Results for the First Six Months (Ended May 31,2008) (PDF 2.4MB)

Transcription

COVER
Interim Results
for the Six Months
Ended May 31, 2008
Tosei Corporation （Ticker Symbol Number: 8923）
Copyright © 2008 TOSEI CORPORATION, All Rights Reserved.
1
INDEX
¾Overview of Results
I. Overview of Interim Results for the Six Months
Ended May 31, 2008
－3
¾Outlook for the Fiscal Year Ending Nov. 2008
and Medium-term Management Plan
II. Tosei’s View of the Operating Environment and
Fundamental Development Initiatives for the Fiscal
Year Ending Nov. 2008
III. Outlook for the Fiscal Year Ending Nov. 2008
－19
－22
[Reference Materials]
I. Introduction to Tosei
1. Tosei Group Overview
2. Examples of Tosei Group Properties
II．Supplementary Materials to the Interim Results for
the Six Months Ended May 31, 2008
III. Supplementary Materials on Real Estate Market Conditions
2
－36
－41
－51
－59
I.
Overview of Interim Results for the Six
Months Ended May 31, 2008
3
Highlights from the First Half of the Fiscal Year Ending Nov. 2008
Achievements in the First Half
¾December 2007 Expansion of funds that specialize in centrally located income-producing properties by collaborating with
Mitsubishi Corporation and the Development Bank of Japan
¾January 2008
THE Palms Nihonbashi Yokoyamacho completed
¾February 2008 Acquisition of land for an office building in a good location near Kamata Station
¾March 2008
Completion of Kichijoji Tosei Building, a commercial property in a good location near Kichijoji Station
¾March 2008
The Board of Auditors of the Tokyo Metropolitan Government approved Tosei’s
Management Innovation Plan in the revitalization business
¾April 2008
Completion of Kanda Ogawacho Tosei Building II, an office building project in a good location on
Yasukuni Street in Chiyoda Ward
¾May 2008
Tosei Asset Advisors, Inc. completed registration of the asset management, advisory and agency, and
Type 2 financial instrument businesses
Other
Rooftop greening plan completed for a cumulative total of 47 properties (approximately 2,000m2) as of
May 31, 2008
¾Composition of
Shareholders
As of May 31, 2007
As of November 30, 2007
As of May 31, 2008
・Individuals &
Others
52.11%
54.79%
⇒
57.70%
（+2.91p）
・Financial
institutions
16.98%
13.95%
⇒
9.03%
（-4.92p)
・Securities
companies
0.63%
0.72%
⇒
0.82%
（+0.1p)
・Overseas investors
13.37%
13.49%
⇒
15.31%
（+1.82p)
・Other corporations
16.91%
17.04%
⇒
17.14%
（+0.1p)
4
Overview of Interim Results for the Six Months Ended May 31, 2008
(¥ million, %)
Six months ended
May 31, 2007
Six months ended
May 31, 2008
YoY change
(Consolidate d)
% of revenues
(Consolidated)
22,205
100.0
39,421
100.0
17,215
77.5
17,784
80.1
23,910
60.7
6,125
34.4
4,420
19.9
15,510
39.3
11,090
250.9
1,401
6.3
1,754
4.5
353
25.2
Operating income
3,019
13.6
13,756
34.9
10,737
355.6
Ordinary income
2,595
11.7
13,146
33.3
10,550
406.4
Net income
1,482
6.7
7,890
20.0
6,408
432.4
432.4
Revenues
Cost of revenues
Gross profit
Se lling, ge ne ral and
administrative expenses
Earnings per share (¥)
%
% of revenues
3,932.98
20,939.78
17,006.80
Return on equity (% )
9.4
34.6
25.2
Return on total assets (% )
2.2
8.9
6.7
15
63
48
Ordinary income per employee
ROE：Net income divided by average total net assets
ROA：Net income divided by average total assets
318.8
*1: Beginning with the six months ended May 31, 2008, ordinary income per employee is calculated using the
average number of employees. For the six months ended May 31, 2007, it was calculated using the number
of employees as of May 31.
5
Overview of Results (Analysis of Changes in Earnings)
(¥ million, %)
Six months ended
May 31, 2007
(Consolidated)
Revenues
Cost of revenues
Gross profit
Selling, general and
administrative
Operating income
Six months ended
May 31, 2008
% of revenues
(Consolidated)
YoY change
% of revenues
%
22,205
100.0
39,421
100.0 17,215
17,784
80.1
23,910
60.7
6,125
34.4
4,420
19.9
15,510
39.3 11,090
250.9
1,401
6.3
1,754
4.5
77.5
353
25.2
34.9 10,737
355.6
3,019
13.6
13,756
Non-operating
income
41
0.2
42
0.1
0
0.5
Non-operating
expenses
465
2.1
651
1.7
186
40.2
2,595
11.7
13,146
33.3 10,550
406.4
Ordinary income
Revitalization business
+¥11,272 million (+586.5%)
Development business
-¥609 million (-59.4%)
Rental business
+¥320 million (+55.5%)
Fund business
-¥3 million (-0.7%)
Property management business +¥107 million (+45.5%)
Alternative investment business -¥5 million (-3.0%)
6
Increased Personnel Expenses
+¥212 million (+26.1%)
Average number of employees：
Six months ended May 2007: 170.5
Six months ended May 2008: 226.5 (+32.8％)
*Average of all employees at the beginning and the end of the
six months ended May 31, 2007 and 2008, respectively
+¥16 million (+14.8%)
Increased Advertising Expenses
・ Billboards in Shibuya, Roppongi and Omote-sando
・ Advertising in subways, etc.
・Advertising during World Cup preliminary rounds
Other
・ Tax and dues
+¥46 million (+34.2%)
Increase in corporate value-added tax
・ Training expenses
+¥10 million (+120.9%)
Training for additional personnel
(Management training, multilevel training)
・Fees paid
+¥39 million (+37.5%)
Increase in J-SOX consulting fees
Increased Interest Expense
・ Average balance of borrowings +¥11.5 billion (+26.1%)
As of May 2008: ¥55.8 billion
As of May 2007: ¥44.3 billion
・ Increased interest expense
+¥200 million (+44.7%)
*Average of balance at the beginning and the end of the six
months ended May 31, 2008 and 2007, respectively
Comparison of Revenues by Segment
The revitalization business was a strong driver of growth in revenues and income.
¾Segment Revenues （Consolidated）
Rental business
Fund business
Property management business
Alternative investment business
(¥ million)
45,000
39,421
¾ Large properties in the revitalization business strongly
drove growth in revenues and income.
¾ Solid growth in all other businesses except development.
40,000
(¥ million, %)
35,000
S ix months ended
May 31, 2007
30,000
(Consolidated）
25,000
20,000
Revenues
32,990
22,205
10,996
15,000
10,000
5,000
522
0 1,229
1,297 1,660
207 1,575
Six months ended
May 31, 2007
2,385
509
561
Six months ended
May 31, 2008
(Consolidated）
% of revenues
100.0
39,421
100.0
10,996
49.5
32,990
83.7
8,184
36.9
2,385
6.1
Rental business
1,297
5.8
1,660
4.2
522
2.4
509
1.3
1,229
5.5
1,575
4.0
207
0.9
561
1.4
Internal transactions
(233)
Note: Total revenues are net of revenues from internal transactions between Group businesses.
% of revenues
22,205
Fund business
8,184
S ix months ended
May 31, 2008
7
-
(261)
-
Revitalization Business
Tosei increased income by quickly selling large and medium-size properties and
primarily acquired office buildings and commercial facilities.
¾Revitalization Business Revenues/Income
Revenues
(¥ million)
Revenues
Gross profit
Operating income
35,000
Gross profit
Operating income
(¥ million)
13,194
13,080
30,000
◆ Major Sales
¾
Revenues and gross profit increased because of the sale
of large and medium-size properties including the
Ginza Wall Building, the Tomisawacho Yowa Building,
14,000
the TSI Hakozaki Building (Chuo Ward), the Yushima
1-Chome Building (Bunkyo Ward), and the Shiba
12,000
Center Building (Minato Ward).
10,000
25,000
32,990
20,000
(¥ million, %)
Office &
Retail
8,000
Revenues
Tosei
6,000
15,000
Gross profit
Gross profit margin
10,000
1,921
0
Gross profit margin
1,833
5,000
Revenues
Pegasus Gross profit
4,000
Total
10,996
Six months ended
May 31, 2007
Revenues
2,000
0
Six months ended
May 31, 2008
8
Gross profit
Gross profit margin
Properties
25,384
12,209
48.1%
4,270
590
13.8%
29,654
12,800
43.2%
8
Vacant
Buildings
941
137
14.6%
941
137
14.6%
3
Condos
769
94
12.3%
1,625
162
10.0%
2,394
256
10.7%
4
Total
27,095
12,441
45.9%
5,895
752
12.8%
32,990
13,194
40.0%
15
Development Business
Tosei restrained prices of for-sale condominiums with the aim of quick sales
because that market is weakening.
¾Development Business Revenues/Income
Revenues
(¥ million)
9,000
Sales to end-users
Sales to investors
Gross profit
Operating income
Gross profit
Operating income
(¥ million)
1,200
8,184
8,000
1,025
1,000
7,000
901
6,000
800
5,000
4,000
3,000
0
56
400
264
2,329
568
Six months ended
May 31, 2007
◆Major Sales
(Sales to investors)
¾ THE Palms Akabane (Kita Ward), THE Palms Akihabara
(Chiyoda Ward) and THE Palms Mita (Minato Ward)
◆Major acquisitions
416
2,385
1,000
Tosei restrained prices of for-sale condominiums with the
aim of quick sales because that market is weakening. Tosei
focused on acquiring land for developing office buildings.
600
7,616
2,000
◆ Overview of Business
200
¾ Acquired land in areas including Nihonbashi Hongokucho
(Chuo Ward), Kamata 5-chome (Ota Ward) and
Koishikawa 2-chome (Bunkyo Ward) for large and
medium-size projects.
0
Six months ended
May 31, 2008
9
Rental Business
Use of our lease-up network list of 18 companies and 170 players resulted
in a higher occupancy rate, and increases in rent when negotiating contract
renewals generated an increase of about ¥40 million in annual rental revenues.
¾Rental Business Revenues/Income
Revenues
(¥ million)
Rent from current assets
Gross profit
Rent from fixed assets
Operating income
Gross profit
(¥ million)
Operating income
1,000
1,800
1,600
1,400
1,660
898
900
807
800
1,297
963
577
600
1,000
526
・ Current assets: 37 properties (Compared with Nov. 30,
2007 : -7)
・Fixed assets: 21 properties (Compared with Nov. 30, 2007 : -2)
・ Strong growth in revenues and income from holdings of
400
300
400
696
488
200
100
0
0
Six months ended
May 31, 2007
large and medium-size properties
・ Steady increases in rent when negotiating contract renewals
generated an increase of ¥40 million in annual rental
revenues.
500
809
600
200
Total properties held: 58 (Compared
Compared with Nov. 30, 2007:
2007 -9)
700
1,200
800
・ Raised occupancy rate by strengthening leasing capabilities
through expansion and enhancement of rental agency
network.
Note: Number of properties refers to properties for lease as of
May 31, 2008.
Six months ended
May 31, 2008
Note: Revenues include internal transactions
(¥21 million in six months ended May 31, 2008)
10
Fund Business (Asset Balance and Fund Lineup)
Assets under management increased to ¥129.1 billion due to
the addition of large-scale buildings.
Assets under Management by Location (Asset value basis)
8.5%
Assets under Management
Tokyo 23 wards
Other
Tokyo 23 wards
Total assets
(¥ million)
64
117,246
Other
Total
9
73
Area
(¥ million)
140,000
91.5%
129,170
120,000
93,691
100,000
Office
Residential
63,416
Office
Total assets
(¥ million)
41
93,783
Residential
Total
32
73
Use
60,000
72.6%
* Tosei began disclosing assets under management during the six
months ended may 31, 2008. Through the year ended
November 30, 2007, Tosei disclosed total assets.
Properties
35,387
129,170
Assets under Management by Value (Asset value basis)
17.8%
M
ay
N 03
ov
.
M 03
ay
N 04
ov
.
M 04
ay
N 05
ov
.
M 05
ay
N 06
ov
.
M 06
ay
N 07
ov
.
M 07
ay
08
41,251
35,424
40,000
20,244
14,766
20,000
4,991
1,282
2,559
449
0
11,923
129,170
Assets under Management by Type (Asset value basis)
27.4%
80,000
Properties
Over ¥2 billion
¥1-2 billion
Under ¥1 billion
Over ¥2 billion
Total assets
(¥ million)
13
73,007
¥1-2 billion
Under ¥1 billion
25
35
33,141
23,021
Total
73
129,170
Value
25.7%
11
56.5%
Properties
Fund Business
The Tosei Group has obtained the licenses required for its investment management
operations, and asset management fees increased steadily due to growth in assets under
management.
¾Fund Business Revenues/Gross Profit
Revenues
(¥ million)
Gross profit
Operating income
(¥ million)
Revenues
Gross profit
Operating income
550
500
600
513
¾ Asset management fees increased steadily due to asset
expansion and have become a stable source of
revenues.
500
450
509
Breakdown of Fee Revenues in the Fund Business
(¥ million)
400
350
522
600
400
509
Brokerage
commission/Other
Asset management
500
300
250
300
323
400
227
300
200
229
150
356
200
Acquisition
Disposition
200
Incentive
100
100
100
50
T okumei Kumiai
dividends
-
0
0
Six months ended
May 31, 2007
△100
Six months ended
May 31, 2008
Six months ended Six months ended
May 31, 2007
May 31, 2008
Note: Revenues include internal transactions.
12
Property Management Business
Large properties helped Tosei increase revenues.
Income also increased due to efforts to reduce costs.
¾Property Management Business Revenues/Income
Revenues
(¥ million)
Revenues
Gross profit
Operating income
Gross profit
Operating income
(¥ million)
1,800
1,400
¾ Number of properties managed: 469
(Compared with Nov. 30, 2007 : +31)
600
・Office buildings: 317 (+17)
500
・Condominiums: 152 (+14)
1,575
1,600
1,229
1,200
343
¾ Revenues increased due to an increase in
the number of properties under
management and large properties.
400
1,000
300
¾ Efforts to reduce costs supported growth
in revenues and operating income.
800
600
106
400
200
200
235
◆ Overview of Results
100
44
0
0
Six months ended
May 31, 2007
Six months ended
May 31, 2008
Note: Revenues include internal transactions.
13
Alternative Investment Business
Tosei is concentrating on monetizing the projects
it has acquired and on sales activities.
◆Overview of Results
Alternative Investment Business
Revenues
(¥ million)
Revenues
Gross profit
Operating income
Gross profit
Operating income
(¥ million)
200
600
180
500
400
180
175
160
125
140
142
･Acquired real estate through like-kind exchanges, as planned
¾ Two properties valued at ¥1,071 million
120
561
300
･Added value to property holdings and sold them.
¾ Added value to (through leasing, more efficient real estate
management, etc.) and sold real estate owned by a
company acquired in September 2007.
･Purchased NPLs (including bulk purchases of NPLs collateralized
by real estate and uncollateralized NPLs)
¾ Acquired two properties valued at ¥111 million
Debt and Real Estate Holding Balances
4,000
3,530
Real estate holding balance
3,500
100
80
200
100
Debt balance
2,500
40
1,985
2,497
3,302
1,500
20
1,000
1,722
1,985
500
0
Six months ended Six months ended
May 31, 2007
May 31, 2008
1,722
2,000
0
0
3,472
3,000
60
207
(¥ million)
14
1,033
169
Nov. 30,
2005
Nov. 30,
2006
Nov. 30,
2007
May 31,
2008
Balance Sheet Summary （Consolidated‐1）
(¥ million)
As of Nov.
30, 2007
Total assets
Cash and deposits
Inventories
(Real estate)
Inventories
(Non-consolidated)
Pegasus
Capital, Ltd.
Fixed assets
(Real estate)
Other assets
[Capital from funds
included in above]
Decrease
As of Feb.
29, 2008
Increase
Decrease
As of May
31, 2008
Increase
86,922
(3,163)
83,758
6,862
90,621
5,181
7,622
12,804
308
13,113
53,422
(996)
11,721
53,179
(996)
(5,137)
19
243
(419)
4
13,006
62,905
(21,223)
57,543
(16,086)
5,361
13,420
11,741
1
1
9,256
1
61,683
1
9,256
61,439
0
0
243
(58)
32
12,979
2
5,414
(889)
-
(31)
1. Current Inventories
・Sales of large and medium-size properties progressed as planned in the first quarter, decreasing
inventories ¥9.4 billion. Purchases in the second quarter resulted in an increase of ¥8.2 billion.
Therefore, as of May 31, 2008, inventories were ¥61.6 billion, a decrease of ¥1.2 billion from
November 30, 2007. This is equivalent to assumed revenues of approximately ¥89.6 billion.
(1,679)
4,524
15
(31)
2,845
-
2. Properties for Funds
・Four of five properties held at December 1,
2007 were sold in the first quarter.
(31)
Balance Sheet Summary （Consolidated‐2）
(¥ million)
As of Nov.
30, 2007
Liabilities and
Net Assets
Interest-bearing
debt
86,922
Decrease
83,758
(3,163)
6,862
90,621
12,858
3,445
28,082
(2,979)
4,131
29,234
8,933
18,459
(3,771)
8,727
23,415
12,378
Interest-bearing
debt (short-term)
45,587
(20,950)
Interest-bearing
debt (long-term)
14,103
(4,577)
Net worth ratio
As of May
31, 2008
Increase
(6,750)
(25,527)
Net assets
Decrease
46,541
59,690
Other liabilities
As of Feb.
29, 2008
Increase
*
52,649
*
*
*
7,979
3,077
11,056
606
11,662
19,252
6,908
26,160
147
26,308
22.1
31.2
Decrease in Interest-bearing Debt
Increase in Net Worth Ratio
Interest-bearing debt decreased ¥7.0 billion from November 30, 2007, with sales of
large and medium-size properties in the first quarter and acquisitions in the second
quarter.
・The net worth ratio increased substantially from
November 30, 2007 due to the decrease in
inventories.
* Includes long-term loans and bonds transferred from long-term debt to long-term debt due within one year (¥2,188 million in the first quarter and ¥3,771 million in the second quarter).
16
29.0
Inventories (Consolidated)
(¥ million)
Value of inventories
as of May 31, 2008
61,683
Assumed revenues
89,618
Breakdown of Inventory Balance
Inventory
By property
type
Revitalization
Office buildings
Condominiums
Single-family
dwellings
Others
Total
Development
(Incl. Alte rnative
inve stme nt busine ss)
No. of
propertie s
Amount
Revenues
Revitalization
No. of
prope rtie s
Amount
Assumed
revenues
Development
(Incl. Alte rnative
inve stment busine ss)
24,691
37
19,052
10
28,540
36,218
64,758
6,237
14
10,231
10
7,395
15,348
22,743
-
0
-
0
-
-
-
1,379
10
89
1
2,002
113
2,116
32,309
61
21
37,938
51,679
89,618
29,373
* Assumed revenues are estimates based on information available to the Tosei Group on May 31, 2008. Actual results may vary substantially due to a
number of factors.
* Value of inventories is the carrying amount at May 31, 2008 and will increase due to factors including the addition of value and construction expenses.
17
Summary of Consolidated Statements of Cash Flows
(¥ million)
Six months
ended
May 31, 2007
Six months
ended
May 31, 2008
(11,542)
14,434
25,977
2,605
13,335
10,729
173
219
45
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation
Net increase (decrease) in assets and liabilities
(11,205)
1
1
13,803
(1,717)
1,398
(328)
1,362
1,690
Sales of (purchases of) property and equipment
(77)
528
606
Investments in securities
131
Others
Net cash provided by (used in) investing activities
Others
(3,116)
2,598
Change
(382)
0
833
1. Net Increase in Assets and
Liabilities, Including:
Decrease in assets due to sale of inventories,
etc.
Six months ended May 2008:
¥22,220 million
¥16,341 million
Increase in assets due to purchase of
inventories, etc.
¥20,998 million
¥33,041 million
(131)
2
1,216
2. Cash Flows from Investing
Activities, Including:
11,366
(7,866)
Net (decrease) increase in debt
11,890
(7,041)
Proceeds from new stock issue
0
Net cash (used in) provided by financing activities
Cash dividends paid
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents of subsidiarie s re move d from
consolidation
Cash and cash equivalents at end of the period
(523)
(504)
6,484
(5)
5,974
18
0
(825)
(19,232)
3
(18,931)
Refund of guarantee deposits:
(¥871 million)
0
(301)
7,931
8,435
5,181
(1,303)
0
5
13,113
7,138
3. Net Decrease in Debt,
Consisting of:
Net decrease in short-term borrowings:
(¥1,790 million)
Net decrease in long-term debt:
(¥5,239 million)
II. Tosei’s View of the Operating Environment
and Fundamental Development Initiatives
for the Fiscal Year Ending Nov. 2008
19
The Tosei Group’s Core Market
Factors such as tighter regulation and the slowdown in real estate lending are causing a
shakeout among players.
Change in Conditions
Conditions during Fiscal Year Ended November 2007
Economic Trends
・Stable gains in corporate performance (Tokyo, large
corporations)
・Personal income growth was weak
Real Estate and Financial Markets
・Rising land prices and construction costs
・Rising prices for residential condominiums caused
buyers to hold off on purchases
・Housing investment slowed due to the revised Building
Standard Law
・Concerns about reduced liquidity due to tighter
regulation and other issues
・Tighter credit due to US sub-prime mortgage crisis
Player Trends
・Fund management system tighter due to
implementation of the Financial Instruments and
Exchange Law
・Concerns about fund procurement (stance of financial
institutions)
・Scandals such as falsified fire resistance
z Economic trends are unclear. Listed companies are projecting lower
earnings for the year ending March 2009 for the first time in seven
fiscal years.
z
z
z
z
z
z
z
z
Land prices are polarizing, CAP rate is rising
Impact of the revised Building Standard Law subsided
Continued rise in construction costs
Sub-prime mortgage crisis causing non-recourse lenders to scale
back or withdraw.
Tighter lending limiting purchasing power of end buyers
For-sale condominium market is weakening.
Strong desire among global investors to invest in core assets
Vacancy rate in large office buildings up slightly
z Reduced transaction volume causing increase in players with
financing problems
z Downward revision of performance among players that bought at
high prices and now have slumping transaction volume
z Polarization progressing as some players cannot respond to factors
such as registration requirements for investment management
operations
z Asset management companies with no fund growth are struggling
20
Environment: Outlook for the Real Estate Industry and Responses
In a challenging market environment, Tosei is executing steadily to generate stable profits.
Tosei’s Business Outlook
Economy
Tosei’s Responses
Corporate earnings are projected to decrease and economic
trends will become increasingly unclear.
zConcentrate on selectively buying and developing properties with solid
tenant demand such as commercial properties near train stations
Construction cost will rise and the for-sale condominium
market will weaken
zWe are strengthening our financial base so that we can quickly
acquire properties if prices return to former levels.
Slight rise in the vacancy rate at large office buildings
z Tosei will strengthen leasing capabilities by using its Lease-Up
Network List of 18 companies and 170 leasing decision makers.
Market
Increase in funds that are selling properties
zHighly selective acquisitions of premium quality properties
Polarization of land prices and rise in CAP
Investment
Lending
Strong desire among global investors to invest in core
assets
z Focus on acquiring and developing highly competitive large and
medium-size properties
Unfavorable debt market conditions projected to continue
in the near term
Players that cannot get funding will be unable to buy new
properties
zDiversify exit options for small-to-medium-size portfolio properties
zHold profitable properties for the medium term, until the market
changes
z Promote enhancement of our financial base and stable fund
procurement capabilities that allow us to selectively invest in quality
properties
Fewer non-recourse lenders
zStrengthen relationships with lenders
zUse the TOSEI Information Network List of 300 companies and 700
players to further enhance and diversify exit options
Lower transaction volume will increase number of players
with financing problems
Players
Downward revision of performance among players that bought at high
prices and now have slumping transaction volume
Progressive polarization as some players cannot respond to factors such as
registration requirements for investment management operations
zWe project increased opportunities to acquire small asset
management firms because our subsidiaries have obtained the
necessary licenses for investment management and other businesses
Increasing difficulties for asset management companies with no
fund growth
zStrengthen ability to build relationships with global investors
21
III. Outlook for the Fiscal Year
Ending Nov. 2008
22
Outlook for the Fiscal Year Ending Nov. 2008
In the second half we will revise the sale prices of portfolio properties to divest those causing concerns. In
addition, we will focus on selling properties that are not forecast to be profitable. As a result, we expect to
generate significant year-on-year gains in revenues and income for the full fiscal year.
(¥ million, %)
FY ended Nov.
30, 2007
(Consolidate d)
Revenues
FY ending Nov. 30, 2008
(forecast)
(Consolidate d)
YoY change
%
% of revenues
40,085
53,776
100.0
13,690
34.2
Operating income
9,006
12,643
23.5
3,637
40.4
Ordinary income
7,949
11,088
20.6
3,138
39.5
Net income
4,557
6,567
12.2
2,009
44.1
23
Performance Forecasts for the Year Ending November 2008
(¥ million, %)
Initial Plan
1Q Projections
Interim Projections
(Announced Jan. 1, 2008)
(Announced Mar. 31, 2008) A
(Announced Jul. 10, 2008) B
(Consolidated）
% of revenues
(Consolidated）
% of revenues
(Consolidated）
% of revenues
YoY change
(A-B)
Amount
%
・Revised projected proceeds from sales of
portfolio properties for the fiscal year.
56,872
100.0
56,872
100.0
53,776
100.0
(3,096)
(5.4)
・Revised plans in order to quickly sell
properties not forecast to be profitable.
41,181
72.4
41,445
72.9
39,935
74.3
(1,510)
(3.6)
6,925
12.2
6,627
11.7
5,349
9.9
(1,278)
(19.3)
Rental business
3,187
5.6
3,219
5.7
3,413
6.3
194
6.0
Fund business
1,211
2.1
1,211
2.1
831
1.5
(379)
(31.3)
2,778
4.9
2,778
4.9
2,778
5.2
1,994
3.5
1,994
3.5
1,873
3.5
Revenues
Operating income
(405)
13,843
-
(404)
24.3
13,843
24.3
(8.7)
(813)
(6.1)
(5.6)
(492)
(252.3)
1,762
51.6
63
3.7
62.3
233
28.0
(521)
(69.1)
13,421
32.4
500
7.2
195
2.9
1,594
50.0
1,698
52.8
814
67.3
754
12,608
(297)
186
6.7
186
6.7
186
6.7
357
17.9
357
17.9
234
12.5
Corporate and eliminations
Non-operating income (expenses)
Ordinary income
Extraordinary gains
Income taxes
Net income
-
(1,199)
32.1
Fund business
0
(6.1)
31.6
13,224
12,643
-
(121)
0.0
23.5
Rental business
(405)
0
0
Fund business
・ Fee income is decreasing because it is taking
longer to increase assets under management.
・ Expenses have increased because of the
preparation of the stringent internal control
systems required for subsidiaries in the fund
business by the Financial Instruments and
Exchange Law.
・Revised projected proceeds from sale of real
estate acquired through means such as likekind exchanges.
(122)
(34.4)
Corporate expenses and others
・Revised planned selling, general and
administrative expenses such as advertising
expenses.
-
(2,771)
-
(2,084)
-
687
(24.8)
(1,753)
(3.1)
(1,753)
(3.1)
(1,555)
(2.9)
198
(11.3)
12,090
21.3
12,090
21.3
11,088
20.6
123
0.2
122
0.2
127
0.2
5,479
9.6
5,479
9.6
4,648
8.6
(830)
(15.2)
6,733
11.8
6,733
11.8
6,567
12.2
(166)
(2.5)
24
・Revised plans to sell properties scheduled for
sale in the current fiscal year to the next
fiscal year and beyond.
0.0
(2,834)
・Revised projected proceeds from
condominium sales for the fiscal year.
(1,001)
4
(8.3)
3.9
Income taxes
・The Board of Auditors of the Tokyo
Metropolitan Government has approved
Tosei’s Management Innovation Plan.
Consequently, Tosei expects to receive
preferential tax treatment in the year ending
November 30, 2008.
Shareholder Returns Policy
Fundamental Shareholder Returns Policy
¾Tosei’s basic policy is to continuously provide stable dividends that are
comprehensively determined to be in balance with internal reserves.
¾Tosei targets a consolidated payout ratio of 20 percent for the FY ending November
2008 as a Group management indicator (a non-consolidated payout ratio of 20
percent has been used up to the FY ended November 2007)
¾The Company’s policy is to consider ways to enhance the liquidity of trading in its
stock with an eye on stock market trends.
19.6
19.6
(non-
(consolidated)
(consolidated)
(nonconsolidated)
consolidated)
(nonconsolidated)
consolidated)
(nonconsolidated)
consolidated)
20.1
20.1
25
N
ov
.
08
N
Note: The dividend for the fiscal year ended Nov. 2004 has been retroactively adjusted to reflect a stock split.
st)
19.2
19.2
(non-
07
10.3
10.3
(non-
(F
o
4.2
4.2
ov
.
3,500.00
3,500.00
06
2,200.00
2,200.00
N
1,400.00
1,400.00
ov
.
450.00
450.00
05
120.00
120.00
N
FY
FYended
ended
Nov.
Nov.07
07
ov
.
FY
FY ended
ended
Nov.
Nov. 06
06
04
FY
FY ended
ended
Nov.
Nov. 05
05
(non(nonconsolidated
consolidated))
Payout ratio
Payout ratio (%)
4,000
3,500
3,500
2,200
3,000
1,400 19.6 20.1
2,500
2,000
19.2
1,500
10.3
1,000 4.2
500 120 450
0
ov
.
Payout
Payoutratio
ratio
(%)
(%)
FY
FY ended
ended
Nov.
Nov. 04
04
FY
FYending
ending
Nov.
Nov.08
08
(Forecast
(Forecastas
as
of
Jan.
of Jan.11)
11)
N
Dividend per
share (¥)
Cash dividends
Dividend per share (¥)
re
ca
Year-end dividend forecast for the fiscal
year ended Nov. 2008
35
30
25
20
15
10
5
0
Initiatives for the Fiscal Year Ending Nov. 2008 (1) Revitalization Business
Focus on highly liquid large and medium-size properties and properties with high tenant
demand including commercial properties near train stations.
Plaza Nakayama (in front of JR
Shimousanakayama Station)
Kikumoto Plaza Building (in front of
JR Chigasaki Station)
★
★
Nihonbashi Hamacho Building
26
Initiatives for the Fiscal Year Ending Nov. 2008 (2) Development Business
(Office Buildings)
Numerous office building projects under way in convenient office districts
NishiNishi-Ikebukuro
5-Chome Building Project
Shinjuku 55-Chome
Building Project
Kayabacho Building
Project
¾ Features of Office Buildings under Development
・Located in business districts with convenient transportation
・Superior designs featuring glass facades
・Rooftop greening counters heat island
*These projects are in the planning stage and project names and details are subject to change.
27
Kanda Ogawamachi Tosei Building II
(Completed Apr. 2008)
(Commercial Buildings)
Tosei is developing the T’S BRIGHTIA series of commercial properties near train
stations, where tenant demand is strong.
T’S BRIGHTIA Kichijoji
T’S BRIGHTIA Tokiwadai
★
★
4 minutes walk from Kichijoji Station, JR Chuo Line
T’S BRIGHTIA Shimokitazawa
★
5 minutes walk from Shimokitazawa, Odakyu Odawara Line
*“T’S BRIGHTIA” is the brand name for Tosei commercial properties (launched June 30, 2008).
28
1 minute walk from Tokiwadai Station, Tobu Tojo Line
Kunitachi Ekimae Project
★
2 minutes walk from Kunitachi Station, JR Chuo Line
(Condominiums)
In the condominium development business, we emphasize income-producing properties
that are designed to match local characteristics.
Leased
Condominiums
From Left:
・THE Palms Shinkoiwa
・Toritsu Daigaku Condominium
Project
・Botan 33-Chome Project
For-Sale
Condominiums
From Left:
・THE Palms Ota Chuo
・ THE Palms Takenotsuka
29
Initiatives for the Fiscal Year Ending Nov. 2008 (5) Heiwajima 4-Chome
Building Project
Steady business development with completion scheduled for spring 2009
¾ Set apart from urban center offices by integration with nature
■ A creative garden forms a greenery
network through integration with
Heiwa no Mori Park.
■ Comfortable office terraces
bring the outside inside.
■ Dedicated tenant stairways connect
office interiors.
¾ A people- and environment-friendly construction plan
◆Property Overview
Location：Heiwajima 4chome, Ota Ward
Standard floor area:
1,908.84 m2（577.4 tsubo）
Site area: 4,694.48 m2
（1420.0 tsubo）
Zoning: Light industrial/
Heiwajima Area Plan
Designation
Access: 9-minute walk to
Heiwajima Station, Keihin
Kyuko Line
・ Double roof reduced thermal loading on the roof
areas exposed to the sun, and rooftop greening
helps counter heat island.
• Comfortable natural ventilation system.
• Use of lighting fixtures that reduce energy
consumption (Eco Roomy) reduces operating costs
by 25 percent compared to double-lamp fixtures.
• Reduced energy consumption (low-E double
glazing).
• Excellent thermal insulation raises air
conditioning efficiency.
30
Initiatives for the Fiscal Year Ending Nov. 2008 (6) Rental Business
We are using our information network list of 300 companies and 700 players
with the aim of further raising high building occupancy rates.
Principal Tosei Portfolio Properties
¾
¾
Tosei has changed the operating contractor of
Takaido Tosei Studio to increase its occupancy rate.
58 portfolio properties as of May 31, 2008 （37 held
under current assets, 21 held under property and
equipment)
*67 portfolio properties as of November 30, 2007 (44 under
current assets, 23 under property and equipment)
Toranomon Tosei Building
・Toranomon, Minato Ward
・Coffee shop chain store on 1F;
rental office space on 2F-3F; 4F
and above occupied by Tosei
Takaido Tosei Studio
・Miyamae, Suginami Ward
・Rental photography studio
Increasing occupancy including
recent use for filming a famous
television series
Uchikanda Kitahara
Building
・Uchikanda, Chiyoda
Ward
・SRC; 9 floors
・CAP rate: 11.8%
Meguro Tosei
Building
・Osaki, Shinagawa Ward
・Steel reinforced concrete;
1 basement floor + 8 floors
above ground
・CAP rate: 11.6%
Ginza Premier
Building
・Ginza, Chuo Ward
・Steel-reinforced concrete;
1 basement floor + 9 floors
above ground
・CAP rate: 10.6%
*As of May 31, 2008
31
Initiatives for the Fiscal Year Ending Nov. 2008 (7) Fund Business
Subsidiary Tosei Asset Advisors, Inc. has obtained a license for its investment management
and other businesses, but is being prudent and selective in making purchases.
Assets under Management
¾ Expanding relationships with overseas investors
¾ Marketing its services with the aim of increasing
assets under management
¾ Overview of Tosei Asset Advisors, Inc. and its
system
1. Registered asset manager (first example of
change from a REIT)
2. Licensed and registered for agency and advisory
business
3. Has executed an asset transfer contract with
Tosei Corporation for asset management operations.
(¥ million)
180,000
166,151
160,000
140,000
120,000
100,000
129,170
80,000
60,000
93,691
63,416
40,000
41,251
20,000
(¥ billion)
Nov. 06
et
）
N
ov
.0
8
M
ay
（T
ar
g
08
7
.0
N
ov
07
ay
M
N
ov
.0
6
0
32
Nov. 07
Nov. 08
Initial plan
¥41.3
¥85.0
¥130.0
Actual &
Target
¥41.2
¥93.6
¥166.1
(Target)
Building the Corporate Brand (Promotion Activities)
10.9% of businesspeople in the 23 wards of Tokyo recognize our corporate name. (Source: Feb. 08 survey)
¾ Advertising on public transportation in the Tokyo area such as subways and city buses to spread awareness of our corporate name and logo
¾ Advertorials in business magazines to promote understanding of Tosei
¾ Excellent exposure for corporate name and logo on highly rated nationwide network TV programs through advertisements during the
preliminary rounds of the World Cup
Media for Spreading Awareness of Our Corporate Name and Logo
Current Ads about Rooftop Greening
Advertorials
Advertising Signage
Mar. 17, 2008: World Cup preliminary
elimination round, Japan vs. Bahrain
Ginza, Hibiya and Marunouchi subway lines
Media to Promote Understanding
of Our Business Activities
Nikkei Business, Jan. 28, 2008
Outdoor Billboards
Ads on City Buses
・Ran
Ran from July 1 to Dec. 31
・Centered on Tosei’
Tosei’s home Minato Ward (Shimbashi
to Shibuya routes)
表参道
表参道
33
Nihon Keizai Shimbun, Jan. 28, 2008
Rooftop Greening Initiative
¾
Worldwide measures to counter global warming
◆The Fukuda Vision – Post-Kyoto Efforts (June 2008)
Long-term Targets (for 2050)
By 2050, reduce emissions of greenhouse gases 60-80 percent
from current levels
Medium-term Targets (2020-2030)
A 14 percent reduction is possible by 2020.
Announce interim targets in 2009
◆Kyoto Protocol
Sets targets, timetables and other measures for reducing emissions of the
greenhouse gases CO2 and methane, which are among the causes of global
warming. Enacted in 2005. Currently, 182 countries are signatories. As of
May 2008, the target for Japan, one of the leading signatories, was a 6
percent reduction from 2008 to 2012.
◆Plan to Achieve the 2005 Targets of the Kyoto Protocol: Urban Design that
Reduces CO2 emissions
・Reduce CO2 emissions and ameliorate environmental warming by
countering heat island through measures such as greening
・Reduce CO2 from offices, shops and other commercial facilities
・Improve energy efficiency of buildings
・Promote measures to reduce carbon emissions including energy
efficient lighting and homes
・Revise measures such as emission trading and environmental taxes
Tosei’s Efforts to Counter the Heat Island Phenomenon
Announced a policy of rooftop greening for all
property holdings, in principle
*As of May 2008
Main Effects of Rooftop Greening
Reduction of heat island
phenomenon
Cleans the air (absorbs CO2 and
NOx, supplies O2)
Less energy use, better insulation
Pleasant, relaxing scenery
2,000m2
Cumulative total of approx.
of greening achieved
at 47 new and existing properties
Environmentally Conscious Office Development
Takanawa Tosei Building: 135m2 of greening
10% reduction in electricity
use by top-floor tenant
08/8/5 12:00
Reduction of
heat island phenomenon
08/8/5 21:00
Heiwajima 4-Chome Building Project
34
Rooftop of Toranomon Tosei Building
Approval of Tosei’s Management Innovation Plan
Tosei applied for approval from the Tokyo Metropolitan Government for its Management Innovation Plan,
which defines the efforts of its revitalization business to in principle implement rooftop greening for all
property holdings as the environmentally sound addition of value to real estate. Tosei received approval for
this plan from the Board of Auditors of the Tokyo Metropolitan Government in March 2008.
Favorable tax treatment: exemption from the tax on undistributed retained earnings
Overview of Management Innovation Plan
The Management Innovation Plan is based on the Law on the Promotion of New Activities by SMEs. Approved plans
receive the preferential treatment in (a) through (e) below. However, preferential treatment upon approval is not
guaranteed, but is subject to investigation by the institution granting the desired preferential measures once a plan is
approved.
(a) Preferential tax treatment (tax breaks on capital investment, exemption from the tax on undistributed retained
earnings for specified family-owned companies)
(b) Preferential guarantees and loans
(c) Investment and grant support
(d) Sales channel development support
(e) Other assistance measures (reduction of or exemption from patent-related fees)
Tosei has presented a three-year plan and plans to receive a three-year exemption from the
tax on undistributed retained earnings.
35
I. Introduction to Tosei
1. Tosei Group Overview
36
Reference
Materials
Group Overview
Name
Name
Address
Address
Date
Dateestablished
established
Capital
Capital
Representative
Representative
TOSEI
TOSEI CORPORATION
CORPORATION
4-2-3
4-2-3 Toranomon,
Toranomon, Minato-ku,
Minato-ku, Tokyo
Tokyo
February
February 2,
2, 1950
1950
¥4,148,020,000
¥4,148,020,000
Seiichiro
Seiichiro Yamaguchi,
Yamaguchi, President
President and
and CEO
CEO
Fiscal
Fiscalyear-end
year-end
November
November 30
30
Stock
Stock listing
listing
TSE,
TSE, Second
Second Section
Section
Total
Total outstanding
outstanding shares
shares
Number
of
shareholders
Number of shareholders
Shareholder
Shareholder composition
composition
Share
Share status
status
Employees
Employees
Main
Main
affiliated
affiliated
companies
companies
376,840
376,840
7,005
7,005
・Individuals/others
(217,421shares)
shares)
・Individuals/others 57.70%
57.70% (217,421
institutions
(34,031
・Financial
9.03%
shares)
・Financial institutions 9.03% (34,031shares)
companies
(3,086
shares)
・Securities
0.82%
・Securities companies 0.82% (3,086 shares)
・Foreign
(57,689shares)
shares)
companies 15.31%
・Foreigncompanies
15.31% (57,689
(64,613
shares)
・Other
companies 17.14%
(64,613
shares)
・Othercompanies
17.14%
145
145 (Non-consolidated)
(Non-consolidated) 222
222 (Consolidated)
(Consolidated)
Tosei
Tosei Revival
Revival Investment
Investment Co.,
Co., Ltd.
Ltd.
Tosei
Tosei Community
Community Co.,
Co., Ltd.
Ltd.
Tosei
Tosei Asset
Asset Advisors,
Advisors, Inc.
Inc.
Tosei
Asset
Management
Tosei Asset Management Corp.
Corp.
As of May. 31, 2008
37
Reference
Materials
History
Revenues
(¥ million)
Changed
Changedcompany
company
name
nametotoTosei
Tosei
Corporation
Corporation
1950
1950Established
EstablishedYukari
YukariKogyo
KogyoCo.,
Co.,Ltd.
Ltd.
1983
Company
name
changed
to
Tosei
1983 Company name changed to ToseiBuilding
BuildingCo.,
Co.,Ltd.
Ltd.
1994
Seiichiro
Yamaguchi
appointed
as
President
1994 Seiichiro Yamaguchi appointed as President
60,000
56,000
52,000
48,000
44,000
40,000
Began
36,000
Beganreal
realestate
estate
revitalization
revitalization
32,000
business
business
28,000
Changed
ChangedJapanese
Japanese
company
24,000
companyname
nametoto
Tosei
Fudosan
Tosei Fudosan
20,000
16,000 Began developing
Began developing
condominiums
12,000
condominiums
8,000
4,000
0
94
Notes: 1.
2.
*3
4.
95
96
Moved
Movedhead
headoffice
office
totoToranomon
Toranomon
Listed
Listedon
onTokyo
Tokyo
Stock
StockExchange,
Exchange,
Second
SecondSection
Section
Began
Begandeveloping
developing
office
officebuildings
buildingsand
and
commercial
commercialfacilities
facilities
Acquired
AcquiredReal
RealEstate
Estate
Investment
InvestmentAdvisor
Advisor
License
License
97
98
99
Listed
Listedon
on
JASDAQ
JASDAQ
01
02
03
04
TRI: Tosei Revival Investment Co., Ltd.
TC：Tosei Community Co., Ltd.
TAA: Tosei Asset Advisors, Inc. (name changed from Tosei REIT Advisors, Inc. in April 2008)
TAM: Tosei Asset Management Corp.
TAA
TAA
・・Investment
Investment
management
management
business
business
・・Type
Type22financial
financial
instrument
instrument
business
business
・・Registered
Registered
investment
investment
advisory
advisoryand
and
agency
agencybusiness
business
Established
Established
private
privateequity
equity
fund
fund
00
38
4
TAM
TAM4established
established
TRI1 1established
TRI established
consolidated
TC2 becomes
2
consolidated
TC becomes
subsidiary
3
established
TAAsubsidiary
TAA3 established
Implementation
Implementation
ofofreal
realestate
estate
M&As
M&As
using
usingLBOs
LBOs
Began
Begandeveloping
developing
single
singlefamily
family
dwellings
dwellings
・・Type
Type22financial
financial
instrument
instrument
business
business
・・Registration
Registrationofofthe
the
advisory
advisoryand
and
agency
agencybusiness
business
05
06
07
08
(Projected)
Reference
Materials
Tosei Group Advantages (1) Capabilities over a Broad Range of Business Areas
With uniform capabilities over a broader range of business areas,
Tosei has solid advantages over other companies in the real estate industry.
“Only One” Business Model
Businesses
Company
type
Tosei
Real
Estate
Revitalization
Real Estate Development
Increase
Value
Condominiums
○
○
○
Developers
Real
Estate
Rental
Real Estate Funds
Single
Office and
Manage Structure
Family Commercial
Holdings
Funds
Dwellings Facilities
○
○
○
○
○
Property
Management
Adminis-
Alternative
Investment
○
○
Manage tration and
Property
Assets Management
○
○
Real estate
traders
△
Principal Investors,
Real Estate Funds
○
△
○
○
△
Real Estate
Funds
△
△
○
○
○
Rental/Other
△
○
39
△
○
Tosei Group Advantages (2) Advantages in Purchasing and Sales
Reference
Materials
Tosei secures high-quality purchasing information and diverse purchasers
through its information network list of 300 companies and 700 players
What gives Tosei’s original purchasing and sales routes the edge?
Relationships of trust with key players in Japan and overseas
Business feature:
Diverse investment tools
Relationships of trust established
with influential players in Japan
and overseas:
Information Network List
(300 companies, 700 players)
Purchasing
Sales
Trends in the Real Estate Brokerage Businesses
z To remain competitive, brokers bring property
information to those who will make a quick decision
and follow through with purchase.
Key Sales Points
z A broad information network is needed because
purchasers differ depending on the property.
z Good relationships with global investors are important
due to active interest in Japanese real estate from
overseas investors, primarily Asian.
Key Purchasing Points
z Having diverse investment tools, and ability to
purchase regardless of property size or use.
Functional features:
Speed of decision-making
Track record of fulfilling
promises
40
I．Introduction to Tosei
2．Examples of Tosei Group Properties
41
Reference
Materials
Examples of Tosei Group Properties (1)
Ueno Tosei Building
Rooftop
Rooftop
Greening
Greening
¾
Location:
Higashi-Ueno 4-chome, Taito
Ward
Land area: 966.28m2 （292.30 tsubo）
Floor space: 7,170.53m2 （739.70 tsubo）
Construction: Steel frame, 10 floors above
ground
Environs:
3-minute walk to JR Ueno Contracted rents by
floor (¥/tsubo)
Station
Use:
Offices
1F 26,000
Completed: May 2007
2-3F 22,000
4-7F 21,000
8-9F 21,000
42
¾
¾
¾
¾
A large-scale property with 170
tsubo/floor, rare in this area
Has high-level utilities and floor
plans for this area. Glass and
aluminum construction give the
exterior a stylish appearance.
Average area rents are approx.
¥16,000/tsubo (as of September 2005).
Concluding contracts at rents of
¥21,000 26,000/tsubo, which is
approximately 29.4% more than the
initial estimate of ¥17,000
Cap rate at acquisition: 7.75%
Reference
Materials
Value-Up
Shibakoen Building (Changed use)
4F/5F
owner’s house
Location:
Land area:
Floor space:
Construction:
Environs:
Use:
Completed:
Shibakoen 3-chome, Minato Ward
205.93m2 (62.29 tsubo)
848.77m2 (256.75 tsubo)
Steel-reinforced concrete, flat roof,
2 basement floors and 4 floors
above ground
8-minute walk to Tokyo Metro
Kamiyacho Station
(Before value-up): Offices and
residences
(After value-up): Offices
January 2004
Hatsudai Building (Changed use)
3F office
2F office
1F shop
B1F bar
Before
B2F bar
Rooftop
Rooftop
Greening
Greening
Use:
Completed:
Honmachi 1-chome, Shibuya Ward
967.95m2 (292.80 tsubo)
1,605.05m2 (485.52 tsubo)
Steel frame, flat roof, 4 floors
1-minute walk to Keio Hatsudai
Station
(Before value-up): Vocational
school
March 2002
Before
4F office
3F office
2F office
1F shop
B1F bar
B2F bar
After
¾ Repaired areas that had
deteriorated
¾ Expanded small classrooms on
the second and third floors to two
rooms each
¾ Met specifications for offices on
the second to fourth floors by
installing mini-kitchens on
second to fourth floors
¾ Replaced fountain in vaulted
courtyard with sculpture
¾ Greened roof terrace
Location:
Land area:
Floor space:
Construction:
Environs:
5F office
¾ Separated the fourth and
fifth floors, which the
previous owner used as a
residence, and converted
them to office specifications
¾ Brought the building
entrance up to legal
specifications
¾ Repaired deteriorated
areas of exterior walls
Value-Up
43
After
Reference
Materials
Kami Ochiai Building (Changed use)
Rooftop
Rooftop
Greening
Greening
Location: Kami Ochiai 2-chome, Shinjuku
Ward
Land area: 439.00m2 (about 132.79 tsubo)
Floor space: 1,390.92m2 （about 420.75 tsubo）
Construction: Reinforced concrete, 1 basement
floor and 4 floors above ground
Environs: 1-minute walk to Tokyo Metro
Ochiai Station
Use: (Before value-up): Offices (After valueup): Offices
Completed: May 8, 1991
Hongo 2-Chome Building (Interior renovation)
Location: Hongo 2-chome, Bunkyo Ward
Floor space: 618.53m2 （about 187.10 tsubo）
Construction: Reinforced concrete, steel-reinforced
overhanging balconies, 1 basement and 6
floors above ground
Environs: 6-minute walk to Tokyo Metro Hongo
Sanchome Station; 9-minute walk to JR
Suidobashi Station
Use: (Before value-up): Offices
Completed: October 18, 1983
¾ Increased rentable area by
removing reception counter on the
first floor and changing office
specifications
¾ Converted research areas on B1F
through fourth floor to offices
¾ Eliminated the irregularly shaped
reception area on fourth floor to
create more regular rentable space
¾ Added greenery to the roof and roof
terrace
Before
Value-Up
After
¾ Plumbing relocated
to expand area
available for office
space
¾ Removed partition
walls to create two
apertures that allow
greater freedom of
use and enhance
natural light
¾ Remedied illegal
slab apertures
Value-Up
Before
44
After
Reference
Materials
Nishi Ayase Condominium (Interior and exterior renovation)
Before
Value-Up
¾ Increased revenues by
converting the 140m2 fourth
floor, which the former owner
had occupied, into three easily
leased residences (1LDK and
2LDK)
¾ Improved security with key
upgrades for each unit
¾ Dismantled the rebar
processing facility on the first
floor and used the 6m ceiling
height to convert the area into
a warehouse
Location: Nishi Ayase 1-chome, Adachi Ward
Land area: 875.98m2 （about 264.98 tsubo）
Floor space: 1,423.73m2 （about 430.67 tsubo）
Construction: Reinforced concrete, steel frame,
5 floors above ground
Environs: 2-minute walk to JR Kosuge
Station; 9 minutes walk to JR
/Tokyo Metro Ayase Station
Use: (Before value-up) Residences and rebar
processing facility
(After value-up) Residences and
warehouse
Completed: June 1990
After
45
Reference
Materials
THE Palms Gotanda
(Interior and exterior renovation)
◆ Property Overview
Location: Nishi Gotanda 3-chome, Shinagawa Ward
Construction: Steel-reinforced concrete, 11 floors
above ground
Environs: 4-minute walk to Tokyo Metro Ningyocho
Station
Use: (Before value-up) Shops, offices and residences
(After value-up) Same
Completed: March 1981
¾ Renovated and added
value to a property built
in 1981
¾ Completely refinished
three facades
¾ Complete renovation of
common area design
including the entrance
and the exterior
¾ Installation of a lighted
wall inside entrance
After
Before
Value-Up
Kanda Ekimae Building (Exterior renovation)
Location: Kajimachi 2-chome, Chiyoda Ward
Construction: Steel-reinforced concrete, 2 basement
floors, 7 floors above ground
Environs: 1-minute walk to Kanda Station, JR
Yamanote and Chuo lines
Use: (Before value-up) Office
(After value-up) Office
Completed: January 1965
¾ Large-scale renovation
using a glass wall on the
east and west facades
¾ 100% occupancy after
renovation, with
numerous parties
expressing a desire to
purchase
Value-Up
46
Before
After
THE Palms Ota Chuo
Location: Chuo 3-chome, Ota Ward
Land area: 1,735.50m2 (about 524.98 tsubo)
Floor space: 4,143.53m2 (about 1,253.41 tsubo)
Construction: Reinforced concrete, 5 floors
above ground
Environs: 8 minutes by bus to Omori Station,
JR Keihin Tohoku Line, 18minute walk to Omorimachi
Station
Use: 48-unit residential condominium
Completed : July 2008
THE Palms Setagaya Sakura
Rooftop
Rooftop
Greening
Greening
◆ Property Features
¾ Three low-rise buildings with gardens that
express the five motifs of light, bamboo, air,
stone and flowers
¾ Comprehensive, high-quality 24-house
security system monitors issues such as
common area equipment, fire and gas leaks.
¾ Located in a quiet residential neighborhood
in Chuo, Ota Ward
Rooftop
Rooftop
Greening
Greening
◆ Property Features
¾ Planted greenery on roof and along
roadways to conserve energy and
maintain ecosystem
¾ Installed storehouse for emergency
Environs: 5 minutes walk to Tokyu Setagaya Line
toilets, food and drinking water, etc.
Location: Sakura 1-chome, Setagaya Ward
Land area: 3,697.44m2 (about 1,118.47 tsubo)
Floor space: 9,879.09m2 (about 2,988.42 tsubo)
Construction: Reinforced concrete
Kamimachi Station
Completed : February 2007
47
Reference
Materials
THE Palms Akabane
Rooftop
Rooftop
Greening
Greening
◆Property Features
Location: Akabane 1-chome, Kita Ward
Floor space: 1,921.20m2 (about 581.16 tsubo)
Construction: Steel-reinforced concrete, 14 floors
above ground
Environs: 4 minutes walk to JR Akabane Station;
4 minutes walk to Tokyo Metro
Akabaneiwabuchi Station
¾ Rapid access to the city center via five
train lines
¾ Full range of shopping facilities in the
area
¾ All floor plans feature natural light
from two sides, and options to put
windows in bathrooms, kitchens, etc.
THE Palms Akihabara
Rooftop
Rooftop
Greening
Greening
Location: Kandasakumagashi, Chiyoda Ward
Construction: Reinforced concrete, 12 floors above
ground
Environs: 6-minute walk to JR Akihabara Station;
3-minute walk to Tokyo Metro Akihabara
Station
Completed: May 2007
¾ In the Akihabara area, which has
access to five train lines
¾ 23 south-facing units, all with riverside
balconies
¾ A full lineup of floor plans and highquality utilities and specifications
48
Reference
Materials
THE Palms Nihonbashi
Yokoyamacho
Rooftop
Rooftop
Greening
Greening
¾ Access to four stations on four lines,
including a 1-minute walk to Bakuro
Yokoyama Station on the Toei
Shinjuku Line
¾ Primarily 1LDK units targeting the
“ double income, no kids” segment
¾ Lobby space in the entrance hall
enables small office, home office use
Location: Nihonbashi Yokoyamacho, Chuo Ward
Land area: 858.35m2 (259.65 tsubo)
Floor space: 7,345.61m2 （about 2,222.04 tsubo）
Construction: Reinforced concrete, 1 basement floor and
12 floors above ground
Environs: 1-minute walk to Toei Shinjuku Line Bakuro
Yokoyama Station ; Stations on three other
lines
Use: 121-unit residential condominium and 3 stores
Completion: January 2008
THE Palms Shinkoiwa
Rooftop
Rooftop
Greening
Greening
Location: Shinkoiwa 3-chome, Katsushika Ward
Construction: Reinforced concrete, 14 floors
above ground
Environs: 5-minute walk to JR Shinkoiwa Station
Use: 104-unit residential condominium and 1 store
¾ Easy access to the city center with a
5-minute walk to the Sobu Line Shinkoiwa
Station featuring rapid train service
¾ All units are 1-room and compact for single
occupancy, and can be used as company
housing
¾ The first-floor store has 200m2 floor space,
suitable for large tenants
49
Reference
Materials
Fund business
Tomigaya Office
Location: Tomigaya 2-chome, Shibuya Ward
Land area: 290.69m2 (87.93 tsubo)
Floor space: 1,113.79m2 (336.92 tsubo)
Construction: Reinforced concrete, 1 basement
floor and 7 floors above ground
Environs: 8-minute walk to Yoyogi Koen Station,
Tokyo Metro Chiyoda line
Use: Office
Completed: August 1991
¾ 8-minute walk to Yoyogi Koen Station,
Tokyo Metro Chiyoda line; 8-minute
walk to Yoyogi Hachiman Station,
Odakyu Odawara line
¾ Value-up construction completed in
September 2007
Altavilla Shimurasakaue
Location: Higashi Sakashita 1-chome, Itabashi
Ward
Land area: 3,194.19m2 (966.24 tsubo)
Floor space: 6,365.26m2 (1,925.49 tsubo)
Construction: Reinforced concrete, 9 floors above
ground
Environs: 1-minute walk to Shimurasakashita
Station, Toei Mita line
Use: Rental condominium
Completed: July 2007
¾ 1-minute walk to Shimurasakashita
Station, Toei Mita line; about a 10minute walk to Shimurasakaue Station
¾ Refined, family-type rental
condominiums
50
Reference
Materials
II. Supplementary Materials to the Interim
Results for the Six Months Ended May 31, 2008
51
Reference
Materials
Overview of Segment Results (1) Revenues/Cost of Revenues
(¥ million, %)
Revenues
Six months ended
May 31, 2007
Six months ended
May 31, 2008
YoY change
Amount
%
(Consolidated）
% of revenues
(Consolidated）
% of revenues
22,205
100.0
39,421
100.0
17,215
77.5
10,996
49.5
32,990
83.7
21,994
200.0
8,184
36.9
2,385
6.1
(5,798)
(70.8)
Rental business
1,297
5.8
1,660
4.2
363
28.0
522
2.4
509
1.3
(12)
(2.4)
1,229
5.5
1,575
4.0
345
28.1
207
0.9
561
1.4
353
170.2
Total
Fund business
Cost of revenues
(233)
-
(261)
Six months ended
May 31, 2007
-
(28)
Six months ended
May 31, 2008
-
YoY change
Amount
%
(Consolidated）
% of revenues
(Consolidated）
% of revenues
17,784
80.1
23,910
60.7
6,125
34.4
9,074
82.5
19,796
60.0
10,722
118.2
7,159
87.5
1,969
82.5
(5,189)
(72.5)
719
55.4
762
45.9
42
5.9
8
1.5
0
0.0
(8)
(99.3)
993
80.8
1,232
78.2
238
24.0
26
12.6
385
68.7
358
1,338.0
(37)
-
Total
Rental business
Fund business
(198)
-
52
(235)
-
Reference
Materials
Overview of Segment Results (2) Gross Profit/Operating Income
(¥ million, %)
Gross profit
Six months ended
May 31, 2007
Six months ended
May 31, 2008
YoY change
Amount
%
(Consolidated）
% of revenues
(Consolidated）
% of revenues
4,420
19.9
15,510
39.3
11,090
250.9
1,921
17.5
13,194
40.0
11,272
586.5
1,025
12.5
416
17.5
(609)
(59.4)
Rental business
577
44.5
898
54.1
320
55.5
Fund business
513
98.3
509
100.0
235
19.1
343
21.8
180
87.0
175
31.3
Total
Operating income
(34)
-
(26)
Six months ended
May 31, 2007
-
(3)
(0.7)
107
45.5
(5)
(3.0)
8
Six months ended
May 31, 2008
-
YoY change
Amount
%
(Consolidated）
% of revenues
(Consolidated）
% of revenues
3,019
13.6
13,756
34.9
10,737
355.6
1,833
16.7
13,080
39.6
11,246
613.4
901
11.0
264
11.1
(636)
(70.6)
Rental business
526
40.6
807
48.6
281
53.4
Fund business
323
61.9
229
45.0
(94)
(29.2)
44
3.6
106
6.8
62
140.5
142
68.6
125
22.4
(16)
(11.7)
Total
Corporate and eliminations
(752)
-
53
(858)
-
(105)
-
Reference
Materials
Main Performance Indicators (Consolidated and Non-consolidated)
¾ 5-Year Summary of Main Performance Indicators
Non-consolidated
Consolidated
FY ended FY ended FY ended FY ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
2004
2005
2006
2007
Six months
Six months
FY ended FY ended FY ended
ended
ended
Nov. 30, Nov. 30, Nov. 30,
May 31,
May 31,
2005
2006
2007
2008
2008
Operating income ratio
14.4%
19.8%
24.9%
27.6%
40.9%
20.0%
23.9%
22.5%
34.9%
Ordinary income ratio
10.4%
16.5%
22.8%
24.7%
39.1%
16.8%
21.5%
19.9%
33.3%
5.5%
8.9%
12.0%
13.3%
23.3%
9.0%
11.1%
11.4%
20.0%
18.2%
20.1%
23.2%
25.0%
33.3%
19.2%
23.3%
26.4%
34.6%
3.3%
4.4%
6.0%
6.6%
9.0%
3.9%
5.4%
6.2%
8.9%
22.6%
21.4%
29.5%
24.1%
29.5%
20.5%
25.3%
22.1%
29.0%
330
247
278
240
227
165
181
206
189
34
41
63
59
89
28
39
40
63
2,833.01
4,378.97
7,306.24 11,222.02 19,495.99
4,664.46
Return on revenues
Return on equity (ROE)
Return on total assets (ROA)
Net worth ratio
Revenues per employee (¥ million)
Net ordinary income per employee* (¥* million)
Earnings per share (EPS) (¥)
Book value per share (BPS) (¥)
Issued number of shares at year end
7,412.80 12,095.04 20,939.78
19,829.73 23,739.56 40,055.23 49,855.74 67,136.69 24,018.05 40,414.50 51,089.15 69,813.89
335,800
344,858
376,838
376,840
376,840
344,858
376,838
376,840
376,840
*Ordinary income per employee is calculated using the average number of employees from the six months ended May 31, 2008, and is calculated using
employees as of May 31, 2007 for the six months ended on that date.
54
Reference
Materials
Assets (Number of Properties Held by Area as of May 31, 2008)
Number of properties held by area as of May 31, 2008
Properties handled are concentrated in the 23 wards of Tokyo
As of May 31, 2008, properties held or purchased by the Group totaled 104. Of these, 89 (approx.
84.8 percent) were in the 23 wards of Tokyo.
Revitali- DevelopRental
zation
ment
business
business business
Chiyoda
Chuo
Minato
Shinjuku
Shibuya
Bunkyo
Shinagawa
Sumida
Taito
7
3
4
7
3
3
1
1
2
2
2
0
1
0
1
0
1
0
3
1
2
1
2
0
1
1
1
zation
ment
business
business business
Total
12
6
6
9
5
4
2
3
3
Toshima
Meguro
Ota
Setagaya
Koto
Kita
Adachi
Arakwa
Itabashi
3
1
1
3
1
0
1
3
1
1
1
3
0
2
1
1
0
1
2
0
0
1
0
2
1
0
0
zation
ment
business
business business
Total
6
2
4
4
3
3
3
3
2
Edogawa
Katsushika
Suginami
Nakano
Nerima
23 wards
Suburban Tokyo
Other prefectures
Total
1
0
0
3
2
51
2
8
61
0
1
1
0
0
19
2
0
21
0
0
1
0
0
19
2
1
22
Total
1
1
2
3
2
89
6
9
104
Notes: 1) To simplify counting of properties in these materials, condominium complexes and single family dwelling subdivisions for individuals/end-users are
treated as single properties.
2) “Other prefectures” means Kanagawa and Chiba, etc.
3) Rental properties are included in property and equipment.
55
Reference
Materials
Overview of Properties Handled (1) By Scale (Revenue Basis)
By Scale
Under ¥1 billion
¥1-2 billion
Over ¥2 billion
40,000
¾ Revenues for the six months ended May
35,000
31, 2008 increased substantially because of
30,000
25,000
15,988
2 properties
2,202
1 properties
20,000
the sale of large properties.
24,614
2 properties
3,694
1.4 properties
15,000
10,000
4,791
4 properties
5,000
6,280
17 properties
8,864
6.6 properties
10,852
7.3 properties
6,427
23 properties
6,251
16 properties
4,445
4 properties
6,317
12 properties
Note: To simplify counting of properties in these materials,
condominium complexes and single family dwelling subdivisions for
individuals/end-users are treated as single properties. For sales that
extend over two accounting periods, the number of properties is divided
between the two periods.
0
FY ended
Nov. 2005
FY ended
Nov. 2006
FY ended
Nov. 2007
FY ended
Nov. 2006
FY ended
Nov. 2005
Revenues
(¥ million)
Six months ended
May 31, 2008
No. of
properties
Revenues
(¥ million)
Six months ended
May 31, 2008
FY ended
Nov. 2007
No. of
properties
Revenues
(¥ million)
No. of
properties
Revenues
(¥ million)
No. of
properties
Inventory as
of May 2008
(No. of
properties)
Over ¥2 billion
3,694
1.4
2,202
1.0
15,988
2.0
24,614
2.0
12.0
¥1-2 billion
4,791
4.0
8,864
6.6
10,852
7.3
4,445
4.0
11.0
Under ¥1 billion
6,280
17.0
8,427
23.0
6,251
16.0
6,317
12.0
59.0
Total
14,765
22.4
19,493
30.6
33,091
25.3
35,376
18.0
82.0
56
Reference
Materials
Overview of Properties Handled (2) By Purchaser
By Purchaser
¾ Investors and funds accounted for approximately 95.1 percent of purchases of properties handled
by Tosei during the six months ended May 31, 2008.
¾ By type, sales of large office buildings drove results, with office and commercial properties
accounting for 83.8 percent of sales revenue.
¾ No. of Properties and Percentage by Purchaser
0.1%
¾ No. of Properties and Percentage by Property Type
13.5%
4.8%
2.7%
95.1%
83.8%
Individuals*
Corporations
Investors, funds & real estate companies
Office/commercial buildings
Vacant buildings
Condominiums & single family dwellings
Purchaser
Individuals*
Corporations
Investors, funds & real estate
companies
Total
No. of
properties
1
Revenues
(¥ million)
56
5
1,686
Percentage
Property type
No. of
properties
8
Revenues
(¥ million)
29,654
Percentage
0.1%
Office/commercial buildings
4.8%
Vacant buildings
3
941
2.7%
Condominiums & single family
dwellings
8
4,780
13.5%
19
35,376
100.0%
13
33,633
95.1%
19
35,376
100.0%
Total
83.8%
*Condominium complexes with units for purchase by individuals are counted as one property. Complexes for which sales extend over two periods are counted
as one property in both periods.
57
Responding to Other Factors Affecting Operating Results
Reference
Materials
Factors of Particular Concern
¾ Impact of changes in the real estate market
The time frame of projects in the revitalization and development businesses is from 6 months to 2 years.
JChanges in the real estate market midway during a project have the potential to affect operating results.
¾ High degree of dependence on interest-bearing debt and interest rate trends
Ratio of interest-bearing debt to total assets (Currently 58.1%)
JCost of procuring capital will increase if interest rates rise.
¾ Changes in accounting standards
Changes in interpretation of consolidation of real estate funds could change the scope of
consolidation.
58
[ Reference Materials ]
III. Supplementary Materials on Real Estate
Market Conditions
59
Reference
Materials
Size of the Real Estate Fund Business Market
At ¥19.8 trillion including private equity funds
and J-REITs, and continuing to expand.
(¥ trillion)
Size of the Private Equity Fund and J-REIT Markets
12.0
Private equity funds
10.0
9.8
J-REITs
8.0
5.5
6.0
6.1
3.4
3.3
2.2 2.1
5.4
4.5
4.4
4.0
6.8
6.7
6.1
2.6
2.0
0.0
Dec. 2004
June 2005
Dec. 2005
June 2006
Dec. 2006
June 2007
Dec. 2007
The balance of real estate fund holdings as of June 2008 was ¥6.8 trillion in J-REITs and ¥9.8 trillion in
private equity funds. With the addition of Japanese real estate assets held by overseas private equity
funds (not included in above), the amount held by private equity funds is about ¥13.0 trillion, for a total
of ¥19.8 trillion.
Source: Private sector survey organization
60
Reference
Materials
Size of the Securitized Real Estate Market
Untapped ¥100 trillion market, significant growth potential
Japan’s total real estate assets2: ¥2,300 trillion
Corporate holdings of
buildings and land in
Japan1: ¥490 trillion
（as of Jan. 2003）
Size of securitized
income-producing
real estate market2:
¥70-100 trillion
J-REITs
¥6.8trillion
Private equity funds4
¥13.0 trillion
Land: ¥406 trillion
Buildings: ¥84 trillion
＋Public sector assets
・ About ¥3 trillion (?)
(Ministry of Finance report:
Unused public land ¥2.1 trillion;
government buildings and
residences ¥1 trillion)
・ ¥400-500 billion
(Housing for government workers)
Securitized real estate market3
¥32.7 trillion
Notes: 1. Source: Ministry of Land, Infrastructure and Transport basic land survey
＋ Japan Post and local
government assets
2. Source: Ministry of Land, Infrastructure and Transport basic land survey and private sector
survey organization
3. Cumulative total of securitized real estate assets: Fiscal 2006 Ministry of Land,
Infrastructure and Transport survey of real estate securitization
4. Balance as of February, 2008 Source: Private sector survey organization
According to a government white paper on land, income-producing properties accounted for ¥70 trillion of the ¥500 trillion
in assets held by corporations, and a private sector survey organization estimates that the size of the untapped market for
revenue-producing real estate is ¥100 trillion.
Given this, with ¥32.7 trillion cumulative securitization to date, the market has the potential to double or triple in size. In
addition, purchases of public sector assets are also planned.
Source: Prepared by Tosei based on materials from private sector survey organization
61
Reference
Materials
Yield Spread
The Tokyo market remains attractive compared with the markets of other
developed countries.
Yield spreads on real estate assets in major cities
Tokyo
London
Paris
Frankfurt
New York
5%
4%
3%
2%
1%
0%
-1%
-2%
2000
2001
Yield Spread:
Earnings rate on investment
minus long-term interest rate
2002
2003
2004
2005
2006
2007
Tokyo
London
Paris
Frankfurt
New York
June. 2007
1.56%
-2.71%
-1.27%
-0.57
-1.12
Dec. 2007
1.90%
-0.58%
-1.06%
-0.16%
-0.32%
With continuing increases in interest rates and rental market rates, yield spreads are already negative in
London (-2.71 percent) and New York (-1.12 percent). Tokyo, which maintained a yield spread of 1.56
percent as of the end on June 2007, remains an appealing market compared with cities in other
developed countries.
Source: Jones Lang LaSalle
出所：ジョーンズ・ラング・ラサール
62
Reference
Materials
Japan’s Real Estate Investment Ratio
Rising investment by Japanese corporate pension funds & regular institutional investors
Traditional Investment
Alternative Investment
Japanese bonds
Japanese stocks
Foreign bonds
Foreign stocks
Hedge funds
Private equity
Changes in Institutional Investor Asset Allocation
2004
Japanese stocks
Foreign stocks
Japanese bonds
Foreign bonds
Real estate
Alternative
Other
29.0%
17.7%
28.7%
10.7%
0.5%
6.3%
7.2%
Corporate Pension Funds
2005
2006
2007
28.2%
17.4%
22.6%
10.4%
1.4%
8.4%
11.6%
29.8%
18.8%
23.7%
11.4%
1.2%
5.7%
9.5%
Real estate
29.3%
19.4%
23.6%
10.6%
2.4%
7.1%
7.6%
Regular Institutional Investors
2004
2005
2006
2007
10.5%
5.8%
59.4%
9.2%
2.5%
1.3%
11.3%
11.6%
13.2% 15.5%
42.9%
47.6% 38.7%
2.6%
2.3%
40.6%
6.1%
3.9%
29.2%
9.8%
2.4%
33.6%
Sources:
Corporate pension funds: Mail
questionnaire* sent to 609 employee
pension funds, defined-benefit pension
funds and approved pension schemes
Regular institutional investors:
Mail questionnaire* sent to 189 life and
non-life insurance companies, city banks
and associated financial institutions, trust
banks and regional banks
* Response rate was 23.6%
Investment in real estate by Japanese pension funds and institutional investors is steadily taking hold. Prolonged low interest rates, sluggish share
prices and globalization of the economy have raised the importance of diversifying investment, thereby focusing more attention on real estate.
The ratio of investment in real estate increased from 1.2 percent in 2006 to 2.4 percent among corporate pension funds and from 6.1 percent to 9.8
percent among regular institutional investors. However, the ratio remains low compared to the 4.4 percent invested by 200 major corporate pension
funds in the United States in 2006 (Source: Pensions & Investments, Sept. 2004). The potential for growth* therefore remains.
*For example, multiplying ¥80 trillion by the U.S. investment rate of 4.4% yields ¥3.5 trillion.
Source: Goldman Sachs Research Department, based on a questionnaire survey by the Association for Real Estate Securitization
63
Reference
Materials
Real Estate Loan Balance among Domestic Banks
The rate of real estate lending is unchanged.
(Reference)
Real Estate Loan Balance
(¥ trillion)
Real estate loan balance
Total loan balance
Real estate loans as a percentage of total loans
600
Total Loans
Real Estate Loans
1980
¥173 trillion
¥11 trillion （6.6%）
(%)
1997
¥514 trillion
16.0%
2003
¥410 trillion
¥48 trillion （11.8%)
2006
¥407 trillion
2007
¥410 trillion
14.0%
500
12.0%
400
10.0%
8.0%
300
Mar. 2008
¥411 trillion ¥57 trillion （14.1%）
6.0%
200
4.0%
100
2.0%
0.0%
19
1980
8
19 1
1982
1983
8
19 4
1985
1986
8
19 7
1988
1989
9
19 0
9
19 1
1992
9
19 3
1994
1995
1996
9
19 7
1998
2099
0
20 0
2001
2002
0
20 3
2004
2005
M 2 06
ar 00
.2 7
00
8
0
While the real estate loan balance among domestic banks has decreased since peaking at ¥65 trillion in 1997, amid flaccid demand for capital
among companies, it bottomed out at ¥48 trillion in 2003 and recovered to ¥57 trillion in 2007, where it remained March 2008 (14.1% of total loans).
In December 2006 the Financial Services Agency formulated policies for the supervision of major banks and other institutions, which included
guidelines for non-recourse loans to real estate funds in particular that require due attention to appropriately managing the risk of sector
concentration. As a result, since 2006 both the real estate loan balance and real estate loans as a percentage of total loans have been unchanged.
Source: Compiled from a Bank of Japan report on loans by borrower.
64
Reference
Materials
Investment Condominium Supply Trend
High level of supply in greater Tokyo
Comparison of Investment Condominium Units For Sale (1988 - June 2007）
Units
Units
Properties
10,000
199
220
212
8,983
200
8,616 8,548
8,387
190
188
8,939
183
Properties
8,000
180
172
7,238
150
142
152
160
6,232
6,213
140
6,000
5,130
108
4,591
105
4,000
3,394
3,758
81
2,000
1,874
1,490
647 16
16
120
100
80
60
2,357
45
1,678
38
82
3,423
69
46
120
117
4,861
4,621
40
20
553
0
6
-
-
6
20
07
.1
20
06
.1
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
19
88
0
Against a backdrop of record-low interest rates, the trend toward urban living and purchases by funds to obtain rental income, the supply
of investment condominium units continuously increased in Greater Tokyo until 2003.
Comparing the first half of calendar 2007 (January to June) with the first half of 2006 (January to June), properties increased by 3 and
units increased by 240.
Source: Real Estate Economic Institute Co., Ltd.
65
Reference
Materials
Condominium Sales Market
Intense competition continues in greater Tokyo in 2008.
Condo units sold in Greater Tokyo
Closing rates for condo units in Greater Tokyo
(Units)
(%)
100.0
12,000
10,000
80.0
8,000
60.0
6,000
40.0
4,000
20.0
2,000
0
0.0
05/4
Tokyo 23 wards
05/7
2000
35,318
(YoY change) (%)
Tokyo suburbs
10,274
YoY change) (%)
Kanagawa Pref.
26,501
YoY change) (%)
Saitama Pref.
11,149
(YoY change) (%)
Chiba Pref.
12,393
YoY change) (%)
Total
YoY change) (%)
95,635
05/10
06/1
06/4
06/7
06/10
2001
31,843
-9.8
9,638
-6.2
2002
31,574
-0.8
10,913
13.2
2003
36,340
15.1
10,548
-3.3
2004
39,147
7.7
8,321
-21.1
2005
31,025
-20.7
8,962
7.7
25,782
-2.7
8,913
-20.1
13,080
5.5
89,256
-6.7
24,357
-5.5
10,339
16.0
11,333
-13.4
88,516
-0.8
20,880
-14.3
8,820
-14.7
6,595
-41.8
83,183
-6.0
21,981
5.3
7,827
-11.3
8,153
23.6
85,429
2.7
23,799
8.3
10,246
30.9
10,116
24.1
84,148
-1.5
66
07/1
07/4
07/7
2007 (Forecast)
2006
2007
23,650
16,563
-23.8
-30.0
7,004
7,728
-21.8
10.3
20,456
-14.0
10,532
2.8
12,821
26.7
74,463
-11.5
07/10
08/1
08/4
¾During the year ended March 2007,
the supply of for-sale condominiums
in the greater Tokyo area fell below
65 thousand units to 61 thousand
units.
¾In 2008, market conditions
continue to deteriorate. As of April
2008, the closing rate had remained
below 70 percent for nine consecutive
months from August 2007.
17,016
-16.8
8,527
-19.0
11,187
-12.7
61,021
-18.1 Source : Real Estate Economic Institute Co., Ltd.
National Office and Apartment Rent Index Survey
Reference
Materials
Office rent index for September 2008 expected to be up 4.7 percent year-on-year
September 2007 National Office and Apartment Rent Index Survey
2007年9月　全国賃料統計
全国
オフィス賃料指数
共同住宅賃料指数
前年比
前年比
Office Rent Index
Apartment
Rent Index
6.5%
YoY change
YoY change 0.5%
地
方北海道地方
All Japan
By
別
Hokkaido
東北地方
region
Tohoku
関東地方
Kanto
北陸地方
中部・東海地方
Hokuriku
近畿地方
Chubu, Tokai
中国地方
Kinki
四国地方
Chugoku
九州地方
Shikoku
沖縄地方
Kyushu
都
Okinawa
市東京圏
Greater Tokyo
Urban
圏
Metro Osaka
大阪圏
center
Metro Nagoya
名古屋圏
Other urban centers
三大都市圏以外
2.3%
6.5%
2.3%
0.5%
0.5%
11.1%
11.1%
-0.9%
1.2%
-0.9%
5.8%
1.2%
1.5%
5.8%
-0.6%
1.5%
-0.3%
-0.6%
3.7%
(2005年を100とする指数)
2005=100
130
0.2%
0.5%
0.2%
1.4%
1.4%
0.2%
0.2%
-0.1%
1.0%
-0.1%
1.1%
1.0%
-0.1%
1.1%
-0.8%
-0.1%
0.6%
-0.8%
0.5%
0.6%
0.5%
0.2%
0.2%
1.2%
1.2%
1.9%
1.9%
0.2%
0.2%
-0.3%
3.7%
11.5%
11.5%
6.3%
6.3%
2.4%
2.4%
0.3%
0.3%
オフィス上位15地点の賃料変動率（2007年9月末時点の前年比）
Highest YoY Rate of Change in Office Rents: Top 15 Locations
1 1東京都千代田区・大手町
Otemachi, Chiyoda Ward, Tokyo
2 2東京都新宿区･西新宿
Nishi-Shinjuku, Shinjuku Ward, Tokyo
3 3東京都渋谷区
Shibuya Ward, Tokyo
4 4東京都中央区・日本橋
Nihonbashi, Chuo Ward, Tokyo
5 5東京都千代田区・神田
Kanda, Chiyoda Ward, Tokyo
6 6東京都新宿区･新宿３
Shinjuku 3-chome, Shinjuku Ward, Tokyo
7 7東京都港区・南青山
Minami-Aoyama, Minato Ward, Tokyo
8 8名古屋市中村区
Nakamura Ward, Nagoya
9 9横浜市西区
Nishi Ward, Yokohama
Shinagawa Ward, Tokyo
1010東京都品川区
Nihonbashi Muromachi, Chuo Ward, Tokyo
1111東京都中央区・日本橋室町
Toshima Ward, Tokyo
1212東京都・豊島区
Toranomon, Minato Ward, Tokyo
1313東京都港区・虎ノ門
Kita Ward, Osaka
1414大阪市北区
Chuo Ward, Osaka
1515大阪市中央区
オフィス賃料指数及び共同住宅賃料指数の動向【全国】
Historical
Trends of Office and Apartment Rent Indices (All Japan)
19.1%
19.1%
18.8%
18.8%
14.7%
14.7%
14.0%
14.0%
12.7%
12.7%
12.4%
12.4%
12.0%
12.0%
11.7%
11.7%
11.7%
11.7%
11.5%
11.5%
9.9%
9.9%
8.3%
8.3%
7.6%
7.6%
7.5%
7.5%
7.3%
7.3%
120
110
100
90
1995
2000
2002
2003
2004
2005
2006
2007
Office Rent Index
オフィス賃料指数
Apartment Rent Index
共同住宅賃料指数
According to the “National Office and Apartment Rent Index” survey prepared by
the Japan Real Estate Institute every September,
・The national office rent index for September 2007 was up 6.5% from the
previous September.
The index rise for metropolitan areas was driven by an 11.5% increase in
Greater Tokyo.
・The national apartment rent index was down 0.5% year-on-year.
・Outlook for September 2008:
Office rent index: +4.7%
Apartment rent index: +0.3%
Source: The Japan Real Estate Institute
67
Office Building Market
資料編
Excellent conditions in the 23 wards of Tokyo will improve further.
The vacancy rate in the 23 wards of Tokyo is rising
after hitting a low point in September 2007.
Growth in the average new tenant lease rate in the
23 wards of Tokyo is slowing.
Average Rent by City (¥/tsubo)
Tokyo 23 wards
Sendai
Vacancy Rate by City (%)
Nagoya
Osaka
Fukuoka
Tokyo 23 wards
Sendai
Nagoya
Osaka
Fukuoka
10.0
15,000
14,000
8.0
13,000
6.0
12,000
11,000
4.0
10,000
2.0
9,000
8,000
Tokyo 23 wards
Sendai
Nagoya
Osaka
Fukuoka
Sept. 06
Dec. 06
Mar. 07
June 07
Sept. 07
Dec. 07
0.0
Mar. 08
Sept. 06 Dec. 06 Mar. 07 June 07 Sept. 07 Dec. 07 Mar. 08
12,680
12,770
12,810
12,980
13,370
13,680
14,160
9,070
9,120
9,130
9,150
9,260
9,140
9,270
9,530
9,630
9,480
9,560
9,600
9,560
9,620
8,830
8,750
8,680
8,750
8,820
8,940
8,920
9,450
9,500
9,420
9,390
9,430
9,460
9,550
Sept. 06
Dec. 06
Sept. 06
Tokyo 23 wards
Sendai
Nagoya
Osaka
Fukuoka
2.8
8.4
6.5
6.6
8.1
Mar. 07
Dec. 06
2.6
8.4
5.9
6.2
8.0
June 07
Mar. 07
2.0
8.1
6.3
5.9
7.4
Sept. 07
June 07
1.9
8.0
6.2
5.8
7.4
Dec. 07
Sept. 07
1.7
8.3
6.6
5.7
7.4
Mar. 08
Dec. 07
1.8
8.6
6.3
5.7
7.9
Source: Prepared by Tosei based on K.K. Ikoma Data Service System’s “Office Market Report”
68
Mar. 08
2.0
8.7
6.8
5.8
8.5
Reference
Materials
Impact of the Revised Building Standard Law
Delays in building certification are subsiding, with conformance evaluation
approvals exceeding applications.
Building Certification and Inspection Flow
and Main Reasons for Delays to Approval
Number of Building Certifications and Conformance Evaluations*
Building Certification Applications
Successful Applications
Conformance Evaluation Applications
Conformance Evaluation Approvals
（Building Certification Applications）
建築確認件数の推移＜交付件数＞
Check of Application Documents is
Cumbersome
(Conformance Evaluations)
2,500
70,000
2,009
70,000
60,000
5万3218件
（対前年同月期 1,833
1,728
▲11.1%）
60,000
50,000
50,000
20,000
30,000
10,000
830
1,539
0
May
June
0
1
July
*Conformance evaluation of specified structural design calculations
0
Sept.
Schedule for Conformance
Evaluation of Structural
Design Calculations (Set by
Governor)
500
52
Aug.
Shortage of
Professionals
for Peer Check
Ministerial Authorization Program
Not Completed
208
66
1
Examination
Based on
Established
Guidelines
1,000
合計
1～3号建築物
4号建築物
月
390
Building
Certification
Building Inspector or
Designated Examining
Institution
2,000
1,500
1万4987件
(同▲25.2%）
10
9月
8月
7月
6月
5月
4月
2,007
Application
1,830
873
10,000
Apr.
1,698
1,430
0
20,000
1,853
1,686
3万8231件
（同▲4.0%）
40,000
40,000
30,000
2,058
Building
Owner
Oct.
Nov.
Dec.
June
Feb.
Source: Ministry of Land, Infrastructure and Transport
Mar.
Delays in building certification that were a major problem in 2007 have subsided, with conformance evaluations
exceeding applications in 2008.
69
Reference
Materials
High-Value Real Estate Transactions Were Concentrated in 2007
(¥ billion)
(No. of transactions)
Real Estate Transaction Trends
6,000
1,600
5,595.2
1,400
1,341
Sales
5,000
4,155.8
Sales (No. of Transactions)
4,000
1,216
4,355.7
1,200
1,157
3,244.0
3,000
859
846
648
2,480.2
2,408.2
2,032.5
594
2,000
800
2,627.9
2,351.2
2,112.2
680
600
536
524
400
1,000
200
No. of transactions
Average price
2000
2,480.2
594
41.8
2001
2,032.5
524
38.8
2002
2,112.2
648
32.6
2003
2,408.2
846
28.5
2004
2,627.9
859
30.6
2005
4,155.8
1,157
35.9
2006
4,355.7
1,341
32.5
H
al
f）
0
20
07
（2
nd
(1
st
H
20
07
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
al
f)
0
Sales
1,000
2007(1H)
2,351.2
536
43.9
2007(2H)
3,244.0
680
47.7
(¥ billion)
Source: Urban Research Institute, Corp.
The number of transactions in 2007 decreased 9.3% compared to last year. Meanwhile, sales increased 28.5% in
terms of monetary amounts. The substantial monetary increase was likely due to the concentration of large-scale
transactions.
70
Global REIT Market －9 Major Countries’ Market Caps－
Reference
Materials
Market Caps
（億円）
(¥ trillion)
60
55
U.S.A
米国
REIT markets in major countries are
steadily expanding.
50
45
40
In particular, REIT markets in late
starters France (2003) and Britain (2008)
have far exceeded Japan’s market cap.
35
30
25
20
(¥ trillion)
14
13
Australia
豪州
12
11
10
U.K.
英国
9
8
7
6
France
ﾌﾗﾝｽ
Japan
日本
60
U.S.A.
Australia
U.K.
France
Japan
Netherlands
Canada
Singapore
Hong Kong
5
4
3
2
1
U.S.A
Australia
U.K.
France
Japan
Netherlands
Canada
Singapore
Hong Kong
Other
Total
2004
24
4
2005
30
6.5
2.0
1.3
1.4
1.1
0.18
2.5
1.9
1.7
1.5
0.5
0.54
34.5
0.73
45.3
2006
44.7
8.8
4.3
3.4
2.4
2.4
0.9
0.63
0.96
68.5
2007
49.6
12.8
8
8
6.3
3.2
3
2
1
1.21
95.1
Source: ARES Real Estate Securitization Handbook 2004-2007
71
Reference
Materials
Survey of Overseas Investor Trends
Investors’ Opinions on Real Estate Investment
Portfolio Diversification: Strong linkage among global stock markets prevents diversification through international investment.
Conversely, real estate maintains a strong diversification effect.
Inflation Hedge: Pension funds require inflation countermeasures, and are starting to look at real estate, infrastructure, timberland, etc.,
which provide real returns.
Return Characteristics: Enables an investment style that provides stable returns with predictable capital gains.
➔ These three factors are spurring increased portfolio allocation of real estate.
➔ For example, North American pension funds have increased the weight of real estate investment by about 1 percent.
Investors’ Views of Japan’s Real Estate Environment
•
•
•
In light of GDP share/global diversification, investment strategies can’t afford to leave out the Japanese market. While returns are
not as high as in emerging nations, the macroeconomic and capital/real estate market environments surpass those in other countries.
Although opinions differ slightly, consensus is growing that Japan’s real estate market is equivalent to Canada, France, U.K., etc., in
terms of investment risk and expected returns – much closer to U.S./ Europe than expected (recognized as core to core-plus market).
Longer-term investors rate cities from a perspective beyond just real estate; they consider amenities in Japanese urban spaces equal
to or better than U.S./Europe, with an appeal unmatched by China, India, etc.
Flow of Real Estate Investment Capital into Japan
•
•
•
VA/core real estate investment capital is expected to flow into Japan from U.S./European investment banks/asset managers over the
next 1-3 years. Unlike previous opportunistic short-term speculation, these will be longer-term investments (5-10 years or longer).
Long-term core investment properties will be primarily class A and class B office buildings of ¥2-10 billion or more.
Sovereign wealth funds (estimated by investment banks, etc., to reach ¥2,000 trillion by 2015) aim toward the management styles of
advanced institutional investors, increasing the likelihood of flow into Japanese real estate.
Survey Period: March 2008
72
Source: Think Tank
Investor inquires:
Corporate Planning Department
TEL：03-3435-2864
FAX：03-3435-2866
URL : http://www.toseicorp.co.jp
DISCLAIMER
Except for historical facts, all plans, forecasts, strategies and other information contained herein are forward-looking statements. Forward-looking statements
include but are not limited to descriptions of future events and performance containing words such as or similar to “believe,” “expect,” “plan,” “strategy,”
“anticipate,” “forecast,” and “estimate,” and are based on judgments derived from the information available to the Company at the time of publication. Various
factors could cause results to differ materially from any projections presented herein. The Company reserves the right to maintain or change its projections
regardless of any new information, conditions or changes in performance. These materials are for informational purposes only, and should not be construed as a
recommendation to invest in the Company.
73

Results for the First Six Months (Ended May 31,2008) (PDF 2.4MB)

Transcription

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