Japan faces difficulties including the appreciation of the Japanese Yen, dependence on government bonds to finance budget deficits, the exodus of personal savings offshore, and the structural contraction of domestic demand as the productive-age population shrinks. However, the present political structure is incapable of formulating drastic measures that might resolve these problems. Under such circumstances, it is difficult to identify measures that might spur a real economic turnaround. Nevertheless, now is precisely the time to reinforce our business base, and I believe that a bold and proactive approach to new business opportunities holds the key to our next phase of growth.

The Three Stages of Mori Trust Group Corporate History

The global economy has been experiencing enormous turbulence since the financial crisis that started in the United States in 2008. Before this upheaval commenced, in 2006, Mori Trust reorganized itself into three divisions dealing with real estate, hotels and resorts, and investment as the third stage of the Mori Trust Group's corporate history. Many years of experience in corporate management helped us envisage changes in the business environment and restructure the Group to strengthen its asset and business portfolios. Allow me to recap the three stages of our corporate history.

The first stage was from 1970 to 1993, when MORI BUILDING DEVELOPMENT CO., LTD. (which changed its name to MORI TRUST CO., LTD. in 1999) was a core member of the Mori Building Group dealing with short- and medium-term projects, while long-term developments were handled by MORI BUILDING CO., LTD. At that time, Mori Building Group was managed by three people: founder Taikichiro Mori was CEO; Minoru Mori, the current president of Mori Building, was in charge of development and marketing; and I was responsible for finance and administration.

The second stage ran from 1993 to 2005, when I became CEO of MORI BUILDING DEVELOPMENT and MORI KANKO TRUST CO., LTD., and Mori Trust Group took its current form. During this stage, which followed the bursting of Japan's bubble economy, we strengthened our financial position by liquidating or turning around nonperforming assets. We also acquired sites in Tokyo's Marunouchi and Shiodome districts and began major urban development projects, constructing a competitive real estate portfolio even as Japan struggled with recession.

The third stage has seen the substantial expansion in our key business of Real Estate and Hotels & Resorts equivalent to those of other top players of the industry. We have established a business structure suitable to our scale and strengthened its operational capability.
This third stage has also been a period for creating and developing new business opportunities emerging from the new business environment. Utilizing a wealth of expertise and management resources built up over many years, we aim to develop our business in directions that contribute positively to society in many ways.

Outlook for 2011

Given the broad trends outlined above, in 2011 Mori Trust Group plans to review, and raise the productivity of existing businesses in ways suited to the current economic environment and to further strengthen its corporate capabilities. We will move forward while keeping close watch on the radical structural changes taking place in the Japanese and global economies, and 2011 will also be a year for developing innovative business models essential for a new era.

The Real Estate division will further reinforce its leasing business and firm up plans for redevelopment projects located in the center of Tokyo, including in the Kyobashi district and at the site of the former Toranomon Pastoral Hotel.

The Hotels and Resorts division will focus on adding value to the functions of cities where our hotels are located by setting new standards of service meeting customer needs in Group hotels. A prime example of such an establishment is the Westin Sendai, an international brand hotel that opened in the Tohoku region in August 2010.

The Investment division, meanwhile, will continue its mergers and acquisitions, venture capital and fund businesses. In a fast-changing global socio-economic environment, the division also plans to examine overseas investments from a mid- to long-term perspective.

The key to success in the current economic environment is providing appropriate and well-timed products via up-to-date business models. With an eye to the changing times, Mori Trust Group will place its three divisions at the core of its operations, but without limiting the scope of its business activities, as it continues to contribute positively to society across a broad range of fields.

Our management philosophy is based on Trust, Continuity, Shared Rewards, and Social Responsibility. The word "Trust" is in our corporate name because it reflects our commitment to contributing to society over the long term, thus proving ourselves worthy of the trust placed in us by society. As we grow hand-in-hand with our customers and partners by creating mutually beneficial business models in a variety of spheres, we also aim to build businesses and systems that benefit our society as a whole.

We firmly believe it is our corporate obligation to manage the Group in a responsible way and thereby create truly outstanding businesses, and for this reason Mori Trust Group will continue striving to earn the trust of our customers and business partners as well as local communities and society as a whole.