Business Risks

Among matters related to our business status, accounting status, etc., the following may have a material impact on the decision-making of investors.

(1) Trends in the real estate market

In the future, changes in economic conditions may reduce demands for office in the rental office market along with deteriorating corporate business performance, or may weaken client appetites for purchasing in the residential housing market, etc. Such trends in real estate may affect the Tokyo Tatemono Group's business development, business results, etc., possibly leading to lowering of value of assets owned by the group.

(2) Establishment, revision, etc. of legislation and the tax system related to the company's businesses

The group's businesses are affected by regulations including ordinances, tax systems, etc. set forth by municipalities as well as by laws and regulations. Therefore, establishment, revision or abolition of related laws and regulations, ordinances, tax systems, etc. in the future may affect the group's business development, business results, etc. due to the newly arising obligations, increase in cost burden, restriction on rights, etc., possibly leading to lowering of value of assets owned by the group. Furthermore, when difference arises in views in tax reporting with tax authority, such might also affect the group's business results and financial status.

(3) Interest rate fluctuations

The group has conducted stable fund procurement with 99% of its interest-bearing debt in long-term loans, etc. and has fixed interest rates for almost all long-term loans to minimize impact of interest rate fluctuations. However, when the interest rate rises, such might affect the group's business development, business results, etc., possibly leading to lowering of value of assets owned by the group.

(4) Occurrence of natural disasters, etc.

Occurrence of natural disasters, such as earthquakes and wind/flood damages, wars, riots, terrorism and other unexpected incidents might affect the group's business development, business results, etc., possibly leading to lowering of value of assets owned by the group.

(5) Trends in stock market

The group holds marketable shares, and thus when the stock market falls and the value of owned shares falls significantly, such may affect the group's business development, business results, etc.