 192.9 859 934 556.8 6

31. Slide 31: Reference⑦ Distribution of Office Buildings

    Reference⑦ Distribution of Office Buildings (Urban Development segment) For the portfolios, office buildings are concentrated in four wards in the Tokyo Metropolitan area (As of Sep-30, 2018) 〈Area〉 〈Completed year〉 Metropolitan 4districts After 2001 482thousand ㎡（83%） 49buildings 354thousand ㎡（61%）

32. Slide 32: Reference⑧ The superiority of Shibuya

    Reference⑧ The superiority of Shibuya The vacancy rate continued to remain low in the 5 wards of central Tokyo as an office area, and rents are steadily on the rise. 〈Falling vacancy rate〉 〈Increasing average rent〉 （2012 figures = 100） （%） Chiyoda-ku Chiyoda-ku 12.0 130.0 Chuo-ku Chuo-ku 127.8 Minat

33. Slide 33: Reference⑨ Major office buildings

    Reference⑨ Major office buildings(Urban Development segment) As of the end of September 2018, the Company holds 60 buildings, located mainly in four wards in central Tokyo. No. of Total floor Area Major properties[Building] Year built notes buildings space * Shibuya Center Place 1983 7 Shibuya Dogen

34. Slide 34: Reference⑩ Major commercial facilities

    Reference⑩ Major commercial facilities(Urban Development segment） As of the end of September 2018, the Company operates 23 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 * Tok

35. Slide 35: Reference⑪ Major facilities (Wellness business)

    Reference⑪ Major facilities (Wellness business) ＊As of Sep-30, 2018 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 Tateshin

36. Slide 36: Tokyu Fudosan Holdings

    & TOKYU FUDOSAN HOLDINGS

Tokyu Fudosan Holdings — Q3 FY2018 Earnings Presentation on 6ix