General Announcement::Quarterly Securities Report, Confirmation Letter

Quarterly Securities Report

(The English translation of the "Shihanki-Houkokusho"

for the second quarter of the 72nd term)

from March 1, 2021

to May 31, 2021

TOSEI CORPORATION

4-5-4, Shibaura, Minato-ku, Tokyo, Japan

(E04021)

This is an English translation prepared for the convenience of non-resident shareholders by translating the Quarterly Securities Report (Shihanki-Houkokusho) submitted to the Director of the Kanto Local Finance Bureau of the Ministry of Finance of Japan on July 9, 2021. Should there be any inconsistency between the translation and the official Japanese text, the latter shall prevail.

Table of Contents

Cover

A.	Company Information ..........................................................................................................	1
I. Overview of the Tosei Group.........................................................................................................	1
	1.	Trends in principal management benchmarks ........................................................................................	1
	2.	Business description ...............................................................................................................................	1
II.	Review of operations ......................................................................................................................	2
	1.	Business and other risks .........................................................................................................................	2
	2.	Management analysis of financial position, operating results and cash flows .......................................	2
	3.	Important operational contracts, etc. ......................................................................................................	5
III.	Filing company................................................................................................................................	6
	1.	Information on the Company (Tosei)'s shares, etc.................................................................................	6
		(1)	Total number of authorized shares, etc. ...............................................................................................	6
		(2)	Status of stock acquisition rights .........................................................................................................	6
		(3)	Exercise of bond certificates with stock acquisition rights with exercise price amendment clause ....	6
		(4)	Trends in total number of issued shares, share capital, etc. .................................................................	6
		(5)	Status of major shareholders................................................................................................................	7
		(6)	Status of voting rights ..........................................................................................................................	8
	2.	Status of Officers....................................................................................................................................	8
IV.	Accounting.......................................................................................................................................	9
	1.	Condensed Quarterly Consolidated Financial Statements....................................................................	10
		(1)	Condensed Quarterly Consolidated Statement of Financial Position ................................................	10
		(2)	Condensed Quarterly Consolidated Statement of Comprehensive Income .......................................	11
		(3)	Condensed Quarterly Consolidated Statement of Changes in Equity................................................	13
		(4)	Condensed Quarterly Consolidated Statement of Cash Flows ..........................................................	14
		(5)	Notes to Condensed Quarterly Consolidated Financial Statements...................................................	15
	2.	Other.....................................................................................................................................................	22
B.	Information on Guarantee Companies, etc. of Filing Company ....................................	22

[Quarterly Review Report of Independent Auditors]

[Cover]

Document to be filed:	Quarterly Securities Report
Provisions to base upon:	Article 24-4-7, paragraph 1 of the Financial Instruments and Exchange
	Act
Filing to:	Director-General of the Kanto Local Finance Bureau
Date of filing:	July 9, 2021
Business year:	Second quarter of the 72nd term (from March 1, 2021 to May 31, 2021)
Company name (Japanese):	トーセイ株式会社 (Tosei Kabushiki-Kaisha)
Company name (English):	TOSEI CORPORATION
Title and name of representative:	Seiichiro Yamaguchi, President and CEO
Location of head office:	4-5-4, Shibaura, Minato-ku, Tokyo, Japan
Telephone number:	[phone]
Contact person:	Noboru Hirano, Director and CFO
Place of contact:	4-5-4, Shibaura, Minato-ku, Tokyo, Japan
Telephone number:	[phone]
Contact person:	Noboru Hirano, Director and CFO
Places where the document to be filed is	Tokyo Stock Exchange, Inc.
available for public inspection:	(2-1,Nihonbashi-kabutocho,Chuo-ku, Tokyo)

1. Company Information

1. Overview of the Tosei Group

1. Trends in principal management benchmarks

Term		71st term	72nd term	71st term
	First six months	First six months
Accounting period	From December 1, 2019	From December 1, 2020	From December 1, 2019
to May 31, 2020	to May 31, 2021	to November 30, 2020
Revenue	(¥ thousand)	45,050,321	40,932,878	63,939,781
[Second quarter of the current fiscal year]	[21,581,741]	[15,831,288]
Profit before tax		1,890,888	8,959,674	5,901,313
	(¥ thousand)
Profit attributable to owners of the parent
or Loss attributable to owners of the parent	1,147,607	6,120,465	3,602,339
	(¥ thousand)	[(2,440,209)]	[3,040,929]
[Second quarter of the current fiscal year]
Comprehensive income for the period
attributable to owners of the parent	592,441	6,752,172	3,064,864
	(¥ thousand)
Total equity		56,661,791	64,585,183	58,969,524
	(¥ thousand)
Total assets		161,154,395	170,923,896	161,684,503
	(¥ thousand)
Basic earnings per share		24.14	130.06
or Basic loss per share	(¥)	76.05
[(51.37)]	[64.74]
[Second quarter of the current fiscal year]
Diluted earnings per share		24.06	129.90	75.94
	(¥)
Ratio of equity attributable to owners of the	35.2	37.7	36.5
parent to total assets	(%)
Net cash from (used in) operating activities	7,411,348	8,803,715	12,509,792
	(¥ thousand)
Net cash from (used in) investing activities	(3,364,222)	(12,857,406)	(4,054,077)
	(¥ thousand)
Net cash from (used in) financing activities	(624,878)	2,043,057	(3,414,376)
	(¥ thousand)
Cash and cash equivalents at end of period	35,420,082	35,030,009	37,039,600
	(¥ thousand)

Notes: 1. Filing company's trends in principal management benchmarks are not disclosed as the Company prepares quarterly consolidated financial statements.

1. Revenue does not include consumption taxes.
2. The above benchmarks are based on the quarterly consolidated financial statements and consolidated financial statements that were prepared in compliance with the International Financial Reporting Standards (hereinafter
   "IFRS").

2. Business description

During the six months ended May 31, 2021, there were no significant changes in business activities operated by the Tosei Group (the Company and its subsidiaries and affiliates) from the previous fiscal year.

Changes in major subsidiaries and affiliates include the inclusion of TREC MOON LLC in the scope of consolidation, due to the acquisition of equity in the silent partnership in the first quarter.

1

II. Review of operations

1. Business and other risks

There were no business and other risks that newly arose during the six months ended May 31, 2021. In addition, there were no significant changes in "Business and other risks" described in the annual securities report for the previous fiscal year.

2. Management analysis of financial position, operating results and cash flows

Forward-looking statements included in this section are judged by information available to the Group's management as of May 31, 2021.

1. Recognition, analysis and contents for discussions of the Group's operating results from the viewpoint of management

1. Recognition, analysis and contents for discussion of business environment and business performance

During the six months ended May 31, 2021, the Japanese economy continued to face a harsh environment due to the impact of COVID-19. While indications continue of an upturn in the domestic economy, it remains necessary to monitor factors such as economic downside risks due to the renewed spread of the virus in Japan and overseas, as well as movements in global financial markets.

In the real estate industry where Tosei Group operates, domestic real estate investments for the three months from January to March 2021 amounted to ¥1.2 trillion, decreasing by 28% year on year. However, Tokyo ranked second in the world ranking by city for the three months from January to March 2021, and it appears that investment demand remains high among overseas investors, who value Japan's highly stable real estate market. There are also signs of a recovery in the purchase and sale of office buildings, for which a decline in profitability was feared, and transactions are expected to be lively throughout 2021 (according to a survey by a private research institute).

In the Tokyo metropolitan area condominium market, the number of newly supplied units from January to April 2021 increased 57.5% year on year to 8,760 units. This appears to be the result of a rebound after a substantial decline under the state of emergency introduced in April last year. Since February 2021, the average contract rate for the first month has remained above the 70% threshold from which market conditions are viewed as favorable, and a steady recovery is underway. However, in the build-for-sale detached house market, housing starts for the three months from January to March 2021 numbered 12,000 units, a decrease of 6.0% year on year (according to a survey by a private research institute).

Regarding construction costs for the four months from January to April 2021, average costs per tsubo

for reinforced concrete structure were ¥915 thousand per tsubo (1 tsubo = 3.30 square meters) (an increase of 0.1% year on year), and average costs per tsubo for wooden structure were ¥567 thousand (an increase of 0.4% year on year). The current increase in the price of steel materials due to the global economic recovery, particularly in China, has raised fears of a future hike in construction costs (according to a survey by the Ministry of Land, Infrastructure, Transportation and Tourism).

In the office leasing market of Tokyo's five business wards, the average vacancy rate as of April 2021 was 5.65% (an increase of 4.09 percentage points year on year), against the backdrop of tenants cutting back on office space as a result of the spread of teleworking lifestyle in certain areas, and a slowdown in expansion. The average asking rent was ¥21,415 per tsubo (a decrease of ¥1,405 year on year), which has continued to fall from August 2020, and it remains necessary to monitor future trends in supply and demand (according to a survey by a private research institute).

In the Tokyo metropolitan area's logistics facility leasing market, leasable stock in April 2021 amounted to 6.60 million tsubo (an increase of 9.5% year on year). The vacancy rate was 0.5%. Although this was a slight increase from the level of 0.2% observed in January 2021, supply remains tight. The vacancy rate is expected to remain low, with leasing activity progressing strongly overall (according to a survey by a private research institute).

In the real estate fund market, the market scale continues to expand. J-REIT assets under management in April 2021 totaled ¥20.7 trillion (an increase of ¥1.0 trillion year on year) and assets under management in private placement funds totaled ¥22.5 trillion (as of December 2020, an increase of ¥2.3 trillion year on year). Combining the two, the real estate securitization market scale grew to ¥43.2 trillion (according to a survey by a private research institute).

In the Tokyo business hotel market, the average guest room occupancy rate in the three months from

2