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THE VALUE
CREATION STORY

The Value Creation Story

2023 Integrated Report

This is the story of our value creation as we aim to be a corporate group that continues to create value. It explains our Group strengths and individuality as we work to solve social issues through our business activities, focusing on concepts found in our long-term vision and themes to work on for value creation (materialities).

2023 Integrated Report for the year ended March 31, 2023

Letter to our stakeholders Our Ideal Vision Process for Value Creation Themes of our efforts to create value (Materialities)Opportunities, Risks and Target Indicators of Materiality Outside Director Discussion

President & CEO, Tokyu Fudosan Holdings Corporation Hironori Nishikawa

Letter to our stakeholders

Taking the transformation of the Group to the next stagefor a future where everyone can be themselves, and shine vigorously

Hironori Nishikawa

President & CEO,Tokyu Fudosan Holdings Corporation

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Toward a Vibrant Future for All 2023 Integrated Report

2023 Integrated Report for the year ended March 31, 2023

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Themes of our efforts to create value (Materialities)

To realize its ideal vision, the Group is engaged in efforts focused around six themes (materialities) through its business activities.
By implementing strategies in line with each theme, we will contribute to the creation of a sustainable society.

Lifestyle

Create a variety
of lifestyles

We will help people to enjoy lives that are both physically and mentally vibrant by promoting the Lifestyle Creation 3.0, a combination of home, work and play styles.

SDG Contributions
Liveable City

Create communities and lifestyles
that encourage well-being

We will realize a society where everyone can feel happy by building secure, safe and comfortable life infrastructure and creating communities where people help each other.

SDG Contributions
Environment

Create a sustainable
environment

As an environmentally advanced company, we will create a carbon-free and recycle-based society by addressing global issues such as climate change.

SDG Contributions
DX

Create value
in the digital era

We will transform our business models by utilizing digital technologies to create new experience value for customers.

SDG Contributions
Human Capital

Create an organizational climate under
which diverse human capital is enlivened.

We will continue to create innovation through an organizational climate that respects human rights and under which diverse human capital can exercise their abilities.

SDG Contributions
Governance

Create governance
to accelerate growth

As a group trusted by all stakeholders, we will aim to enhance our corporate value sustainably by increasing management transparency and fairness.

SDG Contributions

Opportunities, Risks and Target Indicators of Materiality

The Group has organized business opportunities and risks and established KPIs for each materiality toward the achievement of its ideal vision for 2030.
In this way, we aim to increase outputs and impacts on society and contribute to achieving the SDG goals.

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Life style	Main opportunities and risks opportunities Diversification of work styles, home styles and play styles Fusion of all manner of lifestyle scenes risks Mismatch to consumer needs Declining efficiency accompanying response to segmentalized needs	Non-financial KPI Customer satisfaction level *1 90% or more Products and services that contribute to Lifestyles Creation 3.0 100 cases or more
Liveable City	Main opportunities and risks opportunities Increasing importance of community creation Growing need for disaster preparedness and disaster damage reduction Increasing awareness regarding mental and physical health issues risks Declining attractiveness of some cities due to intensifying competition between cities Declining attractiveness of cities due to community decline Decreasing asset values due to insufficient maintenance and management	Non-financial KPI Measures to revitalize communities 100 cases or more Strengthening building safety and security *2 100%
Environment	Main opportunities and risks opportunities Growing need to respond to a decarbonized and recycling-based society Increasing funding from ESG investors risks Escalation of climate change and natural disasters Increasing costs due to environmental restrictions, etc.	Non-financial KPI RE100^3^4 To be achieved by 2025 Percentage of renewable energy power usage 60% or more CO2 emissions (compared with FY2019) (SBT certification^5） (46.2)% Water usage Less than the previous fiscal year Waste volume (compared with FY2019) (11)% Environmental certification acquisition^6(e.g. CASBEE, DBJ) 100% Sustainable procurement (wood materials for molds) 100% Midori wo Tsunagu Project (area of forest protected) 3,000ha Environmental efforts through business 100 cases or more
DX	Main opportunities and risks opportunities Increasing importance of utilizing customer contact points Improving scalability of services provided risks Declining position of real experiences due to enhancement of virtual experiences Appearance of disruptors to existing businesses	Non-financial KPI Number of initiatives utilizing digital technology 100 or more DX investment amount (compared with FY2021)^7 2times Acquisition of IT passports^4 100%
Human Capital	Main opportunities and risks opportunities Increasing opportunities to secure diverse human capital Emergence of innovation due to diversification risks Intensifying competition and increasing costs in the human capital market Declining reputation due to the occurrence of human rights issues	Non-financial KPI Ratio of employees who undergo physical examinations 100% Ratio of women among new graduate hires 50% Ratio of female managers (ensuring the diversity of core human capital) 20% or more Ratio of childcare leave taken by male employees 100% Deepening understanding of DE&I (percentage of employees who took an e-learning course) 100% Respect for human rights in the supply chain (implementation of due diligence related to forced labor and child labor) 100%
Governance	Main opportunities and risks opportunities Strengthening relationships with stakeholders by improving transparency Increasing funding from ESG investors risks Increasing cost of fund procurement Decline in confidence due to legal violations	Non-financial KPI Engagement with shareholders and investors 300 cases or more Improvement of effectiveness of the Board of Directors (third party evaluation) 100% Adherence to the compliance code of conduct 100%

Financial KPI〈Reference indicators〉

ROE 10% or more
ROA 5% or more
D/E ratio 2.0 times or less
Operating profit ¥150 billion or more
Net profit *8 ¥75 billion or more

*1Tokyu Cosmos Members Club questionnaire survey
*2Support for people who have difficulty returning home in the event of a disaster in a large, non-residential building, etc.
*3An international collaborative initiative with the goal of companies procuring 100% of the electric power consumed by their business activities from renewable energy sources.
*4Tokyu Land Corporation
*5 An abbreviation of Science Based Targets. These are medium- to long-term targets for the reduction of greenhouse gases that have been formulated based on scientific research
*6Covers large-scale non-residential owned properties (total floor area of at least 10,000 m2). Excludes some properties, such as joint ventures.
*7Infrastructure-related costs incurred since fiscal 2021, including the new development and introduction of apps and zero trust measures
*8Profit attributable to owners of parent

Overview of
Sustainable Management

Outside Director Discussion

Expecting improved earning power in the medium and long term through the Group's own unique style of environmental management and DX

Five outside directors with diverse professional backgrounds and areas of expertise candidly exchanged their views on the Group's medium-term management plan and growth strategies, discussing plan and strategy progress, their future expectations in these areas, and relevant issues which need to be addressed.