Investor Relations

Leasing

Principal Office Buildings Opened in the March 2011 Fiscal Year

NameLocation (Tokyo CBD)CompletionGross floor area (m2)
Sumitomo Fudosan Iidabashi First Tower Bunkyo Ward Apr. 10 68,382
Sumitomo Fudosan Shibuya First Tower Shibuya Ward Aug. 10 52,942
La Tour Daikanyama (Residence) Shibuya Ward Sep. 10 49,954
Sumitomo Fudosan Hanzomon Ekimae Building Chiyoda Ward Mar. 11 17,220
Total 188,498

Note: Figures for gross floor area indicate the area managed by Sumitomo Realty.

Sumitomo Realty's Strengths

The Company made its full-scale entry into the leasing business in the latter half of the 1970s. In 1995, following the collapse of Japan’s economic bubble, we were the first company in the industry to restart construction work on office buildings. We paid particular attention to large-scale projects in Tokyo CBD (Central Business District), especially those areas legally designated for redevelopment.
  We currently operate about 200 buildings for lease. The advanced interior features of our buildings are complemented with distinctive exterior designs, including hotel-like entranceways and all-glass exteriors. Sumitomo Realty creates innovative buildings with strong market presences.


Overview of the Fiscal Year

In the Tokyo office building market, which accounts for more than 90% of our portfolio, there was a growing sense that the market had hit bottom in the fiscal year under review. From the beginning of the year, there was a trend toward transactions undertaken to increase efficiency, such as the consolidation of multiple offices into a single location. Tenant demand generally recovered, centered on large buildings, and there was a decline in cancellations that stemmed from business withdrawals and other restructuring initiatives.
  In this environment, the vacancy rate for existing buildings peaked in the second quarter, and at the end of March, the vacancy rate was down by a small margin, the first decline in three years.

We made favorable progress in attracting tenants to new buildings, and buildings that opened during the year under review, such as the Sumitomo Fudosan Iidabashi First Tower and the Sumitomo Fudosan Shibuya First Tower, became fully occupied. In addition, buildings that opened for occupancy during the previous year, such as the Sumitomo Fudosan Shiodome Hamarikyu Building, made a full-year contribution to our results. However, due to a year-on-year increase in the vacancy rate for existing buildings and an increase in rent reductions when leases were renewed, revenue from operations decreased 0.2%, to ¥292.9 billion, and operating income was down 9.6%, to ¥88.2 billion.


Outlook

In the March 2012 fiscal year, special purpose entities (SPEs) will be brought within the scope of consolidation. As a result, dividend income from SPEs will be eliminated, and revenue will decline year on year. However, contributions to our performance will be made by the full-year results of properties that were completed in the year under review, such as the Sumitomo Fudosan Iidabashi First Tower and the Sumitomo Fudosan Shibuya First Tower. Moreover, contributions will be made by new buildings scheduled to be opened during the year, such as the Iidabashi Fujimi Project and the Nishi Shinjuku 8-Chome Project. Accordingly, we expect revenue from operations to decline 6.1%, to ¥275.0 billion, and operating income to increase for the first time in three years, rising 0.9%, to ¥89.0 billion.

Leasing
SUMITOMO REALTY'S PORTFOLIO

Major Flagship Buildings

Name No. of floors
(above ground /
below ground)		 Completion
(scheduled)		 Location
(Tokyo CBD)		 Gross floor
area (m2)
Izumi Garden Tower 43 / 4 Oct. 02 Minato Ward 205,574
Shinjuku Sumitomo Building 52 / 4 Mar. 74 Shinjuku Ward 177,467
Shinjuku Central Park City 44 / 2 Feb. 10 Shinjuku Ward 130,226
Shinjuku Oak City 38 / 2 Jan. 03 Shinjuku Ward 117,446
Shiodome Sumitomo Building 25 / 3 Jul. 04 Minato Ward 99,913
Sumitomo Fudosan Mita Twin Building West 43 / 2 Sep. 06 Minato Ward 98,338
Tokyo Shiodome Building 37 / 4 Jan. 05 Minato Ward 95,128
Shinjuku NS Building 30 / 3 Sep. 82 Shinjuku Ward 75,046
Sumitomo Fudosan Iidabashi First Tower 34 / 3 Apr. 10 Bunkyo Ward 68,382
Shibakoen First Building 35 / 2 Jun. 00 Minato Ward 63,822
Chiyoda First Building West 32 / 2 Jan. 04 Chiyoda Ward 61,245
Sumitomo Fudosan Aobadai Tower 33 / 3 Aug. 09 Meguro Ward 55,773
Sumitomo Fudosan Iidabashi Building No. 3 24 / 2 Oct. 02 Shinjuku Ward 53,047
Sumitomo Fudosan Shibuya First Tower 25 / 3 Aug. 10 Shibuya Ward 52,942
Sumitomo Fudosan Iidabashi First Building 14 / 2 Mar. 00 Bunkyo Ward 52,747
Sumitomo Fudosan Shiodome Hamarikyu Building 21 / 2 Aug. 09 Chuo Ward 47,951
Chiyoda First Building East 17 / 2 Oct. 98 Chiyoda Ward 37,473
Sumitomo Fudosan Nishi Shinjuku Building 33 / 2 Apr. 09 Shinjuku Ward 37,317
Sumitomo Fudosan Shibakoen Tower 30 / 2 Oct. 01 Minato Ward 35,549
Sumitomo Fudosan Mita Twin Building East 17 / 1 Aug. 06 Minato Ward 35,047
Shibuya Infoss Tower 21/ 4 Mar. 98 Shibuya Ward 34,460
Sumitomo Fudosan Akihabara Building 19 / 3 Jun. 09 Chiyoda Ward 31,991
Roppongi First Building 20 / 4 Oct. 93 Minato Ward 31,516
zumi Garden Tower Shiodome Sumitomo Building
Note: Figures for gross floor area indicate the area managed by Sumitomo Realty.

In the Tokyo CBD (Central Business District), where buildings that meet the three conditions for prime properties-close, new and large-are in strong demand, our competitive portfolio will provide a strong foundation for us to utilize our strengths-development of high-value-added office buildings, tenant leasing and property management. We will utilize that foundation to maximize the earnings potential of our office building operations and build a strong base for the achievement of sustainable growth in the years ahead.

Shiodome Sumitomo Building

State-of-the-art Facilities

Before 19811982-19961997 and after
Earthquake protection Previous quake-resistant structure New quake-resistant structure Anti-sway structure
Ceiling height* 2.5m 2.7m 2.9-3.3m
Floor load 300 kg/m2 300-500 kg/m2 500-1,000 kg/m2
Air conditioning Central air conditioning system Climate control zones Separate climate control systems
Power capacity 45 VA/m2 60-70 VA/m2 85 VA/m2 and over

*Includes raised floors

Strengths of Sumitomo Realty’s Portfolio

Our portfolio includes many competitive prime properties located in central Tokyo. As of the end of March 2011, our leasing portfolio had a gross floor area of 3.98 million square meters and an average age of 14 years, the lowest among Japan’s major real estate companies. About 47% of the buildings in our portfolio were completed in the past 10 years. Also, 94% of the buildings in our portfolio were located in the 23 wards of Tokyo, with 86% in Tokyo CBD. Furthermore, 82% of the portfolio was made up of large-scale buildings with more than 10,000 square meters of gross floor area, and about 99% of the buildings meet or exceed earthquake-resistance standards that took effect in 1981 and are a key yardstick for earthquake safety. Moreover, nearly half of our buildings have been completed since 1997, when we took the lead in the application of new building design concepts. These high-quality buildings offer leading-edge earthquake-resistant structures,

uninterruptible power sources, separate climate control systems for each suite, reinforced floors for heavy loads, high-capacity electrical systems, high ceilings and other attractive features, and after the Great East Japan Earthquake they have been the focus of strong demand from many tenants.


Competitive Growth Foundation

Including the buildings that we expect to open during the Fifth Management Plan (2011–2013)*, prime properties will account for an even higher percentage of our portfolio. To respond to the change in market demand toward prime properties and away from less-attractive buildings, such as those with low earthquake resistance, we have been investing aggressively in new building construction, thereby further increasing the concentration of prime properties in our portfolio.

*Fiscal year ending March 31

Principal Projects from the 5th Management Plan (from 2011)

Name Location
(Tokyo CBD)		 Expected
completion		 Gross floor area
(Tsubo*)
Projects in the 5th Management Plan (from 2011 to 2013)
Total Gross Floor Area of Projects Completed in the March 2011 Fiscal Year 60,000
Sumitomo Fudosan Shibuya Infoss Annex Shibuya Ward Apr. 11 1,800
Iidabashi Fujimi Project Chiyoda Ward Apr. 11 6,700
Nishi Shinjuku 8-Chome Project Shinjuku Ward Dec. 11 54,500
Sumitomo Fudosan Tamachi First Building Minato Ward Jan. 12 6,700
Sumitomo Fudosan Shibuya Garden Tower Shibuya Ward Apr. 12 18,000
Total Apr. 10-Mar. 13 147,700
Projects After the 6th Management Plan (from 2014)
Nihonbashi 2-Chome Project Chuo Ward 40,000
Roppongi 3-Chome Project Minato Ward 60,000

* 1 tsubo=3.3m2"

Total Gross Floor Area for Leasing (Years ended March 31)

(Thousand tsubo)

Total Gross Floor Area for Leasing (Years ended March 31)
Shibuya Nanpeidai Project