Sun Frontier Fudousan : Business Report 2023 (Interim)

Business performance is strong, driven by the revitalization of real estate.

Thanks to the recovery of flow of people,

the hotel business is recovering and expected to turn up.

We would like to thank our shareholders for their continued support.

During the first half of the 24th fiscal year (April 1, 2022 to Sep- tember 30, 2022), our corporate group made steady progress in our operations amid the easing of activity restrictions, despite the impact of the third year and seventh wave of the COVID-19 pan- demic. Business performance has remained solid as ordinary income has progressed over 60% toward the full-year forecast. In particular, in the office business domain, sales of replanning proper- ties, which were converted into high-occupancy,high-value-added buildings through cross-departmental collaboration across the com- pany, made progress and strongly drove overall performance. In addition, the real estate services business continued to grow steadily even during the COVID-19 pandemic, providing stable support for business performance. In addition, the hotel and tourism business, which had been severely affected by the COVID-19 pandemic, also showed signs of recovery. In addition to the start of nationwide travel support by the government and local govern- ments, the demand from foreign visitors to Japan is rapidly recovering as a result of the easing of entry restrictions, and further recovery is expected in the second half of the year.

A place to develop society and create happiness for people

Our corporate group is currently implementing its medium-term management plan, which will end in the fiscal year ending March 31, 2025. Our basic policy is to provide the world with "places where people gather and communicate with each other, and create social development and happiness for people." Based on this policy, the office business will provide a place where tenant companies can accelerate their growth and create new industries and innovations. In the hotel business, we aim to provide a place that brings comfort, excitement and smiles to the faces of our guests. In the overseas condominium development business, a place where residents may live safely while maintaining a healthy mind. We are strongly promoting our business to create such places and opportunities.

Increasing investment in human capital, digital, and marketing

Since its founding, our corporate group has continued to run its business with its people as the key players. Going forward, we will continue to adhere to our belief that"human resources development is the key to sound management."In this context, our company has been making greater efforts to recruit and develop human resources in the current fiscal year. In addition, in order to further utilize the power of people, the company is striving to utilize digital technology and strengthen its marketing and brand development capabilities. Through these efforts, our company will enhance the quality of our services to customers, improve productivity, and provide differentiated value to the world.

Sticking to the main policy in any environment

In any environment, our corporate group will continue to pursue the main policy:"We seek trust, not profit. We change ourselves, and solve problems from the customers'point of view and exceed their expectations!" Under this policy, we will strive to solve our customers' problems with the spirit of "altruism," which is our credo, and contribute to the realization of a sustainable and prosperous society.

We would like to ask for the continued support and encouragement of our shareholders.

December, 2022

Sun Frontier Fudousan Co., Ltd.

President

Seiichi Saito

Net income per share

(￥)

240

8,300 200

(Full-year forecast)

152.26160

7,415 110.44 120

5,862

5,368 80

40

2022.3 2022.9 0

Composition of Sales by Segment

Brief Consolidated Quarterly Statement of Financial Position

(Conference Room Rental Business)

VC Shinagawa, One of the Largest in the Area, Opens

Vision Center (VC) is expanding its services to meet the needs of changing and diversifying workstyles, such as web conferencing and online streaming . In September 2022, Vision Center Shinaga- wa opened its doors for the first time in the Shinagawa area. With a total floor space of 2,000 m2, it is one of the largest rental conference r o o m s o p e r a t e d b y o u r corporate group, and the 3rd floor offers a venue with a

floor space of 600 m2, making it the largest rental conference room in the Shinagawa area in terms of floor space per room.

(Office Leasing)

Started Collaboration With estie to Promote DX

We have initiated collaboration with estie, Inc. to promote DX in office leasing operations. The real estate industry lags behind in digitaliza- tion, with back-office operations accounting for much of the current business. It is difficult to accumulate and analyze data in a timely manner, making it difficult to make decisions quickly and distribute information efficiently both internally and externally. Through this collaboration, we promote DX in real estate industries that enables the visualization of property states and timely management decisions.

(Specified Joint Business for Real Estate)

Property for Multiple Owners No. 4 Has Been Sold Out, and the Sale of No. 5 Has Begun.

P r o p e r t y N o . 4 , "Newly-built Medical and Educational M a l l i n O t a - k u , Tokyo,"whose ownership was divided into small shares for multiple owners, w a s s o l d o u t i n November 2022. In addition, we have c o m m e n c e d t h e

sale of a "newly built licensed nursery school in Ueno, Tokyo" as our No. 5 project. By investing in real estate that is occupied by tenants that support the local community, we will contribute to improving the comfort of living and building secure social infrastructure together with more investors. (Photo: Exterior view of No. 5)

(New York Real Estate Revitalization Project)

The First Property Sale in New York Completed

We have completed the sale of a Manhattan apartment building that was being commercialized as part of our real estate revitalization business in New York City (NY), the United States. This is the first sale in this business in New York, which has a large economy, high population densi- ty, and a high concentration of real estate, and we sell the property after increasing the value of the property as we do in Japan. We will continue to evolve our b u s i n e s s b y u p d a t i n g o u r business model based on the know-how gained from this sale.

(Specified Joint Business for Real Estate)

Ongoing Support for Ukrainian Evacuees

S i n c e M a y , w e have held a total o f 1 8 s u p p o r t events for evacuees from Ukraine t o J a p a n . T h e U k r a i n e C a f é HIMAWARI, operated by the Japan YMCA Alliance, provides livelihood support, job

guidance, consultation on problems and concerns, and Ukrainian Sunday School "Khrobachok." Our corporate group cooperates by providing the venue, inviting artists, and managing the event on the day with a total of more than 100 employee volunteers.

(Sustainability)

Specific Measures and KPIs Set and a Dedicated Website Opened

In March 2022, we defined "environmental protection," "regional revitalization," and "human resources development" as key issues in our sustainability activities. In addition to establishing specific measures and KPIs to address these key issues, we have launched a dedicated website to enhance the dissemination of sustainability information and expand our sustainability information. https://www.sunfrt.co.jp/sustainability/

(Volunteer Activities)

Protecting the Beautiful Sea of Sado Island "BEACH CLEAN UP 2022"

We collaborated with local people and children to clean up Sumiyoshi Beach, which is recognized for its lovely sandy beaches, on the Sado Island, where we are doing a community development project. There were a total of 24 people who gathered 60 bags of flotsam . We will continue to work on social concerns while being firmly rooted in the community. We collaborated with an artist team, Little Artists League, and presented a flotsam workshop at this event.

(Blog)

Launched FRONTIER JOURNEY, a Blog That Captures "People's Thoughts"and"People's Stories"

We started producing and publishing our own blog, "FRONTIER JOURNEY," in July. We publish weekly articles about "people" and "thoughts." We will expose and report on what we value and think about in running our company and the different stories of our industry that emerge at the frontlines every day through interviews with the "people" involved in our business. https://www.sunfrt.co.jp/blog/