Financial Results Briefing Material for the Fiscal Year Ended March 31, 2025

Financial Results Briefing Material for the Fiscal Year Ended March 31, 2025

May 19, 2025

Enriching everyone's future with Bazukuri that draws people in

Executive Summary ・・・P.3

Financial Results for the Fiscal Year Ended March 31, 2025 and Forecasted Financial Results for the Fiscal Year Ending March 31, 2026

・・・P.5

Progress Review of Medium-term Management Plan "WAY 2040 Stage 1" (FY2024 to FY2026)

・・・P.13

Heiwa Real Estate Group Purpose, Long-term Vision, and Medium-term Management Plan

"WAY 2040 Stage 1" (FY2024 to FY2026)

・・・P.32

Reference ・・・P.49

Executive Summary

• In the consolidated financial results for the fiscal year ended March 31, 2025, operating profit, ordinary profit, and profit attributable to owners of parent all exceeded previous records.

• The forecast of consolidated financial results for the fiscal year ending March 31, 2026 projects that operating profit, ordinary profit, and profit attributable to owners of parent will exceed previous records.

• In June 2024, the Company concluded a capital and business alliance agreement with Taisei Corporation and a three-party agreement related to a capital and business alliance with Taisei Corporation and Mitsubishi Estate Co., Ltd.

• Regarding the Nihonbashi Kabutocho and Kayabacho district, the Company announced the Revitalization Vision 2040, and the urban planning proposal for the Nihonbashi Kayabacho 1-Chome District 6 Development Project (provisional name) was implemented. FinGATE has at least 100 corporate tenants, including independent asset management companies and financial startups (mainly fintech-based).

• Regarding the redevelopment projects in Sapporo, the property rights reallocation plan for the Odori-nishi 4 South was approved, and attracted Park Hyatt, Hyatt's highest-ranking brand. Construction has also begun on a new building at North 4 West 3.

• As part of the Company's initiatives based on the capital and business alliance with Taisei Corporation, the Company has acquired a portion of the shares in Taisei Real Estate Asset Management (TREAM), which is the independent asset management company for the non-listed Taisei Corporation Private REIT, Inc. (TCPR). The Company has also entered into a sponsor support agreement with both TCPR and TREAM.

• A 50% reduction in the Group's greenhouse gas (GHG) emissions (Scopes 1 + 2) compared to FY2018 was achieved.

• Selected for the highest rating, the "A List," for the first time in CDP2024's climate change category.

• Certified as a "Outstanding Organizations of KENKO Investment for Health 2025 (White 500)."

• To further advance management conscious of the cost of capital and the company's stock price, the Company is accelerating its reduction of cross-shareholdings. As a result, Return on Equity (ROE) is projected to be at least 8% for both the fiscal year ending March 31, 2026 and the fiscal year ending March 31, 2027.

• As an initiative to enhance shareholder returns, the Company proactively bought back shares worth approximately 9 billion yen in June 2024. Additionally, the Company plans to implement a special dividend of 15 yen per share* for three years starting from the fiscal year ended March 31, 2025 through the fiscal year ending March 31, 2027.

• To expand its investor base, the Company has resolved to conduct a stock split at a ratio of two shares per share, effective July 1, 2025.

* The Company plans to execute a stock split at a ratio of two shares per share, effective July 1, 2025; therefore, the amounts stated reflect this stock split.

Financial Results for the Fiscal Year Ended March 31, 2025 and Forecasted Financial Results for the Fiscal Year Ending March 31, 2026

• Net sales decreased year on year due to decreasing revenue from sales of properties. Operating profit and ordinary profit increased year-on-year due to increasing leasing revenue resulting from the contribution of Mercure Hotel Tokyo Hibiya, which opened in the previous fiscal year, and properties acquired in the same year. Operating profit and ordinary profit reached record highs.

• Profit attributable to owners of parent increased year-on-year and reached a record high. In addition to the factors mentioned above, this was due to factors such as recognition of gain on sale of investment securities resulting from the accelerated reduction of cross-shareholdings, and a decrease in income taxes - deferred resulting from the recognition of deferred tax assets.

  (Millions of yen)		Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025	Year on year	Year on year (%)	Full-year forecast for the fiscal year ending March 31, 2025 (*1)	Progress against full-year forecast (*1) (%)
  Net sales		44,433	42,075	(2,357)	(5.3)	41,700	100.9
  	Building Business	40,544	37,997	(2,547)	(6.3)	37,600	101.1
  Asset Management Business		3,888	4,078	+189	+4.9	4,100	99.5
  Operating profit		13,022	13,196	+174	+1.3	12,500	105.6
  	Building Business	12,639	13,010	+371	+2.9	12,400	104.9
  	Asset Management Business	2,197	2,355	+157	+7.2	2,300	102.4
  	Intersegment eliminations	(1,814)	(2,169)	(355)	-	(2,200)	-
  Ordinary profit		11,463	11,651	+188	+1.6	10,900	106.9
  Extraordinary income		1,218	799	(418)	(34.4)
  Extraordinary losses		271	16	(254)	(93.8)
  Profit attributable to owners of parent		8,450	9,565	+1,115	+13.2	9,300	102.9
  EPS (Yen) (*2)		118.06	141.55	+23.49	+19.9	137.62	102.9

  *1 Announced on January 31, 2025

  *2 The Company plans to execute a stock split at a ratio of two shares per share, effective July 1, 2025; therefore, the amounts stated reflect this stock split.

  Consolidated Financial Results by Segment for the Fiscal Year Ended March 31, 2025

  Year-on-year differences in segment results

  • Building Business

    (Millions of yen)		Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025	Year on year	Year on year (%)	Main reasons for year-on-year differences in results
    Net sales		40,544	37,997	(2,547)	(6.3)	The increase in leasing revenue mainly reflected contributions from the Mercure Hotel Tokyo Hibiya, which opened in the previous fiscal year, and the ORSUS Shin-Osaka and ORSUS Togoshiginza, which were built and acquired in the previous fiscal year, as well as to success in filling vacant building space and raising leasing amounts. leasing revenue. 0.4 billion yen to leasing revenue. * The vacancy rate for the Company as a whole was 3.25% as of March 31, 2025.
    	Leasing revenue	26,382	27,517	+1,135	+4.3
    	Revenue from sales of properties	12,780	8,965	(3,815)	(29.9)
    Other		1,382	1,514	+132	+9.6
    Operating profit		12,639	13,010	+371	+2.9	projects, etc. reduced leasing revenue by about 0.9 billion yen.
    	Gains on sales of properties	4,808	4,519	(288)	(6.0)	The decrease in sales of properties reflected a decrease in sales of real estate for sale. (Osaka Kitahama Office, Sapporo Office 1 (part of the equity), Sapporo Office 2, and Fukuoka Residence were sold during the period under review.)

    • Leasing revenue

    • Operations of the Mercure Hotel Tokyo Hibiya, etc. contributed about 1.6 billion yen to

    • Increased periodic revenues from acquired and newly built properties, etc., contributed about 0.4 billion yen to leasing revenue.

    • Filing of vacant space along with increases in leasing amounts, etc. contributed about

    • Departures of tenants from buildings scheduled for demolition due to redevelopment

    • Reduced periodic revenues resulting from sales of properties, etc. reduced leasing revenue by about 0.4 billion yen.

    • Revenue from sales of properties

    (Millions of yen)

    Fiscal year ended March 31, 2024

    Fiscal year ended March 31, 2025

    Year on year

    Year on year (%)

    Main reasons for year-on-year differences in results

    • The Asset Management Business saw increased revenue due to higher

    asset management revenue.

  • Asset Management Business

  Net sales	3,888	4,078	+189	+4.9
  Asset management revenue	2,565	2,781	+215	+8.4
  Brokerage commissions	1,322	1,296	(25)	(1.9)
  Operating profit	2,197	2,355	+157	+7.2

• Due to the payment of participation fee for the Odori-nishi 4 South, Type 1 District Redevelopment Project and the North 4 West 3, Type 1 District Redevelopment Project, as well as the construction costs for Caption by Hyatt Kabutocho Tokyo, leading to an increase in total assets. Total liabilities increased, reflecting a rise of interest-bearing liabilities.

• Share buybacks totaling 2.4 million treasury shares, among other factors, led to decreased shareholders' equity and a subsequent reduction in net assets.

* Interest-bearing liabilities comprised short-term borrowings, current portion of bonds payable, current portion of long-term borrowings, certain other current liabilities, bonds payable, long-term borrowings, and long-term accounts payable - other.

Key Performance Indicators

(Yen) 7,000

6,000

5,000

4,673

4,120

5,030 5,287 5,405 5,497

5,774 6,169

4,700

(Yen) 320.0

280.0

240.0

6.5%

236.7

254.3

236.1

283.1

10.0%

8.0%

4,000

3,022

3,456 3,669

2,837

3,455 3,955 3,785 4,080

200.0

4.7% 4.7% 5.2%

5.8%

6.3% 7.3% 7.7%

6.9%

7.9%

6.0%

3,000

2,000

2,581

2,155 2,313 2,377

2,445 2,630 2,820

2,799

3,190 3,270 3,334

3,511

3,534

160.0

120.0

3.4% 2.9%

110.5 113.2 132.6

158.7 184.8 189.8

4.0%

1,000

2,050 2,131

80.0 2.6%

2.8%

2.8% 3.3% 3.2%

3.2% 3.1% 3.3%

3.2% 3.2%

2.0%

1,400

0

40.0

0.0

72.7 62.5

2.9%

2.8%

0.0%

Mar./14 Mar./15 Mar./16 Mar./17 Mar./18 Mar./19 Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

Stock price Book-value per share (BPS) Net asset value per share

Mar./14 Mar./15 Mar./16 Mar./17 Mar./18 Mar./19 Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25

EPS ROE ROA

(Yen) 4,000

3,000

2,336

2,515 2,644 2,702 2,748 2,887

3,085

2,350

(Yen) 160.00

120.00

5.8% 6.5% 6.3%

118.37

127.14

141.55

118.06

7.9%

10.0%

8.0%

2,000

1,291

1,511

1,728 1,834 2,060

1,189 1,222 1,315 1,410

1,419

1,728

1,978 1,893 2,040

80.00

3.4% 2.9%

4.7% 4.7%

5.2%

79.37

92.41 94.88

7.3% 7.7% 6.9%

6.0%

4.0%

1,000

1,077 1,157

1,400

1,595 1,635 1,667 1,755 1,767

40.00

2.6%

2.8%

55.25 56.59 66.29

3.3%

824 844

0

700

1,025 1,066

787

36.36

2.8%

31.27

3.2% 2.9% 3.2% 3.1% 3.3% 2.8% 3.2% 3.2%

2.0%

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

0.00

0.0%

Mar./14 Mar./15 Mar./16 Mar./17 Mar./18 Mar./19 Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

Stock price Book-value per share (BPS) Net asset value per share

Mar./14 Mar./15 Mar./16 Mar./17 Mar./18 Mar./19 Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25

EPS ROE ROA

*1 Net asset value per share is calculated as (net assets + after-tax unrealized gains on assets for leasing and other purposes) / number of shares issued excluding treasury shares

*2 The Company plans to execute a stock split at a ratio of two shares per share, effective July 1, 2025; therefore, the amounts stated reflect this stock split.

Key Performance Indicators

(Billions of yen) (Times)

500

450

400

350

300

250

200

150

100

439.8

4.0

3.0

2.0

1.0

40.0%

34.9%

31.0%

32.3% 33.3%

32.5% 31.6%

31.1%

31.7%

29.0%

30.0% 30.9% 28.1%

1.7

1.6

1.9

1.5

1.6

1.6

1.7

1.6

1.4

1.4

1.5

1.5

30.0%

20.0%

10.0%

50

0

FYE

420.1

421.2

376.8

388.9

339.5

363.5

111.5

116.7

128.4

316.3

286.4

289.6

112.4

112.2

244.2

26.4

268.7

41.7

119.4

62.0

85.6

103.3

70.3

308.6 304.4 311.3

217.8

227.0

224.4

219.2

230.6

236.2

244.0

264.4

276.7

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

0.0

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

0.0%

Mar./14 Mar./15 Mar./16 Mar./17 Mar./18 Mar./19 Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25

Book value Unrealized gains

Mar./14 Mar./15 Mar./16 Mar./17 Mar./18 Mar./19 Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25

Net debt-to-equity ratio Equity ratio

Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2026

• Net sales are forecast to increase year on year, mainly as a result of an increase in revenue from sales of properties in the Building Business.

• Operating profit, ordinary profit, and profit attributable to owners of parent are forecast to increase year on year and expected to reach record highs. This is due to an increase in gain on sales of properties in the Building Business, and the recognition of gain on sale of investment securities resulting from the disposal of cross-shareholdings.

* The Company plans to execute a stock split at a ratio of two shares per share, effective July 1, 2025; therefore, the amounts stated reflect this stock split.

Forecast of Consolidated Financial Results by Segment for the Fiscal Year Ending March 31, 2026

Year-on-year differences in segment results

• Building Business

  (Millions of yen)		Fiscal year ended March 31, 2025	Fiscal year ending March 31, 2026 (Expected)	Year on year	Year on year (%)	Main reasons for year-on-year differences in results
  Net sales		37,997	44,600	+6,602	+17.4	Leasing revenue is forecast to increase mainly on an increase in hotel revenues due to the opening of Caption by Hyatt Kabutocho Tokyo.
  	Leasing revenue	27,517	28,200	+682	+2.5
  	Revenue from sales of properties	8,965	14,900	+5,935	+66.2
  Other		1,514	1,500	(14)	(1.0)
  Operating profit		13,010	13,700	+689	+5.3	Revenue from sales of properties is forecast to increase due to an increase in sales of real estate for sale.
  	Gains on sales of properties	4,519	5,900	+1,380	+30.5	Leasing profit is forecast to decrease mainly due to a recording of opening costs of Caption by Hyatt Kabutocho Tokyo and a decrease of period revenue associated with sales of properties.

  • Leasing revenue

  • Increase in hotel revenues is expected to contribute about 0.9 billion yen to leasing revenue.

  • Revision of rent increase is expected to contribute about 0.1 billion yen to leasing revenue.

  • Contributions from properties acquired in the previous fiscal year are expected to boost leasing revenue by about 0.1 billion yen.

  • Reduced periodic revenues resulting from sales of properties, etc., are expected to reduce leasing revenue by about 0.4 billion yen.

  • Revenue from sales of properties

  • Leasing profit

  (Millions of yen)

  Fiscal year ended March 31, 2025

  Fiscal year ending March 31, 2026

  (Expected)

  Year on year

  Year on year (%)

  Main reasons for year-on-year differences in results

  • Asset management revenue and brokerage commissions are

  expected to grow stable.

• Asset Management Business

Progress Review of Medium-term Management Plan "WAY 2040 Stage 1" (FY2024 to FY2026)

Long-term Vision "WAY 2040" Growth Strategy

Through four growth strategies, we aim to enhance corporate value and achieve our vision for 2040.

Long-term Vision "WAY 2040"

Pursue perpetual dynamic growth to become the "Bazukuri Company"

Sustainable ROE*2 exceeding cost of shareholders' equity

Four Growth Strategies Quantitative Targets

Consolidated operating profit of at least 25 billion yen in 2040*1

Net-zero greenhouse gas (GHG) emissions by 2050

1. Expand redevelopment business

Deploy Bazukuri endeavors that draw people in

throughout Japan

2. Cultivate profit growth while enhancing capital efficiency

Expand leasing business, promote reinvestment by realizing gains from property sales, and

Enhance enter new business areas

corporate

3. Boost social value

value through

synergies

4. Strengthen business foundations

Promote sustainability

initiatives

Maximize human capital

for accelerated growth

*1. More than double the consolidated operating profit target in the previous Medium-term Management Plan

*2. The ROE target is set for each Medium-term Management Plan.

Positioning of the Plan

Our Medium-term Management Plan, "WAY 2040 Stage 1," marks the period of our initial sprint toward dynamic growth.

This initial sprint toward dynamic growth is dedicated to establishing the Nihonbashi Kabutocho and Kayabacho district brand, undertaking our largest-ever redevelopment projects, located in Sapporo, and venturing into new business domains to realize our vision. This signals the beginning of our efforts to "Pursue perpetual dynamic growth to become the 'Bazukuri Company,'" the key goal of our Long-term Vision, "Way 2040."

Heiwa Real Estate Group Long-term Vision "WAY 2040"

Stage 1

Initial sprint toward dynamic growth (FY2024-FY2026)

Stage 2 Further evolution into

the "Bazukuri Company"

Becoming the "Bazukuri Company" capable of dynamic growth

FY2026

Consolidated operating profit

At least 14 billion yen

Earnings per share

(EPS) At least 135 yen

-

Earnings per share (EPS) At least 150 yen

Quantitative Targets

Expected

Return on equity (ROE)

(FY2024-FY2026)

At least 7%

Return on equity (ROE) At least 7% (FY2024)

At least 8% (FY2025-FY2026)

* These projections of profit levels and indicators represent estimates grounded in information available as of January 31, 2025, and incorporate specific premises and future outlooks. Please be aware that these figures are subject to change due to distributable amount regulations, other legal and regulatory requirements, and shifts in the operating environment. For further details, please refer to the announcement dated January 31, 2025 entitled, "Initiatives to Further Advance Management Conscious of the Cost of Capital and the Company's Stock Price." Please note that the Company plans to execute a stock split at a ratio of two shares per share, effective July 1, 2025. Therefore, the EPS is stated with this stock split taken into consideration.

Elevating investment and sensibilities.

Bringing a new wave of dynamism.

The district where Eiichi Shibusawa and others opened the stock market is woven into the history at the heart of the Japanese economy.

To connect this district's trendsetting culture to the future, Nihonbashi Kabutocho and Kayabacho will transform investment and growth into a lifestyle.

Update the financial system and become Japan's premier investment city. Then become an even more expansive neighborhood.

Make investment more casual and the neighborhood more lively.

In a vibrant place where diverse individualities converge and creativity flourishes, chemical reactions generate innovations at all scales.

Let's create spaces together for enjoying business and leisure,

spreading globally unprecedented Bazukuri from this neighborhood that inspires sensibilities.

1. The 2040 Revitalization Vision for Nihonbashi Kabutocho and Kayabacho district

   • Building upon the district's evolution and changes in the external environment over the decade since the "Revitalization Vision for Nihonbashi Kabutocho" was announced in 2014, Heiwa Real Estate announced the "2040 Revitalization Vision for Nihonbashi Kabutocho and Kayabacho" in December 2024. This new vision seeks to further advance investment and lifestyles, fostering dynamic growth in the area.

   • Based on three concepts-"Japan's premier investment city," "a mixed-use district in which diverse individualities converge," and "a city that continuously gives rise to creativity and innovation"-the goal is to carry out Bazukuri that draws people in by revitalizing Nihonbashi Kabutocho and Kayabacho.

     [Reference] Changes in the external environment and

     the changes in the district since the previous vision was announced.

     Changes in the external environment

     2015 Adoption of the SDGs by the United Nations

     Awareness of environmental and social issues increases

     2016 Formulation of the Vision for Tourism

     Continuous growth of inbound tourism in Japan

     2020 Spread of the COVID-19 pandemic

     Diversification and qualitative shifts in workstyles

     2023 Formulation of a plan to make Japan a leading nation in investment and asset management

     Acceleration of the shift from savings to investment

     Kabutocho

     Kabutocho

     A trendsetting neighborhood

     A hub for securities, finance, and investment

     Kabutocho

     A hub for financial startups and unique commercial establishments

     In the Meiji period, Eiichi Shibusawa founded Japan's first bank here. This site became ground zero of Japan's economic emergence, leading to the establishment of its stock exchange and numerous companies.

     Throughout the 20th century, active stock trading led to the neighborhood's development as a financial center, making it one of the world's three major stock markets.

     In 2014, the Revitalization Vision for Nihonbashi Kabutocho was announced with the theme of "creating a neighborhood where people gather and that gives rise to investment and growth."

     The Evolution of Nihonbashi Kabutocho and Kayabacho Over the Past Decade

     • Opening of KABUTO ONE, the neighborhood's landmark building

     • Establishment of five FinGate incubation facilities Attract approximately 100 financial startups

     • Attraction of 20 unique commercial establishments An increase in monthly visitors of approximately 5 times

     Nihonbashi Kabutocho and Kayabacho in 2040

     Elevating investment and sensibilities

     A city that continuously gives rise to creativity and innovation

     Bringing

     a new wave of dynamism

     Japan's premier investment city

     A mixed-use district in which diverse individualities converge

     Laying the groundwork to sustain the town's dynamism

     Walkable

     Sustainable

     DX

     
     
     

     Elevating investment and sensibilities. Bringing a new wave of dynamism.

     The district where Eiichi Shibusawa and others opened the stock market is woven into the history at the heart of the Japanese economy.

     To connect this district's trendsetting culture to the future, Nihonbashi Kabutocho and Kayabacho will transform investment and growth into a lifestyle.

     Update the financial system and become Japan's premier investment city. Then become an even more expansive neighborhood.

     Make investment more casual and the neighborhood more lively.

     In a vibrant place where diverse individualities converge and creativity flourishes, chemical reactions generate innovations at all scales.

     Let's create spaces together for enjoying business and leisure,

     Enriching everyone's future with Bazukuri that draws people in © HEIWA REAL ESTATE Co., Ltd. 17

     spreading globally unprecedented Bazukuri from this neighborhood that inspires sensibilities.

     
     
     

2. KABUTO ONE, a landmark building in the city (opened in August 2021)

   
   
   
   
   
   

   • The HEART, one of the world's largest cube-type LED displays, has been installed in the atrium on the first floor. The lower floors include KABUTO ONE HALL & CONFERENCE, a conference hall that offers investors and companies the opportunity to have dialogues; Book Lounge Kable, a library lounge; KABEAT, a large food hall; and KNAG, a community cafe.

     
     
     

   • Since its opening, KABUTO ONE has hosted finance and investment-related events, contributing to the prosperity and revitalization of the local community as a new landmark building in the city.

     KABUTO ONE Overview

     Location	7-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo (residence indication)
     Access	Directly connected to Kayabacho Station on the Tokyo Metro Tozai Line and Hibiya Line
     Main Use	Office, shops, assembly hall, rental conference rooms, car parking
     Number of Floors	15 floors above ground, two floors below, two-story penthouse
     Construction	Steel construction above ground, SRC structure below (partial steel construction), mid-story isolation structure
     Total Floor Space	Approximately 39,208 m2 (approx. 11,860 tsubo)
     Operators	Heiwa Real Estate Co., Ltd., Yamatane Corporation, Chibagin Securities Co., Ltd.

     
     
     

3. KITOKI (completed in April 2022)

   
   
   

   • KITOKI, Heiwa Real Estate's first office building with retail stores that adopts a hybrid structure (wood and SRC) was completed in April 2022 and is operating with full occupancy.

   • KITOKI has been selected as a project by the Leading Projects Program for Sustainable Buildings for 2020 (led by wooden structure) by the Ministry of Land, Infrastructure, Transport and Tourism. The offices not only will use wood for the interior but also adopt a biophilic design* to prepare and offer an environment to offer even more comfortable working.

   • In appreciation for efforts to create possibilities for using wood in urban areas, KITOKI received the Good Design Award 2022, the Wood Design Award 2022, and the Good Facilities Using Wood Competition 2022-Award for Excellence. KITOKI also won the Grand Prize (Governor's Prize) in the Wood City TOKYO Model Architecture Award in 2023.

     KITOKI Overview

     Location	8-5 Nihonbashi Kabutocho, Chuo-ku, Tokyo
     Access	One minute walk from Kayabacho Station, on the Tokyo Metro Tozai Line
     Main Use	Shops/Office
     Number of Floors	10 floors above ground
     Construction	Timber hybrid construction
     Total Floor Space	791.95 m2
     Design, Supervision and Construction	ADX Co., Ltd.

     
     
     
     
     
     

     * A method of spatial design based on the biophilia theory about the human psychological tendency to be closely associated with other forms of life, such as creatures.

4. Caption by Hyatt Kabutocho Tokyo (scheduled to open in 2025)

   
   
   

   • The Company has invited Caption by Hyatt, Hyatt's latest lifestyle hotel brand, to open the brand's first hotel in Tokyo.

   • This single-building hotel development project employs timber hybrid construction; it is scheduled for completion in June 2025, and the opening is planned for fall 2025.

   • It has been selected as a project by the Leading Projects Program for Sustainable Buildings for 2022 (led by wooden structures) by the Ministry of Land, Infrastructure, Transport and Tourism, for the first time as an accommodation facility with timber hybrid construction operated by a foreign hotel brand.

     Caption by Hyatt Kabutocho Tokyo Overview

     Hotel Name	Caption by Hyatt Kabutocho Tokyo
     Location	12 Nihonbashi Kabutocho, Chuo-ku, Tokyo
     Access	One minute walk from Kayabacho Station on the Tokyo Metro Tozai & Hibiya Lines Two-minute walk from Nihonbashi Station on the Tokyo Metro Ginza Line and Toei Asakusa Line
     Site Area	Approximately 1,093 m2
     Total Floor Space	Approximately 9,967 m2
     Number of Floors	12 floors above ground, one floor below, one-story penthouse
     Construction	Timber hybrid construction
     Number of Guest Rooms	195 rooms (planned)
     Opening	Fall 2025 (planned)

     
     
     

5. Nihonbashi Kayabacho 1-Chome District 6 Development Project (Provisional Name)

   
   
   

   • In October 2024, in collaboration with Mitsubishi Estate and Chuo-Nittochi Group Co., Ltd., the Company devised an urban planning proposal in Nihonbashi Kayabacho 1-Chome in Chuo-ku.

   • Under this plan, the Company has proposed establishing a complex building that includes offices and other functions needed to form a commercial and financial base directly connected to Kayabacho Station of the Tokyo Metro Tozai Line/Hibiya Line and creating an open comprehensive space that serves as the center of a bustling community lush with greenery by expanding and redeveloping the shrine site on the premises.

   • The Company also aims to accumulate finance-related functions that will contribute to the realization of "Global Financial City: Tokyo" promoted by the Tokyo Metropolitan Government; to build a city inspired by the local cultural heritage and historical elements; to improve the area's disaster-prevention capabilities by developing a facility for commuters who may be unable to return home in the event of a disaster; and to design an urban space with greenery so as to contribute to enhancing Tokyo's international competitiveness and attractiveness.

     Overview of Nihonbashi Kayabacho 1-Chome District 6 Development Project (Provisional Name)

     Location	Part of 1-6 Nihonbashi Kayabacho, Chuo-ku, Tokyo
     Access	Directly connected to Kayabacho Station on the Tokyo Metro Tozai Line and Hibiya Line
     Site Area	Approximately 3,715 m2
     Total Floor Space	Approximately 41,650 m2
     Number of Floors/Height	27 floors above ground/3 floors below ground, about 140 m
     Main Use	Offices, shops, shrine, parking lot, etc.
     Schedule	Construction set to begin in FY2027, and to be completed in FY2030

     
     
     

6. Development of FinGATE (contribution to "Global Financial City: Tokyo" concept)

   • FinGATE has 107 corporate tenants, including independent asset management companies and financial startups (mainly fintech-based) as of the end of March 2025, establishing itself as one of the largest concentrations of financial startups in Japan.

     「キャプション By Hyatt 兜町 東京」概要

   • In June 2021, Financial Market Entry Office, a comprehensive consultation service for overseas financial companies offered by Japan's Financial Services Agency and the Finance Bureau, opened at FinGATE TERRACE.

     Facilities at FinGATE

     Number of FinGATE tenants

     • Total number of lease agreements, coworking agreements, and shared-use agreements

     (FY)

     At least 100 companies

     107

     91

     60

     64

     42

     1 8

     26

     31

     2016 2017 2018 2019 2020 2021 2022 2023 2024

     
     
     

7. Creating districts with diversity

   • Since the opening of K5 in February 2020, we have been working to update the district's atmosphere by combining new developments with renovations and by attracting unique and distinctive commercial tenants.

     
     
     
     
     
     

   • The total number of commercial facilities that we have strategically invited in our efforts to revitalize districts is more than 20, and the number of monthly visitors has increased from approximately 10,000 as of April 2021 to more than 50,000 at present.

2020

2021

2022

2023

2024

2025

©K5

K5 KABUTO ONE KITOKI BANK Nib/LAURASIA

K5 store newly opened

Caption by Hyatt Kabutocho Tokyo

Built in 1923 as an annex to the first bank in Japan's third-generation premises, this historic structure has been significantly revitalized through a large-scale renovation.

This landmark building for the district has opened as a leading project in Nihonbashi Kabutocho and Kayabacho.

This is the Company's first building with a timber-concrete (SRC) hybrid structure. KITOKI won the Grand Prize (Governor's Prize) at the Wood City TOKYO Model Architecture Award in 2023.

Renovating the former bank created a new focal point for the area, integrating new amenities like a bakery and lifestyle stores.

The first floor of the Nisshokan Building, formerly used as office space and known as the former residence of Eiichi Shibusawa, was renovated to open new spaces dedicated to "food" and "fragrances."

K5 entered its fifth year, and its first floor is being renovated.

Grand openings of MARUYAMA (izakaya), CAFE DANCE (cafe), and AKAI BAR (bar)

This single-building hotel development project employs timber hybrid construction. It also is the first to attract "Caption by Hyatt" to Tokyo. It has been selected as a project by the Leading Projects Program for Sustainable Buildings for 2022 (led by wooden structures).

1. Odori-nishi 4 South, Type-1 District Redevelopment Project

   
   
   
   
   
   

   • A property rights reallocation plan was approved in October 2024. The Company aims to realize redevelopment suitable for this district, which is located in central urban Sapporo, by building high-function offices, etc. to help businesses enhance their competitive edge.

   • It has been decided that Park Hyatt, the highest-ranking brand of Hyatt's Timeless Collection series, will occupy the upper floors.

   • We invite Mr. Kengo Kuma, who is a world-class architect, to be the design supervisor.

     Hotel overview

     Primary Contractor	Association for the Odori-nishi 4-chome South district redevelopment
     Location	Odori-nishi 4-chome, Chuo-ku, Sapporo-shi, Hokkaido
     Main Use	Office facilities, commercial facilities, accommodations, parking space, community heating/cooling system
     Site Area	Approximately 5,030 m2
     Total Floor Space	Approximately 99,800 m2
     Floor Space Ratio	Approximately 1,650％
     Number of Floors	36 floors above ground, 3 floors below
     Height	Approximately 185 ｍ
     Construction	Steel construction, steel-concrete construction, steel- reinforced concrete construction, seismic isolation structure
     Schedule	2028: To be completed; services to be provided

     
     
     

2. Sapporo Station South Exit North 4 West 3, Type 1 District Redevelopment Project

   
   
   

   • A property rights reallocation plan was approved in July 2024. Construction of the new building began in March 2025.

   • The Company aims to transform the area into a symbol of the gateway to Hokkaido's capital, Sapporo, and to bring fresh vibrancy and excitement to the area, with a view to completing construction in July 2028.

Project overview

* The information above is based on the plan and image at the time this material was created and is subject to change based on future discussions and deliberations.

• Strengthen the hotel business to achieve the perpetual dynamic growth that the Company is pursuing as a key goal of its Long-term Vision.

  	In operation	In operation	In operation	Under development	Under development
  	Hotel Brighton City Osaka Kitahama	K5	Mercure Hotel Tokyo Hibiya	Caption by Hyatt Kabutocho Tokyo	Park Hyatt Sapporo
  Appearance
  Location	Kitahama, Chuo-ku, Osaka	Nihonbashi Kabutocho, Chuo-ku, Tokyo	Uchisaiwaicho, Chiyoda-ku, Tokyo	Nihonbashi Kabutocho, Chuo-ku, Tokyo	Odori-nishi, Chuo-ku, Sapporo
  Total Floor Space (Number of Rooms)	7,447 m2 (233)	2,066 m2 (per building) (20)	17,868 m2 (178)	10,000 m2 (195 (plan))	99,800 m2 (157 (plan))
  Completion Date	March 2008	1923	May 1989	Scheduled to be completed in June 2025	Scheduled to be completed in 2028
  Opening Date	Contract began in March 2008	February 2020	December 2023	Fall 2025 (planned)	Scheduled to open in 2029
  Contract	Lease	Lease	Hotel management contract	Hotel management contract	Hotel management contract
  Operator	Brighton	FERMENT	Accor Group	Hyatt Group	Hyatt Group

• For shareholder returns from FY2024 to FY2026, the Company has adopted a basic policy of targeting a consolidated dividend payout ratio of approximately 50% and implementing flexible share buybacks.

• The dividend amount per share for the fiscal year ended March 31, 2025 is 86 yen annually (71 yen in ordinary dividends and 15 yen in special dividends). For the fiscal year ending March 31, 2026, the forecast dividend amount per share is 88 yen annually (73 yen in ordinary dividends and 15 yen in special dividends). The Company plans to achieve nine consecutive periods of increases in ordinary dividends. The Company also plans to continue paying special dividends in the fiscal year ending March 31, 2027, marking four consecutive periods with special dividends.*

• Based on its basic policy on shareholder returns, the Company bought back shares worth approximately 9 billion yen in June 2024.

  Transition of Dividend Amount per Share (yen)*

100

90

80

70

60

50

40

30

20

10

0

Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022 Mar. 2023 Mar. 2024 Mar. 2025 Mar. 2026

Mar./27

60%

49.1% 50.2% 50.3%

40.6% 40.1% 40.9%

15

15

15

25

30.2% 30.3%

24.9%

23.0%

71

73

75

47.5

52

58

2

16.5

38.5

50%

40%

30%

20%

10%

0%

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

9,048

2,499

2,499

1,999

2,597 1,947

5,969 5,771 5,905

2,877

3,489

3,740

1,037

1,475

1,856

2,125

Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022 Mar. 2023 Mar. 2024 Mar. 2025 Mar. 2026

Dividend per share (Ordinary dividend) Dividend per share (Special dividend)

Consolidated dividend payout ratio (Ordinary dividend only)

(Expected) (Forecast)

Total dividends Acquisition of treasury shares

(Expected)

* The Company plans to execute a stock split at a ratio of two shares per share, effective July 1, 2025; therefore, the amounts stated reflect this stock split.

• Based on the Heiwa Real Estate Group's Long-term Vision, "WAY 2040," and the new Medium-term Management Plan, "WAY 2040 Stage 1," we will promote management that is conscious of capital costs and the stock price to enhance corporate value.

  Our approach toward enhancing corporate value

EPS/ROE*

(Yen)

150.00

141.55 10.0%

100.00

7.9%

5.0%

50.00

0.00

0.0%

Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

EPS

ROE

• • The Company is accelerating initiatives to reduce cross-shareholdings, aiming to halve the balance of approximately 17.5 billion yen as of the end of December 2024 by FY2026. (Reference: Consolidated net assets as of the end of December 2024: Approximately 114.1 billion yen)

  • For shareholder returns from FY2024 to FY2026, the Company will set the consolidated dividend payout ratio at 50%, with an eye on the cost of shareholders' equity and capital efficiency, etc. The Company will flexibly implement share buybacks, while comprehensively considering the stock price level, investment plans, financial conditions, etc.

    * The Company plans to execute a stock split at a ratio of two shares per share, effective July 1, 2025; therefore, the amounts stated reflect this stock split.

    Conclusion of Capital and Business Alliance Agreement between Heiwa Real Estate Co., Ltd. and Taisei Corporation, and Establishment of Tripartite Collaborative Relationship including Mitsubishi Estate Co., Ltd.

• As part of its efforts to realize its Long-term Vision "WAY 2040," the Company concluded a capital and business alliance agreement with Taisei Corporation and a three-party agreement related to a capital and business alliance with Taisei Corporation and Mitsubishi Estate Co., Ltd.

• Through the Alliance, it is expected that establishing a medium-to long-term collaborative relationship will lead to greater corporate value for both companies. This will be achieved by further leveraging their respective strengths in business foundations, expertise, and other domains to

(1) expand and accelerate redevelopment business, (2) collaborate on new business areas such as investments in new real estate (asset classes), and (3) promote business alliances in the fields of sustainability and DX.

Business alliance with Taisei Corporation

1. Collaboration in redevelopment business, etc.

   • To facilitate the progress of medium- to long-term redevelopment business, the parties have agreed to establish and develop a collaborative relationship for redevelopment business in the Nihonbashi Kabutocho district, along with Mitsubishi Estate. They will also engage in sincere discussions to: a) examine and promote redevelopment business in Sapporo, b) establish a comprehensive cooperative relationship, including mutual provision of know-how related to redevelopment business as needed, and c) collaborate on redevelopment business that either or both may consider promoting in the future.

     (ii) Collaboration in new business fields such as new real estate investment

   • The Company aims to venture into new business fields to achieve the Group Long-term Vision, and the parties have agreed to actively collaborate on business alliances in new business fields such as investment in logistics facilities, a new asset class.

     (iii) Collaboration in sustainability and DX

   • The parties have agreed to actively collaborate on business alliances in the fields of sustainability and DX.

   • As an initiative based on the Company's capital and business alliance with Taisei Corporation (Taisei), the Company has entered the Private REIT Business. This was done by acquiring a portion of shares (equivalent to a 13.6% stock ownership ratio) in TREAM, which is a consolidated subsidiary of Taisei and the asset management company for the non-listed TCPR, effective March 10, 2025. This expands the Asset Management Business domain within our Group.

   • Additionally, the Company signed a sponsor support agreement with TCPR and TREAM on the same date, taking on a sub-sponsor role by offering them property information and other necessary support.

   • This endeavor will serve to strengthen the Company's capital and business alliance with Taisei. In addition, by expanding the reinvestment by realizing gains from property sales-a key growth strategy in our Group's Long-term Vision-we seek to enhance corporate value.

* The Company has entered into a business alliance agreement with Heiwa Real Estate Asset Management Co., Ltd., which is a consolidated subsidiary of the Company and the asset management company for Heiwa Real Estate REIT, Inc. (HFR), a listed REIT for which the Company serves as the main sponsor. This sponsor support agreement stipulates that the Company will provide property information and other support so long as doing so does not conflict with the agreement's terms. Given that HFR will be prioritized in the provision of information on properties held or developed by the Group, there will be no change in the Company's role as the main sponsor of HFR.