New Mid- to Long-term
Business Plan

Shibaura 1-chome District
Scheduled start of construction (including demolition) Building S:FY22/3 Building N:FY27/3
Scheduled completion of construction Building S:FY25/3 Building N:FY31/3

3

New Mid- to Long-term Business Plan

Contents
PART Ⅰ

PART ⅡPART ⅢPART Ⅳ

Premises for the Plan

Overall Concept

Structure to Support
GrowthBusiness Strategies
by Each Unit

1. Review of Previous Plan
(Phase 1)

1. Our Vision for the Future

1. Residential Development Business Unit

2. Value Creation

1. Redevelopment / Rebuilding
Business

2. Business Environment

3. Management Benchmarks

2. CSR / ESG

3. Investment Management Business Unit

4. Business Portfolio Strategy

3. Product Development /Quality Control

4. Property Brokerage & CRE Business
Unit

5. Investment Plan

2. Commercial Real Estate Business Unit

5. Property & Facility Management
Business Unit

6. Strategic Investment©Nomura Real Estate Holdings. All rights reserved.

4PART Ⅰ
Premises for the Plan
1. Review of Previous Phase(Phase 1)
2. Business Environment©Nomura Real Estate Holdings. All rights reserved.

5

Ⅰ. Premises for the Plan

Review of Previous Plan (Phase 1: FY17/3–FY19/3)

 In FY19/3, operating revenue expanded to ¥668.5 billion, though it did not reach our target of ¥700.0 billion.
 Operating profit was ¥79.1 billion, which was below our target of ¥85.0 billion.

Operating Revenue and Operating Profit
Target underprevious plan
（FY19/3）

Operating revenue ¥700.0 billion
Operating profit ¥85.0 billion

Operating profit under previous plan

Operating profit (Result)(Billions of yen）

77.2

85.0
76.6
79.1

FY19/3
resultOperating revenue ¥668.5 billion

FY19/3targetFY19/3
resultOperating revenue

700.0

668.5

-31.4

Operating profit

85.0

79.1

-5.8

Residential Development
Business Unit

30.0

23.1

-6.8

Leasing Business Unit

35.0

38.8

＋3.8

Service & Management
Sector

23.5

22.1

-1.3

6.5

5.9

-0.5

10.5

8.1

-2.3

6.5

8.0

＋1.5

-3.5

-5.0

-1.5

(Billions of yen)

Investment Management

FY12/3 FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3
Previous Plan
(Phase 1)

Operating profit ¥79.1 billion

Property Brokerage &CREProperty & Facility
Management
Adjustments

Increase/decrease©Nomura Real Estate Holdings. All rights reserved.

6

Ⅰ. Premises for the Plan

Review of Previous Plan (Phase 1: FY17/3–FY19/3)

 ROA and ROE remained at high levels, but fell slightly short of our targets.
 In FY19/3, payout ratio was over 30% with dividend increase. In addition, carried out acquisition of treasury shares
in FY18/3 and FY19/3.

Financial and Capital Policies

ROE

ROE

ROA

Shareholders’equity ratio

10% level

5% or more

30% level

ROA

29.9%

11.2%

Total return ratio(Dividend payout
ratio)
Approx.

30%

Shareholders' equity (billions of yen)

Dividend payout per share (yen)Shareholders' equity ratio

Dividend payout ratio

30.2%

30.0%

Total return ratio

29.9%

75.0

10.1%

65.0

9.4%

8.9%

70.0

57.5

41.4%
50.6%

5.8%
5.1%

FY16/3

FY17/34.7%

4.7%

FY18/3

FY19/3*ROE＝ Profit attributable to owners of parent / Average shareholders’ equity during the FY
ROA＝ (Operating profit + Non-operating profit) / Average assets during the FY

444.8

FY16/3

481.3

501.4

526.7

23.4%

FY17/3

FY18/3

FY19/3

FY16/326.5%

FY17/3

28.9%

30.5%

FY18/3

FY19/3*Dividend payout ratio = Total amount of dividends / Profit attributable to owners of parent
Total return ratio＝（Total amount of dividends + Total amount of acquisition of treasury shares）/ Profit attributable to owners of parent©Nomura Real Estate Holdings. All rights reserved.

7

Ⅰ. Premises for the Plan

Review of Previous Plan (Phase 1: FY17/3–FY19/3)


In the Residential Development Business Unit, ROA was 5% level due to a decline in the gross margin ratio
for housing sales.
In the Leasing Business Unit, ROA remained at the same level while increasing assets.

Total Assets and Asset Efficiency
FY16/3Results
Residential
Development
Business Unit

Leasing
Business Unit

Service &Management
SectorFY19/3Results

Difference

Total assets(billions of yen)

414.8

415.8

+1.0

ROA（％）

8.0％

5.4%

-2.6％

Total assets(billions of yen)918.7

1,110.9+192.2

ROA（％）

3.6%

3.6%

+0.0％

Total assets(billions of yen)

124.4

135.6

+11.2

ROA（％）

19.4％

17.7%

-1.6％

27.4

97.0

+69.5

1,485.4

1,759.4+274.0

5.8％

4.7%

-1.1％

Other business unit’s assets(billions of yen)Company’s total assets(billions of yen)Companywide ROA*Companywide ROA = (Operating profit + Non-operating profit) / Average assets during the FY*ROA of each business unit = (Operating profit + Share of profit (loss) of entities accounted for using equity method) / Average assets during the FY©Nomura Real Estate Holdings. All rights reserved.

8

Ⅰ. Premises for the Plan

Review of Previous Plan (Phase 1: FY17/3–FY19/3)

 Procured funds amid the low-interest rate environment while maintaining a shareholders’ equity ratio of 30%
level.
 Diversified procurement methods, including hybrid financing, to prepare for future investments.

Interest-bearing Debt / Shareholders’ Equity Ratio■Long-term ■Short-term ー Shareholders' equity ratio ー Shareholders' equity ratio（considering hybrid finance)*

721.9

810.1

877.8

914.0
Short-term loans
payable32.9%
Previous plan:
30% level

30.2%

Bonds payable
140.0

26.0

31.5%

29.9%

Current portionof long-termloans payable
53.5

30.0%

29.9%

Interest-bearing debt

¥914.0Portion incorporating
hybrid financing(corporate bonds andloans)¥105.0 billion

billionLong-termloans payable694.5

FY16/3

FY17/3

FY18/3

FY19/3*50% of ¥105.0 billion in hybrid financing, or ¥52.5 billion, was assumed as capital©Nomura Real Estate Holdings. All rights reserved.

Ⅰ. Premises for the Plan

Review of Previous Plan (Phase 1: FY17/3–FY19/3)

9Initiatives in Mixed-use Developments
Developed various projects including residences, offices and a variety of facilities,
mainly in the Tokyo metropolitan area.

Tsunashima Sustainable Smart Town (PROUD Tsunashima
SST); completed in January 2018

PROUD CITY Kichijoji

Nihonbashi 1-chome Central District

2020–
PROUD Fuchu Station Arena;completed in April 2017

PROUD TOWER Tachikawa;
completed in July 2016

2016

2018

2017
Terrasse Nayabashi PROUD TOWER Nagoya
Sakae; completed in July 2017

PROUD TOWER Musashi-Koganei Cross

Nishi-Shinjuku 3-chome West District©Nomura Real Estate Holdings. All rights reserved.

10

Ⅰ．Premises for the Plan

Review of Previous Plan (Phase 1: FY17/3–FY19/3)

Built a Continuous Business Platform in Overseas

Expanding businesses by collaborating with local developers mainly in Asia.
Bangkok, Thailand（serviced apartments)

Beijing, China(offices / management)

Bangkok, Thailand（condominiums）

Staybridge Suites Bangkok
Thonglor

PARK Origin Thonglor

KNIGHTSBRIDGE PRIME Onnut

KNIGHTSBRIDGE Collage
Ramkhamhaeng

Beijing Fortune Building

Ho Chi Minh, Vietnam(offices)

Manila, the Philippines(condominiums, retail facilities)

KNIGHTSBRIDGE PRIME Ratchayothin

SUN WAH TOWER

Sunshine Fort
©Nomura Real Estate Holdings. All rights reserved.

Ⅰ. Premises for the Plan

11

Review of Previous Plan (Phase 1: FY17/3–FY19/3)
Mutual Growth with Group REITs by Utilizing Leasing Value Chain
Created development opportunities throughstrategic property replacement with Group REITs.

Morisia Tsudanuma

NOF Nihonbashi Honcho
Building

New Business Domains and New Asset Types
Opened our first properties in the elderly carebusiness and hotel business.

OUKAS Funabashi

NOHGA HOTEL UENO

Growth through M&A and Strategic Partnerships
Conducted M&A and capital alliance in growth sectors.
• Invested in shares of UK-based real estate investment
manager, Lothbury Investment Management Group Limited(75% of shares).
• Invested in the owner and operating company of HOTEL NIWA TOKYO (100% of shares).
©Nomura Real Estate Holdings. All rights reserved.

Ⅰ. Premises for the Plan

Business Environment: Opportunities and Threats

12

Notable Business Conditions
Opportunities

Threats

Increase in single, dual-income households, andsenior households

Japan’s declining population

Tokyo’s city power and global competitivenessDecrease in number of family households

Demand for compact towns in regional core cities

Rapid changes in economic conditions

Accumulation of high quality property stock, demand forrenovation and rebuilding of old properties

Labor shortage

Expansion of cross border real estate investment
demands
Fund inflows into Japanese real estate market
Continuous growth in Asian market

Diversification of lifestyles and workstyles
Diversification of values for housing andworkplaces
Rapid evolution in technology
Growth of e-commerce and changing
consumer trends©Nomura Real Estate Holdings. All rights reserved.

Ⅰ. Premises for the Plan

13

Business Environment: Our Company Strengths

Development Capabilities
Based on the Market-in Approach

Development and Expertise of Various Types of Assets

Condominiums

Detached
housingElderly
housing

Retail facilities

Logistics
facilities

Officebuildings

HotelsFitness clubs

Dedication to Quality of Products and Services

Group Synergy
Residential
Development
Leasing

Siphon drainage system“Smart Siphon”

Property & Facility
Management

PROUD
Shirokanedai

Recipient of the Good Design Awardfor the 17th consecutive year
PROUD Shinjuku
Nakaochiai

Smart energy system“enecoQ”

Property Brokerage& CRE
Investment
Management©Nomura Real Estate Holdings. All rights reserved.

14PART Ⅱ
Overall Concept
1. Our Vision for the Future
2. Value Creation
3. Management Benchmarks
4. Business Portfolio Strategy

5. Investment Plan
6. Strategic Investment©Nomura Real Estate Holdings. All rights reserved.

15

Ⅱ. Overall Concept

Our Vision for the Future

Our Group Vision

New Value, Real Value
Integrating all that is precious to people and communities,
we build cities—dynamic stages that connect today with tomorrow’s possibilities—
and embrace every moment of life’s pursuits.
We create new value, social value, and above all, real value.

We work to “build cities that connect todaywith tomorrow's possibilities.”

We work to “embrace every moment oflife’s pursuits.”

Through the provision of products resulting fromreal estate development, we create communities

Through the provision of a variety of services
relating to real estate, we will nurture times ofabundance with people who “live,” “work,”“gather,” and “relax” in communities.

with extensive urban functions that offer safety,
security, and comfort.
We work to create sustainable communities
in which diverse generations and values cancoexist and that take harmonization with nature

We support the development of communities,
linking people to people and people tocommunities.

and the environment into consideration.

©Nomura Real Estate Holdings. All rights reserved.

16

Ⅱ. Overall Concept

Group Initiatives for Value Creation

Seeds for growth planted
under the previous plan
Mixed-usedevelopment

Platform ofoverseas businessNew asset type

Mutual growthwith Group REITs

Accelerated growththrough
M&As

Our Group’s Strengths
Development
capabilities
based onmarket-in approach

Development andexpertise of various
types of assets

Commitment to thequality of products
and services

Group synergy

Value Creation Initiatives①

Realization of enriched lifestyles and workstyles②

Multifunctional urban development toward exceptional
convenience, comfort, and safety③

Urban development and community building toward thefuture of the global environment and local communities④

Global expansion of high-quality products and services©Nomura Real Estate Holdings. All rights reserved.

17

Ⅱ. Overall Concept

Value Creation 1
Enriched Lifestyles and Workstyles

 Provide products and services that are one step ahead of customer needs to enrich
lifestyles and workstyles.
 Extend our value to new business fields which we have created through our distinguishedmarketing and positioning, such as PROUD, PMO, and OUKAS.

Condominiums

Office buildings

Retail facilities

Logistics facilities

Elderly housing

Hotels©Nomura Real Estate Holdings. All rights reserved.

18

Ⅱ. Overall Concept

Value Creation 2
Multifunctional Urban Development toward
Exceptional Convenience, Comfort, and Safety

 Provide exceptional convenience, comfort, and safety to lifestyles through multifunctional
urban development.
 Promote multifunctional urban development in various areas and schemes such as urban
compact towns and station-front redevelopment.

PROUD CITY Hiyoshi
Multifunctional, mixed-use development
centered on condominiums
・Location: Yokohama, Kanagawa
・Site area: approx. 4.1 ha・Main use: condominiums, retail facilities,
residence for elderly people with service, fitnessclub, elementary school, etc.
・Completion (planned): FY20/3–

Efforts to promote community relationships
・Build city base hubs for local communities

・Our employees continue to support community
building even after completion©Nomura Real Estate Holdings. All rights reserved.

19

Ⅱ. Overall Concept

Value Creation 3
Urban Development and Community Building Toward
the Future of the Global Environment and Local Communities Create sustainable cities and communities that are eco-friendly and thrive together
with local communities.
 Utilize digital technology to create a more convenient and comfortable future.

Shibaura 1-chome District
Large-scale waterfront developments
・Location: Minato-ku, Tokyo
・Floor area: approx. 550,000 m2
・Main use: offices, retail facilities, hotel, apartments
・Construction completion (planned):
FY25/3 (South Tower)
FY31/3 (North Tower)

Eco-friendly
urban development
Environmentallyfriendly・Popularize next-generation energy technology byurban development

creating opportunities to spread information andexchanging ideas
・Build energy network and introduce technology to
reduce environmental impact
・Enhance excursion with surrounding areas andcreation of waterfront spaces©Nomura Real Estate Holdings. All rights reserved.

20

Ⅱ. Overall Concept

Value Creation 4
Global Expansion of High-quality Products and Services
 Expand our high-quality products and services globally, mainly in Asia.

 Develop businesses with local partners using market-in approach that cater to thelifestyles and workstyles of each country.

Improve quality and service• Improvement plan to enhance quality and service• Project management with Japanese quality

Cross-border investment opportunities• Respond to cross border investment needs
through cooperation with overseas subsidiaries
and UK-based Lothbury Investment Management• Expand our global network through M&A andcapital alliances©Nomura Real Estate Holdings. All rights reserved.

21

Ⅱ. Overall Concept

Positioning of the Plan Formulate a nine-year plan that captures the development business and the upcoming large-scale properties.
 Develop sustainably based on seeds for growth planted under Phase 1 of the previous plan.

Period under previous plan

Phase 1 of previous plan

FY16/3

FY19/3

Period under new plan

FY22/3

FY25/3

FY28/3©Nomura Real Estate Holdings. All rights reserved.

22

Ⅱ. Overall Concept

Profit Plan
Sustainable revenue growth while maintaining high asset and capital efficiency.
Business Profit

Profit target has been changed to “business profit”*1 in consideration of profit from overseas businesses
and amortization of related intangible assets from M&A activities.
FY19/3 (Results）

FY22/3 (Phase 1)（Billions of yen）
FY25/3 (Phase 2)

79.6

85.0

100.0

25.0

30.0

36.0

Commercial Real Estate

38.0

33.0

36.0

Service & Management Sector

21.6

28.0

35.0

Investment Management

5.9

9.0

12.0

Property Brokerage & CRE

8.1

11.0

14.0

Property & Facility
Management

7.4

8.0

9.0

-5.0

-6.0

-7.0

FY28/3 (Phase 3)

120.0-140.0*2

Business Profit by Business Unit
Residential Development*3

Adjustments*1：Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions*2：Business profit by business unit in FY19/3 has been adjusted to reflect organizational changes made in FY20/3.
*3：The Leasing Business Unit has been renamed the Commercial Real Estate Business Unit as of FY20/3.
©Nomura Real Estate Holdings. All rights reserved.

23

Ⅱ. Overall Concept

Financial and Capital Policies
 Enhance shareholder returns while maintaining capital efficiency exceeding capital costs.
 Achieve a balance between profit growth and shareholder returns. The total return ratio is targeted to
be 40–50% in Phase 1.

Medium- to Long-term Policies
Asset Efficiency

5

ROA：

Capital Efficiency% or more

ROE :

10

% or more

Shareholder Returns（Phase 1）
Total return ratio: approx.

FY19/3Results

Phase 1

ROA

4.7％

Approx. 4–5%

5% or more

ROE

8.9％

Approx. 8–9%

10% or more

Phase 240–50%

Phase 3

©Nomura Real Estate Holdings. All rights reserved.

24

Ⅱ. Overall Concept

Financial and Capital Policies

 Enhance shareholder returns. The target total return ratio for each fiscal year of Phase 1 is 40–50%.
 In FY20/3, dividend is planned to increase for the eighth consecutive year, to ¥80 per share, and acquisition oftreasury shares was announced (third consecutive year).

Shareholder Returns
Phase 1（FY20/3–FY22/3）
Cash dividend per share (¥)

Dividend payout ratio

65.0
57.5

Total return ratio

70.0

75.0

Total return ratio: approx. 40–50%

80.0

50.6%

45.0
25.0
27.1%

FY12/3

30.0

41.4%

35.0

29.5%
24.9%

FY13/3

FY14/3

26.5%
22.4%

23.4%

FY15/3

FY16/3

FY17/328.9%

FY18/330.5%

FY19/3

FY20/3(plan)

FY21/3

FY22/3©Nomura Real Estate Holdings. All rights reserved.

25

Ⅱ. Overall Concept

Business Portfolio Strategy（Profit structure）
Achieve a business portfolio that combines high asset efficiency and stability.

Optimizing Our Business Portfolio
Development
SectorService & Management
Sector

Leasing Business

Property Sales Business

Service & Management

Property
Sales
Business

Service &Management
Profitclassification

Development profit

Recovery ofcapitalProfitfluctuation

Leasing profit

Fees

Short termLong term

－

High

Low

Low

40％

40％

Business
profitportfolio
FY28/3
Realize development

Build a competitive

Expand businessprofits throughasset portfolio byopportunities throughdevelopment and sales indeveloping valuable

M&A and partnershipthe short term, both inleasing properties andbuilding, in addition to

Japan and overseas

strategic property

utilizing the Group's

replacementbusiness resources

Leasing Business
Mid- to Longterm Targets

ROA: 5% or more

ROE: 10% or more

20％
©Nomura Real Estate Holdings. All rights reserved.

Ⅱ. Overall Concept

Business Portfolio Strategy（Profit structure）

26

 Develop overseas businesses as a growth driver with utilizing the expertise we have acquired in Japan.
 Expand overseas business profit ratio to 15–20% of total business profit in Phase 3 by capturing growing overseas
markets.
Overseas Business Strategies
Overseas businessBusiness development

15–20%

Overseas platform

Business expansion in existing
business areas

Establishment of local offices

Thailand, Vietnam, the Philippines, China,
and the UK

Business profit ratio

Business in new areas

FY28/3

Target countries in terms of market size,
growth potential, and stability

Capital and business alliances withlocal companies

Global network

Overseas human resource
development

Expansion through M&A, capital alliances

Risk Management
Business risks

Stress tests

Monitor risks related to the businessenvironment, financial markets, laws andregulations

Confirm soundness of shareholders’equity ratio and business balance basedon assumed risks©Nomura Real Estate Holdings. All rights reserved.

27

Ⅱ. Overall Concept

Investment Plan

 Carry out new investments of ¥5.5 trillion under this plan (total of nine years).
 Achieve high asset efficiency through controlling net increase in total assets to ¥640 billion by increasing asset turnover.

Investment and Balance Sheet（Billions of yen）

End of
FY19/3Phase 1

Phase 2Phase 3

Reference: comparison withprevious plan

Total

Residential
Development
Business Unit

Japan

Investment－

1,100.0

1,250.0

1,250.03,600.0

Recovery－

1,000.0

1,200.0

1,250.03,450.0¥5.5 trillion
Net investment+¥0.6 trillion

Commercial Real
Estate Business Unit

¥4.9 trillion
－

550.0

650.0

700.0

1,900.0

Recovery

－

400.0

500.0

550.0

1,450.0

Total investment(including overseas)－

1,650.0(50.0)

1,900.0(100.0)1,950.0(150.0)5,500.0(300.0)Total recovery(including overseas)－

1,400.0(0)1,700.0(50.0)

1,800.0(100.0)4,900.0(150.0)1,759.4

2,000.0

2,200.02,400.0ー

Total

Previous plan

Investment

Total balance of assets

Overseas

Total investment

Total recovery*Amounts shown represent forecasts of total asset balances for the final fiscal year of each phase.

©Nomura Real Estate Holdings. All rights reserved.

28

Ⅱ. Overall Concept

Strategic Investment

 Make strategic investments to achieve further profit growth and ROA improvement.
 Accelerate our growth through M&A, capital and business alliances, etc.

Strategic Investments
Major investment target
Health services

Real estate brokerageand consulting

Overseas real estatedevelopment

Hotel business

Investment
management business

ICT and digital
sectors

Property
management

Investment Goals• Expand business in Service &Management Sector and overseas

Strategic
Investments• Develop business in new fields• Gain external expertise and resources

Senior business©Nomura Real Estate Holdings. All rights reserved.

29

PART Ⅲ
Structure to Support
Growth
1. Redevelopment / Rebuilding Business​
2. CSR / ESG
3. Product Development / Quality Control​©Nomura Real Estate Holdings. All rights reserved.

30

Ⅲ. Structure to Support Growth

Redevelopment / Rebuilding Business Scheduled to complete several large-scale buildings in Phase 2 and 3, contributing to the Group’s business growth.
 Secured business volume of over ¥500 billion*1 in housing sales and about 320,000 m2 *2 of newly built leasing area
during the period of this plan.

Major Projects under Development
Phase 1Toranomon Station-front District Higashi-Ikebukuro 4-chome
Second District

Phase 2

Nishi-Azabu 3-chome
Northeast District

Shibaura 1-chome (South Tower)

Phase 3

Nishi-Shinjuku 3-chome West District

Nihonbashi 1-chome
Central District

Buildings to be completed
in Phase 2

Buildings to be completed
in Phase 1

Buildings to be completed
in Phase 3(excluding above examples)(excluding above examples)(excluding above examples)

・Minamikoiwa 6-chome

・Itabashi Station Itabashi Exit・Iidabashi Station Central

District

District・Nishi-Nippori Station-front

・Sakai-Higashi Station

・Hirai Station North Exit District

・Soto-Kanda 1-chomeSouth District

・Kawaguchi-sakaecho 3-chome・Mishima Station South Exit

・Nagoya Nishiki 2-chome

District

East District, etc.

Musashi-Koganei Station 2nd District ・Wakashio Heights(rebuilding), etc.

Minami-Ikebukuro 2-chome
C District

・Hankyu Tsukaguchi Station-

Okayama station-front District

front (rebuilding), etc.

*1: Amount of business volume from redevelopment and rebuilding business forecasted under this business plan as of March 31, 2019.
*2: Refers to leasable area for redevelopment or rebuilding projects (offices, retail facilities, hotels, etc.) that are under way as of March 31, 2019 and are planned for completion within the timeframe of this business plan.

Note: Each project (including project name) is currently in the planning stage, and is therefore subject to change.

©Nomura Real Estate Holdings. All rights reserved.

31

Ⅲ. Structure to Support Growth

Redevelopment / Rebuilding Business Utilize our expertise as a developer to promote business in cooperation with local communities and governments
over a long period.
 Maximize asset value by creating attractiveness through our development.
Urban Development through Redevelopment and Rebuilding Projects

Redevelopment Business
Improvement of fire resilience ofUrban revitalization throughhighly populated

station-linked, mixed-use

areas with woodframe housingdevelopments

PROUD TOWER Higashi-Ikebukuro

PROUD Fuchu Station Arena

Rebuilding Business
Restoring of deteriorating
apartment complexes

PROUD CITY Asagaya©Nomura Real Estate Holdings. All rights reserved.

32

Ⅲ. Structure to Support Growth

CSR / ESG
Create social and environmental value through our business activities, based on
our four key CSR themes and two CSR promotion foundations
ThemesE

Environment

Priority issues• Upgrades to environmental
management• Responding to climate change• Consideration for biodiversity• Appropriate utilization of resources and• Effective utilization of water resources

Two Promotion
Foundations

G

Four Key Themes for CSR

S

Safety andSecurity

pollution control• Improved safety/security in designand construction• Initiatives for longer life andincreased durability• Improved quality of safety/security
in operation and management• Safety and security in disasters

Community• Care for communities and support for revitalization

Health andWell-being• Response to aging population and diversity and support for health

Human
CapitalManagement
Structure

Related SDGs

• Improved customer satisfaction and comfort• Health and safety of employees• Improvements to human capital• Promotion of diversity• Supplier safety• Creation of fair and rewarding
workplaces• Corporate governance• Human rights• Compliance• Improved supplier management• Risk management©Nomura Real Estate Holdings. All rights reserved.

33

Ⅲ. Structure to Support Growth

Product Development / Quality Control​
Added value creation and risk control in manufacturing
Product development to create new value

Quality control in pursuit of safety and security

Our quality control manual, drawing from 60 yearsof history

the Good Design Award for

17 consecutive years（62 awards total*）safe

comfortable
costeffective

durableExamples of various certifications acquired

Integrated manufacturing, sales, and製造・販売・管理の一貫体制
management systemcuttingedge
versatile

welldesigned

The Dual TMD-NT: the first vibration control damperof its kind in Japan (patent approved)

Over 200 first-class architects andfirst-class in-house architect office

一級建築士200名超・インハウスの一級建築士事務所*As of March 31, 2019

©Nomura Real Estate Holdings. All rights reserved.

34

PART Ⅳ
Business Strategies
by Each Unit
1. Residential Development Business Unit
2. Commercial Real Estate Business Unit
3. Investment Management Business Unit
4. Property Brokerage & CRE Business Unit
5. Property & Facility Management Business Unit

©Nomura Real Estate Holdings. All rights reserved.

35

Ⅳ. Business Strategies by Each Unit

Residential Development Business Unit
Business Environment
Population decline
Decrease in numberof family households

Increase in numberof single, dualincome households,
and senior
households

Greater demand for
quality in thegrowing AsianmarketDiversification ofcustomer needs due
to lifestyle changes

Evolve into the “No. 1 brand in housing business” by providing housing that responds to market changes
and diversifying needs
Expanding overseas business actively and continuously

Domestic Business
Multifunctional and sustainable
cities and communities

High-quality housing to meet
diversified customer needs

 Increase urban-type compact
towns projects and redevelopment
projects
 Expand business in regional corecities Develop products that respond to
customer needs

Services that support safe living Grow sustainably as acontinuous partner in housingthat can fully meet customer
needs

Expand business domains in “housing”
Gather all living needs (condominiums, detached housing, rental housing, senior housing )in the Residential Development Business Unit
Establish a system to provide more value for products and services©Nomura Real Estate Holdings. All rights reserved.

36

Ⅳ. Business Strategies by Each Unit

Residential Development Business Unit

Accelerate initiatives in urban-type compact towns
and redevelopment business

Expand business in regional core cities in addition toexisting business domains

Expand in 12 cities
Niigata-shi
Toyama-shi
Kanazawa-shi

Akashi-shi
Okayama-shi

Fukushima-shi
Utsunomiya-shi
Takasaki-shi
Mishima-shi

4
Matsuyama-shi

Kameido 6-chome Plan
(934 units, construction completion: planned for 2022)

PROUD TOWER Musashi-Koganei Cross(716 units, construction completion: planned for 2020)

Kasugai-shi

Shizuoka-shi

Okayama Station-front Redevelopment Project(390 units, construction completion: planned for 2025)©Nomura Real Estate Holdings. All rights reserved.

37

Ⅳ. Business Strategies by Each Unit

Residential Development Business Unit

Expand business domains in “housing”
Develop products that respond to customer needs

Grow sustainably as a continuous partner in housingthat can fully meet customer needs

 After-sales service
 Relocation service
 Renovation

Condominium and Detached housing

分譲

Reliable after-sales service
Aftersales
service

New fields: high-grade, compact,senior Interior design Follow-up service
 Online advertising
Management

Building managementwith security
Exclusive
long-term
maintenancesupport

Newly
built
condosInterior
designNomura Real
Estate Group
Customer Club

• Unified and expand customer service• Integrate membership program• Diversification of product planning

Housekeeping
serviceHome
care

Relocation
supportRental housing
Reform

分譲
Rental housing and serviced housing
for seniors

Interior &Furniture

Services ranging
from equipment
replacement to fullrenovation* Depending on certain terms and conditions,some services may not be available.

Leasing

Variousbenefits
andeventsMember benefits
and exclusive events

Rental services*(relocation andmanagement services)©Nomura Real Estate Holdings. All rights reserved.

38

Ⅳ. Business Strategies by Each Unit

Residential Development Business Unit

Overseas Business
Offer new value to local market through solid partnerships with local developers,
meeting expectations for quality and service by utilizing know-how cultivated in Japan
Continue to develop business in Asia, an area with high growth potential
Thailand

Vietnam

The Philippines

Increase profit ratio ofoverseas business inmedium to long term
Japan

China

Phase１

Overseas

Phase２Phase３

Capitalize on overseas growthmarkets and increase the profit
ratio of overseas business toapproximately 20%
in Phase 3©Nomura Real Estate Holdings. All rights reserved.

39

Ⅳ. Business Strategies by Each Unit

Commercial Real Estate Business Unit
Business Environment
Tokyo’s city power
and international
competitiveness

Diversification ofworkstyles andchanges in officespacesInnovations in
AI and IoT

Spread of
e-commerce andchanges in
consumer trends

Increase in foreign
visitors

Urbanization of
growing Asian
countries

Management pursuing distinctive product planning and customer satisfaction

×

Implement high-value-added businesses through new services utilizing digital technology

Highly distinctive
product planning

High-quality
management and services

New initiatives

Office buildings

Retail facilities

Logistics facilities

HotelsFitness clubs

Shared satellite offices
Serviced offices©Nomura Real Estate Holdings. All rights reserved.

40

Ⅳ. Business Strategies by Each Unit

Commercial Real Estate Business Unit

Office Business
Grow further by expanding our customer base through responding to corporate growth andaccommodating workstyle reforms
Diversify product lineupManagement and services thatprovide new value

Develop business where ourowned properties are located

A lineup that fits the customer’s
stage of growthManagement and services
closely focused on customer’s
point of view

Owned office building locations(Tokyo metropolitan area)

Large-scale,
mixed-usedevelopments

Medium-andlarge-sizedbuildings

PMOs

Hold community events and joint
training for tenant companies

Serviced offices

Provide small-scale independent spaces
and shared services including reception
and meeting rooms, etc.

+

New products that accommodate
corporate workstyle reforms
Shared satellite offices

PMO tenant company exchange event

Services that utilize digitaltechnology
Contribute to improving Company andemployee productivity

Note: Buildings owned by Nomura Real Estate and NREGTOSHIBA BUILDING Co., Ltd. and buildings
operated by Nomura Real Estate as of the end of
March 2019 (including buildings under development)©Nomura Real Estate Holdings. All rights reserved.

41

Ⅳ. Business Strategies by Each Unit

Commercial Real Estate Business Unit
Logistics Business• Conduct plans for worker-friendly and productivity
improvements of tenant companies• Provide new services to support tenant companies andworkers

Retail Business• Establish urban-type retail facilities, which mainly
consist of restaurants, and shopping centers in local
communities• Pursue the satisfaction of both visitors andstoreowners through plans and services that provide
a relaxing time for facility users
Morisia Tsudanuma

Hotel Business• Offer special value that can only be enjoyed in that
region’s hotel

Fitness Business• Support healthy and comfortable living by catering
to a variety of customer lifestyles• Cater to a variety of accommodation needs bydeveloping luxury hotels and other specialized
lodgings, in addition to our hotel brands©Nomura Real Estate Holdings. All rights reserved.

42

Ⅳ. Business Strategies by Each Unit

Commercial Real Estate Business Unit

Large-scale, Mixed-use Development Business
Accommodate a variety of workstyles and lifestyles throughmultifunctional and highly convenient urban development

Overseas Business
Expand our development and management expertise tooverseas, strong partnership with local developers
Bangkok,ThailandHo Chi Minh,
VietnamThonglor

Sun Wah Tower

Serviced apartments

OfficeTotal units: 303 units

Leasable space:approx. 26,500 m2(49% share)(24% share)

Shibaura 1-chome District Office/retail/hotel/residential

Musashi-Koganei Station
2nd District
Retail/residential

Manila, the Philippines

Beijing, China

Sunshine Fort

Beijing Fortune Building

Nihonbashi 1-chome
Central District

Retail/residential

OfficeLeasable space: approx. 30,000 m2

Office and others

Leasable space: approx. 55,000 m2

Total units: approx. 1,400 units(participation in operation)(20% share)©Nomura Real Estate Holdings. All rights reserved.

43

Ⅳ. Business Strategies by Each Unit

Investment Management Business Unit
Business Environment
Growing demand foralternative investment

Diversification andcross-borderinvestment needs

Steady growth in REIT business
Expand growth by creating new products and building a global network

Core Business (REIT business)
Establish a brand and promote stable growth by utilizing
the leasing value chain

Assets under management:¥1.074 trillion(at end of FY19/3)

Management pipeline

Growthdrivers《Proven property
management
capabilities》

Sponsor pipeline《Stable supply of
property》

Assets under management:¥216.9 billion(at end of FY19/3)©Nomura Real Estate Holdings. All rights reserved.

44

Ⅳ. Business Strategies by Each Unit

Investment Management Business Unit

Development of Our Next Growth Engine
Accelerate global
development

Strengthen our next
growth engine

Private fundbusiness

OutboundEuropeNorth America

Japan

Partners in Europe
Partners in North America

Securities fundbusiness

Asia
Oceania

Partners in Asia

Inbound• Respond to a variety ofinvestment needs• Deal with the cross-borderinvestments• Address the changing market
with new products• Build strategic partnerships with asset management companies
in North America, Europe, and Asia
• Manage domestic investors’ outbound needs• Increase overseas assets under management©Nomura Real Estate Holdings. All rights reserved.

45

Ⅳ. Business Strategies by Each Unit

Property Brokerage & CRE Business Unit
Business Environment
Continuous demand forreal estate investment
from corporations,institutional investors,
and individuals

Growing demand forbusiness succession
and measures against
inheritance tax

Increasing stock ofhigh-quality, used
residential properties

ICT/AI and othertechnologicalinnovations

Growing inboundinvestment needs

Expand growth by providing high-quality, convenient, and supportive
services/consulting and by building a wide-ranging customer base

Retail Business
Become the No. 1 trusted brand for customers• Improve consulting capabilities• Introduce advanced communication by utilizing ICT and AI• Upgrade lineup of services (“Home Staging,”etc.)• Enhance digital marketing centered on “nomu.com”• Strengthen area marketing by establishing a
network of 120 branch locations by FY28/3• Create a business model that takes advantage of digital
innovation©Nomura Real Estate Holdings. All rights reserved.

46

Ⅳ. Business Strategies by Each Unit

Property Brokerage & CRE Business Unit
Wholesale BusinessMaximize customers’ corporate value
Highly specialized consulting×
Wide-ranging customer base• Build a sales structure that can respond to customers across Japan• Enhance partnership with Nomura Securities and regional financial
institutions• Comprehensive CRE proposals that utilize our development
functions

Hiroshima

Kyoto

Fukuoka• Accelerate growth by actively developing services tailored tocustomer needs and attributes■TokyoOsaka■NagoyaOverseas Business
Increase profit through inbound investment from
Asian countries
Collaboration with overseas bases and business partners
×Extensive information

Tokyo

Hong Kong■ ASEAN countries• Strengthen cross-border transaction through our branches in Tokyo,
Hong Kong, and Singapore• Build sales network by enhancing our cooperative partnership with

Singapore

Nomura Securities in Asia and through strategic partnerships with overseas
companies©Nomura Real Estate Holdings. All rights reserved.

Ⅳ. Business Strategies by Each Unit

Property & Facility Management Business Unit

47

Business Environment
Diversification of lifestyles
Complicated customer
needs

Increasing number of old
buildings
Demand for repairing old
buildings

Lack of human resources
due to declining
population

Development of ICT
Innovations in AI and IoT

Expand business foundation and enhance our customer-oriented,
property and facility management to achieve stable growth
Provide Property and Facility Management Services with High Added Value
Pursue customer satisfaction from the beginning ofurban development
Provide high-quality property and facility management
services from the beginning stage of development to meetthe needs of both users and local communities
Management through proposing procedures
Provide services that support sustainable city growththrough large-scale, mixed-use station-front development
projects and property/facility management for urban-typecompact towns

Shibaura 1-chome District

PROUD CITY Hiyoshi

Offer high-efficiency, high-quality services bycombining the strengths of people and technology
Cleaning robots + young foreign human resources

Higher property and area value

・ Utilize a foreign trainee system and a specialized skills system©Nomura Real Estate Holdings. All rights reserved.

48

Ⅳ. Business Strategies by Each Unit

Property & Facility Management Business Unit

Expand Management Area and Lineup of Services
Priority Business Domains

Business expansion in public affairs(Public–Private Partnerships and designatedmanagement services)

Station-front redevelopment
projects in core cities

Public–Private Partnerships (PPP)

Branch into area management and mixed-use
facility management
Collaboration with Group overseas projects
Provide property management expertise centered on
Commercial Real Estate Business Unit projects

Haneda Airport Unused Land
Zone 1 Redevelopment Project

Utsunomiya Station East Exit
District Maintenance Project

Expand Construction Orders
Large-scale condo repair work
Leverage Attractive 30 and re:Premium services toreduce lifecycle costs and improve customer
satisfaction

Building renewal
Address increasing need to utilize old existing
properties in order to deal with issues of old
buildings and vacant dwellings

4thlargescale
repairStandard repair cost (cumulative over 12-year period)
Cumulative repair costs under Attractive 30 and re:Premium

1stlargescale
repair

Newly constructed

2ndlargescale
repair

1stlargescale
repair• General large-scale repair

12 years
16 years

24 years

12 years
16 years

32 years

12 years

36 years

12 years
16 years

4thlargescale
repair3rdlargescale
repair2ndlargescale
repair12 years 16 years

Widespread
reduction of
repair costs

3rdlargescale
repairCumulative maintenance fees

Renovation work
Respond to growing demand for renovation toaccommodate lifestyle changes

5thlargescale
repairLong-term simulation of large-scale repair work

work: 12–year cycle• Leverage Attractive 30
and re:Premium forlarge-scale repair
work: 16-year cycle

48 years

60 years

12 years
16 years©Nomura Real Estate Holdings. All rights reserved.

Nomura Real Estate Holdings, Inc.
Corporate Communications Dept.
Tel:+81-3-3348-8117
E-mail:nrehd-ir@nomura-re.co.jp

This document has been prepared for the purpose of information only, and should not be construed as an offer,solicitation, or commercial conduct of any nature associated with specific products. The forward-looking
statements with respect to the future financial results contained in this document should not be construed as aguarantee of actual performance in the future. Although this document is intended to be complete and thorough,there is no assurance of the accuracy and reliability of its information. Please note that the contents in thisdocument are subject to change or omission without prior notice. Any duplication, reproduction, distribution, or
use of information contained in this document without express written consent is prohibited.