日本房地产与住宅：新财年投资策略

Investor Presentation| Japan Housing & Real Estate: Investment Strategy for theNew Fiscal Year Expect re-rating of defensive real estate stocks (which near term may be vulnerable to rising interestrates, credit risk). Forecast ongoing asset inflation, driven by rising office rents, drop in new officesupply. Watching medium-term trends for crude prices, interest rates, & monetary policy. Key highlights • What will happen to the urban office market in phases when geopolitical risks such as Middle East tensions intensify? Are there arisk of momentum in rental growth faltering? • Will prices of city center condominiums and inflows of overseas real estate investment money peak out?• Have shareholder proposals and industry M&A activity run their course?• Will there be a virtuous cycle of mild inflation, or will cost-push inflation intensify?• Will real estate cap rates start to rise amid higher long-term interest rates? Will banks’ lending stances change?• What is the impact on housing/real estate from supply-chain disruption from tensions in the Middle East?• Where will recovery in the US detached homes market hit an inflection point? Are negatives priced in at current homebuilder shareprice levels? Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”) is acting as financial advisor to Daito Trust Construction Co., Ltd.(“Daito Trust Construction”) in relation to the proposed acquisition of common shares of Solasto Corporation (“Solasto ”an equitymethod affiliate of “Daito Trust Construction”) by MP-2605 K.K. through a tender offer and subsequent procedures for the purpose ofmaking Solasto into a wholly owned subsidiary as announced on March 24, 2026. This report and the information provided herein arenot intended to solicit a tender of shares into the tender offer or to provide advice to investors with respect to whether a shareholdershould accept the offer. Daito Trust Construction has agreed to pay fees to MUMSS for its financial advisory service. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investmentdecision. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”) is acting as financial advisor to Sumitomo Forestry America, Inc.("SFAM"), which is 100% subsidiary of Sumitomo Forestry Co., Ltd., in connection with its acquisition of 100% shares of Tri PointeHomes Inc. as announced on February 13, 2026. Upon the completion of this transaction, Tri Pointe Homes Inc. will become aconsolidated subsidiary of Sumitomo Forestry Co., Ltd. The proposed transaction is subject to approval by Tri Pointe Homes Inc.’sshareholders and authorizations from the relevant authorities. SFAM has agreed to pay advisory fees to MUMSS for its financialadvisory services. For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearancesand trading securities held by a research analyst account. Coverage Share price performance Real Estate Industry View: In-line Share price performance drivers/share price upside scenarios 1)In phases of rising geopolitical risk, real estate stocks that are lessdirectly affected by factors such as higher crude oil prices arefavored as defensive plays (defensive) 2)Amid rising office rents, improved ROE, and bolstered shareholderreturns, existing properties are revalued, triggering a resumption ofa reflationary market (inflation)3)Under stable interest rates and a weakening yen, excess liquiditymoney drives a sharp surge in real estate prices and real estatestocks (melt-up) Risks: 1)Rising interest rates (e.g. interest rate (r) > growth rate (g))2)Rising credit risk/narrowing of bank lending3)Overseas macroeconomic factors (e.g., overseas bond marketturmoil, reversal of yen carry trades, supply chain disruptions) Stock picks in industry: We positively rate major real estate names taking into account officeexposure, room to increase ROE/shareholder returns, and interest rateresilience. Our current order of preference, in view of city center officeexposure and scope to improve governance, is Sumitomo Real Estate> Mitsubishi Estate > Mitsui Fudosan, but we think Mitsui Fudosan hasscope to catch up in the medium term given its lagging share price andpotential to enhance shareholder returns. Looking broadly from 2023, real estate stocks rally during rising interest rates In the past, developer stocks didn’t necessarily react negatively to long-term interest rate hikes.Looking broadly from 2023, real estate stocks have shown r