IR Documents｜Information for Investors｜Leopalace21 Corporation en kessan ppt

Investor Meeting Presentation

for the Fiscal Year ended March 31, 2016

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-Contents

1. About Leopalace21

1-1 Business Model 4 1-2-1 Results Trend 5 1-2-2 Highlights of Results Trend 6

2. FY16/3 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. FY17/3 Plan

3-1 Plan 13

3-2-1 Summary of Plan(Sales & Gross profit) 14 3-2-2 Summary of Plan(Operating Profit & Net Income) 15 3-3 Plan for Business Segments 16

4. FY16/3 Overview of Business (Leasing)

4-1 Overview of Leasing Business 18 4-2 Main Indicators(Leasing) 19

4-3-1 Indicator(Occupancy Rate) 20

4-3-2 Indicator(Occupancy by Group) 21 4-3-3 Indicator(Shares of Occupied Units by Group) 22

4-3-4 Indicator(Occupied Units by Industry) 23

4-3-5 Indicator(Foreign Tenants) 24

4-4-1 Acquiring Individual Tenants(Office Expansion) 25

4-4-2 Acquiring Individual Tenants(Room-Customize) 26

4-4-3 Acquiring Individual Tenants(Tenant Services) 27 4-4-4 Enhancing Property Value(Security Systems) 28

5. FY16/3 Overview of Business (Construction)

5-1 Overview of Construction Business 30 5-2 Main Indicator (Construction) 31 5-3-1 Indicator(Orders and Sales) 32

5-3-2 Indicator(Offices and Apartment Completion by Area) 33

5-4-1 Example(Ideal Land Usage) 34

5-4-2 Example(New Brand) 35

5-4-3 Example(High-quality Apartments) 36 5-4-4 Example(“Non-sound System”) 37

5-4-5 Example(Elderly Care Facilities and Stores) 38

-2-Contents (cont’d)

6. FY16/3 Overview of Business (Others and International) 6-1 Others(Elderly Care Business) 41 6-2 Others(Domestic Hotels Business) 42 6-3 Others(Resort Business) 43 6-4-1 Others(Solar Power Systems) 44 6-4-2 Others(Roof-lease Solar Power Systems) 45

6-5-1 International(Leasing Business Overseas) 46 6-5-2 International(Serviced Apartment/Office) 47 6-5-3 International(Other Services) 48

Appendix 1. Corporate Data

App.1-1 Corporate Profile 50 App.1-2-1 Quarter Comparison 51 App.1-2-2 Results of Leopalace21 Group 52 App.1-3-1 Indicator(Occupancy by Group) 53 App.1-3-2 Indicator(Foreign Tenants) 54

App.1-3-3 Indicator(Occupancy Rates by Building Age) 55

App.1-3-4 Indicator(Contract Type) 56 App.1-3-5 Indicator(Leopalace Partners Offices and Contracts)57 App.1-3-6 Indicator(Reserve for Apartment Vacancy Loss) 58 App.1-3-7 Indicator(“Azumi En” Area Disposition) 59

Appendix 1. (cont’d)

App.1-4-1 Finance(Balance Sheets) 60 App.1-4-2 Finance(Cash/Deposits and Interest-bearing Debt) 61 App.1-4-3 Finance(Cash Flows) 62 App.1-4-4 Finance(Shareholder Composition) 63

Appendix 2. Medium-Term Management Plan “EXPANDING VALUE”

App.2-1 Business and Financial Strategies 65 App.2-2 Numerical Targets 66 App.2-3 Dividend Policy 67

Appendix 3. Market Trends

-4-1-1

：

Business Model

Business model

1. Construction

Propose construction of apartments to land owners. 2. Master lease

Leopalace21 master leases the constructed apartments and pays a fixed rent to owners, regardless of vacancies. 3. Rent

Leopalace21 attracts tenants for leased apartments. 4. Rental income

Rent received from tenants.

⇒ Prior to the Lehman Collapse (2008), apartment construction

increased supported by rising occupancy demand from the booming secondary industry, especially in rural areas. Growth was led by the Construction Business.

⇒ After the Lehman Collapse, corporations laid off personnel,

and tenant leave increased in cities near corporate factories, deteriorating Leopalace21’s earnings.

⇒ Leopalace21 is shifting to a “Leasing Business-based”

business model, limiting apartment construction to areas of high occupancy demand and cutting leasing costs, as well as implementing property value enhancement measures such as installation of security systems.

Owners

Leopalace21

Leasing Construction

Tenants

2. Master Lease

1.

Construction 4.

Rental Income

3. Rent

1-2-1

：

Results Trend

-5-Sales (Billion yen) Operating profit (Billion yen)

Results Trend

After the Lehman Collapse in 2008, decrease in occupancy rates and stringent loan screening at financial institutions led to a decrease in apartment construction, and Leopalace21 reported operating losses for two consecutive years. However, through structural reform measures such as leasing cost cuts, operating profit was achieved for the fiscal years ended March 31, 2012 - 2016. Operating profit forecast for this fiscal year is 22.5 billion yen, due to improvements in occupancy rates, etc.

302.7 334.5 342.3 356.6 380.3 383.5 388.7

399.3 410.5 420.5

327.5

359.1

237.0

107.8 62.9 53.3 63.1 61.3 74.1

82.8

42.7

39.5

40.9

19.9 _16.2

17.2 19.1 22.5

26.7 24.7 672.9

733.2

620.3

484.3 _459.4

454.2 471.0 483.1

511.4 528.0 71.4 50.1 -29.7 -23.6 4.5 7.4 13.6 14.7 20.9 22.5 -20 0 20 40 60 80 -200 0 200 400 600 800 FY08/3 (Actual) FY09/3 (Actual) FY10/3 (Actual) FY11/3 (Actual) FY12/3 (Actual) FY13/3 (Actual) FY14/3 (Actual) FY15/3 (Actual) FY16/3 (Actual) FY17/3 (Plan)

Leasing Construction Others Operating profit

1-2-2

：

Highlights of Results Trend

-6-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

Plan

Net sales 672.9 733.2 620.3 484.3 459.4 454.2 471.0 483.1 511.4 528.0

Leasing 302.7 334.5 342.3 356.6 380.3 383.5 388.7 399.3 410.5 420.5

Construction 327.5 359.1 237.0 107.8 62.9 53.3 63.1 61.3 74.1 82.8

Operating profit 71.4 50.1 -29.7 -23.6 4.5 7.4 13.6 14.7 20.9 22.5

Leasing 3.0 -1.5 -47.8 -30.0 5.2 8.6 15.5 20.5 22.7 23.4

Construction 73.2 70.1 29.7 11.9 4.3 2.7 2.9 0.2 3.3 4.2

Net income 0.3 9.9 -79.0 -40.8 1.5 13.3 15.2 14.5 19.4 18.5

Managed units*

(1,000 units) 442 506 551 571 556 546 549 554 561 569

Occupancy rate* 92.4% 88.5% 82.3% 80.1% 81.2% 82.9% 84.6% 86.6% 88.0% 89.0%

Orders received 463.0 337.8 250.2 80.3 50.0 73.0 81.1 87.3 86.4 94.0

Before the Lehman Collapse in 2008, Leopalace21’s main profit driver was the Construction Business. After the Lehman Collapse, we shifted our business model through structural reforms, generating profit from the Leasing Business.

-8-2-1

：

Highlights of Results

Highlights of Results

(Million yen)

FY15/3

Actual

FY16/3

Plan

FY16/3

Actual

_YoY

Compared

to Plan

Sales

483,188

525,000

511,424

+28,236

-13,576

Gross profit

75,755

88,500

88,820

+13,064

+320

% 15.7% 16.9% 17.4% +1.7p +0.5p

SGAE

60,992

69,000

67,823

+6,831

-1,177

Operating profit

14,763

19,500

20,996

+6,233

+1,496

% 3.1% 3.7% 4.1% +1.1p +0.4p

Recurring profit

13,424

18,000

19,820

+6,396

+1,820

% 2.8% 3.4% 3.9% +1.1p +0.4p

Net income*

14,507

16,000

19,432

+4,924

+3,432

Although sales did not meet forecasts, profits exceeded forecasts.

-9-2-2-1

：

Summary of Results

(Sales and Gross Profit)

Sales

Gross Profit

FY15/3 FY16/3 FY15/3 FY16/3

Sales

-13.5 billion yen

compared to plan

Leasing

-0.4 billion yen

Construction

-11.8 billion yen

Gross profit

+0.3 billion yen

compared to plan

Leasing

+1.2 billion yen

Construction

+0.2 billion yen

(Billion yen) (Billion yen) FY

Actual 483.1

FY Plan 525.0

FY Actual

511.4

0 200 400

600 _FY

Actual 75.7

FY Plan 88.5

FY Actual

88.8

-10-2-2-2

：

Summary of Results

(Operating Profit and Net Income)

Net income*

+3.4 billion yen

compared to plan

Operating profit

+1.4 billion yen

compared to plan

Leasing

+1.2 billion yen

Construction

-0.1 billion yen

Operating Profit

Net Income

(Billion yen) (Billion yen)

FY15/3 FY16/3 FY15/3 FY16/3

*”Net income” refers to “net income attributable to shareholders of the parent”

FY Actual

14.7

FY Plan 19.5

FY Actual

20.9

0 5 10 15 20 25

FY Actual

14.5

FY Plan 16.0

FY Actual

19.4

Leasing business profits exceeded forecasts due to increase in employment rates. Although Construction business profitability improved, both sales and profits decreased due to lack of construction orders compared to the forecast. Elderly Care profitability decreased because of revisions in nursing care compensations as well as increases in facility establishment costs. U.S. Army accommodations at the Guam Resort did not meet expectations, decreasing sales and profits in the Hotels & Resort business. In Other businesses, solar power generation business increased in sales and profit compared to forecasts.

-11-2-3

：

Results of Business Segments

Results of Business Segments

(Million yen) FY15/3

Actual

FY16/3 Plan

FY16/3

Actual _YoY Compared

to Plan L e a s in g

Sales 399,316 411,000 410,552 +11,235 -448

Gross profit 62,763 66,000 67,248 +4,484 +1,248

Operating profit 20,532 21,500 22,760 +2,228 +1,260

C o n s t-ru c tio n

Sales 61,312 86,000 74,160 +12,847 -11,840

Gross profit 13,223 20,000 20,268 +7,045 +268

Operating profit 210 3,500 3,339 +3,128 -161

E ld e rly C a re

Sales 10,608 11,200 10,798 +190 -402

Gross profit 500 0 -127 -628 -127

Operating profit -606 -1,400 -1,354 -748 +46

H o te ls & R e s o rt

Sales 8,951 12,500 11,427 +2,476 -1,073

Gross profit 2,781 4,200 4,151 +1,369 -49

Operating profit -1,289 -500 -697 +591 -197

O

th

e

rs

Sales 2,999 4,300 4,485 +1,485 +185

Gross profit 1,660 1,700 2,188 +528 +488

Operating profit 31 -100 337 +306 +437

-13-3-1

：

Plan

FY17/3 Plan

(Million yen) FY15/3

Actual

FY16/3 Actual

FY17/3

Plan _YoY

Sales

483,188

511,424

528,000

+16,575

Gross profit

75,755

88,820

94,000

+5,179

% 15.7% 17.4% 17.8% +0.4p

SGAE

60,992

67,823

71,500

+3,676

Operating profit

14,763

20,996

22,500

+1,503

% 3.1% 4.1% 4.3% +0.2p

Recurring profit

13,424

19,820

21,500

+1,679

% 2.8% 3.9% 4.1% +0.2p

Net income*

14,507

19,432

18,500

-932

Income taxes deferred

included in net income

2,613

3,347

0

-3,347

-14-3-2-1

：

Summary of Plan

(Sales and Gross Profit)

(Billion yen)

Sales

Gross Profit

(Billion yen)

Sales

YoY +16.5 billion yen

Leasing +9.9 billion yen

Construction +8.6 billion yen

Gross profit

YoY +5.1 billion yen

Leasing +3.7 billion yen

Construction +2.4 billion yen 483.1

511.4

528.0

400 450 500 550

FY15/3 Actual

FY16/3 Actual

FY17/3 Plan

75.7

88.8

94.0

40 60 80 100

FY15/3 Actual

FY16/3 Actual

-15-3-2-2

：

Summary of Plan

(Operating Profit and Net Income)

Net income*

YoY -0.9 billion yen

Operating profit

YoY +1.5 billion yen

Leasing +0.6 billion yen

Construction +0.8 billion yen

Operating Profit

Net Income

(Billion yen) (Billion yen)

*”Net income” refers to “net income attributable to shareholders of the parent”

14.5

18.5 19.4

11.9

16.1 2.6

3.3

0 5 10 15 20 25

FY15/3 Actual

FY16/3 Actual

FY17/3 Plan 14.7

20.9

22.5

10 15 20 25

FY15/3 Actual

FY16/3 Actual

-16-3-3

：

Plan for Business Segments

FY17/3 Plan (by Business Segments)

(Million yen) FY15/3

Actual FY16/3 Actual FY17/3 Plan _YoY L e a s in g

Sales 399,316 410,552 420,500 +9,947

Gross profit 62,763 67,248 71,000 +3,751

Operating profit 20,532 22,760 23,400 +639

C o n s t-ru c tio n

Sales 61,312 74,160 82,800 +8,639

Gross profit 13,223 20,268 22,700 +2,431

Operating profit 210 3,339 4,200 +860

E ld e rly C a re

Sales 10,608 10,798 12,200 +1,401

Gross profit 500 -127 -250 -122

Operating profit -606 -1,354 -1,750 -395

H o te ls & R e s o rt

Sales 8,951 11,427 8,100 -3,327

Gross profit 2,781 4,151 3,400 -751

Operating profit -1,289 -697 -450 +247

O

th

e

rs

Sales 2,999 4,485 4,400 -85

Gross profit 1,660 2,188 2,400 +211

Operating profit 31 337 500 +162

Adjust-ments Operating profit -4,116 -3,388 -3,400 -11

-18-4-1

：

Overview of Leasing Business

 Indicator

 Occupancy Rate

 Occupancy by Group

 Shares of Occupied Units by Groups

 Occupied Units by Industry

 Foreign Tenants

 Measures

 Office Expansion (for individuals)

 Room Customize (for individuals)

 Tenant Services (for individuals)

 Security Systems (enhancing property value) Owners

Leopalace21

Leasing Construction

Tenants

Master Lease Rental

Income Rent

Leasing Business

-19-4-2

：

Main Indicators (Leasing)

Main Indicators (Leasing)

(Million yen) FY14/3

Actual

FY15/3 Actual

FY16/3 Actual

FY17/3 Plan

Sales

388,768

399,316

410,552

420,500

Gross profit

54,187

62,763

67,248

71,000

Operating profit

15,567

20,532

22,760

23,400

Units under management (as

of the end of FY)

548,912

554,948

561,961

569,000

Occupancy rate (average)

84.58%

86.57%

_87.95%

89.00%

Direct offices

(as of the end of FY)

184

188

189

189*

Number of corporate sales

section(as of the end of FY)

49

59

60

60*

Number of employees

(non-consolidated, as of the end of FY)

2,829

2,989

3,150

3,300*

of which, sales employees

1,512

_1,526

_1,603

_1,851*

80% 82% 84% 86% 88% 90% 92%

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

FY 2013/3 FY 2014/3 FY 2015/3 FY 2016/3

-20-Occupancy Rate

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Avg.

FY13/3 81.77 82.18 82.69 82.53 82.90 83.13 82.59 82.55 82.29 83.39 84.48 84.81 82.94

FY14/3 83.32 83.67 83.69 83.50 83.84 84.28 84.23 84.31 84.12 85.61 86.92 87.47 84.58

FY15/3 86.00 86.03 85.96 85.63 85.78 86.33 86.14 86.10 85.69 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 88.38 89.80 90.53 87.95

4-3-1

：

Indicator (Occupancy Rate)

Achievement of long-term occupancy and stable rates due to increase in long-term contracts. Average occupancy rate for FY17/3 is planned to increase 1.0p yoy (FY16/3: +1.38p yoy).

※

Target average occupancy rate for FY17/3: 89.0%

200 300 400 500 600

0 50 100 150 200 250 300

JunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMarJunSepDecMar FY09/3 FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY

16/3

Managed units (right axis) Occupied units (right axis)

-21-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.

4-3-2

：

Indicator (Occupancy by Group)

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.53

-22-Both occupied units and shares of corporate tenants are steadily increasing due to reinforcement of corporate sales.

4-3-3

：

Indicator (Shares of Occupied Units by Groups)

*Figures are as of the end of each quarter *Reference of p.53

Shares of Occupied Units by Groups

(Thousand units)

47.3% 47.4% 47.7% 49.4% 49.5% 49.5% 49.4% 51.3% 51.5% 51.4% 51.1% 53.0% 53.3% 53.3% 53.0% 54.5% 39.3% 39.4% 38.9% 38.0% 38.2% 38.3% 38.3% 37.3% 37.4% 37.4% 37.6% 36.8% 36.8% 36.8% 37.0%

36.0%

13.4% 13.3% 13.4% 12.6% 12.3% 12.2% 12.3% 11.4% 11.1% 11.1% 11.3% 10.2% 9.9% 9.9% 10.1% 9.5%

460 458 450 463 458 461 461 480 473 476 474 495 488 490 487 509

0% 20% 40% 60% 80% 100%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY13/3 FY14/3 FY15/3 FY16/3

43,942 43,472 46,277 47,510 48,913 24,632 24,570 29,105 32,022 34,689

28,869 30,218 32,995

35,169 36,911 35,601 37,380 39,188 40,878 42,837 13,445 14,710 14,956 16,635 17,509 32,223 35,096 39,783 44,398 48,489 40,527 43,262 43,968 45,965 47,913 219,239 228,708 246,272 262,577 277,261 0 50,000 100,000 150,000 200,000 250,000 300,000

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3

-23-4-3-4

：

Indicator (Occupied Units by Industry)

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 79.6% (+0.3p compared to the previous fiscal year-end) of listed companies* in Japan use Leopalace21.

*Companies listed on the 1st_{and 2}nd_{sections of the Tokyo Stock Exchange, regional stock exchanges, and emerging markets}

YoY +4.3% +7.7% +6.6% +5.6%

-24-4-3-5

：

Indicator (Foreign Tenants)

Leased Units by Foreign Nationals (Excluding Corporate Contracts)

*Reference of p.54

(Units)

Foreign students are able to make lease contracts through our “LAM (Leopalace Alliance Members) school.” In addition to the openings of overseas offices, we are strengthening our support system for foreign customers after coming to Japan, such as the distribution of our service guide, providing customer services via call centers, and holding group gatherings. Foreign customers make up 3.0% of total contracts (6.5% of individual and student contracts). Foreign nationals comprised of students 59% and working-class 41%.

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

* Seoul Gangnam and Seoul Jongno unified to Seoul in April 2015

* Operations started in Sriracha, Thailand and Jakarta, Indonesia (overseas subsidiary) in October 2015

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3

China S. Korea Taiwan

Vietnam Thailand Other Southeast Asia

-25-4-4-1

：

Acquiring Individual Tenants (Office Expansion)

Leasing Offices

*Reference of p.57

Direct offices 189 (+1)

of which, domestic 182 (+2)

of which, overseas 7 (-1)

Partners (franchise) 130 (-11)

Total offices 319 (-10)

As of March 31, 2016 (Figures in parentheses represent comparison to March 2015)

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)

0 50 100 150 200 250 300 350 400

Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3

(Offices)

-26-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 “Room-Customize” as a strategy for acquiring individual tenants. 26,542 contracts have been acquired as of March 31, 2016, and we will continue to promote the image of “Customize = Leopalace.”

“Room-Customize”

 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)

4-4-2

：

Acquiring Individual Tenants (Room-Customize)

(# of contracts)

26,542

0 5,000 10,000 15,000 20,000 25,000 30,000

Industry-academia collaborations



Leopalace Online Shopping

Shopping web site with many everyday-necessities. Products made specially for Leopalace are also available.

TOKYO METROPOLITAN UNIVERSITY (Tokyo)

Show-window display in Shinjuku L+ designed by students.

KINDAI University(Osaka)

Painted stairs by student in Osaka branch.

-27-Rent Guarantee Business

Small-claims and Short-term Insurance

Business

 Plaza Guarantee Co., Ltd

(Leopalace21 100% owned subsidiary)

Providing comfortable environment to all tenants by guaranteeing debts such as rents, common fees, restoration costs, etc.

Asuka SSI

(Leopalace21 100% owned subsidiary)

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 occured.

4-4-3

：

Acquiring Individual Tenants (Tenant Services)

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



LEONET (Wireless LAN)

Use the web without the hassle of contracting with internet providers. Movies and shows are also available.

Wireless LAN services started as of April 2014.

School festival (Gunma)

Participated in school festival held by 14 universities and colleges with the purpose of vitalizing the community.

-28-4-4-4

：

Enhancing Property Value (Security Systems)

Orders and Sales of Security Systems

 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)

Problem detected

Call subscriber, alert emergency services if necessary 3. Dispatch 2. Assign

dispatch Control

Center Emergency

response

personnel dispatched

1. Telephone circuit alert

FY15/3 Actual

FY16/3 Actual

Cumulative total

Orders

Units 43,606 30,820 279,320

Billion yen 9.09 6.77 48.76

Sales

Units 39,045 30,099 256,900

Billion yen 8.73 6.81 46.53 Security system

-30-5-1

：

Overview of Construction Business

Owners

Leopalace 21

Leasing Construction

Tenants

Master Lease Rental

Income Rent

Construction Business

 Indicators

 Orders and Sales

 Offices and Sales by Area

 Construction Examples

 Ideal Land Usage

 New Brand

 High-quality Apartments

 Non-sound System

 Elderly Care Facilities and Stores

-31-5-2

：

Main Indicators (Construction)

Main Indicators (Construction)

(Million yen) FY14/3

Actual

FY15/3 Actual

FY16/3 Actual

FY17/3 Plan

Sales

63,135

61,312

74,160

82,800

Gross profit

14,972

13,223

20,268

22,700

Operating profit

2,954

210

3,339

4,200

Oders

81,139

87,395

86,439

94,000

of which, apartments and

other buildings

67,446

84,679

86,439

94,000

of which, solar power

systems

13,693

2,715

0

0

Offices

(as of the and of FY)

54

60

60

60*

Number of employees

(non-consolidated, as of the end of FY)

1,506

1,638

1,686

1,682*

of which, sales personnel

363

₄₁₈

₄₂₇

_422*

-32-5-3-1

：

Indicator (Orders and Sales)

Gross Orders

*Built-to-order homes of Morizou and solar power systems installed on existing apartments are not included in “Gross orders received (buildings)”

Orders and Sales (Including Solar Power Systems)

FY14/3 FY15/3 FY16/3

(Billion yen)

FY15/3 FY16/3

Q1 Q2 Q3 Q4 Full-year Q1 Q2 Q3 Q4 Full-year

Gross orders received

(Buildings*) 223 277 237 229 966 214 202 181 247 844

(Billion yen) 18.7 25.2 22.7 20.6 87.3 20.7 21.3 18.8 25.4 86.4

Orders outstanding

(Billion yen) 46.7 57.3 64.9 58.1 58.1 66.8 65.1 65.4 66.3 66.3

Sales (Billion yen) 11.4 13.1 13.0 23.5 61.1 15.3 19.8 16.1 22.5 73.9

Construction orders for FY16/3 trending -1.1% compared to last year.

Apartments, etc. (including Morizou)

Solar power systems (excluding those generated by Leopalace21 Group)

18.1 18.1 20.7 19.2 24.2 21.3 _14.7 21.7 18.8 _15.3 20.5 25.4

5.9

0.6 0.0 3.5

1.0

0.0

2.4

0.9

0.0

1.7

0.1

0.0

0 10 20 30

Q1 Q2 Q3 Q4

-33-5-3-2

：

Indicator (Offices and Apartment Completion by Area)

Total 60 offices (As of March 2016)

Tokyo metropolitan: 39 offices Shikoku: 0 offices Hokkaido: 0 offices North Kanto: 0 office Osaka 4 offices

Kyoto 1 office Hyogo 2 offices

Tokyo 20 offices Kanagawa 8 offices Saitama 8 offices Chiba 3 offices

Construction Offices

Apartments Constructed (FY16/3)

 Tokyo metropolitan area makes up 49.9%, and the three metropolitan areas (Tokyo, Kinki, and Chubu) make up 72.6% of construction sales

(Buildings)

*2 offices opened in April 2015 (Tokyo) and 2 offices closed in December 2015 (Mito in North Kanto and Sakai in Osaka)

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).

-34-5-4-1

：

Example (Ideal Land Usage)

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, restaurances, and complex buildings with apartments on road-sides and near stations.

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.

Proposals including mega-solar power plants and parking lots.

Others

Lang usage

proposions of

5-4-2

：

Example (New Brand)

-35-“MIRANDA”

“CLEINO”

New apartment brands “MIRANDA” and “CLEINO” announced in May 2015. While maintaining basic installments such as security systems and the industry’s top class sound-insulation, the launch of two unique brands will strengthen competitiveness and renew brand image.

 Concept is “plain.”

 A “plain-type” apartment brand that fits and matches to

each occupant’s needs and lifestyle.

 Concept is “decorative.”

-36-5-4-3

：

Example (High-quality Apartments)

Announced in December 2014, “L-SECtion” is an apartment with installments to improve the comfortability of the first floor. Also,

“Burliant,” a product utiilizing wall-type precast concrete, was announced in October 2015.

 Space is utilized effectively by a “bunk-bed”

(multifunctional bed) which unifies a bed and storage.

 Improved security and privacy by blocking the line of sight from the outside with 1.7m “high-position balcony.”

Improving First Floor Comfortability: “L-SECtion”

Wall-type precast concrete: “Burliant”

High-position balcony

“Bunk-bed” which unifies a bed and storage

 By manufacturing concrete parts in factories, the

construction period is shortened by two months, leading to reduction of on-site workloads.

 Wall-type precast concrete makes the structure

earthquake resistant (withstanding seismic intensity level 7), wind resistant and watertight.

-37-5-4-4

：

Example (“Non-sound System”)

From April 2013, Leopalace21 apartments are standardly equipped with sound-insulating “non-sound system,” including noise reduction walls, soundproof drains, and “non-sound floors” which reduce noise levels by two ranks compared to conventional wooden structures.

Upgraded Sound Insulation with “Non-sound System”

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.”

Non-sound floor

Reduces noise from upper floors. Insulation improved two to three ranks compared to conventional models.

Sound-insulating

walls

Improved sound-insulation quality of walls, providing TLD-45 for wooden structures and TLD-50 for steel frame structures.

Down

15dB

Construction example Cross section Wooden

TLD-45

Wooden structures

Steel

TLD-50

Steel frame structures Wooden

V-model

Down

1/3

Wooden structures V-model (option)

Steel

Down

1/3

Steel frame structures

-38-Elderly care facility (Setagaya-ku, Tokyo)

Convenience store

（Osaka City, Osaka）

5-4-5

：

Example (Elderly Care Facilities and Stores)

Orders and Sales of Elderly Care Facilities and Stores

Since the latter half of the fiscal year ended March 2012, Leopalace21 has started receiving orders and constructing buildings other than apartments (elderly care facilities, stores). We are strengthening orders of elderly care facilities especially in the Kanto and Chubu area.

Elderly care facility (Kawagoe City, Saitama)

Restaurant

（Adachi-ku, Tokyo）

Elderly care facility (Setagaya-ku, Tokyo)

Restaurant

（Toyokawa City, Aichi）

Elderly care facility (Kokubunji City, Tokyo)

Tutoring school

5-4-6

：

Example (Built-to-order homes)

-39-Luxury custom-built “Taiga”

 Free design house built with top quality kiso-hinoki wood

 In addition to the durability of kiso-hinoki wood, ventilation systems prevent deterioration

 Strong earthquake protection by placing structural control dampers in a balanced manner

Morizou Co., Ltd., a custom-home builder specializing in luxurious homes made with kiso-hinoki wood, has been subsidized as of March 2015. Orders from apartment owners during FY16/3 were 24 buildings.

*Figures are images

List of branches(B) and showrooms(SR)

Head office 5-15-6 Sendagaya, Shibuya-ku, Tokyo Common stock 85 million yen

Established October 2009

Nagano-chuo SR, Nagano B Toyama SR, Toyama B Saku SR, Saku B

Matsumoto-minami SR, Matsumoto 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

Shizuoka B Nagoya SR, Tokai B

-41-6-1

：

Others (Elderly Care Business)

*Elderly Care Business includes 68 “Azumi En” facilities in Tokyo and 8 prefectures (as of April 30, 2016) *Private residential homes include Group homes

Elderly Care Business

(Million yen) FY15/3

Actual

FY16/3 Plan

FY16/3

Actual _YoY Compared to

Plan

E

ld

e

rly

C

a

re

Sales 10,608 11,200 10,798 +190 -402

Gross profit 500 0 -127 -628 -127

Operating profit -606 -1,400 -1,354 -748 +46

Occupancy rate (Day-service) 67.2% 71.7% 66.3% -0.9p -5.4p

Occupancy rate (Short-stay) 98.1% 96.3% 92.3% -5.8p -3.9p

Occupancy rate

(Private residential homes, etc.) 93.5% 93.7% 92.4% -1.1p -1.3p

-42-6-2

：

Others (Domestic Hotels Business)

*Domestic Hotel Business includes 6 hotels (Asahikawa, Sapporo, Sendai, Nagoya, Okayama, and Hakata) as of the end of March 2016

Domestic Hotels Business

Hotel Leopalace Sendai

Hotel Leopalace Sapporo

Hotel Leopalace Hakata

(Million yen) FY15/3

Actual

FY16/3 Plan

FY16/3

Actual _YoY Compared to

Plan

D

o

m

e

s

tic

H

o

te

ls

Sales 2,284 1,900 2,124 -159 +224

Operating profit -30 -100 0 +30 +100

Depreciation and amortization 337 200 289 -47 +89

Occupancy rate 79.7% 81.1% 81.0% +1.3p -0.1p

-43-Resort Business (Leopalace Guam)

6-3

：

Others (Resort Business)

*Non-consolidated figures for Leopalace Guam

*Fiscal year of Leopalace Guam is from January to December

Westin Resort Guam

Leopalace Resort Leopalace Resort Country Club

(Thousand U.S. dollars) FY2014/12

Actual

FY2015/12 Plan

FY2015/12

Actual YoY Compared_{to Plan}

L

e

o

p

a

la

c

e

G

u

a

m

Sales $85,036 $88,200 $88,471 +$3,435 +$271

Operating profit 585 2,400 3,871 +3,286 +1,471

Depreciation and amortization 14,340 14,600 14,557 +217 -43

Occupancy rate (Leopalace Resort) 70.9% 59.7% 60.2% -10.8p +0.5p

Occupancy rate (Westin Resort Guam) 86.0% 82.4% 82.6% -3.4p +0.1p

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)

-44-*2.b.”Installments by Leopalace21 Group” are eliminated on a consolidated basis. (Reference of p.45)

-44-6-4-1

：

Solar Power Systems

Solar power installments started in March 2011. Solar power systems were installed on 12,964 buildings as of March 31, 2016 (roughly 59% of buildings that can be installed).

Installments by Schemes

Schemes Start FY15/3 FY16/3

1. Solar power systems installed with apartment

owners’ burden Mar 2011 7,129 buildings （89.1MW） 7,215 buildings (90.5MW)

2. Roof-lease solar power systems Sep 2012 5,227 （83.3MW） 5,749 (91.6MW) a. SPC and other tie-up installments Feb 2013 1,258 （24.6MW） 1,256 (24.5MW) b. Installments by Leopalace21 Group

* Dec 2013 3,969

（58.7MW） 4,493 (67.1MW)

3.

Mega-solar power plants utilizing idle land Sep 2013 Tomisato,

Chiba （1.7MW）

Tomisato,

Chiba （1.7MW）

Total: 12,356 （172.4MW） 12,964 (182.0MW) (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

-45-6-4-2

：

Others (Roof-lease Solar Power Systems)

Roof-lease Solar Power Systems by Leopalace21 Group

FY15/3 Actual

FY16/3

Actual Cumulative total

Buildings installed

_2,855

₅₂₄

_4,493

Generating capacity

_{37.2 MW}

_{8.4 MW}

_{67.1 MW}

Buildings which started

generation

3,102

710

4,492

Sales from selling generated power

(Billion yen)

1.46

2.83

Generated power

36,600 MWh

_{74,200 MWh}

* Includes Fukushima Pilot Project (67 buildings, 1.2 MW)

* Sales from selling generated power is included in “Other Businesses” * Generated power corresponds to each period

6-5-1

：

International (Leasing Business Overseas)

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 the Philippines as of July, as well as an office in Sriracha, Thailand and a subsidiary in Jakarta, Indonesia as of October 2015.

Leasing Business Overseas

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 Jakarta

Foreign offices, subsidiaries

South Korean JV “Woori & Leo PMC”

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 1,001 managed units as of March 31, 2016

Introduce Japanese apartments to foreigners

Foreign real estate brokerage targeting Japanese individuals and companies

Traditional

In the future

-46-* Seoul Gangnam and Seoul Jongno unified to Seoul in April 2015.

Busan Dalian Beijing Shanghai Guangzhou Taipei Bangkok

Location Starting Date Type Volume

Thailand (Sriracha) October 2015 Serviced Apartment 8 stories and 72 rooms Philippines (Makati) November 2015 Serviced Office 44 rooms

Myanmar (Yangon) April 2016 Serviced Office 17 rooms

Cambodia (Phnom Penh) January 2017 (Planned) Serviced Apartment 13 stories + 1 basement and 48 rooms

6-5-2

：

International (Serviced Apartments/Offices)

-47-List of Serviced Offices and Serviced Apartment

Thailand

(Serviced apartment) Room

Myanmar

(Serviced Office) Reception

Cambodia (Serviced apartment) Exterior (image) Philippines (Serviced office) Meeting space

6-5-3

：

International (Other Services)

-48-World Business Support (WBS)

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 (18 as of July 2015), in cooperation with the Technical Intern Training Program (TITP).

In cooperation with TITP, we have supported the acceptance of 18 Vietnamese intern trainees by our partnering contractors

Assigned to companies (builders) after practical and language training in Vietnam and language training in Japan

The second group (10 trainees) and the third group (11 trainees) assigned from February

Acceptance of Foreign Technical Intern Trainees



Overseas Estate Intermediary



Business Travel Management



Other supports

• Arrangement of flight tickets

• Visa acquisition

• Hotel arrangement

• Arrangement of rental cars, etc.

• Management, sublease, sale of vacant houses

• Purchase and brokerage of used cars

• Medical examination, vaccination

• Moving abroad, brokerage

• Overseas estate intermediary

• Operation and management of serviced apartments and serviced offices

Practical construction training

Language training

-50-App.1-1

：

Corporate Profile

Corporate Data

Shareholder Composition

Group Companies

Company Name Leopalace21 Corporation

Head 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*1

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 7,846 (consolidated), 6,413 (non-consolidated) Authorized Shares 500,000,000

Outstanding Shares 267,443,915 Shareholders 48,476 H o te ls & R e so rt O th e r L e a si n g C o n st ru -ct io n

Woori & Leo PMC

Leasing management in South Korea

Leopalace21 (Thailand)

Real estate brokerage in Thailand Leopalace Leasing Corporate housing agent Leopalace21 Business Consulting (Shanghai) Tenant recruitment LEOPALACE21 VIETNAM

Real estate brokerage in Vietnam

Plaza Guarantee

Rent guarantee

Leopalace21 (Cambodia)

Real estate brokerage in Cambodia Leopalace Power Power generation Leopalace Guam Resort Business ASUKA SSI

Tenant contents insurance

Azu Life Care

Elderly care service

Leopalace Energy Power producer and supplier WING MATE Business travel management Leopalace Smile Special subsidiary Morizou Custom-built homes PT. Leopalace Duasatu Realty

Real estate brokerage in Indonesia

LEOPALACE21 PHILIPPINES INC.

Real estate brokerage in the Philippines

Individuals and Other 16.57%

Business Corporations and Other Legal Entities

-51-(Million yen)

Q1 Apr – Jun

Q2 Jul – Sep

Q3 Oct – Dec

Q4 Jan – Mar

FY15/3 Actual

FY16/3 Actual

FY15/3 Actual

FY16/3 Actual

FY15/3 Actual

FY16/3 Actual

FY15/3 Actual

FY16/3 Actual

Sales 115,626 124,524 117,411 127,792 117,718 124,225 132,432 134,882

Leasing 98,530 102,008 98,902 101,588 98,921 101,390 102,962 105,565

Construction 11,457 15,423 13,193 19,920 13,043 16,149 23,618 22,665

Elderly Care 2,599 2,677 2,676 2,693 2,702 2,701 2,629 2,726

Hotels & Resort 2,386 3,159 1,872 2,379 2,287 2,979 2,404 2,909

Others 652 1,254 766 1,209 763 1,004 817 1,016

Operating profit 2,394 4,221 3,693 6,180 3,457 5,207 5,217 5,387

Leasing 4,090 5,544 5,471 6,668 5,586 5,942 5,385 4,605

Construction -882 -463 -492 855 -480 461 2,065 2,486

Elderly Care -132 -277 _-105 -298 -143 -358 -225 -419

Hotels & Resort 196 96 _-326 -398 -529 -87 -629 -308

Others 158 286 104 224 18 19 -249 -92

App.1-2-1

：

Quarter Comparison

(Million yen) FY15/3 Actual

FY16/3 Plan

FY16/3

Actual _YoY Compared

to Plan

Leopalace21 Sales 484,360 507,100 495,146 +10,786 -11,954

OP 15,595 18,600 20,444 +4,848 +1,844

Leopalace Leasing Sales 1,556 1,700 1,848 +291 +148

OP 112 100 158 +45 +58

Plaza Guarantee Sales 4,576 4,800 4,443 -133 -357

OP 393 300 136 -257 -164

Leopalace Guam Sales 8,995 10,300 10,713 +1,717 +413

OP 61 200 468 +406 +268

WING MATE Sales 1,341 3,600 3,217 +1,875 -383

OP -2 0 -6 -3 -6

ASUKA SSI Sales 1,465 1,500 1,595 +130 +95

OP 166 200 182 +15 -18

Leopalace Power Sales 1,361 2,400 2,701 +1,340 +301

OP -268 -200 0 +268 +200

Others & Exclusions

Sales -20,469 -7,200 -8,241 +12,227 -1,041

OP -1,295 -100 -386 +909 -286

-52-App.1-2-2

：

Results of Leopalace21 Group

FY13/3 FY14/3 FY15/3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Units under management 546,856 547,161 547,978 548,912 550,514 551,545 552,966 554,948 557,017 558,457 560,076 561,961

A. Occupied units 457,683 461,136 460,961 480,110 473,197 476,163 473,862 495,487 487,900 489,771 486,626 508,720

Occupancy rate (average) 83.6% 83.9% 84.2% 86.7%

FY84.6% 86.0% 85.9% 86.0%

88.4%

FY86.6% 87.7% 87.4% 87.1%

89.6% FY88.0%

B. Corporate-occupied units 226,474 228,038 227,580 246,272 243,588 244,967 242,293 262,577 259,923 260,978 257,751 277,261

Corporate share (B / A) 49.5% 49.5% 49.4% 51.3% 51.5% 51.4% 51.1% 53.0% 53.3% 53.3% 53.0% 54.5%

C. Individual-occupied units 175,057 176,782 176,503 179,036 176,885 178,186 178,228 182,142 179,748 180,335 179,883 183,008

Individual share (C / A) 38.2% 38.3% 38.3% 37.3% 37.4% 37.4% 37.6% 36.8% 36.8% 36.8% 37.0% 36.0%

D. Student-occupied units 56,152 56,316 56,878 54,802 52,724 53,010 53,341 50,768 48,229 48,458 48,992 48,451

Students share (D / A) 12.3% 12.2% 12.3% 11.4% 11.1% 11.1% 11.3% 10.2% 9.9% 9.9% 10.1% 9.5%

*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

App.1-3-1

：

Indicator (Occupancy by Group)

Occupancy by Group

-53-

-54-(Units)

FY14/3 FY15/3 FY16/3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

China 5,007 5,497 5,654 6,125 5,906 6,297 6,652 7,033 6,320 6,336 6,446 6,627

South Korea 1,441 1,415 1,384 1,298 1,272 1,293 1,325 1,336 1,322 1,349 1,438 1,447

Taiwan 621 642 651 658 613 618 659 747 706 760 826 949

Southeast

Asia 915 1,195 1,458 1,833 2,018 2,326 2,571 2,859 2,750 2,876 2,987 3,116

of which,

Vietnam 268 499 723 1,059 1,231 1,496 1,717 1,995 1,886 1,947 2,063 2,142

of which,

Thailand 89 91 97 95 101 102 107 103 99 113 113 124

Others 1,651 1,769 1,845 2,013 1,993 2,133 2,213 2,391 2,388 2,506 2,633 2,874

Total 9,635 10,518 10,992 11,927 11,802 12,667 13,420 14,366 13,486 13,827 14,330 15,013

App.1-3-2

：

Indicator (Foreign Tenants)

Units Occupied by Foreign Tenants (Chintai

Contracts*)

*Figures are as of the end of the final month for the relevant period

*Chintaicontracts are long-term (more than one year) leasing contracts with monthly rent payments

-55-App.1-3-3

：

Indicator (Occupancy Rates by Building Age)

Occupancy Rates by Building Age

Occupancy Rates by Area

95.4% 97.8% 98.2% 96.9% 96.9% _{92.6% 89.1%}

85.4% 90.5%

0% 50% 100%

1 year 2 years 3 years Under 3 years

Under 5 years

5-10 years 10-15 years Over 15 years

Total

97.5% 98.1% 97.1% 98.7% 97.7% 98.3% _95.3% 96.8% 96.5% 97.4% 97.8% 97.5% _97.0% 97.8% 97.5% 97.9%

95.8% 95.7% 96.9% 97.3%

94.6% _{91.5% 93.4% 91.6% 92.8%} 95.1% _{91.9% 93.0% 91.6% 93.0%}

70% 80% 90% 100%

Tokyo Saitama Kanagawa Chiba Tokyo Metro

Aichi Osaka Kyoto Hyogo 3-metro areas

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

-56-App.1-3-4

：

Indicator (Contract Type)

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)

117

(32%)

108

(26%)

107

(24%)

104

(23%)

114

(24%) _(20%)94 79 (17%)

68

(14%) (12%)58 _(10%)52

254 306

336 357 365 370 ₃₈₄ 412 438 457 372

414

442 462

478

464 463 480

495 509

0 50 100 150 200 250 300 350 400 450 500 550

'07/3 '08/3 '09/3 '10/3 '11/3 '12/3 '13/3 '14/3 '15/3 '16/3

-57-Partner and Direct Offices, and Contracts by -57-Partners

FY14/3 FY15/3 FY16/3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Partner offices 179 172 167 164 152 149 143 141 135 132 130 130 Direct offices

(domestic) 176 176 176 176 179 179 180 180 180 181 182 182

Total leasing offices 355 348 343 340 331 328 323 321 315 313 312 312

Contracts by Partners 8,204 8,392 7,972 10,516 6,736 7,079 6,748 9,065 6,317 6,724 6,903 9,068

Leasing Offices by Area

Hokkaido Tohoku North

Kanto

Tokyo-metro

Hokuriku,

Koshinetsu Chubu Kinki Chugoku Shikoku

Kyushu, Okinawa

Partner offices 2 7 5 36 9 20 15 12 5 19 Direct offices

(domestic) 9 15 14 49 13 24 25 11 5 17

Total leasing

offices 11 22 19 85 22 44 40 23 10 36

App.1-3-5

：

Indicator (Partners Offices and Contracts)

(Billion yen, %) Managed units (1,000 units) FY15/3 FY16/3 Compared to FY15/3 Q4 FY15/3 Q4 FY16/3 Q4 Diff.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Hokkaido 14 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 -0.1 79% 82% +2.4p

Tohoku 35 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 +0.0 94% 94% +0.1p

North Kanto 40 1.0 0.9 0.7 0.6 0.6 0.5 0.5 0.4 -0.2 85% 85% +0.5p

Tokyo-metro 162 1.1 0.9 0.7 0.6 0.5 0.6 0.4 0.5 -0.1 92% 93% +0.3p

Hokuriku, Koshinetsu 41 1.2 1.0 0.8 0.5 0.5 0.4 0.3 0.2 -0.3 84% 88% +3.9p

Chubu 88 3.2 2.9 2.4 2.0 1.9 1.7 1.4 1.3 -0.7 86% 89% +2.7p

Kinki 80 1.0 0.8 0.7 0.7 0.6 0.6 0.5 0.5 -0.2 90% 91% +1.0p

Chugoku 38 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.1 +0.1 91% 93% +1.2p

Shikoku 14 0.3 0.2 0.1 0.0 0.0 0.0 0.0 0.1 +0.1 84% 87% +3.2p

Kyushu, Okinawa 50 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.1 +0.0 91% 91% +0.0p

Total 562 8.7 7.8 6.4 5.2 4.9 4.5 3.8 3.8 -1.47 89.3% 90.5% +1.2p

-58-App.1-3-6

：

Indicator

(Reserve for Apartment Vacancy Loss)

Occupancy Rate

Reserve for Apartment Vacancy Loss

(Billion yen)

Reversal in the reserve for apartment vacancy loss for FY 16/3 was 1.4 billion yen (compared to forecast of 2.5 billion yen) due to “profit improvement” and “passage of remaining periods.” Balance at the end of FY16/3 is 3.8 billion yen and planned to be the same amount after FY16/3.

Reserve by Area

FY13/3 Reversal ¥5.2 bil FY14/3 Reversal ¥4.5 bil FY15/3 Reversal ¥4.0 bil FY16/3 Reversal ¥1.4 bil

-59-App.1-3-7

：

Indicator (“Azumi En” Area Disposition)

Elderly Care Facilities “Azumi En” Area Disposition

(Number of facilities)

T o ky o K a n a g a w a C h ib a S a ita m a T o c h ig i Ib a ra ki G u n m a G

ifu Aic_h

i

T

o

ta

l

Facilities which include elderly homes with nursing care services

1 1 1 2 2 7

Facilities which include

residential style elderly homes 1 5 2 3 2 1 14

Day-services and Short-stays 3 1 11 18 2 6 1 1 2 45

Group homes 1 1 2

Total 5 3 18 22 7 8 2 1 2 68

★ 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. 5 facilities opened during FY16/3.

Gifu Aichi Kasugai Kakamigahara Moriyama* *

*Tochigi-Daicho opened in April, *Isezaki will open in May

*Anjo will open in June, *Gifu will open in July * Gunma Saitama Tokyo Kanagawa Chiba Ibaraki Tochigi

Sekiｚkawa

Horigome

Ota Tatebayashi_Hanyu

-60-App.1-4-1

：

Finance (Balance Sheets)

(Million yen) FY15/3 FY16/3

A

s

s

e

ts

Cash and cash equivalents 75,221 88,043

Trade receivables 6,254 6,779

Accounts receivables for

completed projects 1,714 1,992

Prepaid expenses 3,656 2,847

Deferred tax assets(short-term) 4,447 5,659

Current assets 102,263 114,185

Buildings and structures 59,899 57,979

Machinery, equipment, and vehicles 15,115 16,105

Land 83,289 84,241

Leased assets 7,880 9,417

Intangible assets 8,894 9,334

Long-term prepaid expenses 3,416 3,686

Deferred tax assets(long-term) 14,654 16,734

Fixed assets 205,887 212,033

Total assets 308,274 326,890

(Million yen) FY15/3 FY16/3

L ia b ilit ie s

Interest-bearing debt (short-term) 24,525 6,003 Accounts payable for completed projects 14,049 12,193

Advances received 40,781 38,701

Current liabilities 116,521 95,384

Interest-bearing debt (long-term) 11,156 34,107 Reserve for apartment vacancy loss 5,280 3,802 Lease/guarantee deposits received 8,019 7,516

Long-term advances received 22,198 18,950

Long-term liabilities 65,279 85,294

Total liabilities 181,801 180,679

N e t a s s e ts

Common stock 75,282 75,282

Capital surplus 51,501 45,235

Retained earnings 427 26,125

Total net assets 126,473 146,211

Shareholders’ equity ratio 41.0% 44.7%

Balance Sheets

-61-App.1-4-2

：

Finance (Cash / Deposits and Interest-bearing Debt)

NDE Ratio

*Net DE ratio = (Interest-bearing debt – Cash) / Shareholders’ equity

48.3 _46.8

31.4 35.6

40.1 41.4

56.6

74.7 75.2

88.0

0.20

-0.17

-0.41

-0.31

-0.33

-0.60 -0.40 -0.20 0.00 0.20 0.40

0 20 40 60 80 100

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3

(Ratio) (Billion yen)

Interest-bearing debt Cash Net DE ratio

1.3

-11.0 22.1

1.7

-17.5 15.7

-20 -15 -10 -5 0 5 10 15 20 25

Cash flows from financing activities Cash flows from

investing activities Cash flows from

operating activities

-62-App.1-4-3

：

Finance (Cash Flows)

Cash Flows

Cash outflow from investing activities is mainly due to solar power system installments (524 buildings).

(Billion yen) (Billion yen)

86.8 74.5

0 20 40 60 80 100

Cash and cash equivalents at end of period

-63-App.1-4-4

：

Indicator (Shareholder Composition)

*Based on number of stock

Shareholder Composition

Institutional investors make up 75.6% of our shareholder composition, with 54.6% in foreign corporations and 21.0% in trust banks.

2012/3 2012/9 2013/3 2013/9 2014/3 2014/9 2015/3 2015/9 2016/3

Individuals and other 35.2% 33.2% 27.5% 19.8% 20.7% 17.1% 16.7% 18.3% 16.6%

Foreign corporations 35.2% 34.3% 42.8% 48.6% 49.1% 46.8% 50.7% 55.3% 54.6%

Trust banks 8.3% 11.8% 12.8% 17.5% 17.6% 23.6% 23.2% 17.6% 21.0%

Financial institutions other than trust banks 3.4% 3.3% 3.6% 2.5% 1.7% 1.9% 1.9% 1.9% 2.1% Business corporations and other legal entities 12.7% 12.3% 7.8% 7.8% 6.9% 6.6% 2.5% 2.6% 2.4%

Securities companies 2.7% 2.6% 3.5% 1.7% 2.4% 2.3% 3.4% 2.5% 1.7%

Treasury stock 2.6% 2.5% 2.1% 2.1% 1.7% 1.7% 1.7% 1.7% 1.7%

Appendix 2.

Medium-term Management Plan “EXPANDING VALUE”

-65-App.2-1

：

Business and Financial Strategies

Business Strategies

Financial Strategies

Leasing Improve occupancy rates by expanding tenant services FY March 2017:

Annual average occupancy rate 89.0%

Construction Expand construction variations based on “ideal land usage” FY March 2017:

Forecast sales 100 billion yen

Elderly Care Open new facilities in collaboration with the Construction business March 2014: 61 facilities

⇒March 2017: 90 facilities

Hotels & Resort High quality hospitality to stakeholders

Solar Power

(Other)

Start roof-lease solar power business utilizing funds raised through public offering

FY March 2015:

Installments/generation on 2,900 buildings

Overseas

(Leasing, Other)

Start real estate brokerage services in Asia

Considering development and operations of service apartments

March 2014: 10 locations

⇒March 2017: 20 locations

Basic policy: “Focus on core businesses and challenging itself with new business fields”

Management emphasizing cash flows

Strengthen soundness of financial structure

(Improve shareholders’ equity ratio)

FY March 2017: Shareholders’ equity ratio 48.0% Active reinvesting in growth areas

Resumption of dividends Achieve positive retained earnings (non-consolidated) by stacking up profits