Thank you everybody for joining. My name is Scott Callon. I'm Chairman of Ichigo. We're working off of the FY 2022 Full Year Corporate Presentation, so this is our full year earnings. I'm joined by Tet Fujita, who is our Lead Independent Director, and also by Dan Morisaku, who is a senior member of finance team and the Head of Global IR for Ichigo. I'm gonna hit start video again, and you cannot start your video because I also stopped it. It continues to be the case. We're just gonna run forward. My apologies to everybody. You don't have to see my face. This may be a feature, not a bug. Let's run forward. Turning to the first page, which would be page eight. I'm jumping past, of course, there are, you know. It's a terrible time in the world with that COVID. We've got an extraordinary humanitarian disaster and war in the Ukraine. We stand with the Ukrainian people. Turning to Ichigo rather than the world outside. Here's what happened during the year. I mean, look, still a mixed bag. We expect a lot more from our business. Yet, I think it's pretty clear at this point that a lot more is going well than poorly, and certainly on a forward-looking basis. We feel pretty confident that we've hit bottom. We'll go up from here. Some highlights from the year. Core earnings are up. We're up 6%-7%. This is in the Sustainable Real Estate business of both multi-asset residential sales. The key change there is, last year we were primarily selling each of the owner's assets, which are residential assets. There's clearly been a broadening of the market, and its appetite for a broad range of assets. Our Sustainable Real Estate business is coming back. Even in the most damaged asset class, we've taken a bunch of damage from COVID in the hotel space. We actually did a hotel asset sale at a very good price in the final quarter. I'll just continue to be fairly specific with respect to location and buyer, but things are coming back. Second point, Ichigo Owners was a business we started five years ago. think it's doing very, very well. Acquisitions were up 10% year-on-year. That, you know, this is a super prime Tokyo residential business. There's just a, you know, voracious demand for these assets. When acquisitions are up, that tells you that earnings will be up, so it's a very strong leading indicator of return's gonna be. We launched a new business, a co-ownership business to continue to drive our long-term stock earnings. By stock, of course, we mean we're a stock plus flow business. Flow is kind of, you know, what happens on a daily basis, and you can have very durable flow, but it's not kind of embedded. Our structural earnings stock are things that are embedded in contracts such as rental agreements and that sort of thing. The co-ownership business we think will be an earnings driver. Again, to remind you what that is, it's small lot, the ability to own kind of a single, you know, parts of real estate at $10,000, for example, at a time, as opposed to kind of buying a $10 million building by yourself. That is a brand new business we launched last year and one that we think will be valuable. Looks like we may have video. We do. We have video. Now you have to look at me. Again, I don't know if that was a feature or a bug. Turning to and then Clean Energy business. Stock earnings were up 13% year-on-year. This is a great business. I mean, it's a stable earnings driver, and it has extraordinary deep social significance given what's going on with both global warming and, you know, the problems we have with trying to get enough energy to keep ourselves going in midst of this, the Ukrainian crisis. Nine new plants online last year, including our first wind power plant, and this is a business we need to and will grow. PROPERA is our proprietary AI-based hotel revenue management system. It's growing market share. We went 2.6x the number of hotels that are on this system. That's obviously small. You'll see later on in the presentation, we expect to grow that very, very substantially this year. This is on a growth track. You should watch this very carefully. Our ability to grow this business, given the powerful kind of platform economics to it, is a potential significant driver of our corporate value. We did a JPY 1.5 billion share buyback. The dollar's gone from 103 yen two years ago to 128 today. It's not as easy to say at 100 yen per dollar, $15 million, 'cause it's become slightly more complicated math. Anyway, about $12 million. We announced another share buyback of the same size today. It is the sixth consecutive year of us doing buybacks. I'll talk a little bit more about our approach to buybacks later in the presentation. Next page, please. This is what it looks like in terms of our stock earnings versus G&A expenses. You know, it is incredibly important to us that we be structurally profitable. It is a way of saying the floor earnings are powerful, and they're ongoing. But in the worst case, even if we have no floor earnings, we expect to be robustly profitable. As you can see, our stock earnings are about 2x our expenses, so we don't expect to ever go upside down. That's really important. Turning to the right side of the page, our stock earnings drop off, very unusual, given how durable our Sustainable Real Estate earnings are. This is mostly rental income. This has been absolutely unprecedented. A drop off of 10%, largely offset by an increase in stock earnings and asset management and in Clean Energy. Next please. One of the things we've done from today is to try to give you more, and I apologize if I didn't express my thanks at the beginning of this call for everybody for joining. We're incredibly grateful for your time. It's important to understand the firm's economics. By the way, this is not meant to make us look good. This is meant to be this. Some of you might need to go, but we're actually pretty pure. You know, we want. We think we need to be transparent. We think we need to exist for the benefit of the world. One of the issues that's occurred with transparency is, as you know, we have moved the majority of our assets into the fixed asset class, which is not only just an accounting category, but is actually a tax category. By moving our assets from real estate for sale to fixed assets, it enables us to have the tax shield of depreciation, which is really, really valuable. With a 30% tax rate, we've got about JPY 5 billion of depreciation on an annual basis. That translates into JPY 1.5 billion of increased cash available to shareholders. It doesn't show up as profits, and so that's one of the things we need the market to understand is that we're actively managing the firm to maximize cash flow for long-term cash flow for shareholders, but it means we're gonna be hitting net income and EPS, and we need to be transparent about that. We introduced cash-based accounting that it will be on the next page that I'll go through. One of the things that also needs to happen is by moving assets into the fixed asset category under JGAAP, so under Japan's accounting system, it means that the Sustainable Real Estate activity where we add value to assets, and then we sell them and make money because we've added value to the assets. If you're doing that against real estate for sale, it shows up as OP, as operating profit. But if you do it against fixed assets, it doesn't show up as operating profit. It shows up as extraordinary gains. The result of this is because we think we've done the absolute right thing for all of you, our shareholders, which is to maximize cash flow. We now have a P&L statement that looks like we have a certain amount of OP, operating profit, and then like a whole bunch of extraordinary gains. It's like, "What's going on with these guys?" That's purely a function of us using the tax shield. In order to truly understand what's happening with the Sustainable Real Estate business and the profitability generated, you need to put back those extraordinary gains into the pro forma operating profit number because it is truly operating profit. This is core activity of the firm in a Sustainable Real Estate, but it's sitting in under Japanese GAAP extraordinary gains. Let's turn to the next page. We'll see the actual numbers. As you can see, all-in OP, that's what we're calling it all-in. You take not just operating profit, but you return the numbers from down below in net income back to the operating profit line and then recurring profit line. All-in OP was up 20% year-on-year, and cash EPS was up 33%. Again, these are, we think, the most important numbers that you should look at. You should understand how we're doing on an OP basis and fully understand that including kind of unraveling the accounting kind of treatment that makes that harder to see. We try to do that by giving you all-in disclosure. You should also look to see how much cash we're generating. These are numbers that year-on-year have done very well, and we expect to continue to do well on them and continue to grow them. You should be tracking us on this. That's what the year looks like in terms of the numbers. Let's move forward. Next page, please. Breaking this into categories. The other thing that we've done from today, again, you know, we think the stock is underpriced. That's why we're in the market buying the stock. Today, we think part of the reason for that may be that we need to be kind of more transparent and help understand the economic drivers of profitability. We've tried to do better disclosure on that. One of the breakouts that you see from today, so if you look at all-in operating profit, you can see asset management is up 31% year-over-year. We've now broken out between our two categories, subcategories within Sustainable Real Estate from today. We have the multi-asset business, which is our classic long-term across all sorts of assets value add business. Typical hold of three or four years. Again, across all asset classes where we think we can add value. Primarily this is we're operating in hotels, ffice, a little bit of residential that's migrated primarily to the owner's business and retail. The owner's business, which is a short-term hold, typically seven to eight months, much quicker turnover, primarily Tokyo super prime located brand new residential. These are very different business models, and we thought it important for you to understand those different business models. As you can see, you know, they move around a certain amount. These are businesses that are primarily... The Ichigo Owners business is almost entirely full of earnings because it holds, you know, stock. Earnings on real estate is typically rental income. Since you've got a seven-month hold, you don't hold it for very long and turn it over. As you can see, the multi-asset business is double year-over-year and Ichigo Owners of nearly half. That's fine. You know, we don't pressure these businesses to make sales based on kind of fiscal year or anything like that. They move around and they generate the earnings that are durable and they can move between quarters and move between fiscal years. The implication to that, of course, well, one, that multi-asset comeback is really important, to us and to Owners will just have more earnings next year than the following year. As you can see also, Clean Energy was up 16%, and this is just a robust, really good business that is indifferent to the operating environment. Next page, please. I won't go into too much detail on the COVID impacts. You can see on the bottom, we have in bold font, Office and Hotel, highlighted in Q2 and Q3 because of the changes that have occurred there. You know, primarily residential and Clean Energy, they had no real impacts. The one area that is having a significant impact continues to be on stock earnings is hotels, and it continues to be kind of more than relatively impacted. It's fairly significant impact on the buy-sell element, which is full earnings on the bottom. Next page, please. Just to go through kind of the elements of our business model, and again, this is something we talk about regularly because we think it's important to understand, but I'm not gonna spend tons of time on it because it's something we talk about regularly. You know, at the heart of the business is a combination of both kind of robust stock earnings, which make us structurally profitable. On top of that, we have full earnings. You can see the big drop-off that occurs as we moved into COVID, both on the core side because it's, you know, some very, very durable earnings, except the hotels went from making lots and lots of money to making no money. These are kind of contracted rents that we think are kind of very durable. We think they should be described as core earnings because they're very, very durable. When we had a global pandemic, you know, things went really south there, and then also a fairly significant drop off in full earnings. I'll talk to that later. You'll see that full earnings are gonna go up quite a bit, and more, and we still got pressure on core. Next page, please. This is how things break down. You can see you've got asset management on the top. You've got Clean Energy on the bottom, Sustainable Real Estate in the middle. Sustainable Real Estate has been overwhelmingly our biggest earnings driver across the board and also for stock earnings. It has gotten fairly very hard squeezed very hard by COVID. We've got growth in Clean Energy and asset management has been relatively stable. Next page, please. The other element that's important is that we have embedded forward earnings. We, you know, add value to our assets day in and day out. On an accounting basis, those earnings, that value creation is not doesn't come into existence until we actually do an asset sale. We have annual third-party appraisals of all of our assets. The appraisers think that we've got JPY 65 billion of unrealized gains on our balance sheet, which tells you that they think NAV is about 65% above what our balance sheet is. If you turn to the next page, in fact, those accounting-based third-party appraisal-based unrealized gains are very low. In fact, we have typically two to three times that with a really good year in fiscal year 18-2. You should expect 2x-3x our appraisal-based third-party appraisal-based unrealized gains. The implication of that is that we've got, you know, something like 2x-3x our current stated BPS and actual NAV. Next page, please. The other thing we focus on is robust cash generation. Accounting earnings don't necessarily come with cash. That's how you can have, you know, accounting earnings and not actual real cash flow. We're very focused on generating a significant cash flow. You can see the big COVID drop-off that occurs. Nonetheless, we'll robustly generate much more cash than what our stated net income is. Next page, please. Finally, you know, one of the great things about being in Japan is that you can borrow kind of, you know, for forever, kind of fixed at almost nothing. We continue to borrow at average term of 10 years at less than 100 basis points. That's fixed. We've had some drop off in the remaining loan maturity. That's, you know, because a lot of our business is now a seven-month business and we've been fine with that. We will stabilize that number. You know, the thing that's important to understand is we have very durable, not just equity capital, but durable debt, which enables us to sustain the business very well and kind of ride in and out of difficult periods. Next page, please. Let me turn to sustainability. One thing that's worth pointing out is we are robustly climate positive. We have based on our solar and wind map power plants about 2.3x more CO2 reduction than our total CO2 emissions. And we think that's an incredibly important social contribution, and that we continue, and we'll continue to focus on. On the next page shows something totally different, which is not. You know, the previous page on the left-hand side showed, you know, everything we're doing for reduction. The right-hand side showed emissions. This page shows how much we're doing on to reduce emissions. We have a target of being 100% renewable energy, and that's for electricity by 2025. And 80% right now of our total energy consumption is electricity, the other 20% is gas. We're 53% of the way there, and that generates a total reduction of 43% because, again, it's against the 50% target. And we fully expect to get 100% renewable energy under the RE100 electricity standard by 2025. Next page, please. It's pretty clear that ESG is extremely important to the world and increasingly important to investors and to financial institutions. It's also pretty clear that Ichigo is well advanced in this space. We are increasingly recognized for our kind of robust environmental credentials. For example, we're getting financing. This will be an example of financing we got from Shinsei Bank just two months ago. Next page, please. Broadly, because there has been a shift towards greater understanding what needs to happen to support the planet and avoid us tipping over from global warming, there's an increasing market for providing ESG lending. These terms tend to be very attractive. They, for example, will frequently not have amortization in them, not really any covenants. This is very good debt. You know, we are very interested and very focused on having as many ESG loans as possible. It's currently 70% of our portfolio. We expect to grow this from here. Next page, please. As you can see, we are increasingly in ESG indices. We'd like to be in more. We are in fact in three of the five indices adopted by GPIF, the Government Pension Investment Fund, which is the largest pension fund in the world. We were awarded leadership and a score of A- from CDP. We continue to get, you know, lots of acknowledgement for the truth, which is we're very, very focused on having a light, stepping lightly on the planet and trying to do everything we can to be responsible. Next page, please. Turning to what's happening in terms of the three different categories. Sustainable Real Estate. Looking to be selective on acquisitions and sales. We've been saying this for years. That particular title hasn't changed because we are selective in acquisitions and sales. I had pointed out earlier, residential sales continue to be relatively stable. Market conditions are also allowing for us to be active across kind of all asset classes, which is very, very important. You can see that we continue to be primarily acquirer in Ichigo Owners. That's in super prime residential. We would like to do more in other asset classes, and we will. In the last year, we are primarily focused in the resi area. Sales actually primarily in multi-asset outside of Ichigo Owners. You can see on the bottom of the page, multi-asset was a net seller of about JPY 22 billion, and Owners was a net buyer of about JPY 8.5 billion. Next page, please. Owners is going very well. You can see this is the one, two, three, four, five years since we started the business. It will continue to grow our profitability. Very nice business. When you think about it, the ability to turn over kind of assets at seven months, at kind of a 10%-15% gross margin, using leverage. I mean, this is like, so, I have to actually do the math. Something like a 40%, 50%, 60% ROE business, sometimes a really good business. Because you're, you know, it's very high turnover and you have really good assets, the amount of financial risk you're taking on is very low. It's a great business and one that, you know, we're happy we've created. I would point out, we think it is also, you know, very responsible. 10%-15% gross margin is actually much lower than what the market has been asking from buyers. We are the value leader in this space. We thought the margins were way too big. We thought we could do better for our customers and for our investors by providing better value, and we are. This is, you know, a business with extraordinarily robust demand. Increasingly, we're recognized as in a sense the premier provider of, you know, high class residential in Tokyo. We will grow this business. Next page, please. Asset management, we've got three different listed vehicles, two REITs and a solar power producer green infrastructure fund. These haven't grown very much over the last couple years. It is a priority of the firm for us to do more here. You should track us on that to see if we have. It's worth pointing out on the ESG topic that Ichigo Office has cut over 100% to renewable energy. It is the only REIT, only Japanese REIT that has done so. We're leading the pack there. At this point, Ichigo Hotel is 31% done over renewable energy. Ichigo Green is a renewable power producer, so it is by definition 100% renewable energy. We can put that on page, but that's true. Next page, please. Here's what's happening on the clean energy business. It has grown very rapidly. It slows down this year a bit. We've talked about this before. We don't have a slide in this presentation. We'd like to go into green biomass, and hopefully start that business this year. That is work underway, and hopefully we'll have some good news for you when we start that business. When I say green biomass, I mean actual biomass that's good for the planet, because a lot of the biomass out there is not. If you wanna have a conversation about that, we can. This will be generally good for the planet, locally sourced, full cycle, good for the planet biomass. Next page, please. I touched on PROPERA earlier on the first slide. We 2.6x this year. We expect to 4x this coming year, so in the next 12 months. That's obviously a very important growth target. This could be kind of a very valuable platform. You know, the basic kind of customer use case for this is Japan does not have very sophisticated pricing optimization for its hotels. There's a large market opportunity for this. We have spent years developing a proprietary AI-based system for this. You know, when we put this into hotels, typically uplift is 20% or more on actual revenues. There's an even higher translation than ROI growth. This is something we think has significant kind of customer and social value, and we expect to grow rapidly and stay tuned. Next page, please. We've done our sixth consecutive year of buybacks, and we will as of today's announcement. Let me just touch on this one a little bit. As you can see, we've generally done JPY 3 billion of buybacks kind of year in, year out, twice a year. Last year, we only did JPY 1.5 billion. We got all sorts of questions as to why we weren't doing more buybacks when the stock was cheap. The answer is we are very involved in trying to do more and to try to do things that are big. That results in us having, on a not infrequent basis, material non-public information. If we're sitting on material non-public information, we can't buy back our stock. You know, anything, for example, that's gonna generate over 10% of forecast sales, so a very large, for example, Owners transaction or a very profitable Owners transaction, anything that will generate over 30% of forecast net income falls into the Material Non-Public Information bucket. Anything that you would think normally is material falls into the Material Non-Public Information bucket. The challenge is, so if we're sitting on MNPI and we'll get a question, and I'll get a good question. They'll go, "Why don't you buy back your stock?" I basically have to talk in my sleep because I can't say we're sitting on MNPI because that would be releasing MNPI, and we wouldn't know what it is. You end up with this kind of mumble, mumble thing. The reason I'm telling you this right now is for all of you, next time you think the stock is cheap and you think, hopefully correctly, that we're very aligned with our shareholders and we're gonna be buying our stock when it's cheap, the answer may not be, oh, Ichigo one doesn't think our stock is cheap, or Ichigo two doesn't have a financial capability to buy back stock. We think our stock is very cheap, and we have robust ongoing capability to buy back our stock. The answer may be, oh, they're sitting on MNPI. If you ask me that question or if you ask Takuma Hasegawa, our CEO, in Japanese that question, we're gonna mumble into our sleeve because we can't actually talk about it. Just FYI. Hopefully I've given you the information you need to know to understand why we only did JPY 1.5 billion last year. Next page, please. We continue to have a J.League shareholder program. It's the first shareholder program in Japan. We include not only our own shareholders, but also shareholders of our REITs and Ichigo Green, which is a solar power producer, and we're also the first company to offer shareholders tickets to every J.League game. This of course had a COVID impact that was really unfortunate. J.League is back up and running, so we're back giving out tickets to our shareholders. Next page, please. Let me turn to the forecast. Again, the two we think most important numbers here are all-in operating profit and cash EPS. As you can see, I mean, and if you look at FY 2022 on the left-hand part of the page, I didn't touch on this on the results page. We literally are generating cash EPS that's twice our stated accounting EPS. We are far more profitable than what your classic EPS numbers look like. It's another reason why we have every ability to invest for the future, including buying back our stock. We think it's cheap. I'm turning to the right-hand side. You can see on all-in operating profit, we think, you know, we've got a range. You know, it's still super uncertain out there. You know, there's COVID uncertainty of course, but there's also kind of macro uncertainty. There's Ukraine uncertainty. We thought, you know, we actually talked about should we go with the spot number? Should we get rid of this range thing? We don't like the range thing. We like to have numbers put out and we beat them. The challenge with that is, you know, it would call on us possibly to kind of be conservative given all the things that are going out there because our job is to beat our forecast. We decided to go with the range yet again this year. As you can see on operating profit, it's biased to the upside, you know, -4% to +18%. On cash EPS, -3% to +13%. The actual EPS numbers will look better than that. They'll be +2% to +33%. That's but of course we did some impairments this year, last year, that pushed down EPS. That didn't have impact. They were non-cash impairments that didn't impact cash EPS. I mean, as Ichigo and we have Ted on the call, who is both our Lead Independent Director and also the head of our audit committee, we're very conservative. Every time we have an opportunity to go, you know, this looks like it could have impairment risk, we write stuff down. Historically, the result of that has been we write it down, we actually get the money back. We are very conservative about uncertainty. Next page please. In terms of segment details, we've got Asset Management down 40%. Sustainable Real Estate is up 1% to +32%. Multi-Asset, it's gonna be down from -10% to +30%. Owners is gonna have a rebound, +39%. Clean Energy +3%. Just to turn to the Asset Management number, it's probably wrong. Things that we've looked, you know, it's in part a function of about 20%. Half of that is a drop-off of performance fees on office sales. We have performance fees in both our Office REIT and Hotel REIT. We are actually the only J-REITs that are entirely based on performance fees. We think that creates alignment with our shareholders, and no one else wants to take that risk. We are very aligned with our shareholders across kind of everything we do. That drop off is we didn't put the performance. We don't have an assumption about kind of a gains on sale that will accrue performance fees for us in the office REIT. That explains about half the year-on-year drop off. The other half actually is kind of internal allocation, which we kind of look at and we're like, "Eh, this doesn't make sense." To be clear, we've kind of shifted up our allocation regime for how we allocate headquarters costs. You know, the asset management business is a really low-cost business. Uses no equity. It's a phenomenal business. It's arguably our best business because it's a non-asset business, so it uses no equity. It has really durable returns to it. Because it's low cost, and when we shifted up our allocation mechanism for how we allocate headquarters costs to the various segments, we noticed this thing. We're sending a bunch of costs to asset management. This doesn't make sense. Quite honestly, we realized it didn't make sense and wanted to change the allocation regime, and didn't have enough time to talk with our external auditors about this. We expect to fix this by Q1. You should know that there's not really that kind of significant drop off in the asset management business. Apologies, we weren't able to fix these numbers by now. We will be totally transparent about what we do, and go through a robust process with our external auditors to walk through what went wrong with our allocation mechanisms and why we need to fix it. We expect to get it done by Q1. Next page, please. This is the final page. That's 'cause I won't go into the appendix. You can see on the right-hand side, a mix of course, stock and flow earnings. Note the big drop off in stock earnings. We continue to have pretty severe COVID effects. If you look compared to 2022, so the February 2020, there's a JPY 55 billion drop off in stock earnings, which is mostly about hotels. A fair amount of Odaiba, our one big office asset in it, which is just extraordinary. You know, we have never experienced anything like it. We're still experiencing these stock earnings effects. We're not gonna get improvement this year in Odaiba 'cause we're gonna give six months free rent to lease up the space. I'm happy to talk about more what we're doing to reposition the asset. A drop off in stock earnings occurs this year. It comes back next year. You can see there is actually a fairly substantial rebound in core earnings, which speaks to kind of the overall market has come back. We experienced two very significant COVID impacts. One is this drop off in core earnings, which we're still experiencing. We expect it to be remedied for next year. The second one was kind of, you know, this kind of collapse in liquidity, in the broad real estate market for our Sustainable Real Estate assets, and that is largely cleared at this point, so it is coming back. Those are my prepared remarks, as it were. Thank you, Greg. Yes. Yes. Two questions, please, Scott. Sure. One is you alluded at the beginning of the call regarding an improvement in the situation for hotel transactions. Yeah. I was wondering if you could elaborate on that. Number two, as far as shareholder return are concerned. Yeah. I see that management has decided to leave the dividend flat des- Yeah. Despite the improvement in cash earnings. Yeah. I was wondering what are the, you know, the thoughts behind that, because, you know, 1 more yen would have been perhaps nice. Thank you. On hotels, look, we did an asset sale in Q4. It was at a robust and good price. It was a global investor taking a view on, you know, COVID is coming to an end, and investing on the rebound. That was very promising. You know, it just tells you that, you know, that was a market that was kind of. It was very frozen, just begun to open up. We actually have a number of hotel assets that we're happy to sell. We've gotta put them in the market, and we expect we'll see some transaction activity around that. What's important about that transaction was it was above kind of pre-COVID pricing. That was great. You know, that's what's happening there. Broadly speaking, two things are happening that are gonna be very robust and contributory across kind of all assets, not just hotels, to profitability. One is we're experiencing inflation again, labor inflation, materials inflation. What it tells you is replacement cost has gone up, so existing assets become more valuable relative to building brand new assets. We own a whole bunch of existing assets, they become more valuable. Two, the yen has weakened. You know, Japanese real estate is on sale, I mean, just in a very profound way. This is a very robustly reforming asset class that has done well for global investors for decades. We're seeing a significant uptick in demand from global buyers who are interested in buying assets at 128 yen when it would've been 115 yen at the beginning of this year and 103 yen at the beginning of last year. Greg, is that all right? Did I get to your questions? Yes. Thank you. Okay. Thank you. Let's turn to Will. Oh, I'm sorry. Wait a minute. I need to talk about the dividend. Yeah. Please, yeah. The number please. Oh, look, I mean, I thought hard about the dividend. You know, we think the stock's very cheap. We leaned into. You know, we expect to have ongoing activity and buying back the shares. Too, we actually talked about the dividend today at the board meeting. You know, we have a ROE policy, which is, you know, we think pretty clear, which is we expect to return. It's a ROE-based dividend on equity, so above 3% of equity, we'll pay out year- after- year to our shareholders. It's got a floor on it, so it's progressive, so you know that dividend is effectively a guaranteed return on our BPS for all of our shareholders. You know, we could bump it JPY 1, and it's like, well, why would we be doing that? Well, it's because we can, would be one answer. But it's a worthy question and a worthy debate. You know, we did think about should we move the dividend to eight, should we keep it at seven? We decided to keep it at seven based on a dividend policy and do a buyback and possibly more buybacks. I hope that makes sense. Okay. Thank you. Thank you. Will, you're next up. Can we unmute you? Can you unmute yourself? Okay. Hi. Hi, Will. Thanks for joining. Yeah. Thank you, Scott. You answered some of my questions, so thanks for that. The next question would be on the Odaiba transaction specifically. I believe I heard on the Japanese call that it was about 80% utilized now or 80% occupancy, and you had to give up six months free rent. Can you just comment on what level, you know, versus the prior tenant? Did you have to, you know, cut the new rent by X%? Roughly speaking, you know, how far down is that? Once it becomes fully rented, let's say by the end of this year or next year, what's the full upside from that asset getting back to, you know, closer to full utilization? That's the first question. Okay. the second question, in the stock earnings, you know, you explained a little bit might be from this asset management business accounting Yeah. Allocations. Definitely from Odaiba impact. I think there's a comment that other COVID factors. Is this specifically retail or additional rent decreases from hotels? Just a bit more specifically on the non-Odaiba related stock earnings and what's behind those assumptions. Thank you. Let's see. Let's start with Odaiba. Actually, what's going on with Odaiba is it's currently at 50% leased, and we expect to get it to 80% by the end of this year. And we will be giving kind of six months free rent on that, and that's generally kind of on, that's on a, like, typically would be a three-year lease. And you know, the thoughts about kind of free rent is used all over the world. It's also used in Japan. It's used here in part because moving costs are really, really expensive, and so it's helpful for tenants to be able to absorb some of those moving costs effectively by having a free rent period. Generally in Japan, classically, you will have anywhere between two to three months free rent to, like, nine months to a year when things are really, really bad. Six months is kind of right in the middle of the ballpark. For us, you know, the advantage of free rent is it's attractive for the tenant. It also means you've got a higher. You know, we understand you don't get cash flows from the first six months. But then again, you know, we then tend to have an earning stream that lasts typically for five or six years that's substantially higher. When the next tenant comes, they wanna know what the existing rent is, in-place rent is. It's higher. Because we are so robustly cash generative, it's kind of been, we're perfectly happy to finance our tenants in a sense for the first 6 months. Look, the downdraft on Odaiba this year just from last year. Looking at this drop from JPY 114.9 billion FY 2022 to JPY 13.1 billion, 10 of that is Odaiba dropping off. You would expect at least kind of 10 or more. I'm sorry. When I said 10, I meant 10 oku. Sorry. Will, oku being a Japanese word, guys, which Will knows. Let me stay on billions of yen. JPY 1 billion of that is gonna be Odaiba. I think I don't have it in front of me, but I think the Odaiba drop-off has been, it's been, you know, occurred in previous years also. It's probably 1.5, or it's probably 1.5 or more. That will come back. In terms of the actual levels, they're kind of bang on where they've been. Kind of something that looks like JPY 15,000-JPY 16,000 per tsubo. The actual business plan for this asset was underwritten at something like looks like more like 13. It continues to actually outperform on the business plan, which tells you, one, it's a great asset. It's a big asset, which has been disastrous under COVID because it's the only big asset we own. Small- and mid-sized office has been extraordinarily robust. No real increase in vacancies. When you re-lease, you're actually re-leasing at a step-up, so typically 10%-20% higher on rents. Odaiba is very different from that. It's not this like robustly, wow, this is going fantastic, no vacancy, and we get to re-lease when there are. There were long vacancy. When tenants leave, we get to make more money. Odaiba is not that. It's a large office. Large offices have been struggling in Tokyo, but it's a good asset at a really good price for tenants, meaning it's a headquarters quality building. You know, at JPY 15,000-JPY 16,000 per tsubo when competitors, you know, in Central Tokyo, so just 20 minutes out, would be something that will kind of 2x that. Did that answer your question, Will? I know I'm gonna turn the stock earnings to- Yes. I guess the 80% is already decided. No. Is that? No, no. That's the target. No, that's the target. Okay. Okay. Yeah. Well, we think we'll get there. On the hotel, rents and retail rents. The non-office impacted stock. Yeah. How's that? How's that going? There's a drop-off of about JPY 1.9 billion in stock earnings between FY 2022 and this year's forecast, right? JPY 1 billion of that is Odaiba. About JPY 400 million of that is a drop-off of us actually doing a very advantageous COVID lease to the government for a COVID facility at one of our hotels. Another JPY 500 million of that is asset sales and expected asset sales, and we haven't actually priced in the possibility we're gonna get rent from asset purchases. That's what explains the JPY 1.9 billion. The asset sales are primarily a mix of both offices and retail, the JPY 500 million drop-off. That's the difference, the JPY 1.9 billion between last year and this year in hotel. So the implication of that is we'll get Odaiba back. Look, I mean, the JPY 400 million on the COVID thing is a drop in the bucket relative to the disaster that's been the loss of hotel earnings, which is kind of between 2022 and 2023. This year's forecast, 2023 to a JPY 5 billion drop-off in hotel. Most of that is hotels. You know, at some point, COVID comes to an end, and we'll get that back. But that's what kind of the immediate future looks like. Thanks very much. Thank you. Next, we'll take Penn, if we can unmute you and you can unmute yourself. Penn, you there? I think so. Can you hear me? Yeah, you're definitely there. Thank you very much. Excellent. Thank you so much for making the time, as always. Sure. I just have a couple of very basic and potentially silly questions, but. No, no. I mean, you mentioned the yen weakness, which is. Yeah. Rapidly accelerating as we speak. Yeah. What is the key delta here in terms of what's changing from a macro environment in terms of global interest? Because I guess everyone keeps on saying Japanese real estate is on sale, but Yeah. If the asset base and the cost base and the interest base is yen-based, maybe it's just my misunderstanding. I'm just trying to understand what a weaker yen actually changes, and maybe if you could expand upon that in terms of interest rate differential, stability of Japan, etc., where the foreign interest is really probably coming from. Yeah. Second question, very separate again, on the buyback. So you mentioned the MNPI side of this. Yeah. Why not just announce a much larger buyback, and with a longer dated range and give yourself more flexibility? Again, something that I don't understand, you've explained in the past how you have to do all this through sort of a trust bank, and you have to leave a lot of things in their hands. Yeah, maybe if you could explain why you couldn't just make something much larger and then maybe put a top-end limit on where you would actually buy back the shares at. Thank you. Yeah. Okay, thanks, Penn. The question on JPY weakness, global investors always worry about are they gonna get returns that turn into returns in their home currency. You both get the local currency return and then you have to worry about FX. Is the target currency going to appreciate, depreciate? Effectively what's going on is there's an implied view that FX risk, you know, the risk has gone down or perhaps an implied view that the yen is at 128 yen. It's literally on an effective exchange basis at a 50-year low, a half-century low for the Japanese yen is a reasonable entry point. So you're absolutely right. It is the case. I mean, there could be a little bit perhaps of, you know, we wanna spend $200 million, and that's our budget. Now we can do bigger assets, move bigger assets. It's overwhelmingly people think 128 yen or 123 yen or 120 yen is a very attractive entry point from an FX perspective. You know, you're absolutely right. It's all the economics are yen-based economics. It's the ability to not lose on the yen and perhaps gain on the yen, which is proving to be attractive to people. On your first question, does that make sense? Yep. I just find it a bit surprising that people are, yeah. Wouldn't global investors actually hedge out the yen exposure? That's sort of how I would've thought of it. Yeah. They actually wouldn't wanna take that currency bet. That's not what their expertise is. Yeah. Some people do, but most don't, because you know long term the issue is that in a sense, so kind of in defense of some people do, but some people don't. I mean, you have to roll the stuff. There's a little bit of operational issue around that. I mean, certainly not gonna be able to really do very well kinda five-year or 10-year FX trades. It's interesting. You know, a lot of global investors do see FX, so FX exposure as diversification correctly. It is. That's another reason why people don't hedge out the FX exposure. The yen, you know, yen-dollar cross is super liquid. You can hedge it out, but you generally can hedge it out for three months, six months, and then you start rolling, right? So it's interesting. From my experience, overwhelmingly, global investors in Japanese real estate do it in yen, and so they care where the yen is. Thank you very much. And so- Sorry for the basic question. No, no, not at all. No. Basic questions are the harder things. Yes. It is a very interesting topic, isn't it? Look, on the buyback thing, yes. I mean, you're right. Another way of playing this is for us to do bigger buybacks and lengthen them out. Frankly, you know, we wish we had done that last year. Yeah, we didn't. There's, you know, an embedded assumption which is worth questioning, that if we do smaller buybacks, there'll be less of an impact on the stock, and therefore we'll be able to buy in the stock at better levels for our shareholders. We do know the way that, again, it's missed opportunities. Last year was the first time ever where we just had so many things going on that we got in the way. It was our first and very painful experience with like we wish we had done a longer term buyback and bigger size. We are monitoring the situation. Yeah, yes, your thinking is clear and is certainly a possible alternative and one that we will try to be thoughtful about. It is one other thought. The idea of not using a trust bank is kind of off the table. Lengthening out the term of your buybacks is doable. Kinda trying to do it by ourselves in the market is not. You will have to hand this over to a third party and avoid the problem being tainted by NPI. Your essential point, which is you can lengthen the buyback, yeah, absolutely. It's something we, you know, may end up doing. For the moment, we've decided to do a smaller shorter term one. Great. Your second question? Yep. Thank you very much for your time again. No, thank you. We next have a question, looks like from or input from Clive. Clive, can you unmute yourself? Hi, can you hear me? Yep. Thanks so much for joining. Hi, Scott. Good to speak to you again after a while. I had a couple of questions, actually. One was regarding the REITs. Yeah. You alluded to the fact that they're not growing, and in particular. Yeah. the green REIT. Yeah. I wonder if you could maybe kinda tell us about, you know, what your kind of thinking is on how you kinda get that going again, because you said you'd like to grow those, obviously. Yeah. You know what can you do to kind of make that happen? You know, especially, you know, in the green REIT, you know, given, you know, it sort of seems strange, it seems anomalous in the world we live in today that, you know, with renewables and you know, growing interest in that you don't have a green REIT that's growing. Yeah. Well, I mean, that may be our fault. Look, kind of across the board, when I say our, it's probably my fault. Look, to give you some history on all of these, the two REITs, and technically speaking, the Green is an infrastructure fund, so it's REIT-like without being a REIT. Yeah, we can call it a REIT also. You know, classically, sponsors have kind of abused trust. They have dealt unfairly with shareholders. They've used these as vehicles to put in assets, not necessarily at a correct price. We just think it's wrong. I mean, we're fiduciaries. We work for all of you, and we work for all shareholders. You know, it's been very important to us that any transactions that the REITs do will be good for the REITs. You know, for me, that meant for a long time, I was against doing any transaction on the REIT. For example, you know, look, to grow REITs, they have to pay out all the dividends, so you really don't have the ability to grow unless you do a public offering. You know, I felt very strongly we shouldn't do public offerings unless they were manifestly accretive. Now, remember, I mean, of course, shareholder value, so a share price is effectively EPS times with a multiple. The thinking was, if we are relentlessly focused, great fiduciaries, we're gonna get a high multiple. Not only will we do a better job of growing EPS for our shareholders at the REITs, we also get a high multiple for that. If we get a high multiple, it's easier for us to do accretive transactions. Clive, that's not what happened. It didn't happen for years. It's like, I mean, basically kind of a value investor at heart. You know, the market's gonna get this right at some point. You know, it's become pretty clear the market is not giving us a high multiple. They've actually been punishing us for not growing our size. The irony is choosing not to do public offerings has been punitive for shareholder value at the REIT level. We're just rethinking it. We haven't done the other three years. We're certainly not gonna do something kind of super, like, wildly, kind of massively dilutive, but, you know, it's creating, you know, we're gonna experiment a little bit. Okay, maybe we should come to market. That's kind of the obvious place to start to see if we can do public offerings that win market support and create a virtuous cycle. You know, which is, to me, it's ironic. I mean, other REITs have been doing dilutive offerings, but they've earned a multiple because quote-unquote, "they're growing." Where growing is not growing EPS or DPS, but growing kind of asset size. Japan is a little bit of a big, too big to fail thing. You know, big is good. Banks like it. I understand all that. Anyway, that's one thought. On Ichigo Green itself, this is kinda trapped between two legs of a stool. I don't know. I left the United States of America in 1984. I may not remember my English or if I do have English, it's like from the 1980s. You know, it's. Will is good about reminding me on a regular basis, you know, that there's an opportunity here. You know, we have all these assets, great assets in our Clean Energy business. Green is priced kinda too low for us to want to put those assets into that business. Meaning these need to be transactions that are good for all shareholders. Yet Green is also not necessarily priced high enough in order to buy assets from other people. So it's kind of stuck. It's not growing. To be honest, you know, the big places to really move the needle and have an impact and to kinda break through is not gonna be at office. It's at Green. It's gonna be at office 'cause it's so much bigger. It's a JPY 200 billion portfolio. Hotel, you know, probably has more of an opportunity given its kind of sophistication and ability to add value to assets, including being prepared to kinda grow quickly. I wouldn't hold your breath on growing. It's run really hard. It's run super low costs. It's a great vehicle. It's hard for institutions to buy. It's, you know, it's largely at this point, an individual investor portfolio. You know, do we have our hopes and dreams for it? Yes, but it's not clear. I hope it's okay to be super transparent. That's gonna be the major vehicle for growth. I would expect to see a lot more out of office and hotel. Did I answer your question? Yes, perfectly. Thanks very much. I had a second question. Sure. On the mid-sized office market, you know, I mean, looking at the short term, as we can see, you know, just in the office market, generally in Tokyo, you know, occupancies of. Rents have been kinda edging down. You know, and it is what it is, you know, from very high levels, obviously. But what's your view on sort of the medium to longer term on where the mid-sized office market goes in Tokyo? I mean, it's easy for, you know, people like me to get a view on, you know, the big, you know, the mega-sized office market and, you know what's going on with, you know, new mega projects in Toranomon and places like that. What's going on in the sort of, you know, the less, you know, visible and dare I say, glamorous end of the market. Yeah. where you guys are operating. Yeah. What's the sort of medium-term, long-term outlook for that, if you could talk through that, please? Can I say it's a better asset class? It truly is. Okay. Everyone gets focused on kind of the big, buildings because they're exciting and they're beautiful and they're trophy assets. Right. They have this, like, huge volatility, and they come with kind of premium pricing. Frankly, it's harder for the big assets, just as physics and engineering to make it earthquake-proof. You have all these tenants and, you know, typically bigger tenants with more pricing power. It's an inferior asset class. The great thing about mid and small office is how incredibly robust and how diversified and how durable the economics are to the asset class. To your point on rents, we have actually experienced no downtick in NOI in our offices. Outside of a little bit of COVID, because typically, you know... We do very well located, you know, central CBD kind of office near the station. Typically, as you would know, Clive, the first floor is gonna be retail. Right. You know, we've had some turnover in retail tenants from that, but you re-lease at a higher rent, because as you also know, Japan has quasi rent control. We've had such a good kind of rent market, I mean, economic and operating environment for like a decade, that in-place rents are typically 20%-30% below where they should be when you release. We continue to have. We're long vacancy in our mid-sized office portfolio. When tenants leave, we get to have a small celebration, which feels inappropriate 'cause the tenant is leaving, but it means we get to re-lease that typically, as I say, these days, kinda 10%-20% higher. Over the longer run, that still feels very durable. The reason is small. Who occupy small mid-sized office? Overall it's small mid-sized firms, and I'll speak to that. It's also big firms in increasingly because they're doing kinda more satelliting and more downsizing. So we've got a new source of demand because classically small mid and small size office was just small mid SMEs, and now we have bigger companies coming into the space because they like the kinda better pricing, and they wanna have kind of remote work, and they also wanna have, you know, offices. There's a new source of demand for that. Most fundamentally, the big drivers of demand in this business, in this asset class are SMEs, and they are desperately fighting for talent, and they wanna do it with office space. What we're hearing from all our tenants is, "Yeah, we're doing more remote. We have less people in the office. That's gonna be ongoing, and we wanna keep our space. You know, we always thought it would be more attractive to have more space for worker, and this is important to us." They're also seeking to upgrade, and want better quality space, again, in the fight for talent. As you know, when you hire somebody in Japan, it's effectively a lifetime commitment. Under Japanese labor law, you're better off, if you can, trying to keep your talent, not by raising their salaries by 10%-30%, but by paying 10%-30% more for better office space that makes them feel it's near that station and you don't have to put out an umbrella when you walk to the office, all those sort of things. Office continues to be, ironically supported. Everyone thought that the decrease in workers was gonna be a demand drag on mid- and small-size office, but in fact it's been a demand driver because there's been in the fight for talent, SMEs wanna have more space for worker, and that's more than the decrease in the number of workers in terms of its impact. Did that answer your question? Yes, perfectly. Thanks a lot. I would have a follow-up, but I noticed we're over the hour, so I'll leave it there. Thanks very much. Yeah. Thank you. Don't mean to cut everybody off. Clive, you're a gentleman. Thank you very much. I think we are done. We actually have run over time. Thank you so much, everybody. Really appreciate your time. And we're gonna work hard for you. Everybody have a really good day.