Investment Bridge Announces Investment Opinion: Bridge Report on Leopalace21 Issued: Improvement in FY3/13 Earnings Expected to

  Investment Bridge Announces Investment Opinion: Bridge Report on Leopalace21
  Issued: Improvement in FY3/13 Earnings Expected to Continue in FY3/14

NOTE TO EDITORS: The following is an investment opinion issued by Investment
Bridge

Business Wire

TOKYO -- June 12, 2013

Investment Bridge, one of Japan's leading independent IR services companies,
has released a "Bridge Report" on Leopalace21 Corporation (TOKYO:8848)
reviewing its fiscal year March 2013 earnings results and its forecasts for
fiscal year March 2014.

  *FY3/13 consolidated sales fell by a small margin of 1.1% year-over-year
    due to a decline in sales of the construction business. However operating
    income benefitted from improvements in the leasing business profitability
    and grew by a large margin of 61.7% from the previous term. Foreign
    exchange translation gains resulting from the weaker yen and taxes
    adjustments contributed to large increases in ordinary and net incomes of
    372.1% and 739.2% year-over-year.
  *Leopalace21 calls for a small increase in sales of 2.9% and a large rise
    in operating income of 90.2% year-over-year on the back of continued
    improvements in profitability of the leasing business during FY3/14.
    Disappearance of foreign exchange translation gains and tax adjustments
    are expected to contribute to a lesser 10% year-over-year increase in
    ordinary income and a 17.5% year-over-year decline in net income.
  *The Bridge Report calls attention to Leopalace21's ability to achieve
    profitability at the operating level without relying upon reversals from
    vacancy loss reserves as significant progress in Leopalace21's strategy of
    restoring stable profitability.

Leopalace21 Corporation conducts construction, leasing, and sales of
apartments, condominiums, and other residential properties, in addition to
operation of hotels and resorts, and elderly care services. Increases in sales
of the leasing, hotels and resort, and elderly care businesses were offset by
a 15.2% year-over-year decline in sales of the construction business and
caused total sales to fall by 1.1% year-over-year to JPY454.2 billion in
FY3/13. At the same time, improvements in profitability of the leasing
business helped to offset lower profits in the construction business and
contributed to a 61.7% year-over-year increase in operating income to JPY7.4
billion.

During FY3/14, Leopalace21 seeks to increase sales in both the leasing and
construction businesses by 1.4% and 14.5% year-over-year to JPY389.0 and
JPY61.1 billion respectively. A large increase in operating income of 90.2%
year-over-year to JPY14.1 billion is also expected due to higher sales and
improvements in gross profitability. However, the disappearance of foreign
currency translation gain and income tax adjustments of JPY5.5 and JPY4.6
billion that occurred in FY3/13 is expected to contribute to a 17.5%
year-over-year decline in net income to JPY11.0 billion.

The Bridge Report also highlights the fact that full year profitability at the
operating level was achieved without having to rely upon reversal of vacancy
loss reserves as a reflection of significant progress in Leopalace21's
strategy of restoring stability to its earnings. In addition, the Report calls
for attention to be paid to Leopalace21's new efforts including its solar
power generation business designed to leverage its stock of 550,000 rooms
managed nationwide and leveraging of its know-how in its overseas business
deployment as called for by its New Midterm Business Plan entitled "Creating
Future".

To view the full report, please go to the following.
http://www.bridge-salon.jp/report_bridge/archives/eng/8848/20130612.html

About Bridge Report:
Bridge Report is produced by Investment Bridge Co., Ltd. and provides accurate
and objective information about the earnings, business strategies, and other
information of publicly traded Japanese companies.

Contact:

Investment Bridge Co., Ltd.
Kaoru Hosaka for Leopalace21 Corporation
+81-3-5842-5765 (Japanese correspondence only)
leopalace21@cyber-ir.co.jp (English and Japanese correspondence)