■Sun Frontier Real Estate ＜8934＞ Growth Strategy

3. Growth Strategy and Priority Measures

In the next medium-term management plan, diversification of real estate utilization combining development and service/operation will be promoted, and growth will be accelerated by expanding business areas and areas. In the office market, as the aging of small and medium-sized buildings progresses in Tokyo, where companies are concentrated, demand for renovation and rebuilding that suppresses waste of resources is strong, so the business area will be expanded to new construction. Also, since small-scale real estate ownership products focus on education and medical care, and long-term cash flow is expected, it is a market with high potential for growth. In addition to the 23 wards of Tokyo, we will respond to customer needs nationwide by expanding the area to major cities such as Osaka and Nagoya and surrounding regions. It is also planned to expand the area to Osaka and Nagoya in terms of rental conference room management. There are many national-scale companies among existing customers of rental conference rooms, and since they also receive inquiries about the Osaka/Nagoya area, the company believes that demand is high. In the residential market, we will provide high-quality residential real estate in New York and Vietnam, where population growth and high growth rates continue, and in the Tokyo area, where overmove-in continues.

The total investment amount in the next medium-term management plan is expected to be 310 billion yen, and the policy is to actively invest in growth fields while being aware of capital costs after emphasizing profit margins and turnover ratios of each business for future business growth.

Furthermore, three priority measures have been set for the next medium-term management plan: “strengthening the human resource base,” “manufacturing and heart-warming services from the customer's point of view,” and “promotion of diversification of core business partnerships.”

(1) Strengthening the human resource base

In addition to increasing human resources by strengthening recruitment, we aim to produce leader human resources through education and development based on management principles, and expand the organization due to amoeba division under amoeba management. It is a policy to respect and utilize diversity as a human resource development policy, and to prepare an environment for creating workplaces with job satisfaction, creativity, and opportunities for growth. We aim to further evolve into a company that has diversity regardless of age, gender, or nationality, and gathers human resources based on the value of “altruism.” Specific measures include improving work environments and providing flexible training opportunities according to employees' life stages, developing and producing amoeba leader human resources for business diversification and organizational expansion, constructing next-generation leader development programs, enhancing support systems, etc. for external training, etc., and promoting the ratio of training hours to prescribed working hours to 12% or more. In addition, individual capabilities will be improved through DX utilization and business process improvements, and the amount of ordinary income per hour will be increased compared to the previous fiscal year.

(2) Manufacturing from the customer's point of view and warm service

In terms of manufacturing, manufacturing capabilities from the user's point of view cultivated through office building replanning are utilized in new building development, hotel development, apartment replanning in New York, and condominium development in Vietnam. Regarding the strengthening of the construction business infrastructure, the use of M&A will also be taken into consideration. In terms of service, we aim to be close to building owners, improve problem-solving ability from a long-term perspective, and improve detailed and heartwarming responsiveness to the requests of tenant service users. Furthermore, we will strengthen the development of human resources and the creation of an organizational culture that can provide heartwarming and enjoyable services to hotel guests.

(3) Promotion of diversification of core business partnerships

By promoting diversification of core business partnerships, we will expand business areas, diversify flow-type businesses, and increase the sales structure ratio of stock type businesses. In the flow-type business, we will develop a new construction business that can maintain the economic value of buildings over a long period of time through cooperation between the leasing management department, property management department, and construction department. Also, for real estate small-lot ownership products, we will promote product development in Osaka and Nagoya in addition to the area around the city center. In overseas markets, we will promote apartment replanning in New York and condominium development in Vietnam. In the stock type business, we aim to provide even more diverse real estate services to solve customer issues. In the leasing management business, we will strengthen the branch network in Tokyo and focus on sublease contracts, and in the property management business, we will promote efforts aimed at increasing the number of management contract buildings. Furthermore, the operating area will be expanded in the rental conference room business, and the number of hotel management rooms will be expanded with a view to M&A in the hotel/tourism business. As we expand our business areas, we believe that by accelerating the growth of stock businesses, the stable profit base of the entire Group will be strengthened.

(Written by FISCO Guest Analyst Ryoji Mogi)