Mitsui Fudosan : Integrated Report 2021(8.67MB)

INTEGRATED

REPORT

2021

Editorial Policy

For stakeholders, including shareholders and investors, to gain a correct understanding of the complete picture concerning the Mitsui Fudosan Group's management strategy and corporate activities, in addition to financial information such as financial results, review of operations and management strategies, it is also important to gain a systematic understanding of non-financial information relating to aspects such as society, the environment, human resources and governance. Based on this belief, our Integrated Report features enhanced and integrated non-financial information. In editing the report, we strived to incorporate the perspectives of all stakeholders by referring to the International

Integrated Reporting Framework, which was published by the International Integrated Reporting Council (IIRC) in December 2013, and Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation advocated by Japan's Ministry of Economy, Trade, and Industry.

Moreover, the Group's activities have been selected and included in the report, based on their importance for stakeholders. For more information, please refer to various other forms of communication given below.

Contents

Mitsui Fudosan's Value Creation

1. Group Statement/Vision/Mission

1. Value Creation Process

1. Our Value Creation

1. A History of Value Creation: Unceasing Challenge in Our DNA

1. Diverse Asset Classes and Global Expansion

1. Joint Value Creation Model with Investors and Sources of Revenue

1. Value Creation Sources and Achievements

Value Creation Strategy

19	Long-Term Vision VISION 2025
23	Message from the CEO
29	Message from the CFO
31	Special Feature 1: Toward Realization of Decarbonized Society

Positioning of the Integrated Report

to Importance stakeholders

Importance to Mitsui

Fudosan's value creation

Financial information

Non-financial information

Integrated Report

•Annual securities report	•Corporate governance report
•Investor presentations	•Internal controls report
•Summary of results	•ESG report

37	Special Feature 2: Diversity & Inclusion Strategy
44	Special Feature 3: What an Outside Director Has to Say

Value Creation Efforts and Base Building

Value Creation Through Business

47 Example 1: Urban Development Originating in Parks

49	Example 2: Providing Value at TOKYO MIDTOWN YAESU
Business Report
51	At a Glance
53	Office
57	Retail
59	Logistics
61	Housing (Homes and Living)
65	Hotels and Resorts
67	Dramatically Growing the Overseas Business
69	CLOSE UP: Entry into the Stadium and Arena Businesses
71	CLOSE UP: DX Initiatives
Our Base for Value Creation

About the Website

Corporate Website	Shareholder and Investor Information		ESG/Sustainability
https://www.mitsuifudosan.co.jp/english/	https://www.mitsuifudosan.co.jp/english/corporate/ir/	https://www.mitsuifudosan.co.jp/english/esg_csr/

Contains materials related to financial results,	Introduces initiatives for society and the
audio and video versions of results briefings	environment based on the Mitsui Fudosan
and information for shareholders and investors.	Group's Group Vision.
	More detailed information on ESG can be found
	in the Group's ESG Report.

73	Main Environment Initiatives
76	Main Social Initiatives
77	Corporate Governance
90	Risk Management
91	Compliance

Data Section

93 Financial Highlights

1. Non-FinancialHighlights
2. Financial Analysis

1. Organization Chart
2. Corporate Data/Shareholders' Information
3. International Initiatives That We Support/External Assessments

Caution Concerning Forward-Looking Statements

This Integrated Report contains figures related to the future, which are included in results forecasts and so forth. These are based on judgements made using information obtained at the time of publication, and thus contain risks and uncertainties. Furthermore, Mitsui Fudosan makes no guarantee that these forecasts will be realized. Therefore, you should not rely on these forecasts alone when making investment decisions. You should be aware that business results arise through various important factors and actual results may vary greatly from forecasts. Important factors influencing actual results include the economic situation encompassing the Group's business domains, foreign currency exchange rates including yen-U.S. dollar cross rate, and the Japanese share market.

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GROUP STATEMENT

The Mitsui Fudosan Group aims to bring affluence and comfort to urban living.

GROUP VISION	What we want to be
	Philosophy	Seeking to link diverse values, coexist in harmony with society and achieve a sustainable
		society, as symbolized by the Mitsui Fudosan " " logo, we will work to foster social and
		economic development as well as global environmental preservation. Under "	",
		we will aim for a society that enriches both people and the planet.

The Group Statement, Vision, and Mission embody the Group management's basic philosophy and its vision for the future. Since their formulation in 1999, they have guided the Mitsui Fudosan Group as an integrated management policy.

GROUP MISSION	What is expected of us
Provide business and	•Maximize urban value creation by providing secure, safe and attractive urban spaces and soft
lifestyle-related solutions	services that bring enrichment and comfort to urban living.
•Provide variable and innovative solutions that stimulate the real estate investment market.
and services

Evolution and	By bringing knowledge and experience together in diverse ways, we seek to advance the
value creation	real estate business and create new value, both at home and abroad, proactively
	responding to global changes in social environments and market structures.

Work in partnership with customers from a global perspective

•Treat customers as the business foundation on which to progress and develop the Company.

•Propose and provide products and services by deploying the collaborative strength of the Group with a multidisciplinary approach that meets the real needs of customers.

•Work in partnership with customers to raise brand value by continuously providing services that are highly valued by them.

A profitable and growing	We seek to create a profitable and growing Mitsui Fudosan Group, acting honestly and
Mitsui Fudosan Group	fairly to realize the capabilities of the entire organization.

Raise our corporate value	•Raise corporate value through sustainable profit growth and continual innovation.
	•Optimize the allocation and use of available resources and pursue efficient operations.
	•Conduct operations while closely monitoring and managing business risks.

Create strong corporate group by building the capabilities of individuals

•Seek to maintain a creative and pioneering spirit by integrating various skills and values.

•Cultivate and institutionalize the professional capabilities of individuals to raise our creative ability for value-added products and services.

•Maintain high awareness of ethical, disciplinary, and compliance issues, and act accordingly.

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Mitsui Fudosan's Value Creation

Value Creation Process

In accordance with the principles embodied by the "" logo-coexist in harmony with society, link diverse values and achieve a sustainable society-the Mitsui Fudosan Group leverages our strengths of engagement in every asset class, an expansive value chain, and development capabilities necessary for creating neighborhoods to solve social issues through neighborhood creation with the aim of achieving a sustainable society and driving sustainable prot growth.

Solve social issues through neighborhood creation under the "" logo principles*

*Coexist in harmony with society, link diverse values and achieve a sustainable society

Extensive customer base (As of March 31, 2021) Ofce tenants: approx. 3,000 companies

Retail tenants: approx. 2,400 companies

Mitsui Housing Loop members*1 : approx. 280,000 *1 September 30, 2021

Diverse human resources (As of March 31, 2021)

Group headcount: 23,992	Before development	The former Hibiya Mitsui Building
Ratio of female employees*2 : 40.6%
Ratio of mid-career hires*3 : 44.1%

*2 Non-consolidated, as of April, 2021

*3 Non-consolidated, FY2020

Management Resources

p.17

High quality real estate asset stock (As of March 31, 2021)

Rental properties: approx. ¥3.0 trillion

Unrealized gain on real estate for rent: approx. ¥2.8 trillion

Real property for sale: approx. ¥1.9 trillion

Mitsui Fudosan's	Value Creation Strategy	Value Creation Efforts	Data Section
Value Creation	and Base Building

•Create neighborhoods that put people first

•Create neighborhoods that get better with age

•Provide real estate to customers as a service rather than a thing

(Real estate ICT)	Reduce environmental impact	Establish
	and generate energy
After development TOKYO MIDTOWN HIBIYA		a Sustainable
	Create new industries	Society
	p.17	p.21
	through open innovation

Establish ultra-smart societies by creating neighborhoods

Material issues	Providing Value
for value creation
p.21

Achieve health, safety, and security in people's daily lives

Solid financial position (As of March 31, 2021)

D/E ratio: 1.42 times

Ratio of long-term debt (excl. non-recourse): 95.5%	Our Strengths
Unused commitment line: ¥400 billion	•Engaged in every asset class
	(Ofces, retail, logistics, housing, hotels, etc.)
	•Expansive value chain
	(Investment, development, management, leasing and sales)
	•Development capabilities necessary for creating
	neighborhoods

Achieve a society where a diverse workforce can thrive

Creating neighborhoods full of life Support for diverse workstyles

Continuously improve compliance and governance

Multi-site shared ofces for	E-commerce mall linked to
corporate clients	real stores

Drive Sustainable

Profit Growth

p.17 p.22

• Earnings and profit growth
• Improvements in asset and capital efficiency
• Shareholder return enhancements

External Environment Recognition

•Population decline

•Low birthrates and an aging society •Evolution of ICT

•Diversification and fragmentation in perceptions of value

•Increase in awareness of sustainability

etc.

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Mitsui Fudosan's Value Creation

Our Value Creation

The Mitsui Fudosan Group has created wide-ranging new value through neighborhood creation. Several examples are introduced below.

Creation of a New Urban Space

During the Period of Rapid Economic Growth

Kasumigaseki Building

As a forerunner in making advanced use of urban space, we constructed Japan's first skyscraper, achieving effective use of land in a city center along with contribution to the community through the creation of open areas and green spaces.

Mitsui Fudosan's	Value Creation Strategy	Value Creation Efforts	Data Section
Value Creation	and Base Building

An Initiative to

Create a Multi-Generational Community

Suncity

By viewing a well-knit community of tenants and local residents as a new asset value and by creating a forest on the grounds of a condominium building, we achieved the formation of a multi-generational community connected by forest.

At the time of

completion

Present day

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