IR News

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
 
 Regarding the "World Innovation Center (WIC)" project, which our group is promoting, we have previously announced that a feasibility study report has been compiled (see our timely disclosure dated March 24, 2026, "Announcement of the Commencement of Formal Discussions Toward the Formation of Syndicated Loan for World Innovation Center (WIC) Project in Shenzhen, China").
 Currently, as discussions with the syndicate of banks are progressing, we would like to provide supplementary information regarding some of the study's contents to facilitate understanding among stakeholders.
 
■ Study Implementation Structure and Prerequisites
 This study is being conducted by Shenzhen GoFiner Land, Real Estate Assessment & Assets Evaluation Consulting Co., Ltd. (hereinafter "GoFiner"), a leading valuation company in China specializing in real estate valuation with extensive experience in commissioned by major banks and government-related institutions. The company handles a wide range of projects, including commercial facilities and industrial real estate, and conducts analyses based on practical experience.
 To comprehensively verify the feasibility of the project, the assumptions included stricter conditions than initially anticipated.
 ・Development costs were approximately 20% higher than anticipated.
 ・Loan amounts and interest payments increased proportionally to the cost increase.
 ・The unit price of office rent, which accounts for the majority of operating revenue, was approximately 30% lower than anticipated at the start of operations.
 ・Office occupancy rate reached 60% in the first year of operation, 90% in the third year, and was maintained thereafter.
 
■ Key Findings of the Survey
 Even with these stringent assumptions, the following results were obtained:
 ・Internal Rate of Return (IRR) exceeded 10%.
  This significantly exceeds the hurdle rate (5%) set by GoFiner for real estate investment businesses.
 ・The investment recovery period (before considering interest rates) was approximately 13 years from the start of operations.
 ・The analysis indicated that the project's viability can be sufficiently ensured.
 Based on these results, the WIC project is evaluated as having high viability even under stressful conditions.
 
■ Status of Discussions with Financial Institutions
 The results of this study have already been shared with the Bank of China and other banks as basic data for discussions toward the formation of a syndicated loan, and confirmation by each bank is currently underway.
 
■ Real Estate Value After Completion
 As disclosed in the timely disclosure dated March 24, 2026, the estimated real estate value after the completion of WIC is approximately 338.2 billion JPY (based on the exchange rate of 23.09 JPY = 1 CNY as of March 23, 2026).
 Based on this valuation, the asset value and marketability of the WIC project have received a high evaluation.
 
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