Tokyu Fudosan Holdings Corporation

Asset-utilization type businesses such as the Urban Development Business and Strategic Investment Business are susceptible to domestic and overseas economic trends, real estate market conditions, the competitive environment, and policy changes by the government and the Bank of Japan, which may lead to a decline in profit margins or a decrease in the value of held assets. The Group Corporate Planning Department has primary responsibility, managing risk exposure by defining risk factors for each investment target asset and calculating and continuously monitoring VaR values.

Real estate development funds are raised through borrowings from financial institutions and bond issuances, and rising interest rates or a significant decline in stock prices may have a major impact on business results and financial condition. As countermeasures, the company maintains a long-term ratio of interest-bearing debt of 95.8% and a fixed-rate ratio of 94.4% (excluding SPC borrowings) to curb interest rate fluctuation risk, and the Group Finance Department quantitatively simulates the impact of rising interest rates.

As transition risks, stricter legal regulations such as carbon taxes and reputational deterioration due to delays in low-carbon initiatives are anticipated; as physical risks, impacts on ski resort operations due to reduced snowfall and increased building damage and construction costs due to more severe abnormal weather are anticipated. The Group Sustainability Promotion Department has primary responsibility, disclosing information based on TCFD recommendations and responding across the Group in line with the "Decarbonization Transition Plan" formulated in fiscal 2023.

If the company fails to respond appropriately and promptly to technological innovation and changes in customer demand amid the rapid evolution of the IT environment, this may affect future business results and financial condition. The emergence of disruptors to existing businesses is also recognized as a factor of change, and the Group DX Promotion Department has primary responsibility, continuously examining the potential application of new technologies to each business.

The decline in the working-age population and labor shortage due to declining birthrate and aging population in Japan may become a major factor hindering growth, and intensifying competition in the talent acquisition market is also a concern. The Group Human Resources Department has primary responsibility, and in addition to establishing telework and work-from-home systems and reducing long working hours, has implemented "Appropriate Labor Management (proper understanding and management of working hours)" as a Group priority measure since fiscal 2023.

The Urban Development, Property Management & Operation, Real Estate Distribution, and other businesses handle large amounts of customer personal information, and if a cyberattack or information leak by an employee occurs, this may lead to a decline in social trust and brand image and adversely affect business results and financial condition. The Group General Affairs Department and Group DX Promotion Department have primary responsibility, strengthening security measures and improving employee literacy through targeted phishing email training and other initiatives.

If a natural disaster such as an earthquake, storm, or flood, or a man-made disaster such as terrorism or an epidemic occurs, this may impact business performance and financial condition through damage to held assets, fulfillment of compensation obligations, or the occurrence of disputes. The Group General Affairs Department has primary responsibility, implementing safety measures, developing BCPs, and conducting drills assuming various disasters, as well as establishing an information communication and decision-making system based on the "Basic Regulations for Emergency Response."

If officers or employees violate laws and regulations, or if a situation requiring payment of damages arises, this may lead to a decline in social trust and brand image and adversely affect business results and financial condition. The Group Legal Department has primary responsibility, working to ensure thorough compliance management across the Group through the formulation of the "Tokyu Fudosan Holdings Group Code of Conduct" and "Compliance Manual" and regular training.

There is a risk that asset value may decline if the company falls behind in inter-city competition in well-being-oriented town development, or if maintenance and management of held assets is insufficient. Economic trends, real estate market conditions, and competitor trends are the main factors of change, and this may affect business results in conjunction with investment risk and financial capital risk.

If the lifestyle and services provided by the Group become mismatched with changes in consumer trends, the profitability of each business may deteriorate. Economic trends, personal consumption trends, and competitor trends are cited as factors of change, and the company responds to this in coordination with the management of investment risk and financial capital risk.