Tokyu Fudosan Aktie

To begin with, we will be presenting the progress of our medium-term management plan 2030. Please turn to Page 6. Progress on the mid-term management plan. For the fiscal year ended March 2026, we achieved record high operating profit of JPY 166.9 billion and net income of JPY 96.7 billion.

ROE was 11.2% and the EPS growth rate was 24.6%. Both net income and ROE have already exceeded the targets set for the fiscal year ending March 2028 in our mid-term management plan, 2 years ahead of schedule. For the fiscal year ending March 2027, while the outlook remains uncertain due to international conditions and other factors, we plan to drive further growth based on the assumption that the robust real estate market will continue with the aim of achieving all financial targets for the fiscal year ending March 2028 ahead of schedule.

Please turn to Page 7. We are also making steady progress on the 2 key priorities of our mid-term management plan, pursuing high growth and efficiency and increasing tolerance to market fluctuation risk. As shown in the graph at the bottom right, the proportion of capital gains in operating profit has increased due to strong performance in sales to investors and the condominium development business.

At the same time, actual amount from rental income and management fees, which we are expanding as a source of stable earnings is steadily increasing due to rising rental income and strong performance in the brokerage business.

Please turn to Page 8. Since we formulated our mid-term management plan last May, the external environment has changed significantly over the past year. Inflation has taken hold in Japan and costs, including construction costs are rising. Interest rates are also rising at a faster pace than anticipated. We also recognize that uncertainty regarding the future is increasing, particularly due to the situation in the Middle East. On the other hand, while our business has been affected by inflation, our brokerage, office leasing and condominium sales operations are progressing better than expected.

As explained earlier, we plan to achieve the fiscal year 2028 financial targets 1 year ahead of schedule this fiscal year. Considering these external and business conditions, we will update our mid-term management plan and announce it next year. We will finalize the details in the coming months, but we remain firmly committed to the key priorities of our mid-term management plan, pursuing high growth and efficiency and increasing tolerance to market fluctuations.

Furthermore, when we announce the plan next year with 4 years remaining until the target fiscal year ending March 2031, we intend to further enhance the visibility of our target achievement so that you can be confident we will meet our goals.

Please turn to Page 9. This is the logic tree for enhancing corporate value as presented in our mid-term management plan. As shown, the growth of income revenue centered on office rents in the Greater Shibuya area and the expansion of management and fee revenue centered on our brokerage business are contributing to both growth and improved efficiency. On the following pages, we will explain our Greater Shibuya area strategy and the brokerage business as the core of our fee revenue.

Please turn to Page 10. In the Greater Shibuya area, which is our group's top priority region, we are implementing various initiatives from the perspectives of industrial development and urban tourism to further enhance the area's appeal and strength. First, regarding our industrial development initiatives.

In the Greater Shibuya area, we provide seamless support, tailored to each company's growth phase in collaboration with various partners from industry, government and academia. Specifically, we provide consistent support from the entrepreneur development phase, including the provision of activity bases and funds through to co-creation via acceleration programs and demonstration experiments and the realization of business partnerships with large corporations.

Through these initiatives, we aim to develop the start up ecosystem so that companies with global competitiveness continue to emerge from Shibuya.

Please turn to Page 11. Next, I would like to discuss our initiatives to strengthen urban tourism. Current challenges in tourism within the Shibuya area include the excessive concentration of inbound tourists at the Scramble Crossing and the short duration of their stays. To address these challenges, we will implement attractive content at various locations throughout the Greater Shibuya area to encourage visitors to explore the entire region.

We will also provide high-quality nighttime entertainment that bridges daytime experiences with overnight stays. Through these efforts, we aim to expand the scope and duration of visitor stays within the Greater Shibuya area, thereby increasing our business opportunities and revenue.

Please turn to Page 12. By strengthening the Greater Shibuya area's capacity to foster industry, we will accelerate the growth and clustering of start ups and aim to further expand office demand. Furthermore, we will expand our office offerings to meet a wide range of needs from newly established companies to large, rapidly growing mega ventures.

Office demand in the Greater Shibuya area is steadily increasing. In the office rent revisions for the fiscal year ended March 2026, we were able to raise rents across the board with an average increase approaching 15%. Furthermore, by strengthening urban tourism, we will increase the flow of people within the area and enhance the profitability of commercial facilities.

In addition, we will work to expand accommodation demand and increase the number of hotels, which are currently in short supply relative to demand. We currently operate approximately 650 hotel rooms in the Greater Shibuya area and aim to double this number as soon as possible. We have set a target of JPY 30 billion in profits generated by our group in the Greater Shibuya area by fiscal year 2030. In fiscal year 2025, profits reached JPY 24 billion, an increase of JPY 5 billion, compared to the previous year, indicating steady growth.

Please turn to Page 13. The increase in office rents in the Greater Shibuya area, as explained earlier, is also contributing to the improvement of our NAV. As of the end of March 2026, the unrealized gains on investment properties stood at JPY 498.8 billion, an increase of approximately 15% compared to the previous year. This increase is primarily driven by rising office rents, particularly in the Greater Shibuya area. NAV per share also increased to JPY 1,739.

Please turn to Page 14. This section covers our brokerage business. The brokerage business continued to grow significantly in the fiscal year ended March 2026, with operating profit reaching JPY 56.1 billion, approximately 4x the level of 5 years ago. Furthermore, as shown by the line graph in the center, we have continued to increase the number of transactions. Combined with rising real estate prices, this has enabled us to significantly increase our transaction volume.

Please turn to Page 15. As shown in the graph in the upper left, while the number of new condominium units sold is on a downward trend, the number of existing condominium sales has remained steady over the past 10 years. Amid these robust market conditions, as shown in the graph in the lower left, Tokyu Livable has increased the number of brokerage transactions by approximately 60% over the past 10 years. Furthermore, as shown on the right side of the page, the ROA for the Real Estate Agent segment, which includes the brokerage business, stands at 21%, indicating very high asset efficiency.

The growth of the brokerage business is contributing significantly to improving the overall efficiency of our company. Please turn to Page 16. Regarding shareholder returns. We increased the annual dividend to JPY 48 for the fiscal year ended March 2026 and plan to increase it to JPY 50 for the fiscal year ending March 2027.

We anticipate a dividend payout ratio of 35.7%. We will continue to return value to our shareholders through dividend increases in line with profit growth. Please turn to Page 17. This shows the trend in our stock price and other metrics. Since last August, our stock price has exceeded book value per share, BPS and surpassed a price-to-book ratio PBR of 1x.

However, the price to net asset value, PNAV ratio remains at around 0.8x. Considering that our non-asset-based businesses account for a high proportion of profits, a factor that makes it difficult to be adequately valued based on NAV, we believe the current stock price level is significantly undervalued, and we recognize the need to further enhance the reputation among shareholders and investors.

While focusing on efficiency and improved resilience to market fluctuations, we will strive to further accelerate profit growth and enhance our valuation in the stock market. Please turn to Page 20. Our assessment of the key business environment. We do not anticipate any significant changes to our previous outlook regarding construction costs and domestic interest rates, and we will strive to achieve top line growth that exceeds cost increases due to inflation. Regarding the situation in the Middle East, no impact has materialized at this time. The status of each business is as described. Regarding the office market, we recognize that the strong performance is accelerating. We will proceed with our business operations while paying even closer attention to changes in the business environment.

Please turn to Page 22. Driven by strong performance in the brokerage business and sales to investors against the backdrop of a robust real estate market as well as improved occupancy rates for office and commercial properties, particularly those in the Greater Shibuya area, we achieved both revenue and profit growth.

This marks the fifth consecutive period of revenue and profit growth with both revenues and all profit metrics reaching record highs. Please turn to Page 24, overview of the balance sheet. Compared to the end of the previous fiscal year, land and buildings for sale have increased in line with the progress of our investment activities.

Please turn to Page 26. Please refer to the table below for our investment results. Capital investment is primarily focused on renewable energy power generation facilities and hotels, while land and real estate for sale are mainly rental housing and logistics facilities.

Regarding overseas operations, we are implementing income-generating investments in the U.S. and investments in Asia. For the fiscal year ending March 2027, we plan to focus capital investment primarily on offices, renewable energy power generation facilities and hotels, while investments in real estate for sale will center on rental housing, offices, logistics facilities and hotels.

Please turn to Page 27. About forecast for the fiscal year ending March 2027, we plan to achieve operating revenue of JPY 1.4 trillion, operating profit of JPY 190 billion, ordinary profit of JPY 161 billion and net income of JPY 100 billion.

We continue to anticipate strong performance in sales to investors, condominium sales and brokerage operations and plan to achieve all financial targets for the fiscal year ending March 2028 as set forth in our medium-term management plan ahead of schedule.

Please turn to Page 29. About trends in operating profit from sales to investors, et cetera. The graph on the left shows that for the fiscal year ended March 2026, sales to investors, et cetera, mainly in offices, commercial facilities and industrial properties totaled JPY 52.5 billion, resulting in an increase in profit. For the fiscal year ending March 2027, we plan to generate JPY 63.3 billion, primarily from industrial properties, wellness, hotels and rental housing, capitalizing on strong market conditions to achieve year-on-year profit growth.

We have already secured contracts for approximately 25% of this amount. The graph on the right shows the balance and total investment amount for sales to investors. With a total investment of approximately JPY 1 trillion, we have prepared a well-balanced and diverse portfolio of assets, which we will systematically sell going forward.

Please turn to Page 31. Starting on Page 31, we will explain the overview by segment. First, the Urban Development segment. For the fiscal year ended March 2026, both revenue and profit increased compared to the previous fiscal year, and we plan for revenue and profit to increase again for the fiscal year ending March 2027. While both actual results and budgeted figures may fluctuate depending on changes in sales to investors, both office and commercial facilities leasing and condominiums continue to perform well.

For the fiscal year ended March 2026, improved occupancy rates in the Greater Shibuya area, specifically the full occupancy of Shibuya Sakura Stage and Tokyu Plaza Harajuku Harakado contributed to these results. Please turn to Page 32. Page 32 shows a graph of the vacancy rate. The vacancy rate as of the end of March was 0.7%, which is extremely low. The average office rent is JPY 30,710 per tsubo per month, while it has declined slightly since the end of December. This is due to the impact of the sale of a partial stake in Shibuya Sakura Stage. Excluding the impact of the sale, the average rent is on an upward trend.

Please turn to Page 37. About the trends in sales indicators for condominiums. We plan to record 899 units for the fiscal year ended March 2026 and 1,214 units for the fiscal year ending March 2027, representing an increase. As shown in the graph on the lower left, the gross profit margin is projected to remain at a high level at 31.4% for the fiscal year ended March 2026 and 29% for the fiscal year ending March 2027.

Condominium sales remain robust with 76% of units already under contract compared to total sales, marking a strong start. Please turn to Page 38. Our land bank for the next fiscal year and beyond stands at approximately 8,800 units. As shown on this page, we have a strong pipeline with large-scale projects in prime locations in the pipeline. Redevelopment projects, which we have been focusing on in recent years, account for 66% of our land bank. Please turn to Page 39. About rental housing business. We are strengthening the development of rental housing for sale to investors, primarily with the aim of selling to REITs sponsored by Tokyu Land Corporation. Against the backdrop of a favorable market, including an accelerating pace of rent increases, we are proceeding with the acquisition of properties in prime locations, primarily in the 23 wards of Tokyo and steadily advancing their commercialization.

Please turn to Page 40. About Strategic Investment business segment. For the fiscal year ended March 2026, both revenue and profit increased compared to the previous fiscal year. The infrastructure industry business saw increased profits due to increased sales to investors, while the overseas business saw increased profits overall due to improvements in its U.S. operations.

For the fiscal year ending March 2027, we plan to see increased revenue and profits driven by increased sales of our industry business to investors, improvements in our renewable energy business and improvements in our overseas business.

Please note that the overseas business, which continues to post an operating loss is as shown in the table on the upper right. For the fiscal year ending March 2027, we plan to see an improvement due to factors such as an improvement in profit and loss during period in the U.S. and an increase in revenue from condominium sales in Vietnam.

Please turn to Page 41. This page covers the renewable energy business portfolio. As of the end of March 2026, we had a total of 301 projects with a rated capacity of 2,693 megawatts, making us one of the top power generation operators in Japan. Furthermore, approximately 80% of our operational facilities and approximately 70% of our secured facilities are covered by the feed-in tariff, FIT, program.

Please turn to Page 42. This page shows the power sales performance and plans for the renewable energy business. This graph shows our operational facilities. We plan to generate JPY 10.8 billion in power sales profit for the fiscal year ending March 2027. Based on currently secured projects, we project that electricity sales profit will grow to JPY 14.3 billion by fiscal year 2030 with an expected improvement in NOI yield to 11.3% and ROA to 4%.

Please turn to Page 43. Page 43 covers the value chain of our renewable energy business. We view our integrated value chain, spanning from the development of power generation facilities to electricity retail as a key strength. Through initiatives such as our business alliance with Mitsubishi Electric and the establishment of a battery storage fund, we aim to strengthen our capabilities in the areas of aggregation and supply-demand balancing, thereby expanding our non-asset-based renewable energy business.

Please turn to Page 47. About industry business. We have achieved high-margin sales primarily of logistics facilities, and we are making progress in acquiring new projects in prime locations.

Additionally, our first data center project in Ishikari City, Hokkaido was completed in March 2026. As a new initiative, we will promote the business development of the industrial town building project, Green Cross Park.

Please turn to Page 51. This page covers the Management and Operations segment. For the fiscal year ended March 2026, revenue decreased, but profit increased compared to the previous fiscal year.

The decline in revenue for the wellness was primarily due to the transition to the equity method following the partial sales of shares in Ewel Company Limited. In real terms, revenue increased and profits rose due to improved hotel earnings. For the fiscal year ending March 2027, we expect both revenue and profits to increase, driven by factors such as the sales to investors in wellness business.

The hotel business is performing well, mainly driven by inbound tourism, and we plan for RevPAR to grow. However, this forecast incorporates costs of renovating some facilities and the opening new ones. Please turn to Page 53. The occupancy status of Tokyu Stay is shown in the lower left corner. Although there was a decline in Chinese guests, growth in guests from Asia, Europe and the U.S. outweighed this and the ADR for the fourth quarter exceeded JPY 20,000, surpassing the previous fourth quarter.

As shown in the graph on the lower right, we have secured approximately 10,600 guest rooms, primarily through Tokyu Stay. We will continue to strive to expand the hotel business. Please turn to Page 54. Regarding the Real Estate Agent segment, for the fiscal year ended March 2026, both revenue and profit increased compared to the previous fiscal year, driven by strong performance in brokerage and real estate sales. We have a similar plan for the fiscal year ending March 2027 with a forecast for increased revenue and profit, particularly driven by continued strong performance in brokerage.

Please turn to Page 55. This is a breakdown of commission revenue for the retail of our brokerage business. By increasing the number of sales staff and improving productivity, we have achieved an increase in the number of transactions handled. Furthermore, against the backdrop of a strong market, the average transaction price has also risen significantly compared to the previous fiscal year. As a result, both transaction volume and commission income have increased substantially compared to the previous fiscal year.

Please turn to Page 56. We have similarly broken down the Wholesale segment. By strengthening our focus on large-scale projects, we have been able to significantly raise the average transaction price and both transaction volume and commission income have grown substantially compared to the previous year. That concludes our presentation.