P.68 Diverse Urban Development Group

68 03. Performance & Data

Diverse Urban Development Group

Serving as a global developer shaping the cities of the future ̶ leveraging the unique strengths of the general trading company̶ to fill communities and lives with smiles and compassion.

Main relevant material issues

▍Quantitative information

2,000　1,500　1,000　500　0 15　10　5　0

FY2025 Investment｜Approx. ¥90.0 billion

Main investment areas

Japan, the U.S., Vietnam, India, Philippines, Australia, etc.

• Urban development
• Industrial infrastructure
• Equipment supply, logistics, and insurance services

Major asset replacement

• Divestment of domestic and overseas real estate assets

▍External Environment: Business Environment

Opportunities

• Growing demand for enriched living and safe, disaster-resilient urban development
• Growing demand for logistics, industrial infrastructure, and data infrastructure amid global restructuring of supply chains driven by rising geopolitical risks
• Increasing opportunities for integrated real estate, social infrastructure, and digital infrastructure developments driven by urban growth and industrial development

Risks

• Rise of nationalism in various countries and further escalation of global geoeconomic risks
• Tighter lending by financial institutions and a slowdown in investment activity due to volatility in interest rates, exchange rates,

and bond markets

• Construction delays and procurement difficulties due to labor shortages and surging material costs and inflation

▍Internal Environment: Key Strengths

• Comprehensive capabilities to design,

propose, and deliver solutions across the value chain by bringing together real estate and infrastructure development and operations, supply of equipment and materials, logistics, and insurance services

• Business development capabilities that address social challenges and local needs,

built on long-standing relationships of trust with local governments and local partners

• Development and operational capabilities that deliver top-level capital efficiency in Japanʼs real estate industry through a diverse asset portfolio

▍Business Strategy

• Deliver value-added urban development by combining our diverse capabilities and networks, unique to a general trading company, with our frontline expertise
• Promote multifaceted global expansion targeting markets with rapid population growth and economic expansion
• Focus on countries and regions of strategic importance (markets where we can establish a unique presence, such as Japan, the U.S., Vietnam, and India, and collaborations with partners that align closely with our strategic and business objectives)

▍Business Development

Sustainable city development

• Real Estate SBU
• Global Urban Development SBU
• Industrial System & Material SBU
• Logistics and Insurance SBU
• Social Infrastructure SBU

▍Medium-Term Management Plan 2026

Initiatives in final year of medium-term management plan Initiatives for next medium-term management plan

• Improve capital efficiency and profitability by promoting asset replacement in the domestic real estate business;

strengthen our portfolio by expanding high-quality assets and pipeline

• Fully launch diverse urban development projects in North Hanoi and Hakozaki (land transfer completed;

construction set to begin)

• Strengthen governance by establishing the Center of Excellence to ensure construction quality and by formulating Quality and Safety Group Policy
• Accelerate asset replacement and third-party capital utilization to achieve after-tax profit of ¥120 billion and ROIC of over 8% by FY2030
• Realize full-scale earnings from overseas real estate,

diverse development, and digital infrastructure businesses

• Develop talent capable of advancing the Groupʼs growth strategy by drawing comprehensively on each SBUʼs strengths and expertise

▍Key Market Trends

By strategically selecting regions and projects, we enhance the quality of our portfolio through asset replacement and new acquisitions while achieving industry-leading capital efficiency.

High capital efficiency and profitability (vs. industry peers)

ROA ●：Earnings scale 5％　10％　15％　20％　25％

Office building vacancy rates (Comparison of actual figures)

(%) Five central wards of Tokyo The Companyʼs office buildings in Tokyo 2019　2020　2021　2022　2023　2024　2025(Year) Source: Prepared by the Company based on data from Miki Shoji * Temporary increase in vacancy rates due to the completion of new buildings or renovation work aimed at enhancing property value

• ※Yukihito Honda Group CEO, Diverse Urban Development Group

［図の構造］Business Development (Diverse Urban Development Group)

Legend: Real Estate SBU | Global Urban Development SBU | Industrial System & Material SBU | Logistics and Insurance SBU | Social Infrastructure SBU

Country → Business:

The United Kingdom → Railway operation (Elizabeth line (Operated under contract with Transport for London)) — Diverse Urban Development Group

Czech Republic → Logistics business — Diverse Urban Development Group

The United Arab Emirates → District cooling — Diverse Urban Development Group

Oman → Desalination IWP — Diverse Urban Development Group

Bangladesh → Industrial park — Diverse Urban Development Group

India → Office building and residential | Industrial park — Diverse Urban Development Group

Myanmar → Industrial park | Railway EPC — Diverse Urban Development Group

Thailand → Logistics business — Diverse Urban Development Group

Singapore → Submarine cable business — Diverse Urban Development Group

Indonesia → Office building and residential | Industrial park | Logistics business | Delivery of rolling stock — Diverse Urban Development Group

China → Residential | Water infrastructure business | Logistics business — Diverse Urban Development Group

Vietnam → Industrial park (Thang Long Industrial Parks) | Sustainable city development (North Hanoi Smart City) | Railway EPC | Residential — Diverse Urban Development Group

Philippines → Industrial park | Railway operation | Railway EPC — Diverse Urban Development Group

Australia → Residential — Diverse Urban Development Group

Japan → Sustainable city development | Real estate business (office buildings, commercial facilities, residential properties, logistics facilities, and hotels) and real estate fund management | Logistics and insurance | Airport operation | Submarine cable business | District heating/cooling business | Manufacture and sale of building materials | Provision of equipment, machinery, services, and solutions for industrial use | Sale of cement-related products and manufacture and sale of ready-mixed concrete | Collection and recycling of PET bottles and others | Yodoyabashi Gate Tower | SGL Akanehama Center (SOSiLA property) | Kyudai Hakozaki Smart City — Diverse Urban Development Group

The United States → Office building and residential | Logistics facility business | Logistics business | New transportation system operations | Delivery of rolling stock — Diverse Urban Development Group

Bermuda → Insurance business — Diverse Urban Development Group

Brazil → Water and sewage concessions — Diverse Urban Development Group