Financial Report2019

For the Year Ended March 31, 2019

Management’s Discussion and Analysis 

1Consolidated Balance Sheet 

13Consolidated Statement of Income 

15Consolidated Statement of Comprehensive Income 

16Consolidated Statement of Changes in Net Assets 

17Consolidated Statement of Cash Flows 

18

Notes to Consolidated Financial Statements 

19

Independent Auditors’ Report 57

Management’s Discussion and Analysis

Trends in the Real Estate Industry

and declining vacancy rates and increasing rent revenue continued

In the real estate industry, the residential market saw sales prices

nationwide.

In November 2018, the Company opened NOHGA HOTEL

Residential Development Business Unit
Operating revenue in the Residential Development Business Unit

UENO (Taito-ku, Tokyo), as the first project of the Group-operated

continue to increase while supply volume declined due to construc-The office building vacancy rate in the five wards of central

totaled ¥362,761 million, which represents an increase of 2.1% year

hotel brand. In March 2019, the Group acquired all of the sharestion costs remaining high and intensified competition for the landTokyo declined by 1.02 percentage points as of March 31, 2019,on year, and operating profit totaled ¥23,180 million, a decrease ofof Ryubundo Co., Ltd., which owns properties such as Hotelacquisition, and there continued to be a trend of polarization in

improving to 1.78%. Average rent levels in the five wards of central

5.5% year on year, resulting in an increase in operating revenue

Niwa Tokyo, and its wholly-owned subsidiary UHM Co., Ltd., a­salability based on the levels of the convenience of the regions

Tokyo as of March 31, 2019 increased by ¥1,435 per tsubo toand a decrease in operating profit compared with the previous

hotel operating company.

and the properties themselves.

¥21,134 compared to March 31, 2018.

fiscal year.

In the real estate investment market, the total asset size ofCondominium supply in the Tokyo region increased by 3.4% year-

This was mainly due to a decrease in gross profit in other busi-

Investment Management Business Uniton-year to 37,132 units in the calendar year 2018. The contract

J-REITs was steadily expanded thanks to the increase of property

ness, excluding residential development, owing to a decline in fees

Operating revenue in the Investment Management Business Unit

number for the first month on newly marketed condominium units

acquisition accompanied by new listings and public offerings, andfrom JV projects, while there is no change in gross profit margin

totaled ¥9,641 million, which represents an increase of 2.8% year

in 2018 decreased by 6.0 percentage points year-on-year to 62.1%.

the appraisal of J-REITs as stable and secure investments notratio for housing sales and there was an increase in the number ofon year, and operating profit totaled ¥5,943 million, an increase of

housing sales and a rise in unit sales prices.

0.5%, resulting in increases in both operating revenue and operat-

In the office market, many deals were executed in connection­susceptible to the impact of international affairs was enhancedwith office expansion such as relocations for more space, opening

because of the favorable domestic real estate market conditions.

of branch offices and the expansion of floor space within buildings,

Expected yields on A-class office buildings in the Marunouchi/

In regard to housing sales, 5,890 units were recorded as sales

ing profit compared with the previous fiscal year.

(an increase of 25 units year on year), including PROUD CITY

In the core REIT business, Nomura Real Estate Master Fund,

Otemachi area remained at the same level year-on-year of 3.5%

Etchujima (Koto-ku, Tokyo), PROUD TOWER Higashi Ikebukuro

Inc. and Nomura Real Estate Private REIT, Inc. acquired a total of

as of March 31, 2019.

(Toshima-ku, Tokyo) for condominiums, and PROUD SEASON

21 properties for ¥75,499 million (transaction amount) from Nomura

Senri Maruyamacho (Suita-shi, Osaka) for detached housing. As

Real Estate Development Co., Ltd. in accordance with the sponsor(Units)(%)

Analysis of Operating Resultsof the end of the fiscal year under review, the number of completed

pipeline in the leasing value chain.

60,00090

In this business environment, the Nomura Real Estate Group (thehousing inventories totaled 276 units (a decrease of 182 units

80“Group”) posted the following consolidated performance for the­compared with the end of the previous fiscal year) and the number

bury Investment Management Group Limited, a British real estate70

fiscal year under review: Operating revenue of ¥668,510 million,of contracted but not recorded housing units totaled 2,996 units

management company, in November 2018. As a result, assets

60

which represents an increase of 7.2% year on year; operating profit(an increase of 165 units compared with the end of the previous

under management have steadily expanded and totaled0of ¥79,162 million, an increase of 3.3%; ordinary profit of ¥69,323

fiscal year).

¥1,669,476 million at the end of the fiscal year under review,

Condominium Supply and Contract Rates in the Tokyo Metropolitan Area
(calendar year)

45,00037,13230,00062.1%

15,000
0

2014

2015

Condominium Supply (left axis)

2016

2017

2018

Contract Rates (right axis)(CY)

Source: Real Estate Economic Institute Co., Ltd.

million, an increase of 1.9%; and profit attributable to owners of

The Company has actively engaged in development projects

parent of ¥45,873 million, a decrease of 0.3%.

24,0008.0

21,13421,000

6.0

18,0004.0

15,000

2.0

1.78%

0

2015
Rent Levels (left axis)

2016

2017

2018

2019

Vacancy Rates (right axis)

0

(CY)

Source: Miki Shoji Co., Ltd.

(Points)(%)
2,000

5

1,907.36

1,600

4

3.5%

1,200

3

800

2

400

1

0
TSE REIT Index (left axis)

2017

Expected Yields (right axis)

2018

2019

Operating revenue in the Property Brokerage & CRE* Business Unit

Thailand.

totaled ¥37,298 million, which represents an increase of 4.5% year
on year, operating profit totaled ¥8,170 million, a decrease of 3.3%,

Operating revenue for each business unit includes internal sales

resulting in an increase in operating revenue and a decrease in

Leasing Business Unit

and transfer amount among business units. Due to the rounding ofOperating revenue in the Leasing Business Unit totaled ¥167,628

fractions, total figures may not match.

million, which represents an increase of 24.2% year on year, and­operating profit compared with the previous fiscal year.
This was mainly due to prior investments in human resources,

From the fiscal year under review, Nomura Real Estate Reform

operating profit totaled ¥38,858 million, an increase of 10.3%,

stores and systems with looking ahead to future expansion in theCo., Ltd., which had been classified under the Residential Develop-­resulting in increases in both operating revenue and operating

business volume.

ment Business Unit, was transferred to the Property & F­ acility

profit compared with the previous fiscal year.
This was mainly due to an increase in leasing revenue in leasing

In the retail business, we opened the following new branches:
Nagoya branch (Naka-ku, Nagoya-shi, Aichi) in April 2018,

Estate Reform Co., Ltd. was merged with Nomura Real Estatebusiness and revenues of property sales in property development­Toranomon Center (Minato-ku, Tokyo) in May 2018, and Yokohama

Partners Co., Ltd. being the surviving company in an absorp-

business.

motomachi Center (Naka-ku, Yokohama-shi, Kanagawa) intion-type merger.

Construction of facilities including the PMO Akihabara North

Changes in Operating Income and ROA*(Millions of yen)

(%)

100,000

79,16275,0000

2016

Property Brokerage & CRE Business Unit

Station-front in Japan and expanding its business in Bangkok,
An overview of segment achievements is given below:

Management Business Unit. As of August 1, 2018, Nomura Real

Changes in TSE REIT Index (as of March 31) and Expected Yield*(as of April 1)

2015­redevelopment projects in Mishima Station-front and Utsunomiya

Operating Results by Segment(Yen)(%)

which represents an increase of ¥383,573 million year on year.

in ­regional core cities in Japan and overseas, such as joining

This year our ROA was 4.7% and ROE was 8.9%.
Vacancy Rates and Rent Levels in the Five Wards of Tokyo(as of March 31)

Moreover, the Company acquired 75% of the shares of Loth-4.7%

50,000(CY)

25,000Source: Changes in TSE REIT Index: Bloomberg
Changes in Expected Yield: Japan Real Estate Institute “The Japanese Real Estate
Investor Survey”* Expected yields for A-class office buildings in Marunouchi and Otemachi are shown

0

2014

2015

Operating Income (left axis)

2016
ROA (right axis)

2017

office building (Taito-ku, Tokyo), the PMO Higashi-Shinbashi office

In January 2019, the Group entered a capital alliance agree-building (Minato-ku, Tokyo), and the GEMS Namba retail facility

ment with Tokio Property Services Pte Ltd., a real estate agency in(Chuo-ku, Osaka-shi, Osaka) have been completed.

Singapore, to strengthen its ability to cope with investment needs

8

In logistics facilities, the Company finished constructing

6­Landport Ome I (Ome-shi, Tokyo), a large-scale, high-functional

4“Category Multi-type” facility, and started its operation. “Category

2

Multi-type” is a new concept that specifies industrial sectors to0which the tenants belong and adds those sectors’ specific func-

2018
2019
(Years ended March 31)

October 2018, and the total number of branch stores is 81.

for real estate from Southeast Asia, where further expansion of theneeds is expected.
*CRE: Corporate Real Estatetions as the facility’s standard functions.

* ROA = (Operating profit + Non-operating profit) / Average assets during the fiscal year

Nomura Real Estate Holdings, Inc.

1

Financial Report 2019

Nomura Real Estate Holdings, Inc.

2

Financial Report 2019

Property & Facility Management Business Unit

Other Business Unit

Major operating-related indices for each business are shown in the table below.

Operating revenue in the Property & Facility Management Business

Operating revenue in the Other Business Unit totaled ¥94 million,

Unit totaled ¥107,802 million, which represents an increase of 3.1%

which represents a decrease of 11.7% year on year, and operating

year on year, and operating profit totaled ¥8,067 million, an in-loss totaled ¥43 million (operating loss in the previous fiscal year

crease of 14.0%, resulting in increases in both revenue andwas ¥10 million).

operating profit compared with the previous fiscal year.
This was mainly due to an increase in revenue of property andAnalysis of Financial Position

facility management with the increase in the number of properties

Assetsunder management and an increase in the number of members in

Total assets were ¥1,759,455 million, which represents an increase

the fitness club business.

of ¥86,355 million compared to the end of the previous fiscal year.

In the fitness club business, we opened MEGALOS HIBIYAThis was mainly due to increases in cash and deposits (increased

Chanter (Chiyoda-ku, Tokyo) in September 2018 and MEGALOS

by ¥29,003 million) and securities (increased by ¥28,000 million).

Reflet SHINSAIBASHI (Chuo-ku, Osaka-shi, Osaka) as a facility for
women only in November 2018 in accordance with the rollout strat-

Liabilities

egy to meet the regional needs and targets.

Total liabilities were ¥1,217,893 million, which represents an

In addition, as of the end of the fiscal year under review, the­increase of ¥59,776 million compared to the end of the previous

number of buildings under management was 732 buildings (up 9fiscal year. This was mainly due to increases in interest-bearing

from the end of the previous fiscal year), and the number of condo-

debt (increased by ¥36,200 million) and notes and accounts

miniums under management was 177,582 units (up 3,877).

­payable-trade (increased by ¥12,230 million).

(As of March 31)

2015

Residential Development Unit:
Condominium sales (units)
Detached housing sales (units)
Gross margin ratio of housing sales (%)
Completed housing inventories (released for sale) (units)
Completed housing inventories (unreleased) (units)
Leasing Unit:
Vacancy rate
Investment Management Unit:
Outstanding assets under management (millions of yen)
Property Brokerage & CRE Unit:
Brokerage: Number of transactions
Brokerage: Total transaction value (millions of yen)
Property & Facility Management Unit:
Buildings under management
Condominiums under management (units)
Members of MEGALOS

2017

2018

2019

6,162
859
21.1
87
2

5,363
643
21.9
134
215

4,885
682
21.7
252
402

5,258
607
19.1
239
218

5,243
647
19.1
229
47

4.5

2.2

0.8

0.7

4.7

1,123,188

1,074,481

1,260,064

1,285,903

1,669,476

7,174
710,980

7,710
713,5748,272
745,147

8,561
800,739

8,922
767,324729
155,706
140,395

705
163,036
144,263

702
168,999
140,743723
173,705
139,836732
177,582
145,065

Changes in Interest-bearing Liabilities

Net Assets
Net assets were ¥541,562 million, which represents an increase of(Millions of yen)

¥26,579 million compared to the end of the previous fiscal year.

1,000,000

914,000

This was mainly due to the acquisition of treasury shares­(decreased by ¥8,783 million) offset by an increase in retained

750,000­earnings (increased by ¥32,271 million).

500,000

Key Factors of Changes in Operating Profit by Business Unit (Compared to FY18/3)

2016(Billions of yen)
250,000
0

2014
Investment
Management

Property
Brokerage
& CRE

+0.0

– 0.2

Leasing
Residential
Development

Property &Facility
Management

OthersAdjustments

–0.0

–0.4

2015

2016

2017

2018

2019
(As of March 31)

Cash Flows from Investing Activities

Changes in Net Assets and Shareholders’ Equity Ratios+0.9

Net cash used in investing activities was ¥46,699 million (a year-

+3.6

– 1.3
• Increase in the number ofbuildings under management(Millions of yen)

(%)

600,000

60

541,562

on-year increase of ¥4,938 million). This was mainly due to thepayment for the acquisition of subsidiary shares accompanying
changes in the scope of consolidation and the purchase of prop-

400,000

40

erty, plant and equipment and intangible assets.

29.9%

76.6

• Increase in revenue from property sales

200,000

20

00Cash Flows from Financing Activities
Net cash provided by (used in) financing activities totaled ¥13,723

79.1
2014
Net Assets (left axis)

2015

2016

2017

2018

Shareholders’ Equity Ratios (right axis)• Decrease in fees from JV projects

2019(As of March 31)

million (a year-on-year decrease of ¥30,063 million). This was
mainly due to the procurement of funds by long-term loans
payable, while there was the acquisition of treasury shares andpayment of cash dividends.

Cash Flows
Cash Flows from Operating Activities
Net cash provided by (used in) operating activities was ¥89,964
million (a year-on-year increase of ¥68,465 million). This was mainly
FY18/3
Actual

FY19/3
ActualNomura Real Estate Holdings, Inc.

3

Financial Report 2019

due to the payments of income taxes, while profit before income
taxes totaled ¥65,407 million and inventories decreased.

Nomura Real Estate Holdings, Inc.

4

Financial Report 2019

Facilities Situation

Business Unit (Millions of yen)In the fiscal year ended March 31, 2019, we invested a total

Residential Development
Leasing
Investment Management
Property Brokerage and CRE
Property and Facility Management
Other
Subtotal
Adjustments
Totalamount of ¥19,776 million, including the acquisition of NOHGA
HOTEL UENO (Taito-ku, Tokyo).

2018

2019

Change¥   645
69,151
26
527
2,110
2
72,464
1,111
73,575¥   537
15,880
10
488
1,692
19
18,628
1,148
19,776¥   (107)(53,270)
(15)
(38)
(418)
16
(53,835)37(53,798)

The following facilities, for which construction was still in progress at the end of the previous fiscal year, were completed in the fiscal year
ended March 31, 2019.
Company Name

Mainly NREG TOSHIBABUILDING Co., Ltd.

Property Name (Location)

NOHGA HOTEL UENO
(Taito-ku, Tokyo)

Business
Segment

Major Use

Size of Construction or Details of Facility, etc. Area (m2)Completion

Leasing

Hotel

Steel-framed construction,
10 floors above ground

October 2018

Building: 4,868
Land: 966

Acquisition Price(Millions of yen)

¥3,153

We acquired the following properties in the fiscal year ended March 31, 2019.
Company Name

Nomura Real Estate
Development Co., Ltd.

Business
Segment

Property Name (Location)

Kyoto Kiyomizu Gojo Project(tentative name) (Note)(Higashiyama-ku, Kyoto-shi, Kyoto)

Leasing

Major Use

Size of Construction or Details of Facility, etc.

Land slated
for building
construction—

Area (m2)

Land: 1,382

Acquisition Price(Millions of yen)

¥3,631

Note: Land area refers to area allocated by our share.

The following non-current assets were reclassified as land held for development and others in the fiscal year ended March 31, 2019.
Company Name

Property Name (Location)

Nihonkouku Tamachi Building
Mainly Nomura Real Estate(Minato-ku, Tokyo) and
Development Co., Ltd.
6 other buildings

Business
Segment

Leasing

Major Use

Size of Construction or Details of Facility, etc.

Area (m2)

OfficeSteel-framed reinforced concrete construction,
1 floor below ground, 7 floors above ground

Building: 17,531
Land: 4,134

Book Value(Millions of yen)

¥77,033

Note: Property name, business segment, major use, size of construction or details of facility, etc., shown are regarding Nihonkouku Tamachi Building.

In accordance with the acquisition of shares in Ryubundo Co., Ltd., in the fiscal year ended March 31, 2019, the following facility is classified as a major facility.
Company Name

Property Name (Location)

Mainly Ryubundo Co., Ltd.

HOTEL NIWA TOKYO(Chiyoda-ku, Tokyo)

Business
Segment

Major Use

Size of Construction or Details of Facility, etc.

Area (m2)

Leasing

Hotel

Steel-framed construction (partially steel-framed
reinforced concrete construction),
16 floors above ground, 2 other buildings

Building: 9,280
Land: 1,710

Acquisition Price(Millions of yen)

¥19,782

As a result of the sale of shares in Toranomon Real Estate Co., Ltd., in the fiscal year ended March 31, 2019, the following facility is nolonger classified as a major facility.
Company Name

Toranomon Real EstateCo., Ltd.

Property Name (Location)

Bansui Building(Minato-ku, Tokyo)

Business
Segment

Leasing

Major Use

Size of Construction or Details of Facility, etc.

Area (m2)

OfficeReinforced concrete construction (partiallysteel-framed reinforced concrete construction),
1 floor below ground, 7 floors above ground

Building: 3,289
Land: 555

Nomura Real Estate Holdings, Inc.

5

Financial Report 2019

Book Value(Millions of yen)

¥5,892Major Facilities and Equipment
Major facilities and equipment by unit for the Nomura Real Estate Group and its consolidated subsidiaries are as follows.
1) Leasing Business Unit
Company Name

Property Name (Location)

Major Use

Size of Construction or Details of Facility, etc.

Total Floor
Completion or
Land
Area (m2) [Time of Acquisition] Area (m2)Book Value (Millions of yen)
Facility

Land

Other

Total

NREG TOSHIBABUILDING Co., Ltd.

Hamamatsucho Building /Toshiba Building(Minato-ku, Tokyo)

OfficeSteel-framed reinforced concrete
construction (partially steel-framed andreinforced concrete construction),
3 floors below ground,
39 floors above ground

Nomura Real Estate
Development
Co., Ltd.

Yokohama Business Park 2(Hodogaya-ku,
Yokohama-shi, Kanagawa)

OfficeSteel-framed construction (partiallysteel-framed reinforced concrete
construction), 2 floors below ground,
21 floors above ground, 11 other buildings

245,200

MainlyFebruary 1990

70,81728,976

14,584960

44,521

NREG TOSHIBABUILDING
Co., Ltd.

LAZONA Kawasaki Toshiba
Building(Saiwai-ku, Kawasaki-shi,
Kanagawa)

OfficeSteel-framed construction,
15 floors above ground

98,428March 2013

9,764

14,07922,245438

36,762

Nomura Real Estate
Development
Co., Ltd.

Nihonbashi Muromachi
Nomura Building(Chuo-ku, Tokyo)

OfficeSteel-framed construction (partiallyreinforced concrete and steel-framed
reinforced concrete construction),
5 floors below ground,
21 floors above ground

44,989September 2010

2,737

13,571

19,227

330

33,130Nomura Real Estate
Development
Co., Ltd.

Yokohama Nomura Building 3(Nishi-ku, Yokohama-shi,
Kanagawa)

OfficeSteel-framed construction,
17 floors above ground, 1 other building

58,755January 2017

6,721

18,831

8,809

503

28,144

Nomura Real Estate
Development
Co., Ltd.

Nomura Fudosan
Ginza Building 3(Chuo-ku, Tokyo)

OfficeSteel-framed reinforced concrete
construction (partially reinforced concreteand steel-framed construction),
5 floors below ground,
17 floors above ground

26,748March 1982

3,184

1,691

22,677

10

24,380Nomura Real Estate
Development
Co., Ltd.

Nomura Fudosan
Nihonbashi-honcho Building(Chuo-ku, Tokyo)

OfficeSteel-framed reinforced concrete
construction, 3 floors below ground,
8 floors above ground

29,430April 1961

3,196

1,918

21,116—23,035

Nomura Real Estate
Development
Co., Ltd.

Shinjuku Nomura Building 2, 3
(Shinjuku-ku, Tokyo)

OfficeSteel-framed reinforced concrete
construction (partially reinforced concreteand steel-framed construction),
5 floors below ground,
50 floors above ground

58,512

May 1978

4,639

5,920

16,303279

22,504

Nomura Real Estate
Development
Co., Ltd.

Landport Takatsuki(Takatsuki-shi, Osaka)

Logistics
facility

Reinforced concrete construction(partially steel-framed construction),
5 floors above ground, 1 other building

70,529June 201735,276

9,879

10,247341

20,468Mainly RyubundoCo., Ltd.

HOTEL NIWA TOKYO(Chiyoda-ku, Tokyo)

Hotel

Steel-framed construction (partiallysteel-framed reinforced concrete
construction), 16 floors above ground,2 other buildings

1,710

March 2009

9,280

3,229

16,418120

19,768

Midosuji Mirai
Development, LLC

Midosuji Nomura Building 2(Chuo-ku, Osaka-shi, Osaka)

OfficeSteel-framed construction (partiallyreinforced concrete construction),
2 floors below ground,
14 floors above ground

20,420February 2009

1,939

3,519

15,70721

19,248

Nomura Real Estate
Development
Co., Ltd.

Morisia Tsudanuma 2(Narashino-shi, Chiba)

Retail facility

Steel-framed reinforced concrete
construction (partially reinforced concrete
construction), 3 floors below ground,
12 floors above ground, 1 other building

97,699MainlyOctober 1978

19,194

1,781

16,03730

17,849Nomura Real Estate
Development
Co., Ltd.

Kameido 6chome Project(tentative name) 2, 4
(Koto-ku, Tokyo)

Land slated
for building
construction—

24,822—

17,497—

17,497

Nomura Real Estate
Development
Co., Ltd.

Nomura Fudosan
Shibadaimon Building(Minato-ku, Tokyo)

OfficeSteel-framed construction (partiallysteel-framed reinforced concrete
construction), 2 floors below ground,
11 floors above ground

15,700April 2010

2,447

3,555

10,65072

14,278

Nomura Real Estate
Development
Co., Ltd.

Otemachi Nomura Building 2, 3
Office(Chiyoda-ku, Tokyo)

Steel-framed construction (partiallysteel-framed reinforced concrete
construction), 5 floors below ground,27 floors above ground

9,815

February 1994

749

1,290

12,584

7

13,881

NREG TOSHIBABUILDING
Co., Ltd.

LAZONA Kawasaki Plaza 3, 5
(Saiwai-ku, Kawasaki-shi,
Kanagawa)

Steel-framed reinforced concrete
construction (partially reinforced concreteand steel-framed construction),
1 floor below ground,
6 floors above ground

98,254September 2006

72,013

13,142—442

13,585Retail facility

Nomura Real Estate Holdings, Inc.

158,732

March 1984

33,921 ¥13,464 ¥129,809 ¥   228

— [December 2017]

6

Financial Report 2019

¥143,502

Company Name

Property Name (Location)

NREG TOSHIBABUILDING Co., Ltd.

Toshiba Hamamatsucho
Building (Minato-ku, Tokyo)

Nomura Real Estate
Development
Co., Ltd.

Dai-ni Edobashi Building(Chuo-ku, Tokyo)

Nomura Real Estate
Development
Co., Ltd.

bono Sagamiono
Shopping Center 3(Minami-ku, Sagamihara-shi,
Kanagawa)

Major Use

Size of Construction or Details of Facility, etc.

Total Floor
Completion or
Land
Area (m2) [Time of Acquisition] Area (m2)

OfficeSteel-framed reinforced concrete
construction, 8 floors above ground

13,482

OfficeSteel-framed reinforced concrete
construction, 3 floors below ground,
9 floors above ground

13,359Retail facility

Reinforced concrete construction(partially steel-framed construction),
1 floor below ground,
11 floors above ground

43,059Nomura Real Estate
Minamigyotoku SC 2
Development(Ichikawa-shi, Chiba)Co., Ltd.

Retail facility

Steel-framed construction (partially­reinforced concrete construction),
2 floors below ground,
2 floors above ground

35,612

Nomura Real Estate TOKYO TORANOMONGLOBAL SQUARE (tentative
Developmentname) 6 (Minato-ku, Tokyo)Co., Ltd.

Land slated
for building
construction

5

—

—

Steel-framed reinforced concrete
construction (partially reinforced concrete
construction), 1 floor below ground,
8 floors above ground, 1 other building

32,299NREG TOSHIBA
Fuchu Toshiba Building
BUILDING Co., Ltd. (Fuchu-shi, Tokyo)

OfficeShinyokohama Toshiba
NREG TOSHIBA
Building (Kohoku-ku,
BUILDING Co., Ltd.
Yokohama-shi, Kanagawa)Training
facility

Reinforced concrete construction,
1 floor below ground, 4 floors above
ground, 4 other buildings

28,822

Nomura Real Estate Nomura Fudosan Sendai
Aoba-dori Building
Development(Aoba-ku, Sendai-shi, Miyagi)
Co., Ltd.

OfficeSteel-framed construction, 1 floor below
ground, 10 floors above ground

Nomura Real Estate
Wako Building
Development(Minato-ku, Tokyo)Co., Ltd.

OfficeNREG TOSHIBABUILDING
Co., Ltd.

NREG Kawasaki Logistics
Center (Kawasaki-ku,
Kawasaki-shi, Kanagawa)

NREG TOSHIBABUILDING
Co., Ltd.

Umeda Sky Building 3(Kita-ku, Osaka-shi, Osaka)

January 2013

April 2000

[October 2018]

April 1993

Other

Total

2,907 ¥   389 ¥ 10,956 ¥     2

1,376

5,797

16,503

2,782

8,290

486

5,458

4,873

—

3,497

10,553

4,649

4,942

9,369

5,247

1

315

10

—

13

¥ 11,349

10,422

9,826

9,369

8,758

12,026

April 2017

1,595

4,012

3,306

89

7,407

Steel-framed reinforced concrete
construction, 1 floor below ground,
8 floors above ground

3,171

April 1971

621

536

6,786

—

7,323

Logistics
facility

Reinforced concrete construction(partially steel-framed construction),
5 floors above ground49,046

March 2014

27,866

3,634

3,109

400

7,145

OfficeSteel-framed construction (partiallysteel-framed reinforced concrete andreinforced concrete construction),
2 floors below ground,
40 floors above ground

43,093

March 1993

8,325

2,417

4,585

99

7,102

886

—

7,049

—

7,049

1,307

959

5,989

4

6,954

NREG TOSHIBABUILDING
Co., Ltd.

Toshiba Osaka Building(Chuo-ku, Osaka-shi, Osaka)

OfficeSteel-framed reinforced concrete
construction, 4 floors below ground,
10 floors above ground

15,220

NREG TOSHIBABUILDING
Co., Ltd.

NREG Midosuji Building /Nomura Fudosan Midosuji
Building (Chuo-ku,
Osaka-shi, Osaka)

OfficeSteel-framed reinforced concrete
construction, 2 floors below ground,
10 floors above ground

21,007—— [September 2017]

October 1965

3,067

5,660

30

April 1974

2,366

535

5,768

32

6,336

OfficeOfficeSteel-framed construction (partiallyreinforced concrete and steel-framed
reinforced concrete construction),
3 floors below ground,
10 floors above ground

4,431

26,352January 1992

20,590

4,080

1,516

36

5,633

6,753

January 1982

1,220

2,871

3,182

2

Size of Construction or Details of Facility, etc.

Total Floor
Completion or
Land
Area (m2) [Time of Acquisition] Area (m2)Book Value (Millions of yen)
Facility

Land

Other

Total

Nomura Real Estate
PMO Nihonbashi Muromachi 3
OfficeDevelopment(Chuo-ku, Tokyo)Co., Ltd.

Steel-framed construction (partiallysteel-framed reinforced concrete
construction), 1 floor below ground,
9 floors above ground

5,333

January 2013

Nomura Real Estate Nomura Fudosan
Tameike Building
Development(Minato-ku, Tokyo)Co., Ltd.

OfficeSteel-framed reinforced concrete
construction, 1 floor below ground,
9 floors above ground

6,478

July 1959

690

179

4,393

—

4,572

Nomura Real Estate Soto-kanda 3chome Project(tentative name)
Development(Chiyoda-ku, Tokyo)Co., Ltd.

Land slated
for building
construction[March 2018]

663

—

4,168

—

4,168

NREG TOSHIBABUILDING
Co., Ltd.

Toshiba Fukuoka Building(Chuo-ku, Fukuoka-shi,
Fukuoka)

NREG TOSHIBABUILDING
Co., Ltd.

Toshiba Manseibashi Building 5
Office(Chiyoda-ku, Tokyo)

Kyoto Kiyomizu Gojo Project
Nomura Real Estate(tentative name) 3
Development(Higashiyama-ku,
Co., Ltd.
Kyoto-shi, Kyoto)

Office——701 ¥   974¥  3,716 ¥    12

¥  4,703

Steel-framed construction (partiallysteel-framed reinforced concrete
construction), 2 floors below ground,
17 floors above ground

23,711

July 1993

4,597

1,860

1,918

26

3,805

Reinforced concrete construction,
1 floor below ground,
9 floors above ground

5,319

September 1961

681

221

3,551

0

3,773

[September 2018]

1,382

—

3,635

—

3,635

Land slated
for building
construction——

NREG TOSHIBABUILDING
Co., Ltd.

Nomura Fudosan
Nishishinjuku Kyodo Building 3 Office(Shinjuku-ku, Tokyo)

Steel-framed construction (partiallysteel-framed reinforced concrete andreinforced concrete construction),
1 floor below ground,
8 floors above ground

6,716

October 1993

1,249

915

2,700

2

3,619

NREG TOSHIBABUILDING
Co., Ltd.

Toshiba Sendai Building 3, 5
(Aoba-ku, Sendai-shi, Miyagi)

Hotel

Steel-framed construction (partiallyreinforced concrete construction),
2 floors below ground,
11 floors above ground

16,179April 1975

1,731

592

2,817

4

3,413

Hotel

Steel-framed construction,
10 floors above ground

4,868

October 2018

966

2,109

617

353

3,080

Mainly NREGNOHGA HOTEL UENOTOSHIBA BUILDING(Taito-ku, Tokyo)Co., Ltd.

Notes: 1. “Facility” represents building accounts, “land” represents land and leasehold rights accounts, and “others” represents structures; machinery; tools, appliances, and fixtures;
vehicles and delivery equipment; and leased asset accounts. “Total” represents the sum of leasehold rights accounts and tangible fixed assets excluding construction inprogress accounts.
2. Includes the trust beneficial right.
3. Refers to calculated area owned including both total floor area and land area.
4. Land area refers to total area at the planning stage including residential development business.
5. Land area includes leased land.
6. Land area refers to the area on which the redevelopment property will exist.

Company Name

Property Name (Location)

Rentable Area (m2)

Nomura Real Estate Development Co., Ltd.

Across Shin Osaka (Yodogawa-ku, Osaka-shi, Osaka)

17,298

Nomura Real Estate Development Co., Ltd.

AKS Building (Chiyoda-ku, Tokyo)

7,516

6,056

2) Property & Facility Management Business Unit
August 1977

548

709

4,999

0

5,709

Creare Toshiba Fuchu(Fuchu-shi, Tokyo)

Residential

Reinforced concrete construction(partially steel-framed reinforced concrete
construction), 10 floors above ground

NREG TOSHIBABUILDING
Co., Ltd.

Tsurumi Toshiba Building(Tsurumi-ku, Yokohama-shi,
Kanagawa)

OfficeSteel-framed reinforced concrete
construction, 1 floor below ground,
10 floors above ground

20,648March 1991

3,501

2,360

3,073

18

5,452

OfficeSteel-framed reinforced concrete
construction, 3 floors below ground,
19 floors above ground

25,103

April 1976

2,256

856

4,413

30

5,301

7

Major Use

The following major Leasing Unit facilities for sublet are rented by the Group and do not appear in the previous table.

Steel-framed reinforced concrete
construction, 2 floors below ground,
9 floors above ground

Nomura Real Estate Holdings, Inc.

Property Name (Location)

8,758

NREG TOSHIBABUILDING
Co., Ltd.

Nomura Real Estate Fukuoka Tenjin Center
Building 2, 3 (Chuo-ku,
Development
Co., Ltd.
Fukuoka-shi, Fukuoka)

Company Name

11,041

15,829Land slated
for building
construction

Nomura Real Estate
Toranomon Central Building
Development(Minato-ku, Tokyo)Co., Ltd.

November 1973

Land

MainlyJune 1969

Nomura Real Estate Kanda Nishikicho 1chome
Project (tentative name)
Development(Chiyoda-ku, Tokyo)Co., Ltd.

Nomura Real Estate Nomura Fudosan
Ichigaya Building
Development(Chiyoda-ku, Tokyo)Co., Ltd.

July 1974

Book Value (Millions of yen)
Facility

Financial Report 2019

Company Name

Nomura Real Estate
Life & Sports Co.,Ltd.

Property Name (Location)

Major Use

Size of Construction or Details of Facility, etc.

Megaros Souka and other45 facilities(Souka-shi, Saitama
and others)

Fitness Club

Reinforced concrete construction,
3 floors, 1 other building and fitness clubBook Value (Millions of yen)

Total Floor
Completion or
Land
Area (m2) [Time of Acquisition] Area (m2)

Facility

Land

Other

Total

15,321¥8,304¥—¥1,055¥9,360June 2002

15,430Notes: 1. “Facility” represents building accounts, “land” represents land and leasehold rights accounts, and “others” represents structures; machinery; tools, appliances, and fixtures;
vehicles and delivery equipment; and leased asset accounts. “Total” represents tangible fixed assets excluding construction in progress accounts.
2. “Total floor area” represents the total owned area of Megalos Kashiwa, Megalos Chikusa 24, and Megalos Saginuma. “Land area” represents the leased land area of thesefacilities. “Size of construction or details of facility, etc.” and “Completion or [time of acquisition]” are in reference to Megalos Kashiwa.

Nomura Real Estate Holdings, Inc.

8

Financial Report 2019

Facilities Establishment and Renovation

Basic Policy Concerning Profit Distribution and Dividends

Changes in Dividend Payments

In the fiscal year ended March 31, 2020, we are scheduled to establish and renovate the following facilities. There is no major e­ xpansion or

for the fiscal years ended March 31, 2019 and 2020

(yen)removal of facilities.

The Company’s payout ratio is approximately 30%, in accordance1) Establishment of major facilities

Company Name

Property Name (Location)

TOKYO TORANOMONGLOBAL SQUARE
Nomura Real Estate
Development Co., Ltd. (tentative name)(Minato-ku, Tokyo)

with business performance, comprehensively considering the oper-

Major Use

Size of Construction or Details of Facility, etc.

Leasing

OfficeSteel-framed construction(partially steel-framed reinforced
concrete construction), 4 floors below
ground, 24 floors above groundKanda Nishikicho
1chome Project
Nomura Real Estate
Development Co., Ltd. (tentative name)(Chiyoda-ku, Tokyo)

Leasing

Ginza 6chome Project(tentative name)(Chuo-ku, Tokyo)

Total

Schedule

Amount Paid Sources of funding

Start

Completion¥14,643

Loans payable
and own funds

FY18/3

FY21/3

Hotel

Steel-framed construction,
1 floor below ground, 6 floors above ground

11,9293,666

Loans payable
and own funds

40

other relevant factors for the fiscal year ended March 31, 2019. The

20

ended March 31, 2019 at ¥37.5 per share as forecasted. Combined with the second quarter-end dividend, the annual dividend

FY20/3

FY22/380.0

60Company intends to set the year-end dividend for the fiscal year
¥35,36175.0

ating environment, capital investment plans, retained earnings, and

0

2014

per share is ¥75.0.
Leasing

NREG TOSHIBABUILDING CO., Ltd.

Planned Aggregate Investment(Millions of yen)

Business
Segment

Kyoto Kiyomizu Gojo Project(tentative name)
Nomura Real Estate
Development Co., Ltd. (Higashiyama-ku,
Kyoto-shi, Kyoto)

Soto-Kanda 3chome Project
Nomura Real Estate(tentative name)
Development Co., Ltd.
(Chiyoda-ku, Tokyo)

80

2015

2016

As for the fiscal year ending March 31, 2020 in Phase 1 of the

2017

2018

2019

2020
(Forecast)(Years ended / ending March 31)

Mid- to Long-term Management Plan (from fiscal year ending

Leasing

Leasing

OfficeSteel-framed construction,
1 floor below ground,
10 floors above ground

Hotel

Steel-framed construction,
10 floors above ground

6,766

Steel-framed construction(partially steel-framed reinforced
concrete construction), 3 floors below
ground, 11 floors above ground

4,572

Retailfacility

11,607

7,079

Loans payable
and own funds

4,186

Loans payable
and own funds

FY19/3Loans payable
and own funds

FY18/3

2,567

FY20/3

FY22/3

FY21/3

March 31, 2020 to fiscal year ending March 31, 2022) formulated in

Consolidated Performance Outlook for the fiscal year ending

April 2019, total return ratio is around 40% to 50%. In regard to the

March 31, 2020 (announced on April 25, 2019)

dividend for this fiscal year, the second quarter-end and year-end

We expect to post operating revenue of ¥739,000 million, operating

dividends will be ¥40.0 per share, and the annual dividend will be

profit of ¥79,500 million, business profit of ¥80,000 million, ordinary¥80.0 per share.

profit of ¥70,000 million, and profit attributable to owners of parentof ¥46,000 million for the fiscal year ending March 31, 2020.

FY20/3

2) Renovation of major facility
Planned Aggregate Investment(Millions of yen)Company Name

Nomura Real Estate Development Co., Ltd.

Property Name—Business Segment

Leasing

Total

Amount Paid

Construction Period

Note¥2,800—April 2019 – March 2020

Construction for facility renovation

Note: Refers to renovation of major facilities of several existing properties owned by Nomura Real Estate Co., Ltd.

Key Factors of Changes by Segment from FY19/3 to FY20/3

Residential
Development– 1.5

Commercial
Real Estate+0.4

Investment
Management(Billions of yen)

Property
Brokerage& CRE

Property &Facility
Management

OthersAdjustments

+0.0

+0.0

–0.4

+0.8

+1.0

• Increase in brokerage commission fee• Increase in assets under management due to such items
as the acquisition of the shares of Lothbury

80.0

79.6
• Increase in revenue from property sales

FY19/3
ActualNomura Real Estate Holdings, Inc.

9

Financial Report 2019

FY20/3
Forecast

Nomura Real Estate Holdings, Inc.

10

Financial Report 2019(6) Risks related to the Real Estate Development Business

Risks Affecting the Business of Nomura Real Estate Group

Furthermore, if revisions to the various tax systems in Japan

We believe that the following matters related to the Group’s busi-

and overseas that impact the Real Estate Development Business

When considering purchases of land for business use, the Groupness, accounting and other conditions could have a material

are implemented, this could lead to an increase in expenses for the

conducts historical and pollution assessments in advance. If the

impact on the decision-making of investors.

holding, acquisition, and sale of assets, or cause a decline in thepresence of pollution is confirmed, the Group either cancels the ac-

It should be noted that matters concerning the future in thispurchasing sentiment of customers. It could also prompt a change

quisition or engages specialists to remove such pollution. However,document have been determined based on information available

in the facility strategies of companies and revisions of their invest-

it is possible that the aforementioned assessments fail to confirm

to the Group as of March 31, 2019.

ment plans. Such events could have an adverse impact on thethe full extent of soil pollution. The detection of soil pollution on

Group’s business performance.

land purchased by the Group, therefore, could lead to changes
in the Group’s original business schedules or to the incurrence of(1) Risks resulting from deterioration of business environment
With regard to the Company’s business environment, a domestic or(3) Risks resulting from a rise in interest rates

additional expenses, which could have a negative impact on its

overseas economic downturn, the planned consumption tax in-

The balance of interest-bearing debt at March 31, 2019 wasbusiness performance or financial condition.

crease in October 2019, and a potential decrease in corporate¥914,000 million, an increase of ¥36,200 million year on year

earnings and a decline in personal consumption, or an increase in(equivalent to 51.9% of total assets, decreased by 0.5 percentage

orders with third parties such as construction and other companies

interest rates and an oversupply in the real estate market may

points year on year). When raising funds by borrowing, the Group

who possess certain skills in building design, construction opera-

occur. Thus, any such events may cause a decline in purchasing­attempts to deal with the risk of a short-term rise in interest rates

tions, and other matters. At the Group, departments possessing

sentiment among customers of the Residential Development Busi-

mainly by taking out long-term, fixed-rate loans.

specialist knowledge carry out appropriate supervision and direc-

Moreover, when carrying out design and construction, we place

However, an increase in borrowing costs due to a rise intion at each stage of design and construction. However, in theconsequent fall in selling prices, an increase in inventories, and val-market interest rates could have a negative impact on the Group’s

event of defective construction work or other issues, confidence

uation losses on inventories.

business performance and financial condition.

in the Group could be lost, and unexpected expenses and delays

ness, the Property Brokerage & CRE Business, as well as ato ­development projects could occur. This could have an adverse

As for the Leasing Business and the Investment Management
Business, there could be a decline in office rent levels, an increase(4) Risks resulting from natural disasters and sudden accidents

in vacancy rates, a fall in property prices or a drop in profit ratios

Natural disasters, such as earthquakes and wind and flood

and an associated valuation loss on assets owned by the Group.

damage, as well as sudden accidents, could lead to damage orAdditionally, declining REIT stock prices and weakening demand for­destruction of real estate owned or managed by the Group. Suchinvestment funds may occur.

incidents could have a negative impact on the Group’s business

The Company has positioned M&A as an important growth

impact on the Group’s business performance.

performance and financial condition.

strategy, and aims to increase its corporate value by implementing
M&A that can be expected to generate synergies and utilizing the(5) Risks resulting from leakage of personal information and acharacteristics of the holding company system. However, in thecrisis in the information management system

event of changes in the business environment, the expected

In the course of carrying out its operations, the various businesses

growth of the acquired company, or the synergy expected from theof the Group handle large quantities of personal information.

acquisition, may not be realized.

The Group endeavors to comply with various laws and regulations

The events described above could have an adverse impact onpertaining to personal information, such as the Law Concerning
Protection of Personal Information, and also handle information in

the Group’s business performance.

the proper manner. Moreover, Group companies have produced(2) Risks resulting from changes to real estate-related

various documents, such as “Information Security Provisions,”“Rules for Handling Specific Personal Information” and “Guidelines

legislation or the tax systems
A number of laws and regulations in Japan and overseas apply

for Handling Information.” In these ways, the Group strives to train

to the various businesses of the Group, which will be subject toand educate employees and protect the interests of customers. In

new regulations as it expands its operational scope in the future.

the event of external leakage of personal information due to unfore-

For example, in Japan, the Group may face new obligations andseen circumstances.

expense burdens if the Building Standards Law, the Building Lots

However, in the event of an external leakage of personal infor-

and Buildings Transaction Business Law, the Financial Instruments

mation or a risk arising to the Company’s information managementand Exchange Law, or other real estate-related laws are revised,system due to unforeseen circumstances including a cyberattack

or if new legislation is implemented. Such events could adversely

or illegal access to the Company’s computer system, confidence inaffect the Group’s business performance.

the Group could be lost, leading to such issues as a decrease insales, the incurrence of expenses to pay compensation fordamages, and delays to business activities and business processing. This could have an adverse impact on the Group’s businessperformance.

Nomura Real Estate Holdings, Inc.

11

Financial Report 2019

Nomura Real Estate Holdings, Inc.

12

Financial Report 2019

Consolidated Balance Sheet
Nomura Real Estate Holdings, Inc. and its subsidiaries
March 31, 2018 and 2019

(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)

AssetsCurrent Assets
Cash and deposits (Notes 2(3) and 5)
Notes and accounts receivable–trade
Securities (Notes 5 and 6)
Real estate for sale (Note 10)
Real estate for sale in process
Land held for development (Note 10)
Equity investments (Notes 5 and 6)
Other
Allowance for doubtful accounts
Total current assets

Non-Current Assets
Property, plant and equipment   Buildings and structures (Notes 8 and 10)   Accumulated depreciation    Buildings and structures, net   Land (Notes 2(15) and 10)   Other (Note 10)   Accumulated depreciation   Other, net  Total property, plant and equipment
Intangible assets

2018

2019

2019

¥   52,347
17,3089,000
102,884
261,278
228,326
9,612
36,917(39)
717,635¥   81,351
26,60137,000161,224
290,398
184,650
18,06650,274(39)
849,528$   732,959
239,677
333,363
1,452,600
2,616,442
1,663,672
162,776452,964(356)
7,654,101

403,011(163,985)
239,026
592,550
26,576(9,778)
16,797
848,374
12,364

Investments and other assets   Investment securities (Notes 5, 6 and 21)   Lease and guarantee deposits (Note 5)   Deferred tax assets (Note 13)  Other   Allowance for doubtful accounts   Total investments and other assets
Total non-current assets
Total Assets

42,362
23,131
20,8438,387(0)94,725955,464¥1,673,099

394,979(171,594)
223,385544,226
29,885(10,464)
19,421
787,033
18,10450,52225,44820,8637,956(0)104,789
909,926¥1,759,455

3,558,698(1,546,035)
2,012,662
4,903,381
269,266(94,285)
174,981
7,091,026
163,118

455,197229,283
187,974
71,684(5)944,133
8,198,278$15,852,380(Millions of yen)

Liabilities
Current Liabilities   Notes and accounts payable-trade   Short-term loans payable (Notes 5 and 7)   Income taxes payable (Note 13)   Deposits received   Provision for bonuses   Provision for directors’ bonuses   Provision for loss on business liquidation  Other   Total current liabilities

2018

2019

2019

¥   41,696
102,300
14,99318,8077,679
590
36
48,073
234,176¥   53,927
79,50013,31826,9158,176
495
26
49,513
231,873$   485,875
716,280
120,001
242,500
73,6664,464
240446,105
2,089,135

Non-Current Liabilities   Bonds payable (Notes 5 and 7)   Long-term loans payable (Notes 5 and 7)   Lease and guarantee deposits received (Note 8)   Deferred tax liabilities (Note 13)   Deferred tax liabilities for land revaluation (Note 2(15))   Provision for loss on subleasing business   Net defined benefit liability (Note 9)   Provision for share-based remuneration  Other   Total non-current liabilities
Total Liabilities

140,000
635,500
60,241
59,8283,900
102
18,375—
5,991
923,940
1,158,116

140,000
694,500
59,24961,5633,900
15
18,175719
7,895
986,019
1,217,893

1,261,374
6,257,320
533,825554,680
35,139139
163,759
6,485
71,1398,883,863
10,972,998

117,072
110,316
275,299(10,004)
492,683

117,293
110,537
307,570(18,787)
516,613

1,056,797
995,923
2,771,153(169,274)
4,654,599

4,516
262
7,860
(225)
(3,605)8,807
2,424
11,067514,982¥1,673,099

6,718
(259)
7,860
(677)
(3,507)
10,134
2,346
12,467
541,562¥1,759,455

60,533(2,334)70,824(6,107)(31,601)
91,314
21,141
112,326
4,879,381$15,852,380

Net Assets
Shareholders’ Equity (Note 14)   Capital stock   Capital surplus   Retained earnings  Treasury shares  Total shareholders’ equity
Accumulated Other Comprehensive Income   Valuation difference on available-for-sale securities   Deferred gains or losses on hedges   Revaluation reserve for land (Note 2(15))   Foreign currency translation adjustment   Remeasurements of defined benefit plans (Note 9)   Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total Net Assets
Total Liabilities and Net Assets
See notes to consolidated financial statements.

See notes to consolidated financial statements.

Nomura Real Estate Holdings, Inc.

13

Financial Report 2019

(Thousands of
U.S. dollars)(Note 1)

Nomura Real Estate Holdings, Inc.

14

Financial Report 2019

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2018 and 2019

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2018 and 2019

(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)

Operating Revenues and Expenses 

2018

2019

2019

Operating Revenue¥623,762¥668,510$6,023,155

Operating Cost

441,708

479,797

4,322,890

Operating Gross Profit

182,053

188,7121,700,265

Selling, General and Administrative Expenses

105,393

109,549

987,023

Operating Profit

76,66079,162

713,241

Interest income

45

44

403

Dividend income

75

69

625

Share of profit of entities accounted for using equity method

25

167

1,505

Gain on donation of non-current assets

—

54

494

Interest on refund

162

—

—

Gain on transfer of right to request purchase of shares

112

—

—

Other

351

409

3,693

Total non-operating income

773

746

6,721

Interest expenses

7,334

8,753

78,868

Other

2,065

1,831

16,499Non-Operating Expenses

Total non-operating expenses
Ordinary Profit(Millions of yen)
2018

Non-Operating Income

9,400

10,584

95,36868,03369,323

624,594

Gain on sales of investment securities

3,311

—

—

455

—

—

Total extraordinary income

3,766

—

—

3,614

1,989

17,925

Loss on building reconstruction

462

835

7,527

Loss on transfer of non-current assets

—

1,091

9,833

Total extraordinary losses

4,077

3,916

35,286

Profit before Income Taxes

67,72265,407589,307

Income Taxes–Current

23,811

23,263

209,596

Income Taxes–Deferred(2,755)(4,385)(39,510)

Total Income Taxes (Note 13)

21,05518,877

170,085

Profit46,666

46,529419,222

636

655

5,907

¥ 46,029¥ 45,873$413,314

Profit Attributable to Non-Controlling Interests
Profit Attributable to Owners of Parent¥46,529$419,222(3,430)
142
(0)
(33)
523

2,201
(521)
(0)
(216)
98

19,833(4,695)0(1,950)886(254)(3,052)

(296)
1,265

(2,670)11,403Comprehensive Income (Note 22)¥43,613¥47,795$430,625(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests¥42,976636¥47,201594$425,272
5,352

See notes to consolidated financial statements.

See notes to consolidated financial statements.

Nomura Real Estate Holdings, Inc.

15

Financial Report 20192019¥46,666

Extraordinary Losses
Impairment loss (Note 12)

2019ProfitOther Comprehensive Income (Note 22)
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans Share of other comprehensive income of entities accounted
for using the equity method   Total other comprehensive income

Extraordinary Income
Gain on sales of non-current assets (Note 11)(Thousands of
U.S. dollars)(Note 1)

Nomura Real Estate Holdings, Inc.

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Financial Report 2019

Consolidated Statement of Changes in Net Assets

Consolidated Statement of Cash Flows

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2018 and 2019

Nomura Real Estate Holdings, Inc. and its subsidiaries
Years ended March 31, 2018 and 2019

(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)
Shareholders’ Equity

Accumulated other comprehensive income(Millions of yen)

Total
Valuation
Foreignaccumulated
Share
difference on
Deferred Revaluation currency Remeasurements
otheravailable-for- gains/losses reservetranslationof definedcomprehensive acquisitionrightssale securities on hedges
for land adjustments
benefit plansincomeNumberof shares
issuedCapitalstock

CapitalsurplusRetainedearnings

Treasury
stock

Total
shareholders’equityBalance at March 31, 2017

191,877,801¥116,779¥110,023¥242,704¥     (3)469,503

Issuance of new shares

277,400

293

293

—

—

586

—

—

—

—

—

—

—

—

586

Dividends from surplus

—

—

—

(13,435)—(13,435)

—

—

—

—

—

—

—

—

(13,435)

Profit attributable toowners of parent

—

—

—

46,029—46,029

—

—

—

—

—

—

—

—

46,029¥ 7,947¥ 119¥7,860¥  62¥(4,129)¥11,860¥1,986

Noncontrollinginterests

Total
net assets¥10,462¥493,813

Purchases of treasury shares

—

—

0

0

(10,001)(10,001)

—

—

—

—

—

—

—

—

(10,001)

Net changes of items otherthan shareholders’ equity

—

—

—

—

—

—

(3,430)

142

(0)

(288)

523

(3,053)437

604(2,010)¥514,982

Balance at March 31, 2018

192,155,201¥117,072¥110,316¥275,299¥(10,004)¥492,683¥ 4,516¥262¥7,860¥(225)¥(3,605)¥8,807¥2,424¥11,067

Issuance of new shares

217,900

221

221

—

—

442

—

—

—

—

—

—

—

—

442

Dividends from surplus

—

—

—

(13,602)—(13,602)

—

—

—

—

—

—

—

—

(13,602)

Profit attributable toowners of parent

—

—

—

45,873—45,873

—

—

—

—

—

—

—

—

45,873Purchases of treasury shares

—

—

—

—

(8,783)(8,783)

—

—

—

—

—

—

—

—

(8,783)

Net changes of items otherthan shareholders’ equity

—

—

—

—

—

—

2,202

(521)

(0)

(451)

98

1,327

(77)

1,400

2,649

Balance at March 31, 2019

192,373,101¥117,293¥110,537¥307,570¥(18,787)¥516,613¥6,718¥(259)¥7,860¥(677)¥(3,507)¥10,134¥2,346¥12,467¥541,562

Cash Flows from Operating Activities
Profit before income taxes
Depreciation
Impairment loss
Loss (gain) on sales of non-current assets
Loss (gain) on sales of investment securities
Share of (profit) loss of entities accounted for using equity method
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on business liquidation
Increase (decrease) in provision for loss on subleasing business
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in inventories
Decrease (increase) in equity investments
Increase (decrease) in notes and accounts payable–trade
Increase (decrease) in deposits received
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

2018

2019

2019

¥ 67,722
18,824
3,614(3,311)
(455)
(25)
1
(11)
(155)
(555)
(121)
7,334
(769)
(28,943)(7,044)
6,084(10,652)
4,566
56,10394(9,425)(25,274)
21,498¥ 65,407
19,201
1,989
—
—
(167)
0
(9)
(87)
(291)
(114)
8,753
(8,922)32,938(8,454)
11,7818,102(8,105)122,023257(8,181)(24,134)
89,964$  589,307
173,001
17,925——(1,505)
1
(83)
(787)
(2,627)(1,028)78,868(80,387)
296,771(76,173)
106,149
73,000(73,028)
1,099,407
2,315(73,713)(217,449)
810,560(4,439)3,491—(4,971)
143(21,544)(44,789)
1,292(194,115)(Thousands of U.S. dollars) (Note 1)
Shareholders’ Equity

Balance at March 31, 2018

Accumulated other comprehensive income

Treasury
stock

Total
shareholders’equityCapitalstock

CapitalsurplusRetainedearnings$2,480,395 $ (90,139) $4,438,991

Total
Valuation
Foreignaccumulated
Share
difference on
Deferred Revaluation currency Remeasurements
otheravailable-for- gains/losses reservetranslationof definedcomprehensive acquisitionrightssale securities on hedges
for land adjustments
benefit plansincomeNoncontrollinginterests

Total
net assets$1,054,804$993,930$40,693$ 2,360$70,825$(2,035)$(32,488)$79,356$21,842$ 99,712$4,639,902

Issuance of new shares

1,992

1,992

—

—

3,984

—

—

—

—

—

—

—

—

3,984

Dividends from surplus——(122,557)—(122,557)

—

—

—

—

—

—

—

—

(122,557)

Profit attributable toowners of parent——

413,314—413,314

—

—

—

—

—

—

—

—

413,314Purchases of treasury shares

—

—

—

(79,134)(79,134)

—

—

—

—

—

—

—

—

(79,134)

Net changes of items otherthan shareholders’ equity

—

—

—

—

—

19,839(4,695)(0)(4,072)886

11,958(700)

12,61323,871

Balance at March 31, 2019

$1,056,797$995,923$2,771,153 $(169,274) $4,654,599$60,533$(2,334)$70,824$(6,107)$(31,601)$91,314$21,141$112,326$4,879,381

See notes to consolidated financial statements.
Note: T he number of issued shares outstanding increased by 277,400 shares and 217,900 shares in the years ended March 31, 2018 and 2019, respectively, due to the exercise ofstock options.

Cash Flows from Investing Activities
Purchase of investment securities
Proceeds from sales and liquidation of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation Proceeds from sales of shares of subsidiaries resulting
in change in scope of consolidation
Purchase of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment and intangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Repayments of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received
Other, net
Net cash provided by (used in) investing activities

—

520

4,688

(71,665)
19,589(1,148)1,240(3,153)
4,189
258(51,637)(20,824)
0
(649)
951
(3,859)3,219
314(46,699)(187,620)
2(5,848)
8,572(34,775)
29,0082,831(420,752)

Cash Flows from Financing Activities
Net increase (decrease) in short-term loans payable
Repayments of finance lease obligations
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from issuance of common shares
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of Exchange Rate Change on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period (Note 15)(11,500)(149)
80,000(60,800)
69,360(10,000)
391(10,048)(13,435)(31)
43,7870
13,64847,699¥ 61,347(8,000)(160)
112,500(68,300)——
122(8,790)(13,602)(44)
13,723(5)
56,983
61,347¥118,330(72,078)(1,447)
1,013,604(615,370)——
1,101(79,202)(122,557)(400)
123,649(50)
513,406
552,727$1,066,134

See notes to consolidated financial statements.

Nomura Real Estate Holdings, Inc.

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Nomura Real Estate Holdings, Inc.

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Financial Report 2019

Notes to Consolidated Financial Statements
Nomura Real Estate Holdings, Inc. and its subsidiaries
March 31, 2018 and 20191.

Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Nomura Real Estate Holdings, Inc. (the “Company”) and its subsid­
iaries (collectively, the “Group”) have been prepared in accordance with the provisions set forth in the Financial Instruments
and Exchange Act of Japan and its related accounting regulations, and accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects as to the application and disclosure requirements of International
Financial Reporting Standards.
The accompanying consolidated financial statements have been compiled from the consolidated financial statements of
the Company prepared in accordance with Japanese GAAP, and translated into English for the benefit of readers outside
Japan. In addition, the notes to the consolidated financial statements include information which may not be required underJapanese GAAP but is presented herein as additional information.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers using
the prevailing exchange rate at March 31, 2019 of ¥110.99=U.S.$1. The approximate rate of exchange prevailing at June 25,
2019 was ¥107.28=U.S.$1. These translations should not be construed as representations that the Japanese yen amounts
have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

Write-downs of inventories as a result of a decrease in profitability for the years ended March 31, 2018 was ¥496 million,
and recognized in operating cost. There were no write-downs of inventories during the fiscal year ended March 31, 2019.
(6) Short-term Investments and Investment Securities
Held-to-maturity debt securities are stated at amortized cost by the straight-line method.
Available-for-sale securities with market value are stated at fair market value based on market quotations at the balance
sheet date.
Unrealized gains and losses are reported, net of the applicable taxes, as a separate component of Net Assets. Cost of
securities sold is determined by the moving-average method. Available-for-sale securities without market value are stated atcost by the moving-average method.
(7) Property and Equipment (except for leased assets)
Depreciation of property and equipment is computed mainly by the straight-line method.
Estimated useful lives used in the computation of depreciation are generally as follows:	  Buildings and structures 2 to 65 years(8) Software (except for leased assets)

2. Significant Accounting Policies

Costs of software for internal use are amortized using the straight-line method over an estimated useful life of five years.

(1) Principles of Consolidation and Accounting for Investments in Affiliates(9) Leased Assets

The accompanying consolidated financial statements include the accounts of the Group that the Company controls directly or

Leased assets are depreciated using the straight-line method, assuming the lease period to be the useful life and the residual

indirectly. Investments in companies over which the Company exercises significant influence in terms of their operating andvalue to be zero.

financial policies have been accounted for using the equity method.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit

Finance leases, other than those that transfer ownership, that started on or before March 31, 2008, are accounted for as
operating leases.

included in the assets resulting from transactions among the consolidated companies has also been eliminated.
(10) Amortization of Goodwill
Goodwill is amortized using the straight-line method over a period of 14 to 20 years.

(2) Foreign Currency Translation
All current and non-current accounts denominated in foreign currencies are translated into Japanese yen at the spot
exchange rates in effect at the consolidated balance sheet date. Differences arising from such translation are recognized as(11) Allowance for Doubtful Accounts

gain or loss.

In order to prepare for possible bad debt losses on notes and accounts receivable and loans, allowance for doubtful accounts

The asset and liability accounts of the overseas subsidiaries and affiliates are translated into Japanese yen at theare provided at an amount calculated on the basis of a historical bad debt ratio for a certain reference period for normal

exchange rates prevailing at the respective balance sheet dates of the subsidiaries and affiliates and the revenue and expense

claims, plus an estimated uncollectible amount determined on the basis of individual assessments for specific claims withaccounts are translated into Japanese yen at the average rates of exchange for the year. Differences arising from such trans-potential losses.

lation are presented as “Foreign currency translation adjustments” in Net Assets.
(12) Income Taxes(3) Cash and Cash Equivalents

Current income taxes are stated at the estimated amount payable during each fiscal year for corporation, enterprise andIn preparing the Consolidated Statements of Cash Flows, cash on hand, readily-available deposits and short-term, highly

inhabitants’ taxes in the Consolidated Statement of Income.

liquid investments with a maturity of three months or less at the time of purchase and with an insignificant risk of market
value fluctuation are considered to be cash and cash equivalents.

The tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting andincome tax purposes are recognized as deferred income taxes.

A reconciliation between cash and deposits in the Consolidated Balance Sheet and cash and cash equivalents is(13) Provision for Retirement Benefits­presented in Note 15.

To calculate retirement benefit obligations, the estimated amount of retirement benefits attributable to the fiscal year is­determined based on the benefit formula method.

(4) Recognition of Revenues and Related Costs
The percentage-of-completion method is applied when the outcome of the construction activity during the fiscal year isdeemed certain in the course of the activity (percentage of completion is calculated by dividing the related cost incurred by
the estimated total cost), otherwise the completed-contract method is applied.

Prior service costs are amortized as incurred by the straight-line method over 10 years, which is within the average
number of remaining service years of the eligible employees.
Actuarial gains and losses are amortized in the following fiscal year in which the gain or loss is recognized by the straightline method mainly over 10 years, which is within the average number of remaining service years of the eligible employees.

(5) Inventories
Inventories are mainly stated at cost, determined by the specific identification cost method (the amounts of inventories in theaccompanying Consolidated Balance Sheet are computed based on the write-down method reflecting decreased profitability).

Nomura Real Estate Holdings, Inc.

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Nomura Real Estate Holdings, Inc.

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(14) Per Share Information
Basic profit attributable to owners of parent per share is computed by dividing the profit attributable to owners of parent­available for distribution to shareholders of common stock by the weighted-average number of shares of common stock­outstanding during each fiscal year. Diluted profit attributable to owners of parent per share is computed by dividing the profit
attributable to owners of parent available for distribution to the shareholders by the weighted-average number of shares ofcommon stock outstanding during each fiscal year assuming full conversion of convertible bonds and full execution of warrants.
Net assets per share as of March 31, 2018 and 2019 were ¥2,664.70 and ¥2,854.21 ($25.72), respectively.
	Profit attributable to owners of parent per share for the years ended March 31, 2018 and 2019 were ¥240.89 and¥245.99 ($2.22), respectively.
	Diluted profit attributable to owners of parent per share for the years ended March 31, 2018 and 2019 were ¥239.52 and¥244.55 ($2.20), respectively.

3. Changes in Presentation Method
Changes due to application of “partial amendments to accounting standard for tax effect accounting”“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 issued on February 16,2018) are applied from the beginning of the fiscal year ended March 31, 2019. As a result of changes in the presentation
method, deferred tax assets are classified under investments and other assets and deferred tax liabilities are classified under
non-current liabilities.
As a result, in the consolidated balance sheet as of March 31, 2018, “deferred tax assets” under “current assets”
decreased by ¥6,911 million, and “deferred tax assets” under “investments and other assets” increased by ¥6,318 million.
Also, “deferred tax liabilities” under “current liabilities” decreased by ¥18 million, and “deferred tax liabilities” under “non-­current liabilities” decreased by ¥574 million.
In addition, since deferred tax assets and deferred tax liabilities of the same taxable entity are offset and recorded at the(15) Land Revaluation
Under the “Law Concerning Revaluation Reserve for Land” promulgated on March 31, 1998, the Company revalued its land
held for business use. The tax amount for the difference between the appraisal value and the carrying amount is accounted
for as “Deferred tax liabilities for land revaluation” in Non-Current Liabilities and the difference net of such tax amount isrecorded as “Revaluation reserve for land” in Net Assets.

net amount, total assets as of April 1, 2018 decreased by ¥593 million.

4. Additional Information
Performance-based stock incentive plan, etc. for directors and executive officers

Method of revaluation:

The Company and certain consolidated subsidiaries have introduced a performance-based stock incentive plan (the “Plan”)

The value of land is determined based on a reasonable adjustment to the assessed value of the fixed assets as stipulated inas an incentive plan for Directors and Executive Officers (excluding Directors serving as Audit & Supervisory Committee

Item 3, Article 2 of the “Enforcement Ordinance Concerning Land Revaluation” (Ordinance No. 119 enacted on March 31,

Members, External Directors and non-residents of Japan; “the Directors, etc.”) from the fiscal year ended March 31, 2019.

1998). Date of revaluation: March 31, 2002

The Plan is a compensation scheme that functions as an incentive for improving medium- to long-term corporate value of theCompany and enables interests to be shared with the Company’s shareholders by linking the compensation paid to the Direc-(16) Derivative Financial Instruments

tors, etc. to the Company’s share price. Specifically, it utilizes the mechanism of an executive compensation BIP trust. The

Net assets and liabilities arising from derivative financial instruments are measured at fair value, with any changes in unrealizedCompany’s shares are acquired in advance by an executive compensation BIP trust, and the Company’s shares and an

gain or loss credited or charged to income. Hedging transactions are accounted for using deferral hedge accounting, whichamount equivalent to the proceeds of converting the Company’s shares into cash are delivered and paid to the Directors, etc.

requires the unrealized gains or losses to be deferred as assets or liabilities until the losses or gains on the underlying hedged

according to their position, etc.

items are recognized.

The shares of the Company remaining in the trust are recorded as treasury shares under net assets at the book value

For interest rate swaps that meet certain hedging criteria, the Group applies exceptional treatment where the Group does
not record these instruments at fair value but charges or credits the net cash flows from these instruments to the interest
arising from the hedged borrowings and corporate bonds. However, for currency swaps that meet certain hedging criteria,
the currency swap contracts (the “Contracts”) and the securities denominated in foreign currencies (the “Hedged items”)

within the trust. The book value and number of such treasury shares were ¥3,782 million ($34,084 thousand) and 1,725,000
shares, respectively, as of March 31, 2019.
Furthermore, the estimated amount of the above executive compensation at the end of the fiscal year is recorded as provision for share-based remuneration.

are accounted for in the following manner:(a) If the Contracts are executed to hedge an existing the Hedged items,

ESOP trust for granting stock	  (i) the difference, if any, between:

The Company and certain consolidated subsidiaries have introduced an “ESOP Trust for Granting Stock” (the “Plan”) from the	   • the Japanese yen amount of the Hedged items translated using the spot rate at the inception date offiscal year ended March 31, 2019 as an incentive plan for employees. The Plan is a compensation scheme that encourages

the Contracts andemployees to execute their duties with an awareness of the Company’s share price because employees can enjoy economic	   • the book value of the Hedged items is recognized in the Consolidated Statement of Income in the period which
includes the inception date, andbenefits from an increase in the price of the Company’s shares, and is expected to have the effect of increasing the motivationof employees and enable them to share interests with the Company’s shareholders. Specifically, it utilizes the mechanism of	  (ii) the discount or premium on the Contracts (that is, the difference between:

ESOP trust for granting stock. The ESOP trust acquires the Company’s shares in advance, and grants them to employees	   • the Japanese yen amount of the Contracts translated using the contracted swap rate andwho satisfy certain requirements.

	   • the Japanese yen amount of the Contracts translated using the spot rate at the inception date of the Contracts)
is recognized over the term of the Contracts.

Furthermore, the estimated amount of the above compensation scheme at the end of the fiscal year is recorded as provision for share-based remuneration.

(b) If the Contracts are executed to hedge a future transaction denominated in a foreign currency, the swap transaction will be recorded using the contracted swap rate, and no gains or losses on the Contracts are recognized.

5. Financial Instruments(1) Policies on Financial Instruments
It is the policy of the Group to limit its fund management to safe and highly liquid deposits while raising funds primarily throughloans from financial institutions and the issuance of corporate bonds. Derivatives are utilized for hedging against the risks
described below not for speculative purposes.

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Nomura Real Estate Holdings, Inc.

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Financial Report 2019

(2) Details of Financial Instruments and Risks(5) Fair Values of Financial Instruments

Securities comprise safe and highly liquid negotiable deposits held for the purpose of managing t­emporary surplus funds.

The book values, fair values and differences of financial instruments as of March 31, 2018 and 2019 are as follows. Items for

Equity investments and investment securities primarily consist of stocks, investment units, and others held for the purpose

which fair value is extremely difficult to determine have not been included.

of business promotion, all of which are exposed to market price fluctuation and issuer credit risk. Currency swaps andforward exchange contracts are used to hedge risks from exchange rate fluctuations on securities in foreign currencies.
Interest rate swaps are used to hedge risks arising from fluctuations in interest rates on long-term borrowings.
Derivative transactions used by the Company are as follows:
Hedging instruments
Interest rate swap contracts
Currency swaps and foreign exchange forward contracts

Hedged items
Borrowings
Securities denominated in foreign currencies

The Group evaluates hedge effectiveness by comparing the cumulative changes in market fluctuations or in cash flows of
the Hedged items to the corresponding changes in the hedging derivative instruments. However, the Group does not evaluate
hedge effectiveness of interest rate swaps for which the Group applies the exceptional treatment.
(3) Policies and Systems for Risk Management
The Company regularly checks the market value of equity investments and investment securities, as well as the financial

Book value
2018(Millions of yen)

¥ 52,347
9,000
37,20598,55334,000140,000
703,800
877,800¥   (525)¥ 52,347
9,000
37,244
98,592
34,000141,428
717,255
892,684¥   (525)¥        —
—
39
39
—
1,428
13,455
14,884¥        —(1) Cash and deposits(2) Securities(3) Investment securities 1
Total assets(1) Short-term loans payable 2(2) Bonds payable(3) Long-term loans payable 2
Total liabilities
Derivative transactions 3

Notes: 1. Includes government bonds, etc. presented as lease and guarantee deposits on the Consolidated Balance Sheet.
2. Current portion of long-term loans payable is included in (3) Long-term loans payable.
3.	For derivative transactions, stated values are the net amounts of receivables and payables arising from the transactions. Figures in parentheses areliability amounts.
Book value

The Finance Department conducts execution of derivative transactions and risk management based on the risk managethe status of transactions and risk information to the Director on a regular basis. The consolidated subsidiaries conduct
execution of derivative transactions and risk management in accordance with internal policies. The Company considers there
is no substantial credit risk associated with these transactions because of the transactions being conducted only with highly
creditworthy financial institutions.
Based on the reports from consolidated subsidiaries and all departments within the Group, the Finance Department of theCompany creates and updates cash flow plans in a timely manner, managing liquidity risk through such methods as ensuringthat a specific amount of on-hand liquidity is always available.
(4) Supplemental Information on Fair Values
The fair values of financial instruments are based on their market prices. The fair values of financial instruments with no­available market prices are determined by using prices calculated in a reasonable manner. However, as various factors areincorporated into these calculations, the resulting values may vary if different assumptions are provided. The contract amountshown in Note 16. Derivative Financial Instruments does not represent the market risk regarding the derivative transactions.

Difference(Millions of yen)­conditions of their issuers.
ment policies and operational plan determined by the Director in charge of Finance. The Finance Department also reports

Fair value(Millions of yen)

2019

Fair value(Millions of yen)(Thousands of
U.S. dollars)¥ 81,351
37,00040,846
159,198
26,000140,000
748,000
914,000¥  (1,010)$  732,959
333,363
368,022
1,434,345
234,255
1,261,374
6,739,345
8,234,976$    (9,101)(1) Cash and deposits(2) Securities(3) Investment securities 1
Total assets(1) Short-term loans payable 2(2) Bonds payable(3) Long-term loans payable 2
Total liabilities
Derivative transactions 3

Difference(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥ 81,351
37,00040,886
159,237
26,000141,589
771,437
939,027¥  (1,010)$  732,959
333,363368,379
1,434,703
234,255
1,275,697
6,950,513
8,460,467$   (9,101)

¥   
—
—
39
39
—
1,589
23,43725,027¥   —$       
—
—
357
357
—
14,322
211,168
225,490$       
—Notes: 1. Includes government bonds, etc. presented as lease and guarantee deposits on the Consolidated Balance Sheet.
2. Current portion of long-term loans payable is included in (3) Long-term loans payable.
3. For derivative transactions, stated values are the net amounts of receivables and payables arising from the transactions. Figures in parentheses areliability amounts.

Notes:
1. Investments in non-consolidated subsidiaries and affiliates are as follows:
Investment securities (stocks, etc.)¥5,538 million as of March 31, 2018
¥10,060 million ($90,644 thousand) as of March 31, 2019
2. Method of measuring the fair value of financial instruments
Assets(1) Cash and deposits
As these instruments are settled within a short term and their book values approximate fair values, their book values are
deemed as their fair values.
(2) Securities
As these instruments, primarily comprising negotiable deposits, are settled within a short term and their book values
approximate fair values, their book values are deemed as their fair values.

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Nomura Real Estate Holdings, Inc.

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(3) Investment securities

Within 1 year

For stocks and investment units, fair values are determined mainly at the price quoted on an exchange. For investment
trusts, fair values are determined at an amount reasonably calculated based on a reasonable estimate of the management. Please see Note 6. Securities for information on those securities in (2) and (3).
Liabilities(1) Short-term loans payable
As these instruments are settled within a short term and their book values approximate fair values, their book values are
deemed as their fair values.
(2) Bonds payable
Principally, bonds issued by the Company, the fair value of which is decided by market prices.
(3) Long-term loans payable
For long-term loans payable, fair value is determined by discounting the total amount of principal and interest at theassumed interest rate on new loans of the same type. Long-term loans with floating interest rates are hedged by interest

2019

Cash and deposits Securities andinvestment securities Held-to-maturity
debt securities   (1) Government andmunicipal bonds, etc.
   (2) Corporate bonds Available-for-sale securities
with maturities   (1) Debt securities  (2) Others
Total(Millionsof yen)

1–5 years

5–10 years

Over 10 years(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)¥ 81,351 $  732,959¥  —$    —¥  —$    —

¥—

$—

265

2,387

460

4,149

805

7,259

—

—

—

—

—

—

—

—

—

—

2
23
37,000333,363¥118,618 $1,068,734

5
—
¥465

46
—
$4,196

—
—
¥805

—
—
$7,259

—
—
¥—

—
—
$—

rate swaps subject to the exceptional treatment, and, therefore, the fair value is determined by discounting the total
amount of interest and principal together with cash flow generated by the interest rate swap at the interest rate assumed
in a reasonable manner for new loans of the same type.

5. Repayment schedule for bonds payable and long-term loans payable at March 31, 2018 and 2019
Within 1 year
2018

Short-term loans payable
Bonds payable
Long-term loans payable
Total

Derivatives
Please see Note 16. Derivative Financial Instruments for information on derivative transactions.

1– 2 years

2– 3 years(Millions of yen)

(Millions of yen)

(Millions of yen)

¥ 34,000—
68,300¥102,300¥    ——
53,500¥53,500¥    —
20,00050,000¥70,000

3. Financial instruments for which fair value is extremely difficult to determineBook value

3 – 4 years

2018(Millions of yen)

Unlisted stocks¥16,266

2019(Millions of yen)(Thousands of U.S. dollars)

Unlisted stocks¥29,279$263,799

Book value

Notes: 1.	Financial instruments for which there is no fair value and for which the fair value is extremely difficult to determine are not included in (3) Investment
securities.
2. Includes unlisted stocks, etc., recorded under “equity investments.”

4. Redemption schedule for financial assets with maturities
Within 1 year
2018

Cash and deposits Securities andinvestment securities Held-to-maturity
debt securities   (1) Government andmunicipal bonds, etc.
   (2) Corporate bonds Available-for-sale securities
with maturities   (1) Debt securities  (2) Others
Total

1–5 years

5–10 years

Over 10 years(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

¥52,298

¥ —

¥ —

¥—

Short-term loans payable
Bonds payable
Long-term loans payableTotal

4– 5 years(Millions of yen)

(Millions of yen)¥    —
10,00055,000¥65,000¥         —10,00068,000¥78,000¥         —100,000
409,000¥509,000

Within 1 year
2019

Short-term loans payable
Bonds payable
Long-term loans payable
Total

1–2 years

614

838

—

—

—

—

—

2
9,000
¥61,338

7
—
¥622

—
—
¥838

—
—
¥—

Nomura Real Estate Holdings, Inc.

25

Financial Report 2019

Short-term loans payable
Bonds payable
Long-term loans payableTotal

2– 3 years(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥26,000—
53,500¥79,500$234,255—
482,025$716,281¥     —
20,00050,000¥70,000$      —180,196
450,491$630,687¥     —
10,00056,000¥66,000$      —90,098504,550$594,648

3 – 4 years

38

Over 5 years(Millions of yen)

4 – 5 years

Over 5 years(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥     —
10,00069,000¥79,000$      —90,098621,678$711,776¥     ——
77,500¥77,500$      —
—698,261$698,261¥      —100,000
442,000¥542,000$         —900,982
3,982,341$4,883,323

Nomura Real Estate Holdings, Inc.

26

Financial Report 2019

6. Securities(Millions of yen)
2019

The following tables summarize the acquisition cost, book value and fair value of securities held by the Group as of March 31,2018 and 2019.
(1) Held-to-maturity Debt Securities with Fair Value(Millions of yen)
2018

Securities whose fair value exceeds book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Securities whose fair value does not exceed book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Total(Millions of yen)
2019

Fair value

Difference¥1,431——
1,431¥1,470
—
—
1,470

¥39
—
—
39

65
—
—
65
¥1,49765——
65¥1,536

(0)
—
—
(0)
¥39

(Thousands of U.S. dollars)Book value

Fair value

Difference¥1,536——¥1,536¥1,576——¥1,576————¥1,536————¥1,576

Securities whose fair value exceeds book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Securities whose fair value does not exceed book value:(1) Government and municipal bonds, etc.
(2) Bonds payable(3) Other
Subtotal
Total

Book value

Book value

Fair value

Difference

¥39
—
—
¥39

$13,847——
13,847$14,204——
14,204

$357
—
—
357

—
—
—
—
¥39

—
—
—
—
$13,847————$14,204

—
—
—
—
$357

Securities whose book value exceeds
acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Securities whose book value does not exceed
acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Total(Thousands of U.S. dollars)Book value

Acquisition cost

DifferenceBook value

Acquisition cost

Difference¥   695¥   137¥  558$  6,266$  1,235$ 5,030———
37,50438,200———28,23828,375

—
—
—
9,266
9,824

—
—
—
337,911344,177———
254,421
255,657———
83,48988,519

693

872

(179)

6,245

7,858

(1,612)—
7—
37,408
38,109¥76,309—7—
37,451
38,331¥66,706

—
—
—
(42)
(221)
¥9,603—70—
337,045
343,360$687,538—70—
337,428
345,357$601,014

—
—
—
(383)
(1,996)$86,523(3) Sales of Available-for-sale Securities
The table below presents sales of available-for-sale securities and corresponding aggregate gains and aggregate losses forthe years ended March 31, 2018 and 2019.
2018(Millions of yen)Type(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Total

Sales
amountAggregate
gains

Aggregate
losses¥3,222

¥455

¥118

—
—
—
—
¥3,222

—
—
—
—
¥455

—
—
—
—
¥118

(2) Available-for-sale Securities with Fair Value(Millions of yen)
2018

Book value

Securities whose book value exceeds acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Securities whose book value does not exceed acquisition cost:(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Subtotal
Total

Nomura Real Estate Holdings, Inc.

Acquisition cost

Difference

2019(Millions of yen)

27

Financial Report 2019

¥ 1,921¥ 1,007¥  914———33,70635,628———28,16529,172

—
—
—
5,540
6,455

—

—

—

—
10
—
9,069
9,080
¥44,708

—
10
—
9,073
9,083
¥38,256

—
—
—
(3)
(3)
¥6,451Sales
amountType(1) Stocks(2) Bonds
1) Government and municipal bonds, etc.
2) Bonds payable3) Other(3) Other
Total(Thousands of U.S. dollars)

Aggregate
gains

Aggregate
losses

¥   3

¥   2

¥—

—
—
—
—
¥   3

—
—
—
—
¥   2

—
—
—
—
¥—

Nomura Real Estate Holdings, Inc.

28

Financial Report 2019

Sales
amountAggregate
gains

Aggregate
losses

$30

$18

$—

—
—
—
—
$30

—
—
—
—
$18

—
—
—
—
$—

7. Short-term Loans Payable and Long-term Loans Payable

The following table shows the maturities of lease obligations subsequent to March 31, 2019.

Short-term loans payable as of March 31, 2018 and 2019 are summarized as follows:(Thousands of
U.S. dollars)(Millions of yen)

Short-term loans payable
Total

2018

2019

2019

¥34,000¥34,000¥26,000¥26,000$234,255$234,255

Short-term loans payable as of March 31, 2018 and 2019 mainly consisted of borrowings from banks with a weighted
average interest rate of 0.2% in 2018 and 0.2% in 2019.

Unsecured bonds (2.0%), due 2020
Unsecured bonds (0.8%), due 2024
Unsecured bonds (0.9%), due 2025
Unsecured bonds (0.4%), due 2021
Unsecured bonds (0.8%), due 2026
Unsecured bonds (0.2%), due 2021
Unsecured bonds (1.0%), due 2036
Unsecured bonds (0.2%), due 2022
Unsecured bonds (1.0%), due 2037
First deferred interest payment clause/unsecured bonds withearly redemption clause (with subordination agreement)
Second deferred interest payment clause/unsecured bonds withearly redemption clause (with subordination agreement)
Long-term loans payable 1
Unsecured
Lease obligations 2
SubtotalLess amounts due within one year

(Millions of yen)(Thousands of
U.S. dollars)

2020
2021
2022
2023
2024 and thereafter¥  142
139
144
147
991
¥1,564$ 1,282
1,252
1,300
1,325
8,930
$14,092

8. Pledged Assets and Secured Liabilities
Pledged assets and secured liabilities at March 31, 2018 and 2019 are summarized as follows:

Long-term loans payable and bonds payable as of March 31, 2018 and 2019 are summarized as follows:(Thousands of
U.S. dollars)(Millions of yen)

Years ending March 31

2018

2019

2019

¥ 10,000
10,00010,00010,00010,00010,00010,00010,00010,000¥ 10,000
10,00010,00010,00010,00010,00010,00010,00010,000$   90,098
90,09890,09890,09890,09890,09890,09890,09890,09830,00030,000270,294

20,00020,000180,196(1) Pledged Assets and Secured Liabilities

2018

703,800
1,551
845,351(68,150)¥777,201

748,000
1,713
889,713(53,350)¥836,362

6,739,345
15,4358,016,156(480,681)$7,535,474

2019

Buildings and structures

¥179

¥—

$—

¥179

¥—

$—

Secured liabilities:
Lease and guarantee deposits received
Total

30

—

—

¥ 30

¥—

$—

(2) As of March 31, 2018, investment securities in the amount of ¥10 million are pledged as collateral for trade payables anda portion of liabilities of investee companies, respectively.
As of March 31, 2019, investment securities in the amount of ¥10 million ($90 thousand) are pledged as collateral for

9. Retirement Benefits(1) Outline of Retirement Benefit Plans
The Company does not have a retirement benefit plan. As defined benefit plans, certain subsidiaries have the lump-sum
pension plan and the defined benefit corporate pension plan, and defined contribution pension plans. In certain cases,­additional retirement benefit payments may be made. For the lump-sum pension plan and the defined benefit corporate
pension plan used by certain subsidiaries, net defined benefit liability and retirement benefit expenses are calculated by­simplified method.

The following table shows the maturities of long-term loans payable subsequent to March 31, 2019Years ending March 31(Millions of yen)(Thousands of
U.S. dollars)

2020
2021
2022
2023
2024 and thereafter¥ 50,000
56,00069,00077,500442,000¥694,500$  450,491
504,549
621,677
698,261
3,982,340$6,257,320(2) Defined Benefit Plan
A reconciliation of the changes in retirement benefit obligations for the fiscal years ended March 31, 2018 and 2019 (excluding
plans applying a simplified method)

2018

2019

2018

¥34,907¥36,315$327,200

Service cost

1,776

1,839

16,569Interest cost

164

171

1,541

Actuarial gain or loss

254

74

670

Retirement benefit obligations at the beginning of the year

Retirement benefit obligations at the end of the year

Financial Report 2019

(Thousands of
U.S. dollars)(Millions of yen)

Retirement benefit payments

29

2019

Pledged assets:

trade payables and a portion of liabilities of investee companies, respectively.

Notes: 1. Long-term loans payable as of March 31, 2018 and 2019 mainly consisted of borrowings from domestic Japanese banks and life insurance companies
with weighted-average interest rates of 0.6% in 2018 and 2019.
2. The weighted-average interest rate for lease obligations is not shown because for some consolidated subsidiaries the lease obligations recorded in theConsolidated Balance Sheet are the amounts before deducting the interest equivalents included in the total lease commitments.

Nomura Real Estate Holdings, Inc.

(Thousands of
U.S. dollars)(Millions of yen)

Nomura Real Estate Holdings, Inc.

30

(787)

(821)

(7,403)¥36,315¥37,578$338,578

Financial Report 2019

A reconciliation of the changes in balance of plan assets for the fiscal years ended March 31, 2018 and 2019 (excluding plans

Breakdown of items recorded in the Consolidated Statement of Comprehensive Income as remeasurements of defined benefit

applying a simplified method)plans, before tax(Millions of yen)

Fair value of plan assets at the beginning of the year
Expected return on plan assets
Actuarial gain or loss
Employer contributions
Retirement benefit payments
Fair value of plan assets at the end of the year

(Thousands of
U.S. dollars)

2018

2019

2019

¥18,024
306
410
1,610
(363)
¥19,988¥19,988
379
(117)
1,650
(446)
¥21,454$180,090
3,421(1,062)
14,867(4,020)$193,297(Thousands of
U.S. dollars)(Millions of yen)

Prior service cost
Actuarial gain or loss
Total

2018

2019

2019

¥ (395)1,149¥  754¥(395)
537¥ 141$(3,564)
4,841$ 1,276

Breakdown of items recorded in the Consolidated Balance Sheet as remeasurements of defined benefit plans, before tax(Millions of yen)

A reconciliation of the changes in balance of net defined benefit liability applying a simplified method for the fiscal years ended
March 31, 2018 and 2019
(Millions of yen)

Net defined benefit liability at the beginning of the year
Increase due to acquisition of new subsidiaries
Retirement benefit expenses
Retirement benefit payments
Contributions to plan
Net defined benefit liability at the end of the year

(Thousands of
U.S. dollars)

2018

2019

2019

¥2,048
—
280
(257)
(23)
¥2,048¥2,048
91
227
(292)
(23)
¥2,050$18,452823
2,050(2,634)(215)$18,477

A reconciliation of retirement benefit obligations as well as plan assets at March 31, 2018 and 2019, and net defined benefit
liability on the Consolidated Balance Sheet(Millions of yen)

Funded retirement benefit obligations
Fair value of plan assets
Subtotal
Unfunded retirement benefit obligations
Net liabilities on the Consolidated Balance Sheet
Net defined benefit liability
Net liabilities on the Consolidated Balance Sheet(Thousands of
U.S. dollars)

2018

2019

2019

¥ 25,651(20,118)
5,532
12,842¥ 18,375
18,375¥ 18,375¥ 26,555(21,604)
4,950
13,225¥ 18,175
18,175¥ 18,175$ 239,255(194,654)
44,601
119,157
163,759
163,759$ 163,759

2018

2019

2019

¥   989(6,184)¥(5,195)¥   593(5,647)¥(5,054)$  5,346(50,882)$(45,535)

Composition of plan assets by major classifications
ClaimsEquityGeneral account
Other
Total

2018

2019

47%
23%
—
30%
100%

37%
22%
14%
27%
100%

The expected long-term rate of return on plan assets has been estimated based on the current and projected allocationof plan assets and the current and expected long-term rate of return on diverse assets which comprise plan assets.
Assumptions used in accounting for the retirement benefit plans are summarized as follows (represented by a weighted average):
Discount rate
Expected rate of return on plan assets
Expected salary increase rate

2018

2019

0.2~0.5%
1.7%
2.2~7.5%

0.2~0.5%
1.9%
2.0~7.5%(3) Defined Contribution Plan
The required contributions to the defined contribution plans of consolidated subsidiaries for the fiscal years ended March 31,2018 and 2019 are ¥608 million and ¥643 million ($5,801 thousand).

Note: It includes the plans applying a simplified method.

Breakdown of retirement benefit expenses(Millions of yen)

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain or loss
Amortization of prior service cost
Retirement benefit expenses calculated by a simplified method
Other
Retirement benefit expenses for defined benefit plan

Nomura Real Estate Holdings, Inc.

Unrecognized prior service cost
Unrecognized actuarial gain or loss
Total

(Thousands of
U.S. dollars)

31

Financial Report 2019

2018

2019

¥1,776
164
(306)
994
(395)
280
2
¥2,516¥1,839
171
(379)
729
(395)
227
13
¥2,205(Thousands of
U.S. dollars)
2019$16,569
1,541(3,421)
6,574(3,564)2,050
120$19,870

10. Reclassification of Assets
As a result of revising the holding purpose the following assets were transferred during the fiscal years ended March 31, 2018and 2019.
Transfer during the year
(Millions of yen)

Real estate for sale from Non-current assets
Land held for development from Non-current assets
Non-current assets from Land held for development

Nomura Real Estate Holdings, Inc.

32

Financial Report 2019

(Thousands of
U.S. dollars)

2018

2019

2019

¥    ——
6,959¥69,2127,820—$623,596
70,461—

11. Gain on Sales of Non-Current Assets

13. Income Taxes

The breakdown of gain on sales of property and equipment for the fiscal years ended March 31, 2018 and 2019 is as follows

The statutory tax rates in Japan for the Company and its domestic subsidiaries were 30.9% for the fiscal year ended March(Not applicable for the fiscal year ended March 31, 2019.):31, 2018 and 30.6% for the fiscal year ended March 31, 2019.
Gain on sales(Thousands of
U.S. dollars)(Millions of yen)
2018

Land
Buildings
Total¥2,938372¥3,311

2019

2019

¥—
—
¥—

$—
—
$—

Significant differences between the statutory tax rate and the effective tax rate
Fiscal year ended March 31, 2018
The note has been omitted because the difference between the statutory tax rate and the effective tax rate is less than 5% of
the statutory tax rate.
Fiscal year ended March 31, 2019

12. Impairment Loss
The Group recognized impairment loss on the following groups of assets for the fiscal years ended March 31, 2018 and 2019:2018

Primary use

Leased assets (3 locations in total)

Type

Location

Buildings

Yokohama-shi, Kanagawa and other locations

Statutory tax rate (adjustment)
Entertainment and other expenses that are permanently nondeductible
Tax effect related to investments in subsidiaries
OthersBurden rate of corporate taxes etc. after application of tax effect accounting

30.6%
0.9%
(3.2)%
0.5%
28.9%

The table below presents an itemized breakdown of deferred tax assets and liabilities as of March 31, 2018 and 2019:
Assets of the Group are grouped into the smallest unit that generates cash flows that are largely independent of cash flows­Significant components of the Company’s deferred tax assets and liabilities.

from other assets or groups of assets. The headquarters building and certain other assets are considered to be shared(Millions of yen)assets.
As a result, with respect to three groups of assets etc., comprising those whose profitability has dropped significantly
due mainly to the changes of usage, decline in rent level or the deterioration of the market conditions, the carrying amount
has been reduced to the recoverable amount and the amount of reduction has been recognized in extraordinary losses as
impairment loss of ¥3,614 million for the fiscal year ended March 31, 2018. The impairment loss consists of ¥3,614 millionof buildings.
The recoverable amount of these groups of assets is measured at the net realizable value and the net realizable value isdetermined based on the appraisal value provided by real estate appraisers.
Primary use

2019Leased assets(2 locations in total)

Type

LocationLand
Buildings

Chiyoda-ku, Tokyo and other locations

Assets of the Group are grouped into the smallest unit that generates cash flows that are largely independent of cash flows
from other assets or groups of assets. The headquarters building and certain other assets are considered to be sharedassets.
As a result, with respect to two groups of assets etc. to be sold, the carrying amount has been reduced to the recoverable amount and the amount of reduction has been recognized in extraordinary losses as impairment loss of ¥1,989 million orDeferred tax assets:
Unrealized profits
Net defined benefit liability
Impairment loss
Provision for bonuses
Inventory write-downs
Excess of depreciation
Revaluation of assets on consolidation
Provision for loss on subleasing business
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Revaluation of assets on consolidation
Reserve for deferred income taxes
Other
Total deferred tax liabilities
Net deferred tax liabilities

2018

2019

2019

¥ 12,456
5,639
5,150
2,208
1,522
776
446
31
6,502
34,733(3,321)
31,412¥ 12,427
5,578
5,576
2,359
656
1,561
451
4
7,031
35,647(3,207)32,439$ 111,966
50,26350,23921,255
5,919
14,0684,071
42
63,350321,177(28,901)
292,275(49,400)(18,066)(2,929)(70,397)¥(38,984)(51,474)(17,869)(3,795)(73,140)¥(40,700)(463,778)(161,003)(34,198)(658,980)$(366,705)

the fiscal year ended March 31, 2019. The impairment loss consists of ¥1,580 million of land and ¥408 million of buildings.
The recoverable amount of these groups of assets is measured at the net realizable value and the net realizable value isdetermined based on the appraisal value provided by real estate appraisers.

Nomura Real Estate Holdings, Inc.

33

Financial Report 2019

Nomura Real Estate Holdings, Inc.

34

(Thousands of
U.S. dollars)

Financial Report 2019

14. Shareholders’ Equity

16. Derivative Financial Instruments

Under the Companies Act of Japan (the “Act”), all funds obtained through the issuance of common stock must be treated(1) Derivatives to which Hedge Accounting is not Applied

as capital stock and, by resolution of the board of directors, an amount equivalent to less than half of those funds may

There are no derivative transactions to which hedge accounting is not applied.

be appropriated to the capital reserve (a component of capital surplus).
The Act provides that an amount equal to 10% of the amount to be distributed as distributions of capital surplus (otherthan the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal(2) Derivatives to which Hedge Accounting is Applied(a) Currency-related derivatives

reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the capital stock account.
As of March 31, 2019, the Group’s capital reserve amounted to ¥110,316 million ($1,038,369 thousand), and no legal
2018

reserve was recorded.

Hedge accounting
method15. Supplementary Cash Flow Information

Deferral hedge
accounting

A reconciliation of cash and deposits in the Consolidated Balance Sheet and cash and cash equivalents in the Consolidated
Statement of Cash Flows is as follows:(Millions of yen)

Cash and deposits
Securities
Time deposits with maturities of more than three months
Cash and cash equivalents(Thousands of
U.S. dollars)

2018

2019

2019

¥52,347
9,000—¥61,347¥ 81,351
37,000(20)¥118,330$  732,959
333,363(188)$1,066,134

Deferral hedge
accounting
Deferral hedge
accounting
Deferral hedge
accounting
Deferral hedge
accounting

Contract amountdue after one year

Contract amount

Fair value

Major hedged
items(Millionsof yen)(Millionsof yen)(Millionsof yen)Securities denominated inforeign currencies
Securities denominated inforeign currencies
Securities denominated inforeign currencies
Forward exchange contract Securities
Sell Chinese Yuan / denominated in
Buy U.S. dollars
foreign currencies
Non-deliverable forward
Securities
Sell Philippine peso / denominated in
Buy yenforeign currencies¥1,326¥1,215¥ (18)¥7,400¥6,280¥(312)¥3,710¥  991¥ (51)¥1,075¥1,075¥(142)¥  209

¥   —

¥   0

¥13,722¥9,563¥(525)

Type of derivatives

Currency swaps
Receipts in yen / Payments in U.S. dollars
Currency swaps
Receipts in yen /Payments in Thai baht
Forward exchange contract
Sell U.S. dollars / Buy yen

Total

Note: The fair value is determined based on the quoted price obtained from the counterparty financial institutions to the derivatives transactions.

Hedge accounting
methodDeferral hedge
accounting
Deferral hedge
accounting
Deferral hedge
accounting
Deferral hedge
accounting
Deferral hedge
accounting
Deferral hedge
accounting
Deferral hedge
accounting
Total

Contract amountdue after one year

Contract amount2019

Fair value

Major hedged
items(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)

Currency swaps
Securities
Receipts in yen / denominated in Payments in U.S. dollars
foreign currencies
Currency swaps
Securities
Receipts in yen / denominated in Payments in Thai baht
foreign currencies
Currency swaps
Securities
Receipts in yen / denominated in Payments in Chinese Yuan foreign currencies
Currency swaps
Securities
Receipts in yen / denominated in Payments in Philippine peso foreign currencies
Forward exchange contract Securities
Sell U.S. dollars / Buy yen  denominated inforeign currencies
Forward exchange contract Securities
Sell Thai baht / Buy yen denominated inforeign currencies
Forward exchange contract Securities
Sell Chinese Yuan / denominated in Buy U.S. dollars
foreign currencies¥ 2,540$ 22,887¥  231$ 2,089¥   (88)$  (799)¥ 9,036$ 81,419¥3,816$34,384¥  (446)$(4,025)¥ 2,562$ 23,091¥    —$     —¥   (80)$  (726)¥ 1,829$ 16,483¥1,829$16,483¥  (133)$(1,201)¥ 1,101$  9,920¥    —$     —¥  (131)$(1,182)¥ 2,454$ 22,110¥    —$     —¥   (34)$  (306)¥ 1,123$ 10,124¥    —$     —¥   (95)$  (859)¥20,648$186,036¥5,877$52,958¥(1,010)$(9,101)

Type of derivatives

Note: The fair value is determined based on the quoted price obtained from the counterparty financial institutions to the derivatives transactions.

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Nomura Real Estate Holdings, Inc.

36

Financial Report 2019

18. Real Estate for Rent(b) Interest rate-related derivatives
2018

Contract amountdue after one year

Contract amount

Hedge accounting
methodExceptional treatment forinterest rate swaps

Fair value

Major hedged
items(Millionsof yen)(Millionsof yen)(Millionsof yen)Some of the Company’s consolidated subsidiaries own rental office buildings and rental facilities (including land) in Tokyo andInterest rate swaps Long-term debt
Receive floating rate /Pay fixed rate¥283,500¥240,000(Note)

other regions.

Type of derivatives

Total

Some rental office buildings are regarded as properties including the portion used as rental properties since they are used
¥283,500¥240,000by the Company and certain consolidated subsidiaries.

—

The book values in the Consolidated Balance Sheet, changes during the fiscal years ended March 31, 2018 and 2019,

Note: The fair value of the interest rate swaps which qualify for exceptional treatment for interest rate swaps is considered to be included in the fair value of the longterm debt.

Hedge accounting
methodExceptional treatment forinterest rate swaps(1) Changes in Fair Value of Rental and Other Properties during the Fiscal Years Ended March 31, 2018 and 2019

Contract amountdue after one year

Contract amount2019

Book value 1

Fair value

Major hedged
items(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)(Millionsof yen)(Thousands of
U.S. dollars)Interest rate swaps Long-term debt
Receive floating rate
Pay fixed rate

¥247,000$2,225,425¥220,500$1,986,665(Note)—¥247,000$2,225,425¥220,500$1,986,665——

Type of derivatives

Totaland fair values of real estate, of which some portions are used as rental property, are as follows:

March 31, 20172018

Rental properties
Properties including the portion used as rental
and other properties

Fair value 2

Increase/Decrease

March 31, 2018

March 31, 2018

(Millionsof yen)(Millionsof yen)(Millionsof yen)(Millionsof yen)¥766,973¥27,505¥794,478¥946,597

26,122(96)

26,02655,820Note: T he fair value of the interest rate swaps which qualify for exceptional treatment for interest rate swaps is considered to be included in the fair value of the longterm debt.
Book value 1

17. Leases

March 31, 20182019

Details of significant lease transactions are as follows:
The table below presents the future lease payments and receipts of operating leases subsequent to March 31, 2018and 2019.
(Millions of yen)
Operating leases

Future lease payments:
Due within 1 year
Due after 1 year
Total
Future lease receipts:
Due within 1 year
Due after 1 year
Total

(Thousands of
U.S. dollars)

2018

2019

2019

¥  3,166
13,946¥ 17,113¥  3,518
14,651¥ 18,169$   31,702
132,003$  163,705¥ 26,392
90,622¥117,014¥ 25,448
85,700¥111,149$  229,289
772,145$1,001,434

Note: The note on finance leases has been omitted due to a lack of materiality.

Rental properties
Properties including the portion used as rental
and other properties(Millionsof yen)(Thousands of
U.S. dollars)¥794,478 $7,158,108

26,026

Fair value 2

Increase/Decrease(Millionsof yen)March 31, 2019

(Thousands of
U.S. dollars)¥(91,246) $(822,110)

234,497

98

889(Millionsof yen)March 31, 2019

(Thousands of
U.S. dollars)¥703,232 $6,335,997

26,125(Millionsof yen)(Thousands of
U.S. dollars)¥878,919 $7,918,905

235,387

56,820511,938

Notes: 1.	Book values in the Consolidated Balance Sheets are the amounts determined by deducting accumulated depreciation from the acquisition cost.
2.	Fair values as of March 31, 2018 and 2019 are determined by the Group (including adjustments based on certain indexes) based primarily on their values
according to real estate appraisal standards. However, if there have been no fluctuations in appraisal values or indexes considered to appropriately reflectmarket values, the Group uses the appraisal values or amounts derived from the indexes of the recent appraisal or acquisition from third parties as the fairvalues at March 31, 2018 and 2019.

(2) Operating Profit and Other Information on Rental Properties in the Fiscal Years Ended March 31, 2018 and 2019
Operating profit
2018

Rental properties
Properties including the portion used asrental and other properties 1(Millions of yen)

(Millions of yen)

¥30,409
1,058¥(761)—

Operating profit
2019

Rental properties
Properties including the portion used asrental and other properties 1

Others (gains (losses) on sale of property, etc.) 2

Others (gains (losses) on sale of property, etc.) 2(Millions of yen)(Thousands of
U.S. dollars)(Millions of yen)(Thousands of
U.S. dollars)¥29,169
1,094$262,815
9,858

¥(52)
—

$(473)—

Notes: 1.	As real estate of which some portions are used as rental property includes portions used by the Company and certain consolidated subsidiaries for­providing services as well as management and administration, operating income for this type of real estate is not recorded.
2. Others include gain on sales of non-current assets (¥3,311 million) and loss on building reconstruction (¥3,614 million) in the fiscal year ended March 31,
2018, and impairment loss (¥38 million ($346 thousand)) in the fiscal year ended March 31, 2019.

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Financial Report 2019

Nomura Real Estate Holdings, Inc.

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Financial Report 2019

19. Segment Information

Results by segment for the fiscal year ended March 31, 2019
(Millions of yen)

(1) Segment Summary
The reportable segments of the Group comprise of those business units for which separate financial information is available,
and which are subject to a regular review conducted by the Company’s Board of Directors in order to determine the allocationof management resources and evaluate their performance.

Property
Brokerage& CRE

Property &Facility
Management

Other 1

Subtotal

Eliminations
or Corporate 2

Total 3¥  668,510

Residential
Development

Leasing

Investment
Management¥361,863¥  165,190¥ 9,639¥35,157¥ 96,565¥ 94¥  668,510¥      —

898

2,437

2

2,141

11,2360

16,717(16,717)—

Operating revenue andoperating income
Operating revenue:  External customers

With the Company being a pure holding company, the Group consists of business companies such as Nomura Real
Estate Development Co., Ltd. The business companies (or business divisions in the case of Nomura Real Estate Develop-  Inter-segment

ment) formulate comprehensive strategies on respective products and services handled by them and conduct business  Subtotal

362,761

167,628

9,641

37,298107,80294

685,227(16,717)

668,510

activities based on such strategies.

   Segment income (loss)

23,18038,858

5,943

8,170

8,067

(43)

84,176(5,013)

79,162415,826

1,110,951

42,46328,22864,984929

1,663,384

96,071

1,759,455¥    450¥   15,895¥    49¥   506¥  1,591¥  2¥  18,495¥    705¥   19,201

—

238

5

—

29

—

273

—

273

 Investment in affiliates
accounted for using
equity method

19,955

7,461

—

76

519

—

28,012

114

28,127 Increase in property, plant and equipment
and intangible assets¥    537¥   15,880¥    10¥   488¥  1,692¥ 19¥  18,628¥   1,148¥   19,776

Investment
Management

Property
Brokerage& CRE

Property &Facility
Management

Other 1

Subtotal

Eliminations
or Corporate 2

Total 3

$ 6,023,155

Therefore, business segments of the Group are distinguished by products and services, primarily by business companies(or by business divisions in the case of Nomura Real Estate Development).

Segment assets
Other items
Depreciation
Amortization of goodwill(2) Methods for Calculating Net Sales, Income (loss), Assets, Liabilities and Other Items by Reportable Segment
The accounting method for reportable segments is almost equivalent to that specified in “Significant Accounting Policies.”
Reportable segment income is presented based on operating income. Intersegment sales and transfer amounts are­presented based on market prices.
Results by segment for the fiscal years ended March 31, 2018 and 2019 were as follows:(Thousands of U.S. dollars)

Results by segment for the fiscal year ended March 31, 2018
(Millions of yen)
Residential
Development

Leasing

Investment
Management

Property
Brokerage& CRE

Property &Facility
Management

Other 1

Subtotal

Eliminations
or Corporate 2

Residential
Development

Operating revenue andoperating income

Total 3Operating revenue andoperating income

Operating revenue:  External customers

Operating revenue:  External customers¥354,565¥  132,501¥ 9,378¥33,521¥ 93,687¥107¥  623,762¥    —¥   623,762

880

2,440

—

2,182

10,8930

16,396(16,396)—  Subtotal

355,445

134,941

9,378

35,703

104,581107

640,158(16,396)623,762   Segment income (loss)

24,52335,232

5,911

8,452

7,078

(10)

81,187(4,527)76,660448,4121,060,815

34,84017,18162,781921

1,624,952

48,147

1,673,099¥    345¥   15,809¥    29¥   436¥  1,525¥  4¥   18,150¥    674¥   18,824  Inter-segment

Segment assets

Amortization of goodwill Investment in affiliates
accounted for using
equity method Increase in property, plant and equipment
and intangible assets  Inter-segment  Subtotal   Segment income (loss)
Segment assets

—

9,827

¥    645

235

4,809

¥   69,151

—

—

—

¥    26—¥   52729

513¥  2,110

—

—

¥  2

264

15,150¥   72,464——¥ 1,111264

15,150 Increase in property, plant and equipment
and intangible assets

Notes: 1. T he “Other” category, which represents operating segments that are not included in reportable segments, includes other businesses.
2. (1) The deduction of ¥4,527 million shown in the eliminations or corporate column for segment income (loss) includes an addition of ¥2,591 million for theelimination of inter-segment transactions and a deduction of ¥7,119 million for corporate expenses not allocated to reportable segments. These corporate expenses mainly consist of general and administrative expenses not attributable to reportable segments.
	  (2) The addition of ¥48,147 million shown in the eliminations or corporate column for segment assets includes a deduction of ¥41,725 million for the elimination of inter-segment transactions and an addition of ¥89,872 million for ­corporate assets not allocated to reportable segments.
3. The segment income (loss) is reconciled to the operating income stated in the consolidated financial statements.

Nomura Real Estate Holdings, Inc.

39

Financial Report 2019

Amortization of goodwill Investment in affiliates accounted for using
equity method¥   73,575$3,260,322 $ 1,488,339 $ 86,849$316,761$870,035$  847$ 6,023,155$      —

8,093

21,96021

19,295

101,2428

150,622(150,622)—

3,268,416

1,510,300

86,871

336,056

971,278855

6,173,778(150,622)

6,023,155

208,847

350,106

53,552

73,61572,682(388)

758,416(45,174)

713,241

3,746,526 $10,009,477

382,584

254,336

585,496

8,374

14,986,795

865,584

15,852,380$    4,058 $   143,211 $    443

Other items
Depreciation

Other items
Depreciation

Leasing$  4,566$ 14,341$   20$   166,642$   6,359$   173,001

—

2,151

51

—

263

—

2,466

—

2,466

179,798

67,223

—

688

4,676

—

252,386

1,035

253,421$    4,843 $   143,078 $     98

$  4,401$ 15,245$  172$   167,839$   10,345$   178,185

Notes: 1. The “Other” category, which represents operating segments that are not included in reportable segments, includes other businesses.
2. (1) T he deduction of ¥5,013 million ($45,174 thousand) shown in the eliminations or corporate column for segment income (loss) includes an addition of¥2,641 million ($23,801 thousand) for the elimination of inter-segment transactions and a deduction of ¥7,655 million ($68,975 thousand) for corporate
expenses not allocated to reportable segments. These corporate expenses mainly consist of general and administrative expenses not attributable toreportable segments.
	  (2) The addition of ¥96,071 million ($865,584 thousand) shown in the eliminations or corporate column for segment assets includes a deduction of¥49,367 million ($444,796 thousand) for the elimination of inter-segment transactions and an addition of ¥145,439 million ($1,310,380 thousand) for­corporate assets not allocated to reportable segments.
3. The segment income (loss) is reconciled to the operating income stated in the consolidated financial statements.

Nomura Real Estate Holdings, Inc.

40

Financial Report 2019

Notes relating to changes in reportable segments etc.

Related Information

From this consolidated fiscal year, Nomura Real Estate Reform Co., Ltd., which had been classified under the Residential

Fiscal 2017 (From April 1, 2017 to March 31, 2018)

Development Business Unit, was transferred to the Property & Facility Management Business Unit to promote businessInformation by major customer

through integration into the property and facility management business.

Information by major customer is omitted because there is no specific external customer that accounts for 10% or more of

In line with this change, the segment information for the previous consolidated fiscal year is prepared and disclosed based

operating revenue in the consolidated statements of income.

on the calculation methods after this change.
Fiscal 2018 (From April 1, 2018 to March 31, 2019)
Impairment loss on non-current assets by reportable segments for the years ended March 31, 2018 and 2019 is summarized

Information by major customer

as follows:(Millions of yen)
Name of customer

(Millions of yen)

2018

Impairment loss

Residential
Development

Leasing¥—¥3,614

Investment
Management

Property
Brokerage
& CRE

¥—

¥—

Property &Facility
Management¥—

Nomura Real Estate Master Fund, Inc.

2019

Impairment loss

Leasing¥—¥1,989Investment
Management

Property
Brokerage
& CRE

¥—

¥—

Property &Facility
Management¥—¥73,523

2019

Impairment loss$—

Leasing business unit

20. Contingent Liabilities
Contingent liabilities as of March 31, 2018 and 2019 are as follows:¥1,989

Leasing

Investment
Management

Property
Brokerage& CRE

Property &Facility
Management

Total$17,925

$—

$—

$—

$17,925(Thousands of
U.S. dollars)(Millions of yen)

Total

Guarantees for home loans of house purchasers from banks and other
Guarantees for loans to co-owners of EBS building(Thousands of U.S. dollars)
Residential
Development

Relevant segment$662,431

Total¥3,614(Millions of yen)
Residential
Development(Thousands of U.S. dollars)

Operating revenue

2018

2019

2019

¥78,107466¥78,574¥113,368
393¥113,761$1,021,427
3,546$1,024,973

21. Additional Capital Contribution Obligations, etc.

The following table presents the amortization and balance of goodwill as of and for the years ended March 31, 2018 and
The Company has additional capital contribution obligations, etc. to the following subsidiaries and associates according to2019 by reportable segments:

the capital contribution ratio with business partners in relation to loans received from financial institutions by the companies.

(Millions of yen)

2018

Amortization
Balance at March 31, 2018

Residential
Development

Leasing

Investment
Management

Property
Brokerage &
CRE

¥—
¥—

¥  235¥2,532

¥—
¥—

¥—
¥—

The outstanding loans payable by the subsidiaries and associates are as follows, and the figures in parentheses indicate theProperty &Facility
Management

Total

¥ 29
¥146

¥  264¥2,679(Millions of yen)

2019

Amortization
Balance at March 31, 2019

Residential
Development¥—¥—

amount based on the Company’s capital contribution ratio to the companies.
As of March 31, 2019
As of March 31, 2018—

ORIGIN RAMKHAMHAENG COMPANY LIMITED—ORIGIN PRIME 2 COMPANY LIMITED

Leasing

Investment
Management

Property
Brokerage &CREProperty &Facility
Management

Total

—

ORIGIN PARK T1 COMPANY LIMITED¥  238¥3,055¥    5¥1,306

¥—
¥—

¥ 29
¥117

¥  273¥4,479—ORIGIN SPHERE COMPANY LIMITED—ORIGIN VERTICAL COMPANY LIMITED

—

Total

(Thousands of U.S. dollars)

2019

Amortization
Balance at March 31, 2019

Residential
Development$—$—

Leasing

Investment
Management

Property
Brokerage &CREProperty &Facility
Management

Total$ 2,151$27,530$    51$11,769$—$—$  263$1,055$ 2,466$40,355

Nomura Real Estate Holdings, Inc.

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Financial Report 2019

Nomura Real Estate Holdings, Inc.

42

Financial Report 2019

(Millions of yen)(Thousands of U.S. dollars)¥   209
(102)
191
(94)
6,980
(3,420)
1,039
(509)
1,519
(744)
¥ 9,940¥(4,870)$   1,886
(924)
1,729
(847)
62,888(30,815)
9,366(4,589)13,689(6,707)$ 89,559$(43,884)22. Consolidated Statement of Comprehensive Income

23. Schedule of Asset Retirement Obligations

The amount of recycling and amount of income tax effects associated with other comprehensive income for the years ended

A presentation of this schedule is omitted pursuant to the provisions of Article 92-2 of the Consolidated Financial Statements

March 31, 2018 and 2019 are as follows:

Regulations as the amount of asset retirement obligations is not more than 1% of the total amount of liabilities and net assets(Thousands of
U.S. dollars)(Millions of yen)

Valuation difference on available-for-sale securities:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effect
Valuation difference on available-for-sale securities

2018

2019

2019

¥(5,205)262(4,942)
1,512(3,430)¥3,169
3
3,172
(971)
2,201

$28,557
27
28,585(8,752)
19,833as of March 31, 2018 and 2019.

24. Stock Options
Information regarding the Group’s stock option plans is summarized as follows:
1. Amount and account title of costs related to stock options(Thousands of
U.S. dollars)(Millions of yen)

Deferred gains or losses on hedges:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effect
Deferred gains or losses on hedges

409
(204)
205
(62)
142

(750)
—
(750)
229
(521)

(6,765)—(6,765)2,070(4,695)

Selling, general and administrative expenses

2018

2019

2019

¥653

¥252

$2,277

2. Amount of gain on non-exercise of stock options(Thousands of
U.S. dollars)(Millions of yen)

Revaluation reserve for land:
Income tax effect

(0)

(0)

(0)

Foreign currency translation adjustment:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effectForeign currency translation adjustment

(33)
—
(33)
—
(33)

(216)
—
(216)
—
(216)

(1,950)—(1,950)—(1,950)Remeasurements of defined benefit plans:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effectRemeasurements of defined benefit plans

162
591
754
(230)
523

(301)
443
141
(43)
98

(2,718)
3,995
1,276
(390)
886

Nomura Real Estate Holdings, Inc.

43

Financial Report 2019

(381)
—
(381)
126

(432)
2
(429)
133

(3,898)25(3,872)
1,202

(254)
¥(3,052)(296)¥1,265(2,670)$11,403

2019

¥20

¥10

3. Description
Nomura Real Estate Holdings, Inc.
FY2011

3rd issue of stock options

Recipients

Directors of the Company(6 persons)
Directors and executive  officers of the Company’s
subsidiaries (57 persons)
Employees of the Company’s
subsidiaries (152 persons)Type/number of shares reserved (Note)

Common stock:
227,800 shares

Grant dateAugust 23, 2011

Vesting conditions

Share of other comprehensive income of affiliates accounted
for using the equity method:Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effect Share of other comprehensive income of affiliates accounted
for using the equity method
Total other comprehensive income

2018

No conditions attachedService period

No period specified

Exercisable period

August 23, 2013 –August 22, 2018

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44

Financial Report 2019

2019

$94

Nomura Real Estate Holdings, Inc.
FY2012

Recipients

Type/number of shares
reserved (Note)
Grant date

Nomura Real Estate Holdings, Inc.
1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Directors of the Company(5 persons)

Directors and executive  officers of the Company’s
subsidiaries (64 persons)

Directors of the Company(5 persons)
Directors and executive  officers of the Company’s
subsidiaries (64 persons)
Employees of the Company’s
subsidiaries (152 persons)Common stock:
31,500 shares

Common stock:
188,900 shares

Common stock:242,700shares

August 23, 2012

August 23, 2012

August 23, 2012

No conditions attached

No conditions attached

No conditions attachedService period

No period specified

No period specified

No period specified

Exercisable period

August 23, 2014 –August22, 2019

August 23, 2014 –August 22, 2019

August 23, 2014 –August 22, 2019

Vesting conditions

Nomura Real Estate Holdings, Inc.
FY2013

Recipients

Type/number of shares
reserved (Note)

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Directors of the Company(4 persons)

Directors and executive  officers of the Company’s
subsidiaries (74 persons)

Directors of the Company(4 persons)
Directors and executive  officers of the Company’s
subsidiaries (74 persons)
Employees of the Company’s
subsidiaries (170 persons)Common stock:
20,200 shares

Grant date
Vesting conditions
Service period
Exercisable period

Common stock:143,300 shares

Common stock:333,300 shares

July 23, 2013

July 23, 2013

July 23, 2013

No conditions attached

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 23, 2015 –July 22, 2020

July 23, 2015 –July 22, 2020

July 23, 2015 –July 22, 2020

FY2015

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

4th issue of stock options

5th issue of stock options

Recipients

Directors of  the Company(6 persons)

Directors and executive officersof the Company’s
subsidiaries(76 persons)

Directors of  the Company(6 persons)
Directors and executive officersof the Company’s
subsidiaries(76 persons)
Employees of  the Company’s
subsidiaries(199 persons)

Directors of  the Company’s
subsidiaries(3 persons)

Directors of  the Company’s
subsidiaries(3 persons)
Employees of  the Company’s
subsidiaries(20 persons)Common stock:35,700 shares

Common stock:
157,500 shares

Common stock:
380,900 shares

Common stock:
4,000 shares

Common stock:
24,000 shares

Type/number of shares reserved(Note)
Grant dateJuly 23, 2015

July 23, 2015

July 23, 2015

October 14, 2015

October 14, 2015

Vesting conditions

No conditions
attached

No conditions
attached

No conditions
attached

No conditions
attached

No conditions
attached

No period specified

No period specified

No period specified

No period specified

No period specified

July 23, 2018 –July 22, 2023

July 23, 2018 –July 22, 2023

July 23, 2018 –July 22, 2023

October 14, 2018 –October 13, 2023

October 14, 2018 –October 13, 2023

Service period
Exercisable period

Nomura Real Estate Holdings, Inc.
FY2016

Recipients

Type/number of shares
reserved (Note)
Grant date

Nomura Real Estate Holdings, Inc.
FY2014

Recipients

Type/number of shares
reserved (Note)
Grant date
Vesting conditions
Service period
Exercisable period

Vesting conditions
1st issue of stock options

2nd issue of stock options

Directors of the Company(6 persons)

Directors and executive  officers of the Company’s
subsidiaries (72 persons)Common stock:40,700 shares

Common stock:
194,400 shares

3rd issue of stock options

Directors of the Company(6 persons)
Directors and executive  officers of the Company’s
subsidiaries (72 persons)
Employees of the Company’s
subsidiaries (187 persons)Common stock:352,300 shares

July 23, 2014

July 23, 2014

July 23, 2014

No conditions attached

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 23, 2016 –July 22, 2021

July 23, 2016 –July 22, 2021

July 23, 2016 –July 22, 2021

Service period
Exercisable period

FY2017

Recipients

Type/number of shares
reserved (Note)
Vesting conditions
Service period
Exercisable period

45

Financial Report 2019

2nd issue of stock options

3rd issue of stock options

Directors and executive  officers of the Company’s
subsidiaries (83 persons)

Directors of the Company(6 persons)
Directors and executive officers of the Company’s subsidiaries(83 persons)
Employees of the Company’s
subsidiaries (226 persons)Common stock:
56,700 shares

Common stock:250,300 shares

Common stock:421,800 shares

July 22, 2016

July 22, 2016

July 22, 2016

No conditions attached

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 22, 2019 –July 21, 2024

July 22, 2019 –July 21, 2024

July 22, 2019 –July 21, 2024

Nomura Real Estate Holdings, Inc.

Grant date

Nomura Real Estate Holdings, Inc.

1st issue of stock options

Directors of the Company(6 persons)

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Directors of the Company(6 persons)

Directors and executive
officers of the Company’s
subsidiaries (90 persons)

Directors of the Company(6 persons)
Directors and executive
officers of the Company’s
subsidiaries (90 persons)
Employees of the Company’s
subsidiaries (241 persons)Common stock:39,800 shares

Common stock:
228,300 shares

Common stock:456,400 shares

July 21, 2017

July 21, 2017

July 21, 2017

No conditions attached

No conditions attached

No conditions attached

No period specified

No period specified

No period specified

July 21, 2020 –July 20, 2025

July 21, 2020 –July 20, 2025

July 21, 2020 –July 20, 2025

Nomura Real Estate Holdings, Inc.

46

Financial Report 2019

Nomura Real Estate Holdings, Inc.

Nomura Real Estate Holdings, Inc.

FY2018

Recipients

Type/number of shares reserved (Note)
Grant date
Vesting conditions
Service period
Exercisable period

1st issue of stock options

2nd issue of stock options

Directors of the Company(5 persons)

Directors and executive officers of the Company’s subsidiaries(36 persons)Common stock:
10,700 shares

Common stock:
49,400 shares

July 19, 2018

July 19, 2018

No conditions attached

No conditions attached

No period specified

No period specified

July 19, 2021 –July 18, 2026

July 19, 2021 –July 18, 2026

Note: Described in terms of the number of shares.

FY2012

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Previous fiscal year end

—

—

—

Granted———Forfeited———

Vested:———End of the year———
67,900Non-vested: (shares)

Vested: (shares)
Previous fiscal year end

8,400

38,300

Vested:———Exercised—

23,60019,700Forfeited
End of the year

4. Scale of offer and status of changes

—

—

700

8,400

14,70047,500(1) Number of stock options
Nomura Real Estate Holdings, Inc.

Nomura Real Estate Holdings, Inc.

FY2011FY20133rd issue of stock options

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Non-vested: (shares)

Non-vested: (shares)
Previous fiscal year end—

Previous fiscal year end

—

—

—

Granted—Granted———Forfeited—

Forfeited———

Vested:—Vested:———End of the year—

End of the year———
234,300

Vested: (shares)

Vested: (shares)
Previous fiscal year end

29,000

Vested:—Previous fiscal year end

6,400

38,300

Vested:

—

—

—

—

8,900

8,300

Exercised

19,800Exercised

Forfeited

9,200

Forfeited

End of the year—

End of the year

—

—

7,200

6,400

29,400218,800

Nomura Real Estate Holdings, Inc.
FY2014

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Previous fiscal year end

—

—

—

Granted———Forfeited———

Vested:———End of the year

—

—

—

29,900104,100

237,300

—

—

—

6,500

33,40019,900Non-vested: (shares)

Vested: (shares)
Previous fiscal year end
Vested:Exercised
Forfeited
End of the year

Nomura Real Estate Holdings, Inc.

47

Financial Report 2019

—

—

5,200

23,40070,700212,200

Nomura Real Estate Holdings, Inc.

48

Financial Report 2019

Nomura Real Estate Holdings, Inc.

Nomura Real Estate Holdings, Inc.
1st issue ofstock options

FY2015

2nd issue ofstock options

3rd issue of stock
options

4th issue ofstock options

5th issue ofstock options

Non-vested: (shares)
Previous fiscal year end——

350,300—

23,000Granted

—

—

—

—

—

Forfeited

—

—

3,000

—

—

Vested:——347,300——

End of the year

—

—

—

—

23,00035,700157,500

25,800

4,000

—

—

—

347,300—

23,000Exercised

7,900

65,500

1,600

2,800

—

Forfeited

—

—

1,000

—

—

27,80092,000370,500

1,200

23,000

Vested: (shares)
Previous fiscal year end
Vested:End of the year

2nd issue of stock options

3rd issue of stock options

Non-vested: (shares)
Previous fiscal year end——

410,000

Granted———Forfeited

—

—

4,000

Vested:———End of the year——

406,000

Vested: (shares)
56,700250,300

7,600

Vested:———Exercised———

Forfeited———

56,700250,300

7,600

End of the year

2nd issue of stock options

Previous fiscal year end——

Granted

10,70049,400Forfeited——

Vested:——10,70049,400Previous fiscal year end——

Vested:——Exercised——

Forfeited——

End of the year——

End of the year
Vested: (shares)

Nomura Real Estate Holdings, Inc.
1st issue of stock options

Previous fiscal year end

1st issue of stock options

Non-vested: (shares)(2) Unit price data

Nomura Real Estate Holdings, Inc.
FY2016FY2018FY2011

3rd issue of stock options

Exercise price (¥)

1,457

Average price upon exercise (¥)

2,425

Fair value on grant date (¥)

315

Nomura Real Estate Holdings, Inc.
FY2012

1st issue of stock options

Exercise price (¥)

2nd issue of stock options

3rd issue of stock options

1

1

1,451

—

2,159

2,282

1,283

1,283

454

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Average price upon exercise (¥)
Fair value on grant date (¥)

Nomura Real Estate Holdings, Inc.
FY2013

Nomura Real Estate Holdings, Inc.
FY2017

Exercise price (¥)
1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Previous fiscal year end——

Granted———Forfeited

—

—

5,000

Vested:———End of the year——

450,400

Non-vested: (shares)
455,400

Vested: (shares)
Previous fiscal year end

39,800228,300

1,000

Vested:———Exercised———

Forfeited———

39,800228,300

1,000

End of the year

Financial Report 2019

2,429

—

2,133

2,662

2,297

2,297

675

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Fair value on grant date (¥)

Nomura Real Estate Holdings, Inc.
FY2014

Exercise price (¥)

1

1

2,016

Average price upon exercise (¥)

2,446

2,183

2,504

Fair value on grant date (¥)

1,718

1,718

371

Nomura Real Estate Holdings, Inc.
1st issue ofstock options

Exercise price (¥)

49

1

Average price upon exercise (¥)

FY2015

Nomura Real Estate Holdings, Inc.

1

2nd issue ofstock options

3rd issue ofstock options

4th issue ofstock options

5th issue ofstock options

1

1

2,741

1

Average price upon exercise (¥)

2,320

2,332

2,409

2,140

—

Fair value on grant date (¥)

2,260

2,260

516

2,085

536

Nomura Real Estate Holdings, Inc.

50

Financial Report 2019

2,355

Nomura Real Estate Holdings, Inc.
FY2016

1st issue of stock options

2nd issue of stock options

3rd issue of stock options

Exercise price (¥)

1

1

1,927

Average price upon exercise (¥)

—

—

—

1,593

1,593

377

Fair value on grant date (¥)

25. Business Combinations
Business combinations by acquisition
I. Consolidation of lothbury investment management group limited and 11 other companies
1. Outline of business combination(1) Name of the acquired company and the descriptions of its business
Name: Lothbury Investment Management Group Limited (“Lothbury”) and 11 other companies

Nomura Real Estate Holdings, Inc.
FY2017

1st issue of stock options

Exercise price (¥)

2nd issue of stock options

1

Average price upon exercise (¥)
Fair value on grant date (¥)

1

3rd issue of stock options

Description of business: Investment management

2,400

—

—

—

(2) Main reasons for the business combination

1,839

1,839

399

Lothbury has outstanding capabilities in investment management in the U.K., and is highly regarded by institutional investors
in the U.K. as well as in other countries overseas. By collaborating with Lothbury, the Company will advance its global business in investment management, such as to contribute to institutional investors in their global investment in real estates.

Nomura Real Estate Holdings, Inc.
FY2018

1st issue of stock options

2nd issue of stock options

Exercise price (¥)

1

1

Average price upon exercise (¥)

—

—

2,029

2,029

Fair value on grant date (¥)(3) Date of the business combination
November 30, 2018(4) Legal form of the business combination
Acquisition of equity interest in exchange for cash consideration

5. Method for estimating per share fair value of stock options
The per share fair value of the stock options granted during the fiscal year ended March 31, 2019 (FY2018) was estimated(5) Name of the entity after the business combination

as follows:

No change(1) Valuation technique used: Black-Scholes method(6) Ratio of acquired voting rights(2) Main base data and estimation methods

75%

Nomura Real Estate Holdings, Inc.

(7) Main rationales for determining the acquiring company

Expected volatility of theshare price (Note 1)
Expected remaining life of
the option (Note 2)
Expected dividend(Note 3)

Nomura Real Estate Holdings, Inc.
1st issue of FY2018 stock options

Nomura Real Estate Holdings, Inc.
2nd issue of FY2018 stock options

32.58%

32.58%

5.5years

5.5years¥75 ($0.68)
per share¥75 ($0.68)
per share

0.00%

0.00%

Risk-free interest rate
(Note 4)

Notes: 1. Calculated based on the actual stock price for five years and six months (from January 2013 to July 2018).
2.	Calculated with an assumption that the stock option is exercised at the middle of the exercise period as the Company does not have sufficient data for amore precise estimation.
3. Based on the expected dividend for the fiscal year ended March 31, 2019 at the grant date.
4.	Based on the yield of Japanese government bonds for the period equivalent to the expected remaining life of the option.

LIM HOLDINGS LTD, a consolidated subsidiary of the Company, acquired the equity interest of the acquiree in exchange forcash consideration.
2. Period of the acquired company’s financial results included in the consolidated financial statements
From December 1, 2018 to December 31, 2018
3. Acquisition costs of the acquired company and breakdown by type of consideration
Cash and deposits
Acquisition costs¥5,539 million ($49,910 thousand)¥5,539 million ($49,910 thousand)4. Description and amount of major acquisition-related expenses
The information has been omitted due to its effect to the consolidated statement of income for the fiscal year ended March
31, 2019 being minor.

6. Estimation of the number of vested options
The estimation of the number of vested options is made based on the actual number of forfeited options due to difficulty in

5. Amount of incurred goodwill, reasons, amortization method and periodreasonably estimating future forfeitures.

(1) Amount of goodwill¥1,311 million ($11,819 thousand)(2) Reasons for goodwill
The acquisition costs of the acquired company exceeded the market value of the net assets of the acquired company at thetime of the business combination. As such, the Company accounted for the difference as goodwill.

Nomura Real Estate Holdings, Inc.

51

Financial Report 2019

Nomura Real Estate Holdings, Inc.

52

Financial Report 2019

(3) Amortization method and period of goodwill(6) Ratio of acquired voting rights

The straight-line method over 20 years

100%

6. T
 he amount of total assets acquired and total liabilities incurred on the day of the business combination and(7) Main rationales for determining the acquiring company
Nomura Real Estate Development Co., Ltd., a consolidated subsidiary of the Company, acquired the equity interest of thetheir major breakdowns(Millions of yen)(Thousands of U.S. dollars)¥1,337
4,972¥6,310$12,054
44,802$56,857(Millions of yen)(Thousands of U.S. dollars)¥  470824¥1,295$ 4,2437,432$11,675

Current assets
Non-current assets
Total assets

Current liabilities
Non-current liabilities
Total liabilities

acquire in exchange for cash consideration.
2. Period of the acquired company’s financial results included in the consolidated financial statements
From March 1, 2019 to March 31, 2019
3. Acquisition costs of the acquired company and breakdown by type of consideration
Cash and deposits
Acquisition costs¥18,257 million ($164,497 thousand)¥18,257 million ($164,497 thousand)4. Description and amount of major acquisition-related expenses
7. The amount of acquisition cost allocated to intangible assets other than goodwill, breakdown by major type, andAdvisory fees etc.

¥617 million ($5,564 thousand)weighted-average amortization period in total and by major type
Customer-related assets
Total¥4,814 million ($43,376 thousand)¥4,814 million ($43,376 thousand)20 years
20 years

5. Amount of incurred goodwill, reasons, amortization method and period(1) Amount of goodwill¥761 million ($6,863 thousand)

8. Estimated amount and calculation method of the impact on the consolidated statement of income for the fiscal
year ended March 31, 2019 assuming that the business combination had been completed at the beginning of the(2) Reasons for goodwill

fiscal year

The acquisition costs of the acquired company exceeded the market value for the net assets of the acquired company at the

The information has been omitted due to its effect to the consolidated statement of income for the fiscal year ended Marchtime of the business combination. As such, the Company accounted for the difference as goodwill.

31, 2019 being minor.
(3) Amortization method and period of goodwill
II. Ryubundo Co., Ltd. and one other company

The straight-line method over 20 years

1. Outline of business combination(1) Name of the acquired company and the descriptions of its business
Name: Ryubundo Co., Ltd. and one other company

6. T he amount of total assets acquired and total liabilities incurred on the day of the business combination andtheir major breakdowns

Description of business: Hotel management, etc.
(2) Main reasons for the business combination
By combining the strength in the base of hotel guests, abundant know-how and human resources available in hotel manage-

Current assets
Non-current assets
Total assets(Millions of yen)(Thousands of U.S. dollars)¥ 2,22124,069¥26,290$ 20,010
216,859$236,869(Millions of yen)(Thousands of U.S. dollars)¥1,0407,753¥8,794$ 9,376
69,859$79,235

ment that are highly acclaimed by the market, and the Company’s expertise in land acquisition and development, it isexpected that the Group as a whole will strengthen its development and management capabilities in the hotel business.
Current liabilities
Non-current liabilities
Total liabilities(3) Date of the business combination
March 1, 2019(4) Legal form of the business combination

7. E
 stimated amount and calculation method of the impact on the consolidated statement of income for the fiscal

Acquisition of equity interest in exchange for cash consideration

year ended March 31, 2019 assuming that the business combination had been completed at the beginning of the
fiscal year(5) Name of the entity after the business combination

The information has been omitted due to its effect to the consolidated statement of income for the fiscal year ended March

No change

31, 2019 being minor.

Nomura Real Estate Holdings, Inc.

53

Financial Report 2019

Nomura Real Estate Holdings, Inc.

54

Financial Report 2019

26. Information on Related Parties(2) Transactions between consolidated subsidiaries of the Company and related parties
Officers, major individual shareholders and others of the Company
Previous fiscal year (From April 1, 2017 to March 31, 2018)

1. Transactions with related parties(1) Transactions between the Company and related parties
Officers, major individual shareholders and others of the Company

Type

Previous fiscal year (From April 1, 2017 to March 31, 2018)

Type

Name

LocationTransaction details

Items

The companies in which close
K.K. Kotobuki Fudosan
relatives of officers(Note 3)holding the majority of voting rights

Exercise ofstock options

Exercise ofstock options

14

—

—

—

—

President of Nomura Real Estate Partners Co., Ltd.

Held
0.0%

Exercise ofstock options

Exercise ofstock options

14

—

—

—

Director and Chairman of the Board of NREG TOSHIBABUILDING Co., Ltd.

Held
0.0%

Exercise ofstock options

Exercise ofstock options

14

—

—

—

Director of Nomura Real Estate Urban Net Co., Ltd.

Held
0.0%

Exercise ofstock options

Exercise ofstock options

Held
0.0%

Exercise ofstock options

Exercise ofstock options

13

—

—

Officers of major
Masaharu Shino
subsidiaries

—
—

13

—

—
Type

Name

Location

Stated capitalor capital
contribution(Millions of yen)

Description of businessor profession

Voting rights
holdingor held (%)

Masaomi Katayama——

Officers of major
subsidiaries

Kenichi Maeda——

President of Nomura Real Estate Urban Net Co., Ltd.

Held
0.0%

Exercise ofstock options

Exercise ofstock options

10

—

—

Officer

Officer

Seiichi Miyajima——

Executive Vice President of the Company

Held
0.0%

Exercise ofstock options

Exercise ofstock options

10

—

—

Officer

Haruhiko Nakamura——

Executive Officer of the Company

Held
0.0%

Exercise ofstock options

Exercise ofstock options

Notes 1. Amount of transaction does not include consumption taxes.
2. Transaction price and terms of payment are similar to generally accepted practices

¥10

—

—

Voting rights
holdingor held (%)

Relationship with
the Company

Transaction
details

Exercise ofstock options

Exercise ofstock options

Amount oftransaction(Millions of yen)Amount oftransaction(Thousands of
U.S. dollars)

Items

Fiscalyear-endbalance(Millionsof yen)—Executive Officer of the Company

Held
0.0%

¥22

$203

—

—

—

—

Executive Officer of Nomura Real Estate Development Co., Ltd.

Held
0.0%

Exercise ofstock options

Exercise ofstock options

17

158

—

—

Officers of major
Hiroyasu Yoshida subsidiaries——

President of NREG TOSHIBA BUILDING Co., Ltd.

Held
0.0%

Exercise ofstock options

Exercise ofstock options

13

125

—

—

Officer——

Executive Vice President of the Company

Held
0.0%

Exercise ofstock options

Exercise ofstock options

11

100

—

—

Officers of major
Hiroshi Kurokawa
subsidiaries——

Managing Executive Officer of Nomura Real Estate Development
Co., Ltd.

Held
0.0%

Exercise ofstock options

Exercise ofstock options

11

99

—

—

Officer——

Executive Officer of the Company

Held
0.0%

Exercise ofstock options

Exercise ofstock options

¥10

$ 92

—

—

Officer

Minoru Hatada

Officers of major
Shingo Iwakiri subsidiaries

Toshiaki Seki

Masaomi Katayama—

Transaction
details

55

Financial Report 2019

Items

Fiscalyear-endbalance(Millionsof yen)

—

Held
0.0%

Real estate sales

Real estate sales

¥86

$780

—

—

—

Executive Officer of the Company

Held
0.0%

Real estate sales

Real estate sales

¥79

$712

—

—

Notes: 1. Amount of transaction does not include consumption taxes.
2. Stock options were granted by the Company pursuant to the Companies Act.

Nomura Real Estate Holdings, Inc.

Amount oftransaction(Thousands of
U.S. dollars)

Executive Officer of Nomura
Real Estate Partners Co., Ltd.

Not applicable for the fiscal year ended March 31, 2019.

Current fiscal year under review (From April 1, 2018 to March 31, 2019)

Description of businessor profession

Katsuya Tanaka

Relationship with
the Company

Amount oftransaction(Millions of yen)

27. Subsequent Events

Notes: 1. Amount of transaction does not include consumption taxes.
2. Stock options were granted by the Company pursuant to the Companies Act.

Location—

Current fiscal year under review (From April 1, 2018 to March 31, 2019)

Officers of major
subsidiaries

Name

—

Notes: 1. Amount of transaction does not include consumption taxes.
2. Transaction price and terms of payment are similar to generally accepted practices.
3. Close relatives of Hideki Saito, Executive Officer of the subsidiary of the Company, own the majority of the voting rights.

Managing Executive Officer of Nomura Real Estate
Development Co., Ltd.

Type

¥32

Real estate
brokerage

Held
0.0%

Stated capitalor capital
contribution(Millions of yen)

Real estate
brokerage—

Managing Executive Officer of Nomura Real Estate Urban
Net Co., Ltd.

——Real estate

—

—

—

1

—

Yuji Kurokawa¥73

Kodaira
City,
Tokyo

—

Officers of major
subsidiaries

Transaction details

—

—

Items

Fiscalyear-endbalance(Millions of yen)

Selling condominiums and optional
construction—¥17

Amount oftransaction(Millions of yen)

Relationship with
the Company——

Yoshitaka Noguchi

Description of businessor profession—

Exercise ofstock options

Officers of major
subsidiaries

Masayuki Nakayama

Relationship with
the Company

Fiscalyear-endbalance(Millions of yen)

Exercise ofstock options—

Officers of major
subsidiaries

Description of businessor profession

Amount oftransaction(Millions of yen)

Voting rights
holdingor held (%)

Selling condominiums and optional
construction

Close relatives of
Hiroyuki Kimura

Held
0.0%

Seishi Miyajima

Tatsuo Inoue

Voting rights
holdingor held (%)

Location

Director and Chairman of the Board of Nomura Real Estate
Urban Net Co., Ltd.

Officers of major
subsidiaries

Officers of major
subsidiaries

Stated capitalor capital
contribution(Millions of yen)

Close relatives
of officers

Name

Stated capitalor capital
contribution(Millions of yen)

Nomura Real Estate Holdings, Inc.

56

Financial Report 2019

Independent Auditors’ Report

Nomura Real Estate Holdings, Inc.

57

Financial Report 2019