Utilization of Commercial and Owned Real Estate

「In the real estate business, we aim to create destinations that attract customers from around the world, connect different uses and maximise the value of each business. While stepping up the development plans for each destination and the design of the value provided in these destinations, we will develop high-sensitivity, premium content such as hotels and restaurants and cultivate the talent responsible for these specialist areas.」

「In the real estate business, we aim to create destinations that attract customers from around the world, connect different uses and maximise the value of each business. While stepping up the development plans for each destination and the design of the value provided in these destinations, we will develop high-sensitivity, premium content such as hotels and restaurants and cultivate the talent responsible for these specialist areas.」

「At 株式会社三越伊勢丹プロパティ・デザイン, whose strengths include high-quality interior work and furniture production, sales expanded mainly through construction work for hotels and offices in external large-scale development projects and brand-store renovations. Despite the impact of soaring raw-material costs, revenue increased.」

「In addition, MITSUKOSHI BGC, a commercial facility being jointly developed by the Group in Manila, won top awards in 2 categories at the 18th PropertyGuru Asia Property Awards, which recognises outstanding real estate projects worldwide.」

「In the real estate business, rental revenue declined due to tenant turnover at properties held by the Group. However, sales expanded at 株式会社三越伊勢丹プロパティ・デザイン, which handles interior construction, design and construction management, mainly through construction work for external commercial facilities, hotels and offices. Despite the significant impact of soaring raw-material costs, the operating result improved.」

「We are currently participating in the Shinjuku 3-chome Station West District Urban Redevelopment Preparatory Association and advancing efforts to formulate a conceptual framework for city development, including landscaping and design.」

「From a city-development perspective, we have begun considering the future configuration of the two flagship stores as symbols of aspiration and affinity within the high-sensitivity, premium destination network.」

「At a meeting of the Executive Committee held on 1 February 2022, we resolved to transfer fixed assets owned by our wholly owned subsidiary 株式会社三越伊勢丹 and entered into an agreement dated 2 February 2022. Gain on transfer: approximately ¥4.9 billion. Property handover date: 31 March 2022 (scheduled)」

「Amid these developments, in July we opened FOOD & TIME ISETAN OFUNA at GRAND SHIP, a commercial facility in front of Ofuna Station, as the second store following the Yokohama location, as part of efforts to build a hub network for high-sensitivity, premium consumption.」

「To create new customer experience value at existing department stores going forward, it is necessary to consolidate functions and expertise within the existing department store business organization for the development of 株式会社三越伊勢丹 and the Group's regional department stores based on a strategy of creating mixed-use commercial facilities that includes real estate tenants, rather than relying solely on proposals based on conventional department store merchandising. Accordingly, in addition to operating the various commercial facilities managed by the existing 株式会社三越伊勢丹プロパティ・デザイン, we will transfer to that organization the work related to the commercial operation of real estate tenants at department store locations.」

「The transfer was completed on 4 January 2021.」

「Specifically, we are promoting initiatives to create mixed-use developments centered on commercial facilities, primarily using owned real estate, and intend to allocate management resources preferentially to this area going forward. Under this Group policy, having evaluated Blackstone's management expertise and track record in Japan's real estate industry, we decided to transfer all shares in IMRE held by IM to エチゴ合同会社 to support IMRE's further development. Date of share transfer: 4 January 2021 (scheduled). Gain or loss on transfer: for the fourth quarter of the fiscal year ending March 2021, we expect to record approximately ¥7.1 billion as a gain on the sale of shares in an affiliated company under extraordinary income.」

「Overseas, we continue to work on a mixed-use real estate development project in the Philippines through a joint venture between 野村不動産株式会社 and Federal Land Incorporated, a leading Philippine real estate company, advancing residential sales and preparations for the opening of the commercial facility building scheduled for 2021.」

「To maximize the asset value of owned real estate, we proceeded with asset reallocation by acquiring real estate around the Isetan Shinjuku Main Store while deciding to sell non-core properties we own.」

「In April 2019, 株式会社三越伊勢丹プロパティ・デザイン transferred its building management business to 株式会社三越伊勢丹アイムファシリティーズ and has been focusing its operations on tenant management and interior construction and design. FOOD&TIME ISETAN YOKOHAMA inside Joinus at Yokohama Station continues to perform well, and we are considering expanding similar initiatives.」

「In April of this year, 株式会社三越伊勢丹プロパティ・デザイン transferred its building management business to 株式会社三越伊勢丹アイムファシリティーズ and has focused on tenant management and interior construction and design. The FOOD＆TIME ISETAN YOKOHAMA facility inside Joinus at Yokohama, which opened last year and has now been operating for one year, continues to perform well, and we are considering expanding similar initiatives.」

「Overseas, we continue to work on a mixed-use real estate development project in the Philippines through a joint venture with 野村不動産株式会社 and Federal Land Incorporated, a leading Philippine real estate company, and began sales of the first phase of the residential development in November 2018. We also announced that the commercial facility would be named “MITSUKOSHI,” distinct from a department store, and that we would seek to attract and develop shops and businesses centered on food.」

「To make effective use of owned real estate, we decided to acquire new real estate for our own use and sell owned rental properties, and proceeded with an asset reallocation. To improve asset efficiency and strengthen our financial position through the effective use of management resources, we decided to transfer the following asset. Gain on transfer: approximately ¥29.4 billion. Property handover date: 17 January 2019」

「株式会社三越伊勢丹プロパティ・デザイン remodeled the existing Shinjuku ALTA commercial facility. FOOD&TIME ISETAN YOKOHAMA, which opened in March as a new commercial facility management business, has also performed well in both customer traffic and net sales. We will continue to consider new commercial facility management businesses that can use this expertise.」

「In addition to the facility inside Sotetsu Joinus at Yokohama Station in March, 株式会社三越伊勢丹プロパティ・デザイン used the creativity and expertise cultivated by the Group to curate a diverse tenant mix and content, opening ミーツ国分寺 at the north exit of Kokubunji Station in April and operating and managing the commercial facility. Going forward, it will test “Meets” as a new brand and aim to expand it. 株式会社三越伊勢丹不動産 acquired ミレアコート銀座プレミア, a newly developed high-grade rental apartment building, in March and began leasing operations. By providing residents with access to facilities and services at the Mitsukoshi Ginza store, it will enhance the added value of the rental apartments operated by the Mitsukoshi Isetan Group and secure stable earnings.」

「Overseas, in July 2017 we announced our participation in a mixed-use real estate development project in the Philippines. By pursuing a residential development business based on the concept of Japan and commercial facility development that leverages our retail business expertise in Japan, we will propose a high-quality, new lifestyle in the Philippines.」

「We will combine department stores, digital operations and real estate by brand and store, deepen our commitment to retail, and transform our business model by leveraging well-located real estate we own, thereby maximizing Group-wide revenue.」

「In the real estate business, 株式会社三越伊勢丹不動産 recorded higher revenue and profit by pursuing a joint condominium development business with its capital and business alliance partner 野村不動産株式会社. Going forward, we are considering the creation of profitable business opportunities using high-quality real estate owned by the Group in Japan and overseas, with a view to making a sustained contribution as a growth business.」

「In the real estate business, we have promoted the commercial use of real estate owned by our Group to secure stable earnings. 株式会社三越伊勢丹プロパティ・デザイン also actively participated in hotel development for the Olympic Games and commercial facilities, and opened アルタシアター last November using the former Studio Alta site.」

「In the real estate business, 株式会社三越伊勢丹プロパティ・デザイン used the former Studio Alta site to open ALTA THEATER (アルタシアター) in November. It will deliver timely content themed around music, video and subculture, which are essential to the lifestyles of a broad range of men and women. 株式会社三越伊勢丹不動産 is also pursuing a condominium development business and other projects using owned real estate with its capital and business alliance partner 野村不動産株式会社.」

「In the real estate business, 株式会社三越伊勢丹プロパティ・デザイン is actively expanding its interior construction business in the Tokyo area, where the Olympic and Paralympic Games were scheduled to be held, and in Hokkaido and the Keihan area, where inbound demand is expected. It is also developing ALTA facilities in Shinjuku, Ikebukuro and Harajuku and expanding its leasing business. 株式会社三越伊勢丹不動産 is expanding the properties handled in its existing real estate leasing and management business and is promoting joint condominium development projects with its capital and business alliance partner 野村不動産株式会社.」

「We will promote the commercial real estate business and seek to improve productivity by developing commercial real estate using the merchandising and curation capabilities cultivated by our retail group, while making maximum use of the real estate we own nationwide.」