Long-Term Management Plan 2030LONG-TERM MANAGEMENT PLAN

Mitsubishi Estate Group announced a review of its long-term business plan for 2030 in May 2024.

Mitsubishi Estate Co., Ltd. (hereinafter “Mitsubishi Estate” or the “Company”) announced its long-term management plan 2030 Review. The details are as follows. 　

1. Goals of this Management Plan 1．Management Plan Aims

In order to realize the basic mission of the our group and achieve sustainable growth, we will practice management based on the two pillars of a “strategy for improving social value” and a “strategy for improving shareholder value.”

In the Long-term Business Plan 2030 Review, we have made "Be the Ecosystem Engineers," as defined in the Sustainability Vision 2050, our basic policy for business, and in terms of business, we will raise the earning power of our group by setting a goal of returning to basics. On that basis, in our shareholder value improvement strategy, we will set KPIs of ROA, ROE, and EPS, and aim to transform our business portfolio into one that is highly efficient and resilient to market changes.

In our social value enhancement strategy, we have revised our sustainability priorities and materiality (important issues) in light of changes in the natural and social environments surrounding our group and the increasingly complex demands on companies regarding sustainability.

In this revision, we have redefined our sustainability key themes, which have previously served as the axis for the value our group provides to society, as "actions for establishing sustainability for both our group and society." By increasing the affinity with our group 's core business of urban development, we aim to integrate our business and sustainability.

For the realization of the Company’s basic mission and sustainable growth, the Company will practice management based on both “strategies for increasing social value” and “strategies for increasing shareholder value.”

In the Long-Term Management Plan 2030 Review, the Company will make "Be the Ecosystem Engineers," as stated in the Sustainability Vision 2050, a fundamental policy to be emphasized in our business, and increase the Group's earnings power by returning to basics. In addition, in strategies to increase shareholder value, the Company uses ROA ROE and EPS as KPIs and aims to transform its business portfolio, making it more efficient and resilient to changes in market conditions.

As part of our strategy to increase social value, the Company has revised our material issues and materiality in light of changes in the natural and social environment.

In this revision, the Company has redefined the material sustainability issues that have served as value creation from the Group to society as "actions to create sustainability for both the Group and society," and the Company has strengthened their affinity with the Group's core business of urban development, thereby integrating our business and sustainability.

What we aim to achieve in this business plan

2. Preconditions and indicators for achieving quantitative targets 2．Key Assumptions for Quantitative Target

Preconditions and indicators for achieving numerical targets

3. [Social Value Improvement Strategy] Materiality and Four Important Themes 3．[Increasing Social Value] Material Issues and Four Key Themes

4. [Shareholder Value Improvement Strategy] our group 's Strengths and Growth Strategy 4．[Increasing Shareholder Value] Strengths and Growth Strategy of the Group

This is the content of our initial Long-Term Management Plan 2030, which was announced in January 2020.

The following is the Long-Term Management Plan 2030 (initial) announced in January 2020.

1. Background of formulation of “Long-Term Management Plan 2030” 1．Background of Formulation of Long-Term Management Plan 2030

Regarding the medium-term our group plan formulated in 2017 (FY phase 3, 2018 to FY phase 3, 2020), all numerical targets are expected to be achieved, and progress is being made in capital policy and corporate governance. accomplished.

Based on this, we have formulated the "Long-Term Management Plan 2030," which will start in April 2020, in order for the our group to provide value to stakeholders in a sustainable manner over the long term.

Medium-Term Management Plan (FY2018-FY2020), which was formulated in 2017 and is currently being implemented, Mitsubishi Estate has achieved steady growth, and expects to achieve all its quantitative targets while also making progress on capital policy and corporate governance.

To build on this progress and provide value to stakeholders sustainably over the longer term, the Company has formulated Long-Term Management Plan 2030, which will start from April this year.

2. Vision for management plan 2．Management Plan Aims

In the social value improvement strategy, we will implement initiatives to realize a sustainable society and provide higher value to all stakeholders, including city users and employees.

As part of our shareholder value enhancement strategy, we will set ROA, ROE, and EPS as KPIs and aim to transform our business portfolio into one that is highly efficient and resilient to market changes.

In strategies for increasing social value, the Company will implement initiatives for the realization of a sustainable society and provide greater value to all stakeholders including visitors and employees. In strategies for increasing shareholder value, Mitsubishi Estate will use ROA ROE and EPS as KPIs and aim to transform its business portfolio, making it more efficient and resilient to changes in market conditions.

3. our group strengths and growth strategies3．Mitsubishi Estate’s Strengths and Growth Strategy

当社グループの強みである「超長期視点でのまちづくりと時代を先取りするDNA」及び「膨大なエンドユーザーとの接点と膨大な不動産への関与」を活かし、「国内アセット事業」、「海外アセット事業」、「ノンアセット事業」の3つ領域にて成長の実現を目指します。

また、ノンアセット事業をはじめとする不動産市況の変動に強い収益の拡大と柔軟な資本政策を組み合わせ、ROA・ROEの底上げを図ります。

Mitsubishi Estate will harness its strengths in “long-term view on Urban Development and Forward-looking DNA” and its “extensive user reach and abundant real estate asset touchpoints” and aim for the realization of growth in the three business domains: “Domestic Asset Business,” “International Asset Business” and “Non-asset Business.”

The Company will improve ROA and ROE by expanding revenue via mainly market-resilient non asset business in combination with flexible capital policy.

Four. Numerical target4．Quantitative Target

（1）2030年の計数目標（1） Quantitative Target for 2030※括弧内は20年3月期予想(2019年5月14日公表値)*The Figures in brackets are estimates for FY2020 (announced May 14, 2019)

ROA※1	ROE※2	EPS※3
5% （3.9%）	10% （7.8%）	200円（100.20円）	200 yen（100.20 yen）

ROA※1	5% （3.9%）
ROE※2	10% （7.8%）
EPS※3	200円（100.20円）	200 yen（100.20 yen）

（2）目標達成に向けた前提・指標（2） Key Assumptions for Achievement of Targets

利益成長	株主還元	財務健全性	Profit Growth	Shareholders Return	Financial Stability
事業利益※4 3,500～4,000億円程度	配当性向：30%程度＋資本政策の一環としての自己株式の取得ただし、不動産市況・投資環境・株価・ROE/EPSの状況等に応じて、株主還元の手法や規模感については柔軟に検討	現状の格付水準が維持可能な財務健全性の確保【参考】現状格付 R&I：AA- S&P：A＋ MOODY’S：A2	Business Profit*4: ¥350-400 billion yen	Current framework* Payout ratio: Approx. 30% ＋ Share buybacks (when determined to be optimal use of funds） *Will adjust to business conditions	Maintain current level of credit ratings 【Reference】 R&I：AA- S&P：A＋ Moody’s：A2

利益成長	事業利益※4 3,500～4,000億円程度	Profit Growth	Business Profit*4: ¥350-400 billion yen
株主還元	配当性向：30%程度＋資本政策の一環としての自己株式の取得ただし、不動産市況・投資環境・株価・ROE/EPSの状況等に応じて、株主還元の手法や規模感については柔軟に検討	Shareholders Return	Current framework* Payout ratio: Approx. 30% ＋ Share buybacks (when determined to be optimal use of funds） *Will adjust to business conditions
財務健全性	現状の格付水準が維持可能な財務健全性の確保【参考】現状格付 R&I：AA- S&P：A＋ MOODY’S：A2	Financial Stability	Maintain current level of credit ratings 【Reference】 R&I：AA- S&P：A＋ Moody’s：A2

※1 ROA＝事業利益※4 ÷ 総資産（期首期末平均）

※2 ROE＝親会社株主に帰属する当期純利益 ÷ 自己資本

※3 EPS＝親会社株主に帰属する当期純利益 ÷ 期中平均株式数

※4 事業利益＝営業利益＋持分法投資損益。尚、事業利益については、ノンアセット事業の成長をはじめ、スピード感をもった事業展開を目指す上で、第三者との協業が従来以上に重要であり、それら事業からのリターンも含めた利益をモニタリングするために設定。

※1 ROA＝Business Profit*4 ÷ Total assets (average)

※2 ROE＝Profit attributable to owner of parent ÷ Shareholders' equity (average)

※3 EPS＝Profit attributable to owners of parent ÷ Average number of shares for the fiscal year

※4 Business Profit＝Operating Profit ＋ Equity in earnings (loss) unconsolidated subsidiaries and affiliates. The Company aims for speedy business expansion, especially growth of Non-Asset Business and collaboration with third parties will, therefore, be more important than ever. Accordingly, the Company set a core operating income target to monitor profit including returns from these joint ventures.

（3） ROE向上に向けた基本方針（3） Basic Policy for Improving ROE

ROAの向上を通じたROEの向上に主眼を置き、レバレッジについては現状の格付水準が維持可能な範囲で適切にコントロール。
The Company will focus on ROA while maintaining current level of credit ratings.

（4）計数目標の実現イメージ（4） Projection for Realization of Quantitative Targets

事業利益は国内アセット、海外アセット、ノンアセットの3つの事業で各500億円程度の成長（20年3月期比）を見込み、3,500～4,000億円程度の水準を目指す。（20年3月期予想は2,305億円）
総資産については、不動産市況に応じた成長投資、資産売却、株主還元、資金調達等の最適な組み合わせにより、1～2兆円増加の7～8兆円程度を想定。（20年3月期予想は5.9兆円）
The Company expects growth of around 50 billion yen in its Domestic Asset Business, International Asset Business and Non-asset Business respectively and aims to achieve business profit of around 350-400 billion yen (estimate for FY2020 is 230.5 billion yen).
The Company expects that, through the optimal combination of investments for growth, assets sales, shareholder return, financing and other measures according to real estate market conditions, total assets will increase by 1-2 trillion yen, to 7-8 trillion yen (estimate for FY2020 is 5.9 trillion yen).

Five. capital policy5．Capital Policy

(1) Basic policy（1） Basic Policy

Improve corporate value by controlling the balance sheet and optimizing the combination of growth investments, asset sales, shareholder returns, and fundraising according to real estate market conditions.
Mitsubishi Estate will seek to improve corporate value through the optimal combination of investments for growth, asset sales, shareholders returns and financing in response to real estate market conditions, and Balance Sheet control.

(2) Capital allocation policy（2） Capital Allocation Policy

Cash inflow from operating cash flow and funding capacity will be allocated to (1) base shareholder return, (2) base investment/recovery, and (3) strategic allocation (growth investment, additional return, or debt control).
Cash flow provided by operating activities and cash inflows from financing activities will be allocated to (i) shareholders returns in the form of dividends (payout ratio of approximately 30%), (ii) planned investments and their return and (iii) a strategic allocation.

(3) Investment recovery plan for the most recent three years (fiscal year ending March 31, 2021 to fiscal year ending March 31, 2023)（3） Three Year Investment Returns Plan(FY2021-FY2023)

今後3年間で約1.5兆円のベース投資※5 約1.1兆円の物件売却による回収を計画。
また、効率性の改善に向け、1,000～2,000億円程度の低効率資産の売却を見込む。
上記に加え、営業活動や財務活動を通じて得られるキャッシュ（6,000億円程度を計画）については、成長投資、追加還元、負債の抑制のいずれかに戦略的にアロケーションする方針。
※5 投資決定済み案件（一部見込みを含む）への投資
Mitsubishi Estate plans to make planned investments of approximately 1.5 trillion yen over the coming three years *It plans to recover these investments through the disposal of assets worth approximately 1.1 trillion yen.
The Company also plans to dispose underperforming assets around 100-200 billion yen to improve capital efficiency.
In addition to the foregoing, the Company plans to strategically allocate cash provided by operating activities and financing activities (projected at approximately 600 billion yen) to investments for growth, additional returns or the suppression of debt.

6. Business strategy6．Business Strategies

In order to achieve numerical targets, we have set the following strategies for business profit growth.

To achieve the quantitative targets, Mitsubishi Estate has established strategies for the growth of Business Profit as shown below.

(1) Domestic asset business: +50 billion yen (compared to the fiscal year ended March 31, 2020)（1） Domestic Asset Business: Growth of approximately 50 billion yen (compared to FY2020)

丸の内エリアでは、今後のまちづくりのテーマを「丸の内Reデザイン」と掲げ、人・企業が集まり交わることで新たな「価値」を生み出す舞台を目指す。また、常盤橋及び有楽町を重点更新エリアとし、2030年までに総額6,000～7,000億円程度を投じ、再開発やリノベーションを推進。
今後10年間で、丸の内エリアの再開発をはじめ、アウトレットモールや物流施設等を含む国内アセット事業全体で、NOI※6ベースで約600億円規模の新規開発や増床プロジェクトを推進
※6 NOI＝賃貸収益－賃貸費用（減価償却費を含まない）
In Marunouchi, the Company has adopted “Marunouchi Re-design” as the theme for future urban development and aims to set the stage for the creation of new value through the attraction and interaction of companies, employees and viitors. With Tokiwabashi and Yurakucho set as key redevelopment area, the Company will invest a total of 600-700 billion yen by 2030 to promote redevelopment and renovation.
Over the coming 10 years, across its entire Domestic Asset Business, which includes not only the redevelopment of Marunouchi but also outlet malls, logistics facilities and other assets, Mitsubishi Estate will promote new development and expansion projects worth approximately 60 billion yen on a NOI*5 basis.
※6 NOI＝賃貸収益－賃貸費用（減価償却費を含まない）

*5 NOI＝Rental Income - Rental Cost(excluding Depreciation)

回転型事業※7については、不動産市況や投資環境に応じ、物件売却によるキャピタルゲインを柔軟にコントロールする。
※7 物件を開発後、グループ会社が運営するファンド等の投資家へ売却し、売却後は、AM・PM等のフィービジネスを継続受託する事業モデル
In the capital recycling business*6, the Company will flexibly control capital gains through the assets sales according to real estate market conditions and the asset environment.
*6 Business model where the Company sells properties it has developed to a fund operated by a group company or another investor and continues to provide services that generate AM and PM fees after the sale.

住宅事業については、2020年代前半は賃貸マンションの開発・売却、及び分譲マンションの再開発案件獲得に注力。2020年代後半は再開発案件の進捗により、分譲マンションの売上計上戸数が回復、賃貸マンションは不動産市況に応じたキャピタルゲインの最大化を図る。
In the Residential Business, Mitsubishi Estate will focus on the development and sale of rental condominiums and the acquisition of residential redevelopment projects in the first half of the 2020s. In the second half of the 2020s, the number of condominium unit sales will increase due to the progress of redevelopment projects, and the Company will seek optimization of capital gains on the sale of rental condominiums according to real estate market conditions.

（2）海外アセット事業：＋500億円程度（20年3月期比）（2） International Asset Business: Growth of approximately 50 billion yen (compared with FY2020)

事業利益を900億円程度、総資産を現状の2倍程度となる1.5兆円程度と想定。
強力な基盤を構築している欧米事業に加えて、アジアを中心とした開発事業を強化し、現状、海外事業におけるアジア事業の比率は総資産で28%、事業利益で5%のところ、2030年までにそれぞれ45%程度に高める。
アジアについては、当社主導型の開発事業の拡大を図りながら、投資残高の積み増し、回転型資産のポートフォリオの構築を強化。
欧州については、収益の安定性と資本効率向上のバランスを意識した投資・回収を実行。また、決定済みの大規模開発案件を中心として開発事業を更に推進。
米国については、ロックフェラーグループインターナショナル社のノウハウを活用した回転型事業を強化。また、現地パートナーとのJV型開発をはじめ、開発事業をより多様化。
The Company forecasts business profit of approximately 90 billion yen and total assets of approximately 1.5 trillion yen, which is around 2 times the current level.
In addition to business in Europe and the United States where the Company has established a strong base, the Company will strengthen development business focused on Asia and will increase the Asia business’ share of the international business from 28% on a total assets basis and 5% on a business profit basis to approximately 45% respectively by 2030.
In Asia, Mitsubishi Estate will strengthen its portfolio of capital recycling assets by increasing development with major stake and joint businesses with local partners.
In Europe, the Company will make and recover investments mindful of the balance between maintaining revenue stability and improving capital efficiency. It will also further promote development business, focusing on large-scale development projects which have already been decided.
In the United States, Mitsubishi Estate will draw on the knowhow of Rockefeller Group International, Inc to strengthen its capital recycling business. It will also further diversify the development business, especially JV development with local partners.

（3）ノンアセット事業：＋500億円程度（20年3月期比）（3） Non-Asset Business: Growth of approximately 50 billion yen (compared with FY2020)

投資マネジメント事業における継続的なAUM拡大、ホテル運営客室数の増加等、既存領域の成長により利益を安定的に拡大。また、建物運営管理・設計監理等のフィービジネスでは、規模の拡大だけでなく、IT活用による効率化等も推進しながら利益成長を目指す。これらの着実な成長により、2030年に向けて事業利益を200～250億円程度増加させる。
社会課題を背景とした潜在的ニーズに対し、BtoCやBtoBtoCに着目したサービスやコンテンツの提供などの新たな事業を展開し収益機会を獲得、2030年に向けて事業利益を250～300億円程度増加させる。
Mitsubishi Estate will steadily expand profit through growth in existing areas including ongoing expansion of AUM in the Investment Management Business and an increase in the number of rooms in the Hotel Management Business. Meanwhile, in Fee Business such as building operation and management and design supervision, the Company will aim not only for expansion in scale but also for profit growth through the use of IT to improve efficiency. Through the steady growth of these businesses, the Company will increase business profit by around 20-25 billion yen heading toward 2030.
The Company will tap into revenue opportunities by expanding new businesses such as the provision of BtoC and BtoBtoC services and content that address latent needs arising from social issues and, through this, will increase business profit by 25-30 billion yen over the years to 2030.

7. ESG initiatives7．Initiatives of ESG

(1) Materiality (Important Issues in Sustainability Management)（1） Materialities（Important Issues for Sustainable Growth）

サステナビリティ経営上の重要課題として、7つのマテリアリティ及びそれに伴う機会とリスクを特定。マテリアリティは、環境、グローバリティ、コミュニティ、ダイバーシティ、少子高齢化、ストック活用、デジタル革新の7つを設定。
Mitsubishi Estate identified seven material issues for the sustainable growth and related opportunities and risks. The seven material issues are The environment, Globality, Community, Diversity, Birthrate/Aging, Leveraging existing properties, Digital innovation.

（2）マテリアリティを踏まえ「三菱地所グループのSustainable Development Goals 2030」を策定（2） Formulation of “Mitsubishi Estate Group’s Sustainable Development Goals 2030” Based on Material Issues

サステナブルな社会の実現に向けた4つの重要テーマを設定。
Establishment of four key themes for the realization of a sustainable society

① Environment：気候変動や環境課題に積極的に取り組む持続可能なまちづくり
② Diversity & Inclusion：暮らし方の変化と人材の変化に対応しあらゆる方々が活躍できるまちづくり
③ Innovation：新たな世界を生み出し続ける革新的なまちづくり
④ Resilience：安全安心に配慮し災害に対応する強靭でしなやかなまちづくり
(i) Environment：Develop sustainable communities to address climate change and Environmental problems
(ii) Diversity & Inclusion：Enable people of all backgrounds to thrive by building communities adaptive to varying lifestyle needs
(iii) Innovation：Create innovative cities that birth innovative ideas
(iv) Resilience：Build strong and resilient communities that prioritize security, peace, and disaster protection

（3）主なKPI（重要指標）と目標（3） Key KPIs (Key Indicators) and Targets

CO2排出量を2030年までに35%削減（目標）※2018年3月期比
1m²あたりの廃棄物排出量を2030年までに20%削減（目標）※2020年3月期比
再生可能電力比率を2030年までに25%へ（目標）※現在1.3%
廃棄物再利用率を2030年までに90%へ（目標）※現在45.5%
Aim for 35% reduction in CO2 emissions by 2030*(Compared to FY2018)
Aim for 20% reduction in waste disposal by 2030*(Compared to FY2020)
Aim to increase renewable energy rate to 25% by 2030*Currently 1.3%
Aim to increase waste recycle rate to 90% by 2030*Currently 45.5%