Message to Shareholders

Founded in 1896 by Zenjiro Yasuda, founder of the now defunct Yasuda financial conglomerate, the Tokyo Tatemono Group has since continued on with Zenjiro Yasuda's principle of "customer first" and "progressive spirit" of acting ahead of the times as the foundation of its corporate activities. The Group has expanded its business centering on commercial properties and residential business while covering a broad range of real estate businesses including real estate solution services business, senior business and overseas business.

The Tokyo Tatemono Group has been pressing ahead with its Medium-term Business Plan (2015-2019), upholding the statement "continue to be the leading choice, providing amazing value through innovative group synergies" since 2015. In light of various changes in business environment such as the bleak investment environment due in part to an escalation in real estate acquisition competition bucked by low interest rates and a rise in construction costs, enhanced/diversified requirement standards for services, a decline in population and expansion of the senior market in Japan, the Group aims to strengthen its earnings power by building a business portfolio that is rich with growth potential through focusing on three key strategies: "strategic investments," "strengthening services" and "exerting group synergies."

In the fiscal year ended December 31, 2017, the third year of the current Medium-term Business Plan, the Tokyo Tatemono Group’s consolidated results were increase in revenue and income compared with the previous fiscal year. Specifically, revenue from operations was ¥266,983 million (up 4.9% from ¥254,498 million for the previous fiscal year) and operating income was ¥44,757 million (up 23.1% from ¥36,363 million for the previous fiscal year). This was due in part to increase in the number of condominiums delivered in the Residence business, mainly large-scale tower condominiums in central Tokyo, including “Brillia Towers Meguro (South Residence)” and “Brillia THE TOWER TOKYO YAESU AVENUE.” In addition, recurring income was ¥39,416 million (up 28.7% from ¥30,635 million for the previous fiscal year) and profit attributable to owners of the parent was ¥22,599 million (up 14.5% from ¥19,742 million for the previous fiscal year). This was due in part to improvement in financial balance.
The Tokyo Tatemono Group has been steadily progressing towards the fiscal 2019 goal of consolidated operating income of 50 billion yen.

As for shareholder returns, the Company’s basic policy is to steadily maintain and improve its distribution levels by comprehensively taking into account future management environment, business expansion, and business outlook while building internal reserve for reinvestment toward enhancement of corporate value. Also, the Company aims to provide dividend payout ratio of about 30%.
As the consolidated earnings for the fiscal year ended December 31, 2017, the year-end dividend was increased by \2 per share to \16 per share (annual dividend of \30) from the forecast dividend announced at the start of the fiscal year (interim dividend of \14 per share/year-end dividend of \14 per share).
We are determined to meet the expectations of shareholders and investors by continuing to steadily build profits going forward.

The Tokyo Tatemono Group will continue to strive for expansion of the company and creation of a prosperous society, taking pride in the trust accumulated over generations under our corporate philosophy of "Trust beyond the era." We ask for your continued support and guidance.

March 2018
President and Chief Executive Office

Hitoshi Nomura