Hulic : Investors Guide for 1st Quarter (January-March) FY2024

Investors Guide

2024 Q1

Table of Contents

Corporate Profile	P.2-4
Medium- and Long-term Management Plan (2020-2029)	P.5-8

2	Corporate Profile
Corporate History of Growth and Achievements
	Since the	Profit and dividend		12-fold increase		External rating up
	increase for			by 3 notches
listing in 2008	15 consecutive years		in ordinary profit

	Consolidated				Initial forecast	Results (difference over initial forecast)		Plan/targets		180.0
Ordinary Profit (Unit: JPY bn)														150.0
																			144.0
													2019
	2008											Made Nippon View Hotel		137.4
											CO., LTD., a subsidiary
	Listed shares on the First
											123.2
	Section of the Tokyo Stock
	Exchange														109.5
									2015
2007			2010					Merged with Simplex			95.6
						Investment Advisors Inc.
Changed corporate		Merged with Senshu			(a real estate company)		846
name to Hulic Co., Ltd.	Shoji Co., Ltd. and
				Fuyo General		2012						72.5
				Development and
1957				Finance Co., Ltd.	Merged with Shoei		51.4	61.8
Established Nihonbashi		(real estate leasing	Co., Ltd. (a real
Kogyo Co., Ltd.			companies)		estate company)
Started property									42.5
management for the former							34.3
Fuji Bank (now Mizuho
					25.9
Bank) branch buildings and					20.0
insurance agency business				16.8
10.9	10.9	12.3
1957	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	2029
External	BBB-	A-				A			A+								AA-
Rating
(JCR)

Long-term Management Plan (2009-18)Long-term Management Plan (2014-23)	Current Medium- and Long-term Management Plan (2020-29)
Achieved all targets	Achieved all targets
four years ahead of schedule	four years ahead of schedule

3	Corporate Profile
Business Overview

Consolidated Business Overview

			FY2023
Business Segment	Operating	Major businesses
Profit
			(Million yen)
１	Real Estate	154,432
		Leasing, etc.	59,192	Leasing, development and asset management, etc.
		Sales	95,239
２	Insurance Agency	1,087	Insurance agency
３	Hotels / Ryokans	1,026	Hotels / Ryokans operation
４	Others	511	General construction, design, construction management, etc.
	Adjustment	-10,878
	Operating Profit	146,178

Selection and Concentration Strategy

for Real Estate Business

	Core Fields			Non-core Fields
	Offices in Tokyo				Offices in
	prime locations				regional areas
	Medium-sized				Large "S-class"
	offices				offices
	Reconstruction /				Large-scale
	Medium-scale				development
	development
	Nursing homes				Condominium
	Hotels / Ryokans				sales

Business data, features

A small group of elite professionals

(As of the end of 2023)

Non-consolidated basis: 222 employees Consolidated basis: 1,357 employees

Ordinary profit per employee: JPY 600 mil

(on a non-consolidated basis)

Operating Hotels / Ryokans

(As of the end of 2023)

• 4 THE GATE HOTEL (608 rooms)
• 11 FUFU [luxury Japanese-inn] (268 rooms)
• 7 View Hotels and others (1,874 rooms)

Real Estate Leasing Portfolio

(Excl. Real estate for sale. As of Mar. 2024)

• # of Properties: 251
• Net Leasable Area: approx. 1,312,000㎡
• Office Vacancy Ratio: 0.4％ (for all Hulic)
• Average rent: 27,859 Yen (for Tokyo Top 5 wards)
• AUM of Hulic J-REIT: approx. JPY 400 bn Hulic also has Private REIT and Funds

Sources of Rent Revenue (Mar. 2024 monthly)

Logistics & Data	Office
Center, etc. 8%		43％
Retail		Office
commercial
38%
25%
Nursing	Office
home
Hotel,	(Mizuho)
4%	Ryokan	5%
	20%
Long-term		Mizuho FG 5%
master leasing	Corporate
(Mizuho Bank's

Residence 0%	branch buildings)

4	Corporate Profile
Shareholder Return

Dividend increase for 15 consecutive years since the listing

Dividend and Payout ratio History	Medium-term Plan
(2023-2025)
(Dividend: Yen)	Payout ratio guidance	(Payout ratio)
40% or higher
			45.0%

	Annual Dividend per Share									40.3% 40.2% (40.3%)
60.00	Payout Ratio
									38.5%				40.0%
								37.8%
										33.9%	35.4%				50.00	(52.00)
50.00									32.6%							35.0%
						32.0%
						27.8%	29.3%							42.00				30.0%
40.00													39.00
					24.0%							36.00						25.0%
				21.8%
										31.50
30.00																		20.0%
										25.50
20.00	Former Hulic*							21.00									15.0%
						15.50 17.00
Merged with Shoei Co.,
	Ltd. in 2012				10.50												10.0%
10.00					6.50
				4.50													5.0%
			3.67
	2.67	3.00
2.00
0.00																		0.0%
2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	2029

*In consideration of the 2012 merger with Shoei Co., Ltd. (share exchange ratio: former Shoei : former Hulic = 1:3), the dividends per share in 2008-2011 were calculated by dividing dividends of the former Hulic by three.

5

Initial

plan

Result

Medium- and Long-Term Management Plan (2020-2029)

Position of the Plans

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

	Previous Long-term Plan "Hulic 10 years"
Phase I		Phase II	Phase III	Ordinary profit:
	JPY 85.0 bn
2014-2016		2017-2019	2020-2023
Phase I	Phase II	Phase III	Achieved
2014-2015	2016-2017	2018-2019	4 years ahead
Ordinary profit:
				JPY 180.0 bn

New Medium- Long-term Plan (2020-2029)

Phase I	New Medium-term Plan
	Phase II
2020-2022
2023-2025
Prioritize		Keep the flexible
reconstruction for		earnings structure
earthquake resilience		to grow profit

Ratio of income gains and capital gains are changeable

according to development schedule and financial market environment.

In progress

Phase III

2026-2029

Leasable floor area

expands &

High-spec buildings

Leasing / Management Profit

ratio will reach 55-65%

	Phase I		・ Start building strong leasing portfolio, resume development and reconstruction projects
	Phase II		・ Monetization of development and value-added businesses and strengthen the REIT and fund business
			In progress

Phase III		・ Build up a solid and expanded portfolio for leasing business

6 Target Profile / Basic Policy / Basic Strategy (2020-2029)Medium-and Long-TermManagement Plan (2020-2029)

Target Profile

2029

Basic Policy

• To increase corporate value through flexible and speedy management decision according to macro environment change
• • Ensuring excellent balances of "PL Growth" "Profitability" "B/S Soundness" and "Productivity (efficiency)"

Basic

Strategy

1. Leasing Portfolio corresponding to future

demographic shift

Business

2. Redevelopment or refurbishment of aged buildings

3. Investing to new business domains

Management infrastructure

	4. Selective business focus for		5. Management commitment to
	stronger management foundation		environmental sustainability

7	Medium- and Long-Term Management Plan (2020-2029)
KPI / Quantitative Targets

2023

2024

2025

2029

Result

Forecast

(the final year of Phase II)

Growth

Ordinary profit

137.4 bn

144.0 bn

150.0 bn

180.0 bn

Debt / EBITDA

7.6 times

-

12 times or less

12 times or less

Soundness

Net D/E ratio

1.3 times

-

3 times or less

3 times or less

Efficiency

ROE

13.0％

-

10％ or more

10％ or more

Shareholder

Dividend payout ratio

40.2％

40.3％

40％ or more

-

return

Note: Financial metrics are calculated with 50% of hybrid finance as nominal equity

For reference

Profit Plan

2025

Investment limit

2023-25

(the final year of Phase II)

(3 years total)

Operating Revenue

-

Net investment

900.0 bn

Operating Profit

165.0 bn

Leasing, management, etc.

550.0 bn

Ordinary Profit

150.0 bn

Development /

200.0 bn

Reconstruction / VA

Profit attributable

98.5 bn

New Business Area*

150.0 bn

to Owners of Parent

*Including growth investment

8 Management Plan Phase II (2023-2025): Basic Strategy & Focus AreasMedium- and Long-TermManagement Plan (2020-2029)

Basic

Strategy

Aim to create a high-quality leasing portfolio that addresses the changing

circumstances, and continue to enhance sustainable management,

while maintaining a strong credit rating

Basic Strategy of

Long-Term Management Plan

(2020-2029)

1

Further evolve the business model and

1

Focus Areas of

New Medium-Term Management Plan

(Phase II : 2023-2025)

Build a high-qualityleasing portfolioand

Focus Areas

restructure the leasing portfolio

2

Strengthen development and value-

added businesses

3

Create unique new business domains

and improve Group strengths

1. Strengthen the management

foundation and implement stringent risk

1. management

2. Implement management that
   emphasizes sustainable co-creation
   and co-existence with society

maintain/strengthen a flexible earnings structure

2 Enhance the pipeline of development,

reconstruction and value-added properties.

Diversify exits to ensure profitability

	3	Diversify revenue sources
		by enhancing new business domains

1. Ensure financial soundness and thorough risk management to maintain a strong credit rating
2. Raise the level of sustainable management, including the promotion of environmental initiatives and human capital development