Investor Meeting Presentation
for the Nine Months ended December 31, 2017
Leopalace21 Corporation
This document and reference materials may contain forward-looking statements, but please understand that actual results may differ significantly from these forecasts due to various factors.
1. About Leopalace21
1-1 Business Model of Core Businesses 4
1-2-1 Results Trend 5
1-2-2 Highlights of Results Trend 6
2. FY18/3 Q1-Q3 Results
2-1 Highlights of Results 8
2-2-1 Summary of Results(Sales & Gross Profit) 9 2-2-2 Summary of Results(Operating Profit & Net Income) 10 2-3 Results of Business Segments 11
3. Overview of Business (Leasing)
3-1 Overview of Leasing Business 13 3-2 Main Indicators(Leasing) 14
3-3-1 Indicator (Occupancy Rate) 15
3-3-2 Indicator (Occupancy by Group) 16
3-3-3 Indicator (Shares of Occupied Units by Group) 17
3-3-4 Indicator (Occupied Units by Industry) 18 3-3-5 Indicator(Foreign Tenants) 19
3-4-1 Leasing Strategy(Office Expansion) 20 3-4-2 Leasing Strategy(my DIY) 21 3-4-3 Leasing Strategy(Tenant Services) 22
3. Overview of Business (Leasing) (cont’d)
3-4-4 Leasing Strategy(Security Systems) 23
3-4-5 Leasing Strategy(IoT) 24 3-4-6 Leasing Strategy(Subsidiary Businesses) 25
4. Overview of Business (Development)
4-1 Overview of Development Business 27
4-2 Main Indicators(Development) 28 4-3-1 Indicator(Orders and Sales) 29 4-3-2 Indicator(Offices and Apartment Construction) 30 4-4-1 Development Strategy(Ideal Land Usage) 31 4-4-2 Development Strategy(Apartment Construction) 32
4-4-3 Development Strategy(Social Welfare Facilities) 33 4-4-4 Development Strategy(Stores) 34 4-4-5 Development Strategy(Built-to-order Homes) 35 4-4-6 Development Strategy(Real Estate Development) 36 4-4-7 Development Strategy(Real Estate Specified Joint
Enterprise Products) 37
5. Overview of Business (Others and International)
5-1 Others (Elderly Care Business) 39
5-2 Others (Domestic Hotels Business) 40 5-3 Others (Resort Business) 41 5-4-1 International(Leasing Business Overseas) 42 5-4-2 International(Serviced Apartments and Offices) 43 5-4-3 International(Other Services) 44
6. Financial Strategy
6-1 Management Metrics 46
6-2 Shareholder Distribution 47
Appendix 1. Supplementary Data
App.1-1 Corporate Profile 49
App.1-2-1 Quarter Comparison 50
App.1-2-2 Results of Leopalace21 Group 51 App.1-3-1 Indicator(Occupancy by Group) 52
App.1-3-2 Indicator(Foreign Tenants) 53 App.1-3-3 Indicator(Units and Occupancy Rates by Area) 54 App.1-3-4 Indicator(Occupancy Rates by Building Age) 55 App.1-3-5 Indicator(Contract Type) 56 App.1-3-6 Indicator(Solar Power Systems) 57
App.1-3-7 Indicator(“Azumi En” Area Disposition) 58
Appendix 1. (cont’d)
App.1-4-1 Finance(Balance Sheets) 59
App.1-4-2 Finance(Cash/Deposits and Interest-bearing Debt) 60 App.1-4-3 Finance(Cash Flows) 61 App.1-4-4 Finance(Shareholder Composition) 62
Appendix 2. Medium-Term Management Plan
“Creative Evolution 2020”
App.2-1 Key Points and Strategy 64
App.2-2 Numerical Targets (Consolidated) 65
App.2-3 Strengthen Distributions to Shareholders 66
Appendix 3. Market Trends
App.3-1 Number of Households 68
App.3-2 New Housing Starts 69
App.3-3 New Housing Starts(Leased Units) 70 App.3-4 Vacant Rental Dwellings 71
App.3-5 Population Inflows and Outflows 72
App.3-6 Rental Housing Starts and Leopalace21
Completions by Area 73
App.3-7 No. of Built Apartments by Area 74
App.3-8 International Students in Japan 75
App.3-9 Elderly Population of Japan 76
Business model
Leopalace21 is a real estate company with two core businesses: the Development Business which constructs apartments mainly for single persons, and the Leasing Business which manages these apartments. The Leasing Business makes up 80% of sales, and we are moving forward to establish a stock-based business model capable of generating stable profits.
Responsive to tenant needs
Responsive to owner needs
Apartment construction leads toinheritance tax reduction, and supports asset inheritance
Our Master Lease System pays rents for all units in buildings regardless of vacanciesfor up to 30 years
Total support fromconstruction to management and operation
Nationwide network centered onthree major metro areas where tenant demand is strong
Provide high value added services such asfurnished apartments with furniture, home appliances, and IoT devices
No brokerage fees(LP21 leases directly from landowners)
Leasing Business Development Business 4. Rent income Owners Tenants 2. Master lease 1. Construction contractor 3. Sub-lease
Business model
(Rooms)As of March 31, 2017
Tokyo metro 166,000 Tohoku 35,000 Chubu 88,000 Kinki 81,000 Chugoku 39,000 Kyushu & Okinawa 50,000 Shikoku 15,000 Hokuriku & Koshinetsu 41,000 Hokkaido 14,000
Kita Kanto 40,000
Rooms under management
No. 1 in Japan
in lease management of rental units for people living alone(570,000 rooms)
Sales (Billion yen) Operating profit (Billion yen)
Results Trend
Decrease in occupancy rates and rent, as well as stringent loan screening caused by the Lehman Collapse led to a decrease in apartment construction, and Leopalace21 reported operating losses for two consecutive years. However, structural reform measures such as leasing cost cuts were implemented in order to target a stable earnings structure for the mid to long term. Structural reforms were completed during the previous midterm management plan, and we are building the basis of our new growth business fields.
*Figures for FY17/3 adjusted to new segments
1-2-1: Results Trend
302.7 334.5 342.3 355.7 379.0 383.6 388.5 399.3
410.6 421.3 435.0
327.5 359.1 237.0
107.8 62.9 53.3 63.1 61.3 74.1 80.3
85.0
672.9 733.2
620.3
483.5 458.2 454.2 470.8 483.2 511.5 520.4
540.0 71.4 501 -29.7 -24.4 3.3 7.4 13.4 14.8
21.0 22.8 23.5
-20 0 20 40 60 80 -200 0 200 400 600 800 -30 92.36% 88.51% 82.25% 80.09% 81.16% 82.94% 84.58%
86.57% 87.95% 88.53% 89.00%
80% 95%
FY08/3 FY09/3 FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 (Plan) Occupancy rate (average)
Highlights of Results Trend
(Billion yen) FY08/3 FY09/3 FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3
Plan
Net sales 672.9 733.2 620.3 483.5 458.2 454.2 470.8 483.2 511.5 520.4 540.0
Leasing 302.7 334.5 342.3 355.7 379.0 383.6 388.5 399.3 410.6 421.3 435.0
Development
(Construction) 327.5 359.1 237.0 107.8 62.9 53.3 63.1 61.3 74.1 80.3 85.0
Operating profit 71.4 50.1 -29.7 -24.4 3.3 7.4 13.4 14.8 21.0 22.8 23.5
Leasing 3.0 -1.5 -47.8 -30.8 4.0 8.7 15.3 20.5 22.8 23.0 25.0
Development
(Construction) 73.2 70.1 29.7 11.8 4.2 2.7 2.9 0.2 3.3 5.7 5.0
Net income 0.3 9.9 -79.0 -41.7 0.3 13.3 15.7 15.1 19.6 20.4 14.2
Managed units*
(1,000 units) 442 506 551 571 556 546 549 554 561 568 575
Occupancy rate* 92.4% 88.5% 82.3% 80.1% 81.2% 82.9% 84.6% 86.6% 88.0% 88.5% 89.5%
Orders received 463.0 337.8 250.2 80.3 50.0 73.0 81.1 87.3 86.4 92.9 92.0
Before the Lehman Collapse in 2008, Leopalace21’s main profit driver was the Construction Business (current Development Business). After the Lehman Collapse, we shifted our business model through structural reforms, generating profit from the Leasing Business.
*“Net income” refers to “net income attributable to shareholders of the parent” *Figures for managed units are as of the end of the final month for each fiscal year *Occupancy rate is the average value for each fiscal year
*Figures for FY17/3 adjusted to new segments
Highlights of Results
Sales did not meet forecasts, but operating and recurring profit exceeded forecasts due to unremitting cost cuts. Extraordinary losses were realized due to asset sales, but losses were covered by tax effects, and net income exceeded forecasts.
*”Net income” refers to “net income attributable to shareholders of the parent”
(Million yen)
FY17/3 Q1-Q3Actual
FY18/3 Q1-Q3 Plan
FY18/3 Q1-Q3 Actual
FY18/3 Full-year Plan
YoY Compared to
Plan
Sales
380,634
387,000
385,521
+4,887
-1,479
540,000
Gross profit
67,256
67,800
72,127
+4,870
+4,327
97,000
% 17.7% 17.5% 18.7% +1.0p +1.2p 18.0%
SGAE
51,454
54,200
53,363
+1,909
-837
73,500
Operating profit
15,802
13,600
18,763
+2,961
+5,163
23,500
% 4.2% 3.5% 4.9% +0.7p +1.4p 4.4%
Recurring profit
15,465
13,100
18,585
+3,120
+5,485
22,500
% 4.1% 3.4% 4.8% +0.8p +1.4p 4.2%
Net income*
12,854
10,100
12,863
+8
+2,763
14,200
Sales
Gross Profit
Sales
-1.4 billion yen
compared to plan
Leasing
+0.3 billion yen
Development
-1.1 billion yen
Gross profit
+4.3 billion yen
compared to plan
Leasing
+2.5 billion yen
Development
+1.2 billion yen
(Billion yen) (Billion yen)
FY17/3 FY18/3 FY17/3 FY18/3
2-2-1: Summary of Results (Sales and Gross Profit)
Q1-Q3 Actual 380.6
FY Actual
520.4
Q1-Q3 Plan 387.0
Q1-Q3 Actual 385.5
FY Plan 540.0
0 200 400 600
Q1-Q3 Actual 67.2
FY Actual
92.6
Q1-Q3 Plan 67.8
Q1-Q3 Actual 72.1
FY Plan 97.0
Net income*
+2.7 billion yen
compared to plan
Operating profit
+5.1 billion yen
compared to plan
Leasing
+3.4 billion yen
Development
+1.4 billion yen
Operating Profit
Net Income
*”Net income” refers to “net income attributable to shareholders of the parent”
2-2-2: Summary of Results (Operating Profit and Net Income)
(Billion yen) (Billion yen)
FY17/3 FY18/3 FY17/3 FY18/3
Q3 progress rate compared to FY plan = Operating profit: 79.8%, Recurring profit: 82.6%, Net income: 90.6%
Q1-Q3 Actual 15.8
FY Actual
22.8
Q1-Q3 Plan 13.6
Q1-Q3 Actual 18.7
FY Plan 23.5
0 5 10 15 20 25
Q1-Q3 Actual 12.8
FY Actual
20.4
Q1-Q3 Plan 10.1
Q1-Q3 Actual 12.8
FY Plan 14.2
(Million yen) 17/3 Q1-Q3 Actual 18/3 Q1-Q3 Plan 18/3 Q1-Q3 Actual 18/3 Full-year Plan
YoY Compared to
Plan
L
easi
n
g
Sales 314,020 324,600 324,990 +10,970 +390 435,000
Gross profit 52,502 56,900 59,481 +6,979 +2,581 76,000
Operating profit 17,854 19,300 22,758 +4,903 +3,458 25,000
D ev el o p -m en t
Sales 52,222 47,700 46,590 -5,631 -1,110 85,000
Gross profit 14,983 12,500 13,768 -1,215 +1,268 23,200
Operating profit 2,115 -600 888 -1,226 +1,488 5,000
E ld er ly C ar e
Sales 8,594 9,300 9,547 +952 +247 12,500
Gross profit -189 -330 -18 +171 +312 -300
Operating profit -1,253 -1,500 -1,125 +127 +375 -1,900
H o tel s, R eso rt & O th er s
Sales 5,796 5,400 4,392 -1,404 -1,008 7,500
Gross profit 2,463 1,600 1,610 -852 +10 2,100
Operating profit -102 -1,150 -572 -470 +578 -1,500
Adjust-ments Operating profit -2,811 -2,450 -3,184 -372 -734 -3,100
Leasing Business sales and profits exceeded previous figures and forecasts, due to stable occupancy rates from strong corporate demand. Although sales and profit for the Development Business decreased YoY, forecasts were exceeded due to improvements in profit margins. Elderly Care Business
exceeded previous figures and forecasts. Sales and profit in the Hotels, Resort & Others Business decreased compared to previous figures due to the sale of hotels in the previous fiscal year, but exceeded forecasted profits by reviewing costs.
Results of Business Segments
*16.7% *17.5% *18.3%
*28.7% *26.2% *29.6%
*Gross profit/Sales *Figures for FY17/3 adjusted to new segments
2-3: Results of Business Segments
*17.5%
Indicator
Occupancy Rate
Occupancy by Group
Shares of Occupied Units by Group
Occupied Units by Industry
Foreign Tenants
Leasing Strategy
Office Expansion
my DIY
Tenant Services
Security Systems
IoT
Subsidiary Businesses Owners
Leopalace21
Leasing Development
Tenants
Master Lease Rental
Income Rent
Leasing Business
Construction
(Million yen) FY15/3 Actual
FY16/3 Actual
FY17/3 Actual
FY18/3 Plan
Sales
399,375
410,641
421,342
435,000
Gross profit
62,822
67,337
70,142
76,000
Operating profit
20,590
22,848
23,009
25,000
Units under management (as
of the end of FY)
554,948
561,961
568,739
575,800
Occupancy rate (average)
86.57%
87.95%
88.53%
89.5%
Direct offices
(as of the end of FY)
188
189
189
189
Number of corporate sales
section(as of the end of FY)
59
60
60
59
Number of employees
(non-consolidated, as of the end of FY)
2,989
3,150
3,284
3,318
of which, sales employees
1,526
1,603
1,701
1,684
Main Indicators (Leasing)
*15.7% *16.4% *16.6% *17.5%
*Gross profit/Sales *Figures for FY17/3 adjusted to new segments
3-2: Main Indicators (Leasing)
Occupancy Rate
Achievement of long-term occupancy and stable rates due to increase in long-term contracts.
Average occupancy rate for FY18/3 is planned to increase 1.0p YoY to 89.5%, and average rates of Q1-Q3 increased 2.01p YoY to 90.01%.
※
Target average occupancy rate for FY18/3: 89.5%
(Occupancy rate = Occupied units / Managed units, %)
Apr May Jun Jul Aug Sep Oct Nov Dec 9 monavg. Jan Feb Mar Avg.
FY15/3 86.00 86.03 85.96 85.63 85.78 86.33 86.14 86.10 85.69 85.96 87.24 88.65 89.29 86.57
FY16/3 87.88 87.61 87.59 87.32 87.26 87.70 87.26 87.14 86.89 87.41 88.38 89.80 90.53 87.95
FY17/3 88.97 88.55 88.60 87.95 87.78 88.31 87.50 87.41 86.97 88.00 88.41 90.18 91.66 88.53
FY18/3 90.51 90.28 90.55 89.75 89.88 90.21 89.73 89.69 89.44 90.01 90.83 90.09
3-3-1: Indicator (Occupancy Rate)
82% 84% 86% 88% 90% 92% 94%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
200 300 400 500 600
0 50 100 150 200 250 300
JunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDec
FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3
Managed units (right axis) Occupied units (right axis)
Corporate tenants are steadily rising, but increasing the number of individual and student tenants still remains an issue. 1. Promote services attending occupant needs, 2. established “Educational Institution Sales Division” as of October 2014, 3. established “PCR Division (sales for public offices)” as of May 2016.
Occupied units by Group (Thousand units)
Managed and occupied units (Thousand units)
Individuals (left axis) Corporate (left axis)
Students (left axis)
*Figures are as of the end of each month *Reference of p.52
Occupancy by Group
Both occupied units and shares of corporate tenants are steadily increasing due to reinforcement of corporate sales.
*Figures are as of the end of each quarter *Reference of p.52
Shares of Occupied Units by Group
(Thousand units)
3-3-3: Indicator (Shares of Occupied Units by Group)
49.5%49.5%49.4%51.3%51.5%51.4%51.1%53.0%53.3%53.3%53.0%54.5%54.8%54.8%54.8%56.4%56.6%56.5%56.5% 38.2%38.3%38.3%37.3%37.4%37.4%37.6%36.8%36.8%36.8%37.0%36.0%36.0%35.9%35.9%
34.6%34.6%34.6%34.5%
12.3%12.2%12.3%11.4%11.1%11.1%11.3%10.2% 9.9% 9.9% 10.1% 9.5% 9.3% 9.3% 9.3% 9.0% 8.8% 8.9% 9.0%
458 461 461 480 473 476 474 495 488 490 487 509 500 499 493 521 517 515 509
0% 20% 40% 60% 80% 100%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY14/3 FY15/3 FY16/3 FY17/3 FY18/3
45,331 45,449 46,562 32,815 36,555 43,615
33,814 34,318 35,468
38,465 40,205 41,278 15,938 16,561 17,156 47,501 50,350 56,109 43,887 46,584 47,441 257,751 270,022 287,629 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000
2015/12 2016/12 2017/12 46,277 47,510 48,913 49,242
29,105 32,022 34,689 39,510
32,995 35,169 36,911
37,507
39,188 40,878 42,837
45,034 14,956 16,635 17,509 18,150 39,783 44,398 48,489 52,920 43,968 45,965 47,913 51,461 246,272 262,577 277,261 293,824 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000
2014/3 2015/3 2016/3 2017/3
Other Construction Food service Services Staffing, outsourcing Manufacturing Retail
Shares of Occupied Units by Industry
Leopalace21 will pursue strategies of “expanding major business connections” and “cultivating ‘low-use’ business connections” while diversifying industry types of corporate tenants. Approximately 80% of listed companies* in Japan use Leopalace21.
*Companies listed on the 1stand 2ndsections of the Tokyo Stock Exchange, regional stock exchanges, and emerging markets
YoY +6.6% +5.6% +6.0%
(Units)
3-3-4: Indicator (Occupied Units by Industry)
+4.8% +6.5% YoY +11.4% +3.6% +2.7% +3.4% +19.3% +2.4% +1.8% +9.1% +3.7% +5.1% +1.6% +13.9% +0.7% +7.4% YoY YoY
(47,815) (No. of company) (46,844)
(48,609) (47,217)
(46,008) (45,784)
Leased Units by Foreign Nationals (Excluding Corporate Contracts)
*Reference of p.53
In addition to getting customers at 16 overseas offices, we are strengthening our support system for foreign customers after coming to Japan such as preparing customer services in 7 languages by overseas employees (196 as of December 2017) at 7 domestic offices in the overseas division. About 60%, or 15,000 units, of the nationality of foreign tenants with corporate contracts are distinguishable. Totally about 32,000 units are contracted by foreign tenants, meaning 6.4% of the total occupied units.
Singapore Overseas
subsidiary Singapore
Indonesia Overseas
subsidiary Jakarta
Philippines Overseas
subsidiary Manila
Myanmar 1 office Yangon
Cambodia Overseas
subsidiary Phnom Penh
Thailand Overseas
subsidiary Bangkok, Sriracha
Vietnam Overseas
subsidiary Ho Chi Minh, Ha Noi
Taiwan 1 office Taipei
South
Korea 2 offices Busan, Seoul
China Overseas
subsidiary
Beijing, Dalian, Shanghai, Guangzhou
17,152 as of December 31, 2017 (YoY +19.8%)
3-3-5: Indicator (Foreign Tenants)
(Units)
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
FY14/3 FY15/3 FY16/3 FY17/3 FY
18/3
China S. Korea Taiwan
Leasing Offices
As of December 31, 2017
Leopalace21 will recruit tenants through direct offices including 7 overseas and franchise partners. Concerning Leopalace Partners, we will aim for “quality over quantity” and increase contracts through training. 4 direct offices opened during FY15/3 and 2 direct offices opened during FY16/3.
* Overseas locations operating foreign real estate brokerage services not included. (Thailand, Vietnam, Cambodia, Myanmar, Philippines, Indonesia, Singapore)
3-4-1: Leasing Strategy (Office Expansion)
Direct Partners Total
Hokkaido 9 2 11
Tohoku 15 6 21
Kita-kanto 14 5 19
Tokyo metro 49 33 82
Hokuriku & Koshinetsu 13 8 21
Chubu 24 16 40
Kinki 25 14 39
Chugoku 11 10 21
Shikoku 5 5 10
Kyushu & Okinawa 17 18 35
Japan 182 117 299
Overseas 7 0 7
Total
(Compared to March 2017)
189
(±0)
117
(±0)
306
(±0)
0 50 100 150 200 250 300 350 400
JunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDec
FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3
(Offices)
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
SepDecMar Jun SepDecMar Jun SepDecMar Jun SepDecMar Jun SepDecMar Jun SepDec
FY14/3 FY15/3 FY16/3 FY17/3 FY18/3
Contracts (Cumulative total)
Contests
Wall-art Contest
Winners paint their work on the walls
of our showroom “Kagoshima-like Rooms”
Students compete in creating rooms which best represent “Kagoshima”
Renovation Party
Self-renovation event. The concept of the renovation is “living with friends without investing a large amount of money”
In May 2012, Leopalace21 has started “my DIY” as a strategy for acquiring individual tenants. 36,665 contracts have been acquired as of December 31, 2017, and we will continue to promote the image of “Customize = Leopalace.”
*"Room-Customize" has been changed to "my DIY" as of October 2016.
“my DIY”
Custom wallpaper for free on 1 wall. Thumbtacks, shelves, and scribbling on the wall is OK
No cost for restoring room to original state
More than 100 types of wallpaper to choose from, including patterns
Male-to-female ratio of 50:50, higher percentage of females compared to overall occupancy (70:30)
(# of contracts)
36,665
3-4-2: Leasing Strategy (my DIY)
T Card Plus (Leopalace Member)
Leopalace Online Shopping
Shopping web site with many everyday-necessities. Products made specially for Leopalace are also available.Tenant services which overturn common practices of the leasing apartment industry are available through “MY PAGE,” an exclusive website for our tenants. Also, industry-academia collaborations and internships are implemented by the “Educational Institution Sales Division” established in October 2014.
Website for Tenants: “MY PAGE
” (from Apr. 2013)STB device “Life Stick”
Expand functions of internet service “LEONET” (started in 2002) through STB device “Life Stick” with AndroidTV
Installation planned in 560 thousand apartments
Life Stick LEONET my-room
LEONET TV
3-4-3: Leasing Strategy (Tenant Services)
MY PAGE
(Exclusive website for tenants)
Issued Leopalace21 original brand credit card from October 1, 2017
Tenants can pay monthly rent via credit
Business alliances with two major security companies
The standard equipment includes fire sensing systems and emergency systems, in addition to sensors that detect intruders
We anticipate an increase in the percentage of female tenants
We are seeking to meet demand for security in corporate housing
(Large companies emphasize security)
Since 2012, through alliances with major security companies, security systems and cameras have been installed. Apartments certified as “Superior Disaster Prevention Leasing” since June 2017.
3-4-4: Leasing Strategy (Security Systems)
Security Systems Installments
FY18/3 Q1-Q3 Actual
Cumulative total
% of total
Security systems (units) 11,923 291,532 51.2
Security cameras(buildings) 1,796 12,019 33.1
Certified as “Superior Disaster
Prevention Leasing”
Designs for “Miranda” and “Cleino” have met the criteria for the certification of a “Superior Disaster Prevention Leasing” apartment.
Open-type delivery locker “PUDO Station”
Industry-first open-type delivery locker installed in an apartment
IoT with “Leo Remocon”
Controlling appliances with a smartphone made possible ie. control AC from outside
Standardly equipped in all newly constructed apartments (after Oct. 2016)
In order to enhance tenant services, Leopalace21 has expanded functions of its internet service and implemented an IoT device which makes controlling appliances and opening locking with a smartphone possible. Smart stations with AI speakers will be standardly equipped in new apartments, starting from those contracted after January 2018.
3-4-5: Leasing Strategy (IoT)
Smart Lock “Leo Lock”
Selected as “Competitive IT Strategy Company”
Facial Recognition System
Remotely lock and confirm via smartphones
Key cylinder replacements and key handovers become
redundant
Standardly equipped on all new apartments (completed after October 2017)
Initiatives such as “industry-first electronic contract service” and “IoT devices in rental housing” led to selection
Promoted by METI and the Tokyo Stock Exchange
First*rental housing with a
locking system that opens only with facial recognition
(installed in LOVIE Azabu-juban and LOVIE Ginzahigashi)
*based on Leopalace21 research
3-4-6: Leasing Strategy (Subsidiary Businesses)
Roof-lease Solar Power Systems (from Dec.2013)
FY18/3 Q1-Q3 Actual Buildings
installed* 4,494
Generating
capacity* 67.1 MW
Generated power* 62,585 MWh
*Refer to p.57
Corporate Housing Agency
(from Sep. 2009)Leopalace Leasing Corporation
Provides agency services such as finding rooms from over 1.6 million, including Leopalace21 apartments, as well as contracting, paying rent, and concluding contracts.
Small-claims and Short-term Insurance Business
(from Sep. 2006)
Asuka SSI
Supporting all tenants’ life by providing insurances which cover niche fields such as an insurance for furniture and fee of tiding up ruins when fire occurred.
Rent Guarantee Business
(from Apr. 2007)Plaza Guarantee Co., Ltd
Providing comfortable environment to all tenants by guaranteeing debts such as rents, common fees, restoration costs, etc.
Tenants Paying “Rents”
+ “Guarantee
Fee”
Plaza Guarantee Lessees
Payment of “Guarantee Fee”
Guarantee Contracts Lease Contracts
Lease Guarantee Contracts
Group companies implement leasing-related businesses, as well as services to increase the competitiveness and profitability.
60,000 contracts (+17.6% YoY)
310,000 contracts (+2.1% YoY)
Owners
Leopalace 21
Leasing Development
Tenants
Master Lease Rental
Income Rent
Development Business
Indicators
Orders and Sales
Offices and Apartment Construction
Construction Examples
Ideal Land Usage
Apartment Construction
Social Welfare Facilities
Stores
Built-to-order Homes
Real Estate Development
Strengthen After-sale Services Construction
Main Indicators (Development)
(Million yen) FY15/3
Actual
FY16/3 Actual
FY17/3 Actual
FY18/3 Plan
Sales
61,312
74,160
80,321
85,000
Gross profit
13,223
20,268
23,124
23,200
Operating profit
211
3,340
5,786
5,000
Orders
87,395
86,439
92,852
92,000
of which, apartments and
other buildings
87,395
86,439
87,592
85,000
of which, real estate
development
0
0
5,260
7,000
Offices
(as of the and of FY)
60
60
60
60
Number of employees
(non-consolidated, as of the end of FY)
1,638
1,686
1,690
1,731
of which, sales personnel
418
427
381
388
*21.6% *27.3% *28.8% *27.3%
*Gross profit/Sales *Figures for FY17/3 adjusted to new segments
4-2: Main Indicators (Development)
Gross Orders
*Cancellation is not included in gross orders received.
Orders and Sales
FY16/3 FY17/3
Orders decreased compared to the previous year (decreased 10.3 billion yen, -15.0% YoY), due to increased competition and negative media reports. Orders outstanding decreased 7.7% YoY.
4-3-1: Indicator (Orders and Sales)
(Billion yen)
FY16/3 FY17/3 FY18/3
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q1-Q3 FY
(Plan)
Orders from
subcontracting (buildings) 236 229 223 404 990 244 254 243 217 958 214 222 204 640 945
(Billion yen) 20.7 21.3 18.8 25.4 86.4 22.4 21.8 22.3 20.9 87.5 19.2 18.6 17.6 55.5 85.0
Orders outstanding
(Billion yen) 66.8 65.1 65.4 66.3 66.3 72.6 71.9 74.4 67.3 67.3 69.7 68.0 68.7 68.7
-Real estate development
(Billion yen) - - - 0.7 1.2 3.2 5.2 0.5 0.7 1.4 2.8 7.0
Sales (Billion yen) 15.4 19.9 16.1 22.6 74.1 14.3 20.7 17.1 28.0 80.3 14.4 17.5 14.5 46.5 85.0
FY18/3
Subcontracting Real estate development
20.7 22.4 19.2 21.3 21.8 18.6 18.8 22.3
17.6
25.4
20.9
0.0 0.0 0.5 0.0 0.7 0.7 0.0 1.2
1.4
0.0
3.2
0 10 20 30
Q1 Q2 Q3 Q4
Total 60 offices
(As of December 2017)Construction Offices
Apartments Constructed (FY18/3 Q1-Q3)
Tokyo metropolitan area makes up 58.1% (FY17/3 Q1-Q3: 57.0%), and the three metropolitan areas (Tokyo, Kinki, and Chubu) make up 80.4% (FY17/3 Q1-Q3: 78.8%) of construction sales of 377 buildings.
(Buildings)
*2 offices opened in April 2015 (Tokyo) and 2 offices closed in December 2015 (Mito in North Kanto and Sakai in Osaka)
Osaka 4 offices Kyoto 1 office Hyogo 2 offices
Tokyo 20 offices Kanagawa 8 offices Saitama 8 offices Chiba 3 offices
Tokyo metropolitan: 39 offices Shikoku: 0 offices Hokkaido: 0 offices North Kanto: 0 office Chubu: 4 offices (Aichi) Tohoku: 3 offices (Sendai, Kohriyama) Hokuriku, Koshinetsu: 0 offices
Kinki: 7 offices Chugoku: 2 offices
(Okayama, Hiroshima)
Kyushu, Okinawa: 5 offices
(Fukuoka, Okinawa)
Leopalace21 will continue to place offices and operate in areas where high occupancy rates can be expected, specifically in the three metropolitan areas (Tokyo, Kinki, and Chubu).
4-3-2: Indicator (Offices and Apartment Construction)
Tokyo Metropolitan 219 Kinki 55 Kyushu, Okinawa 36 Chubu 29 Chugoku 17 Tohoku
Elderly care facilities
Apartments
Matching business
between land owners and care facility operators,
addressing the increasing number
of seniors. Products addressing
needs of tenants. Apartments are bulk-leased and managed by Leopalace21.
Built-to-order houses
Stores
Construction of
convenience stores and restaurants, as well as complex structures with homes or apartments. Construction of
built-to-order houses and house with rooms for rent, in which rent income can be earned.
Leopalace21 proposes the optimal plan fit for the unique conditions of each land.
Various land usage proposals, including management of vacant land and housing, as well as support for sales
Others
Lang usage
proposions of
Leopalace21
Ideal Land Usage
“MIRANDA”
“CLEINO”
New apartment brands “MIRANDA” and “CLEINO” announced in May 2015. The launch of two unique brands will strengthen
competitiveness and renew brand image. Leopalace21 apartments are standardly equipped with sound-insulating “non-sound system,” which drastically upgraded sound insulation.
4-4-2: Development Strategy (Apartment Construction)
Wooden V-model Down
1/3
Steel Down1/3
Non-sound floor Reduces noise from upper floors. Insulation improved two to three ranks compared to conventional models. Wooden TLD-45 Steel TLD-50 Sound-insulating walls Improved sound-insulation quality of walls, providing TLD-45 forwooden structures and TLD-50 for steel frame structures. Down 15dB Construction example Cross section Sound-insulating drainpipes
Installed as a measure against drainage noise. Decreases noise by 15 dB compared to conventional models, providing environments similar to “libraries or midnight suburbs.”
Upgraded Sound Insulation with “Non-sound System”
Concept is “decorative.”
An apartment brand that proposes unique added value and new ideas.
Concept is “plain.”
Elderly care facility (Setagaya-ku, Tokyo)
Since the fiscal year ended March 2012, Leopalace21 has started constructing buildings other than apartments. Elderly care facilities make up the majority of the social welfare facilities constructed, but we are adding and diversifying products such as childcare facilities.
Elderly care facility (Kawagoe City, Saitama)
Elderly care facility (Setagaya-ku, Tokyo) Elderly care facility
(Kokubunji City, Tokyo)
Elderly Care Facilities
Childcare Facilities
4-4-3: Development Strategy (Social Welfare Facilities)
Name Benesse Nursery School in Kokubunji Address Kokubunji, Tokyo
Name Disability Group Home Casa Yanagibashi
Convenience store
（Osaka City, Osaka）
Commercial Facilities
Since the latter half of the fiscal year ended March 2012, Leopalace21 has started constructing buildings other than apartments. Businesses with different industries is increasing, from matching landowners with companies. Also, complex buildings (ie.
apartments + store) are increasing rather than standard commercial facilities.
Restaurant
（Adachi-ku, Tokyo）
4-4-4: Development Strategy (Stores)
Name
Tanakacho Building -Tanaka-ya Pickles Store
-Hotel “Sotetsu Fresa Inn Kyoto Shijokarasuma” Address Shimogyo, Kyoto
Name
Leonext Kinuta Premium -Apartment
In addition to the luxurious homes made with kiso-hinoki wood built by subsidiary Morizou Co., Ltd., Leopalace21 has launched “○○” (maru-maru) Home, constructed using the SE (safety-engineering) method.
Luxury custom-built “Taiga” by Morizou
“
○○
” (maru-maru) Home
Free design is possible, such as spacious chambers and large windows, due to the SE construction method
Adapts to changing family structures by arranging floor plans
Nagano-chuo SR, Nagano B Toyama SR, Toyama B Saku SR, Saku B Morizou Club, Nagano B Showa SR, Yamanashi B
High-quality SR with accommodations SR with kiso-hinoki experience tour
Utsunomiya-nishi SR, Tochigi B Mito SR, Ibaraki B
Kumagaya SR, Saitama-Gunma B Maebashi SR, Saitama-Gunma B
Mitaka SR, Tokyo B Makuhari SR, Chiba B
Morizou Club, Shizuoka B Nagoya SR, Tokai B Yokohama SR, Kanagawa B Morizou Club, Niigata B
Life Living Co., Ltd., a real estate developer operating in the urban areas of Tokyo, Nagoya, and Fukuoka, has been subsidized as of July 2016.
Branche Series
Apartments emphasizing design and functionality, fitting small or deformed land
Constructing four-story buildings under 10 m is possible using the patented “TEN-FOUR CUBE construction method”
Leopalace21 has started real estate specified joint enterprise products for our new condominiums “LOVIE” series located in the center of Tokyo. The first series had completed composition on December 18, and the second series has started raising money from January 15, 2018.
Real Estate Specified Joint Enterprise Products
4-4-7: Development Strategy
(Real Estate Specified Joint Enterprise Products)
Real estate retailed products which enable individuals to invest in small amounts
Reduces inheritance tax, similar to real estate investments
Total amount 1
st: 2.46 billion yen
Operation period 15 years 2nd: 1.4 billion yen
Total units 1
st: 2,460 units
Distributions Twice a year (Jan. and Jul.) 2nd: 1,400 units
1 unit 1 million yen Minimum
amount
5 million yen
(5 units) Reporting
Once a year (Feb. 15)
Tenants
Leopalace21
Subject real estate
Investors Leopalace21
Investors’ association
Lease
Rent Payment
Acquisition
Lease
Rent Payment
Investment Distribution
Selling the subject real estate after completing investment and distributing
profits to investors
LOVIE Azabujuban
LOVIE
*Private residential homes include Group homes
Elderly Care Business
Elderly Care Business is positioned as a growth strategy area, planning to open facilities and stable management. In order to correspond to Japan’s aging society, we plan to increase the number of facilities. 7 facilities opened during April to February totaling 83 facilities at February 1, 2018. We are planning to keep profitability by controlling cost of sales as well as expanding the number of facilities.
(Million yen)
FY17/3 Q1-Q3 Actual
FY18/3 Q1-Q3 Plan
FY18/3 Q1-Q3 Actual
FY18/3
Full-year Plan
YoY Compared
to Plan
E
ld
e
rl
y
C
a
re
Sales 8,594 9,300 9,547 +952 +247 12,500
Gross profit -189 -330 -18 +171 +312 -300
Operating profit -1,253 -1,500 -1,125 +127 +375 -1,900
Facilities as of term-end 75 82 82 +7 ±0 83
Occupancy rate (Day-service) 69.5% 71.4% 74.2% +4.7p +2.8p 71.1%
Occupancy rate (Short-stay) 86.7% 84.5% 89.0% +2.3p +4.5p 85.0%
Occupancy rate
(Private residential homes, etc.) 93.5% 90.9% 88.1% -5.4% -2.8p 91.7%
Domestic Hotels Business
Hotel Leopalace Sendai
Hotel Leopalace Sapporo
Hotel Leopalace Hakata
Occupancy rates improved due to increase in usage by client companies of the Leasing Business. An annex of Hotel Leopalace Sapporo opened in October 2017, and rooms will increase from 86 to 195. Hotels in Asahikawa, Niigata, Yokkaichi, and
Okayama were sold during the previous midterm management plan, and 4 hotels with a total of 542 rooms in Sapporo, Sendai, Nagoya, Fukuoka (Hakata) are currently under management.
(Million yen)
FY17/3 Q1-Q3 Actual
FY18/3 Q1-Q3
Plan
FY18/3 Q1-Q3 Actual
FY18/3 Full-year
Plan
YoY Compared
to Plan
D
o
m
e
s
tic
H
o
te
ls
Sales 1,491 1,400 1,383 -107 -17 1,860
Operating profit -16 -40 -172 -156 -132 -90
Depreciation and amortization 184 180 191 +6 +11 280
Occupancy rate 84.9% 88.0% 85.7% +0.9p -2.2p 86.4%
5-2: Others (Domestic Hotels Business)
Resort Business (Leopalace Guam)
We anticipate stable earnings from an increase in usage by leasing business tenants. Usage by soldiers coming to Guam on exercises started from the end of August 2014, which leads to customer diversification. An executive floor “Medallion Floor” opened in Leopalace Hotel (Guam) in April 2017.
Leopalace Resort Leopalace Resort Country Club
*Non-consolidated figures for Leopalace Guam *Q1-Q3 of Leopalace Guam is from January to September
(Million yen)
FY2016/12 Q1-Q3 Actual
FY2017/12 Q1-Q3
Plan
FY2017/12 Q1-Q3 Actual
FY17/12 Full-year
Plan
YoY Compared
to Plan
L
e
o
p
a
la
c
e
G
u
a
m
Sales 3,888 4,050 3,922 +34 -128 5,580
Operating profit 9 0 -114 -124 -114 40
Depreciation and amortization 670 740 726 +55 -14 1,000
Occupancy rate (Leopalace Resort) 56.1% 54.6% 52.3% -3.8p -2.3p 56.9%
5-3: Others (Resort Business)
Busan Dalian Beijing Shanghai Guangzhou Taipei Introduce Japanese apartments Foreign real estate brokerage Both businesses Bangkok
Ho Chi Minh Phnom Penh Yangon Ha Noi
Manila Seoul
Jakarta Sriracha
Leasing Business Overseas
Foreign offices, subsidiaries
South Korean JV “Woori & Leo PMC”
Established with South Korea’s largest residential property management company
Woori & Leo PMC will provide South Korea’s first systematic leasing management services
Full-scale operations started after the local law enactment on February 2014, with 1,208 managed units as of December 31, 2017 (+90 units compared to March 30, 2017)
Introduce Japanese apartments to foreigners
Foreign real estate brokerage targeting Japanese individuals and companies Promoting businesses of serviced apartments and serviced offices
T raditional
In the future
China Beijing, Dalian, Guangzhou, Shanghai South Korea Busan, Seoul
Taiwan Taipei
Thailand Bangkok, Sriracha Vietnam Ho Chi Minh, Ha Noi Cambodia Phnom Penh
Myanmar Yangon
Philippines Manila
Indonesia J akarta
Singapore S ing apore
Leopalace21 will expand its leasing business overseas. In addition to introducing Japanese apartments to foreigners, we have started foreign real estate brokerage services in Southeast Asia targeting Japanese individuals and companies. Also, we have entered the Korean market through a leasing management venture with a local enterprise. We have started operations at a subsidiary in Singapore, with the purpose of gathering information and investigating real estate investments..
Type Location Starting date No. of rooms
Serviced office Philippines (Makati) November 2015 43 rooms
Myanmar (Yangon) April 2016 14 rooms
Serviced apartment
Thailand (Sriracha) October 2015 8 stories, 72 rooms
Vietnam (Hanoi) August 2016 10 stories + basement, 56 rooms
Cambodia (Phnom Penh) December 2017 14 stories + basement, 56 rooms
List of Serviced Offices and Serviced Apartment
Thailand
(Serviced apartment) Room
Hanoi
(Serviced Apartment) Living room
Cambodia (Serviced apartment) Philippines
(Serviced office) Meeting space
We have started construction and operation of serviced apartments and serviced offices in Thailand, the Philippines, Myanmar, and Cambodia.
Hanoi
Acquired Enplus Inc. and made into an affiliate
Targeting 250 client companies and 10,000 users in 5 years
Service model of Enplus Inc.:
Relocation Management Business
Leopalace21 has started a new service “World Business Support”, in which the company will support the Japanese working overseas. In addition, we will open a serviced office in the Philippines. Also, in response to the shortage of construction labor supply, we have begun supporting the acceptance of technical intern trainees by our partnering contractors (59 since July 2015), in cooperation with the Technical Intern Training Program (TITP).
In cooperation with TITP, we have implemented practical construction training and Japanese language training of Vietnamese trainees, and supported acceptance to our partnering contractors
59 trainees employed as of December 31, 2017 (8 trainees employed by Leopalace21 on July 1, 2017)
Acceptance of Foreign Technical Intern Trainees
Practical construction training
Language training
On the job training
5-4-3: International (Other Services)
Client company
Mobility program consulting Training and orientation
Visa and immigration Rental apartment Moving and air ticket Orientation after moving
Settle in support Family support Help desk during residence Support for returning home Human mobility business
Transferees
Outbound Inbound Between overseas
Vender
Real estate broker Travel Agency Moving company
ROIC
Adjusted ROE
Adjusted EPS Growth
Equity Ratio
7.1%
12.0%
12.3%
47.0%
8%
〜
10%
Maintain 12%
About 10%
Above 40%
Fiscal 2016
(actual)
Fiscal 2019
(directional)
ROIC:
Strive to improve by reviewing asset holdings
*ROIC = After-tax operating income÷ (interest-bearing debt + net assets)
Adjusted ROE:
Examine capital efficiency on normalized earnings given
the expected reversal of deferred tax assets
*Adjusted ROE = (net income + adjustments for corporate taxes, etc.)÷ (average of start-FY net assets and end-FY net assets)
Adjusted EPS Growth:
Examine capital-efficient growth prospects for after-tax
recurring income that excludes one-off factors such as
goodwill amortization, corporate taxes, etc.
*Adjusted EPS Growth = (Recurring income + goodwill amortization)÷ outstanding shares
6-2: Shareholder Distribution
Dividend Forecast
FY15/3 Actual FY16/3 Actual FY17/3 Actual FY18/3 Plan
Q2 0.00 yen 0.00 yen 10.00 yen 10.00 yen
End of FY 0.00 yen 10.00 yen 12.00 yen 12.00 yen
Annual 0.00 yen 10.00 yen 22.00 yen 22.00 yen
Total Cash Dividends
(Annual) 0 million yen 2,628 million yen 5,783 million yen 5,546 million yen
Dividend Payout Ratio 0.0% 13.4% 28.3% 40.1%
Share Buyback - - - 7,999 million yen
Total Return Ratio 0% 13.4% 28.3% 96.4%
Retirement of Treasury Shares
Share Buybacks
4 million shares (1.5% of shares outstanding) retired as of June 15, 2017.
Announced share buybacks of maximum 8 billion yen in May 2017 and completed buybacks as of August 30, 2017. 10.76 million shares (4.08% of shares outstanding before retired) which the company gained were retired as of October 31, 2017.
Leopalace21 will flexibly repurchase shares while monitoring share prices, with proceeds for asset sales as a funding source
No. of shares repurchased
Total value of shares repurchased
May 2017 0 0 yen
June 2017 3,175,700 2,104,688,000 yen
July 2017 3,739,900 2,806,692,600 yen
August 2017 3,845,800 3,088,559,300 yen
Total 10,761,400 7,999,939,900 yen
Individuals and Other 14.31%
Business Corporations and Other Legal Entities
2.48% Foreign Corporations 55.10% Financial Institutions 21.88% Financial Instruments Business Operations (Securities Companies) 1.93% Treasury Stocks 4.30% H o te ls, R e so rt & O th e rs Leopalace Guam Resort Business WING MATE Business travel management Leopalace Smile Special subsidiary E ld e rl y C a
re Azu Life Care
Elderly care service
Corporate Data
(as of December 31, 2017)Shareholder Composition
(as of September 30, 2017)Group Companies
(as of December 31, 2017) Company Name Leopalace21 CorporationHead Office 2-54-11 Honcho, Nakano-ku, Tokyo TEL. +81-3-5350-0001 (Main Line) Established August 17, 1973
Paid-in Capital 75,282 million yen
President President and CEO Eisei Miyama
Operations
Construction, leasing and sales of apartments, condominiums, and residential housing; development and operation of resort facilities; hotel business; broadband business; and elderly care business, etc. Employees 7,778 (consolidated), 6,549 (non-consolidated) Authorized Shares 500,000,000
Outstanding Shares 252,682,515 shares
Shareholders 47,515 (as of September 30, 2017)
L e a si n g Leopalace Leasing Corporate housing agent Plaza Guarantee Rent guarantee Leopalace Power Power generation ASUKA SSI
Tenant contents insurance
Woori & Leo PMC
Leasing management in South Korea
Leopalace21 (Thailand)
Real estate brokerage in Thailand Leopalace21 Business Consulting (Shanghai) Tenant recruitment¥ LEOPALACE21 VIETNAM
Real estate brokerage in Vietnam
Leopalace21 (Cambodia)
Real estate brokerage in Cambodia
PT. Leopalace Duasatu Realty
Real estate brokerage in Indonesia
LEOPALACE21 PHILIPPINES INC.
Real estate brokerage in the Philippines
Leopalace21 Singapore Pte. Ltd.
Investment consulting D e v e lo p -m e n t Morizou Custom-built homes Life Living
Real estate development
App.1-1: Corporate Profile
Enplus Inc.
Relocation management
Enplus Inc., a relocation management company, was subsidized as of October 2, 2017.
The number of shares outstanding is after retirement of treasury stocks as of October 31, 2017.
(Million yen)
Q1 Apr – Jun
Q2 Jul – Sep
Q3 Oct – Dec
Q4 Jan – Mar
FY17/3 Actual
FY18/3 Actual
FY17/3 Actual
FY18/3 Actual
FY17/3 Actual
FY18/3 Actual
FY17/3 Actual
FY18/3 Plan
Sales 125,998 128,450 129,192 130,289 125,443 126,780 139,854 153,000
Leasing 105,808 109,145 104,351 108,294 103,860 107,550 107,322 110,400
Development 14,339 14,476 20,721 17,548 17,161 14,566 28,099 37,300
Elderly Care 2,770 3,084 2,879 3,209 2,945 3,253 2,942 3,200
Hotels, Resort
& Others 3,080 1,745 1,240 1,237 1,476 1,409 1,490 2,100
Operating profit 5,646 6,957 5,690 7,029 4,464 4,776 7,095 9,900
Leasing 6,671 8,206 5,841 7,852 5,342 6,699 5,154 5,700
Development -130 84 1,609 890 636 -86 3,671 5,600
Elderly Care -483 -471 -370 -274 -398 -379 -414 -400
Hotels, Resort
& Others 502 197 -435 -356 -169 -403 -315 -350
Quarter Comparison
Results for Leopalace21 and Major Subsidiaries
App.1-2-2: Results of Leopalace21 Group
(Million yen) FY17/3 Q1-Q3
Actual
FY18/3 Q1-Q3 Plan
FY18/3 Q1-Q3
Actual YoY Compared
to Plan
Leopalace21 Sales 366,604 370,000 370,116 +3,511 +116
OP 14,867 12,600 17,750 +2,882 +5,150
Leopalace Leasing (Corporate housing)
Sales 1,065 1,320 1,206 +140 -114
OP 175 270 263 +87 -7
Plaza Guarantee (Rent guarantee)
Sales 2,938 3,070 3,061 +123 -9
OP 253 240 236 -17 -4
ASUKA SSI
(Tenant contents insurance)
Sales 1,335 1,490 1,285 -50 -205
OP 448 550 293 -154 -257
Leopalace Power (Roof-lease solar power)
Sales 2,265 2,170 2,322 +57 +152
OP 338 450 593 +255 +143
Morizou
(Built-to-order homes)
Sales 3,093 3,350 3,557 +463 +207
OP 43 20 163 +119 +143
Life Living
(Real estate development)
Sales 2,232 2,370 3,020 +787 +650
OP 194 -60 236 +42 +296
WING MATE (Travel management)
Sales 1,810 2,210 2,073 +263 -137
FY16/3 FY17/3 FY18/3
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Units under management 557,017 558,457 560,076 561,961 564,378 565,228 567,008 568,739 570,842 570,802 569,289
A. Occupied units 487,900 489,771 486,626 508,720 500,045 499,143 493,144 521,298 516,886 514,946 509,172
Occupancy rate (average) 87.7% 87.4% 87.1%
89.6%
FY88.0% 88.7% 88.0% 87.3%
90.1%
FY88.5% 90.5% 89.95% 89.62% B. Corporate-occupied
units 259,923 260,978 257,751 277,261 273,908 273,516 270,022 293,824 292,581 291,085 287,629
Corporate share (B / A) 53.3% 53.3% 53.0% 54.5% 54.8% 54.8% 54.8% 56.4% 56.6% 56.5% 56.5%
C. Individual-occupied
units 179,748 180,335 179,883 183,008 179,785 179,393 177,076 180,617 178,802 178,016 175,872
Individual share (C / A) 36.8% 36.8% 37.0% 36.0% 36.0% 35.9% 35.9% 34.6% 34.6% 34.6% 34.5%
D. Student-occupied units 48,229 48,458 48,992 48,451 46,352 46,234 46,046 46,857 45,503 45,845 45,671
Students share (D / A) 9.9% 9.9% 10.1% 9.5% 9.3% 9.3% 9.3% 9.0% 8.8% 8.9% 9.0%
*Occupancy rate is the average value for each period (full-year or quarter)
*Figures for units under management and occupied units are as of the end of the final month for the relevant period
Occupancy by Group
App.1-3-1: Indicator (Occupancy by Group)
Units Occupied by Foreign Tenants (Chintai Contracts*)
*Figures are as of the end of the final month for the relevant period
*Chintai contracts are long-term (more than one year) leasing contracts with monthly rent payments
Foreign customers make up 3.4% of total contracts (7.7% of individual and student contracts). Foreign nationals comprised of students 59% and working-class 41%. Vietnam, the second highest in occupied units, is steadily increasing.
By adding 15 thousand units contracted by corporate foreign tenants, totally over 32 thousand units are contracted by foreign tenants, meaning 6.4% of the total occupied units.
App.1-3-2: Indicator (Foreign Tenants)
(Units)
FY16/3 FY17/3 FY18/3
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
China 6,320 6,336 6,446 6,627 6,056 6,027 5,879 6,490 6,224 6,534 6,512
South Korea 1,322 1,349 1,438 1,447 1,412 1,415 1,424 1,479 1,459 1,478 1,512
Taiwan 706 760 826 949 913 920 918 951 899 873 946
Southeast Asia 2,750 2,876 2,987 3,116 3,067 3,194 3,140 3,708 3,875 4,307 4,646
of which,
Vietnam 1,886 1,947 2,063 2,142 2,097 2,186 2,136 2,604 2,773 3,166 3,478
Others 2,388 2,506 2,633 2,874 2,820 2,885 2,951 3,199 3,230 3,356 3,536
of which,
North America 496 499 528 567 547 560 562 610 600 620 620
Managed Units
(1,000 units)and Occupancy Rates by Area
App.1-3-3: Indicator (Units and Occupancy Rates by Area)
(1,000 Units, %)
FY17/3 FY18/3
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Managed Units
Occupan cy rate
Managed units
Occupancy rate
Managed units
Occupancy rate
Managed units
Occupancy rate
Managed units
Occupancy rate
Managed units
Occupancy rate
Managed units
Occupancy
rate YoY
Hokkaido 14 86% 14 86% 14 82% 14 85% 14 89% 14 89% 14 84% +2p
Touhoku 35 93% 35 94% 35 92% 35 94% 35 94% 35 93% 35 92% ±0p
North Kanto 40 83% 40 83% 41 82% 41 87% 41 87% 41 87% 40 86% +4p
Tokyo-metro 163 89% 164 88% 165 87% 166 93% 167 90% 168 88% 168 88% +1p
Hokuriku,
Koshinetsu 41 86% 41 86% 41 85% 41 90% 41 91% 41 92% 40 90% +5p
Chubu 88 88% 88 88% 88 87% 88 91% 88 90% 88 91% 88 91% +4p
Kinki 80 88% 80 88% 80 86% 81 91% 81 90% 80 90% 80 89% +3p
Chugoku 39 91% 39 92% 39 90% 39 94% 39 93% 39 91% 39 90% ±0p
Shikoku 15 87% 15 86% 15 85% 15 90% 15 89% 15 91% 15 88% +3p
Kyushu,
Okinawa 50 91% 50 91% 50 90% 50 94% 51 94% 51 93% 51 92% +2p
Total 564 89% 565 88% 567 87% 569 92% 571 91% 571 90% 569 89% +2p
86.9%
94.8%
89.3%
84.5%
82.0%
79.5% 87.0%
92.5%
89.2%
85.6%
84.1% 81.4%
89.4%
93.4%
90.6%
89.1% 88.0%
86.0%
70% 80% 90% 100%
Total Under 5 years 5-10 years 10-15 years 15-20 years Over 20 years 2015/12 2016/12 2017/12
89.3%
94.6%
91.5%
87.0%
82.4% 83.3%
90.5%
96.9%
92.6%
89.1%
85.8%
83.5% 91.7%
96.3%
93.2%
91.2%
88.9%
86.9%
70% 80% 90% 100%
Total Under 5 years 5-10 years 10-15 years 15-20 years Over 20 years 2015/3 2016/3 2017/3
Occupancy Rates by Building Age
(as of December 31 of each year)Occupancy Rates by Building Age
(as of March 31 of each year)1. Chintai (General) Contract
• No deposit or brokerage fee
• Monthly payments
• Contracts for more than one year
2. Monthly Contract
• Equipped with basic furniture and appliances
• No utility cost
• One-time payment
• Contracts starting from 30 days
Tenants by Contract Type
Two Types of Contracts
Due to promotion of long-term tenancies, shares of short-term “monthly contracts” have decreased.
(Thousand units)
App.1-3-5: Indicator (Contract Type)
Same period last year
104
(23%)
114
(24%) (20%)94 79
(17%) (14%)68 (12%)58 52 (10%)
52
(10%)
49
(10%)
46
(9%)
357 365 370 384 412 438 457 469 444 463 462 478 464 463 480
495 509
521
493 509
0 50 100 150 200 250 300 350 400 450 500 550
'10/3 '11/3 '12/3 '13/3 '14/3 '15/3 '16/3 '17/3 '16/12 '17/12
App.1-3-6: Indicator (Solar Power Systems)
FY12/3 Q2 FY12/3 Q4 FY13/3 Q2 FY13/3 Q4 FY14/3 Q2 FY14/3 Q4 FY15/3 Q2
Owner-invested Roof-lease (SPC) Roof-lease (Leopalace21 Group)
Solar power installments started in March 2011. Solar power systems are installed on 12,995 buildings as of December 31, 2017 (roughly 59% of buildings that can be installed). Roof-lease solar power systems has started since December 2013.
Installments by Schemes
Schemes Start FY17/3 FY18/3 Q3
1. Solar power systems installed with apartment
owners’ burden Mar 2011 7,236 buildings (90.7MW) 7,245 buildings (90.9MW)
2. Roof-lease solar power systems Sep 2012 5,751 (91.7MW) 5,750 (91.6MW)
a. SPC and other tie-up installments Feb 2013 1,256 (24.5MW) 1,256 (24.5MW)
b. Installments by Leopalace21 Group* Dec 2013 4,495 (67.2MW) 4,494 (67.1MW)
3.
Mega-solar power plants utilizing idle land Sep 2013 Tomisato,
Chiba （1.7MW） Tomisato, Chiba （1.7MW）
Total: 12,987 (182.4MW) 12,995 (182.5MW)
(Cumulative total)
Installments by Area
(Buildings)
0 5,000 10,000 15,000
FY15/3 Q1
Q2 Q3 Q4 FY16/3 Q1
Q2 Q3 Q4 FY17/3 Q1
Q2 Q3 Q4 FY18/3 Q1
Q2 Q3
Tokyo-metro 4,368
Chubu 2,506 Kinki
1,654 North Kanto 1,203 Kyushu, Okinawa
1,174 Chugoku
961
Tohoku 454
Elderly Care Facilities “Azumi En” Area Disposition
(83 as of February 1, 2018)(Number of facilities)
T o k y o K a n a g a w a C h ib a S a ita m a T o ch ig i Ib a ra k i G u n m a G
ifu Aich
i S h iz u o k a T o ta l
Facilities which include elderly homes with nursing care services
1 1 1 3 2 8
Facilities which include
residential style elderly homes 1 5 2 3 2 1 14
Day-services and Short-stays 4 2 13 18 3 6 4 3 4 2 59
Group homes 1 1 2
Total 6 4 20 23 8 8 5 3 4 2 83
★
Elderly homes with nursing care services, Day-services, Short-stays
Elderly homes with nursing care services, Short-stays
■ Elderly homes with nursing care services, Day-services ● Elderly homes with nursing care services
★ Residential style elderly homes, Day-services, Short-stays
Residential style elderly homes, Short-stays
● Residential style elderly homes
○ Group homes
▲ Day-services, Short-stays ● Day-services
Short-stays
Legend
“Azumi En Kisarazu” (the first elderly care facility managed by subsidiary “Azu Life Care”) opened on November 1, 2014. 7 facilities opened during April to February totaling 83 facilities at February 1, 2018, and 3 are planned during FY March 2019, totaling 86 facilities during the current midterm management plan.
Gifu Kasugai Kakamigahara Moriyama Sekigawa Horigome Ota Tatebayashi Hanyu Kanuma Utsunomiya Yaita Shimodate Yuki Koga Koga-Chuou Iwai Nogi Shinkoga Tsuchiura Kokinu Yanagisawa Showa Minamisakurai Ina Kitamoto Gyoda Higashi-Matsuyama Honjyo Chichibu Ome Hirasawa Tatemachi Nakano Yamakita Tsurumaki Tsukuihama Ichihara Oyumi Katsuragi Wakaba Ino Takaoka Nakazawa Namikicho Misaki Takatsukashinden Tokiwadaira Sakasai Abiko Takamihara Komakidai Souka Irumagawa Sayama Komuro MizuhoMihashi Goseki Hanasaki-nooka Ageo Yoshikawa Gamou Yashio Kisarazu Shimizukoen Katsu-tadai Hamura Tochigi-Daicho
Is ez aki
G ifu A njo Aichi T oyata Hiratsuka Higashi-Yamato Kamagaya Nishi-Funabashi ● Sakura*
T akas aki
App.1-3-7: Indicator (“Azumi En” Area Disposition)
Maebas hi
* Utsunomiya-minami Sep. 2017 opened * Ohgaki Oct. 2017 opened * Yaizu Nov. 2017 opened * Fuji Feb. 2018 opened
O hg aki
(Million yen) FY17/3 FY18/3 Q3 A s s et s
Cash and cash equivalents 104,432 96,081
Trade receivables 6,547 6,067
Accounts receivables for completed
projects 2,355 2,254
Real estate for sale and in progress 2,270 6,727
Prepaid expenses 2,827 3,710
Deferred tax assets (short-term) 8,636 10,405
Current assets 133,786 131,627
Buildings and structures 41,827 41,484
Mac hinery, equipment, and vehic les 14,206 12,892
Land 80,388 63,769
Leased assets 13,652 16,472
Intangible assets 11,642 10,444
Long-term prepaid expenses 3,820 3,847 Deferred tax assets (long-term) 17,486 17,275
Fixed assets 203,489 188,744
Deferred assets 552 468
Total assets 337,828 320,839
(Million yen) FY17/3 FY18/3 Q3
L ia b ilit ie s
Bonds and borrowings (short-term) 5,229 5,715 Lease obligations (short-term) 4,647 5,932 Accounts payable for completed projects 12,186 6,101
Advances received 40,003 35,319
Current liabilities 97,524 85,377
Interest-bearing debt (long-term) 29,302 26,145 Lease obligations (long-term) 10,739 12,656 Reserve for apartment vacancy loss 3,183 1,952 Lease/guarantee deposits received 7,152 7,041 Long-term advances received 16,614 14,933
Long-term liabilities 81,433 77,886
Total liabilities 178,958 163,264
N e t a s s e ts
Common stock 75,282 75,282
Capital surplus 45,235 45,235
Retained earnings 39,923 35,882
Total net assets 158,870 157,574
Shareholders’ equity ratio 47.0% 49.0%
Balance Sheets
Assets decreased 16.9 billion yen (-8.3 billion yen in cash and cash equivalents, +4.4 billion yen in real estate for sale and in progress , -16.6 billion yen in land, +1.5 billion yen in deferred tax assets), liabilities decreased 15.6 billion yen (-2.6 billion yen in bonds and borrowings, -6.0 billion yen in accounts payable for completed projects, and -6.3 billion yen in advanced received), and net assets decreased 1.2 billion yen (net income of 12.8 billion yen, dividend payment of -5.6 billion yen, and share buybacks of -8.0 billion yen) compared to March 2017.
