#1Fiscal Year Ended March 2010 Investor Presentation May 2010 MITSUI FUDOSAN www.mitsuifudosan.co.jp/english#2Contents 1. Overview of Results for the Fiscal Year Ended March 31, 2010 (Fiscal 2009) 1-1: Income Statements (Former Segments) 8. Management Business (Brokerage) 8-1: Market Trends 3 8-2: Mitsui Fudosan's Strengths 27 28 1-2: Income Statements (New Segments) 4 9. Management Business (Property Management) 1-3: Balance Sheets & Cash Flow Statements 5 9-1: Mitsui Fudosan's Strengths 30 1-4: Disclosure of Market Value of Rental Properties 6 10. Forecast for the Fiscal Year Ending March 31, 2011 2. Earnings Trends 7 (Fiscal 2010) 32 3. Financial Strategy 8 11. Management Strategy 4. Leasing Business (Office Buildings) 11-1: Response to Maturity and Globalization 4-1: Market Trends 10 11-2: Response to Globalization 4-2: Mitsui Fudosan's Strengths 11 11-3: Initiating the Next Phase of Growth 34 35 36 4-3: Major Capital Expenditures 12 Appendices 4-4: Major Projects 13 5. Leasing Business (Retail Facilities) Appendix 1: Consolidated Balance Sheets (March 31, 2010) Appendix 2: SPC Investments and Off-Balance-Sheet Debt 38 5-1: Market Trends 15 (March 31, 2010) 39 5-2: Mitsui Fudosan's Strengths 16 Appendix 3: Shareholder Composition 40 5-3: Major Projects 17 Appendix 4: Leasing Business - Office Building Portfolio 41 Appendix 5: Leasing Business - Retail Facility Portfolio 42 6. Property Sales Business (Property Sales to Individuals) 6-1: Market Trends Appendix 6: New and Former Segments 43 19 Disclaimer 44 6-2: Mitsui Fudosan's Strengths 20 6-3: Major Projects 21 7. Property Sales Business (Property Sales to Investors) 7-1: Market Trends 23 7-2: Investment and Acquisitions among J-REITS 7-3: Mitsui Fudosan's Strengths 222 24 25 1#31. Overview of Results for the Fiscal Year Ended March 31, 2010 (Fiscal 2009) 2. Earnings Trends 3. Financial Strategy#41. Overview of Results for the Fiscal Year Ended March 31, 2010 (Fiscal 2009) 1-1: Income Statements (Former Segments) (Billions of yen) Year to March 2010 (FY2009) Year to March 2009 (FY2008) Change Results Results Operating income 120.5 171.5 -50.9 Leasing 99.7 99.5 0.2 Sales of housing, office buildings and land 12.0 48.6 -36.5 Housing sales 11.4 20.4 - 9.0 Property sales to investors 0.6 28.2 -27.5 Brokerage, consignment sales and consulting 7.4 18.1 -10.6 Property management 15.9 15.5 0.3 Construction, Sales of housing materials and merchandise, Facility operations, Other, Eliminations and corporate -14.7 -10.3 -4.4 Interest expense, in net -29.2 -29.2 0 Non-operating income/expenses 2.5 3.7 -1.2 (excl.interest expenses, in net) Extraordinary gains/losses 3.7 -30.1 33.8 Income taxes and minority interests -37.6 -32.4 -5.1 Net income 60.0 83.5 -23.4 Net income per share (yen) 68.39 95.10 -26.71 3#51. Overview of Results for the Fiscal Year Ended March 31, 2010 (Fiscal 2009) 1-2: Income Statements (New Segments) Operating income Leasing Property Sales Year to March 2010 (FY2009) Results (Billions of yen) Year to March 2009 (FY2008) Results Change 120.5 171.5 -50.9 95.5 94.1 1.3 12.4 49.2 -36.7 Property sales to individuals 11.4 20.4 -9.0 Property sales to investors 1.0 28.7 -27.7 Management 29.7 38.8 -9.1 Mitsui Home, Other, Eliminations and corporate -17.1 -10.6 -6.4 Interest expense, in net -29.2 -29.2 0 Non-operating income/expenses 2.5 3.7 -1.2 (excl.interest expenses, in net) Extraordinary gains/losses 3.7 -30.1 33.8 Income taxes and minority interests -37.6 -32.4 -5.1 Net income 60.0 83.5 -23.4 Net income per share (yen) 68.39 95.10 -26.71 4#61. Overview of Results for the Fiscal Year Ended March 31, 2010 (Fiscal 2009) 1-3: Balance Sheets & Cash Flow Statements (Billions of yen) Year to March 2010 (FY2009) Results Year to March 2009 (FY2008) Results Change Total assets 3,710.4 3.758.3 -47.9 Interest-bearing debt¹ 1,746.7 1,733.5 13.1 Shareholders' equity² 1,007.8 978.6 29.1 D/E ratio (times)³ 1.73 1.77 -0.04 Net cash provided by (used in) 84.3 -40.9 125.3 operating activities Net cash provided by (used in) -64.8 -141.6 76.7 investing activities Net cash provided by (used in) financing activities -19.7 182.2 -201.9 Free cash flow4 19.5 -182.6 202.1 Balance Sheets Cash Flow 1. Interest-bearing debt: consolidated bank loans + commercial paper + long-term debt due within one year + long-term debt due after one year 2. Shareholders' equity: Net assets - minority interests - new stock acquisition rights 3. D/E ratio: interest-bearing debt/shareholders' equity 4. Free cash flow: net cash provided by (used in) operating activities + net cash provided by (used in) investing activities 5#71. Overview of Results for the Fiscal Year Ended March 31, 2010 (Fiscal 2009) 1-4: Disclosure of Market Value of Rental Properties DISCLOSURE OF MARKET VALUE OF RENTAL PROPERTIES Effective the end of the year under review, the Company will disclose the market value of its rental properties according to "Accounting Standard for Disclosures about Fair Value of Investment and Rental Property." * Properties subject to disclosure: Properties being rented, investment properties, idle real estate Properties not subject to disclosure: Real property for sale; property used for manufacture/sale of goods, provision of services, or business operational purposes; property held by SPCs In the case of the Mitsui Fudosan Group, main properties subject to disclosure are office buildings, retail facilities, and rental housing units, while main properties not subject to disclosure are hotels operated in-house, golf courses, and properties used for in-house purposes. Of total tangible and intangible fixed assets stated in the consolidated balance sheets (amounting to ¥2,105 billion at March 31, 2010), properties subject to the aforementioned disclosure amounted to ¥1,845 billion. Rental income (after depreciation) from rental properties subject to disclosure amounted to ¥79 billion. Amount shown on consolidated balance sheets at fiscal year-end Market value at fiscal year-end Change (amount) (\ billions) 1,845 2,599 753 6#82. Earnings Trends Results bottomed in FY2009 and FY2010, and Mitsui Fudosan is now moving toward the next phase of growth. (Billions of yen) Operating Income ■Holding Trading Management (to FY2005) (Billions of yen) Net income Leasing Property Sales Management (from FY2006) 120 200 179.2 171.5 180 161.8 100 47.3 38.8 160 137.5 87.3 46.6 83.5 120.5 140 115.7 75.2 80 103.2 109.2 40.9 29.7 120 49.2 57.2 33.1 22.1 60 28.7 56.5 100 48.7 12.4 60 60 60 44.3 60 80 31.9 32.2 34.3 40 64 60 40 40 28.6 25.5 94.1 95.5 85.0 75.3 65.0 60.1 14.4 60.0 63.3 20 20 20 20 0 -15.7 -11.8 -11.7 -11.0 -8.8 Others* 2002 2003 2004 2005 2006 -10.3 2007 -10.6 2008 -17.1 2009 (Fiscal Year) * Others included the Construction, Sales of Housing Materials and Merchandise, Facilities Operations, and Other segments, and parent company G&A expenses through FY2005. The Mitsui Home and and Other segments have included parent company G&A expenses from FY2006. 0 7#93. Financial Strategy We will maintain a sound financial structure and our ability to invest in growth opportunities Interest-Bearing Debt and Off-Balance-Sheet Debt, D/E Ratio at Fiscal Year End (Billions of yen) 2,000 (Times) 2.22 Interest-bearing debtat fiscal year end (LHS) 1 Off-balance-sheet debt at fiscal year end (LHS) 2 D/E ratio (RHS) 3 2.50 1,733.5 1,746.7 1,740.0 2.00 1,550.4 2.00 1,500 1,397.2 1.86 1,321.5 1,279.0 1,000 500 95.0 0 03/3 1,258.4 1,199.2 1.60 1.40 1.33 1.77 1.73 1.50 1.00 399.0 421.0 410.0 342.0 0.50 246.0 215.0 193.0 04/3 05/3 06/3 07/3 08/3 0.00 09/3 10/3 11/3 (E) 1: Interest-bearing debt at fiscal year end - the sum of bank loans, commercial paper, long-term debt due within one year and long-term debt due after one year 2: Off-balance-sheet debt at fiscal year end -The debt associated with investments in SPCs that is within the Company's scope of responsibility 3: D/E ratio: Interest-bearing debt / shareholders' equity 8#104. Leasing Business (Office Buildings)#114. Leasing Business (Office Buildings) 4-1: Market Trends The rising vacancy rate in central Tokyo has moderated since summer 2009, but the increase continues. Although supply and demand trends require attention, positive signs include improved corporate earnings. Office Vacancy Rate (%) 10.0 8.57% (03/6,8) -Market vacancy rate (Central Tokyo 5 wards, large-scale) Mitsui Fudosan vacancy rate (Tokyo Metro/Parent basis) 8.75% 8.82% (10/3) (10/4) 8.0 5.8% 6.0 (03/9) 4.0 2.0 0.0 02/3 03/3 04/3 05/3 2.49% 3.9% (10/3) (07/11) 0.9% 0.9% (06/6) (07/6) 06/3 07/3 08/3 09/3 10/3 Source: Miki Shoji Co., Ltd. Trends of Supply Volume of Large-Scale Office Buildings within Tokyo's 23 Wards (Milllon m²) 2.5 Past supply volume (annual average) 2.0 Uncompleted ■Completed 2.16 1.03 million m²/year (total floor space) Forecast supply volume after '10 (annual average) 1.00 million m²/year 1.5 1.54 (total floor space) 1.53 1.0 1.25- 1.21 1.19 0.99 0.91 0.5 0.72 0.77 0.86 0.85 1.40 0.76 0.65 Source: 0.36 0.45 Mori Building Co., Ltd. 0.0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 (Calendar Year) 10#124. Leasing Business (Office Buildings) 4-2: Mitsui Fudosan's Strengths Office building development, leasing and management are core strengths Floor Space of Mitsui Fudosan Properties in 5 Wards of Central Tokyo (As of March 31, 2010)1 A portfolio balanced among outstanding central Tokyo locations Redevelopment capabilities that enable steady progress in redevelopment projects Stable long-term relationships with approximately 3,000 tenant companies WORKERS FIRST 三井のオフィス Shinjuku Ward ≈ 100,000m² Chiyoda Ward ≈ 200,000m² Floor Space of Mitsui Fudosan Properties by Area (As of March 31, 2010)1 Minato Ward ≈ 100,000m² Regional 20% Other Metropolitan Tokyo 5% 75% 5 Wards of Central Tokyo² 1: Consolidated basis, includes jointly held properties (in Japan) 2: Chiyoda Ward, Chuo Ward, Minato Ward, Shinagawa Ward, Shinjuku Ward Shinagawa Ward =30,000m² Chuo Ward ≈ 310,000m² 11#134. Leasing Business (Office Buildings) 4-3: Major Capital Expenditures Sustained investment in carefully selected projects Major Capital Expenditures Office buildings FY2006 Former JFE Building (land & building) 85.0 billion yen FY2007 Former Mitsui Life Insurance Otemachi Building (land & building) 118.0 billion yen Yodoyabashi Mitsui Building (land & building) 25.0 billion yen GranTokyo North Tower (building) 22.0 billion yen Yokohama Mitsui Building (land) FY2008 Chiyoda Fujimi 2-Chome Project (land) 36.0 billion yen LaLagarden Kawaguchi (building) Mitsui Outlet Park Sendai Port (building) FY2009 FY2010 Sumitomo Mitsui Banking Corporation Head Office Building (former JFE Building) (building) Muromachi East District Development Projects Areas 2-2 (building) LaLagarden Nagamachi (building) Mitsui Outlet Park Sapporo Kita- Hiroshima (building) Mitsui Outlet Park Shiga Ryuo (building) Retail facilities LaLaport Toyosu (building) 13.0 billion yen Lazona Kawasaki (Building) Mitsui Outlet Park Marine Pia Kobe (land) 11.0 billion yen Capital Expenditures 220.3 billion yen 340.4 billion yen 165.0 billion yen 61.9 billion yen 140.0 billion yen (E) Schedule for Major Office Buildings FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 Tokyo Midtown Completed Gran Tokyo North Tower Completed Yodoyabashi Mitsui Building Completed Sumitomo Mitsui Banking Corporation Head Office Building (former JFE Building) Acquired Started Completed Yokohama Mitsui Building Acquired Started Completed Muromachi East District Started Completed Development Projects Areas 2-2 Aomi Q Area Project Acquired Started Completed Muromachi East District Started Completed Development Projects Areas 2-3 Chiyoda Fujimi 2-Chome Project Acquired Otemachi 1-Chome Mitsui Building Acquired (former Mitsui Life Insurance Otemachi Building) Sanshin Building/Hibiya Mitsui Building Reconstruction Project Business Plan Formulation Business Plan Formulation Start & Completion Planned Start & Completion Planned 12#144. Leasing Business (Office Buildings) 4-4: Major Projects We deploy our development capabilities to continuously improve our portfolio. Major Newly Operational Projects Office Buildings by Year of Completion FY Completed 2010 Project Name Location Rentable Floor Space March 31, 2003 March 31, 2010 2011 Sumitomo Mitsui Banking Corporation Head Office Building Muromachi East District Development Projects Areas 2-2 Hiroshima Kamiyacho Project Nagoya Mitsui Building Shinkan Chiyoda-ku, Tokyo 46,000 m Within 5 years Chuo-ku, Tokyo Naka-ku, Hiroshima = Nakamura-ku, Nagoya 21,000 m 14,000 m 11,000 m 23% Within 5 years 17% Shimbashi 1-Chome Project Minato-ku, Tokyo Onarimon Project Minato-ku, Tokyo 5,000 m 6,000 m 2.26 million m Within 2.64 million m 14% 6-10 years Nihonbashi Honcho 3-Chome Reconstruction Project Chuo-ku, Tokyo 8,000 m 4% Tsukiji 5-Chome Project Chuo-ku, Tokyo 12,000 m Nonconsolidated basis; includes masterleased buildings Yokohama Mitsui Building Nishi-ku, Yokohama 49,000 m (Scheduled for reconstruction) 2012 Nihonbashi Honcho 2-Chome Area Project Chuo-ku, Tokyo 14,000 m Aomi Q Area Project Koto-ku, Tokyo = 44,000 m 2013 Muromachi East District Development Projects Areas 2-3 Chuo-ku, Tokyo 19,000 m Muromachi East District Development Projects Areas 1-5 Chuo-ku, Tokyo 8,000 m . Scheduled for completion in FY2014 and after • • • Sapporo Mitsui Building Reconstruction Project (Chuo-ku, Sapporo) Chiyoda Fujimi 2-Chome Project (Chiyoda-ku, Tokyo) Kita-Shinagawa 5-Chome Area 1 Redevelopment Project (Shinagawa-ku, Tokyo) Sanshin Building/Hibiya Mitsui Building Reconstruction Project (Chiyoda-ku, Tokyo) Nihonbashi 2-Chome Project (Chuo-ku, Tokyo) Otemachi 1-Chome Mitsui Building (Chiyoda-ku, Tokyo) FY completed and rentable floor space may change in the future. Some project names are tentative. Sumitomo Mitsui Banking Chiyoda Fujimi 2-Chome Project Corporation Head Office Building 13#155. Leasing Business (Retail Facilities)#165. Leasing Business (Retail Facilities) 5-1: Market Trends While sales in every category have been decreasing due to stagnant consumer spending, signs of improvement are starting to appear. 4% Year-on-Year Change in Sales by Category 0.3% 0.3% 0.0% 0% -2.1% -2.1% -0.7% -1.6% -1.7% -0.5% -0.2% -0.7% 2.8% -2.8% -1.4% -1.5% -4.3% -4% -2.3% -2.6% -2.7% -3.2% -3.5% -4.3% -6.8% -8% -12% 2002 General shopping centers 2003 Department stores Chain stores 2004 2005 -10.1% 2006 2007 2008 2009 (Calendar year) Source: Japan Department Stores Association, Japan Council of Shopping Centers, Japan Chain Stores Association 8% Mitsui Fudosan: Year-on-Year Change in Sales by Type of Retail Facility General shopping centers (market data) Outlet parks (6 existing facilities) -LaLaport (8 existing facilities) 4% 0% -3.3% -0.4% -4% -2.7% -8% -6.0% -6.7% -7.7% -8.0% -12% FY08/1Q (4-6/2008) FY08/2Q (7-9/2008) FY08/3Q (10-12/2008) FY08/4Q (1-3/2009) FY09/1Q (4-6/2009) FY09/2Q (7-9/2009) FY09/3Q (10-12/2009) -4.0% FY09/4Q (1-3/2010) Source: Japan Council of Shopping Centers 15#175. Leasing Business (Retail Facilities) 5-2: Mitsui Fudosan's Strengths Diverse types of facilities and a stable revenue structure Retail Facilities Sales' by Category (FY2009)* Ratio of Fixed to Sales-linked Rent by Category (FY2009)* Regional mall 三井ショッピングパーク 1.1. LaLaport 100% ≈5% =20% =20% 80% =40% Urban facilities Other 10% 10% Sales-linked 60% 10% 50% =95% rent Fixed rent Lifestyle center 40% =80% =80% 三井ショッピングパーク 1.1 LaLa garden 20% =60% 20% 0% m MITSUI *includes master-leased properties LaLaport Outlet Others OUTLET PARK Regional Mall MRGAVILET BARK Outlet Mall LaLaport Tokyo Bay 三井ショッピングパーク 1.1. LaLaport Mitsui Outlet Park Iruma m MITSUI Lifestyle Center J-Laka garden All facilities *includes master-leased properties Urban Facility CO OUTLET PARK LaLagarden Nagamachi 三井ショッピングパーク LaLa garden Kojun Building Urban Facility 16#185. Leasing Business (Retail Facilities) 5-3: Major Projects We develop facilities that are best suited to their area, with a focus on metropolitan Tokyo Mitsui Fudosan Retail Facilities in Metropolitan Tokyo Major Newly Operational Projects FY Opened Project Name Store floor Location 2009 (* indicates subleased or jointly owned property) LaLaport Iwata space Iwata, Shizuoka 50,000 m Stellar Town LaLagarden KAWAGUCHI LaLagarden KASUKABE 16 LaLa Terrace MINAMISENJU LaLaport Shin-Misato MITSUI OUTLET PARK Iruma COREDO Nihonbashi LaLaport Shin-Misato Misato, Saitama 60,000 m² LaLaport KASHIWANOHA LaLagarden Nagamachi Sendai, Miyagi 19,000 m 2010 Ginza Trecious* -Ginza Komatsu Reconstruction Project Chuo-ku, Tokyo 4,500 m² Kojun Building LaLaport TOKYO-BAY MITSUI OUTLET PARK Tama Minami Osawa Tokyo Midtown Shiodome City Center Aomi Q Area Project Ginza -Namikidori Building Urban Dock LaLaport TOYOSU MITSUI OUTLET PARK Makuhari LaLaport YOKOHAMA GINZA GLASSE LAZONA Kawasaki plaza Mitsui Outlet Park Sapporo Kita-Hiroshima Mitsui Outlet Park Shiga Ryuo Kita-Hiroshima, 23,000 m Hokkaido Gamo-gun, Shiga 27,000 m G1 Project* Chuo-ku, Tokyo TBD Mitsui Outlet Park Kisarazu Kaneda Treage Shirahata MITSUI OUTLET PARK Yokohama Bayside 2011 Ginza Komatsu Reconstruction Project* Chuo-ku, Tokyo = 8,000 m Ningbo Outlet Project* Ningbo, Zhejiang, China 16,000 m Mitsui Outlet Park Kurashiki 2012 Aomi Q Area Project* Mitsui Outlet Park Kisarazu Kaneda Kurashiki, Okayama ༤ 20,000 m 49,000 m = 25,000 m² LaLaport ⚫ Mitsui Outlet Park • LaLagarden • Urban facilities Koto-ku, Tokyo Kisarazu, Chiba FY opened and store floor space may change in the future. Some project names are tentative. Regional mall 三井ショッピングパーク 1.1. LaLaport Lifestyle center m MITSUI CO OUTLET PARK 三井ショッピングパーク 1.1. LaLa garden Urban Facilities 17#196. Property Sales Business (Property Sales to Individuals)#206. Property Sales Business (Property Sales to Individuals) 6-1: Market Trends Sales conditions are improving with economic recovery and government policies to support the housing market. Contract rates remain strong in metropolitan Tokyo, and unsold inventory is steadily trending downward. The market appears to have bottomed. Metropolitan Tokyo Condominium Market: Initial Month Contract Rate & Unsold Inventory (Thousand of Units) 12 Inventory (LHS) Initial month contract rate (RHS) Avg. initial month contract rate for 2008: 62.7% Avg. initial month contract rate for 2009: 69.7% (%) 100 10 82.8% 90 79.9% (10/3) (10/4) 8 80 6 70 4 60 2 50 Source: Real Estate Economic Institute Co., 0 40 Ltd. 04/1 04/7 05/1 05/7 06/1 06/7 07/1 07/7 08/1 08/7 09/1 09/7 10/1 New units launched (LHS) Metropolitan Tokyo Condominium Market: New Units Launched & Average Price per Unit (Thousand of Units). (Millions of yen) 100 Average unit price, Tokyo 23ward area (RHS) Average unit price, metro Tokyo (RHS) 70 61.2 (18.9%) 59.3 (-3.1%) (YoY comparison in parentheses) 75 85 84 49.2 74 51.9 (-12.5%) 60 60 50 50 46.6 (1.4%) (5.5%) 61 47.7 (2.8%) 51.4 (4.7%) 44 46.4 45.3 (-5.0%) 43 25 36 42.0 (10.6%) 50 40 50 41.0 41.0 (2.2%) (0.9%) (0.1%) 0 04 05 90 06 90 40 07 08 80 09 40 Source: Real Estate Economic Institute Co., 30 Ltd. 10 (Calendar year) 19#216. Property Sales Business (Property Sales to Individuals) 6-2: Mitsui Fudosan's Strengths We are accelerating the cash-to-cash cycle for assets while steadily promoting our strength in high-added-value properties Extensive bookings of high-cost properties will lower profitability in FY2010. We constantly acquire new land for development Strength in high-value-added properties consistently supports operations Sales, Land Acquisition Expenses and Operating Margin (Property Sales to Individuals) FY2009 Sales by Brand (Condominiums) park park COURT park Park Homes Park Mansion MANSION HOMES 35% Park Court 35% Park Tower Park City 30% park park TOWER ICITY FY2009 Sales by Region (Condominiums) (Billions of yen) 400 (%) 12.0 11.4 326.0 Other regions 5% 9.4 305.0 300.9 Kansai & Chubu 300 270.3 9.0 5% 237.8 6.7 200 6.0 142.3 111.7 3.8 95.4 100 3.0 107.4 2.5 0 0.0 Metropolitan Tokyo 90% 2006 2007 2008 2009 Sales (LHS) 2010 (Calendar years) (E) Land Acquisition Expenses Operating Margin 20#226. Property Sales Business (Property Sales to Individuals) 6-3: Major Projects Competitive products primarily in metropolitan Tokyo Major Projects park HOMES Condominium Brand Lineup Small-scale condominium, properties with short sales cycle park park MANSION High-end COURT High-grade urban condominiums condominiums FY Booked Property Name Location Total Units (Mitsui Fudosan Share) 2009 Park Court Akasaka The Tower Minato-ku, Tokyo 479 (70%) Park City Hamadayama Suginami-ku, Tokyo 522 (100%) Park City Musashi-Kosugi Mid Sky Tower Kawasaki, Kanagawa 794 (80%) Hiroo Garden Forest Minato-ku, Tokyo 667 ( 50%) Prime Arena Shin-Yurigaoka Kawasaki, Kanagawa 393 ( 70%) Park Homes Kichijoji Gran Terrace Park Court Akasaka The Tower 2010 Park Court Azabu-Juban The Tower Minato-ku, Tokyo 369 ( 40%) Park Tower Gran Sky Shinagawa-ku, Tokyo 613 (100%) park High-rise condominiums 2011 Kemigawahama Residence Chiba, Chiba 379 (43%) TOWER park Large-scale developments that create CITY their own environment Park City Minami-Senrioka Park City Kashiwanoha Campus Nibangai Kashiwa, Chiba Settsu, Osaka 586 (100%) 880 (100%) THE ROPPONGI TOKYO Minato-ku, Tokyo 611 (45%) (Roppongi 3-Chome Redevelopment) 2012 Meguro-ku Shimomeguro 2-Chome Project Meguro-ku, Tokyo 231 (100%) Roppongi 1-Chome South Area Urban Redevelopment Project Minato-ku, Tokyo 269 (100%) Park Tower Gran Sky Park City Hamadayama FY2013 and after Musashikosugi Station South Exit Area Urban Redevelopment Project ⚫lidabashi Station West Exit East Area Urban Redevelopment Project Kita-Shinagawa 5-Chome Area Urban Redevelopment Project ■ Kashimada Station West Area Urban Redevelopment Project Units become available for sale over multiple fiscal years at some properties. Moreover, the fiscal year in which units become available for sale may change in the future. Some project names are tentative. Park Urban condominiums for small households park Resort condominiums SEASONS Land Bank (As of March 31, 2010) ➤ Land acquired (confirmed): approximately 19,000 units (Mitsui Fudosan share only) Project stage (incl. redevelopment): approximately 13,000 units (before sharing) 21#237. Property Sales Business (Property Sales to Investors)#247. Property Sales Business (Property Sales to Investors) 7-1: Market Trends J-REIT market: various measures and the establishment of a real estate market stabilization fund have accelerated the trend toward recovery Since autumn 2009, institutional reform and measures to strengthen creditworthiness and support financing Trend toward recovery in the J-REIT market Resumption of capital increases through public offerings Progress in mergers and restructuring Resumption of investment corporation bond issues Improvement in the debt financing environment The external growth cycle is beginning again with the resumption of new property acquisitions in the J-REIT market Recovery expected in the overall real estate investment market, which is central to the J-REIT market 23#257. Property Sales Business (Property Sales to Investors) 7-2: Investment and Acquisitions among J-REITS The autumn 2009 establishment of a real estate market stabilization fund has led to the resumption of capital increases through public offerings, investment corporation bond issues and property acquisition in the J-REIT market, and restructuring has progressed. The conditions that could support a recovery of the overall real estate investment market are now in place. Acquisition of Assets by J-REITS (Billions of yen) 600 500 400 300 200 100 September 2009 Real estate market stabilization fund established Since October 2009 Public offerings of investment units Mergers (publicly announced) Investment corporation bond issues 7 6 (As of April 30, 2010) 82.6 225.9 3.5 2008 2008 2008 2008 2009 2009 2009 2009 2010 1Q 2Q 3Q 4Q 1Q 20 3Q 4Q 1Q (Calendar Year) Source: The Association for Real Estate Securitization 24#267. Property Sales Business (Property Sales to Investors) 7-3: Mitsui Fudosan's Strengths Mitsui Fudosan is keeping an eye on recovery in the real estate investment market while moving forward with current projects Inventory of Properties for Sale to Investors* Operating office buildings Planned & under development ≈ 30% ≈ 30% A model for growing in cooperation with a diverse array of investors Management J-REITS managed by the Mitsui Fudosan Group Sales Operating retail facilities ≈ 25% Operating rental housing properties ≈ 15% Management Mitsui * Consolidated basis. On-balance sheet real properties for sale including advances paid for purchases, and assets held by SPCs for the trading business Fudosan Group Sales Private funds structured by the Mitsui Fudosan Group Management Total: 519 billion yen (As of March 31, 2010) On balance sheet: 281 billion yen Off balance sheet: 238 billion yen Sales Corporations 25#278. Management Business (Brokerage)#288. Management Business (Brokerage) 8-1: Market Trends Market conditions are improving. Contracts are rising and contracted prices are starting to increase. YoY Comparison of Existing Home Sales Contracts Number (Units) 4,000 3,000 2,000 1,000 Number of sales contracts (LHS) YoY (RHS) M 0 07/9 07/12 08/3 08/6 08/9 08/12 09/3 09/6 09/9 09/12 (%) 30 25 20 15 10 5 0 -10 -15 10/3 Source: Real Estate Information Network for East Japan, Monthly Market Watch YoY Comparison of Existing Home Sales Contract Prices (Millions of yen) 27.0 Contract prices (LHS) YoY (RHS) 26.0 25.0 24.0 H 23.0 07/9 07/12 08/3 08/6 08/9 08/12 09/3 09/6 09/9 09/12 (%) 20 15 10 5 -5 -10 10/3 Source: Real Estate Information Network for East Japan, Monthly Market Watch 27#298. Management Business (Brokerage) 8-2: Mitsui Fudosan's Strengths The Rehouse network in the Tokyo metropolitan area has been re-engineered, and residential brokerage is robust ■ Re-engineering of the brokerage business (Mitsui Rehouse affiliates) ■ Recovery of residential brokerage for end users Full-scale recovery of corporate brokerage expected Monthly Trends in Number of Contracts (YoY) for Tokyo Metropolitan Area Rehouse Network (%) 30 20 Condominiums -Land & detached houses -Total 10 0 -10 -20 06/4 06/10 07/4 07/10 08/4 08/10 09/4 09/10 10/4 Source: Mitsui Real Estate Sales, Monthly Trend 28#309. Management Business (Property Management)#319. Management Business (Property Management) 9-1: Mitsui Fudosan's Strengths Fee income based on stable property management Property Management Business Results Revenue from operations (LHS) Tenant improvements (Billions of yen) Property management 120 Operating income (RHS) (Billions of yen) 20 102.4 102.4 99.6 100.5 100 90.4 25.3 21.2 15.9 15 29.3 15.4 15.5 77.4 78.2 33.6 80 14.3 69.5 31.0 12.7 22.1 25.9 60 22.3 10.8 10 10.7 40 7.7 77.1 79.2 73.1 66.0 59.3 56.1 5 51.5 47.2 20 0 0 2002 2003 2004 2005 2006 2007 2008 2009 (Fiscal Year) 30#3210. Forecast for the Fiscal Year Ending March 31, 2011 (Fiscal 2010)#3310.Forecast for the Fiscal Year Ending March 31, 2011 (Fiscal 2010) (Billions of yen) Operating income Leasing Property sales Year to March 2011 (FY2010) Forecast 121.0 Year to March 2010 (FY2009) Change Results 120.5 0.4 91.0 95.5 -4.5 18.0 12.4 5.5 Property sales to individuals 8.1 11.4 -3.3 Property sales to investors 9.9 1.0 8.9 Management 30.0 29.7 0.2 Mitsui Home, Other, Eliminations and corporate -18.0 -17.1 -0.8 Interest expense, in net -29.0 -29.2 0.2 Non-operating income/expenses 3.0 2.5 0.5 (excl.interest expenses, in net) Extraordinary gains/losses -10.0 3.7 -13.7 Income taxes and minority interests -35.0 -37.6 2.6 Net Income 50.0 60.0 -10.0 Real property for sale FY2010 (E) FY2009 (Billions of yen) Change Interest-bearing debt New investments Recovery of costs 330.0 306.4 23.5 Interest-bearing debt FY2010 (E) 1,740.0 FY2009 1,746.7 (Billions of yen) Change -6.7 360.0 300.6 59.3 Tangible and intangible assets FY2010 (E) FY2009 (Billions of yen) Change New investments Depreciation 140.0 61.9 78.0 50.0 50.2 -0.2 32#3411. Management Strategy#3511. Management Strategy 11-1: Response to Maturity and Globalization Mitsui Fudosan is innovating its business model by taking the perspective of customers regarding accelerating structural socioeconomic changes Structural Socioeconomic Changes Maturity Population composition (higher average age, low birthrate, population decline) Diversifying values and lifestyles □ Economics (intensifying corporate competition, streamlining in the public sector) ☐ Asset stock enhancement Mitsui Fudosan Group Responses Grasp socioeconomic changes to create new levels of value Create enriched, affluent urban spaces Globalization Acceleration of cross-border real estate investment Globalization of corporate activities Intensifying economic competition among cities in East Asia □ Growing inbound business and tourism Becoming a real estate solution partner in the global market 34#3611. Management Strategy 11-2: Response to Globalization Mitsui Fudosan has finalized a pilot project to participate in China and other dynamic East Asian areas London (Mitsui Fudosan (U.K.) Ltd.) Advance into East Asia Singapore Tokyo Shanghai (Mitsui Fudosan (Shanghai) Consulting Co., Ltd.) New York (Mitsui Fudosan (Asia) Pte. Ltd.) Respond to needs in East Asia (Mitsui Fudosan America, Inc.) *Construction has started at the Shanghai Condominium Project (February 2010) and at the Ningbo Outlet Project (April 2010). 35#3711. Management Strategy 11-3: Initiating the Next Phase of Growth Quickly complete crisis response and initiate the next phase of growth Review, strengthen and re-engineer each core business Response to maturity: business development that accommodates accelerating changes in the domestic market environment Response to globalization: specify growth strategies for China and other East Asian nations Maintain a sound financial structure that supports growth 2011 2012 2013 2014 2015 2016 2009 2010 Respond to crisis and prepare for next phase of growth Formulate new business plan for the medium-to-long term 36#38Appendices#39Appendix 1: Consolidated Balance Sheets (March 31, 2010) Real property for sale (including advances paid for purchases) Total assets: 3,710.4 Mitsui Fudosan Other: 16.1 (2%) Current assets 987.5 Liabilities (Billions of yen) 2,681.1 America G: Cash and time 0.6 (0%) ...deposits 63.2 Interest-bearing debt 1,746.7 Real property for sale (including advances 682.5 paid for purchases) Mitsui Fudosan 264.5 Mitsui Fudosan (39%) Residential 401.2 Equity investments in properties for sales 73.4 (59%) Other current assets 168.3 Fixed assets 2,722.8 Tangible and intangible fixed assets 2,105.8 Deposits from tenants 366.7 Other liabilities 567.7 Net assets (Shareholders' equity) 1,029.2 (1,007.8) Investment securities 392.7 Lease deposits 175.7 Other fixed assets 48.5 Capital expenditures 61.9 Depreciation 50.2 Interest-bearing debt breakdown/duration (B/S basis) Short-term debt, CP and bonds redeemable within one year 313.4 (18%) Long-term debt and SBs 1,433.3 (82%) Interest-bearing debt breakdown/SBs or bank borrowing, CP SBs 245.0 (14%) Bank borrowing, CP 1,501.7 (86%) 38#40Appendix 2: SPC Investments and Off-Balance-Sheet Debt (March 31, 2010) Assets for Trading Business: 238.0 billion yen Total exposure: 548.0 billion yen (Billions of yen) Assets 548.0 Debt 410.0 Assets to be 65.0 Off-balance-sheet 410.0 valued up debt Assets to be developed 173.0 Assets for holding 310.0 Equity 138.0 Equity investments in properties for sale 73.0 On-balance-sheet 138.0 Investments + Investment securities 65.0 Amounts on the right represent the total amount of assets, debt and equity corresponding to Mitsui Fudosan's equity share in each individual vehicle. Disclosure standards differ from those used for the "Guideline Applied to Disclosure of SPCs" presented since the year ended March 31, 2007. All figures are rounded off to the nearest billion yen. The categories "Assets to be valued up," "Assets to be developed," and "Assets for holding" conform to proprietary Mitsui Fudosan standards. 39#41Appendix 3: Shareholder Composition Shareholder Composition as of March 31 2010 6.2 34.5 49.4 9.9 2009 6.3 37.0 47.3 9.4 2008 6.3 33.8 50.3 9.6 2007 6.4 36.7 47.8 8.8 2006 7.5 39.1 45.1 8.3 2005 9.3 45.7 37.6 7.5 2004 9.9 47.8 34.4 7.9 2003 10.9 52.9 29.1 7.1 2002 10.7 51.6 28.9 8.9 2001 10.9 49.0 30.2 9.9 2000 13.4 46.7 27.8 12.2 1999 11.5 52.2 25.1 11.3 1998 10.7 51.1 26.3 11.9 1997 11.9 48.8 25.6 13.7 1996 12.3 47.6 25.3 14.8 1995 13.5 50.1 19.8 16.6 1994 14.0 49.4 19.3 17.3 1993 14.7 48.3 19.1 17.9 1992 14.7 47.0 20.0 18.3 1991 16.1 48.1 15.2 20.6 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Individuals ■Institutional Foreign ■ Other 40#42Appendix 4: Leasing Business - Office Building Portfolio Name Shinjuku Mitsui Building Location Floor space Rentable floor space Shinjuku-ku, Tokyo 179,000 m² ≈ 104,000 m ≈ 212,000 m² GranTokyo North Tower Chiyoda-ku, Tokyo Kasumigaseki Building Nihonbashi Mitsui tower Chiyoda-ku, Tokyo ≈153,000 m Chuo-ku, Tokyo Tokyo Midtown Minato-ku, Tokyo Floors Year completed 55 +3 below ground September 1974 ≈ 65,000 m² 434 below ground ≈ 96,000 m 36+3 below ground ≈ 130,000 m ≈ 51,000 m² 384 below ground ≈ 311,000 m² ≈ 184,000 m² 54+5 below ground October 2007 April 1968 July 2005 March 2007 Building Nihonbashi 1-Chome Name Gate City Osaki Location Shinagawa-ku, Tokyo Chuo-ku, Tokyo ≈ 98,000 m Floor space Rentable floor space Floors Year completed ≈ 50,000 m 20+4 below ground January 2004 ≈ 291,000 m ≈155,000 m² 24+4 below ground January 1999 Jinbocho Mitsui Building Chiyoda-ku, Tokyo ≈ 88,000 m² ≈ 51,000 m 23+3 below ground March 2003 Akasaka Biz Tower Minato-ku, Tokyo ≈ 218,000 m ≈ 99,000 m² 393 below ground January 2008 Sumitomo Mitsui Banking Corporation head Office Buildings Chiyoda-ku, Tokyo ≈ 80,000 m² ≈ 46,000 m 234 be low ground July 2010 41#43Appendix 5: Leasing Business - Retail Facility Portfolio LaLaport Name Location Floor space LaLaport Tokyo-Bay Funabashi, Chiba ≈ 307,000 m² LaLaport Yokohama Yokohama, Kanagawa ≈ 226,000m Urban Dock LaLaport Toyosu Koto-ku, Tokyo ≈ 165,000 m² Lazona Kawasaki LaLaport Shin-Misato Kawasaki, Kanagawa ≈ 172,000 m² Store floor space 113,000 m² Stores Opening 540 stores April 1981 92,000m 280 stores March 2007 Mitsui Outlet Park ≈ 63,000m 22 190 stores ≈ 78,000 m² 300 stores September 2006 October 2006 Urban Facilities Misato, Saitama ≈142,000 m ≈ 60,000 m² ≈ 170 stores September 2009 LaLagarden OUTLET OUTLET PARK MAT SER OUTLET PARK Location Name Mitsui Outlet Park Sapporo Kita-Hiroshima Kita-Hiroshima, Hokkaido Mitsui Outlet Park Shiga Mitsui Outlet Park Marine Ryuo Gamo-gun, Shiga Pia Kobe Kobe, Hyogo Koujun Building Chuo-ku, Tokyo LaLagarden Kawaguchi Kawaguchi, Saitama Floor space ≈ 40,000 m ≈ 44,000 m² ≈ 36,000 m ≈ 17,000 m ≈ 60,000 m Store floor = 23,000 m ≈ 27,000 m² = 22,000m ≈ 8,500 m² ≈ 26,000m² space Stores 130 stores 160 stores 130 stores Opening April 2010 July 2010 October 1999 19 stores October 2004 = 90 stores November 2008 42#44Appendix 6: New and Former Segments Segment Reorganization Chart Leasing Former Segments Office Buildings Retail Facilities Residential (Residential leasing, etc.) (Mitsui Home) Repark, Others (Repark) New Segments Leasing Office Buildings Retail Facilities Other Sales of Housing, Office Buildings and Land Housing Sales and Other Sales Sales of Properties to Investors (Mitsui Home) Property Sales to Individuals Property Sales to Investors Construction Property Management Brokerage, Consignment Sales and Consulting Sales of Housing Property Management Tenant Improvements Brokerage Consignment Sales Consulting Housing Materials Property management Brokerage, Asset management, etc. Materials and Merchandise Facility Operations Other Other Merchandise Merchandise Facility Operations Other *Major segment changes are shown above. Other segments changes have also been implemented. Property Sales Management Mitsui Home Other 43#45Disclaimer This presentation contains forward-looking statements that are based on information available and our judgment when we issued the presentation, and are subject to risks and uncertainties. Actual results may differ from our forecasts depending on factors including changes in economic conditions, market trends and operating conditions. Although we exercised due care in preparing this presentation, we assume no obligation to update, revise or correct the statements and do not warrant their usefulness, suitability for a specific purpose, functionality or reliability. This presentation is not intended to solicit investment. Investment decisions should be based solely on the judgments of the investor. 44