(1) Target indicators and the state of progress of Mitsui Fudosan, medium-term management plan (forecast for FY 2000)

• ROA*1) :3% --- Business Profit*2) FY2000 forecast 60 billion year Total Asset March 31 2001 estimate about 2,060 billion yen

• Balance of interest-bearing debt: 1 trillion yen or less --- The balance has been less than 1 trillion yen for the three consecutive years, that is FY ended March 1998, 1999, and 2000. For the current fiscal year ending March 2001, the balance is prospected to exceed 1 trillion yen. This is due to the influence of restructuring, but without this special factor, a level below 1 trillion yen will be maintained.

• The Debt-to-Equity ratio, which we aim to be 2.0, is prospected to be about 2.4. This too is due to the influence of restructuring, but by implementing the titled Plan we aim to further increase profit and recover Shareholders' Equity as soon as possible.

*1)ROA(parent)=Business profit /Total Assets
*2) Business Profit=operating profit + interest and dividends received

(2) Structural improvement

As was announced in February, we decided to book an appraisal loss on some of our properties, and to implement structural improvement of some of our Group companies. We plan to post a loss of about 200 billion yen, in total, for the two years of FY 1999 and 2000. Through these measures, structural improvement following the collapse of the bubble economy will be completed on the Group level, and we will stand at the starting point of the "new Mitsui Fudosan in the 21st century."

• The recently established Group Medium-Term Management Plan aims to determine the direction to make a new Mitsui Fudosan Group, rich in growth possibilities and profitability in the 21st century.

• First, we established the ideal image of our Group for the time point when the real estate market will have evolved, as expected, and when the asset strategy and non-asset strategy we are presently carrying out will have born fruit. For example, at the time point of 2006, which we think will be an attainment point, we expect to achieve an ROA*3) that exceeds 5% without increasing total assets, with 150 billion yen in operating profit and a balance of 1,200 billion yen in interest-bearing debt.

*3: ROA (consolidated) = (operating profit + interest and dividends received + investment profit and loss by the share method)/ total assets

• However, in a situation, when the paradigm is rapidly and greatly shifting and the business environment remarkably changing, instead of establishing a long-term plan, we thought it more important to set a medium-term target and ensure its progress, and to change our structure in accordance with the shifting paradigm. Therefore, we determined the direction of management for the three years from FY 2000 to 2002, to establish a new growth foundation toward realization of an "ideal image."

• Regarding our financial strength, effectiveness, etc., we have established levels to be reached during these three years. The plan includes specific strategies to achieve these levels. An outline is as follows.

(1) Quantitative targets (FY2002)

The target management indicators are as shown in the following table.

	Consolidated	Parent
Operating profit	105 billion yen	60 billion yen
Interest-bearing Debt	1,450 billion yen	945 billion yen
ROA*1, *3	3.9%	3.2%
Balance of total assets	2,850 billion yen	2,010 billion yen
Debt-to-Equity ratio	3.2	2.1
Operating cash flow	110 billion yen	65 billion yen

(2) Strategy of the entire Group

The strategy throughout the entire Group is as follows.

1) Customer-oriented management

Office building business: thorough tenant-oriented management

• Promote multi-core area development in response to area needs

• Promote IT (Information Technology) preparations, such as renovating the building and upgrading the buildings' telecommunication infrastructure, to respond to customer needs

Housing business: thorough customer-oriented management

• Develop MOC (Mitsui Open Communication) further more powerfully, and implement product plans based on pursuit of customers' needs.

• Expand housing-leasing business and aggressively handle Internet-equipped high-class condominiums and midtown housing.

2) Asset strategy

Expanded returns through minimum investment (acquire maximum business opportunities through minimum investment)

ex.

• Office building business: Introduction of a partner-type, third-party capital for "Shiodome block B," etc.

: Usage of Special Purpose Company for the "Shinnikko Bldg.," etc.

• Shopping mall business: Usage of Special Purpose Company for "Shoppers' Mall, Fukuoka Marina Town"

• Housing lot sale business: Usage of Special Purpose Company in high-class condominium sales.

Usage of real-property-specific joint business (anonymous association method) for "Park Nova Nogizaka" and "Fine Court Tsurukawa"

Improvement of the asset turnover rate (mainly in housing lot sale business)

• Conduct investment control using IRR and shorten the project schedule (to minimizemarket risk).

3) "Nonasset" strategy

• Expand business through optimal usage of the know-how and management resources we have cultivated through managing our own assets.

• Manage an entire project through minimum investment and further extend and strengthen the nonasset business.

• Pursue thorough profit control and cost control, by separately controlling revenues from property management and leasing management as revenue from nonasset activities.

• Change our corporate constitution and cost structure, to receive orders of nonasset business from a third party, by making property management and leasing management into a service industry.

4) Construction of the optimal value chain

• As the paradigm shift related to real estate progresses, each business involving office buildings, commercial facilities, and housing will be further divided into different functions, such as development, construction, management, and control. And within the Group, there are groups of subsidiaries that have accumulated management skills regarding respective functions. To create added value through producing the maximum synergetic efficacy by regrouping these companies.

• To aim at optimization and efficiency improvement of the Group, including integration and reorganization of companies having the same function.

• To Build a value chain with the best members, by flexibly incorporating management resources from outside the Group if necessary.

5) Construction of new business models

(a) Real estate securitization related business

• Office building investment funds
  To achieve a leading role in establishing the real estate investment market, we aim at scale expansion and listing of the fund as soon as possible. We also aim to acquire business opportunities of nonasset business, for example transaction-related business of fund ownership property, fund management, and property management, etc.

• Seek possibilities of developing fund business
  We will seek possibilities of real estate investment funding for rental housing and real estate investment funding that incorporates shopping malls, hotels, etc.

(b) Housing-leasing business

• To aim at Group-level information forwarding and grasping of customer needs, we opened a rental condominium-leasing web site: "AXIS VIEW," in response to the increase of people with various needs.

• The establishment of the fixed-period, house-leasing law, will enable us to expand business by using the Group companies' know-how and development power and product planning know -how which have been cultivated through sales of housing.

• > Aim to receive orders of the total project, in respective levels: development, construction, leasing, and property.

• Introduce funds from the capital market by using the securitization scheme, and to study a Japanese-edition of residential REIT.

(c) "Caring" business

• Promote business related to "medical care, nursing-care, and health," by integrating the know-how accumulated through the pilot projects done so far, into an expert organization: the "CARE DESIGN Business Planning Department". This department was newly established this April , in order to respond to the change in social structure which is moving toward declining birth rate and an aging population.

• Accelerate the formation of a nursing-care community, through the use of "Care Design Plaza (Tamagawa Takashimaya)," "CARE design," magazine, and the "CARE DESIGN NETWORK," which is a tie-up with NEC.

• Accurately keep track of customer needs and construct business models.

(3) Basic attitude in implementing the entire Group's strategy

There are two basic attitudes common in implementation of the entire Group's strategy.

1) Coexistence with the environment

We will state "coexistence with the environment" into the mission of each product division which is also a part of "Attitude of the�•Mark"*4) which we stated in our Group vision. We will emphasize this attitude in each level of specific projects, such as planning residential properties and office building operation systems.

*4):

2) Usage of IT

We will use IT (Information Technology) in a strategic manner, to pursue "creation of added value," by sensitively responding to conversion of business models using IT.

(4) Establishment of an environment to accomplish the Group Medium-Term Management Plan

Toward establishing an environment to accomplish the Group Medium-Term Management Plan, there are few challenges.

1) Construction of an integrated risk management system

In order to promote wide-ranging nonasset business, the following issues must be achieved as soon as possible. The establishment of compliance rules by which customers can entrust their assets with a sense of security, ensure information security accompanying information society, and enrichment of assessment methods to conduct appropriate risk return recognition and improve total returns.

2) The optimal organization to conduct value creation as a Group Seek and realize an optimal organization in connection with the group management organization and corporate governance from such viewpoints as "creation of customer value" and "increase of stockholder value" .

This plan does not just set quantitative targets, but determines the direction of management and to establish a new steady growth base in the concerned three years aiming at realization of a "new Mitsui Fudosan Group, rich in growth possibilities and profitability, in the 21st century. This is based on the recognition that the paradigm shift regarding real estate will further accelerate in the coming millennium. We, both executives and staff, as a whole, will make efforts to achieve this plan.

(Note) The plans and prospects regarding future business achievements, mentioned above, are what the manager judged to be rational based on the economic state, accounting standards/customs, etc., which are presently assumed, and the actual achievements can vary due to various factors, regarding which your understanding is requested.