News Release
Survey on Private Real Estate Funds in Japan
July 2018– Results
September 10, 2018
Sumitomo Mitsui Trust Research Institute Co., Ltd• Starting in 2003, Sumitomo Mitsui Trust Research Institute Co., Ltd. has conducted the “Survey on Private Real
Estate Funds” as part of its research activities concerning real estate investment markets. This is the 26th survey
based on responses to questionnaires received from 53 real estate asset managers.
 Survey subject: Real estate investment asset managers that set up and manage private real estate funds
which focused on Japanese real estateThe number of questionnaires sent: 109The number of responses: 53 (ratio of valid responses: 48.6%)

Survey period: in the July to August 2018

Survey methodology: Questionnaire survey sent by post and e-mail• Based on the results of the survey, hearings and published information, we estimated the market size of private
real estate funds (on an invested asset basis) as of the end of June 2018 to be 16.9 trillion yen. This figure
involves Japanese assets of global funds (*) that we were aware of. Assets under management (AUM) increased
approximately 860 billion yen (5.4%) from the previous survey (16.0 trillion yen as of the end of December2017). The pace of expansion of the market for domestic private real estate funds, which was gradually
increasing in recent years, has accelerated slightly. In this survey, we have revised the past figures to reflect the
new information which was obtained.

The market size of private real estate funds is 16.9 trillion yen including Japanese assets of global funds
・Assets under management (AUM) as of the end of June 2018 were 16.9 trillion yen （This figure involves Japanese
assets managed by global funds）. AUM increased approximately 860 billion yen from the previous survey as of theend of December 2017. The pace of expansion of the market for domestic private real estate funds, which was
gradually increasing in recent years, has accelerated slightly.
・The number of asset managers whose AUM increased exceeded the number of asset managers whose AUM
decreased and there are some managers whose AUM increased more than 100 billion yen. Overall, the market size
we estimated rose approximately 5.4% from the estimate in the previous survey. Both the numbers and AUM ofprivate REITs increased, the total AUM of asset managers who only manage private funds (excluding private REITs)
also increased. We realized that the market size of private real estate funds is expanding by the increase of bothprivate REITs and private funds.
・With debt financing conditions remaining favorable, many managers seem to believe that equity investors’ appetite
for investment is continuing at a high level.
・As to a survey on acquiring or disposing properties in the first half of 2018、more than 70% of respondents answered"Acquired", also more than half of the respondents answered " Sold property " ,both of them increased compared to therecent surveys. In the environment that the number of properties coming onto the market remains low, the managers
on its sellers’ side seemed to have little trouble disposing properties due to the narrowing gap in price expectations
between sellers and buyers and so on. It shows that active acquisition of properties continued with a background of
brisk demand for acquisitions.
(*) We define “global fund” as a fund targeting real estate investments in various countries including Japan.

1News Release September 10, 2018
Assets under management（Trillion yen）

Trends of Market Size of Private Funds and J-REITs
17.7

18.1 17.5
17.2 17.6

17.6

14.3

14
13.7

12

14.0

13.6

15.8

14.9

14.7

15.3

14.8

14.7

13.8

16.7

16.1

15.0

8

6.1

5.5

6
4.5

5.5 5.4

6.1 6.1

6.7 6.8

15.1 15.1 14.8

15.6 15.8

14.8
13.5 14.0
13.8
13.4 13.5 13.1
12.6

14.4

16.0 16.9
17.3

16.5

16.2

14.2

14.3

14.0

14.7

9.0

8.7

8.3

8.0

7.8

7.8

7.6

7.5

7.4

7.4

15.5

15.5

11.9

11.2

10.4

10.0

15.5

14.9

10.2

10

4

16.9 16.8

Private16

17.6

Private17.1

18

Private20

J-REIT

PrivateJ-REIT

J-REIT

J-REIT

J-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT

PrivateJ-REIT0

Private2

2006/06 2006/12 2007/06 2007/12 2008/06 2008/12 2009/06 2009/12 2010/06 2010/12 2011/06 2011/12 2012/06 2012/12 2013/06 2013/12 2014/06 2014/12 2015/06 2015/12 2016/06 2016/12 2017/06 2017/12 2018/06

J-REITsPrivate funds that only invest in domestic real estate“ Survey on private real estate funds”

Private global funds (Domestically invested assets)

July 2018 Survey Results(Note) [n] shown in the figures throughout this document indicates the number of effective responses.

1. Current Status of Real Estate Fund Management Business
1) Management of Overseas Capital
In response to the question as to whether they have managed overseas capital in their private real estate funds, both“Yes” and “No” accounted for 50% (Fig.1). The percentage of respondents who said “Yes” accounted for 69% in theJuly 2015 survey, after that was on a downward trend.It has been around 50% since the January 2017 survey.
The reason why the percentage of the managers who managed overseas capital showed a downward trend since2016 is thought to be a sense of caution among overseas investors against rising real estate prices in Japan. However,based on the results of the recent two surveys, the downward trend seem to have ended and bottoming out. It will benecessary to keep a watch on the trend in the future.
Fig.1 Do you manage overseas capital?
100%
80%

46% 51% 51% 53% 47% 47% 45% 45%

37% 40% 42% 40% 44% 38% 31% 38% 40%
48% 52% 44% 50%

54% 49% 49% 47% 53% 53% 55% 55%

63% 60% 58% 60% 56% 62% 69% 62% 60%
52% 48% 56% 50%

60%
40%
20%
0%

08/07 09/01 09/07 10/01 10/07 11/01 11/07 12/01 12/07 13/01 13/07 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=54) (n=47) (n=63) (n=53) (n=60) (n=57) (n=62) (n=64) (n=62) (n=50) (n=60) (n=55) (n=52) (n=52) (n=55) (n=52) (n=52) (n=52) (n=50) (n=50) (n=50)

Yes

No

2) Status of the Funds under Management – Results of the funds currently operating and agree to disclose their data
The results of the content of currently operating funds showed that “Fixed property type” by fund type and “Core” bymanagement style continued to have a majority (Fig.2 and Fig.3). “Open-ended funds” by fund type is around 20%,
which is the second largest share following “Fixed property type”. By management style, “Development” has increased
5% points to 12% from the previous survey, suggesting the possibility that the launch of “Development” are increasing.
In a survey on target property types, “Office” was chosen by the largest percentage of the respondents(20%), followedby “Residential” and “Retail” (18% each), “Industrial” and “Hotel” (16% each)(Fig.4). The percentage of “Hotel” wasthe same as “Industrial“, suggesting that the presence of “Hotel” as a target property type has increased. In a survey ontarget areas, the percentages of investments in the target areas have remained almost the same since the January 2015
survey, suggesting that investments in diversified areas have been taken root ( Fig.5).

2

News Release September 10, 2018
Fig. 2 Fund types
100%
90%

23%

12%

Fig. 3 Management Style

20% 17%

32%

60%

37%

25% 28%

36%

16%

20%

56% 56% 56%

50% 51%

41%

5%

11%

100%

12% 17%
18% 16% 22% 17% 21%
21% 12%
12%

14%

3%

40%
30%

8%

11%

6%

50%

8%

30% 23% 18% 22%

32%

80%
70%

5%

8%

17%

80%

13%
8%

22%

11%

19% 12%
10%

11%

60%

3% 6% 7%4% 5%
12%
10% 11% 13% 13%
15% 13%
12% 12%
15%
26%
18%
8%
15%
13%
17%
10%
16% 11%
9%
23%
18%
14%
13%
11% 24% 24%
12%
16%
11%
17%
18%
29%
9%

13%

10%

3%
11%

5%

25% 21%

9%12% 10%11%
63% 61% 67% 62%40%
54% 58% 54%

63%
45%

62%

53% 56%

55% 54%20%

64%

63% 58%45%

55%

63% 57%

71%

78% 74%
70%

51%

62% 62%

10%
0%

0%

06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=44) (n=85) (n=61) (n=72) (n=62) (n=59) (n=54) (n=44) (n=39) (n=55) (n=57) (n=59) (n=65) (n=63) (n=55) (n=58) (n=57)

Fixed property type

Additional acquisition type

Discretionary investment typeCore

Open-ended funds

Fig. 4 Target Property Types

Office

7%

9%

4%
11%

5%
10% 10%8%

3%5%

3% 100%4%4%
90%

14% 16%80%

19% 16%70%

19% 18%50%

18% 17% 20%
16% 18%40%

26% 22% 21% 20%
20% 24% 20% 25% 24% 24%

20%

06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=77) (n=164) (n=111) (n=122) (n=151) (n=123) (n=110) (n=74) (n=70) (n=98) (n=118) (n=121) (n=141) (n=121) (n=121) (n=128) (n=137)

0%29% 30% 34% 31% 30% 28% 31%

RetailResidential

Industrial

Opportunity

Development

Debt

Fig. 5 Target Areas

3%
3% 3%
4% 6% 5% 3% 6%
12% 11% 10% 11%
11% 9% 12%
14%
10% 12% 13%
15%
11%
12%
19%
18%
18%
23%
22%
23% 22% 20%
24%
18% 20% 18%
25% 21%
18%
11% 22%
25% 25%36%26%
25% 25% 25%
23% 19% 17% 18% 19%

17% 9%

Value-added

・“Debt ” was added to management investment style from the January 2013 survey.

・“Open-ended funds” was added from the January 2011 survey.

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=45) (n=106) (n=78) (n=88) (n=65) (n=56) (n=58) (n=42) (n=40) (n=54) (n=57) (n=60) (n=64) (n=60) (n=53) (n=54) (n=56)

Hotel

21% 17% 21%
22% 20% 20%

Facilities for the elderly and Health-care facilities

Data center

60%

30%
10%

Others・In the December 2006 survey, Industrial and Hotel types were included in “Other types.”・“Facilities for the elderly” and “Health-care facilities” was added from the January 2013 survey.
・From the December 2017 survey, “Facilities for the elderly” and “Health-care facilities” have been changed to “Facilities for the elderly andhealth-care facilities,” and the past values are added together.
・“Data center” was added from the December2017 survey.

3%4%7% 4% 4%
10% 15%
17% 20% 18% 15%
14% 19%28% 17%13%14%
12% 11%
15%
12%
14%
17%
15%
17%
15% 16%14%27%
20%
16% 22%
17%
19%
20%
24%
19%
27% 22% 20%
23%
20%
20%
37%
24%

31% 25% 26% 27% 33%
25%

36%

8%

16% 16% 17% 15% 18% 16% 16%
15% 14% 17% 17% 20% 17% 16%
21% 21%

22%
22% 24% 23% 24%

23% 23%

21%
21% 19% 20% 18%

24% 24% 24% 21% 22% 20% 24% 25%

06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=83) (n=231)(n=155)(n=189)(n=169)(n=157)(n=105) (n=75) (n=70) (n=104)(n=153)(n=141)(n=174)(n=144)(n=158)(n=148)(n=144)

23 wards of Tokyo

Tokyo metropolitan area

Kinki area

Nagoya area

Local areas

Others・In the December 2006 survey, the Nagoya area was included in Local areas.
・"Others" was deleted from the July 2017 survey.

As to the survey in terms of the average target investment period, it was 6.1 years for funds currently undermanagement and 8.2 years for funds to be launched within a year (Fig.6). Looking at the breakdown of the investment
period of funds currently under management, although the largest share of respondents chose “At least five years but
less than seven years”（26%）, it decreased 13% points from the previous survey. While the percentage of respondents
who chose “At least seven years but less than ten years” and “Ten years or more” accounted for 45% in total, thepercentage of “Less than three years” increased to18%, “At least three years but less than five years” to 12% from 8%each in the previous survey(Fig.7). With the backdrop of the prospect that monetary easing policy by the Bank of Japan
will be maintained, the trend whereby funds with an investment period of five years or more comprise the majority is
expected to continue. On the other hand, there seems to be new needs recently for funds with a short target investment
period, such as bridging funds. In fact, the average target investment period of funds to be launched within a year has
lengthened from 6.7 years to 8.2 years. This is significantly affected by the answer that the target investment period isthirty years, which multiple respondents provided. It does not signify a general trend in which the target investment
period of funds to be launched has become much longer. Also, the survey of the investment period does not include
open-ended funds （private REITs）, whose investment period is indefinite.
Fig. 7 Breakdown of Average Target Investment Period

Fig. 6 Average Target Investment Period
9（Years）
7.7

8
6.4

7
6
5

4.3

4.4 4.6

4
3
2

3.8

3.5

4.2

5.3

6.7

6.4

5.3

5.0

5.2

5.9

7.4

7.3

6.1
6.9

6.1
4.8

6.5

5.3
5.9

100%

8.2

7.5
6.4

7.2

6.6

6.9
6.4

80%

6.7
6.0
5.8

6.1

60%

6.1

20%
0%

05/12 06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07

Funds currently under management

37%

40%

1
0

5% 3% 3% 5% 7% 4%
10%
7% 3%
17% 10%14% 19%23% 28% 20% 17% 16% 19% 21%
22%32%
23% 29%31%
43% 20%20%
46%
30% 25% 24%
18%
34% 27%
21% 32%

19%

35%

29%

44%
46%

34% 32%

15% 14% 19%

32%

36% 59%

47%

3

29%

51% 33% 34%

52% 35% 39%

26%

12%
10%
14% 8% 18%
13% 9%
3%
11% 17%
8% 5%
9%
10%
10%
8%
6% 4%
3% 3% 5% 5% 2% 5%4%

23%

05/12 06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=43)(n=39)(n=76)(n=63)(n=64)(n=56)(n=47)(n=54)(n=30)(n=31)(n=38)(n=39)(n=39)(n=44)(n=46)(n=37)(n=36)(n=34)

Less than three years
At least five years but less than seven years
Ten years or moreFunds scheduled to be launched within a year

48%

At least three years but less than five years
At least seven years but less than ten years

News Release September 10, 2018

The average LTV of funds under management was 58.4%, and that of funds to be launched within a year was
65.3%.(Fig.8). Looking at the breakdown of LTV ranges, for funds currently under management, “at least 50% but lessthan 60% ” accounted for the largest share(31%), followed by “at least 70% but less than 80%”(22%) (Fig.9). Looking
at the trend from the past survey, the total share of “Less than 60%” is on an increasing trend, it seems to reflect
investors’ low risk and low leverage intention. This survey item includes responses from private REITs, and the impactof the increase in the number of these respondents is also large. For funds to be launched within a year, the percentage
of “at least 60% but less than 70%”accounted for 50% as in the previous survey, followed by “at least 70% but lessthan 80%”(25%). As a result, over 80% of respondents chose “60% or more” in total (Fig.11).
While the average LTV of funds under management remain stable at a low level, that of funds to be launched within ayear rises for two consecutive surveys, we need to pay attention to whether this upward trend will continue or not.
With respect to the average target IRR of the funds currently under management, the average target IRR of all types
slightly rose to 11.8% from the previous survey(10.7%)(Fig.10). It was affected by rising drastically in ”Discretionary
investment type” while declining in “Fixed property type”.
Fig. 9 Range of LTV level (Funds currently under management)

Fig. 8 Average LTV Ratio
（％）

100%

75

72.1

70

67.4

68.6

65

71.3
67.6

70.2

71.0

90%

72.3

70.9

70.7

66.2

64.4

66.8

66.4
63.8

50

65.3

64.2

65.3

62.5

61.7

64.9

63.8

60%

67%
62%

50%

59.1

58.1

59.1

58.4

20%
10%
0%

05/12 06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07

Funds scheduled to be launched within a year

90%

20

20.0

21%

21%

10

3%
3%

3%

28%
3%

10%
7%

28%

30%

31%

22%

27% 31% 27%

31%

14%

14%
9%
20% 9%
12% 19%14% 22%
18% 14% 14% 11%
20% 20%3% 12%
4% 9%
7%
10% 6%
7%5%4%
3% 3% 3% 4% 4%22%Less than 40%

At least 40% but less than 50%

At least 50% but less than 60%

At least 60% but less than 70%

At least 70% but less than 80%

80% or more

19%

11% 7%

70%
50%

9.0

40%

5

20%
0%

Additional acquisition type

23%

9%

5%

19% 33%

5%

5%
32%

11% 7% 12% 7% 13% 8%

36% 22% 27% 18% 29%

45%

13% 25%26%

61%
67% 78%46%

20% 29%43%

50% 33%

38%

30%
10%

05/12 06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=33)(n=32)(n=47)(n=61)(n=38)(n=26)(n=29)(n=33)(n=20)(n=26)(n=29)(n=34)(n=34)(n=33)(n=32)(n=18)(n=23)(n=16)

13% 9%
38% 8% 17%

80%

11.8

7.9

Open-ended funds

30%
44%

05/12 06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=33) (n=39) (n=72) (n=61) (n=51) (n=51) (n=48) (n=53) (n=37) (n=36) (n=47) (n=61) (n=63) (n=62) (n=62) (n=51) (n=41) (n=36)

60%

15

Discretionary investment type48%

30% 31%

100%

（％）

25

Fixed property type

66%

7% 11%
9% 7% 6% 12% 11%
15% 16% 20%
23% 23%
16% 20% 23%
20% 22%
48%
26% 28%45%
14%
29% 21%
27% 25% 20%
59%
20% 11%

Fig. 11 Range of LTV level (Funds scheduled to be launched within a year)

Fig.10 Average Target IRR(Funds currently under management)

Total

60%

30%

58.1

Funds currently under management

03%

16% 22%

40%

58.8

63.0

59.4

60.2

57.6

10%

70%

66.0

60
55

15%

80%

68.9
64.9

63.5

6%

45%

36%

44%

36%

45%

29% 50%
50%
7%

40%

25%
41% 14%
25%
30%
21%
29%
18% 18% 17%
25%
5%
22%
9%
17%
14%
4%
10% 11% 4% 4% 4%
6%5% 5% 5% 6% 7%
4%05/12 06/12 07/12 09/01 10/01 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=21) (n=18) (n=28) (n=26) (n=24) (n=35) (n=47) (n=44) (n=31) (n=34) (n=30) (n=29) (n=26) (n=18) (n=23) (n=25) (n=25) (n=20)

Less than 40%
At least 60% but less than 70%

At least 40% but less than 50%
At least 70% but less than 80%

At least 50% but less than 60%
80% or more

3) Debt FinanceRegarding debt financing circumstances, the largest number of the respondents chose “4 ( easy)”, exceeded that ofrespondents who chose “3 (neutral)”(Fig.12-1). The result of this survey have hardly changed since the July 2017
survey and debt financing circumstances can be said to remain favorable(Fig.12-2).
Fig.12-2 Trends in Debt Financing

Fig.12-1 Current Circumstances of Debt Financing

5

2

3
26
26
23

3
2

0

60%

1

20%

0
0

1
0

0%
5

10
18/07 (n=53)

15

20

25

30

6%

31%

19%

33%

57%
60%

30% 29%

33%
13%

3%

5%

32% 32%

17%25% 23% 25%

48%

67%

53%

19% 25%

8%

4%

6%

47% 50% 49%

63% 60%

56%

40%

24

4%

10%

80%

4

Difficult100%

1（Very difficult）⇔5（Very easy）

Easy

11%
3%

32%
8%

17%

55% 53%

59%

55%

55%
58%

21% 15% 26%
13% 13% 14%

43% 46% 43%

10/07 11/01 11/07 12/01 12/07 13/01 13/07 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=63) (n=62) (n=67) (n=62) (n=63) (n=52) (n=62) (n=53) (n=53) (n=53) (n=56) (n=53) (n=52) (n=53) (n=49) (n=52) (n=53)

18/01 (n=52)

1（Very difficult）

4

2（Difficult）

3（Neutral）

4（Easy）

5（Very easy）

News Release September 10, 20184) Equity Raisinga. Appetite of Equity Investors
In terms of a question on the appetite of equity investors, the great majority of respondents chose “No change”.
The percentage of respondents who chose “Rising” decreased 8% points to 20% from the previous survey. Also, therespondents who chose “Declining”, which there were no respondents in the past two surveys, accounted for 4%(Fig13). It seemed that many asset managers believe that the appetite of investors remains high and the views that theappetite of equity investors is declining are minority at this stage, but we need to pay attention to future survey results.
In regards to the investment appetite of domestic and foreign investors by property types, the percentage of
respondents who chose “No change” had a majority in all property types for both domestic and foreign investors. It was“Hotel” that got the largest number of responses of “Increase significantly” or “Increase” for both domestic andforeign investors, unchanged from the previous survey, suggesting that both investors have a strong appetite forinvestment in hotels sector. On the other hand, for foreign investors, some respondents chose “Declining significantly”
for “Retail”, and combining with “Declining”, accounted for 12% in total. A certain number of foreign investors seemto be cautious on investment in commercial facilities in Japan, as they are affected by the adverse circumstances ofcertain commercial facilities of America. As for “Facilities for the elderly and Health-care Facilities”, about 10% of
respondents chose “Declining” for both domestic and foreign investors. It shows that a certain number of respondents
think the appetite for investment in this sector is declining(Fig.14-1,14-2).
Fig.13 Appetite of Equity Investors
100%
18%

80%

25%

54%

73%

45%

75%

07/12
(n=37)

13%
08/07(n=54)

15%

20%

09/01
(n=48)

09/07(n=64)

44%

31%

10/01
(n=55)

20%
10/07(n=67)

11/01(n=61)

11/07(n=66)

26%

26%

12/01
(n=58)

12/07(n=65)

Industrial(n=41) 2%

74%

15%

76%

Hotel
(n=39) 3%
Facilities for the elderly
and Health-care facilities(n=31)

41%

54%

6%
0%

Increase significantly

72%

24%

26%

28%

17/01
(n=51)

17/07(n=46)

18/01(n=50)

76%

20%

40%
Remain unchanged

60%

14/07
(n=51)

15/01(n=53)

15/07(n=54)

16/01(n=51)

16/07(n=52)

18/07(n=50)

Declining

Office(n=32)

31%

69%

5%

Residential(n=31)

32%

65%

5%

Retail(n=32)

7%

Industrial(n=33) 3%

10%

Decrease

14/01(n=54)

3%80%

Facilities for the elderly
and Health-care facilities(n=23)

100%

Decrease significantly

19%

Hotel
(n=32) 3%

3%

84%

Increase

13/07(n=60)

20%

Fig. 14-2 Foreign Investors’ Appetite by Type of Target Property

74%

18%

13/01
(n=50)

No change

68%

21%

Retail(n=39) 3%

74%

44%

39%
24%

Fig. 14-1 Domestic Investors’ Appetite by Type of Target Property

Residential(n=39)

75%

72%

38%

RisingOffice(n=38) 3%

82%

81%

60%

54%

06/12
(n=34)

4%

52%

61%

64%

46%

9%

4%

28%

61%

74%

24%

18%

19%

57%

62%

20%
0%

4%

5%

10%

40%

45%
83%

59%

20%

34%

41%

60%
40%

7%

16%

69%

18%

0%

9%

76%
31%

3%

83%
20%
Increase

40%
Remain unchanged

3%
3%

63%

9%

Increase significantly

3%

9%
60%

80%

Decrease

Decrease significantly

100%

b. Sources of Overseas Capital (or Foreign Funds) by Country or Region
With respect to the capital sources from overseas (targeted to the managers which handle overseas capital), thehighest response rate was for investors from “Asia (excl. China /M.East)”at 38%. The percentage of “Europe” and“North America” decreased to 22% from the previous survey. It seems that the investors (which couduct investment
by funds) from “Asia (excl. China /M.East)” has increased its presence among the foreign investors who invest in
domestic real estate funds (Fig.15).

5

News Release September 10, 2018

Fig. 15 Sources of Overseas Capital by Country or Region
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

17% 19% 17% 20% 17% 20%
25% 22%
27% 23% 27% 24% 21% 21%
35% 33% 30% 31%

North America

22% 27% 26% 27% 25% 30% 24%
22%
24%
26%
24% 24% 29%
27%
24%
4%
6%
25% 25% 31%
10% 9% 9%
6% 6%
10%
17% 6% 13%
12% 10%
10%
12%
6%
13%
11%
8%
12%
13%
11%
8% 10% 11% 6% 7% 9%
17%
12% 8% 14%
22% 25% 28% 33% 30%
28%30%

25% 27% 17% 27%
33% 30% 28% 24%
24%
8%
7%
7%
6%
3%

7%
5%

8%
3%

5%

3%

6%

4%

4%
4%

26%

EuropeMiddle East
China including Hong Kong
Asia including Australia
Asia (excl. China / M. East)

38%

Australia
Others08/07 09/01 09/07 10/01 10/07 11/01 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=52) (n=40) (n=61) (n=49) (n=67) (n=70) (n=59) (n=49) (n=42) (n=58) (n=64) (n=57) (n=66) (n=64) (n=47) (n=46) (n=53) (n=45)

・Since the January 2010 survey, Asia-Pacific has been broken down into China, Middle East, Asia (excl. China / M East), and Australia.
・Since the January 2012 survey, China has been changed to China including Hong Kong.

c. Reasons for Foreign Investors Investing / Not Investing in Japan (Multiple answers allowed)
As for the reasons for investors investing in Japan, majority of the respondents chose “Relatively attractive due tothe yield gap”, “Allocation as part of the global portfolio”, “The size of the real estate market is large”,” Highly stable
income” and “Politically and economically stable” (Fig.16). These choices have been the major reasons indicated inevery surveys in the past, and have been established as the reasons for foreign investors investing in Japan.
As for the reasons for not investing in Japan, the largest number of the respondents chose “Lack of growth potential inGDP, consumption, population, etc.”, followed by “Rising in real estate prices”. “Rising in real estate prices” havebeen the major reason indicated since the January 2016 survey, suggesting the concern over rising real estate prices
seems to remain strong (Fig.17).
Fig.16 Reasons for Foreign Investors Investing in Japan(Multiple answers allowed)

Fig.17 Reasons for Foreign Investors Not Investingin the Japanese Real Estate Market (Multiple answers allowed)

n=98(Respondents27)

n=70(Respondents26)

21

Relatively attractive due to the yield gap

Lack of growth potential in GDP, consumption,
population, etc.

19

Allocation as part of the global portfolio

16
15

Rising in real estate prices

16

The size of the real estate market is large

9

Low growth potential in income

15

Highly stable income

8

Earthquake risk

13

Politically and economically stable

7

Lack of attractive investment opportunities

Making investments in Japan, a mature market, while
expanding investments in Asia

55

Decrease in the supply of investable real estate
Highly transparent real estate market

3

Expected positive effects of exchange rates

3

4

Low transparency in the real estate market
Making investments in Japan as part of investment
strategies in Asia, while avoiding other cities where there
are risks of a fall in prices in the future2
1

Income with growth potential

0

Rental market is in a recovery phase
More deal opportunities

0

Increase in investment opportunities due to undervalued
real estate prices

0

Others

0

0

5

10

15

20

Cannot embark on investment given uncertainty in therental market outlook

2

Large risk of the decline in real estate prices

2

Lack of attractiveness to the yield gap

1

Investment merits due to foreign exchange are notanticipated1

Lack of policy consistency due to government instability

0

Others

0

0

25

5

10

15

20

d. Acquisition and Disposition of Properties during January to June 2018
As to a survey on the acquisition of properties during January to June 2018, the percentage of respondents who
answered "Acquired" accounted 72%, exceeded 70% for the first time in 3 years since the July 2015 survey (Fig.18).
The main reasons that the managers did not acquire any properties were “Can’t agree on prices” and “Severe
competition in bids”, accounted for 74% in total (Fig.19). The results indicate that many managers acquired
properties, although the environment for the acquisition of properties remained challenging.

6

News Release September 10, 2018

As to a survey on the disposition of properties during January to June 2018, the percentage of respondents who
answered “Sold property” was 51% (Fig.20). The percentage of that had been decreased since the January 2015
survey, fell to 37% in the previous survey, but turned up in this survey. The great majority of reasons for “Didn’t sellproperty” was “Did not plan to sell from the onset”, the percentage of that increased 10% points from the previous
survey (Fig.21). The reasons for the increase in the number of managers disposing properties in this survey are notknown, because they are not covered by the survey scope, however, there is a possibility that more funds arereaching the exit stage and there is a fact that while market conditions have remained favorable to sellers, the gap inprice expectations with buyers has narrowed. In the first half period of 2018, both acquisition and disposition ofproperties have become more active. The future status of acquisition/disposition of properties by real estate asset
managers should be watched closely.
Fig.19 Reason for not acquiring property

Fig.18 Circumstances for Acquisition

100%

100%
80%

49% 51%

42% 44% 38%

29%

39% 33% 40% 33% 37%

28%

60%

0%

51% 49%58% 56% 62%

71%

61% 67% 60% 67% 63%

72%

13/01 13/07 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=49) (n=61) (n=52) (n=54) (n=53) (n=55) (n=54) (n=54) (n=53) (n=49) (n=52) (n=53)

29%

38% 36%

60%
40%

70%

60%

71%

62% 64%

20%
0%

49%
56% 50% 51% 58%
63%51%
44% 50% 49% 42%
37%

13/07 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=60) (n=50) (n=52) (n=52) (n=56) (n=54) (n=54) (n=53) (n=48) (n=52) (n=53)

Sold property

46% 48%

57% 57%

40%

24%

20%

32% 23%

33% 37%

Did not plan to acquire from theoutset29% 26%

18% 17%8%

4% 7% 4%8%
4% 16% 13%
10% 6% 4% 12% 8% 13% 7% 13%
4%
10% 3% 6% 7%
11% 3% 3%
5% 7% 3% 7% 6% 4% 8% 8% 9% 11% 9%0%Severe competition in bids

Did not consider, due to a limited
supply of properties in the market
Others13/01 13/07 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=45) (n=37) (n=30) (n=31) (n=30) (n=18) (n=27) (n=25) (n=24) (n=23) (n=28) (n=23)

Fig. 21 Reason for not Selling Property

100%
40%

40%

32%

Didn't acquireFig. 20 Circumstances for Disposition30%

50% 48%80%

20%Acquired80%

51% 57% 55% 57%

60%

40%
20%

Can't agree on prices

80%

Didn’t sell property

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Did not plan to sell from the outset

No inquiries despite sales activities

71%

86%

100%

90% 95% 90% 96%

85%

96%

81%

91%

6%
24% 5%
9%

10% 5%

3%
7%

4%

11%
4% 4%

6%
9% 4%
3% 4%

Can’t agree on prices

Continued to hold properties
through refinancing, following
favorable loan terms
Others

13/07 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=17) (n=22) (n=12) (n=20) (n=20) (n=29) (n=27) (n=27) (n=26) (n=32) (n=23)

2. Plans and Investment Strategies of Asset Managers
1). Plans of Launch of New Funds and Acquisition /Disposition of Properties within a year
Regarding the funds scheduled to be launched within a year, 70% of respondents answered that they “Plan tolaunch” (Fig.22). Around 70% of respondents plan to launch of new funds as in the previous survey.
As to plans of acquiring or disposing properties within a year, the percentage of respondents who plan to acquire
properties accounted for 86%, that of those who plan to dispose properties accounted for 60% (Fig.23,24).
A large majority of managers have the intention of acquiring properties. However, it is likely that the low supply ofinvestment-grade properties will continue throughout the entire market
Fig.22 Plans of Launch of New Funds
100%

16% 20%80%

28%

19% 23%

31% 27% 37% 29% 30%

60%
40%

84% 80%72%

81% 77%

Fig.23 Plans of acquiringproperties

No plantoacquire14%

0%Plan toacquire86%
14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=51) (n=51) (n=53) (n=52) (n=52) (n=52) (n=51) (n=46) (n=49) (n=50)

Plan to launch

No plan to launch

7

Fig.24 Plans of selling properties
n=48

No planto sell
40%

69% 73% 63% 71% 70%

20%

n=50

Plan tosell
60%

News Release September 10, 20182). Investment Strategies of Asset Managers
a. Target Property Types (Multiple answers allowed)
In terms of the target property types, the percentage of “Office” and “Hotel” accounted for about 20% respectively,
followed by “Residential”, ”Retail” and “Industrial”(around 15% each)(Fig.25). Since the January 2017 survey, thepercentage of “Hotel” has been around 20% and established the position following “Office” among the target
property types on which managers will focus.
The percentage of “Data center”, we added to the target property types in the previous survey, increased to 8%(14cases) from 5% (9 cases) in the previous survey. We will pay attention to whether it will become established as atarget property type in the future.
Fig. 25 Target Property Types (Multiple answers allowed)
100%
90%

13% 11% 14%

80%

10%

70%

20%

60%
50%

26%

40%

7%
10%
20%

20%

11%

15%
22%

4%
8%

5%

4%
11%

16%

8%
30%

31%

21%

4%
9%

6%
10%

15%

17%

29%

28%

27%

13%

8%
13%
18%

6%
9%
10%

11%
9%

30%
20%

30%

10%
0%

33%

36%

40%

36%

41%

38%

33%

13%

14%

19%

23%

21%

17%

15%

24%

23%

9%

33%

26%

8%

7%

4%

19%

20%

16%

15%

15%

18%

17%

16%

20%

18%

16%

24%

23%

23%

21%

7%

18%

16%

13%

16%

19%

20%

20%

18%

17%

16%

16%

23%

23%

22%

21%

19%
18%

44%

14%

11%

23%

9%

10%
15%

16%

15%
20%

27%

12%

18%

5%
4%

20%
13%
15%

8%
4%

19%
15%
15%

05/12 06/12 07/12 09/01 09/07 10/01 10/07 11/01 11/07 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=69) (n=61) (n=96) (n=87) (n=123)(n=119)(n=140)(n=138)(n=158)(n=160)(n=157)(n=162)(n=175)(n=174)(n=185)(n=172)(n=176)(n=160)(n=155)(n=177)(n=185)

OfficeResidential

RetailIndustrial

Hotel

Facilities for the elderly and Health-care facilities

・From the December 2017 survey, “Facilities for the elderly” and “Health-care facilities” have been changed to “Facilities for the elderly andhealth-care facilities,” and the past values are added together.
・“Data center” was added from the December2017 survey.

data center

Othersb. Target Areas (Multiple answers allowed)
In terms of the target area, the percentages of “Central 5 Wards of Tokyo”, “23 Wards of Tokyo (excluding Central 5
wards)”, “Tokyo metropolitan area” and “Kinki area” were all around 20%, there is little change in recent surveys(Fig.26). Because it is expected that challenging market condition for acquisitions of properties will continue, we
believe that many asset managers will continue to target a wide range of areas including not only in Tokyo but also inmajor domestic areas in Japan.
Fig. 26 Target Areas (Multiple answers allowed)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

8%
25%

18%
4%
24%

18%
15%

9%
11%
12%
11%

7%
6%
10%

4%
3%
7%
11%

4%
3%

5%

13%

14%

3%
6%
17%

7%
5%
10%
14%

29%

28%

29%

30%

32%

23%

3%
3%
9%
14%

4%
8%

5%
8%

6%
9%

12%

15%

15%

21%

20%

20%
28%

23%

25%
25%
14%
8%

33%

46%

48%

50%

47%

40%

41%

43%

34%

11%
4%

25%

26%

24%

26%

5%

5%

8%

8%

12%

15%

15%

15%

19%

19%

20%

19%

18%

21%

22%

22%

20%

19%

20%

20%

19%

20%

20%

19%

19%

22%

24%

21%

20%

20%

19%

5%

7%

11%

13%

19%
20%

21%

4%
12%

7%
12%

19%

22%

19%
20%

21%

24%

18%

05/12 06/12 07/12 09/01 09/07 10/01 10/07 11/01 11/07 12/01 13/01 14/01 14/07 15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07(n=51) (n=55) (n=98) (n=89) (n=107) (n=98) (n=131) (n=121) (n=148) (n=127) (n=122) (n=151) (n=157) (n=166) (n=183) (n=165) (n=170) (n=167) (n=169) (n=196) (n=206)

Central 5 wards of Tokyo
Kinki area
Nationwide

23 wards of Tokyo (excluding Central 5 wards)
Nagoya area
Others・“Nagaya area” was included in “Local cities” or “Others” until the December 2006 survey.
・The Kinki area was called the Osaka area until the January 2009 survey. The constituent prefectures remain the same.

8

Tokyo metropolitan area
Local cities

News Release September 10, 2018

3. Business Environment of Private Real Estate Investment Management
1）Involvement in Open-Ended Private Funds (so-called Private REITs)
In response to a question about involvement in private REITs, the largest number of respondents answered “Seekto develop a better understanding and gather information, but not working on a detailed study” as in the past
surveys. However, in this survey, the number of respondents who answered “Have already launched” was also thelargest at 17 respondents(Fig.27). In addition, three managers said that they were preparing to launch a private REIT,
which indicates open-ended private funds may increase slightly.
As for important factors for development in the private REITs market, the largest number of respondents chose“Enhancement of the track record”, followed by “Expansion of the categories of investors to invest in funds”(Fig.28). It seems that many managers feel that it is necessary to build a track record, including a response to thedownward phase of real estate market conditions, something that Japan’s real estate open-ended fund market has yet
to experience, and broaden the investor base to overcome that phase.
In addition, there were a certain number of responses to items such as support of sponsors, expansion of market
size, and improvement of liquidity.
Fig.27 Managers’ involvement with private REITs

n=50(Respondents 50)

n=130(Respondents 48)

31

Enhancement of the track record

17

Have already launched

Fig.28 Important Factors for Development in theprivate REITs Market(choosing up to three options)

28

Expansion of the categories of investors to invest in funds

Seek to develop a better understanding and gather
information, but not working on a detailed study

17

16

Support of the sponsor

15

Expansion of the number of private REITs and the asset size

Have heard of the name but not considered
involvement

6

Decided not to launch after consideration, and unlikely
to reconsider in the future

15

Improvement in liquidity (increase in frequency, easing of…

10

Increase in visibility among investors

4

5

Improvement in frequency of disclosure

Preparing for a launch after consideration3

Decided not to launch after consideration but may
consider again

34Standardization of items to be disclosed

3

Review of laws and financial accouting systems

Have neither heard of the name nor considered
involvement

0

Reduction of minimum investment unit001Enhancement of compliance2

Others

5

10

15

20

0

5

10

15

20

25

30

2) Outlook of asset size in the Closed-ended private real estate funds market
With regard to the outlook on asset size in the closed-ended private real estate funds market, the percentage of
respondents who expect an increase accounted for about 60% of the total (Fig.29).
As for the reasons responding “Increase,” many respondents chose “Increase of domestic investors’ money” and“Increase of foreign investors’ money”(Fig.30). We believe that many asset managers expect continuing inflows offunds into real estate investments due to the continuation of monetary easing policy by the Bank of Japan.
The main reason for “Decrease” was “Limited supply of existing/new investment-grade real estate”. We realizedthat there are a certain number of managers who believe that limited supply of investment-grade real estate will leadto a decrease in market size.

935

News Release September 10, 2018

Fig.29 Assets under managementof closed-ended funds
Decrease
10%

Fig.30 Reasons for Changing of Assets under management

20

Increase of domestic investors’ money

18

Increase of foreign investors’ money

Increase
12%
Slightly
decrease30%

n=103(Respondents 50)(Multiple answers allowed)

n=50

Limited supply of existing investment-grade real estate

13

Limited supply of new investment-grade real estate(development projects)

13

Slightly
increase
48%

12

Rise in real estate prices
Expansion of the scope (area, type, etc.) of lenders’consideration of lending

8

Increase in supply of new investment-grade real estate(development projects)

5

Decrease of domestic investors’ money

4

Easing of lending terms (LTV level, up-front fee, covenants,
etc.)

2

Decrease of the scope (area, type, etc.) of lenders’consideration of lending

1

Tightening of lending terms (LTV level, up-front fee, covenants,
etc.)

1

Decrease of foreign investors’ money

1

Decline in real estate prices

10

Increase in supply of existing investment-grade real estate

4

Others

0

5

10

15

20

25

3) Manager’s Requirements for Future Growth and Sustainability of their Businesses (Multiple answers allowed)
Among requirements for sustainability and growth of the asset managers, the largest number of managers chose“Strengthen property-acquisition capability”, greatly exceeded the second most frequent answer “Enhancement of
AM capabilities” (Fig.31). With limited supply and rising real estate prices continuing, most asset managers
emphasize the strengthen property-acquisition capability. In addition to the above, the number of managers whochose “Enhancement of relations with investors” increased compared with the past two surveys. Many managers
seem to recognize the need for more attentive services for investors.
Fig. 31 Requirements for Sustainability and Growth of Managers (choosing up to three options)
44

Strengthen property-acquisition capability

24

Enhancement of AM capabilities

17

Enhancement of relations with investors

14

Management strategy and its explanatory ability

14

Enhancement of equity raising capabilities
Competence in special expertise

7

Enhancing the ability to handle foreign investors

7
7

Expansion of target property types

4

Enhancement of research capabilities

4

Entry into open-ended funds business

3

Enhancement of debt financing capabilities

3

Expansion of foreign real estate fund management business

2

Reinforcement of compliance structure2

Sufficient of information disclosure

2

Corporate strength (financial health, scale of operations)

1

OthersCapabilities for NPL investment activity

0

Strengthening of earthquake/disaster response capability

00July 18（n=155 Respondents53）

10

20

Jan 18（n=153 Respondents52）

30

40

July 17（n=147 Respondents50）

1050

News Release September 10, 2018

4) Awareness of ESG initiatives※

Given that investment taking ESG into consideration has rapidly become the mainstream in real estate
investment, this survey asked about the awareness of ESG initiatives among asset managers and the outlook for
ESG orientation among investors and so on. To the question “Do you have an awareness of investors who choose
investments based on ESG initiatives taken by asset managers?”, about two thirds of respondents answered that “Ihave such awareness”(Fig.32）. In addition, to the question “Do you think that the number of investors considering
ESG initiatives taken by asset managers will increase?” separately asked of domestic investors and foreign
investors, the percentage of respondents who chose “Increase” had a majority for both domestic and foreign
investors. Particularly for foreign investors, about three quarters of respondents chose that answer(Fig.33）. With
respect to the “Principles for Responsible Investment (PRI)” which the United Nations put forward in 2006, many
institutional investors in Japan and abroad have signed them and the number of signatories has been increasing.
Reflecting this situation, many respondents seemed to have given the answer that the number of investors
considering ESG factors will “Increase.”※The concept of “Environment”, ”Society” and ”Governance”, recommended to incorporate into asset
management in the “PRI : Principles for Responsible Investment”

Fig.32 Awareness of ESG Initiatives

Fig.33 Outlook for ESG Orientation among Investors

n=53

Domestic
investors (n=52)
Don't have anawareness
36%

Have anawareness
64%

63%

Foreign investors(n=51)

12%

76%

0%

20%
Increase

11

25%

6%

40%

60%

Not increase

Not sure

80%

18%

100%

News Release September 10, 2018

Definitions of Terms
The definitions of terms used in this report are as follows;
Private real estate fund:A private real estate fund is a structure under which investors’ funds are managed byprofessional asset managers. In this report, commingled funds that are designed for multiple
investors, and separate accounts, investment programs for single investors are both categorized
as private real estate funds. This does not include products governed by the Act Concerning
Designated Real Estate Joint Enterprises.
Fixed property type:
Additional acquisition type:

Discretionary investment type:

Closed-ended fund:Open-ended fund:＜Management Style＞
Core:
Opportunity :Value-added:
Development:
Debt:＜Investment Area＞
Central 5 wards of Tokyo
Tokyo Metropolitan Area:
Kinki Area:
Nagoya Area:
OthersA type of fund in which properties to be invested have been identified at the launch of the fundA type of fund in which certain percentage of properties to be invested have been identified at
the launch of the fund, leaving additional investments after the launch usually at the discretionof manager subject to pre-determined investment guidelines
A type of fund in which the properties to be invested have not been identified at the launch of
the fund, and properties are acquired after the launch at the discretion of a manager subject topre-determined investment guidelines; Also called a blind pool typeThis refers to private real estate funds with stipulations on the management period. In principle,
this system does not allow reimbursement during the management period.
This refers to private real estate funds without stipulations on the management period.
The system enables additional investment, cancellation and reimbursement during themanagement period. The value of the holding is calculated based on the appraisal value at thetime. Open-ended funds currently managed in Japan take the form of a private REIT.

An investment style in which stable long-term investments are envisaged by investing in soundproperties generating steady income flows.
An investment style in which a large capital gain is aimed at by investing in unprofitableproperties and selling them after increasing value with improvements.
Some of opportunity investments invest in development projects and funds that invest incompanies.
An investment style that lies between Core and Opportunity, and aiming at both income gains
and capital gains.
An investment style that specializes in achieving development gains.
An investment style in which an investment is made in loans that pay the principal and interestsfrom income from real estate and real estate trust beneficiary rights. Compared with the equity
investment, the debt investment generally has a lower risk and a lower return.
Chiyoda Ward, Chuo Ward, Minato Ward, Shinjuku Ward, Shibuya Ward
Tokyo excluding 23 Wards, Kanagawa, Saitama, and Chiba prefectures
Osaka, Kyoto, Hyogo, Nara, Wakayama, and Shiga prefectures
Aichi, Gifu, and Mie prefectures
Other than those above

LTV (Loan To Value):

The Loan to Value (LTV) ratio is a ratio of debt against asset value. Asset value represents theappraisal value, actual acquisition price or total investment cost for acquisition.

Cash-on-cash yield:

The cash-on-cash yield is the yield of annual cash flow on the total investment amount. Thisshows the collection rate of own capital.

IRR (Gross):

The Internal Rate of Return (IRR), an indication of return on investment, is the discount rate thatmakes the present value of future cash flow of an investment equal to its original value of theinvestment.

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News Release September 10, 2018

Contact:

Sumitomo Mitsui Trust Research Institute Co., Ltd
3F Hulic Kamiyacho Building. 4-3-13, Toranomon, Minato-ku, Tokyo
105-0001, Japan
https://www.smtri.jp/en/contact/

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1. Any materials provided by Sumitomo Mitsui Trust Research Institute Co., Ltd. (hereafter, “SMTRI”),
including this document, are for informational purposes only, and are not intended to invite, solicit, mediate,
broker, or sale products including real estate and financial instruments, services, rights or other transactions.
Please use your own judgment when making final determinations on securities selection, investment decisions
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2. Although any materials provided by SMTRI, including this document, are prepared based on information
which SMTRI considers reliable, SMTRI cannot be held responsible for their accuracy or completeness. In
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Forecasts, projections, or estimations included in this document are neither assured nor guaranteed. The
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in whole or in part, is not permitted without the prior consent of SMTRI, irrespective of the purpose or
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4. SMTRI is not a real estate appraiser, nor provide clients with any appraisal reports on real estate properties.
SMTRI is a real estate investment advisor authorized by the related Japanese law and regulation, and conducts
advisory services for investment judgments based on the values or value analyses of investment products. In
the process of implementing advisory services, SMTRI may calculate asset values of real estate properties.
However, such calculations are for the necessity of implementing advisory services, and calculated values are
not indicated with single values, but with multiple indications, ranges or distributions.

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