Financial Results for the First Six Months for Fiscal Year 2020...*The gross profit is net of Cost of Revenues including the following write-down amounts under LCM: FY2019:-¥150 million,

東京証券取引所第一部証券コード：8923

シンガポール証券取引所証券コード：S2D

トーセイ式会社

Copyright © 2020 TOSEI CORPORATION, All Rights Reserved.

Financial Results for the First Six Months of the Fiscal Year 2020

Tosei Corporation

Tokyo Stock Exchange, First Section Code : 8923Singapore Exchange, Mainboard Code : S2D


Index

I. Overview of Results for the First Six Months of FY2020

Operating Performance of FY2020 - Highlights-

Operating Performance of FY2020 - Overview –

Business Results By Segment

Revitalization Business

Development Business

Rental Business

Fund and Consulting Business

Property Management Business

Hotel Business

Acquisitions in Revitalization and Development Businesses

Summary of Balance Sheet

Assets

Liabilities/Equity

Inventories

Fixed Assets (Investment Properties and PPE)

Borrowings from Financial Institutions

Overview of Segment Results

Summary of Cash Flow Statements

…P4

…P5

…P6

…P7

…P8

…P9

…P10

…P11

…P12

…P13

…P14

…P15, 16

…P17

…P18

…P19, 20

…P21

*The revenue and profit of the Rental business has been partially transferred in consideration of the establishment of a new hotel business in FY2019. For comparison, segment information for FY2018 is presented based on the revised classification in this material.

II. Revision of FY2020 Forecast and Plans for second half of FY2020

Revision of FY2020 Forecasts

Revision of FY2020 Forecast and Plans for second half of FY2020

Recognition of the Current Business Environment

Business Strategy Responding to COVID-19 and

After Containment of COVID-19

New Business

Topics

Shareholder Returns Policy

lll. Reference Materials for the first time visitors to Tosei

lV. Tosei Group’s ESG

…P23-25

…P26,27

…P28,29

…P30-34

…P35

…P36

…P37,38

…P39-

…P51-

2


I. Overview of Results for the First Six Months of the FY2020

3


FY2020 First Six Months - Highlights-

(Initialforecast)

【 Revenue 】

FY2018 FY2019 FY2020

2,847 2,035

8,808

3,587

1,604 3,204

2,889

-2,440

2,192 2,409 207

797 6,852

8,447

6,476

1,147

14.0%

15.3%14.3%

0%

5%

10%

15%

-3,000

-1,000

1,000

3,000

5,000

7,000

9,000

11,000

'18/11期 '19/11期 '20/11期 '20/11期

2Q'20/11期

2Q

（百万円） ROE

4,150 2,987

13,046

5,359

2,361 4,647

4,212

-3,468

3,331 3,528 327

926 10,171

12,090

9,571

1,890

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

'18/11期 '19/11期 '20/11期 '20/11期2Q

'20/11期2Q

（百万円）

4,341 3,125

13,737

5,535

2,545 4,839

4,316

-3,364

3,470 3,653

517 1,072 10,875

12,690

9,851

2,170

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

'18/11期 '19/11期 '20/11期 '20/11期2Q '20/11期2Q

（百万円）

18,310 17,059

80,354

23,468

14,210 17,393

21,581 12,787 11,289

16,234 14,985

61,543 60,727

45,050

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

'18/11期 '19/11期 '20/11期 '20/11期2Q

（百万円）

4Q 3Q

2Q 1Q

18,310 17,059

80,354

23,468

14,210 17,393

21,581 12,787 11,289

16,234 14,985

61,543 60,727

45,050

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

'18/11期 '19/11期 '20/11期 '20/11期2Q

（百万円）

4Q 3Q

2Q 1Q

【Profit Before Tax】【Profit for the Period】

The achievement rate against the Initial

Forecast 56.1%

FY2020 2Q FY2018 FY2019 FY2020 FY2020 2Q

FY2020 2Q

FY2018 FY2019 FY2020 FY2020 2Q

FY2020 2Q

FY2018 FY2019 FY2020 FY2020 2Q

FY2020 2Q

(Initialforecast)

(Initialforecast)

(Initialforecast)

(before recording

valuation loss)

(before recording

valuation loss)

(before recording

valuation loss)(after recording valuation loss)

(after recording valuation loss)

(after recording valuation loss)

Valuation Loss ¥7.68 billion

Valuation Loss ¥7.68 billion


Forecast 73.4%


Forecast 71.7%


Forecast 73.5%

◆ Revenue ¥45.0 billion (up 30.8% yr/yr), Profit before tax ¥1.8 billion (down 75.2% yr/yr), Profit for the period ¥1.1 billion (down 78.1% yr/yr).

◆ Although the sale of properties remained strong, a ¥7.68 billion valuation loss on inventories centering on hotels/commercial facilities was booked based on the effects of the spread of COVID-19.

2,847 2,035

8,808

3,587

1,604 3,204

2,889

-2,440

2,192 2,409 207

797 6,852

8,447

6,476

1,147

14.0%

15.3%14.3%

0%

5%

10%

15%

-3,000

-1,000

1,000

3,000

5,000

7,000

9,000

11,000

'18/11期 '19/11期 '20/11期 '20/11期

2Q'20/11期

2Q

（百万円） ROE

【Operating Profit】(¥million)

(¥million)

(¥million) (¥million)

4


FY2020 First Six Months - Overview -

(¥million)

FY2019 2Q (6M)FY2020 2Q (6M)(Before recording

valuation loss)

FY2020 2Q (6M)(After recording valuation loss)

yr/yr Change

(A) % % (B) % (B)-(A) %

Revenue 34,452 100.0% 45,050 100.0% 45,050 100.0% 10,597 30.8%

Cost of Revenue 22,487 65.3% 30,536 67.8% 38,217 84.8% 15,729 69.9%

Gross Profit 11,964 34.7% 14,513 32.2% 6,832 15.2% -5,131 -42.9%

Selling, General and Administrative Expenses 4,049 11.8% 4,659 10.3% 4,659 10.3% 610 15.1%

Selling Expenses Pertaining to Property Trading 908 2.6% 987 2.2% 987 2.2% 78 8.7%

Expenses Excluding Selling Expenses Pertaining to Property Trading 3,140 9.1% 3,672 8.2% 3,672 8.2% 531 16.9%

Other Income 56 0.2% 20 0.0% 20 0.0% -35 -63.3%

Other Expenses 7 0.0% 23 0.1% 23 0.1% 15 195.7%

Operating Profit 7,964 23.1% 9,851 17.7% 2,170 4.8% -5,794 -72.7%

Finance Income 41 0.1% 97 0.2% 97 0.2% 56 136.3%

Financial Costs 370 1.1% 377 0.8% 377 0.8% 6 1.7%

Profit Before Tax 7,634 22.2% 9,571 21.2% 1,890 4.2% -5,743 -75.2%

Income Tax Expense 2,394 - 3,095 - 743 - -1,651 -

Profit for the Period 5,239 15.2% 6,476 14.4% 1,147 2.5% -4,092 -78.1%

Comprehensive Income for the Period 5,322 15.4% 6,856 ― 592 1.3% -4,730 -88.9%

EPS(¥) 108.79 136.21 24.14 -84.65 -77.8%

5


6,5199,407

5,525

1,168

13,864

7,254

1,021

7,090

4,822

1,606104

21

100

51

73

576,623

10,451

5,625

8,310

18,760

8,919 27.1%

37.6%

58.4%

0.7%

29.2%

10.6%0%

10%

20%

30%

40%

50%

0

4,000

8,000

12,000

16,000

20,000

'19/11期

1Q

'19/11期

2Q

'19/11期

3Q

'19/11期

4Q

'20/11期

1Q

'20/11期

2Q

（百万円）

Restyling 1棟販売( 向け)

1棟販売(一般向け) 売上総利益率

61.4%

◆ Revenue ¥27.6 billion (up 62.1% yr/yr), Gross Profit ¥6.4 billion (up 12.2% yr/yr)

◆ Sold 3 properties to Tosei Reit Investment Corporation out of 29 properties sold in total (up 1 property yr/yr).

◆ A ¥1.4 billion valuation loss on inventories was booked. In addition, the full-year operating profit forecast was revised from ¥9.1 billion to ¥5.2 billion by postponing the sale of some properties to be sold to the following fiscal year or later.

Revenue / Gross Profit Margin Major Properties Sold

Shinjuku-kuIncome-generating Building

Kashiwa-shiIncome-generating Apartment

Yokohama-shiIncome-generating Building

Revitalization Business

Revenue

Component Ratio

Restyling

Whole Building to General Customers

Whole Building to Tosei REIT

Gross Profit Margin

*The gross profit is net of Cost of Revenues including the following write-down amounts under LCM: FY2019:¥-366 million, FY2020 2Q:¥-1,457 million

6,5199,407

5,525

1,168

13,864

7,254

1,021

7,090

4,822

1,606104

21

100

51

73

576,623

10,451

5,625

8,310

18,760

8,919 27.1%

37.6%

58.4%

0.7%

29.2%

10.6%0%

10%

20%

30%

40%

50%

0

4,000

8,000

12,000

16,000

20,000

'19/11期

1Q

'19/11期

2Q

'19/11期

3Q

'19/11期

4Q

'20/11期

1Q

'20/11期

2Q

（百万円）

Restyling 1棟販売( 向け)

1棟販売(一般向け) 売上総利益率

FY20191Q

(¥million)FY2020 2Q

(first six months)Gross Profit Margin

23.2%

FY20192Q

FY20193Q

FY20194Q

FY20202Q

FY20201Q

FY2019(whole financial year)

Gross Profit Margin29.2%

Gross Profit Margin (excluding the valuation loss)

26.9%

Hachioji-shiIncome-generating Building

Chigasaki-shiEmpty Building

FY2019 FY2020

(¥million)

Six Months

Full-yearSix Months

(Before recording valuation loss)

Six Months (After recording valuation loss)

Full-year(New

Forecast)

Full-year(Initial

Forecast)

Revenue 17,075 31,012 27,679 27,679 33,646 46,776Gross Profit 5,726 9,065 7,880 6,423 6,756 11,199Operating Profit 5,027 7,754 7,022 5,565 5,236 9,165No. of Sales (Restyling) 5 11 4 5 5 No. of Sales (Whole Building, Others)

28 53 29 40 63

6


Revenue / Gross Profit Margin

Development Business

THE Palms Court Funabashi-hoten(Detached House)

Comodo Casa Kanaicho-wakodai(Detached Houses sold by Tosei Urban Home Corporation)

T’s BRIGHTIA Fujimidai

(Commercial Facility)

Revenue

Component Ratio

Major Properties Sold

Office Building, Rental Apartment, Commercial Facility

Detached House, Land Lot, Housing Construction

(¥million)

◆ Revenue ¥9.9 billion (down 3.1% yr/yr), Gross Profit -¥3.9 billion ( FY2019 2Q was ¥2.4 billion).

◆ Sold 240 units of a newly built condominium “THE Palms Sagamihara Park Brightia”.

◆ A ¥6.2 billion valuation loss on mainly hotel and commercial facilities was booked. In addition, full-year operating profit forecast was revised from ¥2.6 billion to -¥3.7 billion.

Condominium

Gross Profit Margin

1,035 1,203 1,1751,874

586

5,179

777 931138

830

1,200

459

7,045

3,181

2,106 2,012

1,046

21.9%

27.1%

20.9%

9.7%

22.8%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

'19/11期 1Q '19/11期 2Q '19/11期 3Q '19/11期 4Q '20/11期 1Q

（百万円）

1棟オフィスビル・マンション・商業施設分譲マンション

戸建・宅地・請負売上総利益率

*The gross profit is net of Cost of Revenues including the following write-down amounts under LCM: FY2019:-¥150 million, FY2020 2Q:-¥6,225 million

1,035 1,203 1,175 1,874586 711

5,179

777 931 138

8,155

830

1,200

459

7,045

3,1812,106 2,012

1,046

8,86621.9% 27.1%20.9%

9.7%

22.8%

-47.5%-50%-45%-40%-35%-30%-25%-20%-15%-10%-5%0%5%10%15%20%25%30%35%

(1,000)

1,000

3,000

5,000

7,000

9,000

'19/11期 1Q '19/11期 2Q '19/11期 3Q '19/11期 4Q '20/11期 1Q '20/11期 2Q

（百万円）

オフィスビル・賃貸マンション・商業施設分譲マンション


FY20191Q

FY20192Q

FY20193Q

FY20194Q

FY20202Q

FY20201Q

FY2019(whole financial year)

Gross Profit Margin21.2%

FY2020 2Q(first six months)

Gross Profit Margin-40.1%

THE Palms Court Kokubunji-Koigakubo(Detached House)

THE Palms Sagamihara Park Brightia(Condominium)

*3 units left (canceled units)

Gross Profit Margin (excluding the valuation loss)

22.7%

1,035 1,203 1,175 1,874586 711

5,179

777 931 138

8,155

830

1,200

459

7,045

3,1812,106 2,012

1,046

8,86621.9% 27.1%20.9%

9.7%

22.8%

-47.5%-50%-45%-40%-35%-30%-25%-20%-15%-10%-5%0%5%10%15%20%25%30%35%

(1,000)

1,000

3,000

5,000

7,000

9,000

'19/11期 1Q '19/11期 2Q '19/11期 3Q '19/11期 4Q '20/11期 1Q '20/11期 2Q

（百万円）

オフィスビル・賃貸マンション・商業施設分譲マンション


22.0%

FY2019 FY2020

(¥million)

SixMonths

Full-yearSix Months

(Before recording valuation loss)

Six Months(After recording valuation loss)

Full-year(New

Forecast)

Full-year(Initial

Forecast)

Revenue 10,226 14,346 9,913 9,913 15,405 17,396Gross Profit 2,406 3,042 2,252 -3,970 -2,514 4,083Operating Profit 1,541 1,528 1,502 -4,720 -3,770 2,625No. of Sales(Detached House, etc.)

43 106 31 73 99

No. of Sales (Condominiums) 138 163 240 243 243No. of Sales (Whole Buildings) 2 2 1 2 3

7

Copyright © 2020 TOSEI CORPORATION, All Rights Reserved.’20/5

627 613 615 623 676 719

16 15 15 16 15 15

837 846 864 901 620 713

1,481 1,475 1,495 1,5411,312

1,447

44.2% 42.4% 45.2% 41.7% 40.0% 43.3%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

0

500

1,000

1,500

2,000

2,500

'19/11期

1Q

'19/11期

2Q

'19/11期

3Q

'19/11期

4Q

'20/11期

1Q

'20/11期

2Q

（百万円）

流動資産 Restyling固定資産売上総利益率

627 613 615 623 676 719

16 15 15 16 15 15

837 846 864 901 620 713

1,481 1,475 1,495 1,5411,312

1,447

44.2% 42.4% 45.2% 41.7% 40.0% 43.3%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

0

500

1,000

1,500

2,000

2,500

'19/11期

1Q

'19/11期

2Q

'19/11期

3Q

'19/11期

4Q

'20/11期

1Q

'20/11期

2Q

（百万円）

流動資産 Restyling固定資産売上総利益率

21 26 23 25 25

5557 57 46 44

76 5

5 5

8389 85

76 74

0

20

40

60

80

100

'16/11 '17/11 '18/11 '19/11 '20/5

Restyling

流動資産

固定資産

Rental Business

( ＊1 )

Revenue

Component Ratio

Revenue / Gross Profit Margin Breakdown of Properties*1 Held by Tosei

Office, Commercial Facilities : 41Apartment : 32

Other : 1

Inventories

Fixed Assets

Restyling

Gross Profit Margin

(¥million)

FY2019 (whole financial year)Gross Profit Margin 43.4%

Increase and Decrease of Properties from Dec. 2019 to May 2020

*The revenue includes internal transactions

◆ Revenue ¥2.7 billion (down -6.8% yr/yr), Gross Profit ¥1.1 billion (down -10.1% yr/yr)

◆ Although there were property replacements due to acquisitions and sales, secured stable revenue by working on improvement of occupancy rate of newly acquired properties.

◆ Although there were requests for rent reductions or payment holidays from some stores because of the spread of COVID-19, the ratio of stores to fixed assets is small and the impact is insignificant.

Buildings

Sold

NewlyAcquired

(Buildings)

*1 are the number of properties which have rental income

Restyling

Inventories

Fixed Assets

FY20191Q

FY20192Q

FY20193Q

FY20194Q

FY20202Q

FY20201Q

FY2020 2Q (first six months)Gross Profit Margin 41.7%

-15+137674

50

70

90

'19/11 '20/20

‘19/11

6.1%

FY2019 FY2020

(¥million)Six Months Full-year Six Months

Six Months(New Forecast)

Six Months(initial Forecast)

Revenue 2,956 5,993 2,760 5,777 5,984

Gross Profit 1,281 2,601 1,152 2,623 2,621

Operating Profit 1,182 2,367 1,038 2,361 2,337

8


36,177 45,997 55,858 63,962 70,382

287,924392,114

499,184

683,138 754,259

124,084

114,097

108,316

99,378 101,173

448,186 552,208

663,359

846,478 925,814

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

'16/11 '17/11 '18/11 '19/11 '20/5

（百万円）CRE

私募ファンドトーセイ・リート

395 415 438 472 540 56430 97 76

430108 211

236 8

520

28 11

179161 197

310

261461

607711 720

1,733

938

1,248

94.4% 95.3% 94.9% 98.4% 95.4% 97.8%

-200%-180%-160%-140%-120%-100%-80%-60%-40%-20%0%20%40%60%80%100%120%

0

400

800

1,200

1,600

2,000

'19/11期1Q

'19/11期2Q

'19/11期3Q

'19/11期4Q

'20/11期1Q

'20/11期2Q

（百万円）

仲介手数料その他ディスポジションフィーアクイジションフィー AMフィー売上総利益率

Fund and Consulting Business

＊2 受託内容の見直しを行ったことから、2016年11月末に私募ファンドAMからCREへ450億円分の振替を行っております。

＊1 グラフの水色部分は、ＣＲＥの残高を表示しています。当社においてＣＲＥ受託は、「企業価値最大化を目指して長期的・全社的な経営戦略の視点に立ち、企業不動産を最適かつ効率的に運用する方針・技術」に関して、不動産のプロフェッショナルの観点で総合的なコンサルティングを行うことと定義しています。

Revenue

Component Ratio

Revenue / Gross Profit Margin Balance of Assets Under Management

Disposition Fee

AM Fee

Brokerage Fee / Other

Acquisition Fee

Gross Profit Margin

FY2019 (whole financial year)Gross Profit Margin

96.5%


Increase and Decrease of AUM from Dec. 2019 to May 2020

Increase Decrease Net Increase

(¥million) (A) (B) (A)-(B)

CRE - - -

Private Funds +83,664 -10,748 +72,915

Tosei REIT +6,420 - +6,420

Total +90,084 -10,748 +79,335

◆ Revenue ¥2.1 billion (up 66.6% yr/yr), Gross Profit ¥2.1 billion (up 69.1% yr/yr)

◆ Asset under management (AUM) increased to ¥925.8 billion (up ¥79.3 billion from end of Nov. 2019) due to new asset management contracts from investors from the United States, Korea, Germany, etc. Asset Management fee also increased steadily. As a result, full-year operating profit forecast was revised from ¥1.7 billion to ¥3.5 billion.

(¥million)

*2

(¥million)

4.9%

CRE*1

Private Funds AM

REIT AM

FY20191Q

FY20192Q

FY20193Q

FY20194Q

FY20202Q

FY20201Q

FY2020 2Q (first six months)Gross Profit Margin

96.8%

*1 The light blue portion indicates the assets under consulting agreements of CRE. CRE is methods of investing in and managing corporate real estate efficiently to maximize long-term enterprise value. By undertaking CRE, Tosei conducts comprehensive consulting services from the views of real estate professional.

FY2019 FY2020




Revenue 1,318 3,773 2,186 5,133 3,194

Gross Profit 1,251 3,641 2,116 4,961 3,066

Operating Profit 690 2,365 1,480 3,587 1,758

9


6.3%

375 395 390 415 436

219270 232

244 253

594665

622659 689

0

200

400

600

'16/11 '17/11 '18/11 '19/11 '20/5

（棟数）マンション

ビル等

931 974 1,021 1,094 1,158 1,006

409584 441 429 341

326

1,3411,559 1,463 1,524 1,500

1,333

31.2% 30.2% 29.3% 29.6% 32.6% 35.5%

-300%-290%-280%-270%-260%-250%-240%-230%-220%-210%-200%-190%-180%-170%-160%-150%-140%-130%-120%-110%-100%-90%-80%-70%-60%-50%-40%-30%-20%-10%0%10%20%30%40%

0

400

800

1,200

1,600

2,000

'19/11期1Q

'19/11期2Q

'19/11期3Q

'19/11期4Q

'20/11期1Q

'20/11期2Q

（百万円）

スポット工事・手数料など PM・BM報酬など

売上総利益率

Property Management Business

Revenue

Component Ratio

Revenue / Gross Profit Margin The Number of Properties Under Management

PM / BM FeeRepair Works, Commission and Fee

Gross Profit Margin

(¥million)

(Buildings)

Example of Properties Under Management

Office Condominium Commercial Facility Hotel



◆ Revenue ¥2.8 billion (down 1.9% yr/yr), Gross Profit ¥960 million (up 8.2% yr/yr)

◆ Although the property management fee from hotels decreased due to the effect of COVID-19, the number of logistics facility under management increased let to an increase in profit. As a result, the full-year forecast of operating profit was revised from ¥530 million to ¥600 million.

140 167 190 215 256 101

FY20191Q

FY20192Q

FY20193Q

FY20194Q

FY20202Q

FY20201Q

FY2020 2Q (first six months)Gross Profit Margin 34.0%%

■Condo/ Apt

■Office Building, Others

商業施設

Logistic Facility

FY2019 FY2020




Revenue 2,900 5,888 2,833 5,765 6,539

Gross Profit 889 1,768 962 1,939 1,946

Operating Profit 289 504 354 606 539

* Red Boxes are the Revenue of PM/BM fee from Hotel management

10


0.6%

73 93 93 98

2014551 51 51

52

118144 145 150

25378.0% 81.1%

71.2%79.9% 82.6%

-30%-20%-10%0%10%20%30%40%50%60%70%80%

0

50

100

150

200

250

'18/11期1Q

'18/11期2Q

'18/11期3Q

'18/11期4Q

'19/11期1Q

（百万円）

賃貸運営売上総利益率

*They are plans at this stage so name and number of rooms, opening date are subject to change in the future.

Hotel Business

Revenue

Component Ratio

Revenue / Gross Profit Margin Hotels Held by Tosei

Gross Profit Margin

* The revenue includes internal transactions* The lost of operating income due to the temporary closure is recoded on Hotel Business and the

evaluation lost of hotel properties are recorded on Development Business.

Hotel Lease OwnManagement

FY2019 FY2020

Six MonthsFullYear

Six MonthsSix Months

(NewForecast)

Six Months(Initial

Forecast)

OwnManage-ment

Hotel Lease

Total TotalOwn

Manage-ment

Hotel Lease

Total Total Total

(¥million) (A) (B) (A)+(B) (A) (B) (A)+(B)

Revenue 515 76 591 1,089 219 51 270 472 1,830

Gross Profit 493 19 513 951 213 18 231 391 1,693

Hotel’s GOP 259 - 259 471 59 - 59 21 788

Operating Profit 111 20 131 99 -477 18 -458 -1,003 -132

◆ Revenue ¥270 million (down 54.4% yr/yr), Gross Profit ¥230 million (down 54.9% yr/yr)

◆ Both revenue and profit substantially declined due to hotel business temporary closure and postponement of hotel opening associated with the spread of COVID-19. In addition, the full-year forecast of operating profit was revised from -¥130 million to -¥1.0 billion.

NameNo. ofRooms

Own Management (Operating Income)

Operated by third party

(Rental Income)Open

Plan / Under Construction

1 Tosei Hotel Cocone Kanda 111 〇Closed during May and Jun.

-

2 Tosei Hotel Cocone Ueno 126 〇Closed during May and Jun.

-

3 Tosei Hotel & Seminar Makuhari 137 〇Closed during May and Jun.

-

4Tosei Hotel Cocone Asakusa-Kuramae

133 〇 (Jul. 2020) -

5Tosei Hotel CoconeUeno-Okachimachi

171 〇 (Jul. 2020) -

6 Tosei Hotel Cocone Asakusa II* 80 Aug. 2021 -

7 Tosei Hotel Cocone Kamakura* 73 After 2021 -

8Tosei Hotel & SeminarChiba-minato Ekimae*

198 After 2022 -

9 Tosei Hotel Cocone Tsukiji* 225 After 2023 -

10 Tama-shi Income-generating Hotel 138 - 〇

Total 1,392 9 Hotels 1 Hotel

201

313

216 228189

29

52

24

27 25

24

26

253

338

243 254214

55

82.6%89.9% 88.2% 87.9% 90.4%

67.9%

-30%-20%-10%0%10%20%30%40%50%60%70%80%90%

0

50

100

150

200

250

300

350

'19/11期

1Q

'19/11期

2Q

'19/11期

3Q

'19/11期

4Q

'20/11期

1Q

'20/11期

2Q

（百万円）

賃貸運営売上総利益率


FY20191Q

FY20192Q

FY20193Q

FY20194Q

FY20202Q

FY20201Q

FY2020 2Q (first six months)Gross Profit Margin

86.8%

(¥million)

11


15,005

28,880

21,452

オフィス（流）16,099

16,472

8,710

7,099

マンション（流）7,322

1,433

2,085

607

土地等（流） 1,711

8656,471 オフィス・商業施設

（開） 1,081

5,114

8,65313,713

ホテル（開） 1,500

2,541

10,461

7,544

4,816

880

4,461

賃貸マンション（開）2,526

2,496

2,873

7,785

戸建・土地（開）2,54949,809

58,556

72,050

34,671

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

'17/11期 '18/11期 '19/11期 20/11期 2Q

（百万円）

戸建・土地（開）賃貸マンション（開）分譲マンション（開）物流施設（開）ホテル（開）オフィス・商業施設（開）土地等（流）マンション（流）ホテル（流）オフィス（流）

OfficeBL

Apartment Hotel LogisticsDetached

House, Land Lot

Total

Revitalization 10(1) 9 - - 6 25(1)

Development 1(1) 1 - (2) - 3 5(3)

Major Properties Acquired

25,808

15,005

28,880

オフィス（流）7,432

1,552

21,321

16,472

8,710

マンション（流）1,223

1,765

1,433

2,085

土地等（流）138

2,808

865

オフィス・商業施設（開）1,165

5,114

8,653

ホテル（開）10,024

2,541

物流施設（開）4,958

6,631

7,544

4,816

880

6,956

2,496

2,873

戸建・土地（開）2,163

契約済

未引渡し7,952

66,842

49,809

58,556

35,056

10,000

20,000

30,000

40,000

50,000

60,000

70,000

'16/11期 '17/11期 '18/11期 '19/11期 1Q

（百万円）

戸建・土地（開）賃貸マンション（開）分譲マンション（開）物流施設（開）ホテル（開）オフィス・商業施設（開）土地等（流）マンション（流）ホテル（流）オフィス（流）

Acquisition ProgressDelivery Basis ¥32.7 billionContract Basis Progress ¥34.6 billion

Acquisitions in Revitalization and Development Businesses -Acquisition Amount and Inventories-

Shibuya-kuIncome-generating Apartment

Toshima-kuIncome-generating Building

Trends in Annual Acquisition Amounts(delivery basis and expected revenues)

(¥million)

*For more details for inventory expected disposition value please look P15~P16

Detached House, Land (Development)

Logistics (D)

Land, etc., (Revitalization)

Office (R)

Rental Apartment (D)

Hotel (D)

Apt Building (R)

Condo (D)

Office, Commercial Facility (D)

Hotel (R)

Initial Acquisition Targetfor FY2020 ¥83.0 billion

Hotel (D)

1,500

Land, etc.

(Revitalization)

1,711

Apt Building (R)

7,322

Offices (R)

16,099

Development¥7.6 billion

(down 64.7% yr/yr)

Revitalization¥25.1 billion

(up 74.3% yr/yr)

Breakdown of Acquisition (FY2020 2Q(6M))

FY2017 FY2018 FY2019 FY2020 2Q

*Revitalization includes properties acquired as Fixed Assets (Investment Properties and PPE)

◆ Total acquisition amount progressed to ¥32.7 billion on delivery basis (down 9.3%), ¥34.6 billion (down 25.2%) on contract basis.

◆ As for acquisitions in and after April and onwards, the Company will closely monitor the market, and assess the effects of COVID-19.

32,786

Detached Houses, Land(Development)

2,549

Rental Apartment(D)

2,526

*() are number of acquired land lots adjoining to existing properties.

Office,

Commercial Facilities (D)

1,081

Yokohama-shiIncome-generating Building

Yokohama-shiIncome-generating Apartment

12


Summary of Balance Sheet (Consolidated) - Assets -

◆ Total asset ¥161.1 billion (¥700 million decrease from end of Nov. 2019).

◆ Investment Properties/PPE ¥50.3 billion (¥3.8 billion increase from end of Nov. 2019), which accounts for more than 30% of total assets.

A：Change in Inventories (Properties)

Inventories (properties) decreased ¥6.5 billion from the end of the previous fiscal year. The decrease was attributed due to ¥7.6 billion of recording valuation lost.

Investment Properties/PPE increased ¥3.8 billion from the end of the previous fiscal year. The increase was attributed ¥2.2 billion for acquisition of new properties and ¥1.2 billion for right-of-use assets increased (application of IFRS 16*) .

*IFRS 16 is a new standard applied from fiscal year beginning on or after Jan. 1, 2019. It is required to appropriate Assets (right-to-use) and Liabilities under this standard in general.

'19/11 Decrease Increase '20/2 Decrease Increase '20/5Six Months Total

(¥million) Decrease Increase

Total Assets 161,894 -1,596 160,297 +857 161,154 -739

Cash and Cash Equivalents

31,998 +365 32,364 +3,055 35,420 +3,421

Inventories (Properties) 73,573 -2,754

70,819 -3,758

67,061 -6,512

-14,129 +11,374 -21,053 +17,295 -35,182 +28,670 Investment

Properties/PPE46,539

1,865 48,405

+1,97650,382

+3,842 -269 +2,134 -297 +2,274 -566 +4,408

Other Assets 9,781 -1,073 8,707 -416 8,291 -1,490

B

A

(¥million) 1Q 2Q Six Months Total

Increase Factor

Acquisition +8,026 +12,342 +20,368

Construction Cost/ Value-added, etc., +3,348 +4,953 +8,301

Decrease Factor

Disposal by Sale -14,127 -13,375 -27,502

Valuation loss, Others -2 -7,677 -7,679

Total -14,129 +11,374 -21,053 +17,295 -35,182 +28,670

B：Change in Investment Properties/PPE(¥million) 1Q 2Q Six Months Total

Increase Factor

Acquisition - +2,223 +2,223

Value-added, Acquisition of Other Assets +898 +50 +949

Right-of-use Asset +1,236 - +1,236

Decrease Factor

Depreciation Expense, etc. -269 -297 -566

Total -269 +2,134 -297 +2,274 -566 +4,408

13


• Total equity decreased ¥1.6 billion from the end of the previous year, reflecting an increase of ¥1.1 billion in profits, the payment of ¥1.99 billion of Cash dividends paid and decrease of ¥510 million of valuation difference on available-for-sale securities.

Summary of Balance Sheet (Consolidated) - Liabilities/Equity -

A： Change in borrowingsB： Change in Equity

C: Financial Soundness

◆ Maintained financial soundness by keeping an equity ratio of 35.2% and Net D/E Ratio 1.02.

The debt balance increased by ¥3.3 billion from the end of the previous fiscal year. The decrease was attributed to properties sold and scheduled payment, etc., which exceeded increases due to new borrowings, also lease liabilities increased ¥1.2 billion due to adoption of IFRS 16.

• Equity ratio is 35.2% (down 0.9 points from the end of the previous year).

• Net D/E ratio is 1.02 times (up 0.03 points from the end of the previous year).

'19/11 Decrease Increase '20/2 Decrease Increase '20/5Six Months Total

(¥million) Decrease Increase

Total Liabilities/Equity 161,894 -1,596 160,297 +857 161,154 -739

Total Liabilities 103,587 -2,900 100,687 +3,805 104,492 +905

Borrowings 89,843-2,687

87,156+6,032

93,188 +3,344

-15,787 +13,100 -20,250 +26,282 -36,038 +39,383

Current Borrowings 16,291-1,700

14,590-5,660

8,930 -7,361

-6,413 +4,713 -10,085 +4,425 -16,499 +9,138

Non-current Borrowings 73,552-986

72,565-11,692

84,258 +10,706

-9,374 +8,387 -10,165 +21,857 -19,539 +30,245

Other Liabilities 13,744 -213 13,531 -2,226 11,304 -2,439

Equity 58,306 +1,303 59,609 -2,948 56,661 -1,644

Equity Ratio (%) 36.0 +1.2 37.2 -2.0 35.2 -0.9

Net D/E Ratio (times) 0.99 -0.07 0.92 +0.10 1.02 +0.03

A

B

C

(¥million) 1Q 2Q Six Months Total

Current(less than

a year non-

current included )

IncreaseFactor

New Borrowing upon Acquisition +2,528 +163 +2,691

Long-term borrowing which due became less than one year +1,937 +4,257 +6,195

Lease Liabilities +247 +3 +250

Decrease Factor

Repayment upon Disposition -4,468 -4,171 -8,639

Other (Refinance, Scheduled Payment, etc.) -1,943 -5,910 -7,853

Lease Liabilities (Liabilities decreased over time) -2 -4 -6

Non-Current

IncreaseFactor

New Borrowing upon Acquisition +4,347 +13,722 +18,069

Short-term, long-term borrowing less than one year switched to long term +3,040 +8,135 +11,175

Lease Liabilities +999 +999

Decrease Factor

Repayments upon Disposition -5,973 -4,674 -10,648

Other Repayments (Refinance, Scheduled Payment, etc.) -1,394 -1,169 -2,563

Long-term borrowing which due became less than one year -1,937 -4,257 -6,195

Lease Liabilities (Liabilities decreased over time) -68 -63 -131

Total -15,787 +13,100 -20,250 +26,282 -36,038 +39,383 14


(¥million)

Total Book Value as of End of May 2020

67,061 (Total 111 properties)Total Expected

Disposition Value 105,178

Breakdown

Property TypeBook Value

TotalBook Value

Book Value on Completion

Expected Disposition Value Total Expected Disposition

ValueRevitalization Development Revitalization Development

Office, Commercial Facility 25,198 (35) 3,605 (4) 28,804Additional

Cost(Construction,

Value-add Cost)

23,965

30,498 5,727 36,226

Condo/Apt Building 10,954 (31) 2,544 (5) 13,498 12,716 10,257 22,974

Hotel - 10,318 (6) 10,318 - 20,657 20,657

Logistics Facility - 4,920 (2) 4,920 - 9,518 9,518

Detached House - 6,837 (17) 6,837 - 11,954 11,954

Other 2,681 (11) - 2,681 3,849 - 3,849

Total 38,834 (77) 28,226 (34) 67,061 91,026 47,064 58,114 105,178

Office, Commercial

Buildings34%

Condo/Apt Buildings

22%

Hotel20%

Logistics Facilities9%

Detached houses

11%

Others4%

The 23 wards of Tokyo

38%

Tokyo (except the Tokyo's 23

wards)13%

Kanagawa21%

Chiba16%

Saitama12%

Less than ¥100M

17%Between ¥100 &

¥500M, 10%

Between ¥0.5 & ¥1B

12%

Between ¥1 & ¥2B

21%

More than ¥2B40%

(121properties)

Breakdown of Inventories (\million)

No. of

properties

No. of

propertiesRevitalization

Office, Commercial Buildings (30) (3) 26,939 31,661 2,914 34,575

Condo/Apt Buildings (54) (5) 29,053 24,965 20,365 45,331

Hotel (1) (2) 7,390 4,539 9,015 13,555

Logistic Facility - - (1) 710 - 2,540 2,540

Detached House - (16) 6,109 - 9,901 9,901

Other (9) - 1,421 1,774 - 1,774

TOTAL (94) (27) 71,625 62,942 44,737 107,679

2,447

8,713

4,328

710

6,109

-

22,309

Total expected

disposition

valueDevelopment

Property type

InventoriesTotal

(A)+(B)

Balance of Inventories

As of Aug. 31, 201771,625

3,062

20,339

24,491

49,316

-

1,421

Expected Disposition Values

Total Expected Disposition

Value107,679

Revitalization

(A)

Development

(B)

Inventories - Breakdown -

Property Type Area Property Size

Expected Disposition Values Base

* ( ) are the number of properties* The expected disposition values above are based on Tosei’s estimate of revenue corresponding to the properties currently

in the inventories. Actual amounts may be vary significantly from the estimates, due to various factors.* The condominium buildings and detached houses are counted as each project being one property.

◆ Balance of inventories is ¥67.0 billion, Total expected disposition value is ¥105.1 billion (Tosei’s estimation).

*Detached houses and condominiums are classified by one unit’s price.

Expected Gross Profit 14,152

Expected Gross Profit Rate 13.5%

Reference

Gross Profit Rate(Past Record*)

24.2%

*Average of past three years (FY2017 – FY2019) gross profit rate of Revitalization and Development Businesses.

15


33%

18%35% 26% 29%

5%4%

31%

22%

23%12%

2%

2%

7%

4%

4%46%

15%

10%

4%

5%

6% 20%

9%

15%

26%

1%

22%

10%

8%

25%

11%11%

76,487

44,588

53,620 46,581

50,127 54,825

60,557

74,365

99,428 100,076 105,357

126,761

105,178

0

20,000

40,000

60,000

80,000

100,000

120,000

2008/11 2009/11 2010/11 2011/11 2012/11 2013/11 2014/11 2015/11 2016/11 2017/11 2018/11 2019/11 2020/05

（百万円）

戸建（開）マンション（開）

物流施設（開）ホテル（開）

オフィス・商業（開）その他（流）

マンション（流）ホテル（流）

オフィス・商業（流）

Inventories - Expected Disposition Values -

Seamless Growth 2020

Advancing Together2018

Next Stage2014

Charge Up2011

Growing Up2008

46%

15% 10% 4% 3% 3%

33%

18%35% 26% 27% 27%

15%

26%

22% 20% 14%

4%

31% 22%

23% 19% 17%

2% 6%

7%

4%6%

5%6%

14%

20%

5%

8%

25%

11%8%

8%

1

76,487

44,588

53,620

46,581 50,127

54,825 60,557

74,365

99,428 100,076 105,357

118,774

0

20,000

40,000

60,000

80,000

100,000

120,000

2008/11 2009/11 2010/11 2011/11 2012/11 2013/11 2014/11 2015/11 2016/11 2017/11 2018/11 2019/02

（百万円）

系列11 戸建（開）

ホテル（流）ホテル（開）

その他（流）物流施設（開）

マンション（流）マンション（開）

オフィス・商業（流）オフィス・商業（開）

Hotel

Condo

Logistics

Apt Building

Detached House

Office,Commercial FacilityOthers

Development

Revitalization

Office, Commercial Facility

(¥million)

Hotel (Revitalization)

Others(R)

Apt Building (R)

Office, Commercial Facility (R)

Detached House (Development)

Hotel (D)

Logistics (D)

Condo (D)

Office, Commercial Facility (D)

◆ During the six months ended May 31, 2020, ¥30.1 billion was added and ¥37.5 billion subtracted, due to sales of properties (Revitalization Business and Development Business), from the inventories.

◆ The expected disposition value was revised down by ¥21.5 billion in consideration of reevaluating the effect of COVID-19 conservatively.

16


22,004 25,172

33,555

42,370 46,370

49,936 22物件

25物件30物件 30物件 32物件 32物件

- 30物件

- 20物件

- 10物件

物件

10物件

20物件

30物件

0

10,000

20,000

30,000

40,000

50,000

60,000

'15/11 '16/11 '17/11 '18/11 '19/11 '20/5

（百万円）

(¥million)

Total Book Value as of end of May 2020

49,936 (32 properties) Fair Value 70,540

Breakdown of Investment Properties and PPE

Property Type Book Value(A)No. of

PropertiesFair Value(B)

UnrealizedGains (B)-(A)

Office, Commercial Building*1 37,601 24 57,030 19,429

Condo/Apt Building 4,260 4 5,599 1,339

Hotel 7,143 3 6,570 -573

Logistics Facility 930 1 1,340 409

Investment Property 49,936 32 70,540 Total 20,604 A

Income Tax Expense*2 -6,799 B

Unrealized Gains (After Tax) 13,805 C (A+B)

(18)*

Fixed Assets (Investment Properties and PPE) - Breakdown -

As of end of May 2020

Per Share

Total Equity 【A】 ¥56,661M ¥1,197.06

Unrealized Gains (after tax)【B】 ¥13,805M ¥291.65

Total (【A】+【B】) ¥70,466M ¥1,488.71

Total Equity including unrealized gains (after tax) in above Changes in Investment Properties and PPE (Book Value)

*( ) are the number of properties which have rental income

◆ Book values of the properties included in non-current assets is ¥49.9 billion and unrealized gains is ¥20.6 billion (Tosei’s estimation).◆ The fair value was reevaluated considering the effect of COVID-19 conservatory, the unrealized gain decreased significantly from 1Q of

¥31.2 billion.

*1 Includes one property which is partially is a hotel*2 Calculated by corporation tax rate 33%* Fair values in above is based on the real estate appraisal by Tosei* PPE book value doesn’t include tools, appliances, and fixtures.

(¥million)(21)

(26) (23)properties

(25 properties)(23)

Assumption for calculating the Hotel’s fair value is occupancy rate 60 to 65%. The loss will be covered when the occupancy rate go backs to 65 to 70%.

17


1.52%

1.30%

1.16%1.07% 1.05%

1.00%

13.1年

10.5年

16.4年 16.0年15.4年 15.1年

4.4年5.3年

4.5年

6.1年 6.3年7.2年

4

15

'15/11 '16/11 '17/11 '18/11 '19/11 '20/5

0

0

（年）

平均借入金利

平均借入期間（固定資産）

平均借入期間（棚卸資産等）

37,605

56,547 47,588 47,530

60,268 59,648

11,049

13,576 19,524

27,488

29,546 32,399

48,655

70,124 67,113

75,019

89,815 92,047

0

20,000

40,000

60,000

80,000

100,000

'15/11 '16/11 '17/11 '18/11 '19/11 '20/5

（百万円）

固定資産

棚卸資産等

Borrowings from Financial Institutions

Changes in Borrowing Rate*1 / Period*2 Changes in Borrowing*3 Balance

Average Interest Rate

Average Borrowing Period (Fixed Assets (Investment Properties and PPE))

Average Borrowing Period (Inventories, etc.)

Borrowing for Fixed Assets (Investment Properties and PPE)

Borrowing for Inventories, etc.

*1 The weighted-average rate of borrowing balance of end of each fiscal year *2 Borrowing period are calculated using the weighted average of period from the date of borrowing until due date of borrowing depending on the borrowing balance.*3 Lease debts are not included

◆ Interest rate 1.00% (down 0.05% from end of Nov. 2019), low interest rate continues.◆ Generally borrow funds based on the assumption of mid- to long-term ownership of properties.◆ The average borrowing period of Fixed Assets is 15.1 years, current assets, etc. is 7.2 years.

years

(¥million)

1.52%

1.30%

1.16%1.07% 1.05%

1.00%

13.1年

10.5年

16.4年 16.0年15.4年 15.1年

4.4年5.3年

4.5年

6.1年 6.3年7.2年

4

15

'15/11 '16/11 '17/11 '18/11 '19/11 '20/5

0

0

（年）

平均借入金利

平均借入期間（固定資産）

平均借入期間（棚卸資産等）

years

18


Overview of Segment Results (Consolidated) -Revenue and Cost of Revenue-

(＊)

(＊)

RevenueFY 2019 2Q (6M) FY 2020 2Q (6M)

Before recording valuation loss

FY 2020 2Q (6M)After recording valuation loss

yr/yr Change

(A) % % (B) % (B)-(A) %

Total 34,452 100.0% 45,050 100.0% 45,050 100.0% 10,597 30.8%

Revitalization 17,075 49.6% 27,679 61.4% 27,679 61.4% 10,603 62.1%

Development 10,226 29.7% 9,913 22.0% 9,913 22.0% -313 -3.1%

Rental 2,956 8.6% 2,760 6.1% 2,760 6.1% -196 -6.6%

Fund and Consulting 1,318 3.8% 2,186 4.9% 2,186 4.9% 867 65.8%

Property Management 2,900 8.4% 2,833 6.3% 2,833 6.3% -66 -2.3%

Hotel 591 1.7% 270 0.6% 270 0.6% -321 -54.3%

Internal Transaction -618 - -592 - -592 - 25 -4.1%

(¥million,%)

Cost of RevenueFY 2019 2Q (6M) FY 2020 2Q (6M)



yr/yr Change

(A) % % (B) % (B)-(A) %

Total 22,487 65.3% 30,536 67.8% 38,217 84.8% 15,729 69.9%

Revitalization 11,349 66.5% 19,798 71.5% 21,256 76.8% 9,907 87.3%

Development 7,820 76.5% 7,660 77.3% 13,884 140.1% 6,063 77.5%

Rental 1,675 56.7% 1,608 58.3% 1,608 58.3% -67 -4.0%

Fund and Consulting 67 5.1% 70 3.2% 70 3.2% 2 3.6%

Property Management 2,011 69.3% 1,871 66.0% 1,871 66.0% -139 -7.0%

Hotel 78 13.2% 38 14.2% 38 14.2% -39 -51.0%


19


Overview of Segment Results (Consolidated) -Gross Profit and Operating Profit-

(¥million,%)

Gross ProfitFY 2019 2Q (6M) FY 2020 2Q (6M)



yr/yr Change

(A) % % (B) % (B)-(A) %

Total 11,964 34.7% 14,513 32.2% 6,832 15.2% -5,131 -42.9%

Revitalization 5,726 33.5% 7,880 28.5% 6,423 23.2% 696 12.2%

Development 2,406 23.5% 2,252 22.7% -3,970 -40.1% -6,377 -265.0%

Rental 1,281 43.3% 1,152 41.7% 1,152 41.7% -129 -10.1%

Fund and Consulting 1,251 94.9% 2,116 96.8% 2,116 96.8% 865 69.1%

Property Management 889 30.7% 962 34.0% 962 34.0% 72 8.2%

Hotel 513 86.8% 231 85.8% 231 85.8% -281 -54.9%


Operating ProfitFY 2019 2Q (6M) FY 2020 2Q (6M)



yr/yr Change

(A) % % (B) % (B)-(A) %

Total 7,964 23.1% 9,851 21.9% 2,170 4.8% -5,794 -72.7%

Revitalization 5,027 29.4% 7,022 25.4% 5,565 20.1% 537 10.7%

Development 1,541 15.1% 1,502 15.2% -4,720 -47.6% -6,262 -406.3%

Rental 1,182 40.0% 1,038 37.6% 1,038 37.6% -143 -12.1%

Fund and Consulting 690 52.3% 1,480 67.7% 1,480 67.7% 790 114.6%

Property Management 289 10.0% 354 12.5% 354 12.5% 65 22.7%

Hotel 131 22.3% -458 -169.9% -458 -169.9% -590 -447.9%

Corporate Expenses, etc. -897 - -1,089 - -1,089 - -192 21.4%

20


(¥million)

FY20192Q (6M)

(A)

FY20202Q (6M)

(B)

yr/yr Change(B)-(A)

Cash flows from / used in operating activities 554 7,411 6,856

Profit before tax 7,634 1,890 -5,743

Depreciation expense 435 577 141

Increase / Decrease in inventories -4,584 -1,078 -3,506

Valuation loss in inventories - 7,680 -7,680

Income taxes paid -2,831 -1,861 969

Other, net -99 202 302

Cash flows from/used in investing activities -209 -3,364 -3,154

Increase / Decrease in PPE -33 -136 -103

Increase / Decrease in investment properties -37 -3,136 -3,098

Other, net -137 -91 46

Cash flows from/used in financing activities 2,235 -624 -2,860

Increase / Decrease in borrowings 5,197 2,232 -2,965

Cash dividends paid -1,454 -1,995 -541

Interest expenses paid -508 -480 27

Purchase of Treasury Share -999 -288 711

Other, net 0 -92 -93

NET Increase / Decrease in cash and cash equivalents 2,581 3,422 841

Cash and cash equivalents at beginning of period 26,520 31,998 5,478

Effect of exchange rate change on cash and cash equivalents -0 -1 -0

Cash and cash equivalents at end of period 29,100 35,420 6,319

Summary of Cash Flow Statements (Consolidated)

Cash Flows from Operating Activities

¥ 7.4 billion increasedMainly due to ;・¥1.8 billion of profit before tax・¥1.0 billion increase in inventories・¥7.6 billion of recording valuation loss・¥1.8 billion of income taxes paid

Cash Flows fromInvesting Activities

¥3.3 billion decreaseMainly due to;・¥3.1 billion purchase of investment

properties (purchase of rental properties¥2.2 billion, Value-add cost, etc. ¥0.9 billion)

・¥130 million of purchase of PPE

Cash Flows fromFinancing Activities

¥0.6 billion decreaseMainly due to;・¥2.2 billion net increase in borrowings・¥1.9 billion of cash dividends paid・¥480 million of interest expenses paid・¥280 million purchase of treasury shares

21


II. Revision of FY2020 Forecast and Plans for second half of FY2020

22


Revision of FY2020 Forecasts

◆ Profit for the first six months of FY2020 had been steadily progressing and profit before tax was expected to reach ¥11.7 billion against ¥13.0 billion in the full-year plan. However, the forecast was revised for the following reasons:

FY2020 Consolidated Full-year Forecast

Initial Forecast (A)Announced on 9 Jan. 2020

Reference：Full-year forecast before

recording valuation loss

New Forecast (B)Announced on 6 Jul. 2020

Increase / Decrease Amount (B-A)

PercentageChange

Reference: Previous Year

Result (FY2019)

Revenue 80,354 64,897 64,897 -15,456 -19.2% 60,727

Operating Profit 13,737 12,361 4,680 -9,056 -65.9% 12,690

Profit Before Tax 13,046 11,750 4,070 -8,976 -68.8% 12,090

Profit for the Year 8,808 7,739 2,411 -6,396 -72.6% 8,447

Basic EarningsPer Share (EPS)

¥185.09 ¥162.77 ¥50.72 -¥134.37 -72.6% ¥176.40

Dividend ¥47 - ¥13 -¥34 -72.3% ¥42

Payout Ratio 25.4% - 25.6% - - 23.8%

(¥million)

1. Review the timing of sale It is considered appropriate to sell properties only after recovery of a certain liquidity. Therefore, the sale of some properties to be sold was reviewed and postponed to the following fiscal year or later. The revenue was revised down to ¥64.8 billion a ¥15.4 decrease.

2. Recording Valuation LossRecorded a evaluation loss of ¥7.6 billion on inventory (mainly on hotels and commercial facilities ) in 2Q based on a conservative estimation of the decline in liquidity of income-generating properties and decline in asset values.

23


(¥million)

Total No. ofProperties

Book Value

Beforerecording

valuation loss

Recording Valuation Loss Book Value

Afterrecording

valuation loss

Preconditions for assessmentbased on COVID-19 Preconditions for assessment

after convergence of COVID-19 No. of

PropertiesAmount %

Buyer’sCAP Rate

Rental / OperatingIncome

Develo

pm

ent

Bu

siness

Hotel 6 15,411 5 -5,092 ‐33% 10,318 ＋1.0%Occupancy rate

Before : around 90%After : 60% to 70%

If occupancy rates and cap rates are seen improving due to the recovery of demand, for in-bound and business uses

Commercial Facility

4 4,515 3 -910 ‐20% 3,605 ＋0.5%Revised down future

rent income 20%

If rents are seen rising to expected levels due to the recovery of in-bound and domestic consumption

RentalApartment

3 1,424 2 -218 ‐15% 1,206 ＋0.5%If cap rates are seen declining due to a decrease in risk premiums

Detached House

Land Lots17 6,839 1 -2 -0% 6,837 No Change

Condominium 2 1,338 0 0 - 1,338 No Change

LogisticFacilities

2 4,920 0 0 - 4,920 No Change

Revitalizatio

n

Bu

siness

Income-generatingProperties

77 40,292 23 -1,457 ‐4% 38,834 ＋0.5%If cap rates are seen declining due to a decrease in risk premiums

Total 111 74,742 34 -7,680 ‐10% 67,061

Details of Revision of FY2020 Forecast

1. Details of valuation loss• Inventories total 111 properties (book value before recording valuation loss ¥74.7 billion ➡ recorded ¥7.6 billion valuation loss, book

value after recording valuation loss ¥67.0 billion)

• Given the difficulty of assessing the impact of the spread of COVID-19 and the timing for when it will be contained, we chose a conservative scenario from among several assumed scenarios, and posted a valuation loss based on the lower-of-cost-or-market method.

• We will consider revising valuations upwards if there is an improvement in market conditions, such as a recovery in occupancy rates for hotels and commercial facilities, after the containment of COVID-19.

24


7,022

1,890

4,070

1,502

1,038

1,480

354

950

1,322

2,106

251

-458 -1,089 -279

-7,680

-328

-544

-1,247 -331

Details of Revision of FY2020 Forecast

Valuation Loss*

*Valuation loss : Preconditions of LCM

• Hotel (Development)Increased 1.0% of the buyers CAP rate, expected occupancy rate is revised down to 60 to 70%.

• Income-generating properties mainly commercial facilities (Revitalization, Development)Increased 0.5% of the buyers CAP rate, expected rent for commercial facilities under development are 20% revised down.

Profit before tax as of end of 2Q

Profit before tax full-year forecast

Property Management

Revitalization

Rental

Development

Fund &Consulting

Property Management

CorporateExpenses

Revitalization

Rental

Development

Fund & Consulting

HotelFinance

income & costs

Result of the first half by segment Forecast of the second half by segment

(¥million)

• Although property sale steadily progressed for first half, profit sharply declined due to booking a valuation loss.

• As for Revitalization Business for second half, as profit from property trading is viewed as almost zero, operating profit is ¥328 million deficit.

• Build up profit mainly in the Rental Business and the Fund Business which are stable, profit-earning businesses.

Hotel

Finance income &

costs

2. Details of profit by segment

CorporateExpenses

25


10,171

12,090

4,070

7,634

1,890

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

'18/11期 '19/11期 '20/11期

（予想）

'19/11期

2Q

'20/11期

2Q

18,723

20,840

13,882

11,964

6,832

44% 45%

77%

35%

75%

-300%

-250%

-200%

-150%

-100%

-50%

0%

50%

0

5,000

10,000

15,000

20,000

25,000

'18/11期 '19/11期 '20/11期

（予想）

'19/11期

2Q

'20/11期

2Q

安定事業比率

-1,319 -1,375 -1,303 -618 -592

34,79331,012

33,646

17,050

27,679

13,261

14,346

15,406

10,226

9,913

5,979

5,993

5,777

2,956

2,760

3,038

3,773

5,133

1,318

2,186

5,2325,888

5,766

2,900

2,833

5571,089

473

591

270

61,543 60,727

64,897

34,452

45,050

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

'18/11期 '19/11期 '20/11期

（新予想）

'19/11期

2Q'20/11期

2Q

その他事業

ホテル事業

不動産管理事業

不動産・事業

不動産賃貸事業

不動産開発事業

不動産流動化事業

内部取引

16,81618,723

20,840

24,278

43% 44% 45% 40%

-80%

-60%

-40%

-20%

0%

20%

40%

0

5,000

10,000

15,000

20,000

25,000

'17/11期 '18/11期 '19/11期 '20/11期

（予想）

安定事業比率

(¥million)

EPS (¥) Dividends (¥)

ROE

StableBusiness

TradingBusiness

Revision of FY2020 Forecast and Plans for Second Half - Major P/L summary, Dividends -

Gross Profit Profit before Tax(¥million)

(¥million)

Profit for the Year

FY2020(New Forecast)

Property SalesExpenses

Dividends

Revenue

Dividends

◼ Others◼ Hotel◼ Property Management◼ Fund and Consulting◼ Rental◼ Development◼ Revitalization◼ Internal Transaction

(Forecast)

(¥million)

Ratio of Stable Business**Total of Gross Profit of Stable Business ÷(Gross Profit - Property Sales Expenses)

FY2018 FY2019 FY20202Q

FY20192Q

6,852

8,447

2,411

5,239

1,147

14.0%

15.3%

4.1%0%

5%

10%

15%

20%

25%

30%

0

2,000

4,000

6,000

8,000

10,000

'18/11期 '19/11期 '20/11期

（予想）

'19/11期

2Q

'20/11期

2Q


FY2018 FY2019 FY20202Q

FY20192Q


FY2018 FY2019 FY20202Q

FY20192Q

StableBusiness

TradingBusiness


FY2018 FY2019 FY20202Q

FY20192Q


FY2018 FY2019

* The revenue and profit of the Rental business has been partially transferred in consideration of the establishment of a new hotel business. For comparison, segment information for FY2018 is presented based on the revised classification in this material. 26


Revision of FY2020 Forecast and Plans for second half of FY2020 (Segment)

(¥ million)

FY2019

FY2020New ForecastAnnounced on

6 Jul.

FY2020Initial Forecast

Announced on 9 Jan.

Forecast Change

FY2020 1H(6M)

FY2020 2HForecast

(A) % (B) % (C) % (B) – (C) % (D) % (B) - (D) %

Revenue 60,727 100.0% 64,897 100.0% 80,354 100.0% -15,456 -19.2% 45,050 100.0% 19,847 100.0%

Revitalization 31,012 51.1% 33,646 51.8% 46,776 58.2% -13,130 -28.1% 27,679 61.4% 5,966 30.1%

Development 14,346 23.6% 15,405 23.7% 17,396 21.6% -1,991 -11.4% 9,913 22.0% 5,492 27.7%

Rental 5,993 9.9% 5,777 8.9% 5,984 7.4% -206 -3.5% 2,760 6.1% 3,016 15.2%

Fund and Consulting 3,773 6.2% 5,133 7.9% 3,194 4.0% 1,939 60.7% 2,186 4.9% 2,946 14.8%

Property Management 5,888 9.7% 5,765 8.9% 6,539 8.1% -773 -11.8% 2,833 6.3% 2,932 14.8%

Hotel 1,089 1.8% 472 0.7% 1,830 2.3% -1,357 -74.2% 270 0.6% 202 1.0%

Internal Transactions -1,375 - -1,303 - -1,367 - 64 -4.7% -592 - -710 -3.6%

Gross profit 20,840 34.3% 13,882 21.4% 24,278 30.2% -10,396 -42.8% 6,832 15.2% 7,049 35.5%

Revitalization 9,065 29.2% 6,756 20.1% 11,199 23.9% -4,443 -39.7% 6,423 23.2% 332 1.7%

Development 3,042 21.2% -2,514 -16.3% 4,083 23.5% -6,598 - -3,970 -40.1% 1,456 24.4%

Rental 2,601 43.4% 2,623 45.4% 2,621 43.8% 1 0.1% 1,152 41.7% 1,470 26.8%


Property Management 1,768 30.0% 1,939 33.6% 1,946 29.8% -7 -0.4% 962 34.0% 977 33.2%

Hotel 951 87.4% 391 82.9% 1,693 92.5% -1,302 -76.9% 231 85.8% 159 5.4%

Internal Transactions -229 - -274 - -333 - 58 - -81 - -193 -

Selling, general and administrative expenses, etc.

8,203 13.5% 9,202 14.2% 10,304 12.8% -1,101 -10.7% 4,659 10.3% 4,542 22.9%

Expenses related to property marketing activities

1,388 2.3% 1,400 2.2% 2,042 2.5% -641 -31.4% 987 2.2% 412 2.1%

Selling, general and administrative expenses(net of expenses related to property marketing activities)

6,814 11.2% 7,801 12.0% 8,261 10.3% -459 -5.6% 3,672 8.2% 4,129 20.8%

Other Income 64 0.1% 24 0.0% 13 0.0% 11 85.8% 20 0.0% 3 0.0%

Other Expenses 10 0.0% 23 0.0% 250 0.3% -226 -90.7% 23 0.1% 0 0.0%

Operating profit 12,690 20.9% 4,680 7.2% 13,737 17.1% -9,056 -65.9% 2,170 4.8% 2,510 12.6%

Revitalization 7,754 25.0% 5,236 15.6% 9,165 19.6% -3,928 -42.9% 5,565 20.1% -328 -5.5%

Development 1,528 10.7% -3,770 -24.5% 2,625 15.1% -6,395 - -4,720 -47.6% 950 17.3%

Rental 2,367 39.5% 2,361 40.9% 2,337 39.1% 24 1.0% 1,038 37.6% 1,322 43.8%


Property Management 504 8.6% 606 10.5% 539 8.2% 66 12.4% 354 12.5% 251 8.6%

Hotel 99 9.1% -1,003 -212.3% -132 -7.3% -870 - -458 -169.9% -544 -269.3%

Corporate expenses, etc. -1,928 - -2,336 - -2,556 - 219 -8.6% -1,089 - -1,247 -

Finance income/costs(net) -600 - -610 - -691 - 80 -8.9% -279 - -331 -

Profit before tax 12,090 19.9% 4,070 6.3% 13,046 16.2% -8,976 -68.8% 1,890 4.2% 2,179 11.0%

Income tax expenses 3,643 - 1,658 - 4,238 - -2,579 -60.9% 743 - 915 -

Profit for the year 8,447 13.9% 2,411 3.7% 8,808 11.0% -6,396 -72.6% 1,147 2.5% 1,264 6.4%

*The orange portion shows gross profit margin and operating profit margin

Revitalization Business• Revenue ¥46.7 B → ¥33.6 B• Operating profit ¥9.1 B→ ¥5.2 B

• Postponed the sale of some properties to be sold to the following fiscal year or later (Revenue -¥13.1 B).Profit is viewed as almost zero in the second half.

Development Business• Revenue ¥17.3 B → ¥15.4 B

• Operating profit ¥2.6 B → -¥3.7 B• Sold a logistics facility, T’s Logi Hashimoto, in Jun.• Postpone sales of a commercial facility to next fiscal year

(Revenue -¥0.6 B)• conservatively estimate the number of detached houses to be

sold in the second half (-¥1.3 B).

Rental Business• Revenue ¥5.9 B → ¥5.7 B

• Operating profit ¥2.3 B → ¥2.3 B• Impact of rent reductions is insignificant.

(Basically dealing with payment holidays. 11 rent reduction, in

total about ¥4 M)

Fund and Consulting Business• Revenue ¥3.1 B → ¥5.1 B• Operating profit ¥1.7 B → ¥3.5 B• Operating profit is planned to double from the initial forecast due

to new AM contracts are expected • At the moment there are no sudden contract cancelations.

Property Management Business• Revenue ¥6.5 B → ¥5.7 B• Operating profit ¥0.53 B → ¥0.6 B

• Although there is a negative effect from the hotels under management due to low occupancy rate, operating profit is expected to increase slightly due to new PM contracts of logistics

facilities

Hotel Business• Revenue ¥1.83 B → ¥0.47 B• Operating profit -¥0.13 B → -¥1.0 B• Two Tosei Hotel COCONE opened in Jul. (Asakusa-kuramae, Ueno-

okachimachi) • Reopened Tosei Hotel COCONE Kanda, and Ueno from July.• Tosei Hotel & Seminar Makuhari reopened after renovating in July.

• The second half occupancy rate is estimated to be 10 to 15%.

27


Type BeforeCOVID-19

Present Policy, Industry Conditions, Demand and Supply Trends etc.Investment

Strategy

Office

• The average vacancy rate as of April 2020 was 1.56%, remaining at a low level, and the average asking rent rising for the 76th consecutive month.

• A large supply of 1,870 thousand m2 is planed in the 23 wards of Tokyo in 2020 and concentration in central area is accelerating and more than 70% of them are located in the main central three wards of Tokyo.

• An increasing number of companies are introducing telework and satellite offices. Changes in the office market are being observed.

Housing

New Condos

• As COVID-19 impacted the market where supply of properties offered for sale had been curbed to respond to slowing sales caused by soaring prices, units were newly offered for sale dropped to 686 in April.

UsedCondos

• Although, the demand are still firm due to relatively low price compare to the newly build condominium,, transaction volume dropped 52.6% compare to previous year in April, due to the effect of COVID-19

Detached Houses

• New supply in the Greater Tokyo Area between Jan. and Apr. 2020 was 18,731 units, a 11.3% decrease compare to the previous year.

• Although decrease of the number of contracts is limited compare to New and Used Condos, the average price decreased for two consecutive months from Mar.

Income-GeneratingApartment

• Leverage was decreasing due to striker lending attitude from before the spread of COVID-19. The market price is moving into an adjusted phase.

Hotel• Lodging demand from both inbound and domestic decreased significantly due to the effect of COVID-19.

• The numbers of hotel rooms and inns in Tokyo are 175,000 hotel rooms (as of Mar 2019), it is expected that new supply of hotel rooms will come to a peak in 2021.

CommercialFacility

• Revenue of tenants deteriorated due to requests to close business because of COVID-19. In addition, changes are seen in consumer trends including an increase in product purchases through EC due to voluntary stay-at-home actions.

Logistics• Rental logistics facility stock in the Greater Tokyo Area increased to 602 million tsubo, but the vacancy rate remained low at 0.9%, and the rent continue

to rise (Apr. 2020).

• Strong demand is expected to continue due to increase in product purchase through EC due to voluntary stay-at-home actions.

Funds

PrivatePlacement

• As of end of Dec. 2019, the market for private placement funds grew to ¥20.2 trillion.

• Investors’ interest in properties continued against the backdrop of a high yield gap, but many investors are now taking a wait-and-see approach because of the spread of COVID-19. Meanwhile, there are investors who have determined their risk premium and resumed investments.

J-REIT

• Real estate transactions between Jan. to Apr. 2020 was ¥0.6 trillion (up 2.5% yr/yr)

• The Tokyo Stock Exchange REIT Index fell sharply on concerns of global economic slowdown due to COVID-19 and then recovered to the 1,700 point mark.

• While specializing in logistics facility and housing REIT impacted in a relatively small way by the COVID-19 disaster was appreciated, the situation for hotels and commercial facility REIT continue to be severe.

Loan Environment

• As of end of Mar. 2020, bank loans for the real estate industry reached ¥103 trillion to hit a record high, which is 15.9% of the total amount of bank loans (¥651 trillion).

• A trend of stricter screening by banks for loans for hotels and commercial facilities.

Recognition of the Current Business Environment◆ Demand for logistics facilities is firm.

◆ As for offices, carefully monitor the new trend of teleworking and satellite office, which increasing number of companies are introducing.

◆ The speed of sale of housing for end-users is expected to slow down because serving visiting customers and the sales method will change with measures against COVID-19, which may be long lasting.

28


5.3% 5.2% 5.3%5.7%

6.1%6.3% 6.4% 6.5% 6.5% 6.5% 6.5% 6.4%

6.2%6.0% 5.9%

5.6%5.4%

5.0% 5.0%4.8% 4.7%

4.5% 4.5% 4.5% 4.4% 4.4% 4.5%

4.8% 4.7% 4.8%

5.3%

6.0% 6.0%5.8% 5.7% 5.6% 5.5% 5.5% 5.4% 5.3%

5.1% 5.0%4.8% 4.7%

4.5% 4.5% 4.4% 4.3% 4.2% 4.1% 4.1% 4.1% 4.0% 4.0%

3.5% 3.5% 3.5%3.8%

4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%4.0% 4.0%

3.8% 3.7%3.5% 3.5% 3.4% 3.3% 3.2% 3.2%

3.0% 3.0% 3.0% 3.0% 3.0%

1.7% 1.7%1.4% 1.5% 1.4% 1.3% 1.4%

0.9%1.3%

1.0% 1.0%0.8%

0.6% 0.6% 0.6% 0.5% 0.3% 0.3%-0.1% -0.1% 0.0% 0.1% 0.0% 0.1%

0.0% -0.2% 0.0%

2007/4 2008/4 2009/4 2010/4 2011/4 2012/4 2013/4 2014/4 2015/4 2016/4 2017/4 2018/4 2019/4 2020/4

ビジネスホテル

マンション

オフィスビル

10年国債金利

Recognition of Current Business Environment (Reference: at the time of the financial crisis)

The expected CAP rate from investors rose 0.7% to 1.2% after the financial crisis.1. Trends in CAP Rate (223 wards of Tokyo)

Source : Prepared by Tosei based on Japan Real Estate Institute “real estate investor surveys”For more details please see “Appendix: Financial Result for the First Six Months of the Fiscal Year 2020” P9,10

Financial Crisis

2. Rental Office Market (5 central wards of Tokyo)Asking Rent Index (calculated Dec. 2007 as 100)

Aug. 2014 lowest 81¥13,146 per tsubo

2013/1 lowest 70¥16,617 per tsubo

¥23,285 per tsubo 98¥32,153 per tsubo 93

2020/4¥16,346 per tsubo 101

Source : Prepared by Tosei based on Sankou estate “market data”For more details please see “Appendix: Financial Result for the First Six Months of the Fiscal Year 2020” P21, 22

2010/11 11.9%

2012/77.2%

0.6%0.4%

2020/42.6%

1.6%1.4%

2007/124.0%

Trends in Vacancy Rate

2007/12＝100¥16,245 per tsubo¥23,841 per tsubo¥34,560 per tsubo

2013/2 lowest 67¥23,167 per tsubo

2010/1010.6%

Business Hotel

Apartment

Office Buildings

10-year government bonds yield

Small-size building

Large-size building

Large-scale building

Small-size building

Large-size building

Large-scale building

29


Issues

Business Strategy Responding to COVID-19 and After Containment of COVID-19

How we respond to COVID-19 and environmental change

Rationalization of the price levels of existing inventories through the posting of a valuation loss. (Especially hotel and commercial facility)

Facilitate business expansion measures・Expand asset types (data center research)・Expand customer base (crowd-funding…P35)

(security token research)・Reinforced/quickened judgment for investments

(T-MAP system development)

Curbing of new acquisition in April and beyond after fully assessing the effect of COVID-19 coronavirus.

Prompt implementation of measures to respond to COVID-19 and establish an appropriate operation structure(the implementation of teleworking for all employees, the improvement of IT environmental conditions and the introduction of an electronic settlement system)

Although profits for the final year of the current medium-term management plan are within reach, a large evaluation loss was posted for the future and profit forecasts were revised significantly downward.

Expansion of profitability in Stable Businesses(Especially the Fund and Consulting Business)

Securing sufficient cash in hand and prolongation of borrowing periods.

Review of timing for sales of inventories (postponement of sales of income-generating properties) and change of product portfolio composition.

Based on the assessment of when COVID-19 will be under control and the development of real estate market conditions thereafter, sales of existing inventories will restart, acquisition will expand and development projects will be facilitated as planned.

Establish a working style which response to COVID-19 and containment of COVID-19.

Based on an assessment of when COVID-19 will be under control and the development of the business environment thereafter, efforts will be made to achieve growth in profitability again.

Expansion of Fund and Consulting Business, Rental Business, Property Management Business (cover the loss from Hotel Business).

Continue the left

GeneralBusiness

Operation

Maintenance of Sound Business

Bases

BusinessStrategy

Mid-term Management

Plan

For detail please refer to

P31

For detail please refer to

P32-33

P34Recovery &

Growth Simulation

Continue

Continue

◆ Concluded the worst period when economic activities came to a halt due to the emergency declaration. Time has shifted to a stage where society needs to brace for the second spike and seek economic recovery.

◆ For the business environment going forward (global recession, declining demand in investments due to uncertainty over financial environment, and financial institutions’ reinforced stance on screening), re-growth/re-expansion will be sought at Tosei, in preparation for a downward cycle such as declining liquidity of profit-earning property and rising expected yield.

Measures for mid- to long term growth

30


Nov. 2007 Nov. 2018 Nov. 2019 May 2020

Cash and cash equivalent ¥5.1 B ¥26.5 B ¥31.9 B ¥35.4 B

Interest-bearing liabilities ¥59.6 B ¥75.0 B ¥89.8 B ¥93.1 B

Equity Ratio 22.1% 37.5% 36.0% 35.2%

Net D/E Ratio 2.82 Times 0.93 Times 0.99 Times 1.02 Times

1.52%

1.30%

1.16%1.07% 1.05%

1.00%

13.1年

10.5年

16.4年 16.0年15.4年 15.1年

4.4年5.3年

4.5年

6.1年 6.3年7.2年

4

15

'15/11 '16/11 '17/11 '18/11 '19/11 '20/5

0

0

（年）

1. Selling, general and administrative expenses and interest rates are covered by Stable Businesses

(Forecast)

◼ Stable Businesses’ Gross Profit

◼ Fixed (administrative expenses)

*Fixed Expenses (administrative expenses and interest) is the amount excluding Direct expenses relatedto selling of properties (brokerage fee/ advertisement fee ) from “general and administrative expenses”

Fixed ExpensesCoverage Ratio

115%

Fixed Exp

enses

Stable B

usin

esses’G

ross P

rofit

(¥ million)

3. Create operation structure preparing for the second spike

• Secure cash in hand to improve cash flow safeness.

• Aim to keep an equity ratio of around 35%.

Business Strategy Based on COVID-19 l (Maintain a Robust Management Structure)

Fixed Assets Borrowing ¥32.3 Billion

• Implement preventive measures against infection at hotels and detached house sales sites.

• Introduce telework and staggered working hours systems

• Build a VPN environment.

• Distribute an iPad terminal to all sales personnel.

• Divide personnel from each department into two groups and set up a workplace separately.

2015.11 2016.11 2017.11 2018.11 2019.11 2020.5

◆ Based on lessons learned from the global financial crisis, facilitate business management, considering a highly sound financial base and resistance to recession.

• Long-term fund procurement for inventories

2. Secure short-term liquidity, Long-term Fund Procurement

Average Interest Rate

InventoriesBorrowing ¥59.6 Billion

years

years

31


Revitalization Facilitate a business strategy in response to the price downward cycle.

Real EstatePrice Cycle

Business Strategy Based on COVID-19 ll (Revitalization Business)

FY2020 2H FY2021 FY2022

¥10 to ¥20 B

¥40 to ¥60B

¥40 to¥80 B

1. Rationalize the price level of existing inventories by immediately booking a valuation loss, and old inventory is replaced by a new one sequentially. (However, there is no need to in a rush. Continue to hold inventories until liquidity recovers to a certain degree, and enjoy rental income.)

2. Assess market conditions and make a purchase while being aware of striking an appropriate inventory balance.

Increase acquisitions once prices hit bottom, while being aware of striking an inventory balance during an opportunity to make a less expensive purchase.

Acquisition are resumed by making a discerning selection while market conditions are being closely monitored.

Rationalize the prices of inventories by booking a valuation loss. A wait-and-see approach is taken for acquisition.

Image of acquisition recovery(Development Projects included)

3. Create profit even in a down cycle by selecting profitable properties and by adding value by our revitalization know-how

Business model that is able to generate profits not relating on rise of

real estate market price

Acquisition+

Revitalizing Costs

Profit 20%

Profit 10%

Profit 10%

Acquire aged/deteriorated property in

Comparatively cheap price

Improve value

by Revitalizing

Market Price Before

Revitalizing

+ =

SaleValue-addedAcquisition

32


T’s Logi Hashimoto (delivered in Jun.)

Development Project Schedule (Holding / Scheduled to be completed)

Development Aim for a development opportunity with the strength of a wide range of asset groups traded.

◆ Compared to the Revitalization Business, the Development Business has a longer business period. Therefore, make a purchase byassessing profitability. (As for asset type, aim to acquire a land lots for logistics facility which are in high demand and condominium which are firm demand)

◆ Start studying about data center facility for expansion the Company’s products lineups.

Type No. Expected Disposition Value (¥million)

Commercial Facility 4 5,727

Condominium 210,257

Rental Apartment 3

Hotel 6 20,657

Logistics Facility 2 9,518

Detached Houses 17PJ 11,954

Total 17 Properties + Detached Houses 58,114

Constructed and holding Under construction or in planning stage

Commercial Facility

Currently Holding

After2022

2021

Tosei Hotel & Seminar Chibaminato Ekimae

Tosei Hotel Cocone Asakusa II

Hasuda-shi Logistics Project (sales contract has been made)

Toda-shi Condominium Project

Logistics

Condominium

Hotel

Hotel

Hotel

Tosei Hotel Cocone Tsukiji

Kichijoji 2-chome Commercial Facility ProjectCommercial Facility

Tosei Hotel Cocone Kamakura

Hotel

Rental Apartment Kashiwa-shi Rental Apartment Project

Rental Apartment Machida-shi Haramachida 5-chome Rental Apartment Project

Meguro-ku Midorigaoka 2-chome Commercial Facility ProjectCommercial Facility

Rental Apartment Chiba-shi Rental Apartment Project

Setagaya-ku Todoroki 5-chome Commercial Facility ProjectCommercial Facility

T‘S BRIGHTIA Minami Aoyama II (holding)

CondominiumTHE Palms Sagamihara Park Brightia(holding the store section)

Logistics

Hotel

Hotel

Tosei Hotel Cocone Asakusa-kuramae

Tosei Hotel Cocone Ueno-okachimachi

*Detached houses projects are not include

Business Strategy Based on COVID-19 lll (Development Business)

33


Sales volume of properties ×Gross profit ratio

Estimated profit before tax of FY2021 matrix

16%

21%

26% 26%

17%

4% 4%

11%

18% 18%

13%

20%

27%

23% 23%27%

0%

5%

10%

15%

20%

25%

30%

0

200

400

600

FY2004 FY2006 FY2008 FY2010 FY2012 FY2014 FY2016 FY2018

売上高売上総利益率Gross profit ratioRevenue

5%

10%

15%

20%

25%

30%

35%

40%

100 200 300 400 500 600 700 800・・・

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023

上上基本

Recovery & Growth Simulation

Recovery simulation for after FY2021 (profit before tax) Assumptions of the simulation are as follows:

1. It is assumed that there will be no additional booking of valuation losses.

2. Cover the SG&A expenses and interest rates with the income from Stable

Businesses.

3. As for the Transaction Businesses, improvement in the gross profit margin and

recovery of trading volume are expected due to old and new inventory

replacements and market recovery.

(Based on a conservative calculation of expect disposition value, gross profit

ratio of inventories is 13.5% as of end of 2Q)

◆ The COVID-19 shock made demand for investments in real estate evaporate and portfolio innovation that meets current trends is required, but it does not change the fact that income-generating property creates cash flow and fundamentals of continued quantitative easing/low interest policy are expected to continue for the time being.

Reference: ： property sales performance

JGAAP*

*Before FY2008, Selling Expenses Pertaining to Property Trading were included in Cost of Revenue. Consequently, Gross Profit Margin is calculated as lower than on the present IFRS basis.

(¥billion)

¥16 B

Estimated sales volume of properties(Revenue of Revitalization Business + Development Business)

(¥B)

FY2019Sales volume ¥45BGross profit ratio 27%Profit before tax ¥12B

FY2021 is estimated to be ¥4B to 7B

Gro

ss pro

fitratio

Image of Profit Before Tax

¥4 B

¥7 B

¥10 B

¥13 B

→Return to the pre-COVID-19 level in two years and pursue the Company’s target, an annual growth rate of 10%.

FinancialCrisis

34

0


◆ Japan’s first crowd-funding using SPC based on the Real Estate Specified Joint Enterprise Act.◆ Expected to start offers for the first project around fall, aiming to grow to assets under management of ¥10 billion scale.

New Business : Launched Crowd-Funding project

https://trec-funding.jp/

• Provide individual investors nationwide with an opportunity to invest a small amount in real estate online.

• A mechanism to protect customers from a bankruptcy risk of real estate specified joint enterprise operators because it is equity-type crowd-funding using SPC.

• Small to mid-sized properties in the greater Tokyo area are the subject that Tosei selects and acquires for investment. Profitability/property value will be increased by Tosei’s value-adding and leasing. When profit is made through a sale, it will be distributed to investors.

Results and trust of the real estate business, Real Estate Crowd-Funding to start with Tosei.

Tosei Real Estate Crowd

ToseiInvestors

Sale

Sale ProfitSale Profit

* The figure is an image and may subject to change.

https://trec-funding.jp/

SPC

Existing Property Investors

Silent Partnership Agreement

Rental IncomeSales Profit

Silent Partnership InvestmentTransfer of Property

Profit Sharing

Silent Partnership Investment

Profit Sharing

Outsourcing /Fees

Asset Management Services,

Solicitation for conclusion of contracts

Seller of the PropertiesSpecified Real Estate Joint Enterprise(business license enterprise 3 and 4)

*Depending on the situation other investment corporation may invest

35


TOPICS new hotels opened in July, newest addition to the Tosei Hotel COCONE Brand

Comfortable, accommodation where sound of heart sounds through

Re-open from July

Hotel dedicated to accommodations withmodern Japanese concepts

Tosei Hotel COCONEUeno-okachimachi

Tosei Hotel CoconeAsakusa-kuramae

Tosei Hotel & Seminar Makuhari

Access: 1-minute walk from Toei Ooedo Line “Kuramae station”

Access: 2-minute walk from JR Lines “Okachimachi station”

Access: 2-minute walk from JR Keio Line “Shinnarashino station”

Hotel can be used for, corporate in-house training programs, large-scale group seminar,

group tour, logging, conference/party, etc.

Second Conversion Hotel

Tosei Hotel Cocone Kanda Tosei Hotel Cocone Ueno

Access: 3-minute walk from JR Line Kanda station

Access: 1-minute walk from Tokyo Metro Ueno station

36



Trends in Dividends ◆ Based on the earnings forecast revision and maintenance of the level of dividend payout ratio before revision (25.4%), dividend per share is ¥13 and the payout ratio is 25.6%.

Repurchase of the Company's Shares

FY2020

FY2016 FY2017 FY2018 FY2019Initial

ForecastNew Forecast

Announced on 6th Jul.

Earnings Per Share (EPS) ¥114.89 ¥127.48 ¥141.36 ¥176.40 ¥185.09 ¥50.72

Annual Dividends Per Share ¥22 ¥25 ¥30 ¥42 ¥47 ¥13

Payout Ratio 19.1% 19.6% 21.2% 23.8% 25.4% 25.6%

ROE 14.4% 14.1% 14.0% 15.3% 14.3% 4.1%

Share Buyback - - - ¥1 Billion （announced on Apr. 6th） ¥0.5 Billion

Total Return Ratio(Including share buyback)

- - - 35.5% 46.3%

◆ Announced to repurchase the Company's Shares up to ¥0.5 billion (announced on April 6, 2020 )

0.7 Billion 1.0 Billion 1.2 Billion 1.4 Billion 1.9 Billion0.6 Billion

1.0 Billion

0.5 Billion0.7 Billion

1.0 Billion 1.2 Billion 1.4 Billion

2.9 Billion

1.1 Billion

18.7% 19.1% 19.6% 21.2% 23.8% 25.6%

35.5%

46.3%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

0.0 Billion

1.0 Billion

2.0 Billion

3.0 Billion

4.0 Billion

5.0 Billion

6.0 Billion

7.0 Billion

8.0 Billion

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

Payout Ratio

Total Return Ratio

Stock Repurchase

Total Amount of Dividends

◼ Reason for the repurchaseStock will be repurchased to raise the level of shareholder returns and improve capital efficiency.

◼ Total number of shares to be repurchasedUp to 700,000 shares (1.5% of issued shares (excluding treasury shares))

◼ Total value of shares to be repurchasedUp to ¥0.5 billion

◼ Period for the repurchaseFrom April 8, 2020 to October 31, 2020

37



Current Share Price

Market Capitalization(As of 30 Jun. 2020)

Profit for the Year (Forecast)(As of 6 Jul. 2020)

Net Book Value(As of end of May 2020)

Unrealized Gain (After Tax)(As of end of May 2020)

Net Asset Value*(As of end of May 2020)

¥53.8billion ¥2.4 billion ¥56.6 billion ¥13.8 billion ¥70.4billion

Stock Price(A)

Earnings per Share(B)

Book Value per Share(C)

Unrealized Gain per Share Net Asset Value per Share*(D)

¥1,137.00 ¥50.72 ¥1,197.0 ¥291.65 ¥1,488.7

PER (A) ÷(B) PBR (A) ÷(C)Price/NAV Ratio*

(A) ÷ (D)

22.42times 0.95times 0.76times

* Net Asset Value = Net Asset Value + Unrealized gains (after tax)* Fair value of Fixed Assets (Investment Properties and PPE) are has been calculated by the Company based “Real Estate Appraisal Standards”.* Corporate tax is calculated at 33%

ROE(Result for end of FY2019)

ROA(Result of end of FY2019)

ROIC(Result of end of FY2019)

15.3 % 8.0 % 6.4 %

Cost of Shareholder’s Equity(Data from Reuters as of Jun. 2020)

WACC(Data from Reuters as of Jun. 2020)

4.9% 2.2%

Business Efficiency Indicators

38


lll. Reference Materials for the first time visitors to Tosei

Group Overview

History of Tosei Corporation

The Tosei Group's Mission

Business Strategy

I. Flexible Portfolio Management through 6 Businesses

II. Wide Range of Business

lll. Wide Range of Product Lineups

lV. Tosei’s Real Estate Revitalization Business

Mid-term Plan "Seamless Growth 2020”

Breakdown of Properties Sold

…P40

…P41

…P42

…P43

…P44

…P45

…P46

…P47

…P48-50

39


Company Name TOSEI CORPORATION

Address 4-2-3 Toranomon, Minato-ku, Tokyo

Date Established February 2, 1950

Paid-in Capital ¥6,600,204 thousand

Representative Seiichiro Yamaguchi, President and CEO

Fiscal Year-end November 30

Employees 200 (Non-consolidated) 502 (Consolidated)

Stock ListingTokyo Stock Exchange, First Section (8923) Singapore Exchange, Mainboard (S2D)

Share Status

◼ Total outstanding shares48,635,300shares

◼ Number of shareholders5,073

◼ Shareholder composition

Group Overview As of May 31, 2020

Individuals/Other 34.32% (16,691,782)

Foreign companies 38.41% (18,681,503)

Other companies 12.41% (6,037,010)

Financial institutions 11.17% (5,433,100)

Securities companies 1.01% (490,700)

Treasury Stock 2.68% (1,301,205)

Corporate Governance

System

◼ Board of Directors constituted by 9 directors(including 3 Independent directors)

◼ Audit & Supervisory BoardConstituted by 4 members(2 full time, 2 part time auditors. All from

outside the Company and independent audit & supervisory )

◼ Organizational formCompany with Audit & Supervisory Board Members

◼ Nominating and Compensation Advisory Committee

Main Affiliated Companies

Tosei Community Co., Ltd.Tosei Asset Advisors, Inc. Tosei Revival Investment Co., Ltd. Tosei Singapore Pte. Ltd.

Tosei Urban Home CorporationTosei Hotel Management Co., Ltd.Tosei Hotel Service Co., Ltd.

Investment Trust Management

Company

Tosei Reit Investment Corporation (3451)*

*The investment corporation, whose assets are managed by Tosei Asset Advisors, Inc., a wholly-owned subsidiary of ToseiCorporation

40


History of Tosei Corporation

(Forecast)

1950: Established as Yukari Kogyo Co., Ltd, the predecessor of Tosei Corporation1983: Tosei Building Co., Ltd. 1994: Mr. Seiichiro Yamaguchi assumed the role of President and CEO

Acquired 100%ownership ofUrban Home.*6

Listed on Singapore Exchange

Revenues(Billion)

Notes: 1. TRI: Tosei Revival Investment Co., Ltd.2. TC: Tosei Community Co., Ltd.3. TAA: Tosei Asset Advisors, Inc.

(Name changed from Tosei REIT Advisors, Inc. in April 2008)4. Tosei Singapore: Tosei Singapore Pte. Ltd.5.Tosei Hotel Management Co., Ltd.6. Tosei Urban Home Corporation

(Name changed from Urban Home Corporation in May 2019)

Began

developing condominiums

Changed its name to

“Tosei Fudosan”

Launched

Revitalization business

Began developing

detached houses

Registered for Real EstateInvestment Consulting

Conducted real estate M&A

through LBO

Set up privateplacement fund

Listed on

JASDAQ

Began developing office and Commercial Facilitys

Established TRI*1

Acquired 100% ownership of TC*2

Established TAA*3

Listed on Tokyo Stock Exchange Second Section

Relocated its head office

to Toranomon

Changed its name to current

“Tosei Corporation”

Introduced Commercial FacilityBrand T’s BRIGHTIA

Registered forFinancial Instruments Business

Registration; Type II Investment Management Business; Investment

Advisor and Agency Business

Launched

Restyling business

Listed onTokyo Stock

Exchange, First Section

EstablishedTosei Singapore*4

Tosei Reit Investment

Corporation Listing

EstablishingTosei HotelManagement*5

Started developmentof Logistics

Started Own Hotel Management

Scheduled to startCrowd Funding

Business

41


*1 Global-minded• Dually listed on the Singapore Stock Exchange. Efforts are being to attract inbound investments for Japan and promote outbound

investments. • Adopted the International Financial Reporting Standards (IFRS). Disclosure documents are disclosed in both Japanese and English.

*2 Professional

• Have comprehensive knowledge of transactions conducted in the greater Tokyo area with our business focused on the area. Have a good grasp of area characteristics, rental needs, investor needs, investors’ trading trends, and expected yields, among other matters.

• Offer optimal plans for revitalization and development for clients by leveraging skills and expertise that we have cultivated over years.

• Have an internal organization that functions as a first-class architect office.• Investment Management Business, Investment Advising and Agency, consultant function based on Type II Financial Instruments

Business

*3 All aspects of real estate

• Broad product range (office buildings, commercial facilities, hotels, condominiums, detached houses, logistics)• Broad customer base (real estate funds, REITs, general business corporations, wealthy individuals, end users))• Diverse means of acquisitions (trust beneficiary rights, real estate M&A, real-estate collateralized loans)

*4 New value and inspiration

• Improve profitability through the revitalization of aged properties from both tangible and intangible perspectives. Create added-value in existing real estate.

• Provide residential and office environments that are eco-friendly, secure, safe, and sophisticated.• Contribute to the creation of a sustainable society through business (reginal vitalization, community development, measures to deal

with an aging and diversifying society)


Create new value and inspiration*4

in all aspects of real estate*3

as a global-minded*1 group of seasoned professionals*2.


42


Business Strategy I. Flexible Portfolio Management through 6 Businesses

Tosei operates its business mainly in grater Tokyo area as a comprehensive real estate company.Portfolio management enable us to control risks by diversified business and seize every opportunity in all real estate scenes.

Real Estate Transaction Businesses

● Revitalization BusinessIn our Revitalization Business, Tosei acquires existing office buildings and condominiums, and resells them as revitalized real estate after improving their equipment and designs, installing eco-friendly facilities and undertaking other renovation work.Project period: a half year to a year and a half

●Development BusinessIn our Development Business, Tosei acquires land for development, and develops and sells new office buildings, condominiums, residential houses, Commercial Facilitys, hotels and other buildings, taking into account the needs and characteristics of the area. Tosei also has an in-house, first-class architect office eager for quality planning and design skills and fully making most of these in "manufacturing.“Project period: one to two years

Stable Businesses● Rental BusinessIn our Rental Business, Tosei generates steady income by leasing office buildings, condominiums, and other properties owned by the Group, mainly in Tokyo. Tosei holds 74 income-generating properties.

● Fund and Consulting BusinessIn our Fund Business, Tosei is engaged in the asset management of properties owned by real estate fundsand Tosei Reit, as well as acquiring and selling properties to meet the needs of a wide variety of investors,and offering advisory services to companies.The balance of assets under management totaled around ¥925 billion

● Property Management BusinessIn our Property Management Business, Tosei undertakes general property management operations, such as management, cleaning and renovation work including fire protection inspection on condominiums and office buildings through Tosei Community Co., Ltd. The number of properties managed by the Company was 689. (Office ,Hotel, School and Others: 436, Residential ：253.)

●Hotel BusinessBusiness for managing or leasing hotels owned by the Company. There are 10 hotels including Company’s own brand hotels, “Tosei Cocone Hotel” and “Tosei Hotel & Seminar” 5 hotels are open and the others are under construction.

(as of end of May 2020) 43


Business Strategy II. Wide Range of Business

Acquisition Maximizing Profit / Management

• Development• Value Up (value-added)

• Asset Management• Property Management• Building Maintenance

Disposal

◆ Offer a broad range of services in all aspects of real estate.◆ Aim for business expansion and increase in business areas by maximizing synergy of the related business.

One-stop solutions for investors from purchase to sale of real estate.

• Consulting

• Brokerage

Detached HouseDevelopment,

Sale

CondominiumDevelopment &

Sale

Lease

AssetManagement,

ConsultingCrowd Funding

HotelManagement

Repair Works

HotelUsers

Owners of Buildings and Apartments

Investors(Individual)

Real Estate Investment Fund

Tenants(Individual, Corporation)

Investors

End-users(Individual)

General Enterprise

Whole Real EstateValue-add,

Development, Sale

BuildingManagement, Maintenance

Selling of Real Estate

Real Estate related services

44


Business Strategy III. Wide Range of Product Lineups

◆ Able to target a variety of investors/customers by providing wide range of products.

◆ Respond to the real estate market cycle by flexibly changing our product lineup.

Development Business (New Building)

Revitalization Business (Revitalized)/Development Business (New Development)

Customers Detached House CondominiumRental

Apartment OfficeCommercial

FacilityHotel Logistic Facilities

Investor(J-REIT /

Fund)

FY2019Share

About 30%

General Company

FY2019Share

About 40%

Individual

FY2019Share

About 30%For Residential Use For Residential Use

Property Size (¥1 billion to more than ¥10 billion)

Property Size(¥0.5 billion to ¥2 billion)

Property Size (¥0.1 billion to ¥1 billion)Unit Size (¥30 million to ¥100 million)

For Investment/Own Use

For Investment For Investment For Investment For Investment For Investment

For Investment For Investment

For Investment For Investment



45


Revitalization (utilization)Revitalization (hardware)

Business Strategy IV. Tosei’s Real Estate Revitalization Business

Change purpose of uses, Attract good tenants, Reduce costsPropose the new ways of using property and provide solutions to improving profitability through measures such as reducing expenses and recovering the occupancy rate .

Revitalization(hardware)

Revitalization (utilization)

Design, Energy saving performance, Security and Functions of facilities, etc.Increase the appeal of buildings through the repairmen and restoration of exteriors, facilities and etc. to heighten property characteristics.

X

Our “In-house Value Up Lab” for new design research and product planning

Renovation of floors in accordance with needs of tenants(change of the purpose of uses and floor plans)

◆ Improve existing building’s functionality and profitability by using two value-added approach

To create the best value for our customers, Tosei provides safety & security, sophistication & comfort, and sustainability & eco-friendliness.

Safety and security

Refinement and comfort

Sustainability and environmental friendliness

Value improvement for security, disaster prevention, community revitalization, and conservation

Value improvement for scenic views, nice exterior appearance, amenities, and enhanced convenience

Value improvement for sustainable energy conservation, cost cuts, and resource saving

Toyo-cho Tosei Building(Build in 1993 as a office)

Toranomon Tosei Building(Build in 2006 as a office)

Introduction of wall greening system, LED light and EV disaster prevention cabinet and wooden deck construction, etc..

Tosei has obtained the A rank certification of the Comprehensive Assessment System for Built Environment Efficiency (CASBEE) for existing buildings.

ARDEN Fujigaoka ApartmentConverted a company dormitory into

a shared house.

The open space in the center has a wood deck, where visitors can make themselves at home.

Grovesnor Square Commercial Property Built in 1990

<Renovation of commercial facilities/offices>- Office => Hotel- Cram school => Office- Store => SOHO specifications

<Renovation of apartments for rent>- Company house

=>Lifestyle-oriented condominiums=>Apartment with soundproof equipment

capable of supporting musicians=> Convert into a shared house

T-Rhythmic Soka ApartmentA company dormitory renovated into a lifestyle-oriented

condominium tailored to the taste of a music loving resident in which musical instruments can be played freely thanks to soundproofing.

Examples

46


Mid-term Initial Plan

2017.11Result

2018.11Result

2019.11Result

2020.11Forecast*2

Target

Revenue (¥million)

FY2020

100,000 57,754 61,543 60,727 64,897

Profit Before Tax (¥million)

FY2020

12,000 9,049 10,171 12,090 4,070

ROE3 Years Average

12% or more14.1% 14.0% 15.3% 4.1%

3 Years Average

11.1%

Average Profit before Tax Growth Rate

3 Years Average

10% or more7.1% 12.4% 18.9% -66.3%

3 Years Average

-23.4%

Ratio of Stable Businesses*1FY2020

50% 43% 44% 45% 77%

Equity Ratio Around 35.0% 37.7% 37.5% 36.0% 35.2%

*1 Ratio of Stable Business is calculated as the following. Total of Gross Profit of 4 Stable Businesses ÷(Gross Profit –Direct expenses related to selling of properties)

*2 The FY2020 Plan was revised on July 6, 2020.

Mid-term Plan "Seamless Growth 2020”

◆ The Company will continue to grow to secure its position as a unique comprehensive real estate company.

Seamless Growth 2020

47


1,221 2,571

8,213

1,895 1,594 2,818

9,45612,086 13,274

7,949 7,388 7,131 6,832

13,356 12,9269,4926,294

8,407

6,251

12,166 11,8057,264

2,418

3,1604,693

12,669

8,877 9,51014,065

11,785

20,422

9,440

7,351

8,513

8,525

4,3882,119

6,2185,422

1,718

1,076

16,862

12,237 10,850

20,771

6,450

3,342

14,017

10,102

24,614

10,998

3,530

8,401

3,373

4,088

11,016

3,637

16,3138,486

4,550

14,867

19,493

33,091

43,064

26,517

19,831

17,297 16,965

27,445

40,854

32,591

38,509

45,308

47,906

45,177

37,501

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY20202Q

（¥ million） 30億円以上

10億円以上30億円未満

1億円以上10億円未満

1億円未満

Breakdown of Properties Sold - Property Size / Revenue -

Over ¥3 billion

Between ¥1 and ¥3 billion

Between ¥100 and ¥1,000 million

Less than ¥100 million

No. of projects

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019FY2020

2Q

Over than ¥3 billion 0 0 1 2 2 1 0 0 2 1 1 2 1 3 2 1

Between ¥1 and ¥3 billion 5 6 6 4 2 4 4 1 1 10 7 6 12 4 3 7

Between ¥100 and ¥1,000 million 16 22 16 28 23 15 9 6 9 23 19 24 39 34 41 22

Less than ¥100 million 2 3 3 6 4 7 18 23 31 26 25 42 48 47 54 18

Total 23 31 26 40 31 27 31 30 43 60 52 74 100 88 100 48

* The condominiums, detached houses and Restyling are counted as each project being one property

* The condominiums and detached houses are classified by one unit’s price. 48


14

22

9

21 18

9 8 4 6

14 17 15 22

12

20 17

8

4

14

15

7

15 19

18 20

28

13 19

34

30

32

111

3 3

3 7

10

11

14

21

35

37

39

15

2

4

6 3

1 1

7

7

8

19

9

9

8

5

23

31

26

40

31 27

31 30

43

60

52

74

100

88

99

48

0

10

20

30

40

50

60

70

80

90

100

'05/11期 '06/11期 '07/11期 '08/11期 '09/11期 '10/11期 '11/11期 '12/11期 '13/11期 '14/11期 '15/11期 '16/11期 '17/11期 '18/11期 '19/11期 '20/11期2Q

その他

戸建

マンション

オフィス・商業・ホテル

Breakdown of Properties Sold – Property Type –

Office

Residential

Others

* The condominiums, detached houses and Restyling are counted as each project being one property.

(Properties)


Other

Detached House

Condominium

Office/Commercial

54%

10%

35%

49


56 49

78

55

33 33 29

45 54

48 40

44 36

43 49 52

2

1

5

3

2 4

2

2

4

6

9

19

19

19

17 16

2

1

1 4

5

5

6 9

12

17

23

31 26 28

3

3

8

6

5 2

2

2

8 5 7

22 24

23 19

15

61

55

91

65

41 43 38

54

72 68 68

102 102

116 111 111

0

20

40

60

80

100

120

'05/11期 '06/11期 '07/11期 '08/11期 '09/11期 '10/11期 '11/11期 '12/11期 '13/11期 '14/11期 '15/11期 '16/11期 '17/11期 '18/11期 '19/11期 '20/11期

2Q

千葉・埼玉ほか

神奈川

東京都下

東京23区

61%

Breakdown of Inventory - Property Location -

Tokyo

* The condominiums, detached houses and Restyling are counted as each project being one property.

(Properties) Chiba, Saitama, Others

Kanagawa

Tokyo (except the 23 wards of Tokyo)

The 23 wards of Tokyo


50


VI. The Tosei Group’s ESG

51


FY2020 Tosei Group’s ESG Topics in the First Six Months FY2020

1. Renew the ESG report and the ESG section of the Company’s website Issued an ESG report in Feb. 2020 and renewed the ESG section on the Company’s website in May for enhancingcontent.

2. DBJ Green Building CertificationToranomon Tosei Bldg. and Koishikawa Tosei Bldg., self-developed and owned by Tosei, acquired“DBJ Green Building Certification” by Development Bank of Japan Inc.

3. Planned on a product pursuing a contribution to SDGs at THE Palms Court HibarigaokaContribution to SDGs was pursued by building detached houses that is friendly to both people and the earth.

4. Carried out a fund raising activity to prevent the spreading of the COVID-19Monetary donation was provided to Tokyo COVID-19 Medical Care Support Fund, which supports healthcare settings and healthcare workers in Tokyo.

E S G

E S G

S

We will set materiality for the Group, aiming to achieve the SDGs and thereby to grow sustainably and contribute to society. We will then promote initiatives.

Plan for FY2020

E S

52


In order to achieve our slogan "Heart into the City", the Tosei Group declares its intention to promote corporate activities that are friendly to people and the environment and to work to reduce burdens on the environment, while keeping true to our philosophy "To create new value and inspiration in all aspects of real estate“.

Tosei Group Eco Declaration

The Tosei Eco Declaration has been established and Eco Missions consisting of three action policies govern the business activities.The Group has been striving to reduce the burden on the global environment by promoting human and eco friendly corporate activities.

Tosei Group’s ESG Environmental Initiatives

■ GRESB Real Estate Assessment

We were assessed by the GRESB, a real estate assessment organization, in 2019 and were awarded a 1 Star GRESB Rating, a relative assessment of the GRESB Score.

Tosei Hotel & Seminar Makuhari (renovated the dinning hall)

E

Before After

■ Revitalization and Development of Hotels

Tosei Hotel & Seminar Makuhari was opened in March 2020. The value of the aging seminar facility was increased, and the facility was restored to a hotel that meets a wide range of needs. In addition, Tosei Hotel Cocone Ueno-Okachimachi and Tosei Hotel Cocone Asakusa-Kuramae, which opened in July 2020, adopted LED in lighting in the building in an effort to save energy.

■ DBJ Green Building Certification

■ Promotion of Net Zero Energy Housing (ZEH)The Tosei Group’s Tosei Urban Home is registered as a ZEH builder with the ZEH support project promoted by the Ministry of Economy, Trade and Industry aims to increase, by 2020, the annual construction of ZEHs to 60% of total properties supplied by Tosei Uran Home. As of November 30, 2019, the number of ZEHs supplied by the company accounted for approximately 50% of the supplied properties.

Tosei Hotel Cocone Ueno-Okachimachi, Tosei Hotel Cocone Asakusa-Kuramae

Toranomon Tosei Bldg

Koishikawa Tosei Bldg.

Toranomon Tosei Bldg. and Koishikawa Tosei Bldg., self-developed and owned by Tosei, acquired “DBJ Green Building Certification,” which evaluates ESG initiatives in office buildings. (at May 2020)

53Front Desk Front Desk Japanese Modern Room


Customers

■ Support for Disaster Stricken AreasContinuing voluntary activities to support areas affected by the Great East Japan Earthquake since 2011.We also made donations to support the areas affected by typhoons in September and October, 2019 through the Red Cross Society.

■Environmental Awareness Raising ActivitiesAs a subordinate organization of the ESG Project, which promotes ESG activities, we have set up the Challenge 25 Project, which promotes internal environmental activities and volunteer activities outside the Company.

Changes in the social environment have created issues such as a declining birthrate and aging population, diversifying lifestyles, andnatural disasters. The Tosei Group addresses those issues through a wide range of activities including creation of comfortable residences, creation of comfortable working environments, and support for disaster stricken areas.

Participation in cleaning activities

Communities

■Detached Houses which aims to contribute to the SDGs

Employees

ESG Activities -Social Initiatives -

■ Initiatives to Reduce Overtime

■Family Visits at Workplaces

We take initiatives to reduce overtime and long working hours,

such as the introduction of no overtime days, the prohibition of

overtime after 21:00, in principle, and the encouragement of

work early in the morning

Forest Lounge Moms & Kids Lounge Study Room

To encourage children to understand

their parents’ work and workplaces, we

invite families to visit workplaces once a

year. In this period, 62 people from 20

families visited workplaces. The visits give

employees and their families an

opportunity to converse with each other.

S

At THE Palms Court Hibarigaoka, contribution to SDGs is pursued in building a home that is friendly to

both people and the earth. The four themes are “Conservation of Green,” “Energy-Saving and

Reduction of Garbage,” “Water-Saving and Conservation of Water Resources” and “Crime and

Disaster Prevention.” It contributes to six SDGs.

Supporting an event

SDGs aim to achieve

A newly built condominium, THE Palms Sagamihara, which was sold out in May 2020, created

community spaces with different concepts in common use space. Efforts were made to create an

environment to allow residents with diverse lifestyles to live comfortably, including the Moms &

Kids’ Lounge, where families and residents can gather as a kids’ playground, and the Study Room,

which is optimum for use as a workspace.

■Creation of Community Spaces in Condominiums

54


We will maintain sound business activities to achieve sound growth by responding promptly and accurately to changes in the operating environment.

Enhance Corporate Governance

The Tosei Group aspires to become a group of companies that make a meaningful contribution to their shareholders, employees, business partners, and other stakeholders by promptly and accurately responding to changes in the management environment and continually carrying out business activities that enable the Group to achieve sound growth.

ESG Activities - Governance Initiatives -

Major subjects discussed at ESG Promotion Meeting in FY2019

• Selection of properties for LED light installation; review of progress of installation

• Monitoring of energy and waste• Examination of green leases• Conducting a survey of tenants and reporting the results of the survey• GRESB application and report of the results

We established the ESG Promotion Meeting in FY2019 to promote ESG activities as a priority in

management. The ESG Promotion Meeting discusses and makes decisions on ESG policies and action

plans every other month. The Meeting is chaired by the Senior Executive Officer of Administrative

Division and consists of two Directors and three Executive Officers that are selected by the Board of

Directors. The results of discussion at the Meeting are reported to the Board of Directors and are

reflected in management plans and business activities.

Establishment of ESG Framework

G

Three Important Items in Corporate GovernanceCompliance Risk Management Information Disclosure

We place compliance at the top of our agenda and raise awareness of it from top management

to all employees of the Group companies

Assuming every possible risk, we prepare and practice responses for daily risk and emergency

conditions.

We practice disclosure appropriately and on a timely basis to all stakeholders including

shareholders.

• Establish and operate “Risk Compliance Committee”• Monitor risk management on an ongoing basis • Set up a Business Continuity Plan (BCP)

■ Compliance Education ■Information Disclosure

• Hold financial results briefings• Timely financial and corporate status

reporting in Japanese and English• Expand the IR information available on our

website (evaluated by external assessment )

1 2

3

■ Risk Management Cycle

1

Company wide risk

evaluation2

Risk AnalysisPreventive MeasuresProblem Clarification

3

Draw Up Individual Preventive Measures

Follow the Manual

• Training for insider trading prevention, Training on action against anti-social forces Mental health Seminar

• Compliance slogans posters• Mail magazine to enhancing awareness of compliance

55

Copyright © 2020 TOSEI CORPORATION, All Rights Reserved.56

Please visit our website.

For Contact

Corporate Management Department

Tel：+81 3-3435-2865

Fax：+81 3-3435-2866

URL :https://www.toseicorp.co.jp/english/

Except for historical facts, all plans, forecasts, strategies and other information contained herein are forward-looking statements. Forward-looking statements include but are not limited to descriptions of future events and performance containing words such as or similar to “believe,” “expect,” “plan,” “strategy,” “anticipate,” “forecast,” and “estimate,” and are based on judgments derived from the information available to the Company at the time of publication. Various factors could cause results to differ materially from any projections presented herein. The Company reserves the right to maintain or change its projections regardless of any new information, conditions or changes in performance. These materials are for informational purposes only, and should not be construed as a recommendation to invest in the Company.

DISCLAIMER

Documents

Financial Results for the First Six Months for Fiscal Year 2020...*The gross profit is net of Cost of Revenues including the following write-down amounts under LCM: FY2019:-¥150 million,