Supplementary Information for the Report on Consolidated Financial Results for the Nine Months Ended December 31, 2025

Supplementary Information for the Report on Consolidated Financial Results for the Nine Months Ended December 31, 2025

January 30, 2026

Highlights During the Nine Months Ended December 31, 2025

• In the third quarter of the fiscal year ending March 31, 2026, the consolidated financial results show increases in net sales, operating profit, and ordinary profit compared with the same period of the previous fiscal year, mainly due to increased sales of properties, increased hotel revenue, and revision of rent increase in the Building Business.

  Profit attributable to owners of parent also increased compared with the same period of the previous

  ＜Progress of Gains on Sales in Properties＞

  fiscal year, due to the reason described above as well as the recognition of gain on sale of investment securities resulting from the reduction of cross-shareholdings.

  【Fiscal year ended March 31, 2025】

  【Fiscal year ending March 31, 2026】

• Heiwa Real Estate Co., Ltd. (the "Company") has upwardly revised its forecast of full-year consolidated financial results for the fiscal year ending March 31, 2026, to reflect expectations for a stronger performance in the office and hotel revenue of the Building Business and higher asset management revenue in the Asset Management Business.

• As a result of the upward revision of the forecast of consolidated financial results, in line with the Company's basic policy of maintaining shareholder returns with a consolidated dividend payout ratio of approximately 50%, the Company revised its plan to pay a fiscal year-end dividend from Â¥52 per share to Â¥57 per share for the fiscal year ending March 31, 2026 (Each amount includes a special dividend of Â¥15 per share). The Company decided to set a maximum limit of 1 billion yen for repurchase of treasury shares and cancel treasury shares of 6.7 million shares in order to strengthen capital policy and shareholder returns.

• The Company expects earnings to remain strong and therefore upwardly revised the quantitative targets in the fiscal year ending March 31, 2027, the final year of the medium-term management plan with consolidated operating profit to at least Â¥15 billion, earnings per share (EPS) to at least Â¥160, and forecast of annual dividends per share to at least Â¥95 (Amount includes a special dividend of Â¥15 per share).

  % indicates the progress rate against the quarterly plan.

  103%

  111%

  100%

• In January 2026, the Company decided to name the building for the Odori-nishi 4 South, Type 1 District Redevelopment Project in the Redevelopment Projects in Sapporo "SAPPORO ONE."

• In December 2025, in the field of climate change in CDP 2025, the Company has been selected to the "A List," the highest rating in the field for the second consecutive year.

  100%

  1Q 2Q 3Q 4Q

  Plan Actual
  
  

  1Q 2Q 3Q 4Q

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

• The Company has upwardly revised its forecast of full-year consolidated financial results for net sales, operating profit, ordinary profit, and profit attributable to owners of parent. This is mainly due to expectations for a stronger performance in the office and hotel revenue of the Building Business and higher asset management revenue in the Asset Management Business relative to the previous forecast.

• As a result of this revision, the Company expects to achieve the targets in the medium-term management plan for operating profit and earnings per share (EPS) one year ahead of schedule, and also forecasts operating profit, ordinary profit, and profit attributable to owners of parent to reach record highs. The revised forecast is expected to reach a record high operating profit for the third consecutive year from the fiscal year ended March 31, 2024, and to reach a record high ordinary profit and profit attributable to owners of parent for the second consecutive year from the fiscal year ended March 31, 2025.

  (Millions of yen)		Fiscal year ending March 31, 2026 (Previous forecast) *1	Fiscal year ending March 31, 2026 (Revised forecast) *2	Change	Change (%)
  Net sales		49,000	50,500	+1,500	+3.1
  	Building Business	44,600	45,900	+1,300	+2.9
  	Revenue from sales of properties	14,900	15,600	+700	+4.7
  	Asset Management Business	4,400	4,600	+200	+4.5
  Operating profit		13,900	14,800	+900	+6.5
  	Building Business	13,700	14,300	+600	+4.4
  	Gains on sales of properties	5,900	5,900	-	-
  	Asset Management Business	2,500	2,700	+200	+8.0
  Intersegment eliminations		(2,300)	(2,200)	+100	-
  Ordinary profit		11,700	12,700	+1,000	+8.5
  Profit attributable to owners of parent		9,700	10,300	+600	+6.2
  EPS (yen)*3		145.22	154.63	+9.41	+6.5

  *1 Announced on April 30, 2025 *2 Announced on January 30, 2026

  *3 Since the Company conducted a 2-for-1 stock split effective from July 1, 2025, the above indicators take this stock split into account.

  Upward Revision of Quantitative Targets and Related Matters for the Medium-Term Management Plan

• The Company formulated the medium-term management plan "WAY 2040 Stage 1" (FY2024-FY2026) in April 2024 and has been pursuing the key strategies of expanding the redevelopment business, cultivating profit growth while enhancing capital efficiency, boosting social value, and strengthening business foundations. In January 2025, the Company issued a release entitled "Initiatives to Further Advance Management Conscious of the Cost of Capital and the Company's Stock Price" in which, after accelerating the reduction of cross-shareholdings, the Company announced updated quantitative targets and planned annual dividend per share in the fiscal year ending March 31, 2027.

• The Company upwardly revised the full-year consolidated earnings forecasts for the fiscal year ending March 31, 2026, due to increased expectations for office and hotel revenue in the Building Business and asset management revenue in the Asset Management Business as the Company has progressed the aforementioned initiatives.

  The Company expects consolidated earnings to remain strong in the fiscal year ending March 31, 2027, and has therefore upwardly revised the quantitative targets in the fiscal year ending March 31, 2027, the final year of the medium-term management plan.

  		Medium-term management plan formulation (April 30, 2024)	Revised forecast (January 31, 2025)	Latest revisions (January 30, 2026)
  Operating profit		At least ¥14.0 billion	At least ¥14.0 billion	At least ¥15.0 billion
  	Building Business	¥13.8 billion	¥13.8 billion	¥14.8 billion
  	Asset Management Business	¥2.4 billion	¥2.4 billion	¥2.7 billion
  	Corporate and elimination	(Â¥2.2 billion)	(Â¥2.2 billion)	(Â¥2.5 billion)
  Earnings per share (EPS)		At least ¥135	At least ¥150	At least ¥160
  ROE		At least 7%	At least 8%	At least 8%
  Annual dividends per share		-	At least ¥90 (comprised of ordinary dividends totaling at least ¥75 per share and special dividend of ¥15 per share)	At least ¥95 (comprised of ordinary dividends totaling at least ¥80 per share and special dividend of ¥15 per share)

  * Since the Company conducted a 2-for-1 stock split effective from July 1, 2025, the above amounts take this stock split into account.

  Upward Revision to Planned Dividend and Repurchase and Cancellation of Own Shares

• In consideration of its consolidated financial performance and other factors, in line with the Company's basic policy of maintaining shareholder returns with a consolidated dividend payout ratio of approximately 50%, the Company revised the plan to pay a fiscal year-end dividend from Â¥52 per share, including a special dividend of Â¥15 to Â¥57 per share, including a special dividend of Â¥15 for the fiscal year ending March 31, 2026 (forecast of a ninth consecutive year of dividend increase).

• The Company decided to set a maximum limit of 1 billion yen for repurchase of treasury shares and cancel treasury shares of 6.7 million sharesin order to strengthen capital policy and shareholder returns. As a result, the consolidated dividend payout ratio (ordinary dividend only) for the fiscal year ending March 31, 2026, is expected to be 50.4%, and the total payout ratio is expected to be 70.1%.

• The Company upwardly revised forecast of annual dividends in the fiscal year ending March 31, 2027, the final year of the medium-term management plan, from at least Â¥90, including a special dividend of Â¥15 to at least Â¥95, including a special dividend of Â¥15 per share. The Company expects the tenth consecutive year of dividend increases.

  Changes in Dividend Per Share (yen) Changes in Shareholder Returns (millions of yen)

  100

  90

  80

  70

  60

  50

  40

  30

  20

  10

  0

  9,048

  About

  1,000

  2,499

  2,499

  1,999

  2,597 1,947

  5,969

  5,771

  About

  6,200

  3,489

  3,740

  1,037

  1,475

  1,856

  2,125

  2,877

  
  
  

  FYE

  Mar./17

  FYE

  Mar./18

  FYE

  Mar./19

  FYE FYE FYE FYE FYE FYE

  Mar./20 Mar./21 Mar./22 Mar./23 Mar./24 Mar./25

  dividend per share (special dividend and others) dividend per share (ordinary dividend)

  consolidated dividend payout ratio (ordinary dividend only)

  FYE FYE

  Mar./26 Mar./27 (forecast)(forecast)

  100%

  15

  15

  15

  25

  49.1%

  50.2%

  50.4%

  40.6% 40.1% 40.9%

  78

  80

  30.2%

  30.3%

  71

  23.0%

  24.9%

  58

  47.5

  52

  2

  38.5

  24

  28

  13

  16.5

  
  
  

  90%

  80%

  70%

  60%

  50%

  40%

  30%

  20%

  10%

  0%

  16,000

  14,000

  12,000

  10,000

  8,000

  6,000

  4,000

  2,000

  0

  FYE FYE FYE FYE FYE FYE FYE FYE FYE

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

  Total dividends Repurchase of treasury shares
  
  

  FYE

  Mar./26 (forecast)

  * Since the Company conducted a 2-for-1 stock split effective from July 1, 2025, the above amounts take this stock split into account.

  Consolidated Financial Results for the Nine Months Ended December 31, 2025

• Net sales, operating profit, and ordinary profit increased compared with the same period of the previous fiscal year, mainly due to increased sales of properties, increased hotel revenue, and revision of rent increase in the Building Business and increased asset management revenue in the Asset Management Business.

• Profit attributable to owners of parent also increased compared with the same period of the previous fiscal year due to the reason described above, as well as the recognition of gain on sale of investment securities resulting from the reduction of cross-shareholdings.

  (Millions of yen)		Nine months ended December 31, 2024	Nine months ended December 31, 2025	Year on year	Year on year (%)	Full-year forecast for the fiscal year ending March 31, 2026*1	Progress against full-year forecast*1 (%)
  Net sales		26,947	32,772	+5,825	+21.6	50,500	64.9
  	Building Business	24,441	29,788	+5,346	+21.9	45,900	64.9
  	Asset Management Business	2,505	2,983	+478	+19.1	4,600	64.9
  Operating profit		7,479	8,659	+1,179	+15.8	14,800	58.5
  	Building Business	7,677	8,549	+872	+11.4	14,300	59.8
  	Asset Management Business	1,346	1,713	+366	+27.2	2,700	63.4
  	Intersegment eliminations	(1,544)	(1,602)	(58)	-	(2,200)	-
  Ordinary profit		6,520	7,287	+767	+11.8	12,700	57.4
  Extraordinary income		-	1,994	+1,994	-
  Extraordinary losses		11	89	+77	+691.7
  Profit attributable to owners of parent		4,939	6,166	+1,226	+24.8	10,300	59.9
  Earnings per share (EPS) (yen) *2		72.80	92.41	+19.61	+26.9	154.63	59.8

  *1 Announced on January 30, 2026

  *2 Since the Company conducted a 2-for-1 stock split effective from July 1, 2025, the above indicators take this stock split into account.

  Consolidated Financial Results by Segment for the Nine Months Ended December 31, 2025

  Year-on-year differences in segment results

  • Building Business

    (Millions of yen)		Nine months ended December 31, 2024	Nine months ended December 31, 2025	Year on year	Year on year (%)	Main reasons for year-on-year differences in results
    Net sales		24,441	29,788	+5,346	+21.9	The increase in leasing revenue mainly reflected contributions due to an increase in hotel revenue, success in raising leasing amounts and the rise in earnings from ORSUS series acquired in the previous fiscal year. Note: The vacancy rate for the Group as a whole was 1.21% as of December 31, 2025.
    	Leasing revenue	20,644	21,550	+906	+4.4
    	Revenue from sales of properties	2,665	6,965	+4,300	+161.4
    	Other	1,132	1,273	+140	+12.4
    Operating profit		7,677	8,549	+872	+11.4	The increase in sales of properties reflected an increase in sales of inventories. (Osaka
    	Gains on sales of properties	828	1,738	+910	+109.9	Office, Sapporo Office (part of the equity), and Oshiage Residence were sold.)

    • Leasing revenue

      • Increase in hotel revenue contributed about Â¥0.7 billion to leasing revenue.

      • Revision of rent increase contributed about Â¥0.2 billion to leasing revenue.

      • Increased periodic revenues, mainly from acquired and newly built properties, contributed about Â¥0.2 billion to leasing revenue.

      • Reduced periodic revenues, resulting mainly from sales of properties, reduced leasing revenue by about Â¥0.2 billion.

    • Revenue from sales of properties

  • Asset Management Business

  (Millions of yen)	Nine months ended December 31, 2024	Nine months ended December 31, 2025	Year on year	Year on year (%)	Main reasons for year-on-year differences in results
  Net sales	2,505	2,983	+478	+19.1
  Asset management revenue	1,760	2,088	+328	+18.6
  Brokerage commissions	745	895	+149	+20.1
  Operating profit	1,346	1,713	+366	+27.2

  • The Asset Management Business saw an increase in revenue, mainly from higher asset management revenue and brokerage commissions.

  Consolidated Balance Sheet as of December 31, 2025

• Due to the payment of the participation fee for the North 4 West 3, Type 1 District Redevelopment Project, the construction costs for Caption by Hyatt Kabutocho Tokyo, and an increase in the market valuation of investment securities, total assets increased. Total liabilities increased, reflecting a rise of interest-bearing liabilities and deferred tax liabilities.

  (Millions of yen)		As of March 31, 2025	Nine months ended December 31, 2025	Year on year	Main reasons for year-on-year differences in results
  Total assets		419,541	441,409	+21,868
  	Current assets	60,036	71,126	+11,090	The decreases in cash and deposits, as well as securities were mainly due to the payment of the participation fee for the North 4 West 3, Type 1 District Redevelopment Project and the payment of construction costs for Caption by Hyatt Kabutocho Tokyo. The increase in inventories mainly resulted from the reclassification from fixed assets to real estate for sale and acquired properties.
  	Cash and deposits/Securities	25,341	21,400	(3,941)
  	Inventories (including operating investments in capital)	31,036	45,210	+14,173
  	Other current assets	3,658	4,515	+857
  	Non-current assets	359,177	369,990	+10,813	Despite an increase which was mainly due to the payment of participation fee for the North 4 West 3, Type 1 District Redevelopment Project and the payment of construction costs for Caption by Hyatt Kabutocho Tokyo, the property, plant and equipment saw a decrease due to the reclassification from fixed assets to real estate for sale. The increase was mainly due to an increase in the market valuation of investment securities.
  	Property, plant and equipment	282,350	281,840	(510)
  	Intangible assets	31,164	31,116	(48)
  	Investments and other assets	45,662	57,034	+11,371
  	Deferred assets	326	292	(34)
  Total liabilities and net assets		419,541	441,409	+21,868
  	Total liabilities	301,541	316,864	+15,322	The net debt-to-equity ratio is 2.0 as of December 31, 2025. The increase in other liabilities was mainly due to the result of increase in deferred tax liabilities.
  	Interest-bearing liabilities	254,072	265,540	+11,467
  	Other liabilities	47,469	51,324	+3,855
  	Net assets	117,999	124,545	+6,545	The increase was mainly due to an increase in the market valuation of investment securities.
  	Shareholders' equity	86,749	86,130	(619)
  	Valuation difference on available-for-sale securities	15,265	22,248	+6,982
  	Deferred gains or losses on hedges	54	238	+183
  	Revaluation reserve for land	15,928	15,928	-

  • Cash and deposits/Securities

  • Inventories

  • Property, plant and equipment

  • Investments and other assets

  • Interest-bearing liabilities

  • Other liabilities

  • Valuation difference on available-for-sale securities

  (Note) 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, long-term non-recourse loans payable, and long-term accounts payable-other.

  Key Performance Indicators

  Share price*1,2

(Yen) 4,000

3,000

2,515 2,644 2,702

2,748 2,887 3,085

(Yen) 160.00

120.00

6.5% 6.3%

141.55

118.37 127.14118.06

10.0%

8.0%

2,000

1,291 1,511

1,728 1,834

2,336

2,060

1,410 1,419

1,728 1,978 1,893

2,0402,350

80.00

3.4% 2.9%

4.7% 4.7%

5.2% 5.8%

92.41

94.88

7.3% 7.7%

6.9%

7.9%

6.0%

1,077

1,157 1,189 1,222 1,315

1,595 1,635 1,667 1,7551,767

55.25 56.59

79.37

66.29

4.0%

1,000

1,025 1,066

1,400

40.00

2.6%

36.36

2.8%

2.8%

3.3% 3.2%

2.9%

3.2%

3.1%

3.3%

2.8%

3.2% 3.2%

2.0%

824 844 700 787

0

0.00

31.27

0.0%

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

FYE

Mar./14

Mar./15

Mar./16

Mar./17

Mar./18

Mar./19

Mar./20

Mar./21

Mar./22

Mar./23

Mat./24

Mat./25

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

Stock price Book value per share (BPS) Net asset value (NAV) per share EPS ROE ROA

339.5

363.5

376.8 388.9

289.6

316.3

111.5

116.7

128.4

244.2

26.4

268.7

41.7

286.4

112.4

112.2

62.0 70.3

85.6

103.3

119.4

308.6

217.8 227.0 224.4 219.2

230.6

236.2

244.0

264.4

276.7

304.4 311.3

(Billions of yen) 500

400

300

200

100

420.1

421.2

439.8

(Times) 4.0

29.0% 31.0%

32.3% 33.3% 34.9% 32.5% 31.6%

31.1%

31.7%

30.0% 30.9%

28.1%

28.5%

1.7

1.9

1.6

1.5

1.4

1.4

1.6

1.5

1.6

1.5

1.7

1.6

1.9

3.0

2.0

1.0

40.0%

30.0%

20.0%

10.0%

0

FYE

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

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

Mat./25

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

Book value Unrealized gains Net Debt Equity Ratio Equity Ratio

*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 stock.

*2 Since the Company conducted a 2-for-1 stock split effective from July 1, 2025, the above indicators take this stock split into account.

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

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

• Operating profit, ordinary profit, and profit attributable to owners of parent are forecasted to increase year on year due to gain on sales of properties and the office and hotel revenue of the Building Business, and the recognition of gain on sale of investment securities resulting from the disposal of cross-shareholdings. Operating profit is expected to reach a record high for the second consecutive year, while ordinary profit and profit attributable to owners of parent are expected to achieve record highs for the third consecutive year.

*1 Announced on January 30, 2026

*2 Since the Company conducted a 2-for-1 stock split effective from July 1, 2025, the above indicators take this stock split into account.

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 (Forecast)	Year on year	Year on year (%)	Main reasons for year-on-year differences in results
  Net sales		37,997	45,900	+7,902	+20.8	Leasing revenue is forecasted to increase mainly on an increase in hotel revenue due to the opening of Caption by Hyatt Kabutocho Tokyo.
  	Leasing revenue	27,517	28,800	+1,282	+4.7
  	Revenue from sales of properties	8,965	15,600	+6,635	+74.0
  	Other	1,514	1,500	(14)	(1.0)
  Operating profit		13,010	14,300	+1,289	+9.9	Revenue from sales of properties is forecasted 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	Caption by Hyatt Kabutocho Tokyo.

  • Leasing revenue

  • Increase in hotel revenue is expected to contribute about Â¥1.2 billion to leasing revenue.

  • Revision of rent increase is expected to contribute about Â¥0.2 billion to leasing revenue.

  • Contributions from properties acquired in the previous fiscal year are expected to boost leasing revenue by about Â¥0.2 billion.

  • Reduced periodic revenues, mainly resulting from sales of properties, are expected to reduce leasing revenue by about Â¥0.3 billion

  • Revenue from sales of properties

  • Leasing profit

  • Leasing profit is forecasted to decrease mainly due to a recording of opening costs of

• Asset Management Business

  (Millions of yen)	Fiscal year ended March 31, 2025	Fiscal year ending March 31, 2026 (Forecast)	Year on year	Year on year (%)	Main reasons for year-on-year differences in results
  Net sales	4,078	4,600	+521	+12.8
  Asset management revenue	2,781	3,100	+318	+11.5
  Brokerage commissions	1,296	1,500	+203	+15.7
  Operating profit	2,355	2,700	+344	+14.6

  • Asset management revenue and brokerage commissions are expected to grow stable.

  Disclaimer

  1. This document is not intended to solicit investment. Users of this document are requested to use their own judgment when making final decisions about investing.

  2. Information other than historical facts presented in this document are forward-looking statements that were formulated according to certain assumptions and were based on judgments by the Company's management in light of currently available information as of January 30, 2026. Therefore, these statements may differ significantly from results announced in the future due to a variety of factors. The Company assumes no responsibility for any losses resulting from the use of this document.

  3. The Company might revise the forward-looking statements contained in this document based on new information or future events; however, this document will not be updated.