The Company's real estate brokerage business is handled by Sumitomo Real Estate Sales Co., Ltd., which was established in 1975 to conduct sales of condominiums developed by Sumitomo Realty. After entering the real estate brokerage sector in 1979, Sumitomo Real Estate Sales achieved significant success in that field, and it was listed on the Tokyo Stock Exchange in 1998.

Under the STEP brand name, Sumitomo Real Estate Sales operates a network of brokerage offices with close ties to local communities. The network has been steadily expanded and upgraded, and the number of offices reached 243 by the end of March 2009. Because all of the brokerage offices are directly operated, the network boasts high profit margins. Sumitomo Real Estate Sales holds the number one position in the industry in terms of brokerage revenue from direct operations and in terms of profitability. In the future, the company will continue working to expand its marketing base and increase its market share.

The existing home market was severely impacted by the deteriorating financial environment and the number of transactions substantially decreased, including corporate transactions and large-amount transactions. In addition, while the number of existing condominium transactions was firm in the first half of the year, it declined from the third quarter due mainly to weak demand.

In this market environment, the number of transactions in our mainstay brokerage operations fell 6.5% year on year, to 27,822; transaction prices were down 20.7%, to ¥29.5 million; and total transaction value decreased 25.9%, to ¥821.2 billion.

Consequently, revenue from operations was down 26.4%, to ¥43.1 billion, and operating income declined 56.3%, to ¥8.8 billion. We opened up four new directly managed brokerage offices in the Tokyo metropolitan area, in such locations as Honancho and Todoroki, and one office in another area, for a total of five offices. At the end of the year under review, our nationwide total was 243 offices.

In the March 2010 fiscal year, we will strive to increase sales efficiency through a reinforced IT strategy and to improve the return on expenditures, such as on advertising. Moreover, we will aim for an increase in the number of brokerage transactions and a return to growth in profits.

As a result, in the March 2010 fiscal year we are forecasting revenue from operations of ¥45.0 billion, up 4.4%, and operating income of ¥10.0 billion, an increase of 14.3%.