Section 1. Becoming a Consolidated Subsidiary of Mitsui O.S.K. Lines and Promoting Management Plans

Daibiru had experienced a difficult management environment during the period covered by the previous plan, Daibiru-3D Project Phase II, with vacancy rates remaining high and weakening rent levels. Of the plan’s profit targets, only the ordinary income target (9.8 billion yen) was achieved, because other than the acquisition of Aoyama Rise Square in April 2010, the company failed to acquire office buildings in Tokyo. With the company celebrating its 90th anniversary in 2013, the new plan would position the ten years leading up to the 100th anniversary as a period of preparation to chart a path for the next 100 years. By formulating this plan, Daibiru committed itself to creating a new 100-year path based on the expertise it had acquired as a pioneer in the rental office business.

The plan called for 100 billion yen to be invested in prior investment areas over the course of five years. The company was to invest in quality assets in Tokyo’s three central wards (Chiyoda, Minato, and Chuo), expand its assets in the senior citizen housing sector, and develop high-quality office buildings overseas in Vietnam. The plan also called for investment in a project to rebuild the new Shin-Daibiru Building with the goal of strengthening the competitiveness of existing assets, improving environmental performance, and implementing the company’s business continuity plan, in addition to improving the competitiveness of existing buildings through renovations. The plan included specific action plans as measures for supporting the competitiveness of assets: making further improvements to office buildings and services, organization-wide initiatives for human resource development, and enhancing recognition through a brand strategy.

One of the acquisitions made in order to expand the company’s assets in the senior citizen housing sector was Aria Ebisu Minami, a fee-based assisted living facility near Ebisu Station on the JR Yamanote Line. It was an excellent property in a peaceful residential environment with good access to the city center, and facility management was handled by Benesse Style Care.

In March 2016, Daibiru established the Real Estate Development Office (now the Investment Development Department), which would specialize in the acquisition and development of real estate within Japan, as the company accelerated its investment in top-quality assets in downtown Tokyo in particular.

For Design 100 Project Phase II, which was formulated in April 2018 (and covered fiscal 2018 through 2022), the company established the theme of “returning to our management philosophy” and set its sights on a new leap forward in light of the fact that the company had ended up falling short of its Phase I investment plans despite more-or-less achieving its revenue and profit targets. The total investment amount was set at 120 billion yen. The priority items were to acquire large office buildings in downtown Tokyo, to expand the company’s investment targets, to promote its overseas businesses, to maintain and enhance the competitiveness of existing assets, and to strengthen and expand the company’s building management operations.

In fiscal 2022, the final year of Design 100 Project Phase II (which covered fiscal 2018 through 2022), operating revenue was 42,683 million yen, operating income was 9,908 million yen, ordinary income was 10,363 million yen, and net income attributable to the parent company shareholder was 8,846 million yen, which met our net income target under that plan. With regard to our investment plan, we greatly exceeded the targets in the original plan as a result of investments both in Japan and abroad following Mitsui O.S.K. Lines’ acquisition of our company in April 2022 to make it a full subsidiary.