IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...

Page created by Wesley Miller
 
CONTINUE READING
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
FY2021
                                    (For the Year Ended on March 31, 2021)

                                 IR Presentation

For details of the "Long-Term Management Plan 2030", which began from April 2020, please refer to the following link.
                                                        https://www.mec.co.jp/j/investor/plan/pdf/plan200124.pdf
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Contents

            Summary of Financial Statements                                                   3
            Summary of FY2021Results and FY2022 Estimates                                     4
            Progress of the Long-Term Management Plan                                         12
            Financial Supplemental Data                                                       22
            Overview of the "Long-Term Management Plan 2030"                                  30
            Business Overview                                                                 40
            Commercial Property Business
                Office Building                                                               43
                Outlet Malls, Retail Properties, Logistics Facilities, Hotels, and Airports   57
            Residential Business                                                              62
            International Business                                                            67
            Other Business                                                                    70
            Investment/Financial Data, etc.                                                   72
            ESG Initiatives                                                                   77
MITSUBISHI ESTATE CO., LTD.                                                                        2
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of Financial Statements

Summary of Financial Statements

 <FY2021 Financial Results>
   •    While rental profit from office buildings increased on a YoY basis, revenue from operations and operating income
        decreased compared with the previous FY due to the impact of COVID-19 on retail properties and hotels.

   •    Dividends per share for the entire fiscal year have increased by 1 yen (from 30 yen to 31 yen.) as a result of an increase
        in profits in comparison to recent estimates.

 <FY2022 Estimates>
   •    Overall increase is expected when compared to previous FY as a result of the completion of new buildings and increases
        in capital gains. Operating income is expected to reach its highest numbers.
   •    As a result of profit recoveries, FY2022 have recovered to FY2020 numbers from 31 yen to 33 yen.

 <Major Topics>
   •    Decided to switch to renewable energy sources for all electricity used in office buildings owned in the Marunouchi area
        by FY2023 (Jan. 2021).
   •    Decided share buyback of 30 billion yen (Apr. 2021).
   •    Launched (Tentative name) Uchikanda 1-chome Project (Apr. 2021).
   •    Entered the US data center development project (May 2021).

MITSUBISHI ESTATE CO., LTD.                                                                                                       3
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of FY2021 Results and
  FY2022 Estimates

MITSUBISHI ESTATE CO., LTD.       4
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of FY2021 Results and FY2022 Estimates

1. Income Statement Results for FY2021
YoY profits have decreased due to COVID-19 and a decrease in capital gains, meanwhile office
rental profits increased.                                                        Millions of yen (rounded off
                                                            Millions of yen (rounded down)   Capital Gains included in Operating Income                            to the nearest billion)
                            FY2021    FY2020                     Change                                                  FY2021                  FY2020        Change
Revenue from Operations                 1,207,594 1,302,196                   △ 94,601       Total                                      51,000                  61,000      △ 10,000
   Commercial Property Business           672,441   723,712                   △ 51,270         Commercial Property Business             32,000                  23,000         9,000
   Residential Business                   362,755   385,538                   △ 22,782         Residential Business                      7,000                  10,000       △ 3,000
   International Business                 114,457   134,175                   △ 19,718         International Business                   12,000                  28,000      △ 16,000
   Investment Management Business          22,199    21,316                        882         Investment Management Business                -                       -             -
   Other*                                  65,119    65,871                      △ 751         Other                                         -                       -             -
   Elimination                           △ 29,378 △ 28,418                       △ 960         Eliminations or corporate                     -                       -             -
Operating Income                          224,394   240,768                   △ 16,374
   Commercial Property Business           180,775   187,855                    △ 7,079
   Residential Business                    24,068    24,320                      △ 251
                                                                                                               Major Factors for Changes in
   International Business                  37,932    46,156                    △ 8,224                        Operating Income by Business
   Investment Management Business           5,966     4,467                      1,499                     Commercial
   Other*                                   △ 130       389                      △ 520                      Property        Residential
                                                                                                                              △ 251     International
   Eliminations or corporate             △ 24,219 △ 22,420                     △ 1,798                      △ 7,079                                           Others
                                                                                                                                          △ 8,224
                                                                                                                                                              △ 819
 Non-Operating Revenue                     26,292    12,377                     13,914
   (of affiliates' equity in earnings)        307       229                         77
 Non-Operating Expense                     39,720    33,574                      6,146                                                Increase in rental profits
Income before Taxes and Special Items     210,965   219,572                    △ 8,606                                                Increase in residential
                                                                                                                                      businesses in Asia
  Extraordinary Income                     16,603    26,251                    △ 9,647                                                Decrease in capital gains
  Extraordinary Loss                       26,304    21,874                      4,429          240,768
Profit Attributable to Owners of Parent   135,655   148,451                   △ 12,796                                  Increase of condominium profits                     224,394
                                                                                                                        Decrease in capital gains

                                                           Millions of yen (rounded down)                   Increase in capital gains
                                                  FY2021    FY2020            Change                        Increase in office rental profits
                                                                                                            Decrease in profits from retail properties and
Business profits                                   224,701   240,998          △ 16,296
                                                                                                            hotels due to the impact of COVID-19
EBITDA                                             331,821   336,784           △ 4,963
Interest-bearing debt                            2,526,142 2,429,883            96,259
                                                                                                 FY2020    Commercial        Residential   International      Others          FY2021
*Architectural Design & Engineering / Real Estate Service Business and Other businesses                      Property

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                             5
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of FY2021 Results and FY2022 Estimates

2. Impact of COVID-19 (Major Impacts on FY2021)
No unexpected changes on businesses. No significant changes in the impact of COVID-19 on the
retail properties and hotel businesses.
                                  Full-year impact
                                                          Full-Year       Operating Profits
                                     on FY2021
          Categories                  (Previous
                                                         Impact on        *2 Extraordinary                                Major Situations and Impacts
                                     Estimates)           FY2021          Losses
 Capital Gains                                       -                -                   -   • Reached the estimates for FY2021

                                                                                              • See p. 8 for details. In addition to urban properties, suburban properties
 Domestic
                                                     -                -                   -     also attracted higher demands
 Condominiums, etc.*1                                                                         • Steady decrease in inventory (-160 units YoY)

                                                                               ▲JPY 13.7B     • See p. 7 for details
                  Retail                                                                      • While the fourth quarter was impacted by the second declaration of
                                     ▲JPY 18.0B          ▲JPY 17.0B
                  Properties                                                                    the state of emergency, the impact was limited compared with that of the
                                                                                ▲JPY 3.3B       first declaration

                                                                               ▲JPY 14.6B     • See p. 7 for details
                                                                                              • While the fourth quarter was impacted by the second declaration of the
                  Hotels             ▲JPY 18.0B          ▲JPY 17.0B
                                                                                                state of emergency, the impact was limited compared with that of the first
                                                                                ▲JPY 2.4B       declaration
 Income                                                                         ▲JPY 0.5B     • See p. 8 for details
 Gain             Offices              ▲JPY 0.5B           ▲JPY 0.5B                          • As expected at the beginning of the FY, the leasing activities of vacancies is
                                                                                          -     taking longer than usual

                                                                                ▲JPY 5.5B     • Real estate brokerage, parking lot, and international residential businesses
                                                                                                were impacted
                  Others               ▲JPY 8.5B           ▲JPY 5.5B
                                                                                              • While the international investment management business was expected to
                                                                                          -     be impacted at the beginning of the FY, there were no impacts
                                                                               ▲JPY 34.3B
                  Subtotal           ▲JPY 45.0B          ▲JPY 40.0B
                                                                                ▲JPY 5.7B
                                                                               ▲JPY 34.3B     *1   Excluding capital gains, etc,. from the Mitsubishi Estate Residence's operating income
                          Total      ▲JPY 45.0B          ▲JPY 40.0B                           *2   Some costs incurred by retail properties and hotels that were closed during this period
                                                                                ▲JPY 5.7B          are recorded as an extraordinary loss due to COVID-19 (e.g. depreciation cost or rent)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                              6
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of FY2021 Results and FY2022 Estimates

3. State of Businesses ①: Retail Properties and Hotels
Although the fourth quarter financial performances for retail properties and hotels were impacted by the second declaration
of the state of emergency, the impact was limited compared with that caused by the previous declaration lasting April-May
2020 (during the previous declaration, aside from a few exeptions, all properties were required to close.)

                                  *Sales Trends in Retail Properties and Outlet Malls Compared to Previous Year

                Type of facility                                 Jun.                         Jul.-Sep.                          Oct.-Dec.                          *Jan.-Mar.

 Outlet malls                                               Approx. 80%                  Approx. 80-90%                    Approx. 80-100%                       Approx. 70-80%

 Stand-alone shopping centers                               Approx. 90%                  Approx. 80-90%                    Approx. 90-100%                        Approx. 90%
 Urban, mixed-use buildings
                                                            Approx. 50%                  Approx. 50-60%                     Approx. 60-70%                        Approx. 50%
 Commercial zone
                  *   The numbers listed are compared with net sales of Feb.-Mar. 2019 due to the impact of COVID-19 on net sales of retail properties and outlet malls during Feb.-Mar. 2020

                                           Royal Park Hotels/Trend in Occupancy Rate (Jan. 2020-Mar. 2021)

     80%       74.1%

                              57.6%                                                                                               56.9%                                        59.3%
     60%                                                                                                                                     48.1%
                                                                                                                       43.6%                                        42.4%
     40%                                                                                                   29.1%
                                          22.2%                                                                                                         26.6%
                                                                                                22.3%
                                                                                     15.9%
     20%                                                                  10.4%
                                                    4.5%       1.4%
      0%
                 Jan.         Feb.       Mar.        Apr.       May.       Jun.        Jul.      Aug.        Sep.       Oct.       Nov.       Dec.        Jan.       Feb.       Mar.

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                7
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of FY2021 Results and FY2022 Estimates

4. State of Businesses ②: Offices and Domestic Condominiums

                                     Trends in Offices                                                          Trends in Domestic Condominiums
 • While the office vacancy rate is increasing, levels remain low.                               • Gross margins are on the improving trend, as a result of the sale of
 • Because many companies are reluctant to extend floor space, and                                 highly-profitable properties.
   expand or relocate offices, occupying vacancies is expected to take                           • Properties in high-convenience urban areas remain in high demand.
   longer than usual.                                                                              Properties in the suburban areas are also attracting more interest.
 • The average rents are continuing to increase.                                                 • Steady decrease of finished inventory (-160 units YoY).
 ■Trends in Vacancy Rates and Average Rents                                                      ■Data for Domestic Condominiums

                                       FY2020               FY2021        FY2022(E)                                               FY2020             FY2021           FY2022(E)
   Vacancy rates                                                                                  Condominium                           202.8                 203.5        203.0
                                             1.07%             2.35%                3.0%          (bn of yen)
   (All Uses in Japan)

   Vacancy rates                             0.69%             2.50%                         -    Condominiums sold
   (Marunouchi Offices)                                                                           (units)
                                                                                                                                        3,214                 3,476        2,900

   Average rents                          ¥ 27,177           ¥ 27,793          ¥ 28,500
    (All Uses in Japan)
                                                                                                  Gross margin                         17.8%              18.7%           20.0%

                                                                                                  Inventory (units)                        373                 213                -
 ■Trends in Increased Revenues for Existing Buildings
                                                                         (Billions of yen)
                Increased annual revenues due to moving in/out                      39.6
  40.0          of tenants and rent revisions during renewals
                                                                          36.4
                Cummulative revenues from FY2015
  30.0                                                           28.4

                                                        21.9
  20.0
                                               16.0
                                      11.3
  10.0                        7.3                              6.5      8.0                      Tsudanuma The Tower(Start of delivery: FY2021)
                       4.9                   4.7      5.9
             2.42.4                 4.0                                          3.2
    0.0
             FY2015      FY2016     FY2017   FY2018   FY2019   FY2020   FY2021 FY2022(E)          The Parkhouse Takanawa Tower(Scheduled delivery: FY2022-)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                           8
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of FY2021 Results and FY2022 Estimates

5. Overview of the Declarations of the State of Emergencies, and the
   Operational Status of Company-owned Facilities (as of May 13, 2021)
                                 Overview of the Declarations of the State of Emergencies (Comparison)

              Item                                   First                                           Second                                              Third

 Period                                      April-May 2020                                  January-March 2021                                   April-May 2021
                                            (Approx. 1.5 months)                                (Approx. 2 months)                                (Approx. 1 month)

                                                                                           Max. of 11 prefectures                                  4 prefectures
 Subject area                                   Nationwide                         (Tokyo, Kanagawa, Saitama, Chiba, Osaka, Hyogo,           (Tokyo, Osaka, Hyogo, Kyoto)
                                                                                         Kyoto, Aichi, Gifu, Fukuoka, Tochigi)        *Aichi and Fukuoka added from May 12, 2021

 Requests to large                                                                                                                               Request to close
                                             Request to close                       Request to shorten business hours                *Relaxed regulations in certain prefectures from
 retail properties                                                                                                                                    May 12, 2021

                              Summary of Actions Taken by the Company's Facilities Under Each Declaration

     Type of facilities                              First                                           Second                                              Third

                                    Standard business operations                       Standard business operations                     Standard business operations
 Offices                        (In principle, work at MEC offices was conducted   (Aim to decrease MEC office attendance rate to     (Aim to maintain MEC office rate at less than
                                                   remotely)                                      30% or less)                                          30%)

 Retail properties/                   Temporarily close with few                                                                          Temporarily close with few
                                                                                    Close by 8pm with few exceptions
 Outlet malls                               exceptions                                                                                          exceptions

                                                                                          Restaurants and eating                           Restaurants and eating
 Hotels                            Temporarily close some hotels
                                                                                      establishments to close at 8pm                   establishments to close at 8pm

 Condominiums                                                                        Operation continued by a 100%                    Operations continued by a 100%
                                   Temporarily close sales outlets
 (model units)                                                                          appointment-only basis                            appointment-only basis

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                           9
IR Presentation FY2021 - (For the Year Ended on March 31, 2021) For details of the "Long-Term Management Plan 2030", which began from April 2020 ...
Summary of FY2021 Results and FY2022 Estimates

6. Income Statement Estimates for FY2022 (vs FY2021 Results)
Due to the completion of new buildings and increases in capital gains, operating income is
expected to reach its highest numbers.                                               Millions of yen (rounded off
                                                            Millions of yen (rounded down)   Capital Gains included in Operating Income                        to the nearest billion)
                                         FY2022    FY2021                                                                             FY2022              FY2021
                                                                  Change                                                                                    Change
                                        Estimates  Results                                                                           Estimates            Results
Revenue from Operations                 1,326,000 1,207,594                    118,406       Total                                      64,000              51,000        13,000
    Commercial Property Business          787,000   672,441                     114,559        Commercial Property Business              43,000             32,000         11,000
    Residential Business                  373,000   362,755                      10,245        Residential Business                       5,000              7,000        △ 2,000
    International Business                  96,000  114,457                    △ 18,457        International Business                    16,000             12,000          4,000
    Investment Management Business          23,000   22,199                         801        Investment Management Business                 -                   -             -
    *Other                                  72,000   65,119                       6,881
                                                                                               Other                                          -                   -             -
    Elimination                          △ 25,000 △ 29,378                        4,378
                                                                                               Eliminations or corporate                      -                   -             -
Operating Income                          245,000   224,394                      20,606
    Commercial Property Business          194,000   180,775                      13,225
    Residential Business                    24,000   24,068                        △ 68                        Major Factors for Changes in
    International Business                  42,000   37,932                       4,068
    Investment Management Business           7,000    5,966                       1,034
                                                                                                              Operating Income by Business
    *Other                                   2,000    △ 130                       2,130
    Eliminations or corporate            △ 24,000 △ 24,219                          219                    Commercial                                     Others
                                                                                                            Property     Residential International        3,383
  Non-Operating Revenue                     11,000   26,292                    △ 15,292                                                  4,608
                                                                                                             13,225        △ 68
    (of affiliates' equity in earnings)        300      307                         △7
  Non-Operating Expense                     36,000   39,720                     △ 3,720
Income before Taxes and Special Items     220,000   210,965                       9,035
                                                                                                                                   Increase in capital gains
  Extraordinary Income                      15,000   16,603                     △ 1,603
  Extraordinary Loss                        17,000   26,304                     △ 9,304
Profit Attributable to Owners of Parent   142,000   135,655                       6,345                             Increase in condominium profits                     245,000
                                                                                                224,394             Decrease in capital gains
                                                           Millions of yen (rounded down)
                                                  FY2022    FY2021
                                                                               Change
                                                 Estimates  Results                                         Increase in capital gains
Business profits                                   245,300   224,701             20,599                     Completion of new buildings
EBITDA                                             344,000   331,821             12,179
Interest-bearing debt                            2,680,000 2,526,142            153,858
                                                                                                 FY2021    Commercial     Residential     International    Others        FY2022
*Architectural Design & Engineering / Real Estate Service Business and Other businesses          Results     Property                                                   Estimates

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                       10
Summary of FY2021 Results and FY2022 Estimates

7. Breakdown of Business Profits for the FY2022 (Changes from FY2020)
  Expecting improved profit levels than FY2020 due to improving business environment
  and increasing capital gains, etc.                                                                                                                           (Billions of yen))

                              Business                                              Business                                                             Business
                               Profits                                               Profits                                                              Profits
                               240.9                                                 224.7                                                                245.3

    Capital Gains                         ▲10.0                                                            +13.0
                                                                                                           【Breakdown】
                               61.0
                                          【Breakdown】
                                                                                                           ・Commercial: +11
                                                                                                                                                            64.0
                                          ・Commercial:+9
                                          ・Residential: ▲3                           51.0                  ・Residential: ▲2
                                          ・International: ▲16                                              ・International:+4

     Domestic                  14.7       +2.0                                                             +4.3                                             21.0
Condominiums,                                                                        16.7
                                          【Main factors】                                                   【Main factors】
          etc.*
                                          +Favorable sales trends                                          +Favorable sales trends
                                          +Profit margin improvement                                       +Profit margin improvement
                                           (Gross margin: 17.8% → 18.7%)                                    (Gross margin: 18.7% → 20.0%)

                                                                                                           +3.3
                                                                                                           【Main factors】
                                          ▲8.2                                                             +New buildings' contributions
   Income Gains                165.2      【Main factors】
                                                                                     157.0                 +Business environment                           160.3
                                          ▲COVID-19 impact                                                 improvement in retail properties
                                          +Increase in building rental profits                             and hotels
                                          +Increase in international rental                                +Increase in non-asset profits
                                          profits (US)                                                     ▲Increase in repair costs
                                          +Increase in profits from Asia                                   ▲Decrease in rental profits due to
                                          condominium business                                             the sell of properties
                                                                                                           ▲Decrease in profits from buildings
                                                                                                           due to redevelopments

                         FY2020 Results              Differences                 FY2021 Results                       Differences                FY2022 Estimates

                                                                                       *   Excluding capital gains, etc. from the Mitsubishi Estate Residence's operating income

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                  11
Progress of the Long-Term Management Plan

MITSUBISHI ESTATE CO., LTD.                   12
Progress of the Long-Term Management Plan

1. Changes in ROA/ROE/EPS

Although the first fiscal year (FY2021) of the Long-Term Management Plan was impacted by
COVID-19, strategies for the 2030 goal have been steadily executed.
                                                                                                                                  10%
   10.0%                                                                                                                                     (Yen)
                                                                                                                                               200
                                                                                                                                   200
     9.0%                                                                 8.5%

                                                                7.8%
     8.0%                                                                            7.6%       7.6%
                                                7.3%
                                                                                                                                               150
     7.0%                              6.6%

     6.0%                     5.6%                                        108.64               106.70
                    5.2%                                                             101.34
                                                                96.97                                                              5%          100
     5.0%                                       86.78

                                       74.00                    4.0%      4.1%                  4.0%
                                                3.8%                                 3.8%
     4.0%
                              60.13
                    52.85
                                       3.6%                                                                                                    50
     3.0%           3.3%      3.3%

     2.0%

     1.0%                                                                                                                                      0
                   FY2015     FY2016   FY2017   FY2018         FY2019     FY2020     FY2021   FY2022(E)                       2030 Target

                                                        EPS(right axis)   ROA      ROE             *   ROA = Business Profit / Total assets (average)

MITSUBISHI ESTATE CO., LTD.                                                                                                                        13
Progress of the Long-Term Management Plan

2. Domestic Asset Business

                                          Increase NOI with Development Projects: Steady Progress of Large Projects
                                                      ■Expected completion in
■Completion in FY2021                                                            ■Progress of Long-Term Development Properties
                                                       FY2022
                                                        Tokiwabashi Tower         Uchikanda 1-chome Project                Toyosu 4-2 Project
  Mizuho Marunouchi                                                                                                                                                Torch Tower (Bldg. B)
  Tower・Ginkokaikan                                           (Bldg. A)                (tentative name)                    (tentative name)
  Marunouchi Terrace

                                                                                                                                                                             Sep. 2020:
                                                                                                                                                                              Announcement of
                                                                                                                                                                              the zone name
                                                                                                                                                                              Process to change
                                                                                                                                                                              plans (increase floor
                                                                                                                                                                              area ratio by 100%)

                              the ARGYLE aoyama                                                                                                                              FY2024:
                                                                                                                                                                              Expected started
           <Expand Outlet malls>                                                  Sep. 2020: Finalized urban planning   Mar. 2021: Project announcement                       date of construction
                                                                                  May 2022: Expected start of           Spring 2022: Expected start of
 ①Gotemba (Phase 4): +16,400㎡                                                     construction                          construction                                         FY2028:
 ②Rinku (Phase 5): +10,700㎡                                                       2025: Expected completion             Spring 2025: Expected completion                      Expected completion

                                            Promoting a rotating business model according to the real estate market
                                               Gaining more investment opportunities than previously assumed
■Transition of Capital Gains (incl. overseas)                       ■Investments in FY2021                                         ■*Domestic Assets

                                                                                                                                                 Book value at end of FY2021
 Recording steady capital gains every FY                             Obtained investment opportunities mainly for
                                                                     offices, logistics facilities, and rental apartments                                  ¥1.2 tn
                                                                                                                                        Office           Composition of Assets
(Billions of yen)                                        64.0        (Performance: +40% than expected)                                                2.3%
                                   61.0
 60.0                                        51.0                                                                                       Retail               8.9%
                        48.0                             16.0                                                                                       2.1%
             39.0                  28.0       12.0
 40.0                   14.0                                                                                                            Rental             8.5%
             15.0                                                                                                                       apartment
 20.0                                                    48.0                                                                           Logistics
                        34.0       33.0       39.0                                                                                                         10.3%
             24.0                                                                                                                                                       67.8%
  0.0                                                                                                                                   Hotel                                    *Totalincome-generating
           FY2018      FY2019      FY2020    FY2021    FY2022(E)                                                                                                                 assets x-Marunouchi,
                                                                                      (Tentative name)                                                                           Outlet malls, and assets
                                                                           Sagamihara-shi Chuo-ku Fuchinobe project                     Other
                        Domestic     Overseas                                                                                                                                    of particular consolidated
                                                                                                                                                                                 subsidiaries

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                           14
Progress of the Long-Term Management Plan

3. International Asset Business

                              US                                                                    Europe                                                                         Asia
  • First to enter the US data center development                        • Obtained development opportunities in several                         • Starting FY2021, accelerate the completion progress
    project.                                                               European countries by cooperating with Europa                           of properties currently under development.
                                                                           Capital Group, one of our Group companies.
  • TA Realty, a subsidiary of Mitsubishi Estate,
    manages the development of the project.
  • MEC participates in the development of two
    buildings (joint investment with Tokyo Century).

 ■Overview of Entire Project
  (Participated in 2 bldgs.):                                                                             (Tentative name)   Fyrkanten11
                                                                                                          (Stockholm, Office renovation)                         Trinity Tower*                   CapitaSpring
      Location: Loudoun County, Virginia                                                                                                                       (Jakarta, FY2021)              (Singapore, FY2022)
                                                                                                                                                   *Previous   project name: Daswin Project
      Total Area: 587,000㎡
      Building Area: 140,000㎡ (total of 7 bldgs.)
      Total cost: Approx. 198 bn yen
      Start of construction: By end of    *12021, *22022

      Completion: *1May 2023, *2Feb. 2024
                                                                                    Morello                       (Tentative name)
                                                                           (London, Rental apartment)    Cristóbal de Moura 121-125
                                                                                                                                                         Savya Financial Center                  180 George St.
                                                                                                                (Barcelona, Office)
                                                                                                                                                      North Tower (Manila, FY2022)             (Sydney, FY2023)

                                                                         • Started the large renovation project of the                           • Participation in a condominium development
                                                                           Warwick Court, an office building in London.                            project in Australia.

                                   *3Completed   image of property
                                                                                                             Rooftop Terrace
                                                                            Appearance (Current)                                                   One Sydney Harbour Residences One (Sydney, Condominium)
                                                                                                        (Image after the renovation)
*1   Schedule for Building 1, which MEC has participated in      *2   Schedule for Building 2, which MEC has participated in           *3   The actual building could look different from the above.

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                                         15
Progress of the Long-Term Management Plan

4. Non-asset Business

      Materialize Steady Growth in Existing Businesses                           New Areas (Utilize technologies/BtoC/BtoBtoC)

 ■Expand *AuM in the investment management business                          ■Efforts to support various workstyles
      • Promote managerial efforts to reach a 5 trillion yen of asset
                                                                                                      TELECUBE
        value by mid-2020s.
                                                                                                     (Private smart workspaces)
        (As of FY2021: Approx. 3.7 trillion yen, increased by 0.1 trillion
        yen vs the previous fiscal year).                                                            Expand installation spots
                                                                                                     to apartment complexes,
      • Started managing an open-end fund in Europe.                                                 convenience stores, offices,
        (November 2020)                                                                              and train stations
                                                                                                                                  NINJA SPACE
     *AuM   = Assets Under Management
                                                                                                            Helping workers find workspaces at
                                                                                                     restaurants, conference rooms, hotels, etc.
 ■Acquire fee income business through the promotion of joint ventures

      • Acquire fee income business and improve investment efficiency
        by operating as a joint venture from the development stage.          ■Proactive promotion of pilot programs of new technologies and
                                                                             services
      • Release several joint venture projects in FY2021.                    Self-standing/driving
                                                                             delivery robot

                                                                                                                                            Pilot program of electric
                                                                                                                                         scooters on public roads (First
                                                                                                                                                    in Japan)
                                                                             Fitting/shopping of
                                                                             D2C brand products

                                                                                                           Finding the most optimal
                                                                                                          garbage collection route by
                                                                                                           utilizing AI and quantum
                                                                                                                   computers
                                                                                                          (Room for approx. 57% of CO2
                              Concept image of joint ventures                                               reduction was confirmed)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                           16
Progress of the Long-Term Management Plan

 5. Capital Policy #1: Cashflow for FY2021 (Results)
  Operating cashflows and cash collections increase. Investment opportunities are on the rising trend. Decided to
  buyback 30 billion yen of shares based on the capital policy of the Long-Term Management Plan while preparing
  for investment expansions for the next fiscal year.
                Cash in                                     Cash out                   (Billions of yen)

(Original estimates)    Result             (Original estimates)      Result
     (740-790)           700                    (740-790)             700

                                                 Strategic
                                                               Share buyback
                                                 allocation          30                                    Decided to buyback 30 billion yen of shares (cash outflow in FY2022)
                                                 (100-150)        Growth
 Financing arrangements                                         investments                                
  (Increase in liabilities)                                          60                                     ・Acquired more investment opportunites mainly in the offices, logistics
    (190-240)     140                                                                                        facilities, and rental apartments than previously expected.
                                                                                                           
                                                                                                            ・Although a number of investment opportunities were acquired, opportunities
                                                                                                             must be expanded mainly in Asia in order to achieve the goals set in the
                                                                                                             Long-Term Management Plan.
             *1Returns                                                                                     Breakdown of FY2021 Investments (incl. growth investments):
                                                         *2Planned
                                                                                                                                                                               Original    Increase/
                                                                                                                                                                Actual
        (370)             380                          investments                                                                                                            estimates    Decrease
                                                                                                               Marunouchi                                                50           60         ▲10
                                                    (600)      600
                                                                                                               Outlet Mall, etc.                                         40          50         ▲10
                                                                                                               Domestic condominium                                  170            170           0
                                                                                                               Domestic capital recycling and others                 280            200         +80
                                                                                                               Overseas                                              120            120           0
                                                                                                               Total                                                 660            600         +60
      *3Operating      cashflows
                                                                                                           Dividend payout ratio: Approx. 30%
        (170)            180                                                                               Dividend per share: 31 yen (6 yen increase in comp. with estimates at the
                                                       Dividends                                           beginning of the fiscal year; 1 yen increase in comp. with previous estimates)
                                                     (30)               40
 *1 Collection amount of book values from sale proceeds of properties *2 Investment amount for approved investment projects (partly incl. expected approvals)
 *3 Operating cashflows, excl. change in inventories and change in equity investments

 MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                           17
Progress of the Long-Term Management Plan

6. Capital Policy #2: Cashflow of FY2022 (Estimates)

Increase cash inflow due to recovered profits and increased collections. Expand investment opportunities in order
to achieve goals set in the Long-Term Management Plan.

                                                                                                                                                                                            (Billions of yen)
                                                Cash in                                                                                                  Cash out
                                               750~800                                                                                                   750~800

                                                                                                                                                        Continue plans of seeking strategic
     Soundness level for new investments                                                                               Strategic                        investment opportunities, mainly overseas in
     (Considering possibility to expand investment                  Financing arrangements                             allocation                       Asia. Consider possibility to expand
     opportunities)                                                                                                    100~150                          investment opportunities.
                                                                     (Increase in liabilities)
                                                                           130~180                               Share buyback                          Execute as a part of the capital policy of the
                                                                                                                       30                               Long-Term Management Plan

                                                                                                                                                        Recently, investment opportunities were
                                                                                                                                                        steadily gained
                                                                                                                                                        【Breakdown】
     Increase in returns as capital gains increase                              *1   Returns
                                                                                                                       Planned
                                                                                                                      *2                                 Marunouchi                                    60
     (+20 compared to previous fiscal year)                                           400
                                                                                                                    investments                          Outlet Mall, etc.                             30
                                                                                                                        580                              Domestic condominium                         160
                                                                                                                                                         Domestic capital recycling and others        190
                                                                                                                                                         Overseas                                     140

     Increase in operating cashflows as business
                                                                               *3 Operating
     profits improve                                                             cashflows                                                              Payout ratio: Approx. 30%
                                                                                                                                                        Dividend per share: 33 yen (Recovered to the
     (+40 compared to previous fiscal year)                                         220                                Dividends                        level of FY2020)
                                                                                                                           40
*1   Collection amount of book values from sale proceeds of properties *2 Investment amount for approved investment projects (partly incl. expected approvals)
*3   Operating cashflows, excl. change in inventories and change in equity investments

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                              18
Progress of the Long-Term Management Plan

7. Capital Policy #3: Shareholders Returns

Decided share buyback of 30 billion yen as a part of the capital policy in the Long-Term Management Plan.
As financial performance recovers, expected dividend payouts during FY2022 will rise to the level of FY2020.

       (Yen)
      40                                                                                                                                    45.0%

                                                                                                                                            43.0%
      35                                                                                              33.00                   33.00
                                                                                                                    31.00                   41.0%
                                                                                       30.00
      30
                                                                      26.00                                                                 39.0%
      25
                                                                                                                                            37.0%
                                                      20.00
      20                                                                                                                                    35.0%
                                       16.00
                              14.00                                                                                                         33.0%
      15
                   12.00                                                               30.9%                        30.6%    30.9%
                                                                      30.0%                           30.4%
                                                                                                                                            31.0%
      10
                                                                                                                                            29.0%
                                       26.6%         27.0%
       5                      26.5%
                   25.9%                                                                                                                    27.0%

       0                                                                                                                                    25.0%
                   FY2014     FY2015   FY2016        FY2017           FY2018           FY2019         FY2020        FY2021    FY2022
                                                                                                                                (E)

 Amount of
   Share                                                                                            ¥ 100 billion            ¥ 30 billion
  Buyback

                                                Dividends per share            Payout ratio (right axis)

MITSUBISHI ESTATE CO., LTD.                                                                                                                         19
Progress of the Long-Term Management Plan

8. Efforts to Improve Social Values

Accelerate the utilization of renewable energy for the development of a more sustainable
community. Improve external opinions through ESG efforts and increase information disclosure.

                          Switch to Renewable Energy                                     External Reviews(Obtained in FY2021)

 ・19 buildings in Marunouchi and other areas to switch                             • Acquired high scores in various benchmarks
  to renewable energy
                                                                                                        Review by GRESB Real Estate
   ■Timing                          FY2022-
   ■Target properties               Marunouchi Area: 18 buildings                                  <5 stars (the highest rank, awarded for
                                    Other areas: 1 building(Yokohama Landmark                                  the first time)>
                                    Tower)
                                    Total: 19 buildings                                                   Ranked within top 20% globally
   ■CO2 reduction volume 180,000 tons/year
                                                                                                    Review by CDP Climate Change 2020
                                                                                                    <A list (the best evaluation, awarded
                                                                                                              for the first time)>
                                                                                                     270 companies were chosen among 5,800
                                                                                                                companies reviewed
                                                                                                       (53 of which are Japanese companies)
                                                                                                    The first among domestic comprehensive real
                                                                                                      estate developers to receive the award.

                              Marunouchi Area            Yokohama Landmark Tower                    Review by CDP Supplier Engagement
 ・Expecting to achieve the *mid-term target renewable                                              <Leader (the best evaluation, awarded
  energy ratio ealier than originally set                                                                   for the first time)>
 ・Going forward, all power used in Company-owned                                                   Top 7% were selected among 5,640 companies
  buildings in Marunouchi area will be converted to                                                globally. (Approx. 80 are Japanese companies)
  renewable energy (expected FY2023)
*Mid-term target is to reach 25% by 2030. (The ultimate target is 100% by 2050.)

MITSUBISHI ESTATE CO., LTD.                                                                                                                       20
Progress of the Long-Term Management Plan

9. Initiatives Looking Ahead to Post-COVID-19
Enhancing value in the office by sophisticating the core functions of the central office and
adapting to diversified workstyles.
                                                                                         Sophistication of the Central Office
                              Previous workstyles                                                 TOKYO TORCH (Tokiwabashi PJ)
                                                                                                  • 2ha outdoor space
                              Work at a predetermined                                             • Communal space for workers
                              place and time.                                                     • Flexible office use by multiple
                                                                                                    tenants
                                                                                                  • Implementation of contactless
                                                                                                    securities
                                                                                                  • Large hall (2,000 seats)
                                                                                                  • World-class hotel (100 rooms)
                                                                                                  • Eco-friendly city development (e.g.
                                                                                                    green bonds)

                                                                                          FINOLAB (renewal)
                                                New workstyles                            • Financial support for startups
                                                                                            (investing in FINOLAB FUND)
                                                                                          • Renewal and expansion
                                               Central office as the core hub of a        • Support services for business
                                               company in order to maintain a               expansion

                                               sense of belonging and trust
                                               among employees with diversified         Approaches to diversified workstyles
                                               values.
                                                                                              WORK × ation Site                        Telecubes
                                                                                              (Workation)                           • Increase
                                                                                                                                      installment
                                                                                              • Establishment of a                    numbers
                                                                                                new hub                             • Expand
                                                                                                (fourth hub)                          installation spots
                                                                                                                                      to condominiums
                                                                                                                                      etc.
                                                                                     NINJA SPACE
                                                                                                                       CIRCLES(Compact office)
                                                                                     ・To locate                        • Completed in 3 buildings
                                                                                     workspaces                        • Currently planning to develop
                                                                                                                         at least 10 buildings
                                                                                                                       • Aim is to develop 30
                                                                                                                         buildings by 2024

MITSUBISHI ESTATE CO., LTD.                                                                                                                          21
Financial Supplemental Data

MITSUBISHI ESTATE CO., LTD.     22
Financial Supplemental Data

1. Management Indicators

                                              Previous Management                                                             Current Management
                                                   Plan Period                                                                     Plan Period
                                                                                                                                        FY2022        2030
                                      FY2018                     FY2019                    FY2020                        FY2021
                                                                                                                                      (Estimate)     Target
 *1Business                                                                                                                                         ¥ 350-400
                                      ¥ 213.4 bn                ¥ 229.4 bn                 ¥ 240.9 bn                    ¥ 224.7 bn    ¥ 245.3 bn
 Profits                                                                                                                                                   bn

 *2ROA                                          3.8%                      4.0%                       4.1%                     3.8%          4.0%          5%

 ROE                                            7.3%                      7.8%                       8.5%                     7.6%          7.6%         10%

 EPS                                       ¥ 86.78                    ¥ 96.97                 ¥ 108.64                    ¥ 101.34       ¥ 106.70       ¥ 200

*1   Business Profit = Operating Income + Equity in Net Earnings/Loss (for unconsolidated subsidiaries and affiliates)
*2   ROA = Business Profit / Total Asset (average of opening / closing balances)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                   23
Financial Supplemental Data

2. Balance Sheet
                                                                Millions of yen (rounded down)                                                           Millions of yen (rounded down)
                                               At March 31,     At March 31,                                                                 At March 31, At March 31,
                                                                                  Change                                                                                    Change
                                                   2021             2020                                                                         2021         2020
Current assets                                     1,164,037        1,115,634         48,402     Liabilities                                     4,011,071    3,917,030        94,041
   Cash                                               170,040          207,896       △ 37,856       Current liabilities                            662,437      664,001      △ 1,564
   Notes and accounts receivable-trade                 52,031           50,340          1,691           Notes and accounts payable-trade             60,507       66,368      △ 5,861
   Property for sale                                   88,116           72,256         15,859           Short-term borrowings                       141,785      115,306       26,478
   Property for sale in progress                      267,563          247,677         19,886           Current portion of long-term debt           127,643      156,778     △ 29,135
   Property for development                               975              975            △0            Commercial Papers                            50,000       50,000            -
   Equity investments                                 496,182          450,520         45,661           Bonds due within one year                    65,000       51,550       13,450
   Other                                               89,126           85,966          3,161           Other                                       217,500      223,998      △ 6,496
Fixed assets                                       4,908,481        4,742,602        165,879        Long-term liabilities                        3,348,634    3,253,028        95,605
   Tangible assets                                  4,179,893        4,107,252         72,640           Bonds                                       745,759      775,584     △ 29,825
   Intangible assets                                  101,095           96,767          4,328           Long-term debt                            1,393,858    1,278,678      115,179
    Investment securities                             281,996          236,969         45,027           Other                                     1,209,011    1,198,762       10,249
    Other                                            345,494          301,611         43,880     Net assets                                      2,061,447    1,941,206      120,241
Total assets                                       6,072,519        5,858,236        214,282        Shareholders’ equity                          1,259,887    1,163,746       96,141
                                                                                                    Other accumulated comprehensive income          592,011      570,716       21,294
                                                                                                    Stock acquisition rights                            231          288         △ 56
                                                                                                    Non-controlling interests                       209,316      206,454        2,861
                                                                                                 Total liabilities and net assets                6,072,519    5,858,236      214,282

               Total Assets                   Consolidated Interest-Bearing Debt Consolidated Interest-Bearing Debt Consolidated Interest-Bearing Debt
               (as of Mar. 2021)                         (as of Mar. 2021)           Fixed/Floating Rate Ratio         Long-term/Short-term Ratio
                  Other                         Commercial Papers       Lease obligations                 (as of Mar. 2021)                            (as of Mar. 2021)
                 302,019                            50,000                   2,095
 International
   Business                                                                                                                                             Short-term
                                                                                                         Floating                                         7.6%
   929,869                                                                                                16.8%
                                                     Bonds
                                                    810,759
 Residential
  Business
                  6,072,519                                     2,526,142                                    2,526,142                                    2,526,142
  673,344

                             Commercial                                     Loans
                          Property Business                              1,663,288
                             4,167,287                                                                                Fixed
                                                                                                                     83.2%                                   Long-term
                                                                                                                                                               92.4%

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                        24
Financial Supplemental Data

3. Asset Compositions
                                                                                                       (End of March 2021)

                 Inventories             Equity Investments                     Tangible Fixed Assets

                                                                11%                              5%
               22%                                                                       9%
                                          30%                                      3%
                                                                          11%
                                                                                  3%
                                                                                 2%
       1%                                                                        3%
                   ¥   355.6 billion             ¥   496.1 billion                       ¥   4,179.8 billion

                                          12%
                                   77%                                                                       75%
                                                                    36%

                 Domestic Condominiums          Domestic (office buildings)     Office Buildings       Outlet Malls
                 US                             Domestic (others)               Logistics Facilities   *Retail Properties
                                                US                              Rental Apartments      Overseas
                 Others
                                                Europe
                                                                                Others
                                                Asia

                                                                                                       * Excluding outlet malls

MITSUBISHI ESTATE CO., LTD.                                                                                                 25
Financial Supplemental Data

4. Consolidated Cash Flow
                                                                                         Millions of yen (rounded down)

                                        ①FY2020       ②FY2021        Change      ③FY2022           Change
                                         Results       Results      (②-①)        Estimates        (③-②)
 Cash Flows From
 Operating Activities                     341,766       207,414     △ 134,352      187,000          △ 20,414

        Depreciation and amortization        84,941        89,107        4,165        90,000                     893

        Change in Inventories               148,161        56,443     △ 91,718        96,000                39,557

        Change in Equity Investment        △ 43,217      △ 21,048       22,169     △ 131,000           △ 109,952

 Cash Flows From
 Investing Activities                   △ 277,440     △ 297,303      △ 19,863    △ 352,000          △ 54,697
        Proceeds from sales of
        investment securities                 5,275        14,186        8,911        17,000                  2,814

        Capital Investment                △ 331,857     △ 319,841       12,016     △ 394,000             △ 74,159

 Cash Flow From
 Financing Activities                    △ 28,886        50,425        79,312      145,000               94,575
 Cash and Cash Equivalents
 at End of Year                           213,008       172,307      △ 40,701      152,000          △ 20,307

 Free Cash Flow                            64,326      △ 89,889     △ 154,215    △ 165,000          △ 75,111

MITSUBISHI ESTATE CO., LTD.                                                                                        26
Financial Supplemental Data

5. Investment Data

          Major Breakdown of Capital Investments                                                               Major Breakdown of Equity Investments

(Billions of yen)                                                                                    (Billions of yen)
                                                                                     394.0
 400.0                                                                                                    400.0
                                                                                      32.0
 350.0                                               331.8                            13.0                350.0
                                                                     319.8                     1.0
                                                      10.7
                 289.5              285.0             12.3    4.3        8.1
 300.0                                         6.5                       25.2         99.0                300.0
                    11.8      7.1
                                        13.0   9.0                       47.4
 250.0                                               113.8                                                250.0
                    93.4                74.7
 200.0                                                                   70.6         82.0                200.0                                                                               176.0
                    22.1                38.4          39.9
 150.0                                                                                                    150.0                                                                                56.0
                    36.0      6.5                                        76.9
                                        36.9          47.8                            93.0                                                                  99.4                                      3.0
                                                                                                                                                                       2.3     93.7
 100.0              15.9                16.8                                                              100.0                                                                        2.1
                                                      15.6
                                        21.3          23.9               19.2                                                                                                                  78.0
                                                                                      14.0                                                                   75.1              49.0
   50.0             96.3                                                                                    50.0
                                        68.4          63.5               72.4         60.0
                                                                                                                                                              8.8              42.6            37.0      2.0
    0.0                                                                                                      0.0                                             13.2
                 FY2018             FY2019           FY2020         FY2021*         FY2022                               FY2018            FY2019           FY2020           FY2021*         FY2022(E)

*Classifications have been changed below from FY2021
                                                                                                                     
        Office Building(MEC: New/Redevelopment)          Office Building(MEC: Refurbishment)                  Office(MEC: New / Redevelopment)               Office(MEC: Refurbishment)
        Office Building(Subsidiaries)                    Lifestyle Property                                   Commercial Property(excluding MEC office)      Residential
        Residential                                      International
                                                                                                              International                                  Special Purpose Vehicle
        Hotel & Airport                                  Special Purpose Vehicle
                                                                                                              Others(including consolidated eliminations)    New Investments
        Other(including consolidated eliminations)       New Investments

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                           27
Financial Supplemental Data

6. Income Generating Assets Unrealized Gains: Current Status #1

Steady caprate and a slight increase in unrealized gains. Decrease in average number of shares and increase in
BPS and revised BPS due to an increase in net worth.

    Income Generating Assets Unrealized Gain                                                          *BPS and Adjusted BPS

(Billions of yen)             Book value     Unrealized gain                         (Yen)                     BPS      Adjusted BPS
9,000                                                                                3,800                                                                  3,606
                                                                 8,270.8   8,361.2
                                                       7,941.1                                                                                   3,432
8,000                                                                                                                                3,241
                                             7,383.4
                                                                                     3,300
7,000                              6,791.9
                                                                                                                        2,950
                         6,079.0
                                                                 4,222.5   4,250.2                             2,643
6,000       5,498.9                                    3,898.4                       2,800
                                             3,422.8
                                   2,963.5                                                            2,384
5,000
                         2,569.0                                                             2,178
            2,180.7                                                                  2,300
4,000

3,000                                                                                1,800
                                                                                                                                                            1,383
2,000                              3,828.4   3,960.5   4,042.7   4,048.3   4,110.9                                                   1,276       1,269
            3,318.1      3,509.9                                                                                        1,224
                                                                                     1,300                     1,148
                                                                                             1,078    1,088
1,000

      0                                                                                800
            FY2015       FY2016    FY2017    FY2018    FY2019    FY2020    FY2021            FY2015   FY2016   FY2017   FY2018      FY2019      FY2020     FY2021

                                                                                                                        *   BPS including unrealized gains (after tax)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                       28
Financial Supplemental Data

7. Income Generating Assets Unrealized Gains: Current Status #2

           Unrealized Gain Breakdown                                                                 Rental Profits
                                                                        (Billions of yen)
                                                                        190
                              International                                                                                     180.5    180.2
                                  10%                                   180                                            174.8
                                                                                                              168.3
                                                                        170
                                                                                                     160.7
                                                                        160
          Domestic
   (Outside of Marunouchi)                    *Marunouchi               150
            17%                               New Building
                                                 44%                    140                 136.2
                                                                                 131.7
                                                                        130
                          Marunouchi
                        Existing Building                               120
                              29%
                                                                        110

                                                                        100
                                                                                 FY2015     FY2016   FY2017   FY2018   FY2019   FY2020   FY2021

  *Redeveloped properties after the completion of Marunouchi Building
                                                      FY2021 Results

MITSUBISHI ESTATE CO., LTD.                                                                                                                       29
Overview of the "Long-Term Management
  Plan 2030"

MITSUBISHI ESTATE CO., LTD.               30
Overview of the "Long-Term Management Plan 2030"

1. New Management Plan: Objectives                                        *Repost from the "Long-Term Management Plan 2030"

                                         Mitsubishi Estate Group’s Mission:
                        Creation of a truly meaningful society through urban development

              2030 Target                                                                         2030 Target
                                                   A pair of driving wheels
 Address Four key themes*
 to realize a sustainable                                                                   ROA        ROE          EPS
 society
                                                                                             5%       10%       ¥   200
 *「Environment」「Diversity

  「Innovation」「Resilience」
                              & Inclusion」   Increasing           Increasing
                                               Social            Shareholder
    Fundamental Approach                       Value                Value                  Fundamental Approach

 Create value for every                                                                   Transformational
                                                                                          improvements to the
 stakeholder including visitors
                                                                                          business portfolio's efficiency
 and employees                                            Synergy                         and market resilience

                                      Realize our mission and sustainable growth
                                 by increasing both social value and shareholder value

MITSUBISHI ESTATE CO., LTD.                                                                                               31
Overview of the "Long-Term Management Plan 2030"

2. Quantitative Target - 2030 Target                                                           *Repost from the "Long-Term Management Plan 2030"

                                                                    2030 Target
                              ROA*1                                         ROE                                         EPS
                               5%                                           10%                                        ¥200
*1   ROA = Business Profits*2 / Total Asset (average of opening/closing balances)

                                                             Key Assumptions
                Profit Growth                            Shareholders Returns                                   Financial Stability

                                                                 Current framework*                                  Maintain
                                                                   • Payout ratio:
                                                                                                                  current level of
               Business             Profit*2                        Approx. 30%
                                                                              +                                    credit ratings
                ¥350–400 bn                                      • Share buybacks                                     【Reference】
                                                                                                                    R&I       :AA-
                                                            (when determined to be an                               S&P       :A+
                                                              optimal use of funds)                                 Moody‘s   :A2

                                                            **   Will adjust to business conditions
*2   Business Profit= Operating Income + Equity in earnings (loss) unconsolidated subsidiaries and affiliates

MITSUBISHI ESTATE CO., LTD.                                                                                                                  32
Overview of the "Long-Term Management Plan 2030"

                                                                                         *Repost from the "Long-Term
3. 2030 Targets: Realization Plan (ROA・ROE・EPS)                                          Management Plan 2030"

                              Current (FY20)     2030 Target

                                                                       Increase of ¥120–170 bn
     Business Profits

                                                                       Approx. ¥50bn growth from each of: domestic
                                                                       asset, international asset, non-asset business
                                                 ¥350-400         bn

                                ¥230.5    bn      (EPS: ¥200)

                               (EPS: ¥100.2)                           

                                                                                 【 Flexible capital policy 】
                                                                        Optimize investments, assets sales, shareholder
     Total Assets

                                                                           return and financing according to market
                                  ¥5.9   tn                                               conditions
                                                 Approx.   ¥7-8   tn

                                                                               Expected net increase: ¥1-2 tn

Business Profits                                                         Increase Net investment: Approx. ¥2–3 tn

Total Assets
                        =       ROA: 3.9%          ROA: 5%
                                                                        Decrease Depreciation: Approx. ¥1 tn
                                               With current leverage

                                ROE: 7.8%          ROE: 10%

MITSUBISHI ESTATE CO., LTD.                                                                                               33
Overview of the "Long-Term Management Plan 2030"

                                                                                                      *Repost from the "Long-Term
4. Capital Policy - Responsive to Market Conditions                                                    Management Plan 2030"

                                 Flexible capital policy - Responsive to market conditions
                                          (Value creation through BS management)

                              Optimize mix of investment, asset sales, shareholders returns,
                                        and financing in response to the market

                                                                                                          Sellers' market

                                                                                                     Asset Sales           :

                                                                                                     Profits               :

                                                                                                     Shareholder return:

                                                                                                          Buyers' market
                                                                                                     Active acquisition
                                                                                                                           :
                                                                                                     /investment
                                       To maximize mid-to-long value, we combine:
                                       1. stable CF from long-term development PJs and asset holdings Capital gain         :
                                       2. capital recycling business in response to the market.
                                                                                                     Shareholders return:

MITSUBISHI ESTATE CO., LTD.                                                                                                    34
Overview of the "Long-Term Management Plan 2030"

5. Value creation through BS management                                   *Repost from the "Long-Term Management Plan 2030"

                               Flexible Capital Policy - Responsive to market conditions
                                     (Value creation through BS management)

                                 Asset                                   Shareholders’ Equity and Liability

        Capital recycling business optimized for market
                           conditions
                                                                           Maintaining Financial Stability
   In seller's market: expedite asset sales                      Financial reserves for seizing buyer's market opportunities
   Invest in promising PJs to enhance corporate value            High credit rating enables long-term and low-cost financing

            Long-term development and asset holdings              In sellers' market, use asset sale proceeds for shareholder
             (core focus: Marunouchi redevelopment)                returns and to maintain financial stability
   Steady capital investment in core business enables stable,
    cycle-proof rental cashflow

   Timely asset sales judged by expected yields and external
      environment                                                          Capital Efficiency Improvement

               Sale of underperforming properties and             Targets: ROA 5%, ROE 10%, EPS ¥200
                        strategic-holding stocks                  Increase numerator (net income) and decrease denominator
   Disposal of underperforming assets, including core asset       (shareholders’ equity)
   Ongoing disposal of strategic-holding stocks                  Choose measures to manage shareholders’ equity according
                                                                   to market conditions
                     Expansion of Non-asset Business

MITSUBISHI ESTATE CO., LTD.                                                                                                      35
Overview of the "Long-Term Management Plan 2030"

6. Capital Allocation Policy                                            *Repost from the "Long-Term Management Plan 2030"

            Cash in             Cash out
                                               Strategic allocation to improve medium- to long-
                               Strategic       term capital efficiency
          Financial
                               Allocation         Allocate capitals based on market conditions
          capacity                                Select projects which help to increase shareholder value
                              investments/
                              shareholder                Capital recycling business expected returns (pre-tax IRR)
                              return/
                              suppression of              Domestic                             : 6-8%
                              debt                        International (developed countries) : 8-10%
                                                          International (developing countries) : 10+%
                                                              *Expected return from total investment in each business

         Cash flow               Planned
           from               investment &
                                  return       Planned projects – return through asset sales (book value)
         operating
         activities                             * Including undetermined projects. See p. 40 for the next three-year forecast

                                  Base         Payout ratio: Approx. 30%
                              shareholders     * Shareholder return method and scale will be adjusted
                                 return          with real estate and financial market conditions, stock price, and ROE/EPS

MITSUBISHI ESTATE CO., LTD.                                                                                                     36
Overview of the "Long-Term Management Plan 2030"

7. Profit Growth Strategy - 2030 Vision                                                                      *Repost from the "Long-Term Management Plan 2030"

           Profit changes vs FY2020*                                                                          Growth Strategy
                                                                         ① Advance “Marunouchi NEXT Stage” project
     ① Domestic Asset
                                                                         ② Increase NOI with development projects
       Business
                              Approx. +¥50 bn                            ③ Optimize capital recycling business to market conditions
                              (FY20E*: Approx. ¥ 201.0 bn)
                                                                         ④ Optimize residential business profit structure

     ② International Asset                                               ① Expand development business in Asia

       Business                                                          ② Enhance development business and revenue base in Europe
                              Approx. +¥50 bn
                                 (FY20E*: Approx. ¥ 36 bn)               ③ Enhance and diversify US capital recycling business

                                                                         ① Steady profit growth in existing businesses
     ③ Non-asset Business
                              Approx. +¥50 bn                            ② Utilization of technology
                                 (FY20E*: Approx. ¥ 16 bn)
                                                                         ③ Provision of service contents focusing on B2C/B2B2C

     ④ Fluctuation Factors                                               ・Asset sales control in response to market conditions
              Approx. ±¥20–30 bn                                         ・Capital gain and rental profit fluctuation due to investment opportunities
*   Composition of FY20 Business Profits = ① Domestic Asset + ② International Asset + ③ Non-asset Business + Eliminations or corporate
        (round number)                      (¥ 201.0 bn)          (¥ 36 bn)              (¥ 16 bn)               (▲ ¥ 23 bn)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                37
Overview of the "Long-Term Management Plan 2030"

8. Roadmap for Profit Growth                                                                 *Repost from the "Long-Term Management Plan 2030"

                                        Early stage                                    Middle stage                              Late stage

                                                   Advance
                                            redevelopment projects                                Redevelopment Projects’ Contribution
  Domestic                    • Complete Tokiwabashi A Bldg.                                      • Long-term developments, e.g. Tokiwabashi B Bldg.
  Asset                       • Open & expand outlet mall                                         • Residential redevelopments
                              • Asset sales and reconstruction of existing buildings (will
  Business                      lower rental profits)
                              • Temporary decline in the condominium units sold

                                   Profits scale with asset accumulation                              Stabilize profits via capital recycling
  International               • 1271 Ave. of the Americas renewal, 8 Bishopsgate
                                completion
                                                                                                  • Shift from asset expansion to recycling
                                                                                                  • Stabilize capital recycling business in Asia
  Asset                       • Stabilize Asia condominium business
                              • Expand assets in Asia capital recycling business
  Business

                              Promoting commercialization in new domains                              Accelerate profits in new domains
  Non-asset                   • Stable growth in existing businesses                              • Stable growth in existing businesses
                              • Promoting commercialization in new domains                        • Accelerate profits in new domains
  Business

MITSUBISHI ESTATE CO., LTD.                                                                                                                            38
Overview of the "Long-Term Management Plan 2030"

                                                                                                                              *Repost from the "Long-Term
9. Three Year Investment Return Plan (FY2021-FY2023)                                                                           Management Plan 2030"
                                                                                                                                                         (Billions of yen)

              3-Year Total                                                                      Composition

                                                                                                                    Strategic                    Strategic
                                                    Planned Investments and Return                                                               Allocation
                                                                                                                     Return
                                                                                                                        Dispose             Vary investment allocation
                                                                                                                underperforming assets      for medium- to long-term
                                                    Domestic Asset                       International Asset      for capital efficiency         capital efficiency
            Strategic Allocation
                    600                                                                                                                                 600
    (investments/shareholders return                                                               Europe and
                                                                    Outlet mall,                       US
    /suppression of debt)
                                                              Capital Recycling asset,     Asia       200
                                                                    And Others
                                                                                           100
  Invest                                                                                                                                   Aim for international profit
   ment
                    Planned                                                 550                                                            growth
                  investments                            Condominium
                       1,500
                                            Marunouchi      500
                                               area
                                              150
                                               0
                                                            500
                     Return
  Return              1,100                                                 300
                                             Asset sales plan assumes                      100
                                            market conditions of previous                             200            100~200
                                                    three years

              Strategic Return
                   100~200          Net
                                   Invest     150            0              250             0          0           -100~-200                         ~600
                                   ment

MITSUBISHI ESTATE CO., LTD.                                                                                                                                           39
Business Overview

MITSUBISHI ESTATE CO., LTD.   40
Business Overview

1. Mitsubishi Estate Group’s Business Segments

                                                       Commercial Property Business
           <Office Buildings>                 <Retail Properties>                   <Logistics Facilities>               <Hotels/Airports>
  Engages in the development,         Develops retail properties and       Development, leasing, and             Undertakes hotel management
  leasing, and operation              outlet malls nationwide, mainly in   management of the “Logicross”         nationwide as the Royal Park Hotels
  management of office buildings,     the major metropolitan areas.        series as a foundation of logistics   group. Began private airport
  mainly in the Marunouchi area and                                        facilities.                           management business.
  other major Japanese cities.

                                                                           Investment Management                    Architectural Design &
      Residential Business             International Business                     Business                        Engineering and Real Estate
                                                                                                                       Service Business
       <Domestic Residential>         Undertakes office building           Provides a wide range of services           <Architectural Design &
  Operate residential condominium     development and                      regarding real estate investment            Engineering Business>
  business under "The                 leasing businesses in the United     for investors.                        Mitsubishi Jisho Sekkei Inc.
  Parkhouse" brand and rental         States and the United Kingdom, as                                          provides architectural design and
  apartments business under "The      well as projects in Asia                                                   engineering services of construction
  Parkhabio" brand.                                                                                              and civil engineering.

                                                                                                                  <Real Estate Services Business>
                                                                                                                 Mitsubishi Real Estate Services Co.,
                                                                                                                 Ltd. offers real estate brokerage,
                                                                                                                 parking lot management support,
                                                                                                                 and other services.

MITSUBISHI ESTATE CO., LTD.                                                                                                                         41
Business Overview

2. Business Scale

                                                           Investment                                                                           *Other
                                 Other*                                                 Other*                   Investment
                                                           Management                                                                            2%
Investment                        6%                                                     0%                      Management
                                                            Business
Management                                                                                                        Business
                                                               2%
 Business                                                                                                            1%
    2%
                                                              International
                                                                                                                      International
     International                                              Business
                                                                                                                        Business
       Business                                                   15%
                                                                                                                          16%
          9%     Revenue      from
                       Operations                                     Operating Income                                            Total Assets
                                                       Residential
                         Approx.                        Business              Approx.                            Residential          Approx.
                                                         10%                                                      Business
                   ¥1,207.5                                              ¥224.3                                    11%         ¥6,072.5
Residential                   billion     Commercial                          billion                                                 billion
 Business                                  Property                                        Commercial                                               Commercial
  29%                                      Business                                         Property                                                 Property
                                             54%                                            Business                                                 Business
                                                                                              73%                                                      70%

                                                                     *Architectural Design & Engineering Business and Real Estate Services Business, Other Business
                                                                                                                                                  (FY2021 Results)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                    42
Commercial Property Business
  Office Buildings

MITSUBISHI ESTATE CO., LTD.      43
Commercial Property Business (Office Buildings)

1. Marunouchi Area Map

MITSUBISHI ESTATE CO., LTD.                       44
Commercial Property Business (Office Buildings)

2. Pipeline

                                  Mizuho Marunouchi Tower,         Tokiwabashi Tower
                                                                                                      (Tentative name)                                                   Yurakucho
                                        Ginko Kaikan,                                              Uchikanda 1-chome                  Torch Tower Bldg. B              Redevelopment
                                     Marunouchi Terrace                 Bldg. A                          Project                                                             (TBD)
  Marunouchi Area

                                  Total Floor Area: 180,900㎡      Total Floor Area: 146,000㎡       Total Floor Area: 84,500㎡      Total Floor Area: 544,000㎡
                                  Completion: Sep. 2020           Completion: Jun. 2021            Completion: 2025               Completion: FY2028

                                  FY2020                        FY2021                   FY2022                       FY2023                       FY2024                       FY2028

                                                                                                                                                  (Tentative name)
                                   Link Square Shinjuku               CO・MO・RE YOTSUYA                    the ARGYLE aoyama                   Toyosu 4-2 Project
        (Outside of Marunouchi)
Tokyo

                                                                                 撮影:SS

                                    Total Floor Area: 43,800㎡         Total Floor Area: 139,600㎡          Total Floor Area: 23,100㎡         Total Floor Area: Undetermined
                                    Completion: Aug. 2019             Completion: Jan. 2020               Completion: Jun. 2020             Completion: Spring 2025

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                              45
Commercial Property Business (Office Buildings)

3. Earnings Related Data: Total Operating Floor Space (Unconsolidated)

                      Total (Domestic)/Marunouchi/Marunouchi Redevelopment Buildings
 (Thousand ㎡)

6,500
                                                                                                                                                                    5,991 6,009
                                                                                                                                                          5,869
6,000                                                                                                                                           5,745
                                                                                                       5,580 5,670                    5,570
                                                                                               5,444                          5,385
5,500                                                                                                                 5,174
                                                                                       5,038
                                                                               4,896
5,000                                                                 4,660
                                                              4,347
4,500                                                4,175
4,000                  3,825 3,907 3,769
           3,684 3,696
3,500
                                                                                                                                                  2,915 2,915 2,952
3,000                                                                               2,687 2,758 2,755 2,583       2,727 2,784
                                                                        2,565 2,565                         2,531
2,500                                                 2,195 2,258
                             1,946 2,024 1,897                                                                                                     1,836 1,836 1,872
2,000                  1,798                                                                                                    1,705 1,705
             1,677
                                                                                                 1,383 1,365 1,360 1,345
1,500                                                                                   1,174
                                                                        1,022 1,022
1,000                                                    743    743
                                        489    489
                256       256    355
  500

      0
              03/3      04/3    05/3   06/3   07/3     08/3    09/3     10/3    11/3    12/3    13/3    14/3   15/3    16/3    17/3      18/3      19/3     20/3      21/3 22/3(E)

                                                     Total (Domestic)      Marunouchi          Marunouchi Redeveloped Buildings

                                                                                                                          *Excluding floor space in Lifestyle Property Business from 16/3

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                           46
Commercial Property Business (Office Buildings)

4. Earnings Related Data: Vacancy Rates and Average Rents (Unconsolidated)

                                  Vacancy Rates (Marunouchi Offices/All uses in Japan) and
                                             Average Rents (All uses in Japan)
(yen / tsubo-month)
 30,000                                                                                                                                                                                        10%
 29,000                       Vacancy rate (Marunouchi offices)                                                                                                                      28,500
                                                                                                                                                                               27,793          9%
 28,000                       Vacancy rate (All uses in Japan)
                                                                                                                                                                      27,177
                              Average rent (All uses in Japan)                                                                                               26,702
 27,000                                                                                                                                             26,193
                                                                                                                                           25,842                                              8%
 26,000                                                                                                                           25,234
                                                                            24,864
 25,000                                                                              24,423
                                                                                              23,974            23,861                                                                         7%
               22,817                                              23,560                              23,850            23,587
 24,000
               6.06%
                                                          22,602
 23,000                  22,213              21,733                                                                                                                                            6%
                               21,902
 22,000                               21,711                                                                    5.29%
                          4.82%
                5.64%
 21,000                                                                                                                                                                                        5%
 20,000                                                                                           3.98%
                  4.36%
                                           3.59%                                     3.58% 3.58%                                                                                               4%
 19,000                                                                    3.40%
                                    2.77%                                                                      4.32%
 18,000                                                                                                                    2.80%                                                        3.0%
                                                               2.86%                                    3.66%                              2.93%
                                                                                                                                                                               2.50%           3%
 17,000                                                                     2.42% 2.26%                                           2.22%                   2.19%
                                                    1.68%                                                                                            1.87%
 16,000
                                          2.77%                                               2.42%                                                                                            2%
                                                                                                                                           2.42%                     1.07%      2.35%
 15,000                                                    2.06%
                                  1.74%                                                                             1.82%                          1.65% 1.80%
 14,000                                                                1.09%                                                      1.37%                                                        1%
                                                          0.19%
 13,000                                     0.55%
                                                                                                                                                                      0.69%
 12,000                                                                                                                                                                                        0%
                 03/3     04/3     05/3    06/3    07/3     08/3    09/3     10/3     11/3     12/3     13/3     14/3     15/3     16/3     17/3     18/3     19/3     20/3     21/3    22/3
                                                                                                                                                                                         (E)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                     47
Commercial Property Business (Office Buildings)

5. Earnings Related Data: Office Building Business, Revenue Breakdown*1
   (Unconsolidated)

                                                                                                                                        (Billions of yen)

                                                              FY2020              FY2021                    FY2021                     FY2022
                                                              (Results)     (Previous Estimates)            (Results)                 (Estimates)

 Rent revenue from            *1office   buildings              406.6                418.6                     418.0                       428.3
 Changes from the previous period                              + 17.9               + 11.9                   + 11.3                      + 10.2
           Rent revenue from new buildings                      + 10.8                + 11.9                    + 12.2                     + 15.8
           Rent revenue from existing buildings                   + 6.8                + 6.1                      + 7.2                      △ 3.3
                     Termination of master lease,
                                                                    + 0.3               △ 1.3                       △ 0.7                      △ 6.5
                     closure of building for redevelopment
                     Moving in/out of tenants,
                                                                    + 6.5                + 7.5                      + 8.0                       + 3.2
                     Rent revisions at lease renewal
           Impact of COVID-19                                     Offices               △ 0.5                      △ 0.5
                                                             *2Mixed-use
                                                                                        △ 5.0                      △ 5.0
                                                                   retail

           Supplementary revenue, incl. common area
           charge
                                                                     +0                △ 0.6                     △ 2.4                       △ 2.2

                                                                                             *1   Office buildings, incl. those with retail areas, etc.
                                                                                             *2   Retail properties in office buildings

MITSUBISHI ESTATE CO., LTD.                                                                                                                               48
Commercial Property Business (Office Buildings)

6. Earnings Related Data: Trends in Rent Revenue From Office Buildings*1
   (Unconsolidated)

                                 Increase/Decrease of Rent Revenue from Office Buildings*1
(Billions of yen)                            (From the Previous Fiscal Year)
  30
          ■New buildings
          ■Existing buildings (moving in/out of tenants, rent revisions at lease renewal)
  25      ■Existing buildings (termination of master lease, closure of building for redevelopment)
                                                                                                                                                            +0.3
          ■Impact of COVID-19 (office buildings,   *2mixed-use   retails)
  20                                                                                                                                                                 +0.3

  15                                                             +14.7                                                                 +22.6 +0.7 +17.9
                                                       +15.3                                                +27.2                                                             +12.2
                                                                            +23.9                                   +18.5 +13.2                                      +10.8                +15.8
  10                                                                                                                                              +9.8
                                     +15.3
                    +13.0                                                           +12.5
    5                                         +7.3                                          +9.5
                              +8.7                                +7.3                                                                                                         +8.0
                                                        +6.0                                         +6.6                     +4.9                          +5.9     +6.5
           +4.3                                                                                                                         +4.0      +4.7                                    +3.2
                                              +1.9                                                                  +2.4
    0                                 -1.1              -1.5       -1.5                                     -0.7                                                                   -0.7
           -3.9               -4.9                                          -4.0    -4.6             -3.4
                                                                                            -5.2                                                                                   -5.5    -6.5
  -5                                  -5.9                                                                  -7.5    -9.0                 -8.1
           -2.5      -10.7                    -10.5                         -2.5                                              -10.5
                              -5.4                                                  -5.6    -6.0     -8.3
-10
                      -5.0
-15
                                                                                                                      *1   Office buildings, incl. those with retail areas, etc.
                                                                                                                      *2   Retail properties in office buildings
-20
            03/3      04/3    05/3    06/3     07/3     08/3       09/3     10/3    11/3    12/3     13/3    14/3   15/3       16/3      17/3      18/3     19/3      20/3         21/3   22/3(E)

 Total     -2.1      -2.7     -1.6   +8.3     -1.3    +19.8 +20.5 +17.4             +2.3    -1.7     -5.1   +19.0 +11.9       +7.6     +18.5 +15.2 +24.1 +17.6 +14.0 +12.5

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                   49
Commercial Property Business (Office Buildings)

7. Office Building Market Data: New Supply of Large-Scale Office Buildings
   (23 Wards of Tokyo)

(Millions of ㎡)
 2.5

                                             2.16

    2                                                                                                                                                             1.87
                                                                                                          1.75

                                                                  1.54
 1.5                                                                          Past average supply                                                   1.41                             1.43
                                                                          approx. 1.04 million ㎡/year
                                      1.25          1.21                         (1998-2019)
                                                                         1.19                      1.17                                                             Average estimate supply
                                                                                                                               1.09                                   for the next 5 years
                                                                                                                                                                      1.03 million ㎡/year
         0.99                                                                                                                         0.97
    1                          0.91                                                                                     0.87
                                                                                       0.86 0.85                                                           0.85
                                                           0.77                                                                                                                             0.77
                        0.72                                                                                                                 0.69
                                                                                0.65
                                                                                                                 0.58                                                    0.54 0.54
 0.5             0.36

    0

                                                                                                                                                                                            *Estimate
                                                                                                          *Research subject buildings: Buildings with a total office floor area exceeding 10,000㎡
                                                                                                                                                         Source: Mori Building (as of May 2020)

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                                        50
Commercial Property Business (Office Buildings)

8. Office Building Market Data: Average Rents/Vacancy Rates
   (5 Central Wards of Tokyo)

(yen / tsubo-month)

 30,000                                                                                                                                                                       12%
                                                                                                                                Average Rent             Vacancy Rate
 28,000

                                                                                                                                                                              10%
 26,000                                                                             9.19% 9.04%
                                                                            8.75%                 8.56%

 24,000                        7.98%
                                                           22,574                                                                                        22,594               8%
                8.18%
 22,000                                                            21,295                                 6.70%                                  21,134           21,541

                                                   20,064
                                       5.51%                                                                                             19,699
 20,000        19,175                                                  6.05%                                     5.30%                                            5.42%       6%
                                                                                                                     18,730
                                     18,095                                18,264                              17,973
                         17,75817,593                                            17,495
 18,000                                                                                                  17,195
                                                                                       16,71616,504
                                                                                                   16,325             3.60%
                                                                                                                                                                              4%
 16,000                                                                                                         4.34%

                                            3.41%
 14,000
                                                    2.72% 2.89%                                                                          2.80%                                2%

 12,000                                                                                                                                           1.78%
                                                                                                                                                          1.50%

 10,000                                                                                                                                                                       0%
                 03/3         04/3   05/3   06/3    07/3    08/3    09/3    10/3    11/3   12/3   13/3    14/3   15/3    16/3     17/3    18/3    19/3     20/3     21/3
                                                                                                                                                          Source: Miki Shoji Co., Ltd.

MITSUBISHI ESTATE CO., LTD.                                                                                                                                                        51
Commercial Property Business (Office Buildings)

9. Competitive Edge of Marunouchi: Vacancy Rates

                                       5 Central Wards of Tokyo (Market) vs. Marunouchi
                                                       (Unconsolidated)
 10%
                                                                              9.19% 9.04%
                                                                      8.75%
   9%                                                                                       8.56%
           8.18%
                      7.98%
   8%

                                                                                                     6.70%
   7%
           6.06%
   6%                                                  6.05%
                                                                                                                                                              5.42%
                                   5.51%
                                                                                                                5.30%
   5%                                                                                               4.32%
              4.36%                                                                         3.66%
   4%                                                                                                                       3.60%
                                                                                                                    4.34%
                                3.41%         2.72%                                                                                 2.80%
   3%                                                                 2.42%                                                 2.42%                             2.50%
                                2.77%                                                                                                       2.19%
                                                      2.89%
   2%                                                                                                                                             1.50%
                                                                              2.26% 2.42%
                                                                                                            1.82%
   1%
                               1.74%                                                                                                1.65% 1.78%
                                                      0.19%                                                         1.37%
                                        0.55%                 1.09%
                                                                                                                                                     0.69%
   0%
             03/3       04/3   05/3    06/3   07/3    08/3    09/3    10/3    11/3   12/3   13/3    14/3    15/3    16/3    17/3    18/3     19/3     20/3      21/3

                                                5 Central Wards of Tokyo (Market)             Marunouchi (Unconsolidated)
                                                                                                                                            Source: Miki Shoji Co., Ltd.

MITSUBISHI ESTATE CO., LTD.                                                                                                                                            52
Commercial Property Business (Office Buildings)

10. Competitive Edge of Marunouchi: Area/Number of Railway Lines

         Marunouchi                          Nihonbashi                  Shinagawa                     Shibuya                 Toranomon
2,400m

               1,500m

 Area:                    120ha          Area:            76ha      Area:            49ha      Area:             86ha      Area:             58ha
 Railway lines:               28 lines   Railway lines:   5 lines   Railway lines:   9 lines   Railway lines:    8 lines   Railway lines:     2 lines

                                                                                                                                     ©Open Street Map

MITSUBISHI ESTATE CO., LTD.                                                                                                                       53
Commercial Property Business (Office Buildings)

11. Competitive Edge of Marunouchi: Number of Headquarters and Offices
                                                                                                                             (as of March 2020)

     ① Fortune Global 500 company headquarters                                    ③ Top 100 law firm headquarters and offices

                                                                                   MARUNOUCHI
                                                                                                                  32
              18                   3            1            0           0          TORANOMON
                                                                                                              5
                                                                                    NIHONBASHI
                                                                                                     1

          MARUNOUCHI            SHINAGAWA    NIHONBASHI    SHIBUYA    TORANOMON
                                                                                       SHIBUYA       1
                                                                                    SHINAGAWA
                                                                                                 0
     ② Top 50 company headquarters in terms of
                                                                                  ④ Foreign financial company offices
       market capitalization

                                                                                   MARUNOUCHI
                                                                                                                            71
            14                                                                      TORANOMON
                                                                                                                       17
                                 3             2             1                                           12
                                                                         0
                                                                                    NIHONBASHI

       MARUNOUCHI             NIHONBASHI    SHINAGAWA     TORANOMON    SHIBUYA
                                                                                       SHIBUYA
                                                                                                          4
                                                                                    SHINAGAWA
                                                                                                 0

MITSUBISHI ESTATE CO., LTD.                                                                                                                       54
Commercial Property Business (Office Buildings)

12. Marunouchi Data: Marunouchi Tenant Mix (Unconsolidated)

 March 2000                   Type of Business              Area ratio   March 2021          Type of Business            Area ratio

          1              Manufacturing                          42.5%        1         Finance                               22.9%

          2              Finance                                22.2%        2         Manufacturing                         20.0%

          3              Trading                                10.4%        3         Professional Firm                     19.2%

          4              Information                             6.3%        4         Trading                               10.4%

          5              Professional Firm                       4.4%        5         Information                            6.2%

                         Others                                 14.2%                  Others                                21.3%

            Professional Firm                                                             Others
                  4.4%        Others                                                      21.3%          Finance
                              14.2%                                                                      22.9%

                        Information         Manufacturing
                           6.3%                42.5%                                  Information
                                                                                         6.2%
                        Trading
                        10.4%                                                          Trading           Manufacturing
                                                                                       10.4%                20.0%

                                  Finance
                                  22.2%                                                     Professional Firm
                                                                                                 19.2%

MITSUBISHI ESTATE CO., LTD.                                                                                                       55
Commercial Property Business (Office Buildings)

13. Marunouchi Data: Approaches for Marunouchi Area Development

                                                                              Relaxation of plot ratio regulations: Special
  Improvement of floor-area-ratio
                                                                              Urban Renaissance Districts
Improving plot ratio in Marunouchi area by reviewing the use                Possible to be permitted for relaxation of floor-area ratio
area                                                                        regulation depending on levels of contribution to city
              1,000% → 1,300%                  (June 2004)
                                                                            regeneration as an exemption of urban planning
                                                                            Example: International business bases (Global Business Hub Tokyo etc.)
                                              *1,200% for limited areas
                                                                            Development of fine urban environment (improvement of water quality of ditch
                                                                            around the Imperial Palace, etc.)
                                                                            BCP functions (self-reliant electric power, water supply, etc.)

  Transfer of plot ratio:                                                     Change of building uses:
  Exceptional plot ratio district system                                      Consolidation of non-office use
Possible to transfer floor area among several areas meeting a               Possible to consolidate and allocate mandated non-office
certain conditions                                                          use floor-areas when running several projects
                                                                            simultaneously
           "Exceptional floor-area
                                                                            ◆Example: Consolidate office and hotel usages
           ratio district" area

                                                                           Non-office ─

                                                                               Office ─
◆Example: Transfer unused floor-area at Tokyo station to other buildings
 around the station

                                                                                                   Consolidate non-office use in
                                                                                                   offices into hotels to expand
                                                                                                   office areas in office buildings

                                                                                       Offices                                        Hotels

MITSUBISHI ESTATE CO., LTD.                                                                                                                          56
You can also read