Sumitomo Realty & Development : Quarterly Earning Document

【Contents】

Basic Management Strategy and Medium- to Long-term Outlook for "Sustainable Growth"

Business in India

The Ninth Management Plan (Apr 1, 2022 - Mar 31, 2025)

Results for the Second Quarter of Fiscal 2023 (Apr 1 - Sep 30, 2023)

Forecasts for Fiscal 2023 (Apr 1, 2023 - Mar 31, 2024)

Principal New Development Projects

ESG Initiatives

3

7

14

16

17

18

24

• Medium- to long-term outlook is expected to be achievable earlier than forecast set out in the Ninth Management Plan (announced in May 2022)

(Billion yen)

Surpassing

¥300 billion

in next plan

250

200

150

100

50

0

Achieve record ordinary profit for the third consecutive year in Fiscal 2023

Earnings Targets

Growth strategy by segment

Aiming to "surpass ¥300.0 billion in ordinary profit" with the comprehensive strengths of the Group as a whole, while continuing to position office building leasing business in Tokyo as our solid foundation

Leasing

For office buildings, by steadily capturing the needs such as increasing floor space which is becoming apparent as economic activity normalizes, maintain and improve the profitability of existing buildings and continue on the trajectory of long-term profit growth through operation of new buildings to be completed with gross floor area of over 700,000 tsubo*

• The "La Tour" premium leasing residences series has grown to a scale of 4,000 units. Continue to improve our brand value and further extend our strong performance
• In the hotel and event hall business, strive to restore the profitability to the pre-COVID-19 levels during the current fiscal year, and aim for further growth in the next medium-term management plan and beyond with the contribution to earnings from the full-scale operation of Haneda Airport Garden with the flagship hotels

Sales

Construction

Brokerage

"STEP"

Maintain our policy of focusing on profit with controlling the pace of sales, rather than chasing volume of units or sales, and maintain the high level of profit scale that we have achieved in previous medium-term management plans

• More than 90% of the 3,000 units planned to be delivered in the current fiscal year were already sold, and sales activities including those for the next fiscal year and beyond are making steady progress
• Although rising construction costs continuously needs to be addressed, we have already secured the necessary amount of land for condominiums to be delivered by the next medium-term management plan
• Promote development that contributes to decarbonization with the adoption of the "ZEH-M Oriented" as the standard specifications for all condominiums we design from the Ninth Management Plan

Aim to achieve record-high profit by increasing orders through appealing to customers for high disaster prevention and environmental performance, while focusing on cost control and minimizing the impact of material price fluctuations

• In Japan, 90% of the over 50.0 million existing houses do not meet the latest energy-saving standards, posing a major challenge for decarbonization
• In "Shinchiku Sokkurisan" remodeling, the percentage of orders for "high-insulation remodeling" has reached 30% at present (target of 20% for the Ninth Management Plan)
• In custom homes, launched the sale of "SUMICA" in 2022 with the latest ZEH (Zero Energy House) specifications as standard; it combines the solar power generation service "SUMIFU × ENEKARI" and high thermal insulation specifications, and the ZEH ratio reached 80% (target of 60% for the Ninth Management Plan)

While the supply of new housing is on the decline, the existing housing market, which is being revitalized by an increase in high-quality stock, is expected to grow, and we will strive to expand our market share by strengthening Group collaboration and further pursuing customer-oriented services

• Focus on spreading "STEP" brand, while operating Mansion Plaza brokerage offices nationwide which exclusively handle high-class condominiums
• STEP Auctions offering fairer and more transparent transactions has been well-accepted by many sellers
• Promote efficiency by paperless operations and digital transformation (DX), including the discontinuation of distributing insert flyers and sending direct mail (DM) in consideration of protecting personal information

Tokyo :Existing 1.5 million tsubo (GFA, Owned, as of the end of Mar 2022)

+ additional 700,000 tsubo and more ⇒Over ¥5 trillion

Mumbai :3 properties, a total of over 380,000 tsubo

⇒Over ¥500 billion

* 1 tsubo ≈ 3.3 m2

Compared to Tokyo

10% of

investment

20% of GFA

Source: Google Maps

ImageImage

Image

ImageImage

New city center 2

BKCAirport

New city center 1

Worli

Former city center

Nariman

Point

Indian Shinkansen (high-speed railway)

• Using Japanese Shinkansen technology
• Planned to connect the approx. 500 km distance between Mumbai and Ahmedabad in about 2 hours
• Its new station planned to open in BKC

Metro Line 3 (scheduled to open in 2024)

• Planned to connect BKC, Worli and Nariman Point from the current airport area

Sea bridge bypass "Sea Link" (scheduled to open in 2024)

• Planned to connect Worli and Nariman Point

Mumbai Trans Harbour Link

 Connecting the new airport (under construction) and the center of Mumbai

 Planned to connect to the sea bridge bypass

Sumitomo Realty & Development Co., Ltd.

Surrounding facilities image

Sumitomo Realty & Development Co., Ltd.

Sumitomo Realty's Business in India - Worli (2)

* 1 tsubo ≈ 3.3 m2

Acquired site

Road - 24m wide

Site area

80,903 sqm

(Approx. 24,473 tsubo)

Building scale

*Gross floor area

Over 1 million sqm

(Over 300,000 tsubo）

The land cost per floor area is expected to be reduced to

1. almost half of the BKC properties through the acquisition of additional FAR (Floor Area Ratio).

1. A freehold land without usage restrictions, allowing for large- scale mixed development

High

Profitability