Leopalace21 Corporation Investor Meeting...
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Investor Meeting Presentation for the Fiscal Year Ended March 31, 2020 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. *Reportable segments were changed in FY18/3 and FY21/3. *Past figures are retrospectively adjusted, due to a change in accounting policy in a subsidiary in the Leasing Business. June 2020 Implementing Structural Reforms based on Strategic Review Results for Drastic Business Strategies Reconstruction
Transcript of Leopalace21 Corporation Investor Meeting...
Investor Meeting Presentation
for the Fiscal Year Ended March 31, 2020
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.
*Reportable segments were changed in FY18/3 and FY21/3.
*Past figures are retrospectively adjusted, due to a change in accounting policy in a subsidiary in the Leasing Business.
June 2020
Implementing Structural Reforms based on Strategic Review Results
for Drastic Business Strategies Reconstruction
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
1-3 Investigation and repair works on properties
constructed by Leopalace21 7
1-4-1 Preventive Measures for Constructive Defects
and Progress 8
1-4-2 Preventive Measures for Construction Defects-1 9
1-4-3 Preventive Measures for Construction Defects-2 10
1-4-4 Preventive Measures for Construction Defects-3 11
2. FY20/3 Results
2-1 Highlights of Results 13
2-2 Results of Business Segments 14
2-3-1 Main Indicators of Leasing 15
2-3-2 Occupancy Rate Trend 16
2-3-3 Occupancy Rate after Announcement of
Construction Defects 17
2-4-1 Main Indicators of Development 18
2-4-2 Orders and Sales 19
2-5 Reduction in SGAE 20
2-6-1 Finance (Balance Sheets) 21
2-6-2 Finance (Cash Flows) 22
3. Forecast for FY21/3 and Plans for FY22/3 and FY23/3
(for reference) based on Drastic Business Strategies
Reconstruction FY20/3 Plan, FY21/3 and FY22/3 Plan
(Reference)
3-1 Mid to Long-term Strategies 24
3-2 Structural Reforms 25
3-3 Roadmap for Short Term and Mid to Long Term 26
3-4 Financial Plans up to FY23/3 27
3-5 Structural Reforms Perspective 28
3-6 Financial Plans up to FY23/3 by Segment 29
3-7-1 Mid to Long-term Strategy for Leasing Business 30
3-7-2 Major Indicators for Leasing Business 31
3-7-3 Plan for Occupancy Rates 32
3-7-4 Measures on Corporate Customers/Foreign
National Customers 33
3-8 SGAE Reduction Perspective 34
3-9 Number of Employees and Productivity
(Sales per Person) 35
3-10 Cash flow Plan 36
4. Overview of Business (Leasing)
4-1 Demand of Leasing Clients 38
4-2-1 Indicator (Occupancy by Group) 39
4-2-2 Indicator (Shares of Occupied Units by Group) 40
Contents
1
4. Overview of Business (Leasing) (cont’d)
4-2-3 Indicator (Occupied Units by Industry) 41
4-2-4 Indicator (Foreign National Tenants) 42
4-3-1 Leasing Strategy (Office Expansion) 43
4-3-2 Leasing Strategy
(WEB agreements, Leo-sign, AI room searching) 44
4-3-3 Leasing Strategy (my DIY and Security Systems) 45
4-3-4 Leasing Strategy (Tenant Services) 46
4-3-5 Leasing Strategy (IoT, AI) 47
4-3-6 Leasing Strategy (Subsidiary Businesses) 48
4-3-7 Leasing Strategy (Minpaku) 49
5. Overview of Business (Development)
5-1 Indicator (Offices and Apartment Construction) 51
5-2-1 Development Strategy (Ideal Land Usage) 52
5-2-2 Development Strategy (Apartment Brands and Homes) 53
6. Overview of Business (Others and International)
6-1 Others (Elderly Care Business) 55
6-2 Others (Domestic Hotels Business) 56
6-3 Others (Resort Business) 57
6-4-1 International (Leasing Business Overseas, SA/SO) 58
6-4-2 International (Other Services) 59
6-5 Work Style Reforming 60
Appendix 1. Supplementary Data
App.1-1 Corporate Profile 62
App.1-2-1 Quarter Comparison 63
App.1-2-2 Results of Leopalace21 Group 64
App.1-3-1 Indicator (Occupancy by Group) 65
App.1-3-2 Indicator (Foreign National Tenants) 66
App.1-3-3 Indicator (Units and Occupancy Rates by Area) 67
App.1-3-4 Indicator (Occupancy Rates by Building Age) 68
App.1-3-5 Indicator (Contract Type) 69
App.1-3-6 Indicator (Solar Power Systems) 70
App.1-3-7 Indicator (Resources of finance for construction) 71
App.1-3-8 Indicator (“Azumi En” Area Disposition) 72
App.1-4 Finance (Cash/Deposits and Interest-bearing Debt) 73
App.1-5 Shareholder Composition 74
Appendix 2. Market Trends
App.2-1 Future Estimate of Population of Japan 76
App.2-2 Number of Households 77
App.2-3 New Housing Starts 78
App.2-4 New Housing Starts (Leased Units) 79
App.2-5 Vacant Rental Dwellings 80
App.2-6 Population Inflows and Outflows 81
App.2-7 Rental Housing Starts and Leopalace21 by Area 82
App.2-8 International Students in Japan 83
Contents (cont’d)
2
1. About Leopalace21
Business Model
Leopalace21 is a real estate company with two core businesses: the Development Segment which constructs apartments mainly
for single persons, and the Leasing Segment which manages these apartments. The Leasing Segment makes up over 80% of
sales, and we are moving forward to establish a stock-based business model capable of generating stable profits.
Responsive to tenant needsResponsive to owner needsApartment construction leads to inheritance tax reduction,
and supports asset inheritance
Our Master Lease System pays rents for all units in buildings
regardless of vacancies for up to 30 years
Total support from construction to management and
operation
Nationwide network centered on three major metro areas
where tenant demand is strong
Provide high value added services such as furnished
apartments with furniture, home appliances, and
IoT devices
No brokerage fees (LP21 leases directly from landowners)
Leasing
Segment
Development
Segment
4.
Rent
income
Owners Tenants
2.
Master
lease
1.
Construction
contractor
3.
Sub-lease
Business model(Rooms)
As of March 31, 2020
Tokyo metro 171,000
Tohoku 36,000
Chubu
88,000
Kinki
81,000Chugoku
39,000
Kyushu &
Okinawa
52,000Shikoku
15,000
Hokuriku &
Koshinetsu
40,000
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)
1-1: Business Model of Core Businesses
4
46%
49%
5%
Sales (Billion yen) Operating profit (Billion yen)
Results Trend
*Figures for FY17/3 adjusted to new segments.
1-2-1: Results Trend
Occupancy rate (average)
Leasing
Development
Others
Operating Profits
FY20/3
SalesFY09/3
Sales
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, in order to target a
stable earnings structure for the mid to long term, business model has been sifted into the Leasing business basis. Huge
operating losses were recorded caused by construction defects problem during FY20/3. We are implementing structural reforms.
5
88.51%
82.25%
80.09%81.16%
82.94%84.58%
86.57%87.95%88.53%
90.59%
88.34%
80.78%
80%
95%
FY09/3 FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
90%
5%5%
334.5342.3355.7
379.0383.6
388.5 399.3 410.6421.3 435.5
426.3
388.9
359.1237.0
107.8 62.9 53.3 63.1 61.3 74.1 80.3 76.5 58.923.8
733.2
620.3
483.5 458.2 454.2 470.8 483.2511.5 520.4 530.8 505.2
433.550.1
-29.7-24.4
3.3 7.4
13.4 14.8 21.0 22.8 22.9
7.3
-36.4 -40
-20
0
20
40
60
80
-200
0
200
400
600
800
Highlights of Results Trend
(Billion yen) FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3FY21/3
(Plan)
Net sales 620.3 483.5 458.2 454.2 470.8 483.2 511.5 520.4 530.8 505.2 433.5 431.1
Leasing 342.3 355.7 379.0 383.6 388.5 399.3 410.6 421.3 435.5 426.3 388.9 413.9
Development 237.0 107.8 62.9 53.3 63.1 61.3 74.1 80.3 76.5 58.9 23.8 -
Operating profit -29.7 -24.4 3.3 7.4 13.4 14.8 21.0 22.8 22.9 7.3 -36.4 -9.8
Leasing -47.8 -30.8 4.0 8.7 15.3 20.5 22.8 23.0 26.0 14.9 -20.8 3.6
Development 29.7 11.8 4.2 2.7 2.9 0.2 3.3 5.7 3.6 -0.9 -5.1 -
Net income -79.0 -41.7 0.3 13.3 15.7 15.1 19.6 20.4 14.8 -68.6 -80.2 -8.0
Managed units*(1,000 units)
551 571 556 546 549 554 561 568 570 574 575 574
Occupancy rate* 82.3% 80.1% 81.2% 82.9% 84.6% 86.6% 88.0% 88.5% 90.6% 88.3% 80.8% 81.6%
Orders received 250.2 80.3 50.0 73.0 81.1 87.3 86.4 92.8 87.6 73.3 9.3 -
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
*Past figures are retrospectively adjusted, due to a change in accounting policy in a subsidiary in the Leasing Business
1-2-2: Highlights of Results Trend
6
Buildings subject to top-priority
investigationsOthers
Total
Nail Series 6 Series SubtotalOthers
（42 series）
To
t-
al Number of constructed buildings 913 14,370 15,283 23,802 39,085
Inve
stig
atio
n
Number of buildings to be investigated (excl.
dismantled bldgs)897 14,268 15,165 23,540 38,705
Number of Investigated buildings 896 14,243 15,139 23,167 38,306
Investigation rate（vs number of buildings to be
investigated）99.9% 99.8% 99.8% 98.4% 99.0%
Number of obviously defective buildings
(Note 1, Note 2)850 6,788 7,638 5,977 13,615
Defect rate（vs number of investigated buildings） 94.9% 47.7% 50.5% 25.8% 35.5%
Rep
air
Number of buildings commenced Repairs 847 5,520 6,367 704 7,071
Repair rate （vs number of obviously defective buildings） 99.6% 81.3％ 83.4％ 11.8％ 51.9％
Number of buildings completed Repairs(Note 3)
846 153 999 9 1,008
Completion rate（vs number of obviously defective
buildings）99.5％ 2.3％ 13.1％ 0.2％ 7.4％
(as of May 31, 2020)
Number of rooms for which tenant recruitment resumed : 85,248 rooms (+18,206 rooms compared to January 2020)
1-3：Investigation and repair works on properties constructed by Leopalace21
7
(Note) 1 Obvious defects include obvious parting wall defects in attics, deficiencies of insulation materials/exterior wall structures/ceilings, and noncompliant
parting walls in fire-proof structure.
2 Apart from the above, 16,455 out of 38,306 buildings contain minor defects.
3 Completion is recognized and calculated on a building basis and time of completion is delayed compared to calculation on a room basis.
Repair works started for 83.4% against obviously defective buildings and completed 13.1%. Repair works delayed due to the failure to maintain adequate
organizational setup and resources. The recovery of business performance is indispensable for surely implementing measures against construction defects
problem. Therefore, we decided on reallocating manpower and physical resources including offering a voluntary retirement program, and determined to
temporarily reduce the scale of repair works and organizational setup from July 2020. We will review the repair works plans and report them when we have
prospects to realize improvement in business performance.
1-4-1：再発防止策について①
Established External Investigation Committee and Received Report
Announced May 29, 2019
Established Feb 27, 2019
Determined Policy
of Preventive
Measures
Final Report released on May 29, 2019
Implemented the
individual measures
August 2019
Established
Compliance
Management
Headquarters
April 2019
1-4-1： Preventive Measures for Constructive Defects and Progress
We decided on the preventive measures for the construction defects problem based on the findings and proposals compiled in the External
Investigation Committee’s report in May 2019. We treated the implementation as top-priority issue and have worked on the three focus areas,
“1. Fundamental Reform of the Corporate Culture,” “2. Restructuring of the System for Managing Compliance and Risk,” and “3. Revision of
the Construction Business Framework.” Out of 50 action plans made public in August 2019, 44 are either complete or in practice.
Fixed and
Announced the
Details of Measures
August 2019 till now
88% achievement for 50 specific
action plans announced in August
2019
CompletedIn
practiceStarted Total
1. Fundamental Reform of the Corporate Culture 9 6 1 16
2. Restructuring of the System for Managing
Compliance and Risk4 6 2 12
3. Revision of the Construction Business
Framework14 5 3 22
Total 27 17 6 50
Complete In Practice
Started
Progress status of preventive measures in the three categories (as of end of April 2020)
8
Announced the progress on the approach to prevent recurrence
https://www.leopalace21.co.jp/info/en/approach.html
*Compliance Management Department was renamed Compliance Promotion Department.
1. Fundamental Reform of the Corporate Culture
1-4-2： Preventive Measures for Construction Defects – Details 1
9
We implemented “a Suggestion Box for Management, “ “Regional Small Meetings,” “Continuous training on compliance,”
“Delivery of President and CEO’s message emphasizing compliance,” and “Revision of Performance Rating System” to help
reform the corporate culture. We will continue to carry out the existing measures and introduce another set of measures to
strengthen developing customer-oriented corporate culture.
(Excerpted version)
Periodic dissemination of messages concerning the compliance-first policy (July 2019 - )
In July, 2019, a video message from the President and CEO was distributed to all group employees, notifying them of our new compliance-
first management policy. President and CEO has sent since then various messages based on compliance first.
Set up a Suggestion Box for Management (July 2019 - )
It is a system that directly collects employee's proposals. The number of posts reached 286 for FY20/3.
Hold the Regional Small Meetings (July 2019 - )
Promote active dialogue among management and employees and held 37 meetings between July and December. An accumulation of
2,310 employees participated.
Report the progress of each action plan of preventive measures (August 2019 - )
Made formal announcement on the state of action plans to the public.
「Develop customer-oriented corporate culture (October 2019 - )
Invite all officers and employees for writing essays on fostering customer-oriented corporate culture. We saw 62 applications made.
Introduce a performance rating system, including adherence to compliance-first policy (October 2019 - )
The personnel rating criteria was revised to evaluate whether employees’ behavior and activities are in line with the compliance-first policy.
Make all officers and employees understand and follow the reporting rules (November 2019 - )
Revised the rules of reporting line to be in line with the changes in compliance regulations. Dual reporting may be required, one to the
superiors in own business divisions and the other to the Compliance Promotion Department in parallel.
Complete
Complete
Complete
Complete
Complete
Complete
Complete
*Compliance Management Department was renamed Compliance Promotion Department.
1-4-3： Preventive Measures for Construction Defects – Details 2
In April 2019, we reorganized then Compliance Management Department. We employed external instructors in October and November 2019
to train employees to identify potential risks. In addition, we created a mechanism of collecting increasing number of potential risk
information by putting the “Compliance Mailbox” operated by the Compliance Promotion Department. We plan to revise the system of
assigning persons in charge of compliance in FY21/3. We will continue existing action plans and revise them if necessary.
2. Restructuring of the System for Managing Compliance and Risk
10
(Excerpted version)
Improve the operation of the Compliance Committee (June 2019 - )
The Committee should be chaired by one of the outside directors who is elected between such directors so that the operation should be
looked at from the objective angles of outside the company.
Improve the risk management method (Make reporting rules well known) (October 2019 - )
In October 2019, external instructors conducted training to identify potential risks at each department. Potential risks identified in each
department based on the training have been reported to the Risk Management
Established rules for disseminating information to in-house audience (November 2019 - )
We established rules for disseminating information on how the Compliance Committee works and disclose the implementation status of
the Committee to the company.
Prepare a complaint handling manual (November 2019 - ）
(i) In case of specific complaints are considered to be an obvious risk, we established the rules that require each business division to
report to the Compliance Promotion Department.
(ii) The Compliance Promotion Department is made known for the tenants’ complaints to the call centers and landlords’ complaints on
construction defects and other matters at the time of negotiation during visit.
Place a “Compliance Mailbox” (December 2019 - )
A “Compliance Mailbox” was put into operation under the responsibilities of the Compliance Promotion Department, thereby building a
system to collect effectively increased number of potential risks.
In Practice
In Practice
In Practice
In Practice
Complete
*Compliance Management Department was renamed Compliance Promotion Department.
1-4-4： Preventive Measures for Constructive Defects – Detail 3
We reviewed the process in product planning and strengthened controlling system by implementing “reconstruction of
legal compliance examination at the stage of product planning” and “addition of an on-site inspection as a step of
construction supervision.” We will continue to work on the measures centered on reinforcing the system for FY21/3.
3. Revision of the Construction Business Framework
11
(Excerpted version)
Reconstruct legal compliance examination at the stage of product planning (August 2019 - )
We decided that the development process for new products should be divided into five major steps and established a rule so that each
step requires approval by the Compliance Promotion Department, an independent organization.
Inconsistency prevention measures between the general diagram and the construction manual (July 2019 - )
We employed an outside service provider to begin examination of the manuals and will strengthening the checking system by
the line managers.
Strengthen inspection mechanism by triple check and review document storage rules (August 2019 - )
We started triple checking by the three parties between the construction contractors‘ inspection, the field engineer inspection, and the
inspection conducted by the Inspection Section in the Construction Legal Department or by an outside inspection agency. We reviewed a
check list and storage rules for inspection records and other documents.
Add a process of on-site inspection as a step of construction supervision (October 2019 - )
We changed construction supervision using on-site inspection in the 8 important processes for improvement and started operation. We
revised the existing guidelines and checklists, provided intensive training for construction supervision using outside consultants and
organized classroom lectures and on-the-job training in the field.
We また、 Put inspection items and operation rules in place (October 2019 - )
We settled inspection items and operation rules so that the Construction Legal Department as an independent organization can conduct
the construction supervision inspection and started the operation.
Started
Complete
In Practice
Complete
In Practice
*Compliance Management Department was renamed Compliance Promotion Department.
2. FY20/3 Results
12
Highlights of Results
Huge net loss was posted for 2nd year in a row due to a deterioration in business earnings caused by construction defects and
recording an extraordinary loss of 24.3 billion yen related to construction defects, impairment loss of 7.6 billion yen, and income
tax adjustment related to reversals of deterred tax assets for 21.4 billion yen.
*“Net income” refers to “net income attributable to shareholders of the parent”
*FY20/3 Plan reflects earnings forecasts revisions announced on November 8, 2019..
2-1: Highlights of Results
13
(Million yen)FY19/3
Actual
FY20/3
Plan
FY20/3
Actual YoY Compared to Plan
Sales 505,223 447,300 433,553 -71,669 -13,746
Gross profit 76,235 33,100 25,441 -50,793 -7,658
% 15.1% 7.4% 5.9% -9.2p -1.5p
SGAE 68,844 61,100 61,915 -6,929 +815
Operating profit 7,390 -28,000 -36,473 -43,864 -8,473
% 1.5% -6.3% -8.4% -9.9p -2.2p
Recurring profit 7,063 -27,800 -36,341 -43,405 -8,541
% 1.4% -6.2% -8.4% -9.8p -2.2p
Net income
(loss)*-68,662 -30,400 -80,224 -11,561 -49,824
In the Leasing Business, occupancy rates stayed low because of suspending new tenants recruitment vis-a-vis priority on investigations,
thus sales and profits decreased YoY. In the Development Business, both sales and profits decreased YoY since orders decreased due to
the negative environment surrounding the apartment construction industry and refrain from taking new orders because of the construction
defects problem. In the Elderly Care Business, sales and profit increased YoY as a result of improvement of existing facilities’ occupancy
rates. In the Hotels, Resort & Other Businesses, sales and profit increased YoY because of all-year-round operation of Hotel Leopalace
Sapporo.
*Gross profit/Sales
*FY20/3 Plan reflects earnings forecasts revisions announced on November 8, 2019..
2-2: Results by Business Segments
14
(Million yen)19/3
Actual
20/3
Plan
20/3
Actual YoYCompared to
Plan
Le
as
ing
Sales 426,388 401,500 388,939 -37,449 -12,560
Gross profit 62,961 27,300 21,101 -41,859 -6,198
Operating profit 14,987 -13,100 -20,828 -35,815 -7,728
Deve
lop
-
me
nt
Sales 58,992 25,400 23,806 -35,185 -1,593
Gross profit 14,343 4,800 4,368 -9,975 -431
Operating profit -995 -5,200 -5,181 -4,185 +18
Eld
erly
Care
Sales 13,922 14,800 14,620 +698 -179
Gross profit 598 1,200 929 +330 -270
Operating profit -846 -200 -559 +286 -359
Ho
tels
,
Res
ort
& O
thers
Sales 5,919 5,600 6,186 +266 +586
Gross profit 2,094 1,500 1,585 -508 +85
Operating profit -1,346 -1,100 -1,000 +346 +99
Adjust-
mentsOperating profit -4,407 -8,400 -8,903 -4,496 -503
*14.8%
*24.3%
*6.8%
*18.9%
*5.4%
*18.3%
Main Indicators (Leasing)
*Gross profit/Sales
2-3-1: Main Indicators of Leasing
15
(Million yen)FY17/3
Actual
FY18/3
Actual
FY19/3
Actual
FY20/3
Actual
Sales 421,342 435,537 426,388 388,939
Gross profit 70,142 76,406 62,961 21,101
Operating profit 23,009 26,062 14,987 -20,828
Units under management 568,739 570,672 574,798 575,798
Occupancy rate (average) 88.53% 90.59% 88.34% 80.78%
Direct offices 189 189 189 189
Number of corporate sales sections 60 59 54 52
Number of employees (non-consolidated)
3,284 3,310 3,293 2,742
of which, sales employees 1,701 1,546 1,494 1,339
*16.6% *17.5% *14.8% *5.4%
Occupancy Rate
Although the occupancy rates had been decreasing since April 2018 due to suspension of new tenant recruitment in properties
subject to priority investigations, the occupancy rate for January 2020 bounced back to 80% mark. Although the occupancy rate
at the end of March 2020 was 83.07% against the planned 85%, we did not manage to achieve it due to cancelation of contracts
and others caused by COVID-19 effect etc..
(Occupancy rate = Occupied units / Managed units, %)
2-3-2: Occupancy Rate Trend
16
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Avg.
FY17/3 88.97 88.55 88.60 87.95 87.78 88.31 87.50 87.41 86.97 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 90.83 92.43 93.72 90.59
FY19/3 92.82 92.76 92.10 90.45 89.41 88.40 87.24 86.38 85.26 85.38 85.57 84.33 88.34
FY20/3 82.35 81.95 81.40 80.68 80.21 80.07 79.49 79.21 78.91 80.19 81.82 83.07 80.78
75%
80%
85%
90%
95%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
FY 17/3 FY 18/3 FY 19/3 FY 20/3
92.8%92.8%92.1%90.5%
89.4%88.4%
87.2%86.4%85.3%85.4%85.6%
84.3%82.4%82.0%81.4%80.7%80.2%80.1%79.5%79.2%78.9%
80.2%81.8%
83.1%
92.2%87.9%
82.0%
77.9%
74.6%
71.1%
68.8%
66.6%65.7%
66.8%64.9%
61.6%60.3%
59.2%58.2%57.4%57.4%57.1%57.4%58.2%
60.6%
64.0%
67.2%
93.1% 94.5%95.3%95.9%96.2%96.4%96.3%95.8%96.5%96.2%95.3%
94.0%94.1%93.9%93.3%93.0%92.8%92.0%91.4%90.5%91.2%91.8%91.9%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
All properties under management Properties subject topriority investigations
The other properties
2-3-3: Occupancy Rates after Announcement of Construction Defects
Occupancy Rates by Apartment Types
Since the confirmation of construction defects, new tenant recruitments of properties subject to priority investigations was suspended, and
occupancy rate decreased every month. But occupancy rate for January 2020 improved to 80.19% due to the availability of rooms for tenant
recruitment was increased .Meanwhile, rental demand is high backed by external factors such as labor shortages, and the occupancy rate of
properties not subject to priority investigations (not suspended) remain more than 90%. We will keep resuming tenant recruitment by repairing
properties in an effort to raise the overall occupancy rate.
Occupancy rates improved due to
the number of room for which
tenant recruitment resumed
increased.
17
2018 2019
Others maintain a occupancy
rate of more than 91 percent.
2020
Main Indicators (Development)
(Million yen)FY17/3
Actual
FY18/3
Actual
FY19/3
Actual
FY20/3
Actual
Sales 80,321 76,587 58,992 23,806
Gross profit 23,124 21,355 14,343 4,368
Operating profit 5,786 3,663 -995 -5,181
Sales (non-consolidated) 70,779 63,636 46,138 19,173
of which, construction sub-
contracting 69,717 58,807 42,784 14,815
of which, real estate
business1,062 4,828 3,354 4,358
Offices 60 60 50 29
Number of employees (non-consolidated)
1,469 1,688 1,579 556
of which, sales personnel 566 540 475 105
*28.8% *27.9% *24.3%
*Gross profit/Sales
2-4-1: Main Indicators of Development
18
*18.3%
0.0 0.0 0.5 0.0 0.7 0.0 1.2 0.0 3.2
20.7 22.4 19.2 21.3 21.8 18.8
22.3 25.4 20.9
0
10
20
30
Q1 Q2 Q3 Q4
(Billion yen)
Subcontracting Real estate development
Gross Orders
Orders and Sales
FY18/3 FY19/3
Competition intensified due to strategic business focus in metropolitan areas. Orders decreased compared to the previous year
and did not achieve plans, due to negative media reports about apartment construction, apartment loans, and the construction
defects problem.
2-4-2: Orders and Sales
19
FY20/3
(Billion yen)FY18/3 FY19/3 FY20/3
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY
Orders from
subcontracting
(buildings)214 222 204 232 872 212 214 201 143 770 46 37 13 24 120
(Billion yen) 19.2 18.6 17.6 20.3 75.9 16.3 17.8 18.8 11.4 64.4 3.2 1.8 1.0 1.7 7.8
Orders outstanding
(Billion yen)69.7 68.0 68.7 63.9 63.9 65.6 65.8 71.1 62.3 62.3 49.2 39.2 33.2 27.6 27.6
Real estate development
(Billion yen)0.6 0.9 1.6 13.2 16.4 0.8 1.6 2.1 7.4 12.1 0.9 1.3 3.4 0.0 5.7
Sales (Billion yen) 14.4 17.5 14.5 29.9 76.5 12.4 14.2 11.5 20.7 58.9 7.3 6.2 6.9 3.2 23.8
19.2 16.3
3.2
18.6 17.8
1.8
17.6 18.8
1.0
20.3 11.4
1.7
0.6 0.8
0.9
0.9 1.6
1.3
1.6 2.1
3.4
13.2
7.4
0.0 0
10
20
30
Q1 Q2 Q3 Q4
(Billion yen)
58
62
66
70
74
2-5: Reduction in SGAE
Reduction in SGAE
FY18/3
Actual
FY19/3
Actual
FY20/3
Actual
73.1
68.8
61.9
Personnel
-4.5 Advertise-
ment
-1.0
Sales
expenses
+0.1Others
-1.5
4.3 bn yen reduction
6.9 bn yen reduction
Personnel
-3.6Advertise-
ment
-1.2
Sales
expenses
-0.3
Others
+0.8
(Billion yen)
20
We will reduce personnel, advertising, and other SGAE expenses. And the Structural Reform Office, which was newly
established in May 2019, will thoroughly manage the cost of the entire Group.
*Others: Repair and maintenance -1.2bn, Supplies expences -0.4bn, Travelling -0.3bn,etc.
・Reduction in executive remuneration: -0.5 bn yen
・Cutting performance-linked bonuses
(not reserving the amount for FY21/3) -2.5 bn yen
・Lessened salaries expenses
due to decrease of employees -1.7 bn yen
(Million yen) FY19/3 FY20/3
Asse
ts
Cash and cash equivalents 84,536 60,501
Trade receivables 6,908 7,260
Accounts receivables for completed
projects1,709 532
Real estate for sale and in progress 6,582 3,986
Prepaid expenses 2,952 3,053
Current assets 110,757 88,304
Buildings and structures 40,542 23,863
Machinery, equipment, and vehicles 11,185 9,798
Land 49,221 36,893
Leased assets 11,732 7,197
Intangible assets 9,575 5,504
Long-term prepaid expenses 3,252 2,250
Deferred tax assets (long-term) 23,650 1,297
Fixed assets 180,705 108,424
Deferred assets 327 224
Total assets 291,790 196,953
(Million yen) FY19/3 FY20/3
Lia
bilitie
s
Accounts payable for completed projects 4,715 1,245
Bonds and borrowings (short-term) 7,804 6,573
Lease obligations (short-term) 5,320 4,344
Advances received 34,635 31,997
Reserve for losses related to repairs 50,707 8,302
Reserve for apartment vacancy loss
(short-term)8,826 11,715
Current liabilities 141,765 90,006
Interest-bearing debt (long-term) 26,421 20,687
Lease obligations (long-term) 8,501 4,532
Long-term advances received 11,869 9,451
Lease/guarantee deposits received 6,599 6,286
Reserve for losses related to repairs - 47,945
Reserve for apartment vacancy loss
(long-term)3,902 4,191
Long-term liabilities 68,687 105,357
Total liabilities 210,452 195,363
Net a
sse
ts
Common stock 75,282 75,282
Capital surplus 45,148 45,148
Retained earnings -38,635 -118,874
Total net assets 81,338 1,589
Shareholders’ equity ratio 27.7% 0.7%
Balance Sheets
Cash and cash equivalents was 84.5 billion yen at the end of March, 2019, decreased by 24.0 billion yen to 60.5 billion yen. Compared to
the end of FY19/3, assets decreased by 94.8 billion yen (-29.0 billion yen in land, buildings and structures, and -24.0 billion yen in cash and
cash equivalents). Liabilities decreased by 15.0 billion yen (-11.9 billion yen in bonds, borrowings, and lease obligations, and -5.0 billion
yen in advances received), Net assets decreased by 79.7 billion yen to 1.5 billion yen and shareholders’ equity ratio decreased to 0.7% due
to net loss of 80.2 billion yen.
2-6-1: Finance (Balance Sheets)
21
-12.0
39.5
-51.6
-15.1
7.3
-7.2
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Cash flows fromfinancing activities
Cash flows frominvesting activities
Cash flows fromoperating activities
Cash Flows
(Billion yen)
(Billion yen)
2-6-2: Finance (Cash Flows)
22
・Purchase of property -3.6 bn yen
・Sale of property +32.0 bn yen
・Sale of investment securities +8.2 bn yen
・Sale of shares of a subsidiary +4.1 bn yen
・Net loss before adjusting income taxes, etc. -58.0 bn yen
・Deprecation, amortization of goodwill +12.4 bn yen
・Impairment losses +7.6 bn yen
・Reserve for apartment vacancy loss +3.1 bn yen
・Reserve for losses related to repairs +5.5 bn yen
・Gain on sale of property, plant and
equipment -7.9 bn yen
・Decrease in advances received -5.0 bn yen
・Decrease in accounts payable and
customer advances for projects in progress -3.7 bn yen
・Repayment of long-term debt -2.7 bn yen
・Repayment of bonds -3.9 bn yen
・Repayment of lease obligations -5.0 bn yen
58.9
83.0
0
20
40
60
80
100
Cash and cash equivalentsat end of period
-15.1
7.3
-7.2
-12.0
-20
-10
0
10
20
Cash and cash equivalentsat end of period
Cash flows fromfinancing activities
Cash flows frominvesting activities
Cash flows fromoperating activities
FY19/3 Full year FY20/3 Full year
-12.0
39.5
-51.6
-15.1
7.3
-7.2
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Cash flows fromfinancing activities
Cash flows frominvesting activities
Cash flows fromoperating activities
Cash flows from operating activities were -51.6 billion yen mainly due to operating loss of 36.4 billion yen and cash out related to
construction defects problem of 18.8 billion yen. Cash flows from investing activities were +39.5 billion yen thanks to sales of
three domestic hotels and rental properties of 30.5 billion yen, and sales of shares in Life Living Co., Ltd., a consolidated
subsidiary, did not offset minuses of cash flows from operating and financing activities, and total cash flow were -24.1 billion yen.
3. Forecast for FY21/3 and Plans for FY22/3 and FY23/3 (for reference) based on Drastic Business Strategies Reconstruction
3-1：Mid to Long-term Strategies
-
24
-
Restore social trust
Improve business performance by implementing structural
reforms and strengthening profitability of Leasing Business.
Maintain solid organizational framework to implement repair
works for steady execution.
Implement structural reforms
Promote transferring or withdrawing from non-core
unprofitable businesses.
Offer a voluntary retirement program to achieve workforce
rightsizing and cost reduction.
Shift from a business diversification strategy to a profitability
focus strategy centered on Leasing Business.
Reconstruct business foundation – selective concentration
3-2：Structural Reforms
---
25
--
Categorize the Leasing Business and Elderly Care Business in the core strategic businesses, whereas transfer and withdraw
from the other non-core businesses.
Offer a companywide voluntary retirement program for right-sizing and reconstruct leaner and more efficient business foundation
Non-core Businesses
Hotels and
Resort
Business,
International
Business (Other Segment)
Withdraw from hotels business in Japan by transferring Leopalace Nagoya
Withdraw from the resort business in Guam
Withdraw from the international business
Transfer subsidiaries which have low synergy possibility with leasing business
Withdraw or transfer
Strategic Business
Elderly Care
Business Create synergy effect with leasing business to attract more senior
tenants and needs development for the target audience
Maintain and continue (expect synergy)
Company Total Offer a voluntary retirement program for about 1,000 expected applicants
Right-sizing
Core Business
Leasing
Business Increase workforce for corporate sales in an attempt to increase the occupancy
rate
Make procedures more efficient by use of IT (Web/AI,IoT and others)
Strengthen
Development
Business (Leasing Segment)
Stop taking new orders in order to concentrate on repair works and resolve the
construction defects problem
Shrink
3-3：Roadmap for Short Term and Mid to Long Term
26
“Structural reforms” will be the major focus for FY21/3 and “Strengthen profitability and strive for further success” will be the
theme for FY23/3 onward.
Short Term
(FY21/3 and FY22/3)Mid to Long Term (FY23/3 onward)
Corporate
Policy
Withdraw from or transfer non-
core businesses
Implement voluntary retirement
for about 1,000 expected
applicants
Structural Reforms
Improve operational efficiency by IT and strengthen strategies based
on area or new target audience such as foreign national tenants and
senior tenants for Leasing Business.
Reinforce cooperation with Development Business for apartment
rebuilding demand and Elderly Care Business.
Strengthen profitability and strive for further success
Leasing
Business
【Strengthen】
Increase workforce for
corporate sales
Make use of IT for efficiency
improvement
Attract more foreign national tenants and senior tenants
Make leasing management more efficient by measures such as smart
lock and web-based contracts.
Increase the number of managed apartments in Tokyo, Nagoya and
Osaka where there are high tenancy demand.
Stop taking new orders
Concentrate on repair works to
resolve construction defects
Elderly Care
Business【Maintain and
continue】
Increase profitability by continuous operational improvement
Develop and expand Leasing Business catered for the needs of senior tenants
Provide advises and prepare support services such as meal delivery, room cleaning, safety confirmation
and watching-over to materialize the above
Hotels, Resort
and Other
Businesses【Withdraw or
transfer】
Transfer properties or
withdraw from business
Ensure to satisfy apartment rebuilding demand by existing
landlords centered in three major metropolitan areas.(Leasing Segment)
Development
Business
【Shrink】
Operating loss and net loss for the FY21/3 was 9.8 billion yen and 7.9 billion yen respectively, due to suspension of new tenant recruitment in properties
subject to priority investigations and COVID-19 effect. Operating profit and net income for the FY22/3 will increase to 11.3 billion yen and 9.9 billion yen
respectively by reinforcing corporate sales and making use of IT (AI and IoT) for efficiency improvement in order to increase occupancy rates. Profits will
recover to the same level as that recorded before construction defects problem was disclosed with operating profit of 23.5 billion yen and net income of
19.1 billion yen for FY23/3.
3-4：Financial Plans up to FY23/3
27
(Million yen)FY18/3
Actual
FY19/3
Actual
FY20/3
Actual
FY21/3
Plan
FY22/3
Plan
(ref.)
FY23/3
Plan
(ref.)
Sales 530,840 505,223 433,553 431,100 451,700 475,200
Gross Profit 96,077 76,235 25,441 43,000 63,100 76,300
% 18.1% 15.1% 5.9% 10.0% 14.0% 16.1%
SGAE 73,147 68,844 61,915 52,800 51,900 52,800
Operating
profit22,930 7,390 -36,473 -9,800 11,300 23,500
% 4.3% 1.5% -8.4% -2.3% 2.5% 5.0%
Recurring
profit22,354 7,063 -36,341 -10,200 10,700 23,000
% 4.2% 1.4% -8.4% -2.4% 2.4% 4.8%
Net income* 14,819 -68,662 -80,224 -8,000 9,900 19,100
Plans
*“Net income” refers to “net income attributable to shareholders of the parent”.
*Recorded deferred tax assets for the following one year in FY21/3 (Plan), FY22/3 (Reference), and FY23/3 (Reference)
(Billion yen)
3-5： Structural Reforms Perspective
28
Structural Reforms Perspective
Operating loss FY21/3
w/o Structural Reforms effect
1.2
28.7
12.5
Profit improvement in
Leasing, etc.
Profit improvement in
subsidiaries
21.0
1.9
Profit improvement in Leasing,
etc.
Operating profit FY22/3
(reference)
Operating profit FY23/3
(reference)
SGAE reduction
3.6
Workforceright-sizing
3.8
COVID-19 impact
Withdrawal from
non-core business
Operating lossFY20/3
Operating loss FY21/3 (plan)
withStructural
Reforms effect
Profit improvement in Leasing,
etc.
-36.5
-20.3
-9.8
11.3
23.5
Significant operating loss will be accounted for the FY21/3 partly by COVID-19 effects, thus Leopalace21 will implement
structural reforms such as withdrawal from non-core businesses and workforce right-sizing to achieve operating loss reduction.
Aim to post operating profits during FY22/3 and recover to the same level as that recorded before construction defects problem
was disclosed during FY23/3 by improving occupancy rates through salesforce reinforcement along with the sales efficiency
improvement.
12.3
3-6： Financial Plans up to FY23/3 by Segment
29
(Million yen)FY18/3
Actual
FY19/3
Actual
FY20/3
Actual
FY21/3
Plan
FY22/3
Plan
(ref.)
FY23/3
Plan
(ref.)
Le
as
ing
Sales 435,537 426,388 388,939 413,900 434,800 460,100
Gross Profit 76,406 62,961 21,101 43,000 62,100 75,000
OP 26,062 14,987 -20,828 3,600 23,300 34,300
Deve
lop
-
me
nt
Sales 76,587 58,992 23,806 － － －
Gross Profit 21,355 14,343 4,368 － － －
OP 3,663 -995 -5,181 － － －
Eld
erly
Care
Sales 12,807 13,922 14,620 14,500 14,900 15,000
Gross Profit -105 598 929 600 1,000 1,100
OP -1,596 -846 -559 -700 -700 -800
Ho
tels
,
Res
ort
& O
thers
Sales 5,908 5,919 6,186 2,700 2,000 100
Gross Profit 2,042 2,094 1,585 -500 0 200
OP -846 -1,346 -1,000 -2,200 -1,300 0
Adj. OP -4,353 -4,407 -8,903 -10,500 -10,000 -10,000
Results and Plans by segment
•The numbers are calculated by Gross profit dividing by Sales.
*Adjustments have been increased for H2FY20/3 and FY21/3 as they contain personnel cost allocation related to construction defects problem.
*Hotels, Resorts and Others Business is changed to Other Segment in FY21/3
*17.5% *14.8%
*27.9% *24.3%
*5.4%
*18.3%
*10.4% *14.3% *16.3%
Wealth Management Department was established and the functions of apartment construction sub-contracting sales department, under former Development
Business, were shifted to Wealth Management Department to strengthen relationship with apartment owners and restore their trust. Leasing Segment and
Development Segment were integrated to (New) Leasing Segment in the reorganization. Although operating loss of Elderly Care Business will increase in
FY21/3 due to COVID-19 effect, gross profit will steadily improve from FY22/3 (operating profit will be flat due to a burden of common expenses)
Integrated to (New) Leasing Segment
3-7-1： Mid to Long-term Strategy for Leasing Business
30
Organization and
Operatioin
Target Customers
Properties and Services
Development
Business
Status Quo
Mainly students and
corporate customers
Studio apartment for
single-households (equipped with furniture
and home appliances)
Face-to-face service is
mainstream at
Leopalace shops
Insufficient manpower
resources due to focusing
constructive defects issue
Tightened financing by
financial institutions
Short-term
(FY21/3 – 22/3)
Attract more foreign
national tenants
Introduce products and
services for foreign
national tenants
Increase accessibility by
use of IoT devices
Increase workforce for
corporate sales
Enhance efficiency by IT
（AI/IoT) for business
operation
Stop taking new orders
Concentrate on resolving
constructive defects
problem
Mid-long term
(FY23/3 onward)
Attract more senior
tenants (create
synergy effect with
Elderly Care Business)
Develop new products
/services for senior tenants
such as watching-over service
Increase the number of
managed apartments in Tokyo,
Nagoya and Osaka
Employ dynamic
pricing model for
deciding on rent
May upgrade operation
observing the progress in
resolving constructive
defects and change in
financial institutions’ policy
Leasing Business
【Mid to long-term strategy for Leasing Business】Offer comfortable living solution to society as a leader of real estate leasing business.
Provide housing in terms of quality and quantity to respond to the social changes such as increasing number of
foreign national workers, single-person households and senior citizens.
3-7-2： Major Indicators for Leasing Business
31
Main Indicators (Leasing)
(Million yen)FY18/3
Actual
FY19/3
Actual
FY20/3
Actual
FY21/3
Plan
FY22/3
Plan (ref.)
FY23/3
Plan (ref.)
Sales 435,537 426,388 388,939 413,900 434,800 460,100
Gross profit 76,406 62,961 21,101 43,000 62,100 75,000
Operating profit 26,062 14,987 -20,828 3,600 23,300 34,300
Managed units (Year end) 570,672 574,798 575,798 574,315 573,841 574,064
Occupancy rate (average) 90.59% 88.34% 80.78% 81.63% 86.87% 89.67%
Direct offices (Year end) 189 189 189 168 － －
Number of corporate sales sections
(Year end)59 54 52 66 － －
Number of employees
(non-consolidated, Year end)3,247 3,241 2,742 2,600 2,400 2,400
of which, sales employees 1,546 1,494 1,339 1,100 1,000 1,000
Sales from development business
(A+B)63,636 46,138 19,173 12,900 10,600 23,600
of which, construction sub-
contracting business (A)58,807 42,784 14,815 8,500 9,100 17,700
of which, real estate business (B) 4,828 3,354 4,358 4,400 1,500 5,900
*Gross profit/Sales
*Sales from development business is on a non-consolidated basis.
*17.5% *14.8% *5.4% *10.4% *14.3% *16.3%
3-7-3： Plan for Occupancy Rates
32
Plan for Occupancy Rates
FY18/3
Year-end rate
93.72%Average rate
90.59%
FY22/3 (Ref.)
Year-end rate
90.23%Average rate
86.87%
FY21/3 (Plan)
Year-end rate
86.52%Average rate
81.63%
FY20/3
Year-end rate
83.07%Average rate
80.78%
FY19/3
Year-end rate
84.33%Average rate
88.34%
Occupancy rates for April to June, 2020 are expected to get lower due to COVID-19 effect. We aim to gradually
improve the occupancy rates to 86.52% at the end of March 2021 and try to achieve average 86.87% for
FY22/3 and 89.67% for FY23/3 by increasing the number of sales staff in Leasing Business and by executing
the repair works to resume tenant recruitment.
FY23/3 (Ref.)
Year-end rate
91.99%Average rate
89.67%
75%
80%
85%
90%
95%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
FY 18/3 (Actual) FY 19/3 (Actual) FY 20/3 (Actual)
FY 21/3 (Plan) FY 22/3 (Reference) FY 23/3 (Reference)
3-7-4： Measures on Corporate Customers/Foreign National Customers
33
Increase the number of contracts with corporate customers which have been affected by the construction
defects problem by measures such as reinforcing the number of sales staff and supportive sales tools.
Expand further the business targeting foreign national customers utilizing the strength of products and
services.Measures for Corporate Sales
Increase the number of sales staff
as many as 150.
Specify the focal corporate
customers and concentrate on
those customers with large number
of tenants.
Reduce vacancies due to
construction defects reasons.
Utilize IT for sales tools.
Measures for Foreign National
Customers
Try to maintain the growth rates as
seen in the latest years.
Provide services in multiple
languages at call centers and
stores. Assist foreign national
tenants to start their living in Japan.
Employ foreign national employees.
Utilize as differentiator the rooms
equipped with furniture, home
appliances and wifi connectivity.
No. of Occupied Units by Group
(Units)
0
100,000
200,000
300,000
400,000
500,000
FY18/3 FY19/3 FY20/3 FY21/3(Plan)
FY22/3(Refference)
FY23/3(Refference)
Corporate-occupied units Student occupied units
Individual-occupied units Foreign tenant-occupied units
45
55
65
75
3-8： SGAE Reduction Perspective
34
SGAE Reduction Perspective
FY18/3
Actual
FY19/3
Actual
FY20/3
ACtual
FY21/3
Plan
FY22/3
Reference
FY23/3
Reference
-9.1 bil yen
（Billion yen）
-0.9 bil yen
73.1
Personnel
-3.6
Others
+0.8
68.861.9
52.851.9 52.8
-4.5-1.0
＋0.1
-1.4
-7.5 -0.1
+0.9
-2.3
-4.1
+2.1 +0.3+0.7
+2.0
-0.04 -0.2-0.9
Advertise-
ment
-1.2 Sales
expenses
-0.3
*Respective changes in Personnel, Advertisement, Sales expenses and others from left to right.
Cutting SG&A significantly by mainly reducing personnel expenses through structural reforms.
・Decrease by a voluntary retirement program -3.8 bn yen
・Reducing welfare costs for employees -0.5 bn yen
・Employees attrition
(excluding a decrease due to a voluntary retirement program) -3.0 bn yen
3-9： Number of Employees and Productivity (Sales per Person)
35
(Million yen) 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/321/3
Plan
22/3
Plan
(Ref.)
23/3
Plan
(Ref.)
No of
Employees9,926 8,582 7,114 6,165 6,277 6,758 7,339 7,846 7,695 7,690 7,600 7,043 5,500 5,200 5,200
Leasing 3,515 2,973 2,287 2,607 2,735 2,947 3,137 3,402 3,526 3,628 3,673 3,133 3,100 2,900 2,900
Development 4104 3,336 2,590 1,508 1,374 1,506 1,732 1,790 1,792 1,844 1,736 645 - - -
Sales per
person73.0 72.3 68.0 74.3 72.4 69.7 65.8 65.2 67.6 69.0 66.5 61.6 78.7 86.7 91.3
Leasing 95.2 115.1 155.6 145.4 140.3 131.9 127.3 120.7 119.5 120.0 116.1 124.1 133.5 150.4 159.1
Development 87.5 71.1 41.6 41.7 38.8 41.9 35.4 41.4 44.8 41.5 34.0 36.9 - - -
Productivity Changes
(Million yen)
Aim to increase productivity (sales per person) mainly in the Leasing business by right-sizing workforce, making use of IT
(Web/AI and IoT), and etc.
*No of employees and sales per person is consolidated figures
73.9
72.3 68.074.3 72.4 69.7 65.8 65.2 67.6 69.0 66.5 61.6
78.786.7 91.395.2
115.1
155.6145.4 140.3
131.9 127.3120.7 118.1 120.0 116.1
124.1133.5
150.4159.1
87.5
71.1
41.6 41.7 38.8 41.935.4 41.4 41.6 41.5
34.0 36.9
0
60
120
180
FY09/3 FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3 FY21/3Plan
FY22/3Refference
FY23/3Refference
All Leasing Development
Integrated to (New) Leasing Segment
3-10： Cash flow Plan
36
Total cash flow will be negative, -17.0 billion yen during FY21/3 due to forecasting net loss and concerning construction defects
problems. Total cash flow will recover during FY22/3 and FY23/3 to±0 billion yen and +9.0 billion yen respectively. This is due to
improvement of financial results and sale of non-current assets despite continuing cash out concerning construction defects
problem.
(Billion yen)
Cash flow (Actual and Plan (Reference))
26.4
-7.2
-51.6
-22
6
19
0.4 7.3
39.5
15.0
5.0
-1.0
-20.1 -15.1 -12.0 -11.0 -11.0 -9.0
6.6
-15.0
-24.1-17.0
0.09.0
-60.0
-30.0
0.0
30.0
60.0
FY18/3 Actual
FY19/3 Actual
FY20/3Actual
FY21/3 Plan
FY22/3Plan
(Reference)
FY23/3Plan
(Reference)
Cash flows fromoperating activities
Cash flows frominvesting activities
Cash flows fromfinancing activities
Total cash flows
4. Overview of Business (Leasing)
Companies that Own Housing/Dormitories for Employees
Corporations are shifting from owning housing/dormitories for employees to renting, due to increasing burden of maintaining
properties. Due to revisions to the Immigration Control Act , we expect up to 350,000 laborers being accepted over the next five
years.
Foreign Workers in Japan
*Excerpt from “Rousei-jihou” No.3911 (16.6.24), No.3957 (18.9.14) *Excerpt from “Labor status of foreigners” (Ministry of Land,
Infrastructure, Transport and Tourism)
（%）
486 563 650 686 682 718 788908
1,0841,279
1,4601,659
0
500
1,000
1,500
2,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Thousand people)
Estimated Number of Foreign Workers to Accept
Industry Number of People
Nursing care 50,000～60,000
Building cleaning 28,000～37,000
Industrial material 17,000～21,500
Industrial machinery manufacturing 4,250～5,250
Electric utility/information 3,750～4,700
Construction 30,000～40,000
Shipbuilding 10,000～13,000
Car maintenance 6,000～7,000
Aviation 1,700～2,200
Lodging 20,000～22,000
Agriculture 18,000～36,500
Fishing 7,000～9,000
Food and beverage manufacturing 26,000～34,000
Food service 41,000～53,000
Total 262,700～345,150
38
4-1 Demand of Leasing Clients
63.5 65.561.2
46.0 42.3
35.8 35.3
29.4
20.7
0
20
40
60
80
1001993 1995 1997 2001 2004 2007 2010 2013 2018
200
300
400
500
600
0
50
100
150
200
250
300
350
Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
Managed units (right axis)
Occupied units (right axis)
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.65
Occupancy by Group
4-2-1: Indicator (Occupancy by Group)
39
*Figures are as of the end of each quarter
*Reference of p.65
Shares of Occupied Units by Group
4-2-2: Indicator (Shares of Occupied Units by Group)
40
(Thousand units)
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%57.8%57.7%56.8%56.4%57.9%57.8%57.2%56.5%57.0%
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%33.4%33.6%34.2%34.4%33.7%33.9%34.3%35.0%34.6%
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% 8.8% 8.7% 9.0% 9.2% 8.4% 8.3% 8.5% 8.5% 8.4%
473 476 474 495 488 490 487 509 500 499 493 521 517 515 509 535 527 507 489 485 468 461 454 478
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 Q4 Q1 Q2 Q3 Q4
FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
Student-occupied units Individual-occupied units Corporate-occupied units
48,913 49,242 50,086 44,518 41,644
34,689 39,510 46,379 44,771 42,991
36,911 37,50738,438
35,462 32,566
42,837 45,03445,157
40,97339,054
17,50918,150
18,77716,676
15,704
48,48952,920
58,293
52,92058,013
47,91351,460
51,932
45,323 42,594
277,261293,823
309,062
280,643272,566
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2016/3 2017/3 2018/3 2019/3 2020/3
Other
Construction
Food service
Services
Staffing,
outsourcing
Manufacturing
Retail
Shares of Occupied Units by Industry
Approximately 80% of listed companies* in Japan use Leopalace21. The suspension of recruiting new tenants into buildings
subject to top-priority investigations impacts tenant matching.
*Companies listed on the 1st and 2nd sections of the Tokyo Stock Exchange, regional stock exchanges, and emerging markets
(Units)
4-2-3: Indicator (Occupied Units by Industry)
41
*No. of companies in
parenthesesYoY +5.2% -9.2% -2.9%
(49,229)*
(43,751)*
+9.6%
-5.8%
-4.7%
-8.2%
-4.0%
-6.5%
-6.0%
(48,609)*(47,217)*
(43,990)*
+6.0%
0
5,000
10,000
15,000
20,000
25,000
Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
China S. Korea Taiwan Vietnam Thailand Other Southeast Asia Other
Leased Units by Foreign Nationals (Excluding Corporate Contracts)
*Reference of p.66
In addition to obtaining customers at 15 overseas offices, we are strengthening our support for foreign national customers when they come
over to Japan in preparing customer services in 7 local languages by our foreign national employees (214 as of March 2020) at 7 offices in
Japan.
We are aware of the breakdown of nationality for about 81% of the foreign national tenants with corporate contracts and assume 16,000
foreign national tenants in total. The overall number of foreign national tenants amount to 39,600, meaning 8.3% of total rooms with
occupant are foreign national tenants.
SingaporeOverseas
subsidiarySingapore
IndonesiaOverseas
subsidiaryJakarta
PhilippinesOverseas
subsidiaryManila
Myanmar 1 office Yangon
CambodiaOverseas
subsidiaryPhnom Penh
ThailandOverseas
subsidiarySri Racha
VietnamOverseas
subsidiaryHo Chi Minh, Ha Noi
Taiwan 1 office Taipei
South
Korea2 offices Busan, Seoul
ChinaOverseas
subsidiary
Beijing, Dalian, Shanghai,
Guangzhou
23,099 as of March 31, 2020
(YoY +18.3%)
4-2-4: Indicator (Foreign National Tenants)
(Units)
42
0
50
100
150
200
250
300
350
Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
(Offices)
Direct Partners
Direct Partners Total
Hokkaido 9 2 11
Tohoku 15 6 21
Kita-kanto 14 3 17
Tokyo metro 49 29 78
Hokuriku & Koshinetsu 13 7 20
Chubu 24 14 38
Kinki 25 12 37
Chugoku 11 10 21
Shikoku 5 5 10
Kyushu & Okinawa 17 18 35
Japan 182 106 288
Overseas 7 0 7
Total(Compared to March 2019)
189
（±0）
106
（-7）
295
（-7）
Leasing Offices
As of March 31, 2020
* Overseas locations operating foreign real estate brokerage services
not included. (Thailand, Vietnam, Cambodia, Myanmar, Philippines,
Indonesia, Singapore)
4-3-1: Leasing Strategy (Office Expansion)
43
3 direct offices were closed in April 2020 followed by 18 direct offices in May 2020. This is to improve sale efficiency and
increase productivity.
44
Started in June 2019 with favorable progress. 392
contracts during FY20/3 and 100 contracts only in
April 2020
Supporting all units managed by Leopalace21
Needed for both Chintai and Monthly contracts
No need to visit our offices for handing over the key if
the room is equipped with the smart lock “Leo Lock”
(7,524 rooms)
Further efficiency is expected by using web-based
rent agreement system together with Leo-sign after
legislation.
Leopalace21 have been employing IT for the Leasing Business such as Leo-sign (an electronic contract system for
rental agreements) since 2015, room-searching system using AI since 2018, and web-based rental agreement system
since 2019. We will create new value by improving operational efficiency in each process as well as enhancing
convenience and services.
Web-based Rent Agreement System
Leo-sign
(An Electronic Contract System for Rental Agreements)
Room Searching System Using AI
(Automated rooms recommendation)
Introduced in 2015. Used for 27.9% (43,764) of the
total contracts with corporate clients
Non-face-to-face agreement conclusions are possible.
Matching with the increasing needs of paperless and
online business post-COVID-19 era.
Only for Chintai contract (impossible for Monthly
contract because of legislation)
Reducing business burden for both employees and
corporate clients by using this electronic contract
system
Introduced in September 2018. Acquiring requests from
customers for room searching and automatically
delivering property information according to their needs
20% of all requests from corporate clients searching for
rooms are taken care through the AI room searching
system. Contract-closing rate is 70%, an equivalent level
to the rate proposed by sales persons.
Operation is in collaboration with “NAVITIME,” a
navigation system and “LINE,” freeware for instant
comms.
Expanded to our leasing offices from October 2019,
aiming for reducing both working hours and costs.
Proposing rooms
Rental agreements
Documentation
Management
AI room searching WEB agreements
(individual tenants) Leo-sign
(corporate clients)
Introducing advanced IT system in each process of
making rental agreements and promoting smarter
contracts conclusion
4-3-2: Leasing Strategy (WEB agreements, Leo-sign, AI room searching)
In May 2012, Leopalace21 has started “my DIY” as a value-added service strategy for acquiring individual tenants. Acquired
48,099 contracts as of March 31, 2020, and we will continue to promote the image of “Leopalace21: flexible for customizing.”
Since 2012, through alliances with major security companies, Leopalace21 has been installing security systems and cameras.
Awarded the “Excellent Security Rental Apartment” certification since June 2017.
“my DIY”
Custom wallpaper for free on one designated wall. Thumbtacks, shelves, and scribbling on the wall is permissible.
No restoration cost for the designated wall.
More than 100 types of wallpapers to choose from, including patterned ones
Users are divided equally between male and female, representing higher usage rate by female considering 70:30 overall tenants breakdown by gender.
87.7% of survey respondents who used my DIY confirmed their satisfaction and intention of longer tenancy.(survey conduced in 2018)
4-3-3: Leasing Strategy (“my DIY” and Security Systems)
45
Security Systems Installment
FY20/3
Actual
Cumulative
total
% of
total
Security systems (units)
4,438 313,382 54.4
Security cameras (buildings)
261 14,671 39.8
Certified as “Excellent Security Rental Apartment”
Designs for “MIRANDA” and
“CLEINO” have met the criteria
for the certification of an
“Excellent Security Rental
Apartment.”
T Card Plus (Leopalace Member)
L-Select Leopalace ShoppingShopping web site with many everyday-
necessities. Products made specially for
Leopalace21 are also available.
Tenant services which overturn common practices of the leasing apartment industry are available through “&Leo,” an exclusive
website for our tenants. The previous website “MY PAGE” which was started in April, 2013, was transferred to “&Leo”. A
Leopalace21 original brand credit card has been issued since October 1, 2017, and tenants can pay monthly rent via credit card.
Website for Tenants: “&Leo” (from Mar. 2019) STB device “Life Stick”
Expand functions of internet service “LEONET”
(started in 2002) through STB device “Life
Stick” with AndroidTV
Installed in 484,592 units (about 84%) as of
March 31, 2020
Life Stick
L MOVIE
4-3-4: Leasing Strategy (Tenant Services)
46
&Leo(Exclusive application for tenants)
Issued Leopalace21 original brand
credit card from October 1, 2017
Tenants can pay monthly rent via
credit card
The only credit card in the real
estate industry with “T Point”
More than 26,000 cards issued
(as of March 31, 2020)
LEONET my-room
Three applications, “LEONET”, “LEOLIFE”, and “LEONET
TIMES” were integrated to “&Leo”
IoT with “Leo Remocon”
Controlling appliances with a
smartphone made possible
i.e. control AC from outside
Standardly equipped in all newly
constructed apartments
(since Oct. 2016)
Installed in 14,451 units
(97.4%)
In order to enhance tenant services, Leopalace21 has expanded functions of its internet service and implemented an IoT device
which makes possible remotely controlling appliances and a door lock with a smartphone. Smart station with AI speaker is
installed as standard equipment in a new apartment, applicable to contracts from January 2018.
4-3-5: Leasing Strategy (IoT, AI)
47
Smart Lock “Leo Lock”
Remotely lock and confirm via
smartphones
Key cylinder replacements and
key handovers become
redundant
Standardly equipped on all new
apartments (completed after
October 2017)
Installed in 7,524 units (100%)
Open-type delivery locker “PUDO Station”
Industry-first open-type delivery locker installed in the
premises of an apartment
Contribute to the local community by improving the lives
of occupants and neighbors around
Installed in 148 apartments, accounting for half of the
installments by real estate companies
Leopalace CLEINO
Cerezo Palthy II
4-3-6: Leasing Strategy (Subsidiary Businesses)
48
Roof-lease Solar Power Systems (from Dec.2013)
FY20/3
Actual
Buildings
installed* 4,482
Generating
capacity* 66.9 MW
Generated power* 74,809 MWh *Refer to p.70
Corporate Housing Agency (from Sep. 2006)
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-amount 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
for compensating the damage to the landlord or the third
party.
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
GuaranteeLessees
Payment of
“Guarantee Fee”
Guarantee ContractsLease Contracts
Lease Guarantee
Contracts
Group companies implement leasing-related businesses, as well as services to increase the competitiveness and profitability of
the managed properties.
76,000 contracts (+3.4% YoY)
295,000 contracts (+1.7% YoY)
181,000 contracts
(+3.6% YoY)
4-3-7: Leasing Strategy (Minpaku)
49
Currently, 38 rooms (Tokyo, Kanagawa, Aichi, and Fukuoka) are operated using in-house properties. Establish a new method of
“Minpaku,” or vacation rental, following sublease contracts and monthly leasing contracts and make a full-fledged entry into the
vacation rental apartment business. In the future, Leopalace21 plans to develop new businesses, such as the operation of hotel
and ryokan business.Leopalace21’s “Minpaku” Scheme
Since operation is limited to 180 days per year under the Private Lodging
Business Act, we need to rent out the remaining days as “monthly” contracts,
hence utilize the apartment for “hybrid operation (‘minpaku’ + monthly).”
If it is possible to change use of the building in accordance with the location,
consider shifting to “hotel and ryokan business” that can be operated 365
days a year.
*1. Method of attracting customers
1st phase - Collaborate with OTA and private lodging/vacation
booking sites (Airbnb,Vacation STAY, etc.)
2nd phase - Attracting visitors via Leopalace21 offices in East
Asia,
where 75% of visitors come from
3rd phase - Respond to the demand of business trips by operating
hotel and ryokan business
*2. Target properties
1st phase - Company-owned properties
2nd phase - Hotel business and ryokan business operation
3rd phase - Proposals to owners for making the vacant rooms
available for “Minpaku”
Private lodging agent
Booking and payment
Lodgers
Lodge
Submit
booking info Maintenance,
cleaning
Private lodging
administrator
Private lodging
business operator
Management outsourcing
OTA*1
(Online Travel Agency)
*2.
・As of April 2020： Operating 4buildings,38rooms
Tokyo（Ohta-ku）、Kanagawa （Yokohama）、Aichi（Toyota）、Fukuoka（ Fukuoka ）
Managed by Leopalace21
TOKYO
KAMATA
LEOPALACE
HAKATA
RX KANNAI
（Operating： 1room）
In special area for “Minpaku”
365-day operation.
（Operating:29rooms）
“Minpaku” + Monthly
leasing
※Planning simple
dormitory bussiness10min walk from Hakata sta.,2min from Canal city
Near from Yokohama China town, Kannai
sta. Good access tor city center.
Good access to Haneda airport,
accommodating up to 4 persons
（Operating:6rooms）
“Minpaku” + Monthly
leasing
5. Overview of Business (Development)
Construction Offices Apartments Constructed (FY20/3)
Of the 163 buildings completed nationwide, Tokyo metropolitan area makes up 50.3% (FY19/3: 51.4%), and the three metropolitan areas (Tokyo, Kinki, and Chubu) make up 72.4% (FY19/3: 75.9%).
(Buildings)
Osaka 2 offices (3)
Kyoto 1 office (1)
Hyogo 2 offices (2)
Tokyo 8 offices (18)
Kanagawa 2 offices (7)
Saitama 4 offices (6)
Chiba 1 office(1)
Tokyo
metropolitan:
15 offices(32)
Shikoku:
0 offices(0)
Hokkaido:
0 offices(0)
North Kanto:
0 offices(0)
Chubu:
3 offices (4)
(Aichi)
Tohoku:
2 offices(2)(Sendai, Kohriyama)
Hokuriku,
Koshinetsu:
0 offices(0)
Kinki: 5 offices(6)Chugoku: 2 offices(2) (Okayama, Hiroshima)
Kyushu, Okinawa:
2 offices (4)(Fukuoka, Okinawa)
We will continue to promote sales activities in the three metropolitan areas (Tokyo Kinki, Chubu). We will also providing follow-up
services especially for existing owners.
5-1: Indicator (Offices and Apartment Construction)
51
Total 29 offices (As of March 2020)( ): As of Mar. 2019
Tokyo Metropolitan
82
Kinki30
Chubu6
Kyushu, Okinawa
18
Tohoku2
Chugoku17
Other8
Elderly care, Childcare facilitiesApartments
Construction of social
welfare facilities that are
in high social demand,
such as elderly care and
childcare facilities.
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.
Others
Land usage
proposions of
Leopalace21
Ideal Land Usage
5-2-1: Development Strategy (Ideal Land Usage)
52
In “Life stage support”, we respond to a variety of needs that are tailored to the owner's
situation, such as rebuilding or selling.
5-2-2： Development Strategy (Apartment Brands and Homes)
Apartment brands “MIRANDA” and “CLEINO”
“MIRANDA” and “CLEINO” are our brands for rental apartment. Leopalace21 sells Tailor-made home with SE construction
method. In addition, Morizou Co.,Ltd., a subsidiary offers custom-built houses made of Kiso Hinoki, Japanese cypress.
An apartment brand that proposes unique added value and
new ideas. And a “plain-type” apartment brand that fits and
matches to each occupant’s needs and lifestyle.
In April 2013, the company introduced the “Non-sound
system” as standard equipment, consisting of a “Non-
sound floor" to reduce impact noise, a “Sound-insulating
walls" to improve sound insulation, and a “Sound-
insulating drainpipes" to reduce drainage noise.
Enjoy freedom of design, such as spacious chambers
without partition and large windows, thanks to SE
(safety-engineering) construction method. Aliso
adapts to changing family structure.
Luxury custom-built home made from carefully selected
Kiso Hinoki cypress. We create homes that provide
comfortable life for families 365 days. A new model
house in Hamadayama (Tokyo) was opened in April
2020.
Tailor-made home
Luxury custom-built houses by MorizouUpgraded Sound Insulation with “Non-sound System”
53
6. Overview of Business (Others and International)
*Private residential homes include Group homes
Elderly Care Business
Elderly Care Business is positioned as a growth strategy area, planning to increase facilities and stabilize management to
correspond to Japan’s aging society. There are 87 facilities as of December 1, 2018. Occupancy rates are steady due to
measures which improve customer satisfaction.
6-1: Others (Elderly Care Business)
55
(Million yen)FY19/3
Actual
FY20/3
Plan
FY20/3
ActualFY21/3
PlanYoYCompared
to Plan
Eld
erly
Care
Sales 13,922 14,800 14,620 +698 -179 14,500
Gross profit 598 1,200 929 +330 -270 600
Operating profit -846 -200 -559 +286 -359 -700
Facilities as of term-end 87 87 87 ±0 ±0 87
Occupancy rate (Day-service) 72.6% 77.4% 72.8% +0.2p -4.5p 67.6%
Occupancy rate (Short-stay) 93.6% 96.3% 95.6% +2.0p -0.7p 94.8%
Occupancy rate (Private residential homes, etc.)
91.6% 92.6% 92.4% +0.7p -0.2p 93.9%
Domestic Hotels Business
6-2: Others (Domestic Hotels Business)
56
Hotel Leopalace Nagoya Suite Room
(Million yen)FY19/3
Actual
FY20/3
Plan
FY20/3
Actual YoYCompared to
Plan
Do
me
stic
Ho
tels
Sales 2,060 2,030 1,849 -210 -183
Operating Profit -764 80 -187 +577 -269
Depreciation and amortization 400 420 242 -157 -180
Occupancy rate 83.1% 82.2% 73.2% -9.9p -8.9p
Operates four hotels (542 guest rooms) in Sapporo, Sendai, Nagoya, and Fukuoka (Hakata).The three hotels in Sapporo,
Sendai, and Fukuoka (Hakata) were sold in October 2019 and our operation scheduled to end around March - April 2020. Hotel
Leopalace Nagoya will be sold during FY21/3.
Resort Business (Leopalace Guam – non-consolidated)
The number of Japanese travelers to Guam has been on a recovery trend since the number of charter flights to Guam increased
significantly in 2019. An executive floor “Medallion Floor” in Leopalace Hotel (Guam) was certified as “L grade,” the highest rank
given by JTB Hotel grade. Occupancy rate during FY20/12 will decrease significantly due to global effect of COVID-19. We will
focus on reducing deficit thorough cost reduction.
Leopalace Resort Leopalace Resort Country Club
6-3: Others (Resort Business)
57
Medallion Room
(Million yen)FY2018/12
Actual
FY2019/12
Plan
FY2019/12
Actual
FY20/12
PlanYoYCompared
to Plan
Le
op
ala
ce
Gu
am
Sales 4,771 4,460 4,427 -344 -33 2,350
Operating profit -432 -820 -769 -337 +51 -1,600
Depreciation and amortization 1,052 1,140 1,171 +119 +31 1,220
Occupancy rate (Leopalace Resort) 43.2% 49.7% 50.5% +7.3p +0.8p 20.8%
Number of arrivals in Guam 1,549,007 - 1,666,665 +117,658 - -
of which, Japanese 563,386 - 684,802 +121,416 - -
6-4-1: International (Leasing Business Overseas, SA/SO)
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. In addition, we
are developing serviced apartments and serviced offices.
Leasing Business Overseas (15 locations)
■Foreign offices, subsidiaries
Introduce Japanese
apartments
Foreign real
estate brokerage
Both businesses
Seoul
Information collection and
research for investment targets
ChinaBeijing, Dalian, Guangzhou,
ShanghaiCambodia Phnom Penh
South Korea Seoul, Busan Myanmar Yangon
Taiwan Taipei Philippines Manila
Thailand Sri Racha Indonesia Jakarta
Vietnam Ho Chi Minh, Hanoi Singapore Singapore
List of Serviced Offices and Serviced Apartment
Serviced Apartment
(3 buildings, 184 rooms)
Thailand (Sri Racha), Vietnam (Hanoi),
Cambodia (Phnom Penh)
Serviced Offices
(5 locations, 164 rooms)
Philippines (Makati) 2 locations,
Myanmar (Yangon), South Korea (Seoul),
Vietnam (Ho Chi Minh)
Vietnam (Serviced Office) Cambodia (Serviced Apartment)
*Results of the International Business are reported
under the “Leasing Business” segment
Singapore
Jakarta
Busan
Shanghai
DalianBeijing
Guangzhou Taipei
Manila
HanoiYangon
Sri Racha
Phnom Penh
Ho Chi Minh
58
6-4-2: International (Other Services)
Leopalace21 offers one-stop service concerning personnel transferring by acquiring Enplus Inc. and made into an affiliate. Also,
in response to the shortage of construction labor supply, we have begun supporting the acceptance of technical intern trainees
by our partnering contractors (74 since July 2015), in cooperation with the Technical Intern Training Program (TITP). Also, we
have entered the Korean market through a leasing management venture with a local enterprise.
South Korean JV “Woori & Leo PMC”
Acquired Enplus Inc. and made into an affiliate
Offering “RM Plus,” a total management service of global
personnel affairs
Targeting 250 client companies and 10,000 users in 5 years
Cloud-typed
platform ”RM+Online”
• Managing personnel
information of expatriate
employees
• Progress, date
management, and data
analysis on cloud
• Enabling efficiencies
and optimization of
mobility works
*Results of the International Business are reported
under the “Leasing Business” segment
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 2,836 managed units as of March 31,
2020 (+753 units compared to March 31, 2019)
Acceptance of Foreign Technical Intern Trainees
Practical construction training Language training
Relocation Management Business
In cooperation with TITP, we have implemented practical
construction training and Japanese language training of
Vietnamese trainees, and supported acceptance to our
partnering contractors
74 trainees employed as of March 31, 2020
(14 trainees employed by Leopalace21)
59
60
6-5: Work Style Reforming
Ratio of Workforce Turnover,
Reduction in Overtime Hours Parental Leave
Paid Vacation Ratio External Assessment
*Selected as “Telework Pioneer 100” in November, 2018
*Received Bronze Award for PRIDE Indicator 2019,in
October,2019.
27.9 27.8
22.4 20.0
18.3
15.0 13.3
11.3%
9.1%8.0%
7.1%8.1%
8.6%13.6%
0%
10%
20%
0
10
20
30
40
FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
No. of overtime hours (monthly average) Total
137 137113
144177 183
205
1 03
5
8055
51
1.1%2.9%
25.5%
30.0%
24.4%
0%
10%
20%
30%
40%
0
100
200
300
FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
No. of maternity leave No. of paternity leave
% of paternity leave
31.7% 33.0%
70.1% 72.2% 74.1% 76.8%84.3%
0%
50%
100%
FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
Appendix 1. Supplementary Data
61
Hote
ls,
Resort
& O
thers
Leopalace GuamResort Business
WING MATEBusiness travel
management
Leopalace SmileSpecial subsidiary
Eld
erly
Care Azu Life Care
Elderly care service
Corporate Data (as of March 31, 2020)
Shareholder Composition (as of March 31, 2020)
Group Companies (as of March 31, 2020)
Company Name Leopalace21 Corporation
Established August 17, 1973
Paid-in Capital 75,282 million yen
President President and CEO Bunya Miyao
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 7,043 (consolidated), 5,820 (non-consolidated)
Authorized Shares 500,000,000
Outstanding Shares 244,882,515 shares
Shareholders 59,743 (as of March 31, 2020)
Leasin
g
Leopalace LeasingCorporate
housing agent
Plaza GuaranteeRent guarantee
Leopalace PowerPower generation
ASUKA SSITenant contents insurance
Woori & Leo PMCLeasing management
in South Korea
Leopalace21(Thailand)
Real estate brokerage in Thailand
Leopalace21 Business Consulting
(Shanghai)Tenant recruitment¥
LEOPALACE21 VIETNAM
Real estate brokeragein Vietnam
Leopalace21(Cambodia)
Real estate brokeragein Cambodia
PT. Leopalace Duasatu Realty
Real estate brokeragein Indonesia
LEOPALACE21 PHILIPPINES INC.Real estate brokerage
in the Philippines
Leopalace21Singapore Pte. Ltd.
Investment management
Develo
p-
ment
MorizouCustom-built homes
App.1-1: Corporate Profile
62
Enplus Inc.Relocation management
Inte
rnatio
nal*
*Results of the International Business are reported under the “Leasing Business” segment
Individuals and Other28.00%
Business Corporations and Other Legal Entities
35.98%
Foreign Corporations21.10%
Financial Institutions12.56%
Financial Instruments Business Operations
(Securities Companies)2.05% Treasury Stocks
0.31%
(Million yen)
Q1
Apr – Jun
Q2
Jul – Sep
Q3
Oct – Dec
Q4
Jan – Mar
FY20/3
Actual
FY21/3
Plan
FY20/3
Actual
FY21/3
Plan
FY20/3
Actual
FY21/3
Plan
FY20/3
Actual
FY21/3
Plan
Sales 113,324 104,500 108,192 109,100 107,203 107,400 104,832 110,100
Leasing 100,380 99,500 96,887 105,100 95,138 103,400 96,533 105,900
Development 7,330 - 6,268 - 6,943 - 3,263 -
Elderly Care 3,606 3,500 3,695 3,700 3,705 3,700 3,613 3,600
Hotels, Resort
& Others2,008 1,500 1,340 300 1,415 300 1,421 600
Operating profit -4,235 -7,500 -12,891 -3,100 -5,679 100 -13,667 700
Leasing -1,735 -4,100 -9,405 -300 -1,469 3,400 -8,217 4,000
Development -1,515 - -1,957 - -221 - -1,485 -
Elderly Care -170 -300 -76 -100 -138 -100 -174 -200
Hotels, Resort
& Others299 -100 -431 -700 -404 -800 -464 -600
Quarter Comparison
App.1-2-1: Quarter Comparison
63
Results for Leopalace21 and Major Subsidiaries
App.1-2-2: Results of Leopalace21 Group
64
(Million yen)FY19/3
Actual
FY20/3
Plan
FY20/3
Actual YoYCompared
to Plan
Leopalace21Sales 477,834 316,500 413,844 -63,989 +97,344
OP 5,561 -24,400 -36,589 -42,151 -12,189
Leopalace Leasing(Corporate housing)
Sales 2,751 2,500 3,450 +698 +950
OP 566 400 667 +101 +267
Plaza Guarantee(Rent guarantee)
Sales 4,246 2,900 4,208 -37 +1308
OP 544 300 192 -351 -108
ASUKA SSI(Tenant contents insurance)
Sales 1,811 1,200 1,544 -266 +344
OP 305 100 -131 -437 -231
Leopalace Power(Roof-lease solar power)
Sales 2,884 2,200 2,785 -98 +585
OP 775 800 902 +126 +102
Morizou(Built-to-order homes)
Sales 3,904 2,900 3,256 -647 +356
OP - 300 -100 -267 +33 -167
WING MATE(Travel management)
Sales 3,136 2,000 2,652 -483 +652
OP 164 100 72 -91 -28
FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
Q4 Q4 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Units under
management554,948 561,961 568,739 570,672 571,927 572,972 573,671 574,798 575,196 575,780 575,741 575,798
A. Occupied units 495,487 508,720 521,298 534,847 526,738 506,511 489,100 484,718 468,225 461,031 454,292 478,295
Occupancy rate
(average)
89.3%
(86.6%)
90.5%
(88.0%)
91.7%
(88.5%)
93.7%
(90.6%)92.1% 88.4% 85.3%
84.3%
(88.3%)81.4% 80.1% 78.9%
83.1%
(80.8 %)
B. Corporate-occupied
units262,577 277,261 293,824 309,062 303,701 287,615 275,786 280,643 270,586 263,822 256,592 272,566
Corporate share (B /
A)53.0% 54.5% 56.4% 57.8% 57.7% 56.8% 56.4% 57.9% 57.8% 57.2% 56.5% 57.0%
C. Individual-occupied
units182,142 183,008 180,617 178,643 177,072 173,189 168,462 163,318 158,634 158,059 158,933 165,594
Individual share (C /
A)36.8% 36.0% 34.6% 33.4% 33.6% 34.2% 34.4% 33.7% 33.9% 34.3% 35.0% 34.6%
D. Student-occupied
units50,768 48,451 46,857 47,142 45,965 45,707 44,852 40,757 39,005 39,150 38,767 40,135
Students share (D /
A) 10.2% 9.5% 9.0% 8.8% 8.7% 9.0% 9.2% 8.4% 8.3% 8.5% 8.5% 8.4%
*Figures for units under management, occupied units, and occupancy rate are as of the end of the final month for the relevant period
Occupancy by Group
App.1-3-1: Indicator (Occupancy by Group)
65
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 4.8% of total contracts (11.2% of individual and student contracts). Foreign nationals comprised of
students 61% and working-class 39%. Vietnam, the second highest in occupied units, is steadily increasing.
By adding 16 thousand units contracted by corporate foreign tenants, totally about 40 thousand units are contracted by foreign
tenants, making up 8.3% of the total occupied units.
App.1-3-2: Indicator (Foreign National Tenants)
66
(Units)
FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
Q4 Q4 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
China 7,033 6,627 6,490 7,048 6,592 6,640 6,551 6,635 6,589 7,027 7,134 8,170
South Korea 1,336 1,447 1,479 1,594 1,622 1,602 1,625 1,604 1,587 1,561 1,565 1,582
Taiwan 747 949 951 1,005 994 990 980 947 935 970 995 1,015
Southeast Asia 2,859 3,116 3,708 5,339 5,614 6,121 6,160 6,362 6,448 6,800 6,661 7,726
of which,
Vietnam1,995 2,142 2,604 4,028 4,287 4,751 4,792 5,000 5,122 5,479 5,307 6,238
Others 2,391 2,874 3,199 3,862 3,872 3,882 3,888 3,971 3,953 4,047 4,100 4,606
of which,
North America 499 567 610 657 640 635 617 657 632 647 639 660
Total 14,366 15,013 15,827 18,848 18,694 19,235 19,204 19,519 19,512 20,405 20,455 23,099
Managed Units (1,000 units) and Occupancy Rates by Area
App.1-3-3: Indicator (Units and Occupancy Rates by Area)
67
(1,000
units, %)
FY18/3 FY19/3 FY20/3
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate
Managed
units
Occup-
ancy rate YoY
Hokkaido 14 87% 14 87% 14 76% 14 69% 14 69% 14 70% 14 72% 14 70% 14 73% +4p
Touhoku 35 95% 36 94% 36 90% 36 86% 36 85% 36 83% 36 82% 36 80% 36 85% ±0p
North Kanto 40 91% 40 88% 40 85% 40 82% 40 80% 41 77% 41 76% 41 74% 40 77% -3p
Tokyo metro 168 94% 169 91% 169 88% 170 86% 170 86% 171 83% 171 81% 171 81% 171 85% -1p
Hokuriku,
Koshinetsu40 93% 40 92% 40 87% 40 82% 40 79% 40 76% 40 75% 40 74% 40 79% ±0p
Chubu 88 95% 88 93% 88 90% 88 87% 88 85% 88 82% 88 80% 88 78% 88 82% -3p
Kinki 80 94% 80 92% 81 88% 81 85% 81 83% 81 80% 81 78% 81 77% 81 82% -1p
Chugoku 39 93% 39 93% 39 92% 39 89% 39 88% 39 86% 39 85% 39 83% 39 87% -1p
Shikoku 15 92% 15 92% 15 87% 15 84% 15 84% 15 82% 15 81% 15 79% 15 83% -1p
Kyushu,
Okinawa 51 96% 51 95% 51 91% 51 88% 51 88% 51 86% 52 85% 51 83% 52 87% -1p
Total 571 94% 572 92% 573 88% 574 85% 574 84% 575 81% 576 80% 576 79% 576 83% -1p
Occupancy rates decreased since the Company stop recruiting new tenants into rooms subject to top-priority investigations
(about 220,000 units) .
93.7%
97.5%
94.6% 93.8% 92.3%
89.5%
84.3%
97.5%
91.4%
85.4%
78.0%
72.7%
83.1%
97.1%
92.8%
84.8%
80.9%
67.2%
60%
70%
80%
90%
100%
Total Under 5 years 5-10 years 10-15 years 15-20 years Over 20 years
2018/3 2019/3 2020/3
App.1-3-4: Indicator (Occupancy Rates by Building Age)
Occupancy rates of building age 20+ years, in which there are lot of rooms subject to priority investigations, decreased
drastically.
Occupancy Rates by Area (as of March 31 of each year)
68
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)
69
114(24%)
94(20%)
79(17%)
68 (14%)
58(12%)
52(10%)
52(10%)
48(9%)
29(6%)
32(7%)
365 370 384 412 438 457 469 487
456 446
478 464 463
480 495
509 521
535
485 478
0
50
100
150
200
250
300
350
400
450
500
550
'11/3 '12/3 '13/3 '14/3 '15/3 '16/3 '17/3 '18/3 '19/3 '20/3
Chintai (General) Monthly
7,259
1,256
4,482
1
Owner-invested Roof-lease(SPC) Roof-lease(Leopalace21 Group) Mega-solar
App.1-3-6: Indicator (Solar Power Systems)
70
Solar power installments started in March 2011. Solar power systems are installed on 12,997 buildings as of March 31, 2020
(roughly 59% of buildings that can be installed). Roof-lease solar power systems has started since December 2013.
Installments by Schemes
Schemes Start FY19/3 FY20/3
1. Solar power systems installed with apartment
owners’ burdenMar 2011
7,259
buildings（89.6MW）
7,259
buildings（89.6MW）
2. Roof-lease solar power systems Sep 2012 5,739 （91.4MW） 5,739 （91.4MW）
a. SPC and other tie-up installments Feb 2013 1,256 （24.5MW） 1,256 （24.5MW）
b. Installments by Leopalace21 Group* Dec 2013 4,483 （66.9MW） 4,482 （66.9MW）
3.Mega-solar power plants utilizing idle land Sep 2013
Tomisato,
Chiba（1.7MW）
Tomisato,
Chiba（1.7MW）
Total: 12,998 （182.7MW） 12,997 （182.7MW）
(Total buildings)
Installments by Area
(Buildings)
Tokyo-metro4,369
Chubu2,506
Kinki1,654
North Kanto1,203
Kyushu, Okinawa
1,175
Chugoku961
Tohoku454
Others675
71
App.1-3-7: Indicator (Resources of finance for construction)
Based on number of buildings Based on monetary amount
10.1% 5.5% 7.2% 7.4% 5.5% 5.2% 3.4%
21.9%17.5% 19.6% 17.0% 15.6% 13.3% 18.9%
47.5%
50.4% 48.7% 48.0% 54.5%50.7%
60.1%
20.2%26.3% 24.4% 26.9% 23.3%
30.0%16.6%
0%
25%
50%
75%
100%
FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY17/6 FY18/6
City banks Regional banks Shinkin banks and Credit associations Agricultural/Fisheries Cooperative Japan Housing Finance Agency Others
22.6% 23.3% 25.0% 22.4% 21.1% 17.9%
51.1% 52.1% 51.6% 55.9%55.0% 59.2%
19.5% 17.8% 15.0% 14.0% 15.3% 15.3%
6.4% 6.8% 7.0% 5.1% 5.7% 3.1%
0%
25%
50%
75%
100%
FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
26.3% 24.4% 26.9%23.3% 23.0%
16.7%
50.4%48.7%
48.0% 54.5% 54.0%58.3%
17.5%19.6% 17.0%
15.6% 16.1% 18.0%
5.5% 7.2% 7.4% 5.5% 5.6% 3.7%
0%
25%
50%
75%
100%
FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3
Elderly Care Facilities “Azumi En” Area Disposition (87 as of March 31, 2020)
(Number of facilities)
Tokyo
Kanagaw
a
Chib
a
Saita
ma
Tochig
i
Ibara
ki
Gunm
a
Gifu
Aic
hi
Shiz
uoka
Tota
l
Facilities which include elderly
homes with nursing care
services
1 1 1 3 2 8
Facilities which include
residential style elderly homes1 5 2 2 2 1 13
Day-services and Short-stays 4 3 13 18 4 7 4 3 4 4 64
Group homes 1 1 2
Total 6 5 20 23 8 9 5 3 4 4 87
★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
○ 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 FY18/3, and 4 opened during FY19/3, totaling 87 facilities.
Gifu
Kasugai
Kakamigahara
Moriyama
SekigawaHorigome
Ota
Tatebayashi
Hanyu
Kanuma
Utsunomiya Yaita
ShimodateYuki
KogaKoga-
Chuou
Iwai
Nogi
Shinkoga
TsuchiuraKokinuYanagisawa
Showa
Minamisakurai
InaKitamoto
GyodaHigashi-
Matsuyama
Honjyo
Chichibu
Ome
Hirasawa
Tatemachi Nakano
Yamakita
Tsurumaki
Tsukuihama
Ichihara
OyumiKatsuragi
WakabaIno
Takaoka
Nakazawa
Namikicho
MisakiTakatsukashinden Tokiwadaira
SakasaiAbiko
Takamihara
KomakidaiSouka
Irumagawa
Sayama
Komuro
MizuhoMihashi
Goseki
Hanasaki-
nookaAgeo
YoshikawaGamou
Yashio
Kisarazu
Shimizukoen
Katsu-
tadai
Hamura
Tochigi-DaichoIsezaki
Gifu
Anjo
Aichi
Toyata
Hiratsuka
Higashi-Yamato
KamagayaNishi-Funabashi
●Sakura*
Takasaki
App.1-3-8: Indicator (“Azumi En” Area Disposition)
72
Maebashi
Ohgaki
Yaizu
Utsunomiya-Minami
FujiShizuoka
Iwata
*Mito
Atsugi
Shizuoka
34.5 35.6 34.2
27.2
104.4 106.5
84.5
60.5-0.44-0.45 -0.62
-25.51
-70.00
-50.00
-30.00
-10.00
10.00
30.00
50.00
0
20
40
60
80
100
120
FY17/3 FY18/3 FY19/3 FY20/3
(Ratio)(Billion yen)
Interest-bearing debt Cash Net DE ratio
NDE Ratio
*Net DE ratio = (Interest-bearing debt – Cash) / Shareholders’ equity
*Lease obligations are not included in interest-bearing debt
App.1-4: Finance (Cash / Deposits and Interest-bearing Debt)
73
*Based on number of stock
Shareholder Composition
App.1-5: Shareholder Composition
74
2015/3 2015/9 2016/3 2016/9 2017/3 2017/9 2018/3 2018/9 2019/3 2019/9 2020/3
Individuals and other 16.7% 18.3% 16.6% 15.3% 20.5% 14.3% 13.9% 15.2% 27.7% 31.3% 28.0%
Foreign corporations 50.7% 55.3% 54.6% 55.3% 49.7% 55.1% 58.3% 54.2% 39.0% 27.1% 21.1%
Trust banks 23.2% 17.6% 21.0% 21.5% 21.5% 20.2% 21.5% 17.9% 12.5% 10.2% 10.3%
Financial institutions other than trust banks 1.9% 1.9% 2.1% 2.1% 2.0% 1.7% 2.0% 1.8% 2.3% 1.2% 2.3%
Business corporations and other legal entities 2.5% 2.6% 2.4% 2.4% 2.6% 2.5% 2.4% 2.5% 10.5% 28.3% 36.0%
Securities companies 3.4% 2.5% 1.7% 1.7% 1.9% 1.9% 1.7% 4.9% 7.7% 1.6% 2.0%
Treasury stock 1.7% 1.7% 1.7% 1.7% 1.7% 4.3% 0.2% 3.5% 0.4% 0.3% 0.3%
0%
50%
100%
The ratio of business corporation and individual investors is steadily increasing since the start of FY19/3.
Appendix 2. Market Trends
75
According to “Future Estimate of Population by Areas in Japan” (2018, Institute of Population Problems), total population will decrease from
127.09 million in 2015 to 106.42 million in 2045 (-20.67 million, -16.2%). However, population in Tokyo will be stable, decreasing only 6%
during 2015-2045 in the metropolitan areas (Tokyo, Kanagawa, Saitama, Chiba), meaning centralization of population is continuing. In
addition, working age population (16-64 age) will also decrease from 7.72 million in 2015 to 5.58 million in 2045, accelerating the aging of
society in Japan. Japanese population
(%)
App.2-1: Future Estimate of Population of Japan
76
(Million people)
*Excerpted from “White paper on aging society” (Cabinet Office, Government of Japan)
8490
9499
105112
117121 124 126 127 128 128 127 125 123
119115
111106
10297
9388
1.3 1.5 1.7 1.9 2.1 2.5 3.1 3.9
4.8 5.7
7.1
9.1
11.0
12.7
14.9
17.8 19.2 19.6 20.2
21.4
23.7 25.1 25.7 25.5
0
5
10
15
20
25
30
0
50
100
150
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065
0-14 15-64 65-74 Over 75 Unknown % of Over 75
14,45716,785 18,418 19,342 19,960 20,254 20,233 19,944
9,63710,269
10,758 11,101 11,203 11,138 10,960 10,715
14,64614,474
14,34214,134 13,693 13,118 12,465 11,824
4,112
4,5354,770
5,020 5,137 5,141 5,0744,9246,212
5,7795,044 4,510 4,123 3,833 3,583
3,35049,063
51,84253,332 54,107 54,116 53,484
52,31550,757
0
10,000
20,000
30,000
40,000
50,000
60,000
2005 2010 2015 2020(E)
2025(E)
2030(E)
2035(E)
2040(E)
Singles Married couples
Married couples with child Single parents with child
Others
(29.5%) (32.4%) (34.5%)(39.3%)(37.9%)(36.9%)(35.7%)
(38.7%)
Number of general households are predicted to decrease, but single-person households are expected to increase.
Single-person households in the working age population, which is also our target, is expected to stay from 10-12 million
households for the next 20 years.
Number of General Households by Category
(Thousand units) (Thousand units)
App.2-2: Number of Households
77
*Excerpted from “Future Estimates of Households in Japan” (2018, Institute of Population Problems)
Number of Single-person Households by Age
2,178 2,060 2,021 2,009 1,879 1,781 1,681 1,584
2,971 2,999 2,987 2,830 2,795 2,705 2,558 2,429
5,4446,745 7,157 7,479 7,774 7,809 7,577
6,968
1,898
2,2872,884 3,067 2,812 2,913 3,343
3,8411,967
2,693
3,3693,958 4,700 5,045 5,075 5,122
14,457
16,785
18,41819,342
19,960 20,254 20,233 19,944
0
5,000
10,000
15,000
20,000
25,000
2005 2010 2015 2020(E)
2025(E)
2030(E)
2035(E)
2040(E)
under 25 25-34 35 - 64 65-74 Over 75
1,663 1,673 1,665
1,343
1,420
1,5101,561
1,485
1,630
1,341
1,1801,226 1,213
1,1731,146
1,174 1,1931,249
1,285
1,036 1,039
775819 841
893
987
880921
974946 953
884
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
(Thousand units)
Leased units Condominiums House for sale Owner-occupied houses Company housing
New Housing Starts by Fiscal Year
Although new housing starts have been on an increasing trend after the Lehman collapse, starts decreased by 7.3% YoY for
FY2019.
*Excerpted from “Housing Start Statistics” (Ministry of Land, Infrastructure, Transport and Tourism)
①Consumption tax: 3% to 5%
(April 1997)
FY1996: +9.8% YoY
FY1997: -17.7% YoY
App.2-3: New Housing Starts (Leased Units)
78
②Consumption tax: 5% to 8%
(April 2014)
FY2013: +10.5% YoY
FY2014: -10.8% YoY
YoY
Company housing -23.2%
Owner-occupied houses -1.5%
House for sale +0.4%
Condominiums -6.7%
Leased units -14.2%①
②
New Housing Starts of Leased Units by Fiscal Year
Leased units starts in FY2019 decreased 14.2% YoY, and leased units under 30 m2 decreased 27.8% YoY.
*Excerpted from “Housing Start Statistics” (Ministry of Land, Infrastructure, Transport and Tourism)
(Thousand units)
App.2-4: New Housing Starts (Leased Units)
79
YoY
Over 30 m2 -11.1%
30 m2 or under -27.8%
240 262 274
178 186149
117 126 128 114 102 80 80 97 104 108 113 123 128 112 11760 39 31 31 36 48 61 76 79 73 53
842821
767
582
687652
574 564
616
516
444426 418
442 455 459 467
518538
431 445
311292 290
321
370 358384
427410
390
335
0
100
200
300
400
500
600
700
800
900
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Leased units under 30㎡ Leased units over 30㎡
16.8%17.3%
18.0%
18.8%
17.4%
17.7%
18.8%19.1%
19.6%
18.8%
17.0%
20.6%
23.3%
22.2%
20.4%
10%
15%
20%
25%
1998 2003 2008 2013 2018
Tokyo metro
Three major metro areas
Other
1,834
2,336 2,619
3,520
3,978
4,4764,600 4,604
12.4%
14.3%14.3% 17.4%
18.8%
20.1% 19.9%19.5%
0%
5%
10%
15%
20%
25%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1983 1988 1993 1998 2003 2008 2013 2018
Vacant Dwellings Available for Rent or Sale (Left)
Vacancy Rate (Right)
Number of vacant rental units in Japan has risen steadily. When a nationwide recovery in demand is unlikely; it will be important
to supply properties to areas where occupancy rates are high, to introduce differentiated products and to adopt measures that
enhance property values in ways that perceive tenant needs.
*Excerpted from “FY2018 Housing and Land Survey” (Ministry of Internal Affairs and Communications (MIC))
App.2-5: Vacant Rental Dwellings
80
No. and Ratio of Vacant Rentals Nationwide Vacancy Rates by Area
(1,000 rooms)
Net population inflows (“-” represent outflows)
in 3-metro areas
*Excerpted from “report on internal migration in Japan derived from the basic resident registers” (Ministry of Internal Affairs and Communications)
Net inflow of domestic migration into the three metro areas (Tokyo, Chubu, Kinki) continues, and Leopalace21 concentrates
apartment construction in these areas with high leasing demand.
(No. of
people)Construct-
ion Offices 2017 2018 2019
Tokyo 873,124
(95%)
79,844
(96%)
82,982
(99%)
Saitama 4 22,181 24,652 26,654
Kanagawa 2 17,514 23,483 29,609
Chiba 1 12,711 11,889 9,538
Tokyo-
metro15
125,530
(80%)
139,868
(79%)
148,783
(82%)
Aichi 3 5,710 3,112 -1,931
Osaka 2 1,136 2,388 8,064
Kyoto 1 -1,428 -2,536 -2,688
Hyogo 2 -5,947 -5,330 -6,038
3-metro
areas23 125,001 137,502 146,190
(No. of
people)Construct-
ion Offices 2017 2018 2019
Sendai 1 1,399 1,979 1,349
Nagoya 2 3,750 1,868 3,415
Kyoto 1 -1,385 -1,273 -338
Osaka 1 9,453 12,081 13,762
Kobe 1 -2,168 -2,331 -831
Okayama 1 -1,268 -1,538 -1,989
Hiroshima 1 -359 -661 -1,220
Fukuoka 1 6,986 6,138 8,191
Net population inflows (“-” represent outflows)
near Leopalace21 offices
*Excluding Tokyo-metro area
*Figures in parentheses represent ratio of population inflow between age
20 to 39
App.2-6: Population Inflows and Outflows
81
(Rooms) FY18/3 FY19/3 FY20/3
Hokkaido 21,052 19,535 15,625
Tohoku 24,138 22,430 17,821
Kita-kanto 17,265 14,145 10,705
Tokyo metro 148,557 140,539 122,971
Hokuriku & Koshinetsu 16,185 15,123 14,664
Chubu 39,736 40,567 34,460
Kinki 58,442 58,058 50,912
Chugoku 20,551 18,893 15,934
Shikoku 9,097 7,865 6,797
Kyushu & Okinawa 55,332 52,938 44,620
Nationwide 410,355 390,093 334,509
App.2-7: Rental Housing Starts and Leopalace21 Completions by Area
82
New rental housing starts by region Leopalace21 completions by region
(Rooms) FY18/3 FY19/3 FY20/3
Hokkaido 0 0 0
Tohoku 258 314 26
Kita-kanto 220 128 50
Tokyo metro 3,797 2,258 943
Hokuriku & Koshinetsu 24 0 36
Chubu 521 461 100
Kinki 963 581 356
Chugoku 456 282 259
Shikoku 24 34 46
Kyushu & Okinawa 928 584 279
Nationwide 7,191 4,642 2,095
*Excerpted from “Housing Start Statistics” (Ministry of Land, Infrastructure, Transport and Tourism)
International Students in Japan
*Excerpt from “Result of an Annual survey of International Students in Japan 2017” (Japan Student Services Organization)
International students in Japan are increasing every year. 2015: 2017: +11.6%, 2018: +12.0%, 2019: +4.4%.
About 78% live in private housing (not set up by schools or government), leading to continuing leasing demand.
International Students by Housing
76.9% of international students
in Japan live in private housing
(+24,831 year-on-year)
Public housing are set up by
schools, local government, etc.
(As of May 2019)(People)
App.2-8: International Students in Japan
83
Private242,77177.8%
Public69,44322.2%
161,848 161,145
184,155
208,379
239,287
267,042
298,980312,214
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2012 2013 2014 2015 2016 2017 2018 2019
