Japan is currently working to recover from the damage it suffered in the Great East Japan Earthquake. The nation is faced with a mountain of serious issues that range from nuclear power disaster measures to ensuring power supply and reducing power usage. To find a brighter future amidst all this, every company and every person in Japan is tackling the challenge posed by this national crisis. This disaster has also made Mitsui Fudosan Group businesses re-examine the inherent challenges in achieving safe, secure, and sustainable lifestyles. We shall combine the strength of our Group companies in working to overcome the problems posed by these new challenges to drive our future growth.

The economic situation in Japan remains harsh. Increased unemployment and stagnating individual consumption that were concerns even before the earthquake remain concerns. Internationally, the economy is beset with uncertainty due to a number of factors. These include the rise in raw materials prices brought about by the conflicts in the Middle East and North Africa and the increasing demand for energy from emerging nations; inflation in emerging nations; and the European financial crisis with its uncertain outlook. The real estate market, which was on the road to recovery from the financial crisis before the earthquake, is likely to be affected by the disaster in the short term, although we believe that in the medium term it will continue towards recovery.

In the housing market, 2010 has seen an increase in the supply of new condominiums over the previous year for the first time in five years. While the market stalled temporarily due to the earthquake, sales continue to trend positively. The rental office space market shows no major changes due to the earthquake.

In the real estate investment market, there was a temporary drop in the TSE REIT Index, but it recovered quickly as damage to buildings owned by J-REITs was only minor. Moreover, the stable yields of REITs were positively evaluated, and new purchases by the Bank of Japan also proved effective.

In this situation, the Mitsui Fudosan Group is continuing to implement its core strategy under the New Challenge Plan 2016 of “ensuring customer focus.” We will continue to make innovative reforms of our business in line with this strategy. We are working to strengthen our global customer base and take on the challenge of innovation for the new era by looking outwards and working together with all members of the Group.

This year we believe that the “safety and security” and the “sustainability” that we aspire to in our standard of value will only strengthen in post-quake Japan. We will seek to apply these qualities even more to the goods and services we provide, in both material and organizational ways, as we continue to cater to customer needs.

The Mitsui Fudosan Group’s strategic viewpoint is that “maturity” and “globalization” will accelerate in societies and economies of the future. “Maturity” means, for example, the diversification of customers’ sense of value in the housing industry. As residential stock increases in richness and variety, customers are given a range of choices, from new to used to renovated, and their needs continue to diversify and become steadily more multi-faceted. “Globalization” means aiming for the globalization of markets and customers, and for the elimination of borders. We hope to become a real estate solutions partner in the global market, building on our strong track record in Europe and North America by rolling out businesses in East Asian countries such as China which are developing rapidly, and by providing solutions as a partner to overseas customers expanding into Japan.

Our initiatives in this maturing residential market will involve strengthening and expanding our renovation business in response to a diversifying sense of value among our customers. We will draw on the management resources of our Group and channel our efforts through Mitsui Home Remodeling Co., Ltd, in which we acquired an equity stake in March 2011.

As for our global initiatives, the projects in China we announced last year are proceeding smoothly, and the Ningbo Outlet is in the finishing stages, preparing to open. Sales of the Shanghai House Huang Ma Yuan (Malu Project) condominiums are continuing strongly. Tianjin Eco-City, a national-level project for China and Singapore, started selling condominiums last autumn and has made steady progress. In the rapidly developing city of Dalian, we are participating in the development of residential and commercial facilities at Dalian Software Park Phase 2, which covers some 27km² in total.

We will continue to capture more business opportunities in China, using our local corporate subsidiaries in Shanghai and Beijing.

Last October saw the opening of COREDO Muromachi and the Muromachi Higashi Mitsui Building. As part of the Muromachi Higashi Mitsui Building, COREDO is also part of our restoration plan for the Nihonbashi area, based on the concept of “Proceeding to Create While Retaining and Reviving.” Media coverage of the many different attractions of Nihonbashi has increased interest in the Nihonbashi area by numerous clients from a range of different age groups.

The Nihonbashi area takes its name from the famous Nihonbashi bridge (“Japan Bridge”). As the symbol of the Nihonbashi area, the bridge has been designated as an Important Cultural Property by the Japanese government. This year will be the 100th anniversary of the bridge, and a number of events are being planned. We are working in concert with local people to make this an appealing place for visitors from Japan and abroad. We invite you to keep an eye on the ever-increasing excitement that is Nihonbashi.

In our retail properties business, Mitsui Shopping Park LaLaport TOKYO-BAY in Funabashi, a trail-blazer of Japan’s shopping centers, celebrated its 30th anniversary this April. It has evolved considerably since it first opened because we have been sensitive to the changing times and worked to maintain an accurate understanding of customer needs. Even today, its annual visitors number 25 million. We have 10 regional shopping centers around the country, with total sales now in excess of 300 billion yen. There are also 10 Mitsui Outlet Parks currently open, with new ones being developed in Kurashiki and Kisarazu. While individual consumption stagnates, our company’s facilities are finding ways to maintain steady performance through various evolution-oriented initiatives.

Our environmental efforts in urban development are showcased by our initiatives at Kashiwanoha Campus City. This Keidanren (Japan Business Federation) “future city” project is based on our environment communication word “” We will continue our cutting-edge initiatives to preserve the global environment in a variety of projects, including office buildings, housing, and retail facilities.

In real estate investment, this year marks the 10th anniversary of the J-REIT market. It was initially listed back in 2001 with the first REIT in Japan, the Nippon Building Fund Inc., based around the Mitsui Fudosan Group. During this period, the J-REIT market has attracted participants in the Japanese real estate investment market from both Japan and overseas, and our Group’s business fields have expanded exponentially with investment from these new customers. In the future, too, we expect the J-REIT market to continue to grow and evolve as a global market that includes private funds, as we strive to contribute to the further development of the real estate investment market.

This year, Mitsui Fudosan marks seventy years since its founding. The company was born from the real estate division of Mitsui Company in 1941, and after the Second World War became involved in innovative business initiatives, always reading the trends of the times and developing new markets. Mitsui Fudosan was a major player in the coastal development businesses and the construction of large-scale residential zones on which post-war economic growth was founded. We built the Kasumigaseki Building, famed as the first skyscraper in Japan, developed housing and condominiums, engaged in large-scale redevelopment in central cities, and helped create the real estate securitization market. Recently we have been promoting urban development, such as with Tokyo Midtown and the Nihonbashi Revitalization Project. Essentially, Mitsui Fudosan’s DNA is about understanding new senses of value and the real nature of the issues, needs, and desires of the world, then meeting the creative challenge of providing solutions for them. Our business has evolved as our track record has grown, and we intend to stay on this path into the future.

There is a paradigm shift now under way as the social and economic situation in Japan matures and globalizes at an increasing rate. As a front-line industry partner, the whole Mitsui Fudosan Group will work together as one to boldly tackle the challenges of creating new value for the coming era.