Integrated Report 2022

Initiating the Nomura Real EstateGroup’s Future Plan
Nomura Real Estate Group (“the Group”) has formulated Nomura Real Estate Group
2030 Vision “Be a ‘Life & Time Developer,’ as never seen before.”
Under this vision, we will realize high profit growth, and high asset and capital efficiency
during the period of the Group’s Mid- to Long-term Business Plan (FY2023/3 - FY2031/3).
In addition, we have established our Sustainability Policy, named “Earth Pride,”which outlines our vision for 2050 by viewing social changes, such as climate change andthe diversification of values, as new growth opportunities.
Along with this policy, the Nomura Real Estate Group will take steps toachieve ambitious growth targets and unprecedented value creation to realize
our Group Vision: “New Value, Real Value.”

The Nomura Real Estate Group Vision for 2030

Nomura Real Estate Group has always
connected closely with customers’ lives and time,through real estate development andreal estate-related services.
Now, as we confront various social issues,
as well as diversified lifestyles and values,
we must change ourselves.
To enrich people’s respective lives andevery moment of their time, we willtransform ourselves into a “Life & Time Developer”
that creates new, significant values on
a global scale.

Integrated Report 2022

1

Life

to solve Japan’s housing
1957 Aimed
shortage, a social issue during the& Timepostwar reconstruction period

The Group was established in 1957 with the construction of a new head
office building for Nomura Securities. The Group subsequently took its firststep as a real estate developer by joining new large-scale urban development
projects, starting with the development of the Kajiwarayama residential
area (Kamakura City, Kanagawa Prefecture), aimed at solving the housing
shortage, which had become a serious issue following the end of World War
II. Dedicated to focusing on the needs of individual customers since its foundation, the Company developed the housing trust system, a pioneer oftoday’s housing loan, at a time when most residential purchases were madeusing short-term loans. The system provided a 10-year installment payment
plan and helped to supply high-quality housing to many customers.

To enrich people’s respective lives,
we create a foundation for living,create a foundation for cities.
Our residential development business was launched to help solve
Japan’s housing shortage following World War II.
With the principle of taking a “client-first approach” upheld in
the Group’s action guideline, we have developed “our approach to connect closelywith individuals” by adopting this attitude since the foundation of the Company.
By adhering to this approach and viewing various social issues asopportunities for growth, we have continued to enrich people’s lifestyles bybuilding the physical foundations of their lives and communities.
Our approach to connect closely with individuals, that is established in the GroupScenery of Nihonbashi (Tokyo) at the time of its founding

The Kajiwarayama residential area (Kamakura City, Kanagawa Pref.)Even now, communities face a number of social issues related to housing,including safety issues due to the aging of buildings and high concentrationsof wooden houses in certain neighborhoods. Harnessing our expertise built
up over 60 years as a real estate developer, as well as the trust of our customers and society, the Group has continued to engage in the developmentof urban areas where people can live safely and comfortably. We have done
this using various development methods including redevelopment andrebuilding business. Our track record of developing a total of approximately
181,000 units of housing is a testament to the Company’s long history of
supporting people’s lives.

P32

Rebuilding ofcondominiums

Land
readjustment
projects

Renovation of
condominiums

Legal
redevelopment

Over 60 years of developed properties
Cumulative number ofhousings supplied: approx.

181,000 units*
2

Nomura Real Estate Holdings, Inc.

* As of March 31, 2022

Integrated Report 2022

3

Life &

2002

Providing residents with some of
their “Greatest Moments at Home,”
where the longer they live in theirhome, the more they love it
PROUD, which was launched in 2002 as an integrated brand for housing products and related services, upholds the brand mission of “Greatest Moments at
Home.” Guided by this mission symbolizing the Group’s approach to connect
closely with individuals and enrich every moment of their time, the cumulative
number of PROUD housing units supplied amounts to approximately 74,000.
Among other factors, the COVID-19 pandemic has made the time spent athome more important than ever. Focused on providing residents of PROUD
residences with some of their greatest moments at home, where the longer they
live in their home, the more they love it, the Group’s residential development has
further solidified our position as the top residential brand.

LivingWe connect closely withpeople living, working, andgathering to enrich every
moment of their time.
PROUD, whose brand mission is “Greatest Moments at Home,”
has long been beloved by our customers.
As exemplified by PROUD, we have endeavored to enrichevery moment of a person’s time, not only when they are athome but also when they work and gather in their community.
By imagining every moment of such time and connect closelywith individuals, we aim to provide our customers with
unprecedented enjoyment of every moment.

PROUD Kugayama

Cumulative number of housings supplied: approx.74,000 units*1
Brand ranking: No.1 for 15th consecutive year *2

HUMAN FIRST workstyles
2020 Promotingwith a focus on each individual’s time
Amid the transformation of workstyles as a result of the evolution of digitaltechnologies and AI, the Group has been tackling new challenges under the
HUMAN FIRST concept which put importance on every individual worker.
To realize HUMAN FIRST workstyles that will lead to the maximization of
performance, we want to help every worker feel comfortable at all times,
wherever they are. The Office Portfolio Strategy for tenants, in which we
propose a combination of office types to meet a variety of tenant needs,
has been driving a shift away from the conventional office.

Large-sized officeWorking

Number of developed
properties:

70 properties*

1

Number of developed
properties:

15 properties*

1(including types that incorporated
in developed property’s floors)

4

Nomura Real Estate Holdings, Inc.

*1. As of March 31, 2022 (number of developed properties includes planning properties)*2. Calculated by the Group for the number of years in which “PROUD” received the largest number of
evaluation categories in the Condominium Brand Survey conducted by Nikkei, Inc.

Number of developed
properties:

216 offices*1(including affiliated offices)

Integrated Report 2022

5

Our Group Vision“New Value, Real Value”
Earth Pride

Sustainability Policy

Earth PridePursuing
humanity

Maintaining harmony
with nature

Building thefuture together

We strive to answer the deep questions ofhuman existence and well-being in a world
where technology is increasingly progressing and being integrated into our lives.
By providing an inclusive living environment where people support and connect
with each other, we contribute to thecreation of a society where no one will beleft behind.

Our aim is to achieve true harmony
with our natural environment for our
future children and healthy ecosystems
by reconsidering how human economic
activities should operate.
While carefully conserving the Earth’s
finite resources, we improve therelationship between nature andhumans.

The ambition we have is to create unprecedented value from diverse organizations andpeople working together to overcome
boundaries.
We are continuously challenging ourselveswith novel ideas of living, business andworking styles for an innovative society
where all people with various backgrounds
and values can build on their strengths.

Priority Issues (materiality) by 2030

Society and employees

Climate change and natural environment

Diversity &inclusion

Decarbonization

Human rights

Biodiversity

Circular design

Launch of the Shibaura Project
The Shibaura Project is a qualified project of the National Strategic Special Zone Plan and a large-scale mixed-use development that includes offices, a hotel, residences, and retail facilities, with a gross floor area of approx. 550,000 m2.This
iconic sustainable urban development project aimed at realizing net-zero CO2 emissions for the entire district embodies the
Nomura Real Estate Group 2030 Vision, “Be a ‘Life & Time Developer,’ as never seen before,” and “Earth Pride” vision of 2050.
In addition, by consolidating the Group’s head offices, we plan to foster an organizational culture across theGroup that will allow us to take on more challenges than ever before. By realizing a new way of working in which eachworker designs his or her own day while enjoying the sky, sea, and greenery of central Tokyo, we aim to evolve andtransform ourselves into a new type of developer, not just of real estate but of “Life & Time.”
Large-scale mixed-use development with gross floor area ofapprox. 550,000 m2 (office, retail facility, hotel, residence)

6

Nomura Real Estate Holdings, Inc.

* New workstyle for the current era in which the working environment and ways of working have changed

Propose a new workstyle:TOKYO WORKation*

Realize net-zero CO 2 emissions forthe entire district

Integrated Report 2022

7

Nomura Real Estate Group
in numbers (FY2022/3)

Portfolio Developing Diverse Businesses
Residential Development
Business Unit

The Group aims for high growth, high asset and capital efficiency, and high shareholder returns throughcollaboration between the Development Sector and the Service & Management Sector.

¥309.2 billion (46.1%)

Operatingrevenue*3

Total

Achieve Sustainable Growth (Comparison of last 10 years)
Operating revenue¥

645.0 billion(Billions of yen)
700
600

¥

92.7 billion(Billions of yen)
100

645.0
approx.
1.4 times

80

500

¥

92.7

300

approx.

250
200

49.9

40

307.81300

1.9 times

50

100
0

0

FY12/392.38

0FY22/3

FY12/3

FY22/3billion

FY12/3

FY22/3Total
assets¥2,040.5 billion¥

1,022.7 billion

Business
profit*1,3¥202.4 billion (30.2%)

Overseas Business Unit

¥38.5 billion (38.6%)

Overseas Business Unit

Total

¥2.6 billion (0.4%)

Investment Management
Business Unit¥

¥12.8 billion (1.9%)
Property Brokerage & CRE
Business Unit

¥43.7 billion (6.5%)

Property & Facility Management
Business Unit

¥0.2 billion (0.3%)

92.7

Investment Management
Business Unit

¥7.8 billion (7.8%)
Property Brokerage & CRE
Business Unit

billion¥11.7 billion (11.7%)

Property & Facility Management
Business Unit

¥99.2 billion (14.8%)¥9.2 billion (9.2%)

Other

Other

¥0.1 billion (0.0%)-¥0.1 billion (-0.2%)

Commercial Real EstateBusiness Unit

Overseas
Business Unit

Number of housing units soldNet lettable area

Participated projects(Results for the FY22/3)(As of March 31, 2022)(As of March 31, 2022)

790,000 m

approx.

37projects

2 *4

Cumulative number of
PROUD housings supplied

Number of properties
developed for sales

Estimated total project cost(our share)(As of March 31, 2022)(As of March 31, 2022)(As of March 31, 2022)

74,000 units

approx.
Interestbearing
debt

Commercial Real EstateBusiness Unit

Development Sector (Value creation through real estate development)

4,329units

100
20

645.0

¥32.5 billion (32.6%)

Commercial Real EstateBusiness Unit

Residential Development
Business Unit

approx.
3.3 times

150

200

¥

307.81

(yen)
350

60

450.8

400

Basic earnings per share(EPS)

Business profit*1

Residential Development
Business Unit

286 units

Major brands, etc.

*5554.0 billion

approx. ¥Major brands, etc.

Realize Both High Asset and Capital Efficiency and High Shareholder Returns
ROA*2

Total return ratio*2

ROE*2

4.7 %

9.2%

44.3 %

Last 3 years average 4.5%

Last 3 years average 8.6%

Last 3 years average 45.2%

8

Ratingevaluation

Number of consolidated
employees

ESG index selection
adopted by GPIF

30.3 %

A A-

7,548

5 5 indices

Nomura Real Estate Holdings, Inc.

/

*1. Business profit = operating profit + equity in earnings of affiliates + amortization of intangible
fixed assets arising from corporate acquisitions. Figures for FY12/3 are operating income.
*2. See P130-131 for formulas for each indicator.

Property Brokerage & CRE
Business Unit

Property & Facility Management
Business Unit

Assets under management(AUM)

Number of property
brokerage transactions

Number of housings
under management(As of March 31, 2022)(Results for the FY22/3)(As of March 31, 2022)

1.9trillion

Shareholders’equity ratio(R&I)

Investment Management
Business Unit

approx. ¥Foundation for Growth / External Evaluation(JCR)

Service & Management Sector (Value creation through provision of real estate-related services)

10,081

186,000 units

approx.

Number of institutional
investor clients

Number of nomu.com
members

Number of buildings
under management(As of March 31, 2022)(As of January 31, 2022)(As of March 31, 2022)

235

Major brands, etc.

approx.

255,000

772 units

Major brands, etc.

*3. The composition ratio is calculated based on the simple sum of each item and rounded to the first decimal place, so the total may not add up to 100%. In addition, the total
displayed in the center of the pie chart includes the amount of “Elimination or corporate” in segment information, so it differs from the total sales or business profit of each Business Unit.
*4. The total net lettable area of offices and retail facilities owned by the Group over the long term
*5. Number of properties developed for sales includes planning properties.

Major brands, etc.

Integrated Report 2022

9

Our Group Vision “New Value, Real Value”

Composition of the Integrated Report 2022

Integrating all that is precious to people and communities,

Towards achieving the Group Vision, “New Value, Real Value,” the Nomura Real Estate Group upholds the Nomura
Real Estate Group 2030 Vision and the Sustainability Policy and takes steps to deliver sustainable growth by integrating sustainability into its business.
The Integrated Report 2022 is divided into sections titled “Vision of Nomura Real Estate Group,” “Sources ofCompetitiveness,” “Growth Strategy,” and “Governance” to provide easy-to-understand explanations of the Group’s
value creation process.

we build cities—dynamic stages that connect today with tomorrow’s possibilities,
and embrace every moment of life’s pursuits.
We create new value, social value, and, above all, real value.

Value creation model

See P28-29 for the Value Creation Process, which explains more detail about the Group’s value creation.

Our Group Vision “New Value, Real Value”
Editorial policy

Nomura Real Estate Group 2030 VisionThis integrated report is published in order to foster understanding and serve as a tool for a deeper dialogue amongshareholders, investors, and other stakeholders of the Nomura Real Estate Group. It explains the Group’s
approaches, strategies, and specific measures toward the creation of mid- to long-term value (social value and economic value) by giving consideration to the external environment and linking financial and non-financial information.
In this report, we endeavor to explain the concept of value creation driven by “our approach to connect closely withindividuals,” which is established in the Group, and “our unique initiatives.” We also share our growth strategy, which
combines our business strategy with sustainability initiatives and solid profit growth, based on our new Mid- to Longterm Business Plan announced in April 2022, the Nomura Real Estate Group 2030 Vision, and the Sustainability Policy.
The editing and layout of this report follow guidelines such as the International Integrated Reporting Framework of
the Value Reporting Foundation (VRF) and the Guidance for Integrated Corporate Disclosure and Company–Investor
Dialogues for Collaborative Value Creation of the Ministry of Economy, Trade and Industry. In addition, feedback andrequests raised during dialogues with investors have been also incorporated.
Referenced guidelines

Period covered by the report

Forward-looking statements

Global Reporting Initiative (GRI) Standards
ISO 26000–Guidance on Social Responsibility
Value Reporting Foundation (VRF)
Integrated Reporting Framework
Guidance for Integrated Corporate Disclosure andCompany–Investor Dialogues for Collaborative Value
Creation of the Ministry of Economy, Trade andIndustry

From April 1, 2021 to March 31, 2022
(Fiscal year ended March 31, 2022)

This integrated report contains forward-looking statements about the futureplans, strategies, and performance of Nomura Real Estate Holdings, Inc.
These forward-looking statements are not historical facts.
Rather, they are estimates, forecasts, and projections based on
information currently available to the Company and are subject to a number ofrisks and uncertainties, which include economic trends, intensification ofcompetition in the real estate industry, legal and taxation systems, and otherregulations. As such, actual results may differ from those projected.

Parts may discuss information from times
prior to this period or activities or outlooks fortimes following this period.

Scope of the report
Nomura Real Estate Holdings, Inc. andNomura Real Estate Group 23 companies

Sustainability Policy

The Mid- to Long-term Business Plan

Awareness ofthe businessenvironment

Our approachto connect
closely withindividuals,

Stakeholder
expectations andpriorities

Uniqueinitiatives

that is established in
the Group

Business assets

Management base

Information disclosure on the website
Additional information can be found on our website.
Websitehttps://www.nomura-re-hd.co.jp/english/

Business assets /Management baseFinancial information

Integrated Report• Investor relations
https://www.nomura-re-hd.co.jp/english/ir/

10Nomura Real Estate Holdings, Inc.

Earth Pride
Uniqueinitiatives

that is established in
the Group

Non-financial information

https://www.nomura-re-hd.co.jp/english/ir/ir_library/annualreport.html• Management policy• Financial information• IR library• Stock information etc.

Our approachto connect
closely withindividuals,• Company information• Business overview• Sustainability
https://www.nomura-re-hd.co.jp/english/sustainability/• Sustainability Report (PDF)
https://www.nomura-re-hd.co.jp/english/
sustainability/download/index.html

Business assets /Management base

Sources ofcompetitiveness

The Mid- to Long-term
Business Plan

The Nomura Real EstateGroup Vision for 2030

Sustainability
PolicyOver 60 years of continuous realestate development and provisionof related services have led tothe construction of solid businessassets, and have earned highpraise from stakeholders. These,
along with management basesuch as governance and risk
management, support thesustainable growth of the GroupOur unique value creation isbased on our strengths based on
an approach that connects
closely with individuals andour unique initiatives to realize
high profit growth andhigh asset and capital efficiency.

The Group’s Mid- to Long-term
Business Plan is an ambitious
and sustainable growth strategy
that integrates various elements
such as business, sustainability,
human resources, and DX.
Through this plan, we aim toachieve both high profit growth atan average annual rate of 8%
level and high shareholder
returns.

This vision clarifies what theCompany is aiming for by 2030.
We are working to transform
ourselves into company thatdevelops value as never seen
before centered on enrichingpeople’s respective lives andevery moment of their time.

This policy was formulated withthe view that changes in the
management and businessenvironment, such as climatechange, the intensification ofdisasters, and the diversificationof people's values, are newopportunities for growth.
Through the achievement ofour vision and policies, we aim
to realize our Group Vision:“New Value, Real Value.”

Integrated Report 2022

11

Part 4Governance
The explanation focuses on the governancesystem that supports sustainable growthPart 1The Vision of
Nomura Real
Estate Group

ShoichiNagamatsu

Part 2

Sources ofCompetitiveness

Eiji
KutsukakePresident andRepresentative Director
Group CEOThe explanation of the Group’s strengths,
action guidelines, and unique approach

16 CEO Message
22 History of Nomura Real Estate Group
24 Awareness of the External Environment
and Business Management System
26 Process for Formulating
the Sustainability Policy
28 Value Creation Process

32 The Group’s Strengths and Action
Guidelines That Form the Foundation
for Conducting Business Activities
34 Initiatives to Realize High Profit Growth,and High Asset and Capital Efficiency
34 1. Establishment of Value Chain within
the Group Based on Development
Capabilities
36 2. Development of Unique Brands
38 3. Continuous Value Creation throughProviding Real Estate-related Services
39 4. Accumulation and Utilization of
Knowledge Leading to
New Value Creation

Part 342 Strong Business Assets That Support
Value Creation and External Evaluation
and Results

Growth Strategy

96 Dialogue between the Chairman of the Board of
Directors and Chairman of the Advisory Committee
Relating to Nominations and Compensation
100 External Directors’ Roundtable Discussion
104 Corporate Governance
114 Sustainability Governance
116 Risk Management
120 Internal Controls, Compliance/Information Disclosure
122 Directors and Executive Officers

The explanation of growth strategies focuses on
the Mid- to Long-term Business Plan

Executive Vice President,
Representative Director
Group COO

46 COO Message
51 CFO Interview
56 Overview of the Mid- to Long-term
Business Plan (FY2023/3 - FY2031/3)

I would like to know about...

58 Profit Targets (Business profit)
59 Financial Targets
60 Financial Strategy

62 Sustainability Strategy(Climate Change and Natural Environment)
64 Roadmap to Decarbonization

68 Sustainability Strategy(Society and Employees)
70 Human Resources Strategy
12

Nomura Real Estate Holdings, Inc.

Items applicable to the Guidance for Integrated
Corporate Disclosure and Company-Investor
Dialogues for Collaborative Value Creation

90 Feature: Urban Development along with
Various People

Contents

Page

CEO Message・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・16-21
Awareness of the External Environment and Business Management System・・・・・・・・・・・・・・・・・・・・・24-25
Process for Formulating the Sustainability Policy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・26-27
Value Creation Process・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・28-29

the Group’s strengths andcompetitive edge

Business model(position in the competitive landscape)

Nomura Real Estate Group in Numbers・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・8-9
The Group’s Strengths and Action Guidelines That Forms the Foundation for
Conducting Business activities・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・32-33
Initiatives to Realize High Profit Growth, and High Asset and Capital Efficiency・・・・・・・・・・・・・・・・・34-41

the Group’s profit structure

Business model(essential elements for ensuring acompetitive advantage)

Strong Business Assets That Support Value Creation andExternal Evaluation and Results・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・42-43
COO Message・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・46-50
CFO Interview・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・51-55

Sustainability and growth(recognition of ESG factors)

CEO Message・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・16-21
Awareness of the External Environment and Business Management System・・・・・・・・・・・・・・・・・・・・・24-25
Process for Formulating the Sustainability Policy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・26-27
Relationship between Each Business and Financial/Non-financial Information・・・・・・・・・・・・・・・・・・76-77

Sustainability and growth(relationships with key stakeholders)

Sustainability Strategy (Climate Change and Natural Environment)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・62-67
Sustainability Strategy (Society and Employees)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・68-69
Human Resources Strategy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・70-71
Relationship between Each Business and Financial/Non-financial Information・・・・・・・・・・・・・・・・・・76-77
Internal Controls, Compliance/Information Disclosure・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・120-121

Sustainability and growth(risks within changing environment)

CEO Message・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・16-21
COO Message・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・46-50
CFO Interview・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・51-55
DX Strategy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・72-75
Risk Management・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・116-120
Internal Controls, Compliance/Information Disclosure・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・120-121

the Group’s
specific strategies

Strategy

COO Message・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・46-50
CFO Interview・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・51-55
Overview of the Mid- to Long-term Business Plan (FY2023/3 - FY2031/3)・・・・・・・・・・・・・・・・・・・・・・56-61
Relationship between Each Business and Financial/Non-financial Information・・・・・・・・・・・・・・・・・・76-77
Strategies by Business・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・78-89
Feature: Urban Development along with Various People・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・90-93

the Group’s indicators formeasuring the progress of
its strategies

Performance and key performanceindicators (KPIs)

Overview of the Mid- to Long-term Business Plan (FY2023/3 - FY2031/3)・・・・・・・・・・・・・・・・・・・・・・56-61
Sustainability Strategy (Climate Change and Natural Environment)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・78-89
Sustainability Strategy (Society and Employees)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・62-67
Strategies by Business・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・68-69
11-year Financial Data, Business Unit Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・130-133
ESG Data・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・134-135

the Group’s position on managing its
business portfolio and capital cost

Performance and key performanceindicators (KPIs)

Initiatives to Realize High Profit Growth, and High Asset and Capital Efficiency・・・・・・・・・・・・・・・・・・34-41
CFO Interview・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・51-55
Overview of the Mid- to Long-term Business Plan (FY2023/3 - FY2031/3)・・・・・・・・・・・・・・・・・・・・・・56-61

GovernanceDialogue between the Chairman of the Board of Directors and Chairman of
the Advisory Committee Relating to Nominations and Compensation・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・96-99
External Directors’ Roundtable Discussion・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・100-103
Corporate Governance・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・104-113
Sustainability Governance・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・114-115
Risk Management・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・116-120
Internal Controls, Compliance/Information Disclosure・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・120-121

Director,
Group CFO

Residential Development Business Unit
Commercial Real Estate Business Unit
Overseas Business Unit
Investment Management Business Unit
Property Brokerage & CRE Business Unit
Property & Facility Management Business Unit

124 Major Asset Brands
128 Major Development Projects
130 11-year Financial Data
132 Business Unit Information
134 ESG Data
136 Group Company Information
138 External Evaluation
139 Corporate Information
139 Publication of Integrated Report 2022
(Guaranteed by the Director in Charge)

ValuesHiroshi
Kurokawa

78
80
82
84
86
88

Fact Data, etc.

the Group’s values anddirection toward growth

the likelihood of
the Group achieving
sustainable growth

72 DX Strategy
76 Relationship between Each Business andFinancial/Non-financial Information
78 Strategies by BusinessPart 5

Index(Business, Sustainability, and DX)

Daisaku
MatsuoChairman of the Advisory
Committee Relating toNominations andCompensation(External Director)

Chairman of theBoard of Directors(Chair and Director)

The explanation of the Vision of the Group

Contents

TetsuroHigashithe Group’s
governance systemthat supports strategy

Integrated Report 2022

13

The Vision of
Nomura Real Estate GroupThe Group has formulated the Nomura Real Estate Group 2030 Vision,“Be a ‘Life & Time Developer’ as never seen before” andthe Sustainability Policy, “Earth Pride” (vision of 2050).
They state what type of value the Group wants to continue providing in a changing andever more complex society, one in which people’s lifestyles and values are increasingly diverse.
Achievement of the Nomura Real Estate Group 2030 Vision and the Sustainability Policy.
Both represent the goals of the Group and lead to our Group Vision “New Value, Real Value.”

Contents

Positioning of this part

16 CEO Message
22 History of Nomura Real Estate Group
24 Awareness of the External Environment andThis section presents
the vision of the Groupthrough the message
from the CEO and explains
the Nomura Real EstateGroup 2030 Vision, theSustainability Policy,
Group Vision, how theseconnect with one another,and the process of achieving
the vision and goals.

Business Management System

26 Process for Formulating the Sustainability Policy
28 Value Creation Process

14

Nomura Real Estate Holdings, Inc.

Our Group Vision “New Value, Real Value”
Nomura Real Estate Group 2030 Vision

Sustainability Policy

The Mid- to Long-term Business Plan

Awareness ofthe businessenvironment

Stakeholder
expectations andpriorities

Integrated Report 2022

15

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )CEO Message

MESSAGEWe will strive to sustainably increase
our corporate value by realizing
the Nomura Real Estate Group 2030 Vision,
Mid- to Long-term Business Planand Sustainability Policy.
President and Representative Director,
Group CEOEiji KutsukakeFirst of All
The fiscal year ended March 31, 2022 marked the final
year of Phase I (fiscal year ended March 31, 2020—fiscal
year ended March 31, 2022) of our previous Mid- toLong-term Business Plan (“the previous plan”) formulated
in April 2019. Looking back on the three years of Phase I,
although financial results declined temporarily due to theimpact of COVID-19, business profit rebounded sharply
in the year ended March 31, 2022, reaching a record
high of ¥92.7 billion, and we attained the targets of theprevious plan.
In view of the business environment surrounding theGroup, in April 2022 we launched “Be a ‘Life & Time

Developer,’ as never seen before” as our Vision targeting
2030 and commenced our new Mid- to Long-term Business Plan (“the new plan”) that runs from the fiscal year
ending March 31, 2023 to the fiscal year ending March 31,
2031. Concurrently, we announced our Sustainability
Policy “Earth Pride” as the Group’s vision of 2050 inworking toward the further growth of the Group and therealization of a sustainable society.
Guided by our Group Vision “New Value, Real Value,”
we will steadily stride ahead toward the attainment of the
new plan.

Nomura Real Estate Group Vision and Our Approach to Connect Closely with IndividualsGroup Vision and History
As in the past and in the future as well, the Group is continuously aiming to realize New Value, Real Value as theGroup Vision. This vision represents our strong desire toconnect people’s lives and their work through real estatedevelopment, as well as real estate-related services, and toconnect an affluent society and people with the future.
Looking at the history of the Group, the origins of the

16

Nomura Real Estate Holdings, Inc.

Group can be traced back to 1957, with the establishmentof Nomura Real Estate Development as an independent
entity from Nomura Securities. The company was established with the mission of developing new towns to solve
the housing shortage, which was a major social issue inJapan at the time. Driven by this desire, as early as 1963
we started undertaking the condominium business andhave continued to meet the needs of customers seeking
better lives.

Integrated Report 2022

17

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )CEO Message

We take the same approach of earnestly addressing
the needs of customers in fields other than housing andrelated services as well. Amid changes in people’s lives,
we have continued to grow by constantly listening to theneeds of each and every customer and by providing realestate development (products) and related services.

Realize High Asset and Capital Efficiency
Based on Our Strengths
Throughout every era, we have placed high value on our“market-in approach” that pinpoints customer needs
and changes in society and on “our approach to connect
closely with individuals” in response to the respective livesof people who live, work, and gather. I consider this isestablished in us amid changes in society and the era.
In keeping with these two approaches, we have provided

attractive real estate development (products) and related
services by reflecting the needs we have identified into thecreation of high-quality products and services.
We have carried out sustainable value creation bybuilding high-quality brands via a series of Group collaborations, from development (real estate acquisition, designand construction management) to sales, leasing, andproperty & facility management. These serve as theGroup’s major strengths.
Backed by these strengths, alongside providing realestate development and services we believe that continuously creating new value also encompassing DX initiatives
and pursuing high asset and capital efficiency will serveas the Group’s unique business strategy and will be afundamental factor driving our continuous growth in asociety that is expected to undergo a significant transformation in the future.

The New Mid- to Long-term Business Plan and Nomura Real Estate Group 2030 Vision
Issue Recognition as CEO andBackground of Plan Formulation
In the fiscal year ended March 31, 2022, the final year of
Phase I of the previous plan, we responded to the dramatic changes in the business environment and promoted

our business with a strong determination to achieve ourgoals. Thanks to these efforts, we attained each of ourtargets as we posted record-high business profit of ¥92.7
billion and also achieved ROA of 4.7%, ROE of 9.2%, anda total return ratio of 44.3%. We take pride in the acclaim
for these achievements that we have received from ourshareholders and other stakeholders.
On the other hand, the average annual growth rate ofbusiness profit remained stuck at around the 5% level
during the three years of Phase I and I recognized this is
an issue. Accordingly, I felt that the Group needed toformulate the new nine-year plan and to show our will inorder to achieve further profit growth toward 2030 and thestrategy for realizing growth.
As exemplified by the spread of COVID-19, Russia’s
invasion of Ukraine, and global-wide inflation, we currently live in a time when the economic environment isshifting so drastically that even looking six months into
the future is difficult. In the real estate business, theaccelerating advance of digitization in people’s daily lives
is spurring dramatic changes in their concepts of “working,” “living,” and “gathering.” This of course means thatthe needs of the real estate business are also evolving
with astonishing speed.
In such an environment, we launched the Breakthrough Project that brings together everyone fromgeneral managers to top management to address theissue of “What is needed for the Group to unite andattain further growth?” Through the Project, we held
in-depth discussions while incorporating the opinions ofexternal directors and others. During these discussions,
we concluded that we need a clear-cut “vision” of “As acorporate group, what kind of value do we want toprovide to society and our customers in the future?” toachieve further profit growth.
Our recently launched plan was formulated based onthese discussions. Under a clear “vision,” the new plancontains the ideas of officers and employees for realizing
high profit growth and raising corporate value to an evenhigher level. I am confident that this is a strong growthstory that can respond to future changes in the businessenvironment and in the real estate business.

Be a “Life & Time Developer,”as Never Seen Before
The Group’s Vision targeting 2030 is “Be a ‘Life & Time
Developer,’ as never seen before.” When formulating thisvision, we focused particularly on concepts like BHAG
(Big Hairy Audacious Goals (bold goals for the future
fortunes of the company)*) that are capable of coalescing
the awareness of all officers and employees. This vision
should unite the entire Nomura Real Estate Group andserve as a force that drives our business. Our ideas fromthis perspective are embodied in the phrase “never seen
before” and this expresses the future of the Group and themagnitude of its latent potential. For instance, in rapidly
growing Asian countries, we anticipate a future in which
we undertake new urban development “never seen
before” and a future where new technological innovations
through DX transform the shapes of housings and offices
into something “never seen before.”
Besides the generally envisioned roles of developers
such as developing real estate, building housings, andcreating urban development, “Life & Time Developer” also
incorporates our strong desire to become a group thatcreates such value by developing people’s lives and timein a broad sense.

Realize High Profit Growth andHigh Asset and Capital Efficiency
Under the new plan, we aim to realize high profit growthand high asset and capital efficiency. Owing to the characteristics of the real estate business, efforts toward profit
growth tend to cause an expansion of balance sheets.
Furthermore, developing even more-attractive products
further prolongs development times, which raises theprobability that asset and capital efficiency for an entire
company will decline. Meanwhile, in continuing on fromthe previous plan, the Company has set targets to achieve
high asset and capital efficiency during the period of the
new plan as well. As well as realizing these targets, we
aim to significantly raise profit growth to 8% level versus
annual average growth of approximately 5% during theperiod of the previous plan. The key point of the new plan
is to achieve the dual imperatives of high profit growthwith high asset and capital efficiency.
The key strategies for achieving this objective arefurther expansion of the domestic real estate development
business, high profit growth in the Service & Management
Sector, and steady growth of overseas business. We
explain details of specific strategies in Summary of theMid- to Long-term Business Plan P56-61 and in Strategies
by Business Units P78-89 of this report. We aim to further
expand profits in the property sales business, including
overseas business, and aim for high profit growth in theService & Management Sector. We will also of course
continue to provide high returns to our shareholders, ahighly acclaimed hallmark of the Group.

DX Promotion
DX promotion is another important strategy in the newplan. I have a sense of urgency that the recent advancesin digital technology could make obsolete our previous
successful business models and IT systems we have built
in a short period of time. Value creation through DX isessential for evolving the products and services the Group
provides to customers, which also includes providing
housings and offices “as a service,” to ensure that we canmaintain our competitiveness in the future. I shouldemphasize, however, that the basis of our efforts here aswell will continue to be our “market-in approach” and“our approach to connect closely with individuals” while
we work toward our goal of providing products and services that help improve the quality of life of each individual
by DX promotion.
Leveraging our existing customer base to provide newplatform services is also an important strategy. Throughits long years of business, the Group has already built awide-ranging customer base beginning with approximately 147,000 members in the Nomura Real Estate Group
Customer Club, about 186,000 housing units for which weengage in property & facility management, and around
222,000 members in our H¹T satellite-type shared offices.
This extensive customer base functions as major strengths.
In the future, we will improve the quality of life of ourcustomers and realize convenience that transcends thetangible value of real estate by providing services thatutilize enormous amounts of data to people who live andSource: “Built to Last: Successful Habits of Visionary Companies” written by Jim Collins

18

Nomura Real Estate Holdings, Inc.

Integrated Report 2022

19

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )CEO Message

work there. In this way, we will invest in DX with a focus on
business areas where we can leverage our strengths. The
Group’s specific themes, roadmaps for realization, andinvestment amounts have been generally determined by
the whole Group during discussions aimed at formulating
the new plan. In April 2021, we launched the DX Strategy
Committee and established a system for comprehensively
monitoring the initiatives of the entire Group and eachBusiness Unit.
Recruiting and training human resources in DX is alsoa major issue. To this end, we have already started
measures such as training that targets all Group officers
and employees to foster a Group-wide DX mindset andraise skill levels. Furthermore, we have launched DX
promotion organizations at each Group company, and I
am confident that we are ready to promote DX with theentire Company.

Human Resources Strategy Including
Diversity and Inclusion
I regard human resources as being the most importantmanagement capital for a company, and for this reason,
we place particular importance on human resource strategies to effectively deploy our people. The crucial point is
to secure professional human resources who possess ahigh level of expertise while creating an environment thatenables diverse human resources to play active roles andcollaborate across the Group. In other words, raising ourlevel of expertise in each field, such as housings andoffices, is extremely important. However, at the sametime, we must be sure to avoid sectionalism between
each Business Unit. This is because we foresee a growing
number of situations in which we can link various viewpoints and capabilities, such as initiatives forredevelopment and mixed-use development, overseas
business, and the promotion of DX, as we move forwardwith the new plan. I believe that human resources withhighly specialized capabilities and an abundance ofdiversity who collaborate and play active roles will lead tothe development and provision of services that will beapplauded by customers.
Even now, we are proud of being a group created byorganizations and employees with diverse backgrounds,
ideas, and perspectives. Typifying this strength is“Luxmore,” P37 a unique product development projectof PROUD that places particular emphasis on the living
comfort of customers. Developed through a project led
mainly by female employees, Luxmore integrates fiveelements that include “creating lifestyles (enriching time),“consideration of design,” and “ease of use,” making this atype of product that people wish to use for their entire
lives. More than 10 years have passed since this project
was started and during this time it has earned extensive
plaudits from customers. In general, there is a perceptionthat female employees do not play active roles in the realestate industry. In fact, however, there are rapidly expanding opportunities for them to play active roles in the Groupand we intend to further increase these opportunities in
the future.
I also believe that “inclusion” is extremely important forbecoming an organization where people mutually raise
each other up and continuously take on challenges. To
further advance this idea, in April 2022 we initiated theWellness and D&I Management Committee and in September 2022 we announced the Nomura Real EstateGroup Diversity & Inclusion Policy. Based on these, we will
make efforts for promoting wellness management anddiversity and inclusion.

the Company’s procurement guidelines. In the fiscal year
ending March 31, 2023, we are proceeding with theimplementation of human rights due diligence and will
work with even stronger determination to address humanrights issues.
Turning to decarbonization, the Group has long beenworking on environmental initiatives as an importantmanagement issue. In the future as well, we will promotevarious initiatives to achieve SBT certification targets andthe RE100 targets to achieve the Japanese government’s
goal of “the realization of carbon neutrality by 2050.”
Specifically, in addition to accelerating initiatives for
decarbonization such as ZEH (net zero energy house) andZEB (net zero energy building), we will promote othermeasures that include generating renewable energy using
rooftops of the Landport logistics facilities and the rooftops of PROUD SEASON detached housings while
reducing CO2 emissions at construction sites in cooperation with suppliers. Moreover, to ensure that management
has an even greater sense of ownership in decarbonization initiatives, from the fiscal year ending March 2023, we
introduced a system design that links executive compensation with the attainment level of the Building
Energy-efficiency Index (BEI), an indicator of the energy-saving performance of buildings. To instill our
Sustainability Policy, I believe it is important to instill ourGroup Vision in the hearts and minds of each and every
officer and employees, as well as in our business policies
as we promote various initiatives.

Importance of Corporate Governanceengage in lively discussions at the meetings of the Boardof Directors, and aim to further improve the effectivenessof the Board of Directors and establish a diverse Board of
Directors by pursuing and enhancing a form of governance befitting the Group.

For Raising Corporate Value andContributing to a Sustainable Society
Earlier, I explained the thought encapsulated in the phrase“never seen before.” I believe that the role of the CEO is tolook ahead to a future “never seen before” and “express
the directions we intend to pursue.” I recognize the importance of repeatedly communicating this so that it
permeates both inside and outside the Company.
Furthermore, to earn acclaim from shareholders, investors, and other stakeholders and to realize managementthat is aligned with the expectation from capital markets, it
is important to deepen dialogue from a short- andmedium-term perspective toward attaining quantitative
targets in addition to taking the long-term perspective
represented by the promotion of sustainability.
We have clearly set our “directions we intend to
pursue” on various time axes, such as Nomura Real
Estate Group 2030 Vision, new plan, and Sustainability
Policy. In the future as well, we will aim to raise corporate
value and contribute to a sustainable society by achieving
these goals.
I would like to ask all of our stakeholders for theircontinued support and expectations as we move toward a
new stage.

Corporate governance is also extremely important for thesustainable growth of the Group. During the process of
formulating the Nomura Real Estate Group 2030 Vision,
the new plan, and the Sustainability Policy as well, external directors participated in discussions and provided us
with numerous opinions with plentiful suggestions. We

Sustainability Promotion Integrated into Management Strategies
Sustainability Policy “Earth Pride”
The Group regards changes in the management andbusiness environment that include such globally sharedissues as climate change, increasing severity of disasters,
and diversification of people’s values as new opportunities
for growth. To utilize these opportunities, we formulated
the Sustainability Policy “Earth Pride” as our vision of2050 based on our belief that we must clarify the direction
as a Group and ensure that each and every employee
firmly shares our long-term direction. This policy is integrated with our Group Vision of “New Value, Real Value”
and Nomura Real Estate Group 2030 Vision of“Be a ‘Life & Time Developer,’ as never seen before,” andis positioned as a guideline that indicates the path weshould take. Additionally, a major feature of the policy is
its format that focuses on people as a means of sustainability unique to the Company.
Our Sustainability Policy is based on three themes

20

Nomura Real Estate Holdings, Inc.

consisting of “Pursuing humanity,” “Maintaining harmony with nature,” and “Building the future together.”
Furthermore, to achieve these goals, we have identified
five priority issues (materiality) that should be
addressed by 2030. These consist of “diversity andinclusion,” “human rights,” “decarbonization,” “biodiversity,” and “circular design.” To track our progress onthese priority issues, we will also set and promote key
performance indicators (KPI).
First, in terms of “diversity and inclusion,” we have set
a 20% for female manager and junior manager ratio by
2030 as one of the KPI and established the Wellness and
D&I Promotion Committee in April 2022 as mentioned
previously.
Regarding human rights, in the fiscal year ended
March 31, 2022, along with the formulation of the Group
Human Rights Policy and surveys for human rights due
diligence, we held full-scale interviews with business
partners regarding the status of their compliance with

President and Representative Director,
Group CEO

Integrated Report 2022

21

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy¥

FY2013/3
FY2010/3
Business profit*3

We have been able to achieve business growth amid changing times
by anticipating the needs of customers and society.
Our past initiatives have created the current and future values.

Business profit*1, 2¥35.7
billion

FY2005/3¥26.2
billionExceeded ¥ 500.0 billion

Exceeded ¥ 300.0 billion
FY1994/3
Business profit¥9.1
billionFY1982/3

FY1996/3

FY2002/3
Business profit

Exceeded ¥ 200.0 billion¥16.6
billionExceeded ¥ 100.0 billion

FY2022/3

Business profit¥92.7
billion[Pie chart (business profit) legend]
Residential Development
Commercial Real Estate
Overseas
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other

1957 19601970

645.0 billion¥39.2
billion

FY2005/3
Business profit*3
FY1991/3
Business profit*1. Business profit = operating profit + share of profit (loss) ofentities accounted for using equity method + amortization of
intangible assets associated with corporate acquisitions*2. The Figures before FY2018/3 are equivalent to figures ofoperating profit.
*3. With regard to the pie charts of operating profit in FY2005/3
and FY2010/3, the figures were calculated in a simplified way
in accordance with the current business segment.
Accordingly, the operating profit of each segment is different
from the result shown in the documents disclosed in the past.

Fact Data, etc.
FY2022/3

History of Nomura Real Estate GroupOperating revenue

Governance(Business, Sustainability, and DX )

1975

1980

High economic growth period - Bubble economy

1985

1990

Bubble burst
High- Recession
economic ingrowththe 1990’s/Lost
period - Bubble
decadeeconomy

2000

1995

2005

Economic recovery - Global financial crisis

2010

2020

Great East Japan Earthquake- Advancements in globalization

To the era of with /post COVID-19

Entered into the residential development
business to solve the housing shortage
during the postwar reconstruction period.

Overcoming financial crisis byconcentrating business resources on
the residential business.

Accelerating growth throughM&A and development ofcharacteristic brands.

Initiatives to build cities that connect
today with tomorrow’s possibilities inJapan and overseas.

In 1957, the Company was established as an asset management company for Nomura
Securities when it constructed its new head office building. In 1961, the Company entered
the residential development business with the aim of solving the housing shortage, which
was a key social issue during the postwar reconstruction period. In 1963, the Company
advanced into the condominium development business and firmly established its position
as a major private real estate developer. While steadily expanded office building business,in 1978, we developed Shinjuku Nomura Building, a skyscraper which still serves as theCompany’s head office to this day.

When the bubble burst, the economy and the real estate market conditions rapidly
deteriorated. The Group overcome the crisis by grasping the residential needs that werereturning to urban centers due to falling land prices and concentrated its businessresources on the condominium business. In 1999, the Company launched the real estate
information website “nomu.com,” utilizing IT ahead of other firms. In 2002, we announced
the integrated brand of housing and related services, “PROUD,” and have since continued
to create products and services leading to a strength for the Company.

In October 2006, the Company was listed in the First Section of the Tokyo Stock
Exchange (now the TSE Prime Market). We increased our financing capabilities from
capital markets and significantly expanded the Leasing business through the M&A of
NREG Toshiba Building (merged into Nomura Real Estate in April 2022). We also
developed a string of characteristic asset brands, including PMO (with which wecreated a new market of medium-sized high-grade offices), and Landport (logistics
facilities with advanced and high functionality, created by identifying investor needs
through early-stage market entry and development).

We have opportunities to demonstrate the Group’s expertise. One of them is
Shibaura Project, a large-scale, mixed-use development, for which construction
started in October 2021. The Group’s urban development is not limited to Japan.
The overseas expansion of our expertise cultivated in Japan has accelerated,
especially in the cities of rapidly growing ASEAN countries. Both in Japan andoverseas, we will identify the needs of people living in each area and pursue
initiatives to build cities that connect today with tomorrow’s possibilities.

2003

1961
1957
Spun off from Nomura Securities andlaunched real estate business focused onleasing and management of office buildings

Launched real estate development
business with development of Kajiwarayama residential area in Kanagawa

Nomura Real Estate Office Fund waslisted on the Tokyo Stock Exchange

Completion: 1990 and onward
Yokohama Business Park (YBP), one of the largest
business developments by the Company alone as a
private company, completed

2015

2006
Nomura Real Estate Holdings was listed on theFirst Section of the Tokyo Stock Exchange

1999

Established “Nomura Real Estate
Master Fund” through the merger of
3 REITs

2020
Completed construction ofTOKYO TORANOMON GLOBAL SQUARE

Launched the real estate information
website “nomu.com”

2022
2007
Completed construction of
Landport Atsugi

2008

2022

Completed construction of
PMO Nihonbashi Honcho

Scheduled for completion ofGrand Park 2nd period in Vietnam

Established Federal Land
NRE Global (FNG), a joint venturecompany in the Philippines

1963
Launched condominium development business with construction of Co-op Takenomaru
in Kanagawa

1978Completed construction of Shinjuku Nomura Building
Head Office was moved from Nihonbashi to Shinjuku

22

Nomura Real Estate Holdings, Inc.

2002
Launched “PROUD” as the integrated brand of housing and related services
Completed construction of PROUD Kugayama (2003)

2008

NREG TOSHIBA BUILDING
joined the Group

2025

Started construction of
Shibaura Project (South Tower)

Integrated Report 2022

23

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Awareness of the External Environment andBusiness Management System
The business environment surrounding the Group has been changing on a daily basis, as seen in the diversification ofpeople’s lifestyles and values and the acceleration of digitization, resulting in increased complexity and uncertainty. Amidsuch an environment, with the aim of achieving our Group Vision “New Value, Real Value” and thus delivering sustainablegrowth, we have established Nomura Real Estate Group 2030 Vision, “Be a ‘Life & Time Developer,’ as never seen before,”and Sustainability Policy (vision of 2050), “Earth Pride.” In addition, we have formulated financial targets and priority issues(materiality) for 2030 (the fiscal year ending March 2031) and key performance indicators (KPIs).

The Nomura Real Estate Group management structure chart

Priority issues (materiality) for 2030 and key

Priority issues (materiality) and identified reason

The Nomura Real Estate Group 2030 Vision

Society and employees

Financial targets

180.0 billion or more
Capital efficiency: ROE of 10 % or more
Shareholder returns: Payout ratio at 40% level

Human rights

Climate change and natural environment

Achieve both strong growth (annual average profit
growth ratio at 8% level) and high shareholder returns
through high asset and capital efficiency

P56-61

P115

Related major
business
environment

Key performance indicators (KPIs)
Female manager and junior manager ratio 20 %

2

7

8

Childcare leave utilization rate by men and women 100 %

2

7

8

80 %

6

11

Creation of human rights due diligence system

6

11 12

Percentage of participation in human rights training 100 %5

8Provision of products and services with inclusive design

2

5

7

Percentage of implementation of one-on-one meetings 100 %

1

2

8

CO 2 emissions reduce by 35 % (Compared to FY20/3)

5 10 12

Procurement guideline survey implementation rate

Leveraging diverse perspectives inbusiness is a key to creating new
corporate value

Respecting the dignity and basic
human rights of all stakeholders
results in responses being made tohuman right risks/issues and theenhancement of corporate value

Business profit: ¥Evolution andtransformation ofvalue creation
approaches andmethods

performance indicators (KPIs)(top three elements)

Diversity & inclusion

Mid- to Long-term
Business Plan

“New Value, Real Value”
back casting

Our Group Vision

Decarbonization

Biodiversity

Circular design

Energy conservation performance indicators in new buildings
Maintain ZEH/ZEB-oriented standards

Responding to climatechange will result in theprevention of risks anddevelopment of new
cities, products, andservices, thus increasing
competitiveness

Conserving the naturalenvironment willcontribute to preventing
risks and development of
new cities, products, andservices, thus increasing
competitivenessWith the importance of acircular economy gaining
greater recognition,
developing a system to recycle
resources is becoming
increasingly important incorporate activities

Sustainability Policy(vision of 2050)

Pursuing
humanity

Maintaining
harmony
with nature

Building
the future
together

5 10

Develop timber-based buildings

5 10

Obtain biodiversity certification

5 10

Initiatives to promote building longevity

5

9 10

Promote waste reduction and increase recycling rate

3

4 10

Promote sustainability
through business activities

Discussions at the Sustainability Committee

Profit and financial targets

Financial strategy

P58-59

P60-61Strategies by business
P78-89Sustainability strategy

Human resources strategy

DX strategy

P62-69

P70-71

P72-75Gathered opinions on the vision of 2050 through workshops
for employees. Extract 12 important items for its realization.

Conducted a questionnaire equivalent to the content explained on
the left column for external stakeholders and check their severity.

Environment forecast

Awareness ofthe businessenvironment

24

Nomura Real Estate Holdings, Inc.

1

Response in the era with and after COVID-19

4

Changes in values on ownership and real place

7

Advances in shrinking workforce, declining birthrate and aging of society

2

Diversification of lifestyles and work styles

5

Heightened awareness of sustainability

8

Intensification of competition to obtain human resources

11 Increased geopolitical risks

3

Accelerated evolution of digital technology

6

Development of emerging economies

9

Increase in reconstruction needs such as aging of buildings

12 Increased volatility risk in the financial environment

10 Climate change and increased severity of disasters

Integrated Report 2022

25

The Vision of
Nomura Real Estate Group

Process for Formulating
the Sustainability Policy
The Group started the discussions to formulate its Sustainability Policy (vision of 2050) andidentification of priority issues (materiality) for 2030 in August 2020 and announced them in April 2022.
During the process of formulating the policy, to make it more compelling, we held workshops within
the Group to collect opinions on what kind of value should be provided. We also asked
senior management about the options for priority issues (materiality) via a survey.
The process also reflected the results of surveys conducted targeting various stakeholders
outside the Company.

STEP 1

Extract important elements for the Group

Number of participants:

STEP 2

183

GovernanceFact Data, etc.

(Business, Sustainability, and DX )460

STEP 3214

Conducted online workshops targeting theGroup’s management (general managers, senior
managers, etc.) and scored the 12 items.

Growth Strategy

internal and external
stakeholders were involved in
the formulation of the policy

Collect opinions from management

Number of participants:

Conducted workshops that were attended by the Group’s
183 young and mid-career employees in their 20s to early 40s.
Collected opinions from rising-generation employees by
asking questions such as “What kind of value should be
provided in 2050?” and “How do you want the Company to beviewed in 2050?” and identified 12 items.

About

Sources ofCompetitivenessCollect opinions of stakeholders

Number of participants:

41

Discuss at the Sustainability Committee

approx.

Conducted a survey targeting the Group’s 41 stakeholders to
confirm the significance of the 12 items.
Sustainability experts................................ 10
Institutional investors.................................. 5
Financial institutions................................... 3
Customers (tenant companies)........................ 3
Customers (condominium residents, etc.) .......... 4

STEP 4

Business partners (construction companies, design offices).... 5
Business partners (academic institutions in R&D)................ 4
Business partners (consulting firms)................................. 2
Joint venture partners.................................................. 1
Prospective employees................................................. 3
Employee union............................................................ 1

20

participants in total

Conducted a survey targeting the members(management) of the Sustainability Committee to confirm the significance of the 12
items.
In light of the responses elicited in each step,in addition to the survey results, multiple
discussions were held by the Sustainability
Committee, and the Sustainability Policy,
priority issues (materiality), and key performance indicators (KPIs) were formulated.

Items recognized with higher priority
Environment (E):“Contribute to a circular economy” gained the highest scoreSocial (S):“Provide healthy and comfortable lifestyles,” “Create smart cities,” and “Promote secure andsafe urban development” scored higher

Opinions from young and mid-career employees
A company that always
provides the greatest
fulfillment, even as
times change

A company thatconnects people inboth physical andcyber spaces

A company that creates environmentally friendly and resource-friendly
products that can be handed down
to future generations

Items recognized with higher priority
Environment (E):The use of timber is a significant andurgent issue for the effective use ofJapan’s forest resources, and is the area
in which the Nomura Real Estate Groupcan play the most active role

From the perspective of urban competitiveness, an environment that embraces
diversity in the workforce attracts
talented human resources and leads tothe creation of new businesses“Contribute to a circular economy” gained the highest scoreSocial (S):“Provide healthy and comfortable lifestyles,” “Create smart cities,” and“Pursue happiness and dignity for future society” scored higher

Business partner(consulting firm)

Importance for our stakeholders

Matrix of 12 items
Provide healthy and comfortable lifestyles

Contribute to a circular economy
Develop smart cities

Make unique contribution to regional
revitalization

Pursue happiness and dignity for future society
Implement co-creation and open innovation
in society

Contribute to a decarbonized society
Promote secure and safe urban development
Contribute to diversity & inclusion

Cultivate creativity and sensitivity

Develop rules and standards for market creation

Maintain harmony with the natural environment

Importance for the Group
26

Nomura Real Estate Holdings, Inc.

Sustainability Policy(vision of 2050)

This process was characterized by the factthat in each step many people sympathizedwith opinions and thoughts that focused on
people. We established our Sustainability
Policy through discussions premised on ashared recognition that unless all of ourcorporate activities can coexist with the
Earth, the human species is not sustainable.

Sustainability
expertPursuing
humanity

We strive to answer the deep questions of human existence andwell-being in a world where technology is increasingly progressing andbeing integrated into our lives.
By providing an inclusive living environment where people support andconnect with each other, we contribute to the creation of a society where
no one will be left behind.

Maintaining
harmony
with nature

Our aim is to achieve true harmony with our natural environment for our
future children and healthy ecosystems by reconsidering how humaneconomic activities should operate.
While carefully conserving the Earth’s finite resources, we improve therelationship between nature and humans.

Building
the future
together

The ambition we have is to create unprecedented value from diverse
organizations and people working together to overcome boundaries.
We are continuously challenging ourselves with novel ideas of living,business and working styles for an innovative society where all people
with various backgrounds and values can build on their strengths.

Integrated Report 2022

27

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Value Creation Process
The Group will realize high growth and high shareholder returns through the achievement of
the Mid- to Long-term Business Plan by the source of competitiveness based on our strengths.
Our strengths are supported by both “action guidelines that form the foundation for conducting businessactivities” and “initiatives to realize high profit growth and high asset and capital efficiency.”
Furthermore, the Group will realize the Nomura Real Estate Group 2030 Vision andSustainability Policy, as well as the Group Vision “New Value, Real Value.”

Target for fiscal
year ending
March 2031

Financial targets

Priority issues (materiality)

ProfitCapital efficiency

180.0 billion or more

Business profit: ¥ROE:

Shareholder returns

10% or more

Society and employees

Dividend payout ratio:

40% level

Realization of high growth /High asset and capital efficiency /High shareholder returns
Ambitious andsustainablegrowth strategy

The Mid- to Long-term
Business Plan

P56-61

Evolve and transformapproaches and methodsof value creation

Source ofAwareness ofthe businessenvironment

A foundation
for conducting
business activities

P24-25

Action guidelines

The Group’s
strengths

P32

P33

Sources ofcompetitivenessP32-41The Group’s strengths
and action guidelinesthat form the foundation
for conducting
business activities

Creating new value
based on original ideas
Always being achallenger

Our approachto connect
closely withindividuals,that is established in
the Group

Acknowledging our
growth with society
Working with vigor
and achieving
wellness

Business assets
and managementbase that support
value creation
28

Nomura Real Estate Holdings, Inc.

P42-43

Climate change and natural environment

Society and employees

Decarbonization (Reduction of CO 2 emissions)(Compared to FY20/3)

Diversity &inclusion

HumanrightsDecarbonization

Biodiversity

CirculardesignFemale manager andjunior manager ratio:

Scope 1, 2:
Scope 3:
20% Reduceby 35% Reduce by 35%

Implementation of sustainability
activities through businessProfit and financial targets

Financial strategy

Strategies by business

P58-59

P60-61

P78-69Sustainability strategy

Human resources strategy

DX strategy

P62-69

P70-71

P72-75competitivenessStakeholder
expectations andpriorities

Market-in approach

Client-first approach

Measurement indicators (KPIs)

Businesscollaborationand value
creation within
the Group

Commitment toqualityOpen-minded approachto new ideas andbusinesses

P104-113

Establishment ofvalue chain within
the Group based on
development
capabilities

Continuous
value creation
through providing
real estate-related
services

P26-27

Initiatives to realize
high profit growth,and high asset andcapital efficiency

Uniqueinitiatives

Development of
unique brands

Accumulation andutilization of knowledge
leading to new value
creation

P114-115

P116-120

Compliance / Information disclosure

P120-121

Integrated Report 2022

29

Sources of CompetitivenessThe sources of the competitiveness of the Nomura Real Estate Group include“initiatives to realize high profit growth and high asset and capital efficiency”
that facilitates economic value and its contribution to the solution ofmany social issues and a further increase in competitiveness in addition to
the approach of connecting closely with individuals, which is grown throughout its history.
These mutually operate in value creation and continue to enhance the Group’s competitiveness.

Contents

Positioning of this part

32 The Group’s Strengths and Action Guidelines That Form the Foundation forThis section provides
our strengths andunique initiatives thatmake up the “source ofcompetitireness” that
support our businessactivities. In addition,
we show business assets
and external evaluationthat support them.

Conducting Business Activities

34 Initiatives to Realize High Profit Growth, and High Asset and Capital Efficiency
34
36
38
39

1. Establishment of Value Chain within the Group Based on Development Capabilities
2. Development of Unique Brands
3. Continuous Value Creation through Providing Real Estate-related Services
4. Accumulation and Utilization of Knowledge Leading to New Value Creation

42 Strong Business Assets That Support Value Creation and External Evaluation and Results

30

Nomura Real Estate Holdings, Inc.

Our approachto connect
closely withindividuals,

Uniqueinitiatives

that is established in
the Group

Business assets

Integrated Report 2022

31

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

The Group’s Strengths andAction Guidelines That Form the Foundation
for Conducting Business Activities

Approach established in the Group that connects closely with individuals

While valuing our points of contact with each customer, wehave taken a comprehensive approach to connect closelywith individuals who live, work, and gather in properties
across all aspects of our business, thus continuing to tackle
various social issues. This approach, which we have refined

Value creation with a focus on people

throughout the Group’s history of more than 60 years, isthe source of competitiveness that supports the Group’s
unique value creation with a focus on people. Thisis a unique quality of the Group that will not change, nomatter how much society changes around us.

Environment at the time of establishment of the Company

Develop desired
properties andservices from theperspective of eachcustomerBusiness environment without leasing assets that generate steady cash flows

Business
operator’s
perspective
Structure businesswith a focus oneffective use ofproperties and land

Methods for capturing business opportunities

Business expansion with a focus on housing

Taking an approach to connect closely with individuals,
meeting their expectations, and maintaining their trust
is our lifeline to the next business opportunity

Cultivating a corporate culture of continuing to connect closelywith customers by responding to their specific needs inrelation to housing, which forms the foundation of their lives

Management decision in light of extremely challenging business environment(bursting of the bubble in the 1990s)
We resolved the management crisis by reorganizing our business, which had been diversified
during the bubble economy, and concentrating management resources into the residential
development business as a core business. The accumulation of experience and know-how, which
had been refined through our approach of forming intimate connections with individuals, led to
the launch of the PROUD and PMO brands.

Business collaboration andvalue creation within the Group

Our approachto connect
closely withindividuals,

Create new value through the value chain within the Group

that is established in
the Group

Commit to quality of real estate development andservices we provide

Commitment to quality

Open-minded approach to
new ideas and businesses
Continue challenges by expanding the areas ofvalue creation to a wide range of asset types andservices in Japan and overseas

Landport ---logistics facility that realized
early market entry by capturing investor needs

Action Guidelines “What We Value”
The Group has set out its action guidelines titled “What We
Value” to serve as a foundation for employees in conducting
business activities. These guidelines present our approachto connect closely with our customers, society, and our
employees in more concrete terms and in the form ofactions.

Client-first approach

We maintain our “client-first” approach as well as our attitude to ensure trust andfulfill expectations, which we have valued since the foundation of the company.

Creating new value basedon original ideas

We pursue creating new value with free and out-of-the-box thinking,placing importance on anticipating future and global perspectives.

Always being a challenger

We always bear in mind that we are a challenger and take on new challenges
with humility and ambition.

Acknowledging our growthwith societyEver mindful of our responsibility and pride in creating the future for people and cities,
we contribute to society and continue to be a company on which it relies.

Working with vigor andachieving wellness

Recognizing that working with vigor brings growth to both the company andourselves, we take the utmost care of our mental and physical health.

Nomura Real Estate Holdings, Inc.

Develop real estate, provide real estate-related services,
and implement sustainability initiatives based on theneeds of customers and markets

Cultivate an approach established in the Group thatconnects closely with individuals

A foundation for conducting
business activities

32

ability initiatives, and continue to create new value throughthe Group’s value chain. In addition, with our comprehensive commitment to quality, we expand our value creation
domains to include a wide range of asset types and services in Japan and overseas and continue to take onchallenges. These strengths significantly contribute to theGroup’s sustainable value creation.

Market-in approach

Historical background of refined approach

NomuraReal Estate Group

Fact Data, etc.

The Group’s strengths

Demonstration ofcapabilities

that is established in
the Group

Governance(Business, Sustainability, and DX )The Group’s four strengths developed based on its
approach to connect closely with individuals: the market
oriented concept, business collaboration and value creation
within the Group, commitment to quality, and open-minded
approach to new ideas and businesses. Based on the
demands of customers and markets, we develop real estateand provide real estate-related services, implement sustain-

The basis of all of our business activities and the source of competitiveness is
Nomura Real Estate Group’s established approach to connect closely with individuals.
This approach supports the growth of the Group while incorporating into action guidelinesthat form the foundation for conducting business activities and strengths.
Our approachto connect
closely withindividuals,

Growth Strategy

Our approachto connect
closely withindividuals,that is established in
the Group

In anticipation of a further rise in e-commerce demand, we
entered the logistics facility development business in 2004,
becoming one of the first companies in the industry to do so. In
2007, we completed the construction of our first Landporthigh-function logistics facility.
One of the significant factors that enabled this early market
entry was the insight of the Investment Management Business
Unit, which adequately captured the needs of institutional
investors to invest in the logistics sector and established alogistics investment fund ahead of other companies. And ourfrontline efforts to value our contact points with investors andrespond to their trust bore fruit: as of March 31, 2022, 42 logistics facilities have been commercialized.
In order to ensure a comfortable working environment for
tenants, our Landport facilities are also equipped with cafeterias
and air-conditioner. On the environmental front, we have obtained
various certifications including CASBEE A grade or higher and
DBJ Green Building certification in an effort to promote ourbusiness by connecting closely with customers and society.

Landport Higashinarashino

On-site cafeteria

Integrated Report 2022

33

Sources ofCompetitiveness

The Vision of
Nomura Real Estate Group

Initiatives to Realize High Profit Growth,and High Asset and Capital Efficiency

1. Establishment of Value Chain within the Group Based on
Development Capabilities

The Group

Property sales businessLeasing business

Propertysales
Expand business stockbusinessbusiness

Expandstableearnings

Specializing inleasing. Payment ofcorporate tax is
exempted by
distributing 90% ormore of profits

What isrequiredProfit growth/High ROE

Stability

Cost ofequity7–8%

2–3%

AUM/property management/
property brokerage
Business
expansion

Business
expansion

Service &managementbusiness
Business
expansion

Accumulate and utilize knowledge
Use feedback collected from customers to improve products and services

Maximizing added value in each process of property development, sales, and management
The real estate development business involves various
processes, from the acquisition of land to product delivery tocustomers and property and facility management. The Group
has strived to enhance the quality of its products and services by implementing initiatives based on its integrated
development, sales, and management system ahead ofindustry peers. By comprehensively refining our business inAchieve ROA of 5% or more for the entire business portfolio
Property sales
Overseas Business

Domestic BusinessBusiness type

Housing sales
Properties for sale

Housing sales
Properties for sale

Medium–High

Investment risk
Revenue fluctuationrisk

each process and leveraging close collaboration, we havemaximized our added value across the entire flow. This
strength cultivated in the housing sales business, as
exemplified by the PROUD brand, has also been
demonstrated in property development for sales including
the PMO and overseas business, becoming one of theGroup’s unique strengths.

High

P60 “Business Portfolio Strategy”

Service & management

Leasing

Property
Brokerage &CRE Business

Investment
Management BusinessMediumLow

Low

MediumMediumMedium–Low

Low

Low

MediumROA (efficiency)

Management policy

Business model thatcombines property sales,
leasing, and service &management to generate
profits from development,
leasing, and fees

Characteristics

Cost of equity: 7 - 8 %Leverage equivalent to shareholders’ equity ratio at the 30% level

Listed REIT

(real estate developer)

Leasing

Fact Data, etc.

and high profit growth, based on a business portfolio thatcombines businesses with different characteristics occupying different positions along the risk-return spectrum,including property sales, leasing, and service & management, taking into account the market environment, business
opportunities, and earnings fluctuation risks.

Mid- to long-term target: ROE of 10% or more

Businesscharacteristics

Differences in business modelBusiness expansion based on development capabilities

Expandbusinessthroughreinvestment

As a real estate developer, the Group aims for managementwith high asset and capital efficiency while pursuing profit
growth. The Group strives to achieve an ROA of 5% or morewhile maintaining its shareholders’ equity ratio at the 30%
level. Toward the achievement of this target, we aim torealize both capital efficiencies exceeding the cost of equity

business ensures ongoing fee-based revenue through theprovision of real estate-related services. This value chain
within the Group leads to the maximization of added value,
while enabling both high profit growth and capitalefficiency exceeding the cost of equity through a businessportfolio that leverages the characteristics of eachbusiness.

Value chain-oriented business model based on
development capabilities

Governance(Business, Sustainability, and DX )Develop business portfolio with high asset and capital efficiency by
combining businesses with different characteristics

In its Mid- to Long-term Business Plan, the Group has set “realizing high profit growth,and high asset and capital efficiency” as a priority theme.
This is supported by our variety of distinctive initiatives, including the establishment of
the Group’s value chain, which are closely linked with our key strategy for growth andour business strategies under the Mid- to Long-term Business Plan.

Based on our wide range of real estate development capabilities achieved by harnessing our strengths and uniquenessas a real estate developer, we have established the Group’s
value chain by combining three businesses. The property
sales business aims to generate development profits. The
leasing business allows us to achieve stable leasing revenues
by holding valuable assets. The service & management

Growth Strategy

Achieve ROA at a high level
during the period of investment
expansion by increasing profitability

Leasing Business

Property & Facility
Management Business

High

Low

Aim for ROA of 5% or more based on stable earnings (lower revenue
fluctuation risk) through profit growth of the service & managementbusiness and increased profitability of the leasing asset portfolio

Demonstrating the Group’s unique strengths in the overseas business
Real estate is generally thought of as a local business.
This is why, in the overseas development of real estate,
there are many cases in which the business is outsourced to local partner companies and the Japanesecompany acts simply as an investor. With this in mind,
we have classified our overseas business into twoparts: one in which we rely on local partners, such as
for land acquisition and the gaining of permits andlicenses, and another in which our expertise cultivatedin Japan can be leveraged, such as for product planning, quality management, and marketing. By taking
part in the upstream processes in this way, we havestrived to maximize our added value. We have beenrolling out these initiatives as part of our KAIZEN activities, which has helped us gain the trust of local partners
and access new business opportunities. Federal Land
NRE Global (FNG), our joint venture established in 2022
in the Philippines, is one such achievement.

Key operational processes in the real estate development businessLand acquisition
Wide range of land acquisition
methods
Connection with landowners

34

Product planning and design
Layout and building plans that use land
effectively
Product planning to meet market needs

Nomura Real Estate Holdings, Inc.

Construction
Original manuals
Daily improvement at
the front line

Sales
Direct understanding ofcustomer needs
Feedback for product planningManagement
Extension of cycle ofrepair works
Increased efficiency throughthe introduction of DX

On-site construction check (Vietnam)

Follow-up customer satisfaction survey (Thailand)

Showroom exhibition planning (Philippines)

Integrated Report 2022

35

Sources ofCompetitiveness

The Vision of
Nomura Real Estate Group

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Initiatives to Realize High Profit Growth, and High Asset and Capital Efficiency

2. Development of Unique Brands
Value creation through the use of the PROUD brand's products
and services is a key characteristic of the Group.
We have maintained and improved our unique brand value by
consolidating knowledge gained from customer feedback
and the like and expertise accumulated through diverse

Value enhancement cycle by combining real estate and branding

contact points, and utilizing these as intangible assets.
Furthermore, our ability to develop multiple brands withdiverse assets by consistently adhering to our approach toconnect closely with individuals is one of the Group’s characteristic strengths.

We have been consolidating our accumulated expertise andthe knowledge we have extracted from ratings and opinions
received from customers to further develop our brands.
When providing products and services, we commit tocreate the added value in each process, and this approachleads to the acquisition of new know-how. Through thisvalue enhancement cycle, we are improving the brand value
unique to the Group.

Reasons for (benefits of) developing and strengthening brands
A distinguishing feature of the real estate industry is that notwo lands or properties are identical, meaning that every
property has strong individuality. In our case, integrated
brands for each asset type, such as housing or office, amongproperties that are used over a long period of time represent
the Group’s strong commitment to our customers for security

and quality. They help raise our customers’ sense of security
and their trust in each of the products and services
provided by the Group and promote their recognition of our
products under an integrated brand name. In this sense, boththe Group and the real estate industry as a whole are wellplaced to benefit from branding.

Characteristics of branding

Strong individuality

High reliability of each product and service

Real estate is used for a long time as the basis ofpeople’s lives, while no two properties exist under
the same location conditions.

Establishment of a brand image that
promotes customer recognition andrises a sense of security regarding products.

Creating new value by accumulating evaluation and expertise

Open-minded
approach to
new ideas
andbusinesses

Make improvements toprovide higher-quality
products and services inevery process

The Group’s
strengths

Property and facility
management

Meticulously anticipate ourcustomers’ future living
and working arrangements

Market oriented
concept

Identify customers
requiring our
products andservices

Characteristics of real estate

Collect feedback from
customers

Provide high-quality
products and services

Consider the most effective
methods
Negotiate acquisition priceDevelop financial schemes

Increase management quality
Compress management cost
Execute investments
contributing to productivity
improvement

Businesscollaboration
andvalue creation
within theGroup

Design andconstruction

Sales and leasing

Leverageknowledge andknow-how ofeach brandCommitment toquality

Land acquisition

Research and set optimal prices
Optimal rent/ Promote early
expiration of lease periods
Compress sales expenses

Develop functions valuable
to customers and compile
them in a database

Increase rentable ratio
Increase product value
in the property plan
Reduce construction cost
Increase efficiency ofschedule

Expand knowledge
and know-how into
other brands

P124-127 “Major Asset Brands”

Expanding and evolving the Group’s approach to connect closely with individuals
The Group has developed a number of competitive brands
and products such as PMO, a premium brand for medium-sized offices, and Landport, a brand for advanced andhigh-function logistics facilities. The key to our successful
brand development is our approach to connect closely withindividuals that we have promoted since the Group’s founding. To build on this success, rather than simply expanding

horizontally, we have grown and evolved this approach bythinking first about the people who live, work, and gather inour properties. Going forward, by demonstrating theGroup’s strengths, such as our market oriented concept
and commitment to quality, in diverse types of assets, wewill continue to create new product and service brands withuniqueness.

Development and provision of services
through utilizing branded properties
Expand and evolve our approach to connect closely with individuals
Extensive information and know-how collected fromeach property through characteristic brands

LivingRental housing
129 properties

Working
Satellite-type
shared office
216 locations

Logistics facility
42 properties
Medium-sized
office building
70 properties

Small officewith services
15 properties

Our approachto connect
closely withindividuals,

PROUD’s unique product development “Luxmore”
PROUD underpins No.1 ranking in condominium brand evaluation
for the 15th consecutive year
Luxmore is the collective name given to PROUD’s
unique product development that realizes customer
needs by pursuing luxury and comfort with a relentless commitment to livability. Since its launch in 2007,
we have consistently reflected the voices of our customers in products to continue to provide them withfulfilling lifestyles while responding to changes in how
they live. Unlike products developed by household
fixture manufacturers, Luxmore takes advantage ofthe real estate developer perspective to make proposals on space utilization that turn a residential unit into
an ideal housing.

Luxmore’s development reflects
the expressed needs of customers

Realizing an environment that can respond to different lifestyle needs

Issues are identified from the feedback of customers, which is carefullycollected and updated in detail in order to realize more comfortable living.

1

that is established in
the Group

Condominium/
Detached housing
approx. 74,000 units
Health promoting
senior rental housing
6 properties

Urban retail facility(focusing on restaurant business)
22 properties
Hotel
3 properties

Neighborhood
shopping center
6 properties

Urban retail facility(focusing on service business)
8 properties

Gathering

Case:

7

Collect customer
feedback

2

Analyze the collected
feedback

3 Identify issues
4 Determine
Luxmore’s policy

Customers use
the product5 Embody ideas

6

My child studies in the livingroom instead of their own room

Want a space near the living room
where my child can spend time
The bedroom
is darkReexamination

Reflect user
feedback in further
Conduct repeated trials anddevelopment
testing with manufacturers
Complete productdevelopment

Want morestorage space

Start product development

PROUD has been ranked No. 1 in condominium brand evaluation
for the 15th consecutive year

Customer feedback
Determination of the policy
Create a storage area next to the living roomby taking space from the two bedrooms

CompletionTwobedrooms

Multi-purpose
storage* Numbers of properties are as of March 31, 2022 (including plans)

36

Nomura Real Estate Holdings, Inc.

Integrated Report 2022

37

Sources ofCompetitiveness

The Vision of
Nomura Real Estate Group

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Initiatives to Realize High Profit Growth, and High Asset and Capital Efficiency

3. Continuous Value Creation through Providing
Real Estate-related Services

4. Accumulation and Utilization of Knowledge Leading to
New Value Creation

As real estate provides the basis of people’s lives and of
corporate activities, appropriate maintenance and repair are
essential to ensuring safe, secure, and comfortable use overthe long term. Moreover, over the course of the long-term useof a particular property, relocation or renovation due tochanges in life stage, office relocation due to changes in thebusiness environment, reallocation of production facilities, orsimilar such changes may become necessary.
Rather than limiting itself to property development, theKnowledge that is useful for business purposes, such as
information on people’s lives and behavior, is readily
accumulated in real estate. In a society where people live andwork in increasingly diverse ways, collecting and accumulating
information, such as on customer behavior and changing
preferences, in the form of knowledge and applying it to theprovision of new products and services can provide asignificant strength.
While aiming for high asset and capital efficiency without

Group continues to provide a broad range of real estate-related services to promote the comfortable use of properties
after customers start to occupy them.
Under our business model of creating new value by
connecting closely with our customers, we aim to develop
and provide unique real estate-related services based on theprompt detection of changes in customers’ lives, behavior,and preferences and on the predictions, we make about the
future.

depending on asset ownership (“asset light”), the Group has
been striving to accumulate knowledge that will lead to newvalue creation, and to utilize such knowledge through DX andother technologies by leveraging its vast high-quality businessstock acquired through various points of contact withcustomers (“knowledge heavy”). The Group’s unique Leasing
Value Chain designed to achieve mutual growth with the Group
REITs and funds has greatly contributed to the achievement ofan asset “light” and knowledge “heavy” strategy.

Making each brand knowledge “heavy” without depending on asset ownershipSocial changes

Addition of value throughnew services corresponding
to changes in society
Adding value through services
Appropriate maintenance throughmanagement and operation
Controlling deterioration
due to aging

Value creation throughreal estate development

Our approachto connect
closely withindividuals,

P37

Accumulate knowledge = various
information on customer behavior
and preferences

P72-75Service & Management Sector

Various points of contact with customers nurtured by our approach toconnect closely with individuals*1

Building various and continuous pointsof contact with customers(Direct access to customers for gathering feedback)Number of properties owned by the Group: 133 properties

Service & Management Sector

Development Sector

Real estate-related services of each Business Unit

38

Residential
Development
Business Unit

Services aimed at providing assistance to customers concerning their homesarrangements in housing business
Management of health-promoting senior rental housing in response tosuper-aging societyInternet advertising service dedicated to real estate

Commercial
Real EstateBusiness Unit

Leasing of assets held by the Group that meets the diversified needs of tenants
Management of high-quality retail facilities, hotels, serviced offices, etc.
Fitness services that contribute to healthy lifestyles

Overseas
Business UnitManagement of office buildings in Beijing, China and Ho Chi Minh City,
Vietnam through local operating companies

Investment
Management
Business Unit

Enhancement of product lineup responding to various needs of investors
Initiatives to achieve further increases in value, such as obtaining environmental certifications

Property
Brokerage & CRE
Business Unit

A real estate brokerage service that contributes to community activation byencouraging relocation
Comprehensive brokerage and CRE services for companies that meet corporate
real estate needs

Property & Facility
Management
Business Unit

High-quality property and facility management service for maintaining asset
value over the long term
Renovation and large-scale repair work that helps increase property value

Nomura Real Estate Holdings, Inc.

Provide new products andservices by utilizing knowledge

Acceleration ofknowledge utilization
through DX

Development Sector

that is established in
the Group

Being asset “light” byharnessing the Leasing
Value Chain P40

Brand valueenhancement cycle

Examples of the Group’s
unique real estaterelated services

Leasing Business

Off-balance
sheet

Number of buildings under management:
772 buildings
Number of tenants:
More than 2,000 companies*2

Office building, retail facility, etc.

Achieved extension of cycle oflarge-scale condominium repair works

Providing Services

Off-balance
sheet

Shared office, real estate brokerage, fitnessclub, online advertising service, etc.

Provides various workplaces andservices based on the HUMANFIRST business concept

Number of H 1T members: approx. 222,000
Number of nomu.com members: approx. 255,000
Number of MEGALOS members: approx. 110,000

Number of Nomura Real EstateGroup Customer Club members:
approx. 147,000
Provides variety of real estatetransaction information for individuals,
investment, business, etc.

*1 Data are as of March 31, 2022, except the number of
nomu.com members, which is as of January 31, 2022.
*2 The number of tenants is the total of tenants in theproperties held by the Group and properties managed
under property management contracts.

Our approachto connect
closely withindividuals,

Investment
Off-balance
sheetManagement Business
Office building, logistics facility, retailfacility, rental housing, etc.

that is established in
the Group

Housing Sales Business / Property &Facility Management Business

Number of properties under management: 468 properties
Number of institutional investors: 235 institutions

On- and offbalance
sheet

Condominium, detached housing, etc.
Cumulative number of PROUD housings supplied: approx. 74,000 units
Number of housings under management: approx. 186,000 units

Integrated Report 2022

39

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Initiatives to Realize High Profit Growth, and High Asset and Capital Efficiency

Leasing Value Chain established with the Group REITs and funds
The Leasing Value Chain consisting of the Group and theGroup REITs and funds such as Nomura Real Estate MasterFund enables the implementation of brand strategies forleasing properties, for which integrated branding is generally considered more difficult than for other property types
such as condominiums. It is a unique strength of the Group
that supports the development of diverse assets and leads
to the accumulation and utilization of knowledge.
Selling the distinctive properties developed by theGroup to the REITs and funds through the “property acquisition pipeline,” and we continue to provide services throughthe “management pipeline,” thereby maintaining brand value
through services provided after the sale. This will enable us
to realize development profits at an early stage and accelerate new development initiatives. At the same time, it will also
lead to the stable acquisition of branded and high-quality
leasing properties for the Group REITs, contributing tomutual growth.

Relationship between the Mid- to Long-term Business
Plan and initiatives to realize high profit growth, andhigh capital and asset efficiency
Our unique initiatives, which form part of the Group’s strengths, and the structure that enables such initiatives areclosely linked with the priority theme of the Mid- to Long-term Business Plan and our business strategy for growth.

Mid- to Long-term Business Plan

Priority theme: Realize high profit growth, and high capital and asset efficiency

Leasing Value Chain
Realize mutual growth with Nomura Real
Estate Group and REITs and funds

Competitive product design anddevelopment, including high environmental
performance, based on REIT needs
Proposal and execution of leasing
activities and measures to raise
brand value, for properties held by
the Group and REITs

Private funds
Asset management and property acquisition
to maximize the value of REITs, etc.
Examination and execution of measuresunified with the Group to maximize thevalue of properties held

Business strategy for growth andstrategies by business

Sales to REITs and private funds (property acquisition pipelines)

Strengthen brand value andenhance asset value of
properties held by REITs(Management pipelines)

Further expansion ofdomestic real estatedevelopment businessHigh profit growth inService & Management Sector

Residential Development
Business Unit

Investment Management
Business Unit

Deepen and evolve PROUD in the housing
sales business(Stable supply of 4,000 to 5,000 units per year)
Strengthen efforts in redevelopment andreconstruction projects
Response to diversifying needs
Monetization of non-asset business

Steady growth of the REIT business, whichis the core business, leveraging theLeasing Value Chain
Strengthening of the private fund businessas a growth engine following the REIT
business
Development of new investor base andexpansion of business areas

Commercial Real EstateBusiness Unit
Evolution and transformation of value
creation linking environmental changes tobusiness opportunities
Realize development profit and unrealized
profitStrategic asset replacement

Strategies
bybusiness
P78-89The system in which the Group and the Group REITs work
together on property operations, such as brand strategy
implementation for each asset, contributes to an increase invalue for both.
The competitive business stock including properties heldby the Group REITs is an important element of the Group’s
competitiveness.

We have conducted a large number of transactions sincesigning the Leasing Value Chain agreement in 2015. The
Leasing Value Chain functions as a superior counterpart in
the Group’s property sales and as a sponsor pipeline for theGroup REIT’s acquisition of competitive, high-quality properties featuring, for instance, high environmental performance,
which contributes significantly to our mutual growth.

Highly competitive branded assets

Sale to REITs and private funds

79 properties for¥ 396.8 billion

Acquisition from REITs

7 properties for¥ 51.1 billion* Acquisition and sale amount are as of March 31, 2022.

40

Nomura Real Estate Holdings, Inc.

Overseas
Business Unit
Responding to expectations for quality andservices, and providing new value
overseas through the utilization of
know-how cultivated in Japan and strong
partnerships with local developers

Property
Brokerage & CRE
Business Unit
Expansion of stable revenue base capturingstrong demand in the retail business
Capturing various needs throughcollaboration with the Nomura Group andfinancial institutions in the middle business
Promotion of CRE proposals and capturing
investment needs of funds in the wholesale
businessStrengthen proposal-based management
to ensure customer satisfaction
Provide highly efficient and high-quality
management services by using digitaltechnology
Expand business area and service offering
Increase number of orders for large-scale
repair works and other construction orders

Initiatives to realize highprofit growth, and highcapital and asset efficiency

Mutual growth of the Group and the Group REITs

Steady growth ofoverseas business

Property & Facility
Management
Business Unit

Acquisition from REITs and private funds toward redevelopment

Growth in value linked to Group REITs

P56-61

Establishment ofvalue chain within
the Group based on
development
capabilities

Development of
unique brands

Continuous
value creation
through providing
real estate-related
services

Accumulation andutilization ofknowledge leading to
new value creation

Integrated Report 2022

41

Sources ofCompetitiveness

The Vision of
Nomura Real Estate Group

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Strong Business Assets That
Support Value Creation andExternal Evaluation and Results
The Group has strong business assets, such as a stable financial base, that support value creation based on
its approach to connect closely with individuals as well as its efforts to realize high profit growth and high asset andcapital efficiency, large landholdings for future development, and a customer base with which it has extensive
contact points. Our business assets result in positive stakeholder evaluation and the generation of financial andnon-financial value through our unique value creation, which is then channeled back to reinforce our business assets.

High evaluation from stakeholders
External evaluation
ESG evaluation: Selected as a constituent of all five ESG indices adopted by GPIFGood Design Award

Received for20th consecutive year

Results

accumulated over the Group’s history of more than 60 years

Financial data

Non-financial data

Operating revenue:

Cumulative number ofhousing units supplied¥

645.0 billion

approx.

Progress for
decarbonization

181,000 units

Progress in reduction of
CO 2 emissions

Business profit:¥

92.7 billion

ROA:

4.7%

ROE:

9.2%

Cumulative
number ofproperties
developed
for saleRental housing:

Offices:

Retail facilities:

Logistics facilities:

129 units

77 units

38 units

42 units

Cumulative number ofLeasing Value Chain transactions

that is established in
the Group

Business
Financial capital

Manufactured capital

Shareholders’ equity ratio:

Land held for housing sales: approx. ¥30.3%

Number of residential redevelopment projects undertaken:

D/E ratio:

Land held for properties for sale: approx. ¥1.7 times

Net lettable area: approx.

Uniqueinitiatives

790,000

No. 1

840.0 billion

Total business expenses of
the Group’s Overseas Business (our share):Number of
consolidated
employees:

Assets under management:

Femaleemployee ratio:

Number of housing units under management:

Number of in-house
first-classlicensed architects:

approx. ¥554.0 billion
approx. ¥1.9 trillion

approx. 186,000 units

Sales to REITs and private funds

79 properties ¥396.8 billion

Female manager andjunior manager ratio:

11.6%

Initiatives to achieve high profit growth,and high asset and capital efficiency

assetsHuman capital

1.4 trillion

Scope 3: Reduced byapprox. 39 %Strengthening anddiversifying humanresources

44.3%

The Group’s strengths
The Group’s action guidelines thatform the foundation for conducting
business activities(Compared to FY20/3)(Compared to FY20/3)

Total return ratio:

Our approachto connect
closely withindividuals,

Scope 1 , 2: Reduced byapprox. 14 %Intellectual capital,
natural capital, etc.

7,548
32.4 %
268

Expertise in real estate development:

More than 60 years

Expertise in asset management:

More than 20 years

Award-winning product planningand design capabilities

Customer base
Nomura Real Estate Group Customer Club members: approx.

2,000 companies
222,000
Number of MEGALOS members: approx. 110,000
Number of institutional investers: 235
Number of nomu.com members: approx. 255,000

147,000

Number of tenants: More than

Number of H1T members: approx.

*1 Data are for the fiscal year ended March 2022 or as of March 31, 2022, except for the number of nomu.com members, which is as of January 31, 2022.
*2 We counted the number of years in which PROUD ranked first in the highest number of evaluation categories in the Condominium Brand Survey conducted by Nikkei, Inc.
*3 Including those scheduled to be received *4 Survey by Nielsen NetView *5 “SumaiSurfin” Property Management Company Customer Satisfaction Survey ranking*6 Source: Based on in-house research *7 The number of tenants is the total number of tenants in the properties held by the Group and properties managed under property management contracts.

42

Nomura Real Estate Holdings, Inc.

Integrated Report 2022

43

Part

3

Growth Strategy(Business, Sustainability, and DX)
In April 2022, we announced a new Mid- to Long-term Business Plan that will cover a total of nine years(FY2023/3 - FY2031/3).
This plan aims to realize high profit growth, high asset and capital efficiency, and achieve both highshareholder returns and high growth under the Nomura Real Estate Group 2030 Vision,“Be a ‘Life & Time Developer’ as never seen before.”
We will aim to evolve and transform value creation approaches and methods and achieve the targets set
in the plan by accelerating activities such as business operations, environmental efforts, human resource
development, and DX.

Positioning of this partContents
46 COO Message
51 CFO Interview
56	Overview of the Mid- to Long-term Business
Plan (FY2023/3 - FY2031/3)
58 Profit targets (Business profit)
59 Financial targets
60 Financial strategy

62	Sustainability Strategy (Climate Change andNatural Environment)
64 Roadmap to decarbonization

68	Sustainability Strategy (Society and Employees)
70 Human Resources Strategy

44

Nomura Real Estate Holdings, Inc.

72 DX Strategy
76	Relationship between Each Business andFinancial/Non-financial Information
78 Strategies by Business
78 Residential Development Business Unit
80 Commercial Real Estate Business Unit
82 Overseas Business Unit
84 Investment Management Business Unit
86 Property Brokerage & CRE Business Unit
88 Property & Facility Management Business Unit

90	Feature: Urban Development along with Various People

In addition to the COO message
and an interview with the CFO to
outline the overview of the Mid- toLong-term Business Plan and key
points for achievement, this section provides a detailed
explanation of the concept offinancial strategy and shareholder
returns, efforts to address priority
issues (materiality) by 2030, environmental and human resource
activities, DX, and business-specific strategies.

The Mid- to Long-term Business Plan

Integrated Report 2022

45

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

COO Message
dential Development and Commercial Real EstateBusiness Units, the Overseas Business Unit also madesound progress in capturing development opportunities
as a basis for our future profit growth. Performance of theService & Management Sector also progressed steadily.
In the Investment Management Business Unit, our assets
under management (AUM) increased, mainly for private
REITs and private funds. In the Property Brokerage & CRE
Business Unit, the brokerage transaction value increased,
mainly for the retail business. In the Property & Facility
Management Business Unit, the number of housing units
under management increased.
In summary, it is my view that we managed to securebusiness opportunities for future growth during the past
three years. We achieved a strong business performanceby flexibly responding to business environment changes,
while there was a temporary decline in earnings due to the
spread of COVID-19.

Leveraging Changes in the Business Environment for
GrowthMESSAGE

Amid a changing environment, we aim to deliver
high profit growth by consistently adhering toour approach to connect closely with individuals.
Executive Vice President and Representative Director
Group COO
President and Representative Director of Nomura Real Estate Development

Daisaku Matsuo

Review of the Fiscal Year Ended March 2022 andPrevious Mid- to Long-term Business Plan
For the fiscal year ended March 2022, which was the final
year in Phase I of the previous Mid- to Long-term Business Plan (from the fiscal year ended March 2020 to thefiscal year ended March 2022), we delivered a record
business profit of ¥92.7 billion, significantly exceeding ourtarget of ¥85.0 billion. ROE was 9.2%, above our target
range of 8% to 9%.

46

Nomura Real Estate Holdings, Inc.

Looking back on the Phase I period, the performanceof the Residential Development Business Unit progressedstrongly, recording the highest gross profit ratio in the
housing sales business for the fiscal year ended March
2022, on the back of the diversification of needs stemming from lifestyle and workstyle changes caused by the
COVID-19 pandemic. In the Commercial Real EstateBusiness Unit, sales of properties progressed as
expected against the backdrop of a strong real estatetransaction market and our leasing asset portfolio’s
replacement progressed steadily. In addition to the Resi-

When I look at the business environment, I perceive theaccelerating pace of changes and the increasing importance of responding quickly to it. In fact, the COVID-19
pandemic dramatically transformed the need for housingsand offices in a short period of time. In addition, in thewake of the Ukraine crisis, supply chains were badly
disrupted, and the prices of energy and other goods
soared. We were forced to respond to these changes as
they occurred. While unpredictable changes could
happen in the future, I think it is necessary for us to regard
such changes not just as risks but as business opportunities for future growth.
Let me explain the business environment that we keep
an eye on specifically. In the domestic housing market, adecline in the labor force is expected over the long term
due to the declining birthrate and aging population. However, in the short term, new demand has been generated
as a result of an increase in dual-income households andchanges in housing preferences amid the COVID-19
pandemic. In the office market, the roles and significanceof a core office have been questioned as new workstyles
such as teleworking become more prevalent. I also thinkthat demands for logistics facilities with high functionality
will continue to increase in the future in line with the
expansion of e-commerce.
Also, in major Asian cities where the Group conducts
its housing sales business, needs for high-quality residences are expected to continue to grow. In particular,
demands for township development featuring large-scale,diverse urban functions have been increasing significantly,
and we see this as a change that will lead to new business
opportunities.

Our Focus Points in the New Mid- to Long-term
Business Plan
In April 2022, we formulated our new Mid- to Long-term
Business Plan (“the new plan”), which covers the period

between the fiscal year ending March 2023 and the fiscal
year ending March 2031. Under the new plan, we aim toachieve annual average business profit growth of 8% level,
which exceeds the target under the previous plan. In
addition, based on the belief that we will need to set a
clear vision in order to realize sustainable and high profit
growth in the rapidly changing business environment, wehave established the Nomura Real Estate Group 2030
Vision, “Be a ‘Life & Time Developer,’ as never seen
before.”The Group is characterized by its business model,
which is to provide real estate development and related
services based on the close collaboration of the Development Sector and the Service & Management Sector. In
other words, what we provide and focus on is not just thevalue of properties as our “products” but also the “Life” and“Time” of our customers. Given the constantly changing
environment, it is essential for us to evolve and transform
our approaches and methods of value creation, as well as
to continue to provide new value toward the future. That is
a value that both we and our customers have never seen
before. Our 2030 Vision represents such a commitment.
In order to realize profit growth under the new plan, it
is necessary for each of us in the Group to focus on thiscommitment and strive to provide new value.

Key Strategies for Achieving a Profit Growth Rate of 8%level
In order to realize profit growth, we have established thefollowing key strategies: “further expansion of domestic
real estate development business,” “steady growth ofoverseas business,” and “high profit growth in service &management business.”

Further expansion of domestic real estate development
business(Residential Development Business Unit / Commercial
Real Estate Business Unit)
In the Residential Development Business Unit, we aim to
maintain high profitability in the domestic housing sales
business with a plan to supply 4,000 to 5,000 housing
units per year during the period of the new plan. As mentioned earlier, in the domestic housing market, long-term
growth cannot be expected. While new demand has been
generated with the diversification of needs accelerated by
the COVID-19 pandemic, from the perspective of condominium suppliers, due to constraints such as heatedcompetition over land acquisition arising from a shortageof land suitable for residential development and soaring
construction costs, it has been difficult to secure businessvolume. As a result, the volume of supply in the overallmarket has been decreasing. Under such circumstances,
we will aim to maintain the supply volume by expanding
our product range and housing services and taking a
multilayered approach to various measures aimed atsecuring land for development. In other words, we will
strive to expand our market share in shrinking markets
and enhance our value as a top brand by flexibly responding to environmental changes and maintaining the supply
volume.

Integrated Report 2022

47

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

COO Message

In Commercial Real Estate Business Unit, which
provides a broad range of products and services related
to offices, commercial facilities, logistics facilities, hotels,
and others, our core strategy has been to capture market
changes, respond to the needs of each and every customer, and provide new value. By earning development
profits through investment in various assets generated
from such efforts and by realizing unrealized profits
through our leasing asset portfolio strategy, we aim todeliver a gross profit from property sales of over ¥30.0
billion for Phase I (from the fiscal year ending March 2023
to the fiscal year ending March 2025) and at the ¥40.0
billion level after Phase II (from the fiscal year ending
March 2026 to the fiscal year ending March 2028). In
addition, making proposals for a flexible office portfolio in
response to diversified workstyles will remain an important strategy. Due to the changes in workstyles in recent
years, the needs for satellite and shared offices, where
each employee can work comfortably in a variety oflocations, have increased greatly. We will actively makeoffice portfolio proposals by combining satellite-type
shared offices (H¹T) and small serviced offices (H¹O),
medium-sized high-grade offices (PMO), and large offices.
As a leading project for large-sized offices, the construction of the Shibaura Project started in October 2021.
Located in the Hamamatsucho area, which is a National
Strategic Special Zone, and equipped with 72,000 tsubo
of office space, a 219-room luxury hotel making its debutin Japan, 5,500 tsubo of commercial facilities, and residences, this is one of the Group’s largest development
projects ever. In the past few years, we learned that we
could work anywhere through teleworking and othermethods. On the other hand, issues such as the delay inhuman resources development, the weakening of
employee engagement, and the stagnation of innovation
are emerging. As a real estate developer, the Group will
redefine the significance of a core office with the aim ofpursuing new urban development to provide attractive
spaces for workers as well as opportunities for new value
creation. Based on this, we will newly propose “TOKYO
WORKation,” a new way of working that encourages
people to “enjoy a sense of openness and comfort inTokyo” and to “reduce stress and enable well-being indaily life” by taking advantage of the most importantfeatures of this project: the convenience of the city center,the overwhelming sense of freedom derived from panoramic views of the sea and sky, and a rare waterfront
location with abundant greenery beneath your feet.
The Residential Development and Commercial Real
Estate Business Units have already completed most of theland acquisition needed to achieve profit targets for Phase I.
Therefore, the probability of achieving business profit
targets is extremely high, and the key point in the future isto secure land for development toward Phases II and III.
For this reason, we will continue to invest in housing sales
to meet diversified needs as well as in sales of various
properties for sales. In addition, in order to secure land fordevelopment from a medium- to long-term perspective,
we have been promoting initiatives through the Development Planning Division of Nomura Real Estate Development,
which specializes in legal redevelopment and condominium rebuilding projects, areas in which the Group has
strengths. We will also cultivate business opportunities in
new fields, in addition to mixed-use developments in48

Nomura Real Estate Holdings, Inc.

public land with fixed-term land lease, concessions, MICE
facilities, hotels, and residential properties, through theBusiness Creation Division, which was newly establishedat Nomura Real Estate Development in April 2022.

Steady growth of overseas business
The Group currently conducts its overseas businessmainly in housing sales in Asian cities. By bringing
together the Group’s know-how accumulated in Japanand responding to the needs of customers in each country, we aim to increase the volume of our property sales
business in addition to housing sales, thus increasing theshare of overseas business as a proportion of the Group’s
overall business profit to 15% or more in Phase III.
When promoting our overseas business, we focus on
increasing customer satisfaction, rather than simply
providing funds. Thus, we provide added value in development by utilizing the know-how that the Group has
cultivated in Japan in various phases of design, construction, and sales. Since entering the housing sales businessin Southeast Asia in 2014, we have been striving to identify and build relationships of trust with local partners andhave gradually engaged in projects where we can provide
added value in the upstream phase.
In 2022, we established Federal Land NRE Global, ajoint venture to conduct real estate development in thePhilippines over the long term in partnership with Federal
Land, which is the real estate division of GT CapitalGroup, a major business group. This is a symbolic example of how our trust-based relationship with a local
business partner led to the acquisition of new business
opportunities. With Federal Land, we have worked on
Sunshine Fort, a mixed-use development project. The
establishment of this joint venture testifies to the highrating given by the partner to the Group’s know-how indesign, sales, and construction management. Federal
Land owns abundant land for development in the Philippines and we have determined to make investments
exceeding ¥700.0 billion in total over the medium to longterm through this joint venture.
As in the domestic real estate development business,and in overseas business, we have secured the businessstock for the most part to achieve business profit targets
for Phase I. Going forward, we will continue to strive forfurther growth in the housing sales business in Asia bydemonstrating the Group's know-how. Also, we will
expand the property sales business, such as offices,logistics facilities, and retail facilities, with the aim ofcontributing to profits from Phase II onwards. In addition
to the U.K., we will also actively promote business development in developed countries such as the U.S.

High profit growth in the Service & Management Sector(Investment Management Business Unit / Property Brokerage & CRE Business Unit / Property & Facility
Management Business Unit)
In the Service & Management Sector, we will continue toaccumulate stable business stock through developing
properties in each business of the Development Sector. In
addition, we will grow profit by enhancing productivity
through DX.
The Investment Management Business Unit will con-tinue to achieve mutual growth for both the Group and thefunds managed by Investment Management Business
Unit through leveraging the Leasing Value Chain. In addition, Nomura Real Asset Investment, established jointlywith Nomura Holdings, will engage in the real estate fundbusiness including the commercialization of new asset
classes and products by harnessing the Group’s knowhow in real estate investment management and the broadcustomer base of Nomura Holdings, thereby aiming for
further profit growth.
In addition to retail and wholesale services,
Property Brokerage & CRE Business Unit endeavors to
expand our transaction value in the “middle” field, targeting small and midsize companies, business owners, someindividual investors, and high net worth individuals. As themarket for the middle business is expected to continue togrow in the future, we will aim to capture increasing needs
on a steady basis.
In the Property & Facility Management Business Unit,
we will strive to steadily increase our management stock
through the entrustment of properties developed by theGroup, while increasing the number of construction orders
received based on our competitive construction proposal
capacity, such as “re:Premium,” a scheme to extend thecycle of large-scale repair works.
As mentioned earlier, the key to increase profit further
in each of the Service & Management Sector’s businesses
is enhancing productivity through DX. For example, in
Property Brokerage & CRE Business Unit, as for retailbusiness, we have nomu.com, a real estate information
website, which has the largest number of users in the realestate brokerage industry. In addition, we will provide newservices using AI and expand our know-how to the middle
market and wholesale businesses in the future. Meanwhile, in Property & Facility Management Business Unit,
we are introducing management services using smartphones as well as the “Will TAP” app, which residents ofGroup-managed condominiums can use to lock doors
and make reservations for shared facilities.
In addition to these examples, we believe that further
promoting DX will support higher productivity and investing in generated human resources to provide more
attractive services will contribute significantly to profitable
growth in the Service & Management Sector.

Strength of Expertise Accumulated through a Numberof Development Projects Based on Our Approach toConnect Closely with Individuals
I believe that what makes it possible to realize thesestrategies is our expertise accumulated through a numberof development projects based on our approach to connect closely with individual customers, mainly in the
B-to-C business.
The Group has grown primarily through its housing
sales business. In this traditionally labor-intensive industry,
the mainstream business model was one that pursued
efficiency in product planning and sales. Against thisbackground, the Group tried to differentiate itself in the
1990s by becoming the first real estate developer in theindustry to introduce tailored services. The reason why wedecided to commit to a method that our competitors

considered inefficient and had not adopted is because weplaced a strong emphasis on understanding and responding to the needs of each and every customer. Since its
establishment, the Group has engaged in its housing
sales business based on an integrated development,
sales, and management system. Our approach to connect
closely with customers by communicating with them,listening to them, and identifying their needs has been
passed down to now.
“Yukai-full” is an example case in our product development in recent years. The product uses double flooring,which has been considered difficult to install in condominiums, to provide each dwelling unit with a central
air-conditioning system that keeps the entire living space,including hallways and toilets, at an appropriate temperature 24 hours a day, 365 days a year. Although theintroduction of the product leads to an increase in construction costs, we have decided to introduce it to our
PROUD condominiums in consideration of customer
comfort. At present, the system is being introduced at
multiple new projects. In addition, we believe that our DX
initiatives, such as online customer services and virtual
previews using VR technologies, which were introduced
amid the COVID-19 pandemic, would not have beenpossible without our customer-centric perspective.
Our approach is also applied to not only for housing
sales business, but also for office business. The Group
offers a wide range of offices depending on the size of thespace and the purpose of use, including H¹O (quality small
office) and H¹T (satellite shared office) in addition to PMO(medium-sized high-grade office). What we aim to embody

Integrated Report 2022

49

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

COO Message

here is the concept of “HUMAN FIRST,” which means
forming close connections with individual workers. Eachoffice has been designed with the aim of maximizing theperformance of each and every worker using the office,and our offices have been highly acclaimed by their users.
The unique quality of the Nomura Real Estate Group isestablished in the experience of steadily taking seemingly
circuitous journeys by placing the utmost importance on
the satisfaction of each and every customer. I am confident that this quality has served as a steadfast strength ineach and every one of our businesses, including largescale mixed-use development projects, overseas
business, and businesses in the Service & Management
Sector.

Promoting Sustainability Integrated with
Our Businesses
I think that the promotion of sustainability is essential
because the continuous growth of the Group and contribution to a sustainable society are inseparable. We would
like to create a positive synergy between the Group’s
efforts to realize a sustainable society through its businessactivities and our customers’ agreement with such efforts.
For this reason, we identified the following five priority
issues (materiality) for the Group in April 2022: “Diversity &inclusion,” “Human rights,” “Decarbonization,” “Biodiversity,” and “Circular design.”
Among these priority issues, “Diversity & inclusion” is atheme that cannot be separated from our business interms of enhancing the value of our human capital.
“Human rights” form the foundation of the Group, and an
environment in which people with diverse backgrounds
and values can demonstrate their abilities is essential.
Toward realizing such an environment, we have set atarget to increase the female manager and junior manager
ratio from about 12% currently to 20%. In addition, alongwith the enhancement of various systems to support
stage-of-life changes such as bearing and raising children, we have set a target to achieve children leave
utilization rate by men and women of 100%. But achieving
these targets is just the first step. We will actively promote
the Group’s “Diversity & inclusion” initiatives by connecting the achievement of the targets to the development ofan efficient work environment and a change of awarenessamong managers. As the value of “working” diversifies,
we will continue to endeavor to develop various systems
and environments from a variety of perspectives tobecome an employer that employees want to work for andremain with for a long time. In terms of “Human rights,” wewill implement human rights due diligence and othermeasures toward ensuring respect for the human rights of
not only the Group’s employees but all people involved in
the Group’s businesses.
In response to “Climate change and natural environment,” we aim to achieve the Science Based Targets(SBT)*1 initiative goal of “CO2 emissions reduce by 35% foreach of Scope 1, 2, and 3 by the fiscal year ending March
2031 compared with the fiscal year ended March 31,
2020.” We are planning to achieve this target by enhancing the energy-saving performance of our condominiums
and office buildings and installing solar power generationequipment for the Landport logistics facility and PROUDSEASON detached housing in order to achieve RE100*2by leveraging the Group’s product development capabilities.

Conclusion
In the new plan, we will aim to achieve high profit growth
based on a clear vision. As I mentioned at the beginning,in order to realize this in a society with rapidly diversifying
and complex values, the most important thing is to act
swiftly while nimbly adapting to changes. To this end,
I place importance on the “psychological capital” of each
employee. “Psychological capital” refers to “positive
thinking” and “energy,” and when these are sufficiently
present in an organization, each individual’s “creative
power” and “power to innovate” are stimulated, leading to
the growth of the organization. Expanding this cycle
throughout the entire Group is essential for future growth,and I believe it is my mission as Group COO.
Lastly, the Group will relocate its headquarters to
S tower of the Shibaura Project in 2025. This relocation is
aimed at cultivating an organizational culture marked by aspirit of challenge across the Group in order to achieve
the high growth target under the new plan. By redefining
the significance of a core office and realizing a well-being
work style and consolidating the functions of the Group
headquarters at the Shibaura Project, which will be aplace for new value creation, we will maximize synergies
and take on challenges and explore new businesses topromote induction and creation of innovation.
The Group will continue to grow in the future by adhering to its approach to connect closely with individual
customers, and thus responding to the expectations ofcustomers and the demands of the times.
I sincerely appreciate our stakeholders for their ongoing support.

*1. Science Based Targets: An international initiative for companies to set greenhouse gas emission reduction targets in line with the standards required by the Paris Agreement*2. RE100: An international initiative that aims to procure 100% renewable energy for the electricity used in business activities

50

Nomura Real Estate Holdings, Inc.

CFO Interview

Executive Vice President andRepresentative Director
Group COO

INTERVIEW

Establishing a high growth, high efficiency*, highshareholder returns business model to“Be a ‘Life & Time Developer’ as never seen before”
from a financial standpoint
Director, Group CFO

Hiroshi Kurokawa
Please tell us your evaluation of Phase I (FY20/3-FY22/3) of
the previous Mid- to Long-term Business Plan.
In the fiscal year ended March 2022, we were able tosuccessfully achieve all four of the financial targets set for
Phase I of the previous Mid- to Long-Term Business Plan(“the previous plan”) (business profit of ¥85.0 billion, ROE
of around 8–9%, ROA of around 4–5%, and total return
ratio of around 40–50%).
We were able to improve significantly from our performance in the fiscal year ended March 2021, during which
we suffered the effects of the COVID-19 pandemic, toachieve record high business profit of ¥92.7 billion, ROE of
9.2%, and ROA of 4.7%. In terms of shareholder returns,
we maintained a dividend increase for a 10th consecutive
year, with a dividend payout ratio of 31.7% and total return
ratio of 44.3%, with the acquisition of treasury shares also
contributing to this ratio. In this way, I believe that we havefirmly demonstrated the management policy that we havecontinued to convey thus far, emphasizing high asset andcapital efficiency (“high efficiency”) and high shareholder
returns, to our investors.

Business profit (left scale)ROE (right scale)(Billions of yen)
100

ROA (right scale)

92.7

80

79.6

60

8.9

82.8

76.4

(%)
16

12

9.2

9.1
7.4

40

4.6

4.7

4.1

8

4.7
4

20

0

FY19/3

FY20/3

FY21/30

FY22/3Business profit = Operating profit + Equity in earnings of affiliates + Amortization of intangible fixed
assets arising from corporate acquisitions
ROE = net profit / (average) shareholders’ equity during the period
ROA = business profit / (average) total assets during the period* High efficiency represents high asset and capital efficiency.

Integrated Report 2022

51

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

CFO Interview

Please tell us the reason why the Company adopts
its management policy of high efficiency, high shareholder
returns and high growth.

The reason is that those three elements arefundamental for real estate companies toevaluate corporate value.
I believe that the corporate value (largely equivalent to shareprice) of real estate companies, as with companies in otherindustries, is evaluated from these key viewpoints: achieving ROE that exceeds the cost of shareholders’ equity,
improving EPS, and high shareholder returns.
In the real estate industry in particular, there are vehicles called real estate investment trusts (REITs) whichhave a relatively low costs of shareholders’ equity
because their main business is leasing and they have tax
advantages.
Therefore, as for real estate developers, in order togenerate profits that exceed the relatively high cost ofshareholders’ equity compared to REITs and improve
corporate value, we believe that it is necessary to aspire
to high efficiency management focused primarily on
earnings from the process of creating value through realestate development, realizing that value through sales,
and linking that to reinvestment to grow. We recognize ourcost of shareholders’ equity is around 7-8%, and thinkthat achieving an ROE of 10% or more, which exceedsthat cost, will lead to an increase in corporate value.
It is also important for us to properly return the benefits of our business performance to our investors. We
believe that improving EPS through reinvestment for future
growth while at the same time providing high shareholder
returns, based on a high ROE, will lead to maximizing ourcorporate value and an improvement in total shareholder
return (TSR).

Please tell us about the key points of the new Mid- toLong-term Business Plan announced in April 2022.

The key points are annual average profit
growth at the 8% level as well as high efficiency and high shareholder returns.
Achieving both high efficiency and high shareholder
returns is fundamental for the Group, and we believe that
we have gained a certain level of recognition from external
stakeholders outside. At the same time, although ourshare price has improved somewhat from previous levels,
it remains less than NAV per share and book value pershare (as of the end of August 2022). As CFO, I have astrong awareness of the issues that need to be addressed
for us to increase our corporate value. Over the past year I
have also had many dialogues with investors, and what I
felt keenly was the need for profit growth.
Investors may evaluate corporate value from a range ofperspectives, but I think it is more appropriate to evaluate
real estate developers, whose characteristics differ fromthose of REITs, based on the profits they generate throughreal estate development (largely equivalent to EPS) rather
than a valuation of the assets they hold. Our thinking was

52

Nomura Real Estate Holdings, Inc.

that if investors would consider the stock price from theviewpoint of PER, we would be able to achieve an increasein share price by realizing high profit growth.
Reflecting on our business performance, ROE was in
the 9% range, exceeding the cost of shareholders' equity.
In terms of profit growth, however, profit growth wasaround 5% over three years and under 4% over five years.
To overcome this low growth and achieve both highassets and capital efficiency and high shareholder
returns, under the new Mid- to Long-term Business Plan(“the new plan”), we have set the target of annual average profit growth at the 8% level. We would therefore likeinvestors to recognize us as a growth company andunderstand our new business model.

What kinds of strategies and initiatives arenecessary to achieve profit growth at the 8% level?

We will achieve it through our unique business portfolio strategy, which is a value
creation chain model.
Our businesses are composed of three key businesstypes with differing risk and return characteristics:
Property Sales, Leasing, and Service & Management. I
would now like to explain our business portfolio strategy,
which describes how these business types are related
and what roles they are given.
Firstly, our core competencies, which are our starting
point, are our real estate development capabilities basedon achievements. By maximizing these development
capabilities, we are building a chain-based model in which
we expand the volume of our business in the property
sales business and leasing business in Japan and overseas along with the increase of our business stock(number of properties under management and balance ofassets under management, etc.), contributing significantly
to the growth of the Service & Management Business.
Continuing to reliably implement this business process isthe basis of this strategy.
The next priority is improving the profit margin of ourdomestic business operations and expanding overseas
business, which has high profits, in the property sales
business. In the real estate development business,where a long period of time is required from fund investment to recover profitability that does not decrease the
ROA of the entire portfolio is required for each individual
business, even in the growth investment expansion
phase.
Therefore, in formulating the new plan, we have madechanges in this area. We have shifted to a style of management combining two indicators. In addition tooperating profit ratio, which has been the investment
standard for many years, we adopted internal rate of
return (IRR) as another target.
By accumulating improvements in the profitability ofeach business, we have created a structure that will
enable us to achieve the ROA we are aiming for, while also
expanding the funds, to increase investments that will leadto profit growth for the business portfolio as a whole.
In our overseas business, we set the required rate of
return at a higher rate than for our domestic business. The(DX) on net, while at the same time seeking toachieve both high ROA and high ROE.

significance of this is two-fold: raising our premium, since
the risk of overseas business operations is high, andactively seeking to secure excess revenue.
By driving the growth of overseas business which we
can expect to be highly profitable and improving the profitability of the domestic property sales business, we aim to
improve the ROA of the property sales business as a whole.
Finally, there is the coupled growth of the Leasing
Business and the Service & Management Business. One
thing that these two businesses have in common is thatthey enable us to acquire stable cash flows; however, theLeasing Business has the characteristic of pushing down
ROA, while it is possible to increase earnings by expanding assets held, and the Service & Management Businesshas the characteristic that it is difficult to rapidly increase
earnings, while it is a non-asset business with high ROA.
The idea is to sum the profits and assets of these twobusinesses with their different characteristics, aim for a
ROA of 5% or more in both businesses combined, andseek to strengthen our stable earnings base. If the Service& Management Business grows, the Leasing Business will
also grow, and overall ROA will be maintained.
In other words, it is a two-pronged strategy. We createa solid earnings base through the Leasing and Service &Management businesses, which generate stable cash
flow. Concurrently, we achieve high turnover and highprofitability in the Property Sales Business by leveraging
our strengths to take appropriate risks. With this strategy,
we intend to achieve both profit growth and high efficiency
at the same time.

Under the new plan, net investment is expected to reach¥700.0 billion over a nine-year period. The framework ofthis plan is to achieve a high level of ROA and ROE while
increasing new investment on net to enable continued
growth even after the end of the plan. In domestic housing
sales, we will secure our position as a market leader byinvesting and recovering at the same level, as well as
accelerating investment in the property sales business in
the Commercial Real Estate Business Unit and in overseas businesses, both of which are expected to display
further growth in the future.
We will also continue to implement “the Leasing asset
portfolio strategy” that we have been implementing since
the previous plan. This is our solution to unrealized gains,
about which investors have expressed concerns about thereal estate developer industry, and shows clearly that wewill convert unrealized gains on leasing assets we holdinto realized gains. In fact, during the three years of Phase Iof the previous plan, we materialized unrealized gains ofover ¥36.0 billion. Going forward, we will continue to build
a highly competitive and higher-quality leasing asset
portfolio while realizing unrealized gains through appropriate interchange of leasing assets during the period of the
new plan.
We will also be accelerating DX investments. Over thenine-year period of the new plan, we plan to invest ¥130.0
billion, including investments in the fields of DX and ICT.
The purpose of these investments is to improve productivity and build new digital businesses, which we believe willcontribute greatly to the Company’s future profit growth.

Please tell us about the Company’s investment
and recovery plans.

To grow sustainably, we will increase new investments and investments for digital transformation

Points for achieving profit growth (annual average profit growth rate of 8%)
Business Portfolio
Strategy• Support the high turnover, highearnings risk-taking model Property
Sales (55) business with the solid
revenue base provided by the Leasing(15) and Service & Management (30)businesses, which enable us toobtain stable cashflow to achieve an
overall ROA of 5% or more.

Profitgrowth* Figures in parentheses represent		 percentage portfolio makeup in FY31/3.

• In the Property Sales business,
we have set IRR as an
UPDATE
additional target value (inaddition to the conventional
investment standard net profit
ratio) and will seek to improve
profitability by increasing the ratioof overseas businesses with highprofit margins.
• In Leasing and Service & Management businesses, which generate
stable cash flows, we aim to achieve
an ROA of 5% or more with these twobusinesses through coupled growth.

Capital efficiency
in FY31/3

Profit growth rate
under the new plan:
8% level

Implementing
the Business
Portfolio
Strategy(ROE 10% or more)

Past profit
growth rate:
4–5%

Capital efficiency
in FY22/3(ROE 9% level)

Past results
3-year 5-year
average average
Business profit
growth rate

5.2% 3.7%

ROE

8.6% 8.8%
4.5% 4.6%

ROA

Shareholder
returns(total return ratio:
40-50%)

Financial leverage:(shareholders’ equity ratio at the 30% level)

Shareholder
returns policy• Updated returns policyemphasizing dividends• Phase I total return ratio:
40-50% (a phased increase ofdividend payouts)• Phase II dividend payout ratio:
40% level. Acquisition oftreasury shares is not includedin the plan but will be consideredaccording to the situation.

UPDATE

Financial leveragepolicy• No change in the policy ofmaintaining a shareholders’equity ratio at 30% level.

Integrated Report 2022

53

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

CFO Interview

The purpose is to satisfy both preparedness
for market fluctuations and investment capacity at the time of investment opportunities.
The real estate industry is a business that requires large
amounts of investment per project and a lot of funds. Given
the fact that the amount of borrowings will increase to acertain degree with the Company’s profit growth, it isextremely important for us to maintain financial soundness.
We believe that the discipline of setting shareholders’equity ratio at a level of 30% will enable us to withstandcyclical market fluctuations, which are a particular featureof the real estate industry, from the viewpoint of financial
soundness and enable bold decision making when a large
investment opportunity presents itself.
Although we may potentially see a decline in theshareholders’ equity ratio when upfront investment
increases, we will continue to operate with a financial
discipline in mind and steadily accumulate equity capitalthrough profit growth.

What is your financing policy, amid the possibility
for interest rates to increase going forward?

The three key points are dispersion of debt
repayment (redemption) ladders, diversification of financing methods, and sustainablefinancing initiatives.

54

Nomura Real Estate Holdings, Inc.

The first point is risk management through proper disper­sion of debt repayment (redemption) ladders. The Company
sets the ratio of long-term and fixed-rate debts at 90% or
higher, and distribute annual repayment (redemption)amounts and deadlines. Through that, the Company manages the cost impact of rising interest rate.
The second is the diversification of financing methods.
We appropriately manage risks and costs by issuing
corporate bonds and increasing the number of funding
sources. In the medium to long term, we hope to improve
our credit rating and further enhance the stability of our
financing by increasing our financial soundness.
In addition to these points, we will also focus on
procuring funds through sustainable finance. In the last
integrated report, we mentioned that we will raise approximately ¥200.0 billion through sustainable financing overthe next five years. As of the end of June 2022, we havealready succeeded in raising ¥71.0 billion. We believe that
this kind of financing is significant both in terms of
responding to the strong needs of lenders and investors
and contributing to society by conducting our own sustainable business operations through financing.

The Company’s shareholder returns policy has been
updated. Can you explain the way of thinking behind this?

We consider it to be an optimal returns policy
to contribute to the improvement of corporate
value and TSR in the medium to long term.
Our basic policy is to properly return the fruits of ourbusiness activities to our shareholders. To do so, it isimportant to appropriately allocate profits generated byhigh ROE.
If, hypothetically, we can achieve an ROE that exceeds
the expectations of our investors, reinvesting the fullamount of profit would lead to the fastest growth of EPS,
and theoretically this would be the correct way to increase
corporate value. But there is also the practical point of
whether such investment opportunities exist to such an
extent in the actual real estate market. The profit growth
and returns policy presented by the Company this time
represents our pursuit of an optimal balance between
business investment opportunities leading to further
growth and returns to shareholders. If we are less able tosecure business opportunities than anticipated andtherefore cannot expect to see profit growth, we may havethe option of increasing returns.
This idea is shown here in the figure. To continue improving our TSR, which must be valued by investors, in the longterm, we must be aware of both increases in EPS, which
contributes to stock price performance, and increases incash dividends, which contribute to dividend yield. We
believe that emphasizing the balance between investments(i.e., profit growth) and shareholder returns, while at the sametime assessing the business environment, will lead to an
improvement in both corporate value and TSR.
The new plan also sets forth policies placing moreemphasis on shareholder returns in the form of cash
dividends. In terms of specific guidelines, the total return
ratio for Phase I (including the acquisition of treasury
shares) is set at 40-50%, and the dividend payout ratio for

Phases II and III is set at the 40% level.
We consider Phase I to be the phase in which we will
steadily achieve our target of business profit of ¥115.0
billion and ensure 8% profit growth. Since the current
share price level is still not satisfactory, we have set the
total return ratio for Phase I at 40-50% and will convey astrong message from management to the market throughcash dividends and flexible acquisition of treasury shares.
Toward Phase II, we will also gradually increase our dividend payout ratio from 31.7% (actual rate for the fiscal
year ended March 2022) to 40%.
Regarding the improvement of TSR in Phases II and III
and beyond, we aim to drive the improvement of EPS
accompanying profit growth while supporting it with cash

dividends at a payout ratio of 40% level. To avoid any
misunderstanding, I should say that we are not in any way
denying the acquisition of treasury shares. The acquisitionof treasury shares should be determined flexibly based on
factors such as the company’s share price at that time,
investment opportunities, ROE, and financial position at
the time. For example, if ROE is low, there are no investment opportunities and the share price is also low, then it
is more rational to acquire treasury shares than reinvestment, and we will take a bold approach to do so.
However, we have not factored in such assumptions at
this point. When we enter Phase II, we will consider optimal capital allocation according to the share price leveland business conditions at that time.

Capital allocation (for the nine-year period of the Mid- to Long-term Business Plan)• Achieve both growth investment and returns while enhancing our ability to generate cash flows, mainly through development profits.
• Aim to improve TSR by increasing EPS and cash dividends.
Cash IN

Cash OUT

Financing throughinterest-bearing debts

Net investments:¥700.0 billion(shareholders’ equity ratio at the
30% level)

Cumulative
depreciation andamortization

Residential Development:¥50.0 billion
Commercial Real Estate:¥500.0 billion
Overseas: ¥150.0 billion

Increase in EPS

Increasein EPS

Cumulative net profits
Securing cash flows
through high efficiency
management
Expected profit composition
ratio in Phase III
Property Sales:
55%
15%
Leasing:Service & Management: 30%

Cash flows from operating activities

DX and ICT investments(¥130.0 billion)
Strategic investments, etc.
Acquisition of

Shareholder treasury shares
returns(see right)

Cash dividends

Cash flows from investment activities

Increasein cashdividends

Increasein profits

Phase I

Phase II & III
Increase TSR throughmainly an increase in EPS
by business growth andcombined with anincrease in dividends

Message frommanagement

Reductionin shares
issuedProfit growth

Increase TSR through a
combination ofbusiness growth andreturn methods

Dividendyield

Share priceperformance

TSR

Contributing to TSR

Please tell us the background to setting the appropriate
level for shareholders’ equity ratio at 30%.

Increase in
cash dividends
A steady
increase individends

Acquisition oftreasury shares

Dividend payout
ratio

Total return ratio: 40-50 %Annualaverage
profitgrowth rate:

Determine
flexibly

Phased increase individend payout ratio
toward Phase II

8% level(to be consideredaccording toconditions)

Dividend
payout ratio:
40 % level

Cash flows from financing activities* Due to the simplified classification, it differs from the actual statements of cash flows.

Lastly, please tell us about your role and resolve as CFO.
By establishing the Vision of “Be a ‘Life & Time Developer,’as never seen before,” we have made it clear what theGroup should aim for as it heads toward 2030. We willtransform in various fields, such as digitalization, sustainability, and overseas markets, which are not restricted by
the conventional framework of the real estate industry. I,
personally, am looking forward to the changes to gain therecognition of our stakeholders as a growth industry.
Under our system of management based on highefficiency and high shareholder returns, my role is tosupport the Group’s sustainable, high-level growth from afinancial standpoint. In addition to enhancing the quality
and quantity of our earnings in each Business Unit, we will
aim to create new value through organic connections
between each business in our business portfolio strategy.
In preparation for the formulation of our returns policyemphasizing dividends, as outlined in the new plan, at thetime of the announcement of financial results for the third
quarter of the fiscal year ended March 2022 (prior to theannouncement of the plan), the Company decided to revise
its earnings forecast upward. Moreover, the Company
announced forecast of dividend increase at an unusual
timing for our company and tried to see the reaction of themarket. As a result, we received many positive opinionsfrom the stock market and investors regarding our stanceof emphasizing dividends, and it was at this time that I
became confident that our capital policy is oriented in thesame direction as the market. I believe that maintaining a
constant dialogue with the market in this way is essential
for increasing corporate value.
Going forward we will continue to communicate with
our stakeholders, including shareholders and investors,
more than ever, to further enhance our corporate value.

Integrated Report 2022

55

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

Overview of the Mid- to Long-term Business
Plan (FY2023/3 – FY2031/3)

Phase III180.0 -

Phase II

The Group formulates and executes long-term business plans by taking into account the characteristics of its real estate business, which
has a long business period. At the same time, the Group flexibly reviews the plans in principle every three years to ensure highly effective
management plans that reflect changes in the external environment.

Phase I

140.0 115.0

77.2

76.6

92.7

82.8

79.6

76.4

9.1%

10.1%

9.4%

97.0 *3

9.2%
7.4%

8.9%

■ Business profit
● ROE

*1, 2

(Billions of yen)

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3*1. B usiness profit = operating profit + share of profit (loss) of entities accounted for using equity method +amortization of intangible assets associated with corporate acquisitions*2. Figures before FY2018/3 are operating profit.
*3. Forecast as of July 28, 2022.

Mid- to Long-term Business Plan
(FY2017/3 – FY2025/3)

Overview of the plan/Financial targets“Creating Value through Change”• Steadily expand earnings in existing businesses• Achieve sustainable earnings growth with high asset
efficiency founded on a stable financial base
• Make active efforts to realize long-term growth

Review/Achievements“New Value, Real Value”• Build an optimal business portfolio that combines businesses that havedifferent risk/return characteristics• Increase both investment and recovery and return to shareholders throughhighly efficient management that exceeds cost of equity• Based on awareness of the external environment, four value creation
initiatives clarify the value creation that the Group aims for

Phase I: FY17/3 – FY19/3• Operating profit: ¥85.0 billion

Four value creation initiatives

Mid-term policies• ROA 5% or more
• ROE 10% level• Shareholders’ equity ratio 30% level• Dividend payout ratio (DPR): Around 30%

Realization of enriched
lifestyles and workstyles

Multifunctional urban development
toward exceptional convenience,
comfort, and safety

Urban development and community
building concerning the future of the
global environment and local communities

Global expansion of high-quality
products and services• Business profit: ¥85.0 billion • Total return ratio: Around 40-50%• ROA: Around 4-5%
• ROE: Around 8-9%

• Enhanced shareholder returns through dialogue with• Financial targets, such as business profit, ROA, ROE and total return ratio
were all achieved.
• Implementing initiatives to realize four priority themes.

• Due to the market fluctuations that exceeded theassumptions, of the residential development business,failed to achieve profit plans and ROE and ROA targets

FY28/3

FY31/3(Phase I)(Phase II)(Phase III)

Mid- to Long-term Business Plan (FY2023/3-FY2031/3)
Evolve and transform approaches and methods of value creation to realize the Nomura Real Estate Group 2030 Vision.
Realize high profit growth, and high asset and capital efficiency. Achieve both high shareholder returns andhigh growth.
Promote sustainability by viewing the Group’s sustainable growth and contribution to a sustainable society as
an integral part.
Nomura Real Estate Group 2030 Vision

Be a “Life & Time Developer,” as never seen before

Phase I: FY20/3 - FY22/3

Results

Issue

FY25/3(Forecast)Priority theme | Realize high profit growth and high asset and capital efficiency

Results

capital markets (acquired treasury shares for the firsttime and continued dividend increase)• Steadily paved the way for future growth by promoting
mixed-use development and expanding participationin overseas projects

Main initiatives
Achieving original productdevelopment, such as acondominium version of thebuilding-wide air conditioning
system “Yukai-full,” etc.

KAIZEN Project(improvement project) toaccelerate high-quality
manufacturing in overseas
business

Phase I: FY23/3 - FY25/3

Phase II: FY26/3 - FY28/3

Business profit: ¥115.0 billion

 usiness profit: ¥140.0 billion
Bor more (FY28/3)
Dividend payout ratio: 40% level
ROA: 5% level
ROE: 10% level(FY25/3)

Total return ratio: 40-50%
ROA: 4.5% level
ROE: 9% level

Profit/Financial targets

Issue

Average business profit growth rate for Phase I was low at 5.2%

P58-59

Achievement status of financial KPIs
Results for FY19/3

Mid- to Long-term Business
Achievement status
Plan (Phase I)

Results for FY22/3

Mid- to Long-term Business Plan (Phase I)¥79.1 billion¥85.0 billion

Business profit¥92.7 billion¥85.0 billion

4.6%

5% or more

Total return ratio

44.3%

around 40-50%

ROE

8.9%

10% level

ROA

4.7%

around 4-5%

Shareholders’ equity ratio

29.9%

30% level

ROE

9.2%

around 8-9%

ROA

Nomura Real Estate Holdings, Inc.

Achievement status

Phase III: FY29/3 – FY31/3

Business profit: ¥180.0 billion ormore (FY31/3)
Dividend payout ratio: 40% level
ROA: 5% or more
ROE: 10% or more

Evolution and transformation of value creation approaches and methods

Achievement status of financial targets

Operating profit

56Mid- to Long-term Business Plan (FY2020/3-FY2028/3)

FY23/3Financial strategy

Business strategy for growth・ Further expansion of domestic real estate development
business・ High profit growth of Service & Management Sector・ Steady growth of overseas business

P60-61Strategies by businessResidential Development
Business Unit

Commercial Real EstateBusiness Unit

Overseas Business Unit

P78-89Investment Management
Business Unit

Property Brokerage &CRE Business Unit

Overseas Business Unit

Sustainable strategy

P62-69Human resources
strategy

P70-71DX strategy

P72-75Integrated Report 2022

57

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

Overview of the Mid- to Long-term Business Plan (FY2023/3 – FY2031/3)

Profit Targets (Business Profit)

Financial Targets

Realize an average annual business profit growth rate of 8% level. Business profit is expected to grow approximately double
the current level during the period of the plan.

Business strategy for growth

Average annual
growth rate %
level

8

• Further expansion of domestic real estatedevelopment business• High profit growth of Service & Management Sector• Steady growth of overseas business
Average annual
growth rate %level(Billions of yen)

8

Average annual
growth rate %
level

8

ROA・ROE

180.0 -

140.0 -

Shareholder Returns

Phase I

After Phase II

Phase I

After Phase II

Increase investment to achieve
profit growth from Phase II
onward while maintaining ROE
that exceeds the cost of equity.

Expect improvements in ROA
and ROE as projects begin tocontribute to profits after therevision of investment targets
and expanding thecontributions of overseas
businesses to profits.

Make returns by combining
stable dividends with agile
acquiption of treasury shares.
Dividend payout ratio will beraised gradually to the 40%
level heading toward Phase II.

Continue to increase dividend
payouts along with profit
growth, in line with thedividend payout ratio of 40%
level. Consider acquiption oftreasury shares depending on
business conditions.

10%

115.0
3%

92.7

FY22/3 Results

4.0

Overseas Business Unit

Phase I

Phase II

Phase IIIFY22/3 Results

4.5% level

5% level

5% or more

Total return ratio: 44.3%

ROA

4.7%

55.0

38.5

ROE

9.2%

9% level

10% level

10% or more

20%
32.5

Investment Management
Business Unit
Property Brokerage & CRE
Business Unit
Property & Facility
Management Business Unit

7.8

9.0

11.7

12.0

9.2
-7.4

10.5

FY22/3Results

FY25/3Phase I

Other and Adjustment

FY28/3Phase II

FY31/3Phase IIIThe land bank rate for Phase I is generally at mostly 100% (as of the end of FY22/3). We aim to generate profits from Phase
II onward.

Phase I

Phase II• Land bank rate of around 50% for each business• Profit contribution of projects after reviewing investment targets• Starts in new large-scale development projects

Stable supply of
Residential Development

sales business
Commercial Real Estate
Commercial Real Estate

over

Secured landbank rate:

Commercial Real Estate

Overseas business Unit

Mostly58¥30.0 billion each fiscal year

Residential Development

100％ for all businesses

Nomura Real Estate Holdings, Inc.

4,000-5,000 units in housing
sales business

40.0

Profit from property sales: ¥billion level for each fiscal year
New operations (Non-current assets): N ihonbashi 1-chome Central District
and Shibaura Project (South Tower)

Secured landbank rate

Residential
Development

Commercial
Real Estate30-50％

50-60％ 40-70％

Capital allocation to maximize corporate value

Improve ROE

Increasing EPS

Shareholders return

Create ROE of 10% or more thatexceeds the cost of equity

Aim for average annual
growth of 8%

Continue to increase
dividends to achieve a
dividend payout ratio of 40%
levelSpecific initiatives and measures•	Unique business strategy to realize high profit growth,and high asset and capital efficiency P34-41•	Business portfolio strategy (realization of ROA of
5% or more)•	Appropriate financial leverage (shareholders'equity ratio of 30% level)

Reduce the cost of equity

Stable supply of

Profit from property sales:

Dividend payout
ratio: 40% level

40-50%

Optimal utilization of profits generated from high ROE that generates equity spreads
Maximize corporate value by both EPS increase through annual profit growth of 8% level and high shareholder returns

Expand equity spreads

Profit Growth Roadmap (Development Sector)

4,000-5,000 units in housing

Dividend payout ratio:
31.7%

Total return ratio:

Approach to improving corporate value under the plan

*1. Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions*2. Calculate the profit ratio of each division after excluding other and adjustment amounts from the business profit forecast.

Residential Development

Phase III

30%

26%

-8.0

• Land bank for each business has already been sufficient• Accelerating investments for growth in Phase II onward

Phase II

26%

Aim to reduce the cost of equityfrom 7-8%

Optimal utilization of earned profits

32.5

Residential Development
Business Unit

Phase I

40%

45%

2.0
Commercial Real EstateBusiness Unit

Achieve high asset and capital efficiency with high shareholder returns.

Specific initiatives and measures•Business portfolio strategy(business expansion starting fromdevelopment)•Investment and recovery strategy•Leasing asset portfolio strategy

Specific initiatives and measures•	Sustainability initiatives (risk reduction)
Sustainability strategy and human resources
strategy•Governance enhancement•Risk management

Evolve and transformapproaches and methods ofvalue creation•Strategies by business•Sustainability initiatives(expand our business
opportunity)•Sustainability strategy andhuman resources strategy•DX strategy

Specific initiatives and measures•Return the benefits of profit growth
to shareholders (expect to pay
dividends that exceed those paid
during the previous plan period)•Increase in cash dividends thatcan contribute to TSR (Phases I, II
and III)•Implement stable dividend payouts
and flexible acquisition of treasury
shares (Phase I)

Overseasbusiness Unit

Contributing to improve ROE

Integrated Report 2022

59

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

Overview of the Mid- to Long-term Business Plan (FY2023/3 – FY2031/3)

Financial Strategy
Business portfolio strategy

Investment and Recovery Strategy (Residential Development/Commercial Real Estate/Overseas)

Leverage the characteristics of each business to achieve a business portfolio that combines profit growth as well as highasset and capital efficiency.

Aim for high and sustainable profit growth, expand net investment while maintaining and improving ROA and ROE.
(Billions of yen)

Key points of Business portfolio strategy• B usiness expansion through collaboration and value chain-type businesses stemming from real estate development capability
based on the company’s track record —a core component of value creationof the Property Sales and Leasing businesses contributing to the growth of the Service & Management business• Expansion• A chieve ROA of 5% or more through the combination of Leasing business (low ROA) and Service & Management business (highROA) which both generate stable cash flows• A ccelerate profit growth by reviewing earnings targets for individual projects, improving productivity through DX and strategic
replacement of property assets

Phase I

Phase II

Phase III(FY23/3 – FY25/3)(FY26/3 – FY28/3)(FY29/3 – FY31/3)

Investment

850.0

850.0

900.0

2,600.0

Recovery

800.0

850.0

900.0

2,550.0

Investment

700.0

800.0

1,000.02,500.0

Recovery

450.0

700.0

850.0

2,000.0

Investment

150.0

200.0

200.0

550.0

Recovery

50.0

150.0

200.0

400.0

Investment

1,700.0

1,850.0

2,100.05,650.0

Recovery

1,300.0

1,700.0

1,950.0

4,950.0

Net investment

400.0

150.0

150.0

700.0

Total

Residential Development

Commercial Real Estate
Real estate development capability based on thecompany’s track record

Overseas

Property Sales BusinessBusiness typeService & Management BusinessLeasing Business

Total

4

1
1
Housing sales
Propertydevelopment
for sales

Overseas

Businesscollaboration

2

Profitability

Value chain

5 Expansion

Investment
management
Property brokerage &CREProperty & facility
management

3

6
5 Expansion

Leasing
5

7

Leasing asset portfolio strategy (Commercial Real Estate Business Unit)
Business
Business volume

1 Improve profitability throughreviewing targets of individual
projects
2 Expand business volume throughdeveloping overseas business3 Increase business volume throughthe real estate development
capability

4 Improve profitability by strengthening
proposal capability and enhance
productivity through DX
5 Increase business stocks
associated with stable supply

6 Improve profitability in leasing
assets portfolio by strategic
replacement of leasing assets
7 Increase business volume throughthe real estate development
capability

Businesscharacteristics

Overseas property sales

Domestic property
sales

Property brokerage &CRE

Investment management /Property & facility
management

Leasing

Investment risks

Medium to highMediumLow

Low

MediumEarnings fluctuation
risks

High

MediumROA (medium)

ROA target

Medium to low

Low

ROA (high)Low

Aim for stable revenue (low risk of revenue fluctuation) with ROA of 5% orwill achieve a high level of ROA evenmore through profit growth in the service & management business andwhen expanding investment.

improvement of profit rate of leasing asset portfolio.

Nomura Real Estate Holdings, Inc.

55

30

Realize unrealized gains, improve leasing asset portfolio by increasing the number of new development projects.
Execute sales of a certain amount of newly developed properties, at the appropriate timing.

Sale

Property for
sales

Sale

Investment and recovery

ROA (low)

By improving profitability, this businessProfit breakdown(FY31/3)60* Figures in the table are rounded to the nearest of ¥50.0 billion

15

Leasing property
heldRealization of
unrealized gain
through property
sales

Property replacement at theappropriate timing

Redevelopment andrebuilding
Maintaining and improving
asset value

Realization of
unrealized gain
through property
sales

Property replacement at theappropriate timing

Highly competitive
properties (after
redevelopment andreconstruction)

Integrated Report 2022

61

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

Sustainability Strategy(Climate Change and Natural Environment)
The Group recognizes climate change, natural resource depletion, and ecosystem destruction as important social
issues. We are therefore contributing to realize a sustainable society through environmentally friendly buildings andurban development, including initiatives for an energy-efficient and low-carbon society. We also comply with environmental laws and regulations and promote appropriate environmental management, while stepping up our
initiatives in collaboration with our stakeholders, including tenant companies and suppliers.

Contribution to the urgent global issue of reducing CO2 emissions,

Measurement
indicators (KPI)

Decarbonization

CO 2 reduction

Biodiversity

CO 2 fixation

Initiatives in “energy saving,” “low-carbon business,” and “shift to renewable energy”
SBT: 35% reduction in Scope 1, 2, and 3 by FY31/3 compared to FY20/3

CO2 emissions reduce by 35% (Compared to FY20/3)
Energy conservation performance indicators in new buildings: Maintain ZEH/ZEB-oriented standards

Climate change and natural environment

The Group embraces the following three approaches to decarbonization: “energy saving,” “low-carbon
business,” and “utilization of renewable energy.” In particular, to fulfill its responsibilities as a real estatedeveloper, its first and foremost priority is to supply properties that consume as little energy as possible(“energy saving” and “low carbon”). The use of renewable energy and other initiatives are additionallyimplemented as part of the Group’s decarbonization efforts.

Allocation of decarbonization initiatives
Top priority

Supply properties withlow energy needs

Remaining energy is tobe as renewable energy

Energy saving
and low carbon

Initiatives of
the Group

Energy saving andlow-carbon business
P67

RenewableenergyUtilization of renewableenergy and other initiatives
P67

・Improve energy
efficiency
・Switch to timber-based
properties, etc.

Initiatives for acquiring green building certification
The Group aims to acquire green building environmental certification (e.g., DBJ Green Building,*1
LEED,*2 CASBEE,*3 BELS*4) for all non-current assets and properties for sale (excluding rental
housing) that it newly develops in Japan.
*1 D
 BJ Green Building: A certification system run by the Development Bank of Japan. It is aimed at promoting real estate that contributes tothe environment and society.
*2 L EED: A certification system developed and run by the U.S. Green Building Council (USGBC). Certification is granted to environment-friendly buildings.
*3 C ASBEE: A comprehensive assessment system for built environment efficiency. It includes a certification system run by the Institute for
Built Environment and Carbon Neutral for SDGs (IBEC) and others, and assessment systems by local governments.
*4 B ELS: A building-housing energy efficiency labeling system established by the Ministry of Land, Infrastructure, Transport and Tourism.
The energy efficiency of properties and housing is evaluated and certified by a third-party assessment organization.

Develop timber-based buildings
Initiatives to promote building longevity

Nomura Real Estate Holdings, Inc.

Circular design

CO 2 absorption

CO 2 reduction

Contribute to a decarbonized society and a circular economy
through urban development and service provision that incorporate
longer lives of properties, recycling, and sharing

Obtain biodiversity certification
Promote waste reduction and increase recycling rate

We believe biodiversity can contribute not only to the naturalenvironment but also to the realization of a decarbonized society. In
particular, on the theme of forests, we believe our contribution to
the restoration of the forest cycle through the use of domestic
timber in new buildings will contribute to carbon fixation and anincrease in CO2 absorption, with the recovery of forest functions
thus leading to the realization of a decarbonized society.

Circular design means to pre-install a mechanism for recycling
resources in products and services and/or to extend the life of the
products themselves. It is aimed at reducing waste and also
contributes to the realization of a decarbonized society. We will
make efforts in other ways toward reducing waste and recycling inour different business areas, with a view to collaborating withoutside companies.

Comprehensive partnership agreement with
OKUTAMA TOWN, Tokyo

Promote building longevity

In August 2021, we entered into a comprehensive partnershipagreement with OKUTAMA TOWN in Tokyo, where we operate, tohelp solve the town’s challenges as well as address forest-related
issues and preserve the biodiversity and rich natural environment ofTokyo’s forests.

First private company to sign an “Agreement on the
Promotion of Timber Use in Buildings” with the
Ministry of Agriculture, Forestry and Fisheries
Japan’s self-sufficiency rate for timber is low. Despite the richdomestic resources that are available, there are cases where timberthat has reached its usable age is not being felled due to a failure tosecure a buyer.
In response to this issue, in 2022 the Company entered into an“Agreement on the Promotion of Timber Use in Buildings” with both
the Ministry of Agriculture, Forestry and Fisheries and manufacturers of housing construction materials to develop a stable supply
chain for domestic timber. Specifically, the Group will strive to use a
total of 10,000 m3 of domestic timber over the next five years,
thereby contributing to maintaining the forest cycle, which
serves multifaceted functions
such as revitalizing mountainvillages, promoting the absorption and fixation of CO2, andpreserving biodiversity.

Upstream(forestry operators)

Fell & supply timber that has reachedusable age

Midstream

Develop stable supply system fordomestic timber

Downstream

Use 10,000 m3 of domestic timber overthe next five years in detachedhousing, etc. built by the Group(manufacture of housing construction
materials and trading company)(developer)62

CO 2 fixation

By restoring the forest cycle in Japan, contribute to CO2 absorption
and to the natural environment through urban afforestation andforest preservation, thus enabling rich biodiversity

Reforestation support

Priority issues(materiality)/targets

biodiversity preservation and realization of a circular society that contributes to CO2 reduction

The Company is also working on reducing both life cycle costs andCO2 emissions by promoting building longevity. Specifically, ourre:Premium and re:Premium Duo services significantly extend thecycle of large-scale repair work performed on our condominiums
while our Attractive 30 service adopts highly durable materials andconstruction methods for new construction. These initiatives haveenabled the cycle of large-scale repair work to be extended from thetypical 12 years to 16 to 18 years.

Sharing
Under the H1T brand, the Company operates
satellite-type shared offices that provide a
comfortable space for workers to use asneeded. By reducing travel times and improving productivity, the offices contribute to the
reduction of CO2 emissions and the realizationof a circular society.

Waste reduction
We are working on reducing and recycling
waste at the Group’s NOHGA HOTEL
through efforts such as cutting down on
plastic by scrapping individually packaged bath amenities and using
biodegradable bamboo straws as well as
using name plates and neckerchiefs
made from recycled scrap leather anddiscarded kimonos.

A name plate made fromshredded and recycled leather/kimono fabricIntegrated Report 2022

63

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

Sustainability Strategy (Climate Change and the Natural Environment)
Results of scenario analysis (risks and opportunities) and initiatives based on the analysis

Roadmap to decarbonization

Recognizing that these changes will bring significant financial risks and opportunities to the Group, we are stepping up
initiatives to address climate-related issues.

Initiatives for decarbonization are a major pillar of the Group’s environmental sustainability strategy.
While adhering to the principles of the TCFD, SBT, and RE100, we collaborate with outside companies and focus on uniqueinitiatives as a real estate developer.

Large

Category
Small

Our
recognition

Impact on the Group
Implementation and/or strengthening of GHG emissions reduction regulations in businessand property units (Scope 1, 2)

Response to the TCFD

1 Governance●

The Group is taking Groupwide measures to address
climate change, overseen by the Group CEO. In addition,
the Sustainability Committee, which comprises directors of
Nomura Real Estate Holdings and Group companies andothers, deliberates on and decides related policies andaction plans. The Sustainability Committee sets targets forresponses to climate change and monitors progress on
them.

Policy and regulatory risk・ S trengthening of regulations in Japan and abroad (Energy Saving Act, Tokyo Metropolitan Environmental
Security Ordinance, emissions trading scheme, carbon tax, etc.)
・ Enhancement of subsidy systems (for energy-saving technologies and ZEHs and ZEBs, etc.)

Opportunity

Delay in energy efficiency improvements for properties (buildings, housing, etc.) and indevelopment or introduction of decarbonization technologies

Transition risks

Nomura Real Estate Holdings and Nomura Real Estate Asset Management are fully
aware that the substantial impact of climate change on their business continuity is amajor management issue, and they therefore agreed to recommendations made by the
Task Force on Climate-related Financial Disclosures (TCFD) in order to further promote
their initiatives.

Risk

Expected cases

Market risk・ Rise in real estate development costs・ Investments in decarbonization technologies and energy-efficient equipment・ Introduction of renewable energy

Opportunity

Rise in customer demand for functions related to the environment, energy saving, anddisaster prevention

Risk

Expected cases

Reputational risk

Incorporation of non-financial indicators in performance evaluation

・ Changes in the needs of customers (tenants of buildings, buyers of housing, REITs, etc.)
・ Rise in customer rating of ZEHs and ZEBs
・ Impact on appraisals of properties owned by the Company

Opportunity

Risk of the Group’s initiatives and businesses not being appreciated by investors andconsumers

To respond to climate change while also raising awareness among directors and other management team members ofGroup companies, the Group has incorporated BEI (building energy efficiency index) figures as a non-financial performance indicator into the performance indicators used to calculate bonuses, starting from the fiscal year ending March
2023.

Risk

Expected cases

Technical risk・ A shift in trust and brand value of the Company’s businesses and products・ Impact on financing due to evaluations by shareholders, investors, and financial institutions

Opportunity

Damages due to natural disasters such as typhoons, floods, and torrential rain

2 Strategy●

In the analysis, we examine the risks and opportunities that
may be presented to the Group as a result of climatechange and consider and implement strategies and policies
that capture such risks and opportunities.

Scope of the analysis

Setting out scenarios

The analysis covers all businesses of the Group, including theResidential Development Business Unit (development and sale ofcondominiums and detached housing), the Commercial Real
Estate Business Unit (development, leasing, and sale of officebuildings, retail facilities, logistics facilities, and hotels), the Overseas Business Unit, the Investment Management Business Unit
(management of REITs and private funds), the Property Brokerage& CRE Business Unit (real estate brokerage), and the Property &Facility Management Business Unit (real estate management).
The scope of calculation of GHG emissions includes all of
Scope 1, 2, and 3 emissions generated by the Group.

In the scenario analysis, the Group has adopted as its base casethe “2°C scenario,” assuming the achievement of the Paris Agreement and the realization of a decarbonized society. The “4°C
scenario,” a model in which climate change countermeasures do
not make sufficient progress and the severity of natural disasters
increases as a result, is also considered. The following documents
were the main materials referred to in anticipating possible
changes to the global environment under each scenario. The
Group is also considering the “1.5°C scenario” separately.
・United Nations IPCC Fifth Assessment Report (2014), “Representative Concentration
Pathways (RCP) 2.6” and “Representative Concentration Pathways (RCP) 8.5”
・IEA World Energy Outlook 2020, “Sustainable Development Scenarios (SDS)” and “Stated
Policies Scenario (STEPS)”

Acute physical risk

Risk

Impact of a rise in average temperature on business
Impact on real estate appraisal due to the manifestation of a rise in sea levels
Risk

Expected cases

Chronic physical risk・ Health impact on customers, employees, and suppliers due to an increase in number of very hot summer days・ Damage to real estate values in coastal areas, etc.

Quantitative impact up to 2030 based on
the results of the scenario analysis (risk oropportunity)
Based on the scenario analysis, we will consider
further expanding the coverage of quantitative impacts
in terms of both risk and opportunity going forward.

Financial impact (cumulative) expected up to 2030
Risk

Upon considering climate change strategies, the Group
conducted a qualitative scenario analysis based on the
IPCC Fifth Assessment Report and the details of the Paris
Agreement.

Physical risks

Expected cases・ Damage to or failure of properties owned by the Company due to a natural disaster・ Suspension or delay in construction work for a real estate being developed by the Company due to a natural
disasterOpportunity

TOPIC

Risk

Expected cases

Quantitative impact(maximum figure)

Rise in non-life insurance premiums due to increase in natural disasters¥6.0 million

Introduction of carbon pricing and/or carbon tax¥1.5 billion

Decrease in financing costs due to achievement of CO2 reduction targets¥150 million

Decrease in energy costs due to greater environmental performance of buildings¥0.9 billion

Possible changes to the global environment under each scenario (mainly in Japan)
Some of the possible changes that are expected to have a significant impact on the Group are listed as follows.

Possible changes

the 2°C scenario

the 4°C scenario

Increase in typhoons and floods

Increase (about two times in Japan)

Increase significantly (about four times in Japan)

Increase in the number of extremely
hot days, on which the temperaturerises above 35°C

Increase (by about 10 days in Japan)

Increase significantly (by about 50 days in Japan)

Tightening of laws and regulations

Dramatic tightening of regulations

Regulations will be limited

Customer behavior

Proliferation of ZEHs, ZEBs, renewable energy
Approximately 50% reduction in office energy consumption

Proliferation of ZEHs, ZEBs, renewable energy
Approximately 20% reduction in energy consumption at work

64

Nomura Real Estate Holdings, Inc.

3 Risk management Processes for the identification, evaluation, and management of●climate-related risks on an organizational basis

As for risks and opportunities associated with environmental andclimate change, the Sustainability Committee, Environmental
Subcommittee, and the Sustainability Management Department
mainly consider countermeasures. Among the measures considered, those that are particularly important for the Group’s
management are reported to and approved by the Board of
Directors and the Management Committee.
P114-115 Sustainability Governance

Risks associated with changes in the business environment
due to climate change and risks associated with natural disasters
are also identified as major risks, and the Risk Management
Committee deliberates and discusses necessary measures. The
contents of deliberations are reported to and supervised by the
Board of Directors at least once every three months.
P116-120 Risk Management

Integrated Report 2022

65

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

Sustainability Strategy (Climate Change and Natural Environment)
Roadmap to decarbonization
4 Indicators and targets●

5 Initiatives for achieving targets●

The Group acquired SBT certification in 2020 and also joined RE100 in January 2022. “Indicators and targets” have been set
according to these certifications and the GHG protocol.

Scope 1, 2

Scope 3*Medium- tolong-term
targetTotal GHG (CO2) emissions by FY31/3
compared to FY20/3

Reduce by 35%

Reduce by 35%

Short-termtargetTotal GHG (CO2) emissions by FY26/3
compared to FY20/3

Reduce by 15%

Reduce by 15%

Scope 1, 2

Scope 3

* Applicable to categories 1 and 11

Indicator concerning renewable energy

Medium- tolong-term
targetElectricity consumed by the entire Group by
2050

100% derived fromrenewable energy-

Short-termtargetElectricity consumed by all rental properties*
100% derived from
Nomura Real Estate Development owns in Japan by
renewable energy
FY24/3-

Energy saving

Indicator concerning total greenhouse gas (GHG) emissions

Promote development of ZEH/ZEB-oriented standard buildings
The Group works on developing ZEHs (net zero energy houses) and ZEBs (netzero energy buildings) in new buildings. It has also identified decarbonization as
one of its new priority issues (materiality) and prescribes “energy conservation
performance indicators in new buildings: Maintain ZEH/ZEB-oriented standards”
by 2030 as a measurement indicator (KPI).
The Residential Development Business Unit and Commercial Real EstateBusiness Unit have formulated long-term roadmaps for achieving the ZEH/
ZEB-oriented standards by 2030 for ZEHs and ZEBs, respectively. In achieving
the roadmaps, the energy efficiency indicators sought to be benchmarked eachyear have been designated, and a scheme for linking the compensation of
directors with the level of achievement of the indicators was launched in the fiscal
year ending March 2023.
In the fiscal year ended March 2022, the PROUD Musashi-Shinjo Station Marks
development was selected for the Ministry of the Environment’s High-Rise ZEH-M
Support Project.

PROUD Musashi-Shinjo Station Marks* E xcludes rental assets (including portions used by tenants) for which Nomura Real Estate Development has a direct electricity contract with a powercompany, assets sectionalized or shared between Nomura Real Estate Development and another party, assets subject to sale or demolition, and thecommon areas of some rental housing.

■ Scope 1

150 thousand t (4%)

150

approx.

■ Scope 2

132
126

112

Other:
approx.

190

23

20

FY20/3

FY21/3thousand t(Scope 1, 2: thousand t-CO 2)
200
180
160
129 Reduce by 35% 140
120
97
100
80
107
82
60
40
20
21
15
0
FY22/3
FY31/3(Base year) (Actual figures) (Actual figures)

FY20/3
Actual emissions
Total

3,510

approx.

Category 1

approx.

970

Scope 1, 2
reductionmeasuresthousand t (27%)

thousand t
Base year●	Adopt energy-efficient products for various equipment(LED, air-conditioning equipment, etc.)(Scope 3: thousand t-CO 2)

3,172

approx.

2,500

2,200 thousand t

2,000

(62%)

1,916

1,000
500
0

Property Sales Business
Scope 3

approx. 3,360 thousand t (96%)

Of which the sum of categories 1 and 11, which are subject to SBT certification, is

FY20/3

FY21/3

FY22/3(Base year) (Actual figures) (Actual figures)

Scope 3
reductionmeasures

FY31/3(Target year)● Improve energy efficiency in new building●	Promote use of low-carbon materials (timber, etc.) in
construction

approx. 3,170 thousand t[Reference] Main cause of change between FY20/3 and FY21/3
Scope 1, 2: Drop in electricity use due to tenants’ voluntary restriction of activities amid the COVID-19
pandemic
Scope 3: Decrease in condominium supply due to the pandemic, decrease in condominiums subject tocalculation

66

Nomura Real Estate Holdings, Inc.

PROUD Kanda Surugadai’s exterior and common area

(Tentative name) Tameike Project

Utilization of renewable energy

2,062

1,287

1,500

PROUD CITY Itami’s common building

Reduce by 35%

3,000Category 11

The Company is promoting the development of timber-based buildings, as CO2 emissions in building construction can be
reduced by switching from conventional steel-framed construction to one that incorporates timber, a low-carbon material. The
Residential Development Business Unit has adopted a policy for the default use of domestic timber for the structures of standalone common areas as well as for the interiors of common areas such as lounges.
In the fiscal year ended March 2022, we entered into a basic agreement with a co-creation partner to promote R&D for
timber construction materials. We will also deepen our collaboration with construction companies as we switch to materials
with a low environmental load (low-carbon materials).

● Utilization of renewable energy■ Scope 3
3,500(Target year)

Timber-based buildings

Low-carbon business

Scope 1, 2Service & Management Business[Reference] Main cause of change between FY21/3 and FY22/3
Scope 1, 2: S witch to renewable energy menus for electricity, sale of non-current assets
Scope 3: Increase in completions of new properties (condominiums, properties for sale)

Switch to renewable energy

Leasing Business

Having joined the RE100 initiative in January 2022, the Company aims to switch to 100% renewable energy for the Group’sbusiness activities by 2050. Ahead of this, renewable energy is planned to be introduced to all rental properties in Japan owned
by Nomura Real Estate Development, the core company of the Group, by the fiscal year ending March 2024. This will include
the energy used by building tenants. Going forward, we will sequentially switch to internal power generation, additional generated energy,* or renewable energy.

Landport Atsugi Kaneda

Landport Kashiwa Shonan I* To contribute to the further proliferation of renewable energy by establishing new renewable
power generation facilities

Nomura Real Estate Development andTEPCO Energy Partner are working toachieve carbon neutrality by 2050. As
part of that effort, they have launched
the Virtual Mega Solar initiative for
PROUD SEASON, detached housingsthat Nomura Real Estate Development operates mainly in the Tokyo
metropolitan area. The Virtual Mega Solar initiative provides solar poweron the same scale as is generated by a mega solar power plant.
(→See P114 for details)

Integrated Report 2022

67

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

Sustainability Strategy (Society and Employees)
As a corporate organization that links people and communities to the future, the Group aims to realize lifestyles suited to people withdiverse backgrounds and values. In all of its business activities, the Group respects the dignity and basic human rights of all people
and promotes sustainability for co-creation that transcends organizations and business categories by setting diversity & inclusion
and human rights as priority issues.

Strengthening the foundation for promoting sustainability for
Priority issues(materiality)/targets

Diversity & inclusion

Human rights

Create an organization that enables diverse workers, including women and foreign nationals, withvarious backgrounds and values to make meaningful contributions

Measurement
indicators (KPI)“co-creation” that transcends organizations and business categories

Female manager and juniormanager ratio: 20%

 hildcare leave utilization rate byC
men and women: 100%

 rocurement guideline survey
P
implementation rate: 80%

Solidify a corporate foundation of mutual respect for the dignity and basic human rights of every employee and business partner

 reation of human rightsCdue diligence systemP ercentage of participation inhuman rights training: 100%

Providing products and services
with inclusive design*P ercentage of implementation of
one-on-one meetings: 100%Society and employees* A design process that involves people with diverse backgrounds, values, and challenges

Nomura Real Estate Group Diversity & Inclusion Policy and promotion system

Developing a human rights due diligence system

Diversity & Inclusion Policy

Promotion system (Wellness and D&I
Management Committee)

To realize a “society where people support andconnect with one another and where no one willbe left behind” and an “innovative society where all
people with various backgrounds and values canbuild on their strengths,” which we uphold in our
Sustainability Policy, we released the Nomura Real
Estate Group Diversity & Inclusion Policy, which
outlines our principles in promoting diversity &inclusion, in September 2022.

The Group established the Wellness and D&I Management Committee in the fiscal year ending March 2023.
The Committee deliberates and determines actionplans and targets, identifies issues and determines
improvement measures, and monitors plans andtargets, reflecting the results in management plans
and business activities.
President and Representative Director and GroupCEO of Nomura Real Estate Holdings is overseeing
the operation of the system.

The Group respects the dignity andbasic human rights of all of its stakeholders and has demonstrated this bysigning the UN Global Compact. To step
up its human rights initiatives, the Group
formulated its Human Rights Policy in thefiscal year ended March 2021 and, since
the fiscal year ended March 2022, theGroup has been developing a system topromote human rights due diligence on afull scale.

Main contents

Major international human rights standards that
the Group respects and supports

Compliance with international
human rights standards
Scope of application
Respecting human rights in practice
Identifying salient human rights issues
Relationships with stakeholders→Describe initiatives by four categories: employees, suppliers
and other business partners, customers, and local
communities

International Bill of Human Rights
The ILO Declaration on Fundamental Principles and Rights at Work
The ten principles of UN Global Compact
Children’s Rights and Business Principles
Guiding Principles on Business and Human Rights

Remedial measures
Nomura Real Estate Group Human Rights Policy: https://www.nomura-re-hd.co.jp/english/sustainability/pdf/hrp.pdf

The full text is available here: https://www.nomura-re-hd.co.jp/english/sustainability/pdf/dip.pdf

Initiatives of
the Group

Roadmap for promoting diversity & inclusion

Phase 1

With an awareness that all of us are diverse in various characteristics, and any one of us may belong to theminority in certain characteristics at the same time as belonging to the majority in other characteristics. The
Group shall solve the issues that arise from these characteristics and create substantially equal opportunities
that focus on the individual differences of each employee. The Group shall work on the promotion of inclusive
design in which people with various characteristics inside and outside the Group participate in product/
service development processes and contribute their diverse perspectives, thereby creating yet unseen value
through its business activities.

STEP

Roadmap for achieving the Nomura Real Estate Group 2030 Vision
We are seeking to swiftly foster a diversity and inclusion culture by designating three items—raising diversity
and inclusion awareness, routinely incorporating diversity and inclusion into business activities, and developing a culture of innovation—as important themes for achieving our vision. We then classified them into threedifferent steps, and set key goals for each step. The key goals for Step I are the achievement of annual paid
leave acquisition targets set forth by Group companies and the utilization of childcare leave by both men andwomen at a rate of 100%. We aim to link the achievement of these goals to the development of the workplaceenvironment and a change in awareness at the managerial level.
See here for details: https://www.nomura-re-hd.co.jp/sustainability/labor/diversity.html (Japanese only)

Step I (2 years of FY23/3 and FY24/3)

Step II (2 years of FY25/3 and FY26/3)[Raise diversity and inclusion awareness][Routinely incorporate diversity andinclusion into business activities]

Foster a corporate culture where employees
respect one another’s differences and feel
accepted themselves

Step III (5 years of FY27/3 to FY31/3)

Diverse organizations and people work together
and continue challenges themselves[Develop a culture of innovation]
Create new value

Foundation: Flexible ways of working, wellness of mind and body, psychological sense of safety
Specific measures (excerpt)⚫Diversity and inclusion training for all Group employees⚫Measures to encourage men to take childcare leave⚫Awareness survey targeting Group employees⚫A framework for inclusive design initiatives

Progress of key
performanceindicators (KPI)(FY22/3)

68

Nomura Real Estate Group Human Rights Policy

Nomura Real Estate Holdings, Inc.

Key goals for Step I(1) A chieve annual paid leave acquisition targets(2) A chieve 100% childcare leave utilization rate by men and women

In promoting the active participation of all employees, and thereby incorporating diverse perspectives into its businessactivities, the Group has set goals related to the active participation of women and the utilization of childcare leave.
The Group is also developing a personnel system and promoting various measures to encourage the active participation of people who have various lifestyles and are at various stages of their life, such as having and raising children,
providing elderly care, and coping with injuries/illnesses.
Female manager and junior manager ratio

11.6%

Childcare leave utilization rate:(Rate among men: 15.8%)

96.2%

1

Phase 2
STEP

2

STEP

3

STEP

4

Status as of October 2022

Phase 3

5

STEP

STEP

Clarifying human rights
risks and issues in thevalue chain

Identifying significant human rights
issuesFormulation of the
Human Rights
PolicyEstablishment of a system to
implement human rights due
diligence

Implementation of human rights
due diligence and the PDCA cycle

Human rights risks are identified
on two axes, with “all concerned
stakeholders” and “theCompany’s value chain.”

To identify particularly
serious human rights risks,
risks are mapped on the twoaxes of “severity of impact”
and “probability ofoccurrence.”

Following deliberation by
the Sustainability
Committee, the Human
Rights Policy was approvedby the Board of Directors.

Following an investigation involving related
departments and an analysis of the current
situation, four priority issues were identified,and 16 to-do lists were created. (Thepriority issues being: (1) Wellness andhuman rights of employees; (2) Overseas
business, non-Japanese workers; (3)Human rights in the supply chain; and (4)Remedial measures)

The four priority issues and 16 to-do lists arebeing addressed (e.g., survey on form of
employment of overseas non-Japaneseemployees, fact-finding survey given to
non-Japanese technical interns hired bysuppliers)

6

Establishment of agrievance mechanism

Engagement with the Group’s Procurement Guidelines
The Group formulated the Nomura
Real Estate Group Procurement
Guidelines in 2018 and has been
making efforts to familiarize its
business partners with them.
Engagement activities were conducted with 10 business partners in
the fiscal year ended March 2021
and with the roughly top 200
business partners in terms oftransaction value in the fiscal year
ended March 2022. The Group willcontinue to expand those meetings
in the future and request them tocomply with our guidelines.

FY2019/3Efforts to raiseawareness of theGroup’s Procurement Guidelines
Since the disclosure of
the guidelines in 2018,
the Group has conductedawareness-raising
activities targetingaround 4,600
companies.

FY2021/3
Engagement
activities with 10
business
partners

FY2022/3

FY2023/3

Expand the targets of engagement companies

Review of the Group’s
Procurement
Guidelines
Expand the targets ofengagementcompanies

The top 200 or so business partners were identified
based on the value of transactions undertaken with
the Group’s major companies (¥237.0 billion in total)in the fiscal year ended March 2021.
 questionnaire survey on compliance with the 28 items of theA
Procurement Guidelines was then conducted targeting thesebusiness partners.
Responses were received from approx. 90 companies (accounting for
approx. ¥90.0 billion in transaction value) = 37% questionnaire
implementation rate (¥90.0 billion as a proportion of ¥237.0 billion)
Feedback materials were sent to all respondent companies
Interviews with 10 further identified companies were conducted
directly

Increase awareness ofthe guidelines, mainly
among new business
partners

Increase awareness of the guidelines, mainly among new business
partners

P134-135

Integrated Report 2022

69

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

Human Resources Strategy
The Group promotes to provide Wellness Management so that all of
its executives and employees can work energetically in good physical and mental health, which leads to sustainable corporate growth.
It also seeks to realize employee happiness and become a company that can continue to take on challenges through the cycle ofactive participation of a diverse workforce and the securing of
human resources in growth areas.

Realize employee happinesscan continue to take on

and become a company thatchallenges

Success of diverse human resources
Realize wellness that each employee working withvigor

Promote diversity and inclusion to enable a diverse
workforce P68

Human resources retention in growth areas
Retain and foster human resources in the Development
Sector that is the starting point for growth

Allocate personnel to focus areas of the Service &Management Sector• Grow to a corporate group that contributes to growth and rewarding for• Establish a working environment that maximizes the potential of diverse• Obtain personnel with a high level of expertise in multi-use, redevelopment

employees• Cultivate management personnel and leadership personnel that draw out
diverse capabilities of each employee
re-skilling, in which each employee voluntarily develops his or her own• Introduce
potential

personnel with a variety of backgrounds and values such as women, seniors,
LGBTQ, people with disabilities, and foreign nationals through the promotion ofdiversity management training• Support the balance of work and childbirth, childcare, nursing care, injury andillness, and raising awareness aimed at shortening working hours

and architecture by strengthening recruitment• Distribute resources to growth areas through personnel exchanges within
the Group• Cultivate global personnel• Recruit and cultivate national staff in countries where the Group operates

Promotion of wellness

Work style reforms

Development of a system to realize human resources strategies

Planned implementation of new working styles trial
following relocation of the Group’s head office

Establishment of the Human Resources Strategy Committee

Group-wide, level-specific training

Nomura Real Estate Development has established the Human Resources
Strategy Committee as a subordinate organization of the Management
Committee to develop a system that promotes greater discussion on the
allocation of human resources to growth areas.

We provide a competence development program so that every employee of theGroup can perform his or her tasks at a professional level with a high degree of
specialization.
In addition to the competence development program of each Group
company, we provide group-wide, level-specific training.

Revision of the personnel system

Level-specific joint training for Nomura Real Estate Group
companies

Wellness questionnaire at Group companies
Wellness questionnaire surveys are conducted targeting all Group employees tomonitor the status of wellness promotion across the entire organization. Issues
are identified based on presenteeism, absenteeism, the stress check, andlifestyle scores. The following two goals have been set in the fiscal year ending
March 2023.

Rate of improvementof presenteeism: 30%

Lifestyle improvement(priority on meals and exercise)Through our head office relocation project, we aim to realize employee
happiness and become a company that can continue to take on challenges. We
will establish and deploy systems and operational rules in stages so as torealize flexible ways of working.

Monitoring improvement of the work environment
We will deliberate and determine the establishment of action plans, setting oftargets, identification of issues, and formulation of improvement measures on
working hours and annual paid leave rates at each Group company, andmonitor the progress management of the plans and targets. The results will bereported to the Board of Directors and reflected in management plans andbusiness activities.

personnel in the Group
Allocate retained personnel to focus areas<Focus areas>
Investment management

Property Brokerage & CRE

Property & Facility Management

Private funds business

Middle business*

Construction ordered business* R eal estate brokerage for small and midsize companies, business owners, someindividual investors and high net worth individuals

Competence development

Target level
General manager
position or equivalentWorkation trials
We carry out “Workation” trials aimed at returning profits to Group businesses
and balancing long vacations with flexible ways of working.

Global human resources
universities abroad, undertaking internships at foreign companies)

Promotion of one-on-one meetings across the entire Group
Deeming employees’ psychological safety to be important in achieving
employee growth and wellness, the Group introduced one-on-one meetings in
October 2020.
(Percentage of implementation of one-on-one meetings in FY22/3: 84%)

70

Nomura Real Estate Holdings, Inc.

In search of optimal ways of working for maximizing
the performance of individuals and the organization
alike, we have compiled information on the efficientdivision of physical and remote work and know-how
on improving productivity to create the Workstyle
Guidebook. Customizable by each company andorganization, the guidebook helps promote flexible working styles across theentire Group.

level)• Organizational management (practical level)• Business formation and management strategy from a• Problem identification-based problem solving (practical• P romotion of programs upon overseas assignment (taking language courses

Creation of the Workstyle Guidebook• E xecutive management programGroup or management perspective

Hiring and development of global human resources and DX human resources
Senior Manager or
equivalent• H iring of international students (foreign nationals) (cultivating global personnel)• P articipation in the Asia Business Leader Project (attending lectures at
See here for details: https://www.nomura-re-hd.co.jp/sustainability/labor/healthandsafety.html(Japanese only)

Training description (excerpt)• Problem identification-based problem solving (practical
Senior Manager
position equivalent

Certification by survey of Group companies’ healthmanagement through wellness-related measures
We promote measures tailored to each Group company, such as encouraging
employees to take paid leave or setting periods of intensive wellness measures(implemented each December since 2018).

In order to enable individuals and the organization to continue to take onchallenges, Nomura Real Estate Development has introduced a multi-track
personnel system where diverse workers can develop their respective strengths,
achieve growth, and play active roles in the workplace. In addition, everyorganization will also introduce the Human Resources Development Meeting(scheduled for April 2023) for the purposes of understanding each employee on
an individual level, providing growth opportunities for them, and expanding thearea in which they can make contributions.

• Improve productivity through the acquisition and cultivation of DX

3rd-year employee• Problem-solving dialogue• Business idea work

2nd-year employee• Occurrence-based problem solving• Task sharing work

1st-year employee• Logical presentation, thinking, writing• Business stance• Team building, communication skills• Group understanding training

abroad)DX human resources• A ctive mid-career hiring of human resources with an extensive career history
in the DX business• Improvement of IT and digital literacy through external training• P eriodic implementation of group-wide, DX-related e-learninglevel)• Organizational management (theory level)• Unconscious bias training• Group understanding training

Integrated Report 2022

71

The Vision of
Nomura Real Estate Group

Growth Strategy

Sources ofCompetitivenessGovernanceFact Data, etc.

(Business, Sustainability, and DX)

DX Strategy
DX initiatives are the key to the expansion and improvement of the ideas and methods of value creation and to
the realization of “Being a ‘Life & Time Developer,’ as never seen before.” In our DX strategy, we will link strategic investments and initiatives unique to the Nomura Real Estate Group with new value creation while focusing
on business domains where we have a strength as well as on expressing our approach to connect closelywith individuals.

Establishment of a platform
We will aim to establish a platform that utilizes digital data bybuilding on the Group’s strength, which is its customer base.
From a user’s perspective, the platform will also contribute to

the improvement of human’s QOL, as various products andservices will be available from one touch point.

A platform service built on the Group’s customer base
Overview of our DX strategy

Stronger product strength using digital data

Value proposition targeted in our DX strategy

Customer baseAt the core of our DX strategy is human—people who live,
work, and gather in our buildings. In other words, it is linked
to our approach to connect closely with individuals, whichplaces an emphasis on each individual person. This is thesame approach as we take in our business. Through DX
initiatives, we will expand on and/or reform our strengh,

which includes a market oriented concept, business collaboration and value creation within the Group, commitment toquality, and open-minded approach to new ideas andbusinesses, and harness it to develop and provide products and services that contribute to the improvement ofcustomers’ quality of life (QOL).

Increase in
the numberof members

Enhancement ofloyalty brandImprovement of service quality through feedback

stepping up our development efforts with a further focus onhuman through DX.

Strengthen initiatives to improve QOL
including service expansion

Focus on humanInvestment in improvement of
productivity realizing cost reductions

More enriched and innovative

Quality of life

Housing | OfficeDX

Development of “Time”
Improve the quality of daily lifeand each moment spent

Housing | OfficeCommunity | City
Local community | Global environment
Development of “Life”

Improve the total QOLof the human to whom
the Group’s value
proposition isextended through DX

Development and provision ofgood products and services

Community | CityDX

Establishment of cities
and communities

Local community | Global environment
DX

Improve the quality of people’s lives and lifestyles

Consideration to society
and the earth

Time

The Company views DX as the transformation of businesses, business models, and created value using digital
tools and environments in order to establish a digital business. It expresses the creation of new conveniences andvalue for human through the use of digital technologies as
the “digital dream.”
When making efforts for DX, we put the emphasis on
human. As an expression of the Group, which drives ourapproach to connect closely with individuals, we have

A business operator’s
perspective

Previously provided bydifferent business
operators and industries

Value proposition

Land, buildings

Live

Lead a life

Live
Work
Shopping, enjoy
Health, gathering
Safety and security, support……

GrowthStrength domains• Taking on the challenge of creating never-before-seen value－A trial and error approach－ROI (return on investment) difficult to calculate・Shared-ride bus reservations
・Robot delivery(Retail facility → residential)• Initiatives to accelerate growth of existing businesses－Renew operation systems－Utilize digital tools in existing businesses• Respond to maintenance or update of existing systems
the cloud, strengthen cybersecurity
Maintenance • Utilize• D iversify devices, introduce paperless processes, improve work
efficiency

New domains (e.g.,
IoT services)
・Remote monitoring・V isualization of power
consumption

Investments in domains that can best leverage the Group’s strengths
Strengthdomains

Lead a life

Investment themes in “innovation”

MaaS

ICT
Usage

tial domains. To this end, we will prioritize the constructionof a common cloud platform for the Group and thein-house development of prototype systems. In addition, inorder to measure the progress of DX, we will confirm theprogress of the actual amount of DX investment and thenumber of members through the DX Strategy Committee
every year.

Classification of DX investment themes

Innovation

A user’s perspective
The Company’s perspective

Realization of new value creation, the “digital dream,” through the use of digital technologies

Nomura Real Estate Holdings, Inc.

Our policy is to concentrate investment capital and humancapital in areas where we can best leverage the Group’s
advantages. We will make balanced DX investments fromthe perspective of “innovation,” “growth,” and “maintenance” of our business and aim to evolve or transform into
a corporate group that offers differentiated value. We will
work on the “innovation” theme systematically and swiftly
by dividing our business into strength domains and essen-developed and provided a wide variety of products andservices based on the user’s perspective. Through theutilization of digital technologies, we will accelerate productdevelopment with a focus on human who live, work, andgather in our buildings, and aim to cultivate new markets
and thereby realize the “digital dream” by rethinking the
products and services that have been provided by various
business operators and industries.

Products and services

Land, buildings
Commerce, restaurants
Healthcare, education
Infrastructure, utilities
Government administration, public service……

DX investment themesDX

DX unique to the Nomura Real Estate Group (Realization of the digital dream)

72

Provision of efficientand convenient newservices

Creation of opportunities tolearn about services

Improvement of Quality of Life (QOL)
To improve QOL, we place emphasis on the following two
aspects: Life (human’s respective lives) and Time (every
moment of their time).
We will aim to provide new products and services by

Increase of sales of products and services
Increase of surplus for investment

Essential
domains• Make investments in areas where we have strength, such as platform services thatbuild on the Group’s customer base• Through an R&D approach, search for domains where we can exercise our strength

Data development
and useResponses in view of changes in society

・Cloud infrastructure
・Customer data

Essential domains

Customer engagement
e-commerce・EC website creation→Home remodeling→Interior design→Shopping centers, hotels,
sports clubs

Smart technologies(smartphone apps,
digitalization)
・Shared officespace search service
・A I application in
brokerage smart search・Metaverse

Productivity
improvement
・RPA
・AI tools
・Various business systems• Address essential themes that respond to an increasingly digitalized society (expand
into MaaS or the e-commerce area as an enhancement of housing-related services)• Improve productivity of each business through the utilization of digital technologies

Integrated Report 2022

73

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

In addition to using DX to improve QOL, improving productivity by revising various work processes and introducing
systems is also important. In promoting Internet or cloudservices, the importance of security also increases. Under
this recognition, the Group plans to invest a total of ¥130.0
billion in DX and ICT over the nine-year period of the Mid- to

DX & ICT investment plan (images)

Long-term Business Plan.
Regarding the hiring and development of DX humanresources, we intend to formulate and strengthen plansseparately from this investment plan.
P70-71 Human Resources Strategy

DX investment:¥60.0 billion (nine-year total)

60

DX
investment

Investment themes
Innovation, growth40

DX
investment
20

DX
investment
0
Phase I (FY23/3 to FY25/3)

Investment theme: MaintenancePhase II (FY26/3 to FY28/3)

ICT investment

E
OS
CL

Gain new business opportunities
through “real estate × DX”

Investment planUP

DX Strategy

The Group’s office portfolio strategy proposes ways of using
office space that combine various types of offices and is
aimed at helping each person who uses those offices toimprove their performance. The satellite-type H1T sharedoffices play a part in this strategy. The H1T offices, which
propose a style of working that is not bound by place, have
rapidly expanded to 216 offices, mainly in the Tokyo metropolitan area, and approximately 222,000 members over thethree years or so since the 2019 launch.
We were successful in swiftly capturing the huge demand
generated by the diversification of working styles resulting
from company-driven reforms and the outbreak of the COVID19 pandemic. One of the factors in this success was our useof DX. The establishment of a completely automated platformthat does not require manual intervention due to the use ofdigital tools, such as smart keys, has led to greater customer
convenience and enabled the fast and responsive implementation of site strategies.

Satellite-type sharedoffice H¹T

2,248 companies／
approx. 222,000 members
No. of offices: 216
No. of members(including affiliated offices)* As of end of March 2022

The combination of comfort and affordability has deliveredhigh ratings
Rapidly adding locations from central Tokyo to the suburbs
There has been a rise in the importance of a workplace where people canwork comfortably and productively without needing to worry about their officelocation, infrastructure or environment. We are adding more H1T offices,
including in retail facilities connected to railway stations, by making working
people’s time our top priority, with the aim of providing a convenient andcomfortable workplace that will serve as their “second office.”

Phase III (FY29/3 to FY31/3)

A platform that automates booking and access has been established¥70.0 billion (nine-year total)

Using digital technologies, all procedures are automated and do not require manual intervention
Promotion system
As a subordinate organization of the Management Committee, we have established a DX Strategy Committee, which
discusses matters relating to investment plans, such as
establishing policies and plans regarding the promotion ofDX, improving the ICT environment, and preparing the ICT
base. In promoting our DX strategy, specific issues are
addressed at the Group DX Council and Subcommittee
and regular meetings of various working groups (WGs).

1

Book on members’
webpage2Enter and exit using asmartphone3

Use the H1T office4

Fee charged touser companies

DX Strategy Committee• A subordinate organization of the Management Committee that ascertains the situation regarding deliberations on systems investment and DX promotion, andshares information and knowledge in coordination with other conference bodies.

• With its establishment of adequate policies and plans, the Committee appropriately steers the DX projects being promoted at the front lines.
Progress

Direction of issues and responses

Progress

Group DX Council

Group DX Subcommittee (irregular)

Regular meetings of various WGsInformation• P romotes DX coordination within the Group coordination • Considers measures for specific issues
V
isualizes
DX
projects
ofeachcompany
related to the entire Group•and division• Shares the Group’s DX budget (alsoshares the ICT budget)

Information
coordination • DX is accelerated by establishing WGs
operated in coordination by Business Units
and Group companies under a shared DX
theme, generating synergy.

Message from the Executive Officer in charge

We will aim to improve the QOL of the human who live, work, andgather in our properties by actively utilizing digital technologies

Executive Officer in charge ofCorporate Planning Dept., DX &Innovation Management Dept.

Masato Yamauchi
74

Nomura Real Estate Holdings, Inc.

Through its business, the Group has always worked to improve human’s QOL and support the lives ofcustomers who live, work, and gather in its properties in order to continue to be chosen by them. Our
principle of placing human and individuals at the center of our business also applies to the promotionof DX.
In making efforts for DX, it is necessary to wholly reconsider the value that is gained from living in acondominium or working in an office, which is what we have been offering, from the resident or user’s
perspective. Improving QOL through the provision of new products and services generated using
digital technologies—this is the “digital dream” that we are trying to achieve.
A large amount of data is accumulated in the real estate business, which supports human’s lives.
We will aim to create new and unprecedented value through the establishment and promotion of aplatform that uses digital technologies and is based on the strong foundation that real estate provides.

Offices are mainly located at major railway stations in thecenter and suburbs of the Tokyo metropolitan area
Enables users to work comfortably anywhere at any time
H1T Location map in Japanese

TOPIC

New business development

Digital platform for shared offices

The application for booking,etc. that is provided by H1T
and is linked to smart keys
is being used in various
partner shared offices as aplatform for shared offices
and contributes to greater
operational efficiency. We
intend to continue to broadly
offer the platform.

Integrated Report 2022

75

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

Relationship between Business and Financial
and Non-financial Information
For the Group to grow continuously toward the realization of Nomura Real Estate Group 2030 Vision andSustainability Policy, it is essential to expand on and/or reform the ideas and methods of value creation by
combining financial and non-financial considerations, such as sustainability, DX, and human resources utilization, with our business portfolio strategy. We will make efforts toward further business growth while utilizing
our strengths and management capital of each business under the business strategies of each Business Unit
based on the different business characteristics.

Financial targets

Business profit
Phase I

¥ 115.0 billion

Financial information(FY2025/3)

C ommercial Real EstateBusiness Unit

Overseas Business Unit

¥ 32.5 billion¥ 55.0 billion¥ 4.0 billion

Housing sales
business

Leasing businessInvestment Management Business Unit

¥ 9.0 billion

Property Brokerage& CRE Business Unit

¥ 12.0 billionP roperty & Facility Management Business Unit

¥ 10.5 billion

5% or more

ROA

Phase III

Phase I

ROA

Residential Development
Business Unit

4.5％ level

Phase II

5％ level

Service & Management Business

Phase III

5％ or more

Achieve high ROA through profitability enhancement evenwhen expanding investments

Generate stable revenue
Aim for ROA of 5% or more through the coupled growth of the twobusinesses (Leasing Business and Service & Management Business)

P60 Business Portfolio Strategy

Initiatives for sustainability
Environment

Initiatives for environmental issues

SocialInitiatives for social issues• Promoting building longevity andenvironmental performance(e.g., ZEH-oriented standards, etc.)
Environment• Reduction of total CO2 emissions
Environment• Promotion of use of low-carbon

Non-financial informationmaterials(e.g., timber-based buildings)
Environment• Achievement of net-zero CO2 emissions forthe entire Shibaura Project district
Environment• Promoting building longevity andenvironmental performance(e.g., ZEB-oriented standards, etc.)
Environment

existing buildings(U.K. office building for leasing 127CXR)
Environment• Quality improvement through design
KAIZEN and frontline KAIZEN
Environment

Social• 100% renewable energy for electricity

SocialSocial• “TOKYO WORKation”(Shibaura Project)Social• Digitalization of marketing activities• Use of digital tools in product planning(e.g., smart condominium app, robotdelivery, smart lock)• Provision of services that use digitaltechnologies(e.g., facial recognition access systemfor office products, H1T smart lock,
Techrum of Landport)

emissions by properties undermanagement• Initiatives taken ahead of the rest of

the real estate management industry(Climate Change Action Award from the
Minister of the Environment)
Environment

consumption of leasing assets• Human First brand• Reduction of energy use and CO2• Provision of disastercountermeasures information
Environment• Initiatives for social issues throughproperties under management

Design KAIZEN

Frontline KAIZEN

Social• Brokerage transactions that lead tocommunity development and givedue consideration to theenvironment
Environment

Social76

Nomura Real Estate Holdings, Inc.

Environment• Initiatives for aging buildings(re:Premium, re:Premium Duo)Social• Effective use of real estate stock(CRE proposal, CRE-NAVI)
Social• Supply of high-quality housing(e.g., KAIZEN)
Social• Adoption of digital technologies

that enable progress atconstruction sites to be checkedusing images• Productivity improvement

through introduction of systems(e.g., fund management system,
earthquake & inland flood alert
system)• Provision of services that use

digital technologies(e.g., digitalization of contracts)• Digitalization of marketing• Utilization of nomu.com

See P90-91 Feature: KAMEIDO PROJECT

Environmentwork

methods

For examples of value creation initiatives in Japan• Introduction of energy-efficient devices• Proposals for renewal and renovation

Environment

Environment• Be ACTO

Promotion of DX• Extension or alteration work on• Digitalization ofbuilding
management(Kanri Roid)• RPA of simple
tasks

For examples of value creation initiatives abroad
See P92-93 Feature: Overseas business

Integrated Report 2022

77

The Vision of
Nomura Real Estate Group

Strategies
by Business

Sources ofCompetitiveness

Growth Strategy

Interview with Business Unit Manager
Q1 Whatare the key points for achieving profit
targets in the Mid- to Long-term Business Plan?

Residential
Development

Haruhiko Nakamura

Business Unit

Executive Officer,
Business Unit Manager ofResidential Development Business Unit

Business of the Unit

Major Group companies

Development and sale of condominiums, detached housing and rental housing, development and management of senior housing, Internet advertising,development and sale of systems related to real estate, provides services
aimed at providing assistance to customers concerning their homes arrangements, etc.

Nomura Real Estate Development/Nomura
Real Estate Wellness/PRIME X/Musashi/First Living AssistanceBusiness environment in focus
	Changes in market size due to declining birthrate and aging
population
	Changes in lifestyles, diversification of housing needs
	Heightened awareness of sustainability and carbon
neutrality

The strengths

	Social needs for redevelopment and reconstruction such as
the regional activation, aging buildings, and solving districts
crowded with wood- frame housings	General application of business methods utilizing digitaltechnology

Business assets (As of March 31, 2022)

	Product planning capability generated by integrated
development, sales, and management system	Solid customer base, highly value-added services anddevelopment capability tailored to diverse customerneeds	E xpertise in urban-type compact town, redevelopment,
and rebuilding projects

	Land bank in the housing sales business:¥1,441.0 billion (equivalent to 21,100 units)	Number of Nomura Real Estate Group Customer Club
members: approx. 147,000	Number of residential redevelopment projects
participated: No.1*

Profit plan (Business profit)

Business strategy(Billions of yen)	Deepen and evolve PROUD in the housing sale business(stable supply of 4,000 to 5,000 units per year)	Strengthen efforts in redevelopment and reconstruction projects
	Response to diversifying needs	Monetization of non-asset business40

32.5 32.5

32.5

30

20

Specific policies and initiatives (As of March 31, 2022)

1002022 2023(results) (forecast)2025(phase I)

2028(phase II)* Source: Based on in-house research

78

Nomura Real Estate Holdings, Inc.

2031
(FY)
(phase III)Land bank equivalent to¥1,441.0 billion (equivalent to21,100 units) already secured
for stable supply in the housing
sale business.
Business operated with thegoal of acquiring land for
projects posted in and after
Phase II.

Land bank: ¥1,441.0 billion (equivalent to 21,100 units)

Redevelopment andrebuilding: ¥499.0 billion(6,380 units)
Other thanredevelopment
and rebuilding:¥942.0 billion(14,720 units)

Continuously supplying high-quality residences with a focus
on the PROUD brand that meets customer needs is the basic
concept of our efforts toward the growth of the Buisiness Unit.
It posted housing sales of 4,329 units in the fiscal year ended
March 31, 2022, achieving a high gross profit margin of
23.6%. In the Mid- to Long-term Business Plan, as well, ourbasic policy is to raise and maintain profitability while steadily
supplying 4,000 to 5,000 housing units per year.
While the conditions for land acquisition continue to bedifficult, the land bank for the period up to the end of Phase
I (fiscal year ending March 31, 2025) is already secured,
and we are working to acquire land for Phase II and thereafter. Despite the long period required for each project andhigh entry barriers, our active approach to redevelopment
and rebuilding projects often in good locations to seize
business opportunities has contributed to the successfulacquisition of land. We plan to raise the percentage of redevelopment and rebuilding business to 20% level from Phase
II. We expect that this business will contribute to solutions
to social issues such as regional revitalization and thehandling of obsolete buildings.
In Japan, demand associated with housing is changing
more rapidly than before due to changes in lifestyles andhousehold structures such as an increase in single-personhouseholds, dual income households, and elderly households. We will provide a variety of floor plans including
compact floor plans and sell strategically residential properties located in core regional cities. In addition, we will
provide rental housing, PROUD FLAT, health promoting
senior rental housing, OUKAS, and other types of residential units to meet increasingly diverse consumer needs.
Moreover, we aim to provide more convenient services
corresponding to progress in digitization such as thecreation of a comprehensive website for the businesses
and services related to housing and living provided by the
Nomura Real Estate Development Group.

Q2 What
is the Buisiness Unit focusing on toachieve its priority issues (materiality)?

Mid- to Long-term Business Plan (business strategy/profit plan)

Secured land bankratio (Phase I):
Mostly 100%
Percentage ofredevelopment andrebuilding:More than 30%

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

This Business Unit is also actively expanding energy-saving
products and services. We are pursuing the supply ofenvironmentally friendly housing by working to ensure theenergy-saving performance of newly built properties meets
the ZEH Oriented standard; introducing Yukai-full, a condominium air-conditioning system for entire buildings; andadopting the Attractive 30 service of reducing life cycle
costs in large repair projects and other projects.
Further, we are building sustainable communities
through the high functionality and convenience of housing
and the revitalization of communities throughout the region
with the goal of providing housing that allows customers tocontinue living for many years with peace of mind. The Be
ACTO initiative P91 promoted in PROUD TOWER
Kameido Cross (Koto-ku, Tokyo) contributes to the development of an environment for activities led by residents andcommunity members.

Q3 Please tell about your DX initiatives that lead tonew services and improved profitability.
We are ongoing new sales techniques that use digital andonline technologies. We have installed the ROOV 3D communication platform in all PROUD properties to makeinformation about properties viewable from anywhere on a
PC or mobile phone. This contributes to customer convenience, reduces resource consumption, and leads to the
optimization and increased productivity of our sales
activities.
At PROUD CITY Hiyoshi (Yokohama, Kanagawa), weare conducting product delivery demonstration experiments using a robot. We are also introducing WillTAP, amobile application for locking front doors, filling baths,
reserving shared facilities, and reading announcementsfrom a management association and local community
information using a mobile phone to provide services that
support the safe, secure, and comfortable lives of residents.

TOPICS
Product delivery demonstration experimentusing a robot
Jointly with KDDI Research and theresidents of PROUD CITY Hiyoshi,
we have been conducting a demonstration experiment using a robot todeliver products in stages since
February 2022. Products purchased
online from local stores are delivered
to each floor of the building or eachresidential unit by a delivery robot as
part of our efforts to increasecustomer convenience.

PROUD Takadanobaba (Shinjuku-ku, Tokyo),a sustainable condominium capable of responding
to increasingly diverse household structures
This property was selected to be a part of the Ministry of theEnvironment’s High-Rise ZEH-M Support Project. We haveinstalled the Yukai-full air conditioning system for the entire
building and adopted the Attractive 30 service which reduces
lifecycle costs, including the cost of large repairs, to provide
environmentally friendly housing based on a carbon neutral,energy conserving, and recycling-oriented society. The
property also features the inclusion of compact units inaddition to family-type units in light of the diversification ofhousehold structures.

Integrated Report 2022

79

The Vision of
Nomura Real Estate Group

Strategies
by Business

Sources ofCompetitiveness

Growth Strategy

Interview with Business Unit Manager
Q1 Whatare the key points for achieving profit
targets in the Mid- to Long-term Business Plan?

Commercial
Real EstateBusiness Unit

Makoto Haga
Director and Executive Officer,
Business Unit Manager of Commercial
Real Estate Business Unit

Business of the Unit

Major Group companies

Development, leasing, sales, and entrusted management of office building, logistics facility, retail facility, etc.; development, leasing, andmanagement of hotel; management of fitness club; planning and management of construction work, etc.

Nomura Real Estate Development/Nomura
Real Estate Life & Sports/Nomura Real Estate
Retail Properties/Nomura Real Estate Hotels

Business environment in focus
Changes in customer values, emphasis on the individual,
the community, health, and the value of time
Heightened awareness of sustainability and carbon neutrality
Changes in employees’ awareness of work styles
Global trends regarding the inflow of funds from investors
for real estate in JapanThe strengths

Interest rate and yield spread trends
Changes in purchase structure and heightened needs forlogistics hubs due to e-commerce and diversification ofsales channels

Business assets (As of March 31, 2022)

Track record for developing diverse asset types
Brands (PMO, GEMS, Landport) based on the market
oriented concept
Strong value chain model collaborating with Investment
Management Business Unit
Participation in major large-scale development projects
in central Tokyo, including Shibaura Project and Nihonbashi 1-chome Central District Redevelopment

Net lettable area (offices/retail facilities):
approx. 790,000 m2
Number of tenants: 2,000 companies or more*
Number of H1T offices and their members:
216 offices/2,248 companies,
approx. 222,000 members
Number of MEGALOS fitness clubs and their members:
38 clubs/approx. 110,000 members

40

	Evolution and transformation of value creation linking environmental changes
to business opportunities
Realize development profit and unrealized profit
Strategic asset replacement
55.0

38.5

Specific policies and initiatives (As of March 31, 2022)

41.0

20

0

2022 2023(results) (forecast)2025(phase I)

2028(phase II)

2031
(FY)
(phase III)* Total number of tenants located in properties that the Group owns and conducts
property management in the Commercial Real Estate Business Unit

80

Nomura Real Estate Holdings, Inc.

It is important for this Buisiness Unit, which develops andoperates office buildings, logistics facilities, retail facilities
and various other types of assets, to increase the amount it
develops and pursue growth through both the capital gains
on the sale of property and income gains from the management of leasing properties.
The Group has created original brands with high merchantability, including PMO, medium-sized high-grade
offices, under which a total of 70 properties have beendeveloped (including those scheduled for construction, as
of March 2022); Landport (logistics facilities); and GEMS
(retail facilities). We will earn development profit by selling
property for sales while also strategically replacing theleasing asset portfolio with the goal of realizing unrealized
profit. Gross profit on property sales business in the fiscal
year ended March 2022 was ¥28.1 billion. We will increase
gross profit on the sale of property to exceed ¥30.0 billion
in each fiscal year in Phase I of the Mid to Long-term
Business Plan, and to ¥40.0 billion level in each fiscal year
in and after Phase II.
In and after Phase II, large development projects suchas the Shibaura Project and the Nihonbashi 1-chome
Central District Redevelopment will be completed, and they
will begin operating. Through those projects, we will start
providing new value through large mixed-use developments
featuring office, retail facility and hotel and expect anincrease in leasing revenue.
We are also more actively developing H1O and H1T as
office products capable of flexibly responding to the diversification of workstyles. H1T uses a membership businessmodel. We believe that flexibly changing our profit model
itself in line with changes in customer needs is important asa growth strategy.

responses to social change and value creation rooted in theuse of facilities and services by each customer. In particular, people’s perception of health, family relationships, andworkstyles have changed significantly as a result of the
COVID-19 pandemic. For example, the diversification of ouroffice product lines to respond to people’s changing needs
is an expression of our corporate responsibility. We believethat the “HUMAN FIRST” (prioritizing people) perspective isthe basis of sustainability.
Regarding environmental consideration, the Group joined
RE 100 and is working to replace the electricity consumed at
its domestic leasing properties with renewable energy by thefiscal year ending March 2024. For new development
projects, we aim to standardize the ZEB-oriented by 2030
and carry out activities to achieve carbon neutrality throughcommunity development projects such as the Shibaura
Project.

Q3 Please tell about your DX initiatives that lead tonew services and improved profitability.
Digital transformation (DX) is essential to respond to increasingly diverse customr needs, increase customer satisfaction,and promote the creation of new value. Examples include
entering and exiting offices using facial recognition, meetingroom reservation, and controlling lighting and air conditioning
using a mobile application. The fully automatic system fromonline reservation and office entry and exit using smart locks
to the invoicing of shared offices brand H1T has been praisedby users. P75
In the logistics facility business, we are working to shift
from the simple leasing of facilities to supporting the streamlining of logistic operations to more closely meet the needs oftenants. We will implement the intercompany co-creation
program Techrum with 30 partner companies by fully leveraging DX to take the initiative in the automation(mechanization and labor reduction) of distribution and seize
the initiative by the verification of its effect on operations.

Q2 What
is the Buisiness Unit focusing on toachieve its priority issues (materiality) ?

Business strategy(Billions of yen)
80

60

Fact Data, etc.

The business of the Buisiness Unit is essential for theachievement of priority issues (materiality) throughMid- to Long-term Business Plan (business strategy/profit plan)
Profit plan (Business profit)

Governance(Business, Sustainability, and DX)

Stock of investment property
valued at ¥743.0 billion (total
investment) is secured for therealization of development
profit/unrealized profit.
Development profit/
unrealized profit exceeding¥66.8 billion was created/
realized over the past three
years. We will aim to continue
the growth of the business.

Sales of property and gross profit■Sales of property■Gross profit(Billions of yen)
120

106.8

100

106.4
87.8

Phase II and thereafter:¥40.0 billion level ineach FY

80
60
40
20
0

17.6
2020

21.1
2021

Assumptions for grossprofit from sale of property
Phase I: ¥30.0 billion
or more in each FY

28.1

2022 (FY)

Secured land bankratio (Phase I)
Mostly 100%TOPIC
For sustainable community development "Shibaura Project"
The Shibaura Project proposes TOKYO WORKation, a
new way of working while experiencing the sky, sea, andgreenery in the urban center using the unique location of
the Shibaura area facing Tokyo Bay. We have named theactivities for sustainable community development
through industry-academia-government partnership
Shibaura Sustainable Action. We have set the goal ofachieving effectively net-zero CO2 emissions from theentire district through power generation at in-housefacilities using the latest energy conservation technologies, and we aim to develop a disaster-resilient
community capable of quickly and steadily recovery by
maintaining the functions necessary for businesses
through measures to address earthquakes, power
failures, flooding, and other disasters.

Integrated Report 2022

81

The Vision of
Nomura Real Estate Group

Strategies
by Business

Sources ofCompetitiveness

Growth Strategy

Interview with Business Unit Manager
Q1 Whatare the key points for achieving profit
targets in the Mid- to Long-term Business Plan?

Overseas
Business Unit

Takashi Kaku
Executive Officer,
Business Unit Manager of Overseas
Business Unit, in charge of Overseas
Business

Business of the Unit

Major Group companies

Business of developing, leasing, and sellinghousing, office buildings, serviced apartments,and mixed-use development, primarily inSoutheast Asia, China, and the U.K.

Nomura Real Estate Development/ZEN PLAZA/Beijing shokai Nomura
Real Estate Management/NOMURA REAL ESTATE ASIA/NOMURAREAL ESTATE (THAILAND)/NOMURA REAL ESTATE VIETNAM/
NOMURA REAL ESTATE CONSULTING (SHANGHAI)

Business environment in focus
Further growth of the Asian housing market
Heightened expectations in the resolution of social issues
through township development

The strengths

Increased liquidity of the commercial property sales market

Business assets (As of March 31, 2022)

Over 60 years of proven performance in real estatedevelopment in Japan
Commitment to manufacturing quality and productplanning and improvement capabilities

Number of housing sale projects the Group participated in/total project cost (our share): 26/approx. ¥491.0 billion
Number of leasing projects the Group participated in/total project cost (our share): 11/approx. ¥62.0 billion

Mid- to Long-term Business Plan (business strategy/profit plan)
Profit plan (Business profit)

Business strategy(Billions of yen)40	Meeting expectations for high quality and providing services that provide
new value in overseas markets, leveraging the expertise acquired in Japanand strong partnerships with local developers

30

Specific policies and initiatives (As of March 31, 2022)
20

10

5.5

4.0

0.2
0

82

2022 2023(results) (forecast)2025(phase I)

2028(phase II)

Nomura Real Estate Holdings, Inc.

2031
(FY)
(phase III)Operating business focused on
the rapidly growing Southeast
Asian market. The Group has
already secured land for business
whose total project cost wereapprox. ¥554.0 billion (our share)
to be used mostly for the housing
sales business that is one of ourstrengths.
Aiming to increase ourparticipation in property sales
business in addition to the
housing sales businessLand bank (total project cost) (our share): approx. ¥554.0 billion■Vietnam ■Thailand ■The Philippines ■China ■U.K.

Housing sales:¥491.0 billion

Leasing:¥62.0 billion

Secured land bank ratio (Phase I) Mostly 100%

This Business Unit operates businesses developing andselling housing and developing and leasing property forsales such as office buildings generally in rapidly growing
Asian cities. The Business Unit was established in the fiscal
year ending March 31, 2023 as a new start. In the Mid- toLong-term Business Plan (“the plan”), we aim to increase
the percentage of business profit of the entire Group fromthis Business Unit to 15% or more in Phase III (fiscal year
ending March 2031) by establishing a revenue base throughthe increase of the volume of both of these businesses.
The housing sales business mainly targets individuals
with actual demands in Thailand, Vietnam, the Philippines
and China. More than 60% of the profit in Phase III is
expected to come from the housing sales business. As
such, it is a major revenue source for this Business Unit. In
Thailand, we operate a joint venture with our local partner,
ORIGIN PROPERTY PUBLIC, which has expanded to a
total of 14 buildings with approximately 7,900 housing units(as of March 31, 2022). We will work to grow the businessbased on our strong trust relationship.
In Vietnam, we operate a business with three large local
developers, and the Grand Park 2nd period project withtotal of approximately 11,000 housing units will contributesignificantly to the profit of the Business Unit for the fiscal
year ending March 31, 2023. In the Philippines, we havefounded Federal Land NRE Global (FNG) jointly with Federal Land, a real estate company and a member of GT
Capital Holdings, a large local financial group in the Philippines, with the goal of sustainable participation in local
businesses. In China, we plan to operate a business while
monitoring changes in the business environment.
The core of the Business Unit is the housing sales
business in Asia, which we have proven our performance.
Furthermore, another focus of the plan is to work on thecommercial property for sales business in Asia, and developed countries, etc. We will operate a business extending
and renovating existing office buildings in the center ofLondon in cooperation with Lothbury Investment Management, the U.K. real estate investment management divisionof the Group, and will also aim to capture opportunities anddevelop rental housing and office buildings in other developed countries, etc.
For both the housing sales and property sales businesses, we have already acquired the volume of businessnecessary to achieve the Phase I profit target. We are currently in the process of verifying and commercializing newparticipation in a housing sales and property sales businesses and an investment property development in Phase II.
It is assumed that the aforementioned FNG will start contributing to profits in Phase III. It is expected to increase thegrowth of our overseas business to the next stage.

Q2 What
is the Buisiness Unit focusing on toachieve its priority issues (materiality)?
We believe that supplying high-quality housings for Asian
consumers will contribute to the resolution of social issues.
The added value that the Group is capable of providing in its
overseas business includes two types of added value, proposals for products and quality improvement. For productproposals, we cooperate with local partners in upstream
stages such as product planning and design based on a
profound understanding of local ways of housing and con-

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

sumer needs gained through industry-academia research
conducted jointly with local universities.
Regarding quality improvement, we have achieved great
results through our KAIZEN activities. Southeast Asia is not
an exception, and the countries of the area are also
affected by climate change. Rainwater leaks are a serious
problem, not just for residences. We have collaborated withresidential facility manufacturers and general contractors toprevent leaks and develop and install cost-competitive
products. These efforts have been praised by customers.
Furthermore, we address the serious deterioration ofwater sources and water quality by improving water quality
within townships, with the goal of contributing to neighboring communities. We are preparing localized versions of ouroriginal design and quality assurance manuals to accumulate a track record of performance and experience and to
make these efforts into ongoing activities. The expertisedeveloped by the Group in the housing sales business inJapan is used effectively and is aiding our earning the trustof local consumers.
The real estate business is a local business. Precisely
for this reason, it is essential to flexibly adjust the expertiseand experience gained in Japan, rather than directly
exporting it, to match local customer needs and the technical level of the local construction companies. The ability tolisten to the voices of local customers and partners andapply the information learned in product development andproblem solving in countries outside Japan has become
one of the Group’s strengths.

Q3 Please tell about your DX initiatives that lead tonew services and improved profitability.
At the site of KAIZEN activities, the digital transformation has
accelerated as a result of the COVID-19 pandemic. In thebusiness environment where it is difficult to grasp the current
situation of the construction site due to travel restrictions toeach country, as an example, digital technology is the technologies developed by OpenSpace, which is said to be theconstruction site version of Google Earth.
This low-priced system makes images of all construction
sites from the past to the present viewable by obtaining
information from CV which specializes in real estate technologies, which we invested in during the fiscal year ended
March 31, 2022. As this example shows, we are aspiring todevelop and improve through DX as an effective means ofdeveloping richer and larger townships.

TOPIC
Entry into the office development business in the U.K.
based on business collaboration within the GroupBy the end of 2022, we will start construction
on a large extension and a reconstruction
project adding three floors to a low-rise,four-story office building purchased in
London in the U.K. This is a collaborative
project with the U.K. real estate investment
management division of the Group, Lothbury
Investment Management, and it will be aforerunner in our office development business in the U.K. Redevelopment in the areasurrounding the property has been increasingly active, and demand for high-quality
office buildings is growing. We will seek tocapture the next business opportunity
through cooperation with Lothbury, which
has extensive experience and expertise inreal estate development in the U.K.

The building now

The image of building
after renovation

Integrated Report 2022

83

The Vision of
Nomura Real Estate Group

Strategies
by Business

Sources ofCompetitiveness

Growth Strategy

Interview with Business Unit Manager
Q1 Whatare the key points for achieving profit
targets in the Mid- to Long-term Business Plan?

Investment
Management

Koki Miura

Business Unit

Executive Officer,
Business Unit Manager of Investment
Management Business Unit

Business of the Unit

Major Group companies

Investment management services including listed and private
real estate investment trusts (REITs), private funds and realestate securitization products

Nomura Real Estate Asset Management/Lothbury
Investment Management

Business environment in focus
From traditional investment to alternative investment
Expansion of ESG investment
Expansion of investment target sectors

Globalization of real estate investment management

The strengths

Business assets (As of March 31, 2022)

Business growth model based on the Leasing Value Chain
Relationships built with institutional investors through many
years of asset management experience
Product development capabilities that meet the needs ofinvestors

Assets under management (AUM):
approx. ¥1.9 trillion
Number of institutional investors through asset
management in Japan (excluding listed REIT): 235
institutions

Mid- to Long-term Business Plan (business strategy/profit plan)
Profit plan (Business profit)

Business strategy(Billions of yen)	Steady growth of the REIT business, the Buisiness Unit’s core businessleveraging the Leasing Value Chain
	Strengthening of the private fund business as a growth engine second to the
REIT business	Capturing of a new category of investors and expansion of business areas

20

The basis of the growth of this Buisiness Unit’s profits is thestable increase of AUM by meeting the needs of investors
for alternative investments. To achieve our profit targets, we
aim to achieve steady growth through the expansion of
product lines that meet diverse investor needs in the private
fund business, which is a growth engine second to the
REIT business, in addition to the stable growth of the listed
and private REITs that are the mainstay business. Moreover,
it is also important to develop overseas business and new
business areas to more certainly ensure future growth.
The AUM of the listed REIT, Nomura Real Estate MasterFund is approximately ¥1,120.0 billion, and the AUM of theprivate REIT, Nomura Real Estate Private REIT is approximately ¥300.0 billion (both as of March 31, 2022). Bothcontinue to grow steadily. This is a result of the pursuit ofexternal growth while leveraging the Leasing Value Chain
P40 , which is a strength of the Group. We will continue tostrengthen our revenue base centering on the listed andprivate REIT business.
The private fund business had AUM of less than ¥50.0
billion about five years ago. Now it has grown to approximately ¥190.0 billion by meeting the strong demand frominvestors for alternative investments. We have also built
strong trust-based relationships with institutional investors
and will continue to create investment techniques toaccommodate diverse investment needs, invest in various
asset types, and consider wide-ranging new products,
including ultra-long-term investments.
In our overseas business, the partnership with Lothbury
Investment Management, which joined our group in 2018,is steadily making progress. We plan to expand our global
network, including considering M&A of overseas asset
management companies over the medium to long term.
As part of our efforts to enter new business areas, wehave established Nomura Real Asset Investment with
Nomura Holdings to jointly operate real estate fund business. This company plans to expand its investor base,including wealthy individuals and foreign investors, andinvestment products, including the commercialization of
new asset classes, by leveraging the expertise in real estate
investment that we have developed over the years and thestrong client network of Nomura Holdings.

15

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

Q2 What
is the Buisiness Unit focusing on toachieve its priority issues (materiality) ?
In response to an increase in demand from investors for
ESG investments, investments and asset management inlight of ESG are becoming the standard in the real estate
investment industry. It is extremely important to respond tothese changes in investor demand, and attract funds frominvestors to achieve the stable growth of AUM. With thegoal of becoming the frontrunner of sustainability in theindustry, the Unit has taken the initiative and applied a
progressive approach ahead of the industry. As a result, inthe fiscal year ended March 2022, we became the firstprivate REIT that received Eco Action 21 certification andregistration. We are also the first real estate investmentcompany to receive the Minister of the Environment’s
Climate Change Action Award (promotion and dissemination category) in recognition of our efforts to address
climate change.
We will continue to take the initiative and engage inactivities to lead the industry while appropriately assessing
industry trends and our Business Unit’s position in theindustry.

Q3 Please tell about your DX initiatives that lead tonew services and improved profitability.
Our goal is to become an asset management company
excelling in both quantity and quality. We believe that anincrease in AUM (quantity) must be backed by performance(quality). We believe that increasing the efficiency of fundmanagement through the use of DX enables prompt andaccurate judgments, which in turn will contribute significantly to the improvement of performance.
As a specific DX activity, we began operating a newfund management system in the fiscal year ended March
31, 2022. This system centrally manages and connects
diverse data from management of properties, fundaccounting and other operations, which facilitates theincrease of productivity not only within our Business Unit
engaging in asset management, but for all parties involvedin fund management, including property management.
An example of DX focusing on real estate resilience is ourconstruction of a mechanism that will enable us to promptly
share disaster information and enable a quick initial responsein the event of a disaster using an earthquake and flooding
alert system. We believe this system is meaningful and will
significantly contribute not only to the streamlining of operations but also to the safety and security of tenants.

Specific policies and initiatives (As of March 31, 2022)
10

Meet the needs ofinstitutional investors foralternative investments andsubstantially grow the assets
under management (AUM)
such as private funds.
Keep focusing on theprivate fund business withthe goal of achieving thecontinued growth ofbusiness.

9.0
7.8

8.0

5

TOPIC

Transactions in AUM■ Listed REIT ■ Private REIT
■ Private funds, etc.
■ Overseas asset management company(Billions of yen)
1,948.0
1,815.6
2,000
1,798.5
1,669.4
1,285.9
1,500

Property acquisition using
Leasing Value Chain(private fund)4 properties/¥ 66.0 billion
Major property acquired

1,000
500

0

2022 2023(results) (forecast)2025(phase I)

2028(phase II)

2031
(FY)
(phase III)02018 2019 2020 2021 2022 (FY)

Yokohama Nomura
Building*

Establishment of Nomura Real Asset Investment, a jointcompany that operates a real estate fund business
Nomura Real Asset Investment will start a real estate fund business, including thecommercialization of new asset classes and products, leveraging the strengths ofthe two companies, including the Group’s expertise in real estate investment andthe client network of Nomura Holdings.
The new company will prepare to establish a business involving new asset classes
over medium to long term while operating a business focusing on funds for institutional investors and individual investors in the traditional sector for several years
after its establishment. It will aim to build its AUM to between ¥700.0 to 1,000.0
billion in the future.

Nomura Real Estate Holdings
Experience and track recordof real estate fundmanagement

Nomura Holdings
Extensive investor baseand client network

Nomura Real Asset Investment
Management of real estate funds, including thecommercialization of new asset classes and products
leveraging the strengths of the two companies* Part of the equity in this property was acquired as of the end of the FY22/3. The remaining equity will be acquired in FY23/3.

84

Nomura Real Estate Holdings, Inc.

Integrated Report 2022

85

The Vision of
Nomura Real Estate Group

Strategies
by Business

Sources ofCompetitiveness

Growth Strategy

Interview with Business Unit Manager
Q1 Whatare the key points for achieving profit
targets in the Mid- to Long-term Business Plan?

Property
Brokerage& CRE

Kenichi Maeda

Business Unit

Executive Officer,
Business Unit Manager of Property
Brokerage & CRE Business Unit

Business of the Unit

Major Group companies

Real estate brokerage and consulting, real estate information
website operation, insurance agency

Nomura Real Estate Solutions/NOMURA REAL ESTATEHONG KONG/Tokio Property Services

Business environment in focus
Continuous expansion of the used real estate market
Increase of real estate needs due to inheritance and businesssuccession
Increase of off-balance sheet needs of general corporations

The strengths

Increase in alternative investment needs of institutional
investors
Intensification of service competition among major
companies, rise of IT startups

Business assets (As of March 31, 2022)

Possessing advanced digital technology
High customer satisfaction rating in retailbusiness
Partnerships with Nomura Securities andregional financial institutions

Number of retail branches: 86
Number of wholesale offices: 10
Number of nomu.com members:
approx. 255,000 (as of January 31, 2022)
Number of partner financial institutions including Nomura Securities
and regional financial institutions: 98

Mid- to Long-term Business Plan (business strategy/profit plan)
Profit plan (Business profit)

Business strategy	E xpansion of stable revenue base capturing strong demand in the retailbusiness*1
	Meeting various needs through collaboration with the Nomura Group,
financial institutions, etc., in the middle business*2
	Promotion of CRE proposals, and capturing investment needs of funds in thewholesale business*3(Billions of yen)
20

15

11.7

11.5

12.0

Specific policies and initiatives (As of March 31, 2022)

10

5

0

2022 2023(results) (forecast)2025(phase I)

2028(phase II)

2031
(FY)
(phase III)The middle business, which is
expected to expand further inthe market, was added as a
new category.
Based on the growth of theretail business, where demandremains firm, the goal is tofurther expand the middle andwholesale businesses andachieve our profit targets.

Property brokerage fees commissions (image)(Billions of yen)
40
30
20

■ FY22/3 (results) ■ Phase III (FY31/3)

approx. 1.3
times
21.8

10
0

Retail

*1. Retail business: real estate brokerage business for individuals*2. Middle business: real estate brokerage business for small and midsize companies, business owners, some individual investors, and high net worth individuals*3. Wholesale business: real estate brokerage business for large corporations, funds, and overseas investors

approx. 2.0
times

approx. 1.7
times

8.3

9.6

MiddleWholesaleThis Business Unit aims to achieve medium- to long-term
profit growth by increasing the total transaction value
through services centered on real estate brokerage and
CRE proposals. The percentage of brokerage fees received
in the fiscal year ended March 2022 was approximately
55% in the retail business, approximately 21% in the middle
business, and approximately 24% in the wholesale business. Under the Mid- to Long-term Business Plan, we will
significantly expand the middle and wholesale businesses
that are expected to grow further, while ensuring stablerevenue from the retail business.
The retail business has achieved sales above expectations, including a 50% increase in transactions of high-end
housings priced ¥0.2 billion or more thanks to REALIA, abrand of high-grade condominiums in central Tokyo established in the previous fiscal year. We expect steady growthin the used housing sales market supported by diverse
demand including housing, investments, and inheritancetax shields.
We have positioned the middle business as a new
growth area. The middle business responds to demand
from small and midsize companies, individual investors,
and high net worth individuals related to the purchase andsale of property, providing specialized services related tobusiness succession, inheritance, and other needs related
to real estate transactions. We expect potential demand in
this market to be very high and will work to meet thisdemand in cooperation with the Nomura Group, financial
institutions, and licensed professionals.
The wholesale business still has significant potential,
including CRE proposals. In the fiscal year ended March
2022, we brokered the purchase and sale of an obsolete,unused college campus to meet the needs of a foreigninternational school planning to open a campus in Japan.
This contributes to sustainability by inviting foreign funds
into the Japanese real estate market and making use of idle
properties.

Q2 What
is the Buisiness Unit focusing on toachieve its priority issues (materiality)?
This Business Unit contributes to the revitalization of society through the effective use of real estate stock, which has
become a social issue. In particular, CRE proposals contribute to the effective use of companies’ idle properties
and increase asset efficiency, leading to sustainability.
Additionally, in March 2022 we established the CRE-NAVI
website supporting CRE strategies to respond to widerranging issues. The website posts information about themarket and trends, and also information about companies’
use of properties to achieve the SDGs in collaboration withexternal experts.
We also focus on sharing information about regional
disasters in response to the frequent natural disasters thathave occurred in Japan in recent years. In November 2021,
a section on the disaster control measures taken in communities was added to the nomu.com website, providing
explanations about the hazard maps of each area. We
believe that the knowledge of the characteristics of eacharea from the perspective of disaster control will provide

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

customers with confidence when making decisions related
to their relocation in new housings.

Q3 Please tell about your DX initiatives that lead tonew services and improved profitability.
The delivery of high-quality and diverse services using
digital technology is one of the basic policies for the growthof the Business Unit.
VR Home Staging provided by nomu.com, a real estate
information website, is used by the largest number ofvisitors in the industry for 13 consecutive years*. VR Home
Staging, which uses AI and virtual reality technologies toreproduce spaces in housings with residents, and manyother types of web content will be the foundation for the
future expansion of services. We will continue to improvethe useful information provided and strengthen the website’s function as a contact for customers considering realestate transactions.
In addition, developing new sales techniques using DX
is also an important measure. At “Nomura no chukai +(PLUS)” branches, online customer service, webinars, anda mobile app for mortgage procedures led to an increase inproductivity and these technologies are meeting customer
needs, including the need for online, contactless communication and the need to use time effectively.

TOPICS
Launch of an electronic contract system forsigning and placing seals on contracts.
Anticipating the revision of the Building Lots and Buildings
Transaction Business Act, in November 2021 we started using
digital signatures and seals in contracts for real estate transactions of individuals using an electronic contract system. This
enables important business documents
and buy-sell agreements, which werepreviously required to be in paper form,
to be delivered or exchanged in a digitalformat. Progress in the digitization ofreal estate transactions can be
expected. Our delivery of services
ahead of other companies will facilitate
an increase in customer convenience.

Revitalization of a former school building with adistinguished history as an international school
In the fiscal year ended March 2022, the strong desires of aproperty seller, a domestic school corporation, for the revitalization of community activity and the preservation of a valuable
school building for future generations and the desires of aforeign buyer to create a new educational facility in Japan andacquire a prestigious building appropriate for an international
school resulted in a successful deal.
This project revived acollege campus which had
long been idle as an international school. It proved to be
extremely significant in viewof community development
and contribution to sustainability, including environmental
The photograph is an image.
preservation.

* Nielsen NetView survey: https://www.nomu.com/plus/ (Japanese only)86

Nomura Real Estate Holdings, Inc.

Integrated Report 2022

87

The Vision of
Nomura Real Estate Group

Strategies
by Business

Sources ofCompetitiveness

Growth Strategy

Interview with Business Unit Manager
Q1 Whatare the key points for achieving profit
targets in the Mid- to Long-term Business Plan?

Property &Facility
Management

Akihiro Fukuda

Business Unit

Executive Officer,
Business Unit Manager of Property &Facility Management Business Unit

Business of the Unit

Major Group companies

Operation and management of and contract work for condominiums,
office buildings, etc.; renovation business; local cooling and heat
supply business; solar power business, entrusted cleaning of officebuildings

Nomura Real Estate Partners/Nomura Real
Estate Heating and Cooling Supply/Nomura Real
Estate Amenity Service

Business environment in focus
Evolution of digital technology
Changes in lifestyles and work styles, diversification of resident attributes
Shrinking workforce, declining birthrate, and aging of society

The strengths

Aging of buildings, increase of smart buildings, andobsolescence of existing buildings
Frequent occurrence of disasters, strengthening ofresilience

Business assets (As of March 31, 2022)

Stable increase in property under management throughGroup collaboration
High level of external evaluation for management quality
Competitive construction proposal capacity, including
scheme for extending large-scale repair works cycle

Number of housings under management:
186,549 units
Number of buildings under management:
772 buildings

Mid- to Long-term Business Plan (business strategy/profit plan)
Profit plan (Business profit)

Business strategy

	Strengthening proposal-based management with high customer satisfaction
	Providing high-efficiency and high-quality management services utilizing
digital technologies	E xpanding management areas and services
	Increasing construction projects ordered, including large-scale repair works(Billions of yen)
20

15

10.5
10

9.2

Specific policies and initiatives (As of March 31, 2022)

9.0

5

0

88

2022 2023(results) (forecast)2025(phase I)

2028(phase II)

Nomura Real Estate Holdings, Inc.

2031
(FY)
(phase III)Continuing to maintain andimprove the high level of customer
satisfaction by leveraging
operation management, which
has been ranked No. 1 for 13
consecutive years.
Aiming to increase construction
projects ordered based on the
reputation and trust from
customers.

SumaiSurfin
Management Company
Satisfaction Survey 2021

Achieved an extension of
the cycle for large
condominium repairs from

Ranked 1st for 13
consecutive years

12 years to 16-18 years

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

This Business Unit works to maintain and increase theproperty value mainly of condominiums and office buildings
by providing operation and management services andthrough large-scale repair works. The total number ofcontracted housings under management exceeds 186,000
and the number of office buildings is slightly less than 800(both as of March 31, 2022). We have developed operationand management expertise, particularly in the operationand management of the properties of the Group companies. As a result of continuing to provide high-quality
services, we have been reputed by customers and ranked
no. 1 in the SumaiSurfin Management Company Satisfaction Survey for 13 consecutive years.
In the Mid- to Long-term Business Plan ("the plan"), we
have established two key growth strategies: digital transformation (DX) and the increase of construction projects
ordered.
The reason of the reputation for the services provided
by this Business Unit is its abundant human resources
capable of providing hospitable, high-quality services. We
will increase customer convenience by automating some
operations through DX and intensively assigning welcoming
employees to new projects, thereby increasing the qualityof management and the delivery of services. In otherwords, we will create an environment that facilitates thisBusiness Unit’s continued exertion of its strengths andincreases customer satisfaction. While securing humanresources continues to be an important issue, DX maximizing the use of limited resources will be crucial to the growthof this Business Unit.
It is also important to increase the number of construction projects, thereby ordered by customers based on thetrust built on our high-quality operation management.
Approximately 60% of office buildings under management
contracts are more than 20 years old. Condominiums of the
Nomura Real Estate Group, mainly our brand “PROUD”, willenter the phase where large-scale repair works are appropriate in the coming years. Due to this background behind
our business, there is social significance to our implementing repairs leveraging our technical and proposal-creation
skills. Thus, we expect to grow further.

the assets that are precious to customers.
In addition, construction proposals incorporating sustainability perspectives are essential for enabling theconstruction ordered business to grow over the medium tolong term. Customers’ expectations regarding construction
proposals introducing excellent energy-saving devices andother renovation proposals maintaining long-term value
have been increasing every day. We believe that making
proposals that meet the needs of each customer based on
our approach to connect closely with individuals established in the Group will lead to the solution of priority issues(materiality).

Q3 Please tell about your DX initiatives that lead tonew services and improved profitability.
Our business is relatively labor-intensive, and conventional
analog methods are still used today in many operations,suggesting that there is still a lot of room to increase productivity through DX. The streamlining of operations using
digital technology is an urgent issue also because of thesocial conditions making it difficult to secure senior humanresources who have experience managing workplaces
mainly as a result of companies raising their retirement
ages.
Again, this Business Unit aims to allocate the resources
generated by increasing efficiency through DX to highvalue-added operations. We have already started introducing Kanri-roid, which increases workplace productivity, incyclic building management operations and are actively
implementing the robotic process automation (RPA) of
simple tasks. We are planning to facilitate the developmentof personnel for DX-related divisions and make investmentsin the range of several billion yen in DX in the plan and
expect the effects of DX to exceed the invested funds.
Providing high-efficiency and high-quality management
services by allocating digital technologies and the righthuman resources in the right places will help increase thecompetitiveness of the Business Unit.

TOPIC
Q2 What
is the Buisiness Unit focusing on toachieve its priority issues (materiality)?
In this Business Unit, the appropriate management ofoperations and systematic repairs is directly linked tosustainability. For example, we are maintaining and increasing the value of existing buildings over a long period of time.
An increase in obsolete and abandoned condominiums has
become a social issue in recent years. The Business Unit
developed re:Premium, a project to extend the cycle forlarge-scale repair works of the condominiums of PROUD
brands, and re:Premium Duo, a project targeting condominiums sold by the Group before the launch of the
PROUD brand. We are actively proposing these projects tocustomers. This leads to reducing lifecycle expenses. The
funds generated through cost reduction can be used topropose construction projects that increase asset value.
These activities protect and promote the long-term use of

Introduction of Kanri-roid for digitization ofbuilding management
In June 2021, we launched company-wide implementation ofKanri-roid in our building management operations. We havealready installed it in more than 600 properties, and willcontinue to verify its effects with the goal of increasing
productivity through the reduction of manual operations,meter reading leveraging AI
technology, etc. Over the medium
term, we hope to accumulate
records of errors and management operations as retrievable
and analyzable electronic data
and use this data to develop
highly accurate and active
proposals for building owners.
Meter reading using AI image analysis

Integrated Report 2022

89

Feature

The Vision of
Nomura Real Estate GroupUrban Development Along with Various People

The KAMEIDO PROJECT, urban development
for the future of the community:
Large-scale mixed-use development of housing, retail facilities, educational facilities, andopen space
No two properties are identical in the urban and real estate development project being carried out by Nomura
Real Estate Group.
This is why we stay close to the local community and aim to build a town where residents’ attachment to thetown and pride in living there become the driving force that enables it to grow into an even better place to live.
In the KAMEIDO PROJECT, we are proceeding with urban development for the future of the community while
maintaining an active dialogue with local people.

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

KAMEIDO PROJECT — aiming tointegrate with the local community

Paths have been secured to enable local people to pass through the area.
Elementary school(existing)Elementary
schoolKAMECLO STAGE carries on the function of Sun Street Kameido asa place for people to gather and interact.
KAMECLO YOKOCHO presents an image of the good old days of
downtown Tokyo and promotes gatherings by showcasing a foodculture unique to the district. The KAMEIDO PROJECT offers various
elements to promote interactions between people living in, working
in or visiting the area and it creates new gatherings and activities.

(extension)

Large retail facility(KAMEIDO CLOCK)

Condominium

Condominium

KAMECLOStage(open space)

KAMECLOYOKOCHO

Community-based urban development led
by residents
The KAMEIDO PROJECT is a large-scale mixed-use development project
including residential, retail, and educational facilities built on the site of Sun
Street Kameido, a retail facility that was loved by local people for 20 years.
In the development project, the Group has focused on taking the land that
local people were attached to and ensuring it can be passed down to thenext generation. To this end, we have earnestly listened to the voices of
local people and continued to engage in active dialogue through an urban
development council from the stage of district planning.

Sources ofCompetitivenessSun Street Kameido, a retail facility long loved by local people
Local restaurants and stores operate along the path between the condominium and the retail facility. A co-working space is available for use by local
people.

An open space is available for use by visitors and residents. It provides a place
for local residents to interact.

Be ACTOstimulating community activity

Site under development

KAMEIDO PROJECT
Location : Koto-ku. Tokyo
Access : 2-min. walk from Kameido Station
Main use : PROUD TOWER Kameido Cross condominium(total number of units: 934)
K AMEIDO CLOCK retail facility (leasing area:
approximately 28,000m2)
Elementary school and preschool
KAMEIDO CLOCK (left)/PROUD TOWER Kameido Cross (right)

Elementary school visiting lesson

Watching over theCommunity
Watching over the Community lesson
given at Daini Kameido Elementary
School as part of the activities forcreating a town that grows together
with the local community
Daini Kameido Elementary School next tothe project site

90

Nomura Real Estate Holdings, Inc.

Watching over the Community
Watching over theCommunity is an educational
program to observe the town
from the perspective of otherpeople. It promotes
awareness of the various
functions in the town, which are a normal part of life and often
overlooked, and potential value. It is an attempt to create a new
town by increasing children’s interest in the community andpreserving the precious assets of the community for the future.

The Group carries out urban development based on the idea that theformation and vitalization of diverse communities increase the value ofregions or towns. To this end, we have introduced Be ACTO, one of ourarea management activities and the Group’s original scheme, under which
local people lead activities. In addition to multipurpose spaces for children’s activities, telecommuting, studies and other activities that become
an easily available activity base, we aim to encourage the activities of thelocal community, in which community members participate in activities formaking friends and current and new residents communicate with eachother.

The sustainable urban development
Achieving both a decrease in environmental
burden and an increase in comfort
This project responds to priority issues (materiality), climatechange and the natural environment, and achieves sustainableurban development. PROUD TOWER Kameido Cross isequipped with Yukai-full, the condominium version of our original whole-house air-conditioning system that creates a
comfortable living space while increasing energy efficiency. The
building also meets the ZEH-M Oriented standard. The
KAMEIDO CLOCK retail facility has installed a cogeneration
system to use the heat generated during the generation ofelectricity to boil water and heat rooms. The facility contributes
to the reduction of CO2 emissions through high-efficiency
energy consumption.

total heatexchanger
exhaustair supply

air-conditioner

Outside aircleaning feature
Total heat exchange
ventilation feature
outside aircleaning filter

Air-conditioning
featureEnergyconservation

floor outlet
outdoor unit
balcony

Legend:Space under the double floor
not requiring a complex ductis used for air-conditioning
and fresh outside air.

air flowheat radiation

Integrated Report 2022

91

Feature

The Vision of
Nomura Real Estate GroupUrban Development Along with Various People

Operating a business rooted in the local
community and making an overseas businessa growth driver
We have placed the steady growth of overseas business as one of the priority strategies of the Mid- to Long-term
Business Plan.
As in Japan, we will stay close to the local people who live and gather in particular places with the goal of providing comfortable, abundant lives and experiences in our overseas business as well.
By developing a business that is optimized for customer needs, customs, construction environments, and otherconditions in each country based on relationships of trust with local partners, we are aiming to achieve a profit of
15% or more for the entire company in Phase III (fiscal year ending March 31, 2031) of the plan.

Transformation of overseas business
Increasing involvement in business by strengthening relationships of trust with local partners
The Nomura Real Estate Group resumed its overseas
business in 2014 and has been mainly operating a housing
sales business, an area in which we have established a
track record in Japan. Real estate businesses are local
businesses that are strongly affected by local national andmunicipal laws and regulations, trends and the businesspractices of the people living and working in the area andother conditions. It is essential to operate a business rooted

Beginning
2014

2015

2016

2017

2018

2019

2020

⚫ Partner search⚫	Participate in Japanese JV with aminority share⚫ Build and improve partnership⚫ Participate singly in JV with partner companies

Involvement inbusiness⚫	Business participation similar topure investment⚫	Creation of added value and expansion into
upstream businesses

Human resourcesand organization⚫	Human resource development
and know-how acquisition⚫ Establishment of local subsidiaries⚫ Promotion of business localization

GovernanceFact Data, etc.

(Business, Sustainability, and DX)

Establishing local presence and promoting localization

While enhancing trust-based relationships with local partners, we promote the continued localization of thebusiness. In addition to the establishment of local subsidiaries, we participate in businesses in which Japanesecompanies hold a majority share and began participation insome businesses from the upstream area. We are contributing to the improvement of product appeal and design
quality, the decrease of architectural costs, an increase in
selling prices, and the shortening of sales schedules, andare receiving a reputation from local partners and Japanesecompanies.
Three companies, Isetan Mitsukoshi Holdings, Federal
Land (“FLI”), a real estate company affiliated with GT Capital Group, a large Filipino financial group, and Nomura Real
Estate Group, are jointly developing The Seasons Residences, a condominium project in Manila, the Philippines.
In 2021, the project received an award for Best Residential
High-Rise Development in the Philippines from the International Property Awards, which commends outstanding real
properties globally. Starting with this business, the development of locally rooted businesses, including a company
founded jointly with FLI in 2022, is beginning to beachieved, and we have arrived at a stage with significant
potential for the growth of the overseas business.

2021

TOPIC

Sunshine Fort (Philippines Manila)
Main use: Housing (The Seasons Residences, total number of units: approx. 1,400),
retail facility
Completion: 2022 and onward

After resuming overseas business, the Group first entered a
JV in Vietnam and China with a minority share. At first, ourparticipation was similar to the pure investment that would
meet local partners’ need for funds. We have, then, worked
to develop trust-based relationships with local partners
through KAIZEN activities aiming to improve quality, inwhich we have packed our expertise and experience
accumulated in Japan. These seemingly laborious efforts
have resulted in the prevention of problems and othereffects that led to a reduction in construction periods,
which has significantly contributed to earning the trust of
our local partners.

KAIZEN activities
Design KAIZEN

Workplace KAIZEN

Activities to improve quality through consortiums with local companies
We undertake activities that meet local needs in each phase of business, fromproject planning, design and construction to delivery. The activities contribute to
the increase of salability and quality through the improvement of design quality,
the prevention of defective construction, etc. and the reduction of construction
periods.

Establishment of a joint company with the goal of participating incontinuous business in the Philippines

In 2022, Nomura Real Estate Development and FLI
founded a joint company, Federal Land NRE Global(“FNG”). It is a going concern benefiting from thestrengths of the partners, including the extensive
business infrastructure of GT Capital Group, a large
financial group, the large land bank of FLI, and theGroup’s expertise in real estate development gained inJapan and abroad. FNG will be a stable and sustainable foundation for businesses that can beincorporated into a real estate development business,
and we aim for the continuous growth of business in

the Filipino market, where growth can be expected.
The initial properties we have decided to purchaseare development land in four areas in Metro Manila andCebu. We will operate a real estate development
business with a total project area of approximately 250
ha and a total project cost of approximately ¥770.0
billion (approximately ¥270.0 billion in the first 10 years).
For the future, we are considering additional investments in areas other than these four projects.

Overview of the four initial projects Total project area of approx. 250 ha and total project cost of approx. ¥770.0 billion

Delivering our added value through our original KAIZEN activities

Nomura Real Estate Holdings, Inc.

Growth Strategy

Growth Phase

Partner strategy

Beginning92

in the country, and our general rule is to establish joint
ventures (“JV”) with local partners.
Overseas businesses that started with meeting local
demand from companies for funding have shifted into aphase in which the added value provided by the Group isrecognized in the country. We will accelerate the delivery of
the unique added value that the Group can provide andachieve growth.

Growth Phase

Sources ofCompetitivenessMandaluyong

Metro Park

CaviteCebu

Main use:
Residence (approx. 4,700
units)
Retail facility (49,570 m²)
Office (18,005 m²)
Construction:
Scheduled to start in 2024
Main use: Residence/
Residential area development(approx. 42,000 units)
Retail facility (110,337 m²)
Office (653,613 m²)
Construction:
Scheduled to start in 2025

Main use:
Residence (approx. 1,600
units)
Retail facility (23,449 m²)
Office (13,824 m²)
Construction:
Scheduled to start in 2024
Main use:(approx. 940 units)
Retail facility (18,306 m²)
Construction:
Scheduled to start in 2025

Integrated Report 2022

93

Part

4

94

Governance
The Group considers that it must be governed to maximize the corporate group’s value continuously
and in the long term while considering the interests of its shareholders and other stakeholders.
We will manage and oversee the business activities of Group companies through operation by directors
with diverse experiences, aiming to increase the profitability of the entire Group and strive to build a fair
and transparent management system.

Contents

Positioning of this part96	Dialogue between the Chairman of the Board of Directors andChairman of the Advisory Committee Relating to Nominations and Compensation
100 External Directors’ Roundtable Discussion
104	Corporate Governance114	Sustainability Governance
116 Risk Management
120 Internal Controls, Compliance/Information Disclosure
122 Directors and Executive Officers

It is essential to build an effective governance system and operation of the Board of
Directors to achieve sustainable growth.
This section provides a detailed explanationof the effectiveness of the Group’s governance to promote the understanding ofinvestors and other stakeholders while
incorporating a dialogue between the
Chairman of the Board of Directors and the
Chairman of the Advisory Committee Relating to Nominations and Compensation, anda roundtable discussion among external
directors.

Nomura Real Estate Holdings, Inc.

Management baseIntegrated Report 2022

95

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )DIALOGUE

Dialogue between the Chairman of the Board of
Directors and Chairman of the Advisory Committee
Relating to Nominations and Compensation
Through the dialogue between Shoichi Nagamatsu, Chairman of the Board of Directors, andTetsuro Higashi, Chairman of the Advisory Committee Relating to Nominations and Compensation,
we will explain the evaluation and issues regarding the effectiveness of the Company’s governance system.

Shoichi Nagamatsu

Tetsuro Higashi

Chairman of the Board of Directors(Chair and Director)

Chairman of the Advisory Committee
Relating to Nominations and Compensation(External Director)

Shoichi Nagamatsu

Composition of the Board of Directors and
Evaluation of the Director Compensation Plan
What is your view on the composition of theBoard of Directors?
Higashi I think that the composition of members is
well-balanced, as there is sufficient diversity in theexperience and knowledge possessed by the current
directors. However, since Ms. Katsura Ito was appointed
to an important post in the Japanese government andresigned from the position of external director as ofMarch 2022, there is currently only one female director.
I believe that this situation should be corrected immediately. Since the Group’s products and services are usedby many female customers, it is necessary to increase
the number of female Directors to incorporate diverse
ideas. In fact, we have been examining specific candidates at the Advisory Committee Relating to Nominations
and Compensation.
In addition, I recognize the necessity to consider theappointment of a director of non-Japanese nationality inorder to further expand our overseas business in the
future. Having said that, I think that it is desirable toappoint a non-Japanese director after ensuring that thecandidate has in-depth knowledge of the Group andunderstanding of its DNA and corporate culture, instead ofimmediately appointing a non-Japanese director at thisstage.
Nagamatsu I agree that the appointment of a female
director is an imminent issue. In addition, in order topromote DX, an important strategy under the Mid- toLong-term Business Plan, I think that we will need directors and executive officers with in-depth knowledge of
ICT and digital technologies. In this regard, we will consider the option of inviting an expert from outside theGroup. As indicated by the fact that high profit growthhas been set as a target in the plan, the Group seems to
be in the phase of pursuing a proactive strategy at the
moment. In such a phase, risk management becomes
more important. While we should welcome that businessplans are actively proposed by each Business Unit inorder to achieve profit growth, it is extremely important toensure functions to analyze associated risks and apply
brakes as needed from the perspective of governance.
We will also consider how to strengthen such functions
going forward.

The compensation plan for directors has beenrevised. What are the details and purposes of
the revision?
Higashi Following the deliberations by the Advisory
Committee Relating to Nominations and Compensationand the resolution of the General Meeting of Shareholders, the share-based compensation plan for directors has
been revised. Specifically, to achieve the targets under the
new Mid- to Long-term Business Plan, the amount paid asperformance-based compensation of share-based compensation has been increased to further link the
management efforts of directors with the compensation
plan. In addition, external directors (excluding those who
also serve as Audit & Supervisory Committee Members)
have been added to the targets of share-based compensation paid as non-performance based compensation.
Nagamatsu While the revision was also discussed by the
Board of Directors, it has been determined that sharebased compensation after the revision will be at an
appropriate level for relative comparison within the industry and is desirable given the accountability for
performance.
Higashi The mission of directors is to increase corporate
value over the medium to long term, and I recognize that
one of the representative indicators of success or failure is
the stock price. Therefore, it is extremely reasonable topay share-based compensation in order to link the interests of directors and shareholders. We believe thismotivates directors to increase corporate value over the
medium to long term and gives shareholders a sense of
security about long-term ownership of the Company’s
shares. There were many foreign investors among theshareholders of the semiconductor manufacturing equipment company where I used to be a representative
director, and it was a matter of course for a director tohold shares of the company. Through the revision of thecompensation plan, we have increased the ratio of sharebased compensation in the total compensation of
directors. It has been evaluated that we achieved a betteralignment of interests between directors and shareholders
from a global
perspective.

Perspective of Protecting Minority Shareholders
What is your view on the relationship with
Nomura Holdings, the Company’s major
shareholder?
Nagamatsu As a person originally from Nomura Holdings,
I would say that the relationship should lead to theenhancement of the Group’s corporate value. For thisreason, I believe it is important to promote collaboration in
the field where Nomura Holdings’ strengths in its client
networks in Japan and overseas, including corporate
customers and high net worth individuals, can be utilized
in the Group’s businesses as a real estate company. For
example, the Group’s investment management businessand property brokerage and CRE business are representative fields where such strengths can be leveraged togenerate synergistic effects. In August 2022, we andTetsuro Higashi

96

Nomura Real Estate Holdings, Inc.

Integrated Report 2022

97

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Dialogue between the Chairman of the Board of
Directors and Chairman of the Advisory Committee
Relating to Nominations and Compensation

Nomura Holdings jointly established Nomura Real Asset
Investment, an investment management company that will
engage in the real estate fund business. This is a representative example of how the Group can enhance its
corporate value by leveraging the strengths of both companies. Since these business collaboration efforts arewelcomed both by major and minority shareholders, weshould actively promote such efforts.
Higashi Our relationship with Nomura Holdings is attracting a great deal of attention from external stakeholders. In
particular, I recognize that the appointment of former
Nomura Holdings employees in the management of theCompany is a point of great interest. As Mr. Nagamatsustated, it is important to advance collaboration in areas
where the two companies can demonstrate synergies.
However, in order for shareholders and investors to understand the relationship between the two companies, it isessential to ensure transparency in the appointment of
directors and explain the reasons for appointment in aconvincing manner. In this sense, the role of the Advisory
Committee Relating to Nominations and Compensation,
which deliberates and reports to the Board of Directors on
the nomination, compensation, and dismissal of candidates for directors and executive officers, is significant. I
believe that the system in which I, as an independent
external director, serve as the Chairman of the Committee
is evidence of effective governance.

What We Can Do to Sustain Effective Governance
What are the evaluation and issues of theCompany’s succession plans?
Higashi I recognize that we have sufficient personnel
serving as our directors with diverse experiences andcapabilities for the next generation, such as directors who
have been working at Nomura Real Estate since graduation, with in-depth experience in the real estate business,and directors with expertise in the securities business
who are originally from Nomura Holdings. From a
medium- to long-term perspective, the challenge is todevelop human resources who will play a major role in theGroup’s management in the next generation in addition to
the candidates for successors of the current management. We will continue to consider the possibility of
appointing younger employees and hiring highly specialized personnel from outside the Group.
Nagamatsu Depending on the business environment
surrounding the company and its stage of growth, thequalities required for executives will change. The qualities
required for the Group’s upper management have changed
significantly from the past, when we focused heavily on theresidential development business, to today, when ourbusinesses are diversified, including overseas business.
While members who sufficiently meet the qualifications
based on this perspective have been appointed as present

98

Nomura Real Estate Holdings, Inc.

directors, the Advisory Committee Relating to Nominations
and Compensation will continue to select appropriate
members in the future after thoroughly discussing thequalifications required for the Group’s management.

Recent Discussions at the Board of Directors Meetingsand Management Issues
What do you recognize as management issues
and how is the Group responding to them?
Nagamatsu The promotion of DX has long been one of
the Group's biggest challenges and will continue to be an
important subject. In the process of formulating the newMid- to Long-term Business Plan, the Board of Directors
actively discussed this topic, and I highly evaluate the factthat specific details such as the amount of DX and ICT
investment were incorporated into the plan. Currently, theadministrative divisions are playing a central role in promoting DX-related initiatives, but I believe that it will bemandatory to promptly promote collaboration across theGroup in order to realize initiatives that meet the needs ofthe front line in the future. It is also crucial whether theefforts by each Business Unit to achieve high profit growthunder the plan will progress steadily in the future. I thinkthat it is necessary to continue to monitor the progress
and provide supervision for the expansion of the overseas
business in particular.
Higashi While DX among Japanese companies had been
focused on boosting the efficiency of information processing in accounting departments, it has been increasingly
used as a service menu for customers recently. Indeed,
we are beginning to see concrete prospects for the future,
and we are feeling a growing awareness of DX across theGroup.
In addition, I have long recognized the need forin-depth discussions on issues related to the overseas
business, such as the priority regions in our global strategy and the specific business development in each region
based on such strategy. With regard to this point, we havebeen able to narrow down our focus to a certain extent bydiscussing priority countries, cities, and businesses
through the formulation of the Mid- to Long-term Business
Plan. In the future, I will closely monitor the businesses wepromote in each country to determine whether they
provide the Group’s unique value and how they differentiate themselves.

Lastly, what are your thoughts and resolutions
on the enhancement of the Group’s sustainablecorporate value?
Nagamatsu As stated that “it is necessary to evolve andtransform approaches and methods of value creation” inthe new Mid- to Long-term Business Plan, we are committed to transforming ourselves in order to achievesustainable enhancement of its corporate value. For thisreason, it is necessary to approach our businesses from a
broad perspective, without being bound by past knowhow or the current organizational structure. While theorganic growth of each Business Unit is of course important, the Business Creation Division was newly establishedwithin Nomura Real Estate Development to explore business opportunities in new fields with the aim of further
demonstrating the spirit of challenge as a real estatedeveloper. I highly appreciate this move and look forward

to the future of this new division. I would like to deepen
discussions at the Board of Directors with a balanced
view so that we can support our efforts for growth, while
placing importance on risk management.
Higashi In the semiconductor industry where I used towork, the business cycle was short, and innovation was
happening every couple of years. In such an environment, there is a strong sense of urgency that we must
keep trying new things, and we have no choice but totake on challenges. There was a culture that tolerates
failure and places value on identifying the cause andsharing it internally. Even in the real estate industry, whichis said to have a longer business cycle, we need to shift
our thinking to the assumption of new challenges intoday's rapidly changing environment. While hoping thatnew business opportunities will be generated based on
the Nomura Real Estate Group Vision for 2030 “Be a ‘Life& Time Developer’ as Never Seen Before,” I would like tocontribute to linking them to the enhancement of corporate value.

Integrated Report 2022

99

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )DIALOGUE

External Directors’ Roundtable Discussion
Three external directors’ discussion toward formulation of
the Company’s new Mid- to Long-term Business Plan and
Evaluation and issues regarding the Group’s governance, etc.

Yoshio Mogi

Akiko Miyakawa

Tetsu Takahashi

Director(Audit & Supervisory Committee Member)(External Director)

Director(Audit & Supervisory Committee Member)(External Director)

Director(Audit & Supervisory Committee Member)(External Director)

100 Nomura Real Estate Holdings, Inc.

Discussion toward Formulating the Company’s Mid- toLong-term Business Plan and Long-term Vision
How do you assess the new Mid- to Long-term
Business Plan and the Nomura Real EstateGroup 2030 Vision?
Takahashi It is my understanding that the framework for
the Mid- to Long-term Business Plan (the “plan”), which
has been discussed for about a year, was formed aroundthe second half of 2021. But I also recognize that even
before that time the Group had a high awareness of theissue of profit growth, which had stalled at a low level incomparison with other companies in the same industry.
In the Breakthrough Project, which was started under
the leadership of Kutsukake CEO to break away from thislow growth, we saw various ideas presented and discussed, including new business ideas. In the end, we
decided to return to the fundamental starting point of how
to grow our main business while at the same time continuing to value and protect what is most important to the
Nomura Real Estate Group: the intrinsic value that theGroup has cultivated up until now. For example, thisincludes the essential “Nomura Real Estate Group” rootvalue that each employee possesses, including brandvalue. I think it was a very important opportunity to form acommon consensus.
Based on these discussions, each Business Unit set
ambitious targets, properly incorporating the further
growth of existing businesses and attempts at new business domains into the plan. I thought that the averageannual profit growth target at the 8% level was an excellent result of refining the plan in this way, and I got astrong impression of the sheer will of the Group, including
its senior management, to try new things and makecertain changes.
Mogi I was actually a little concerned that in the discussion of the plan, the whole company tends to have aperspective that is limited to real estate business. From
my point of view, as a person who used to work at a
trading company involved in multiple businesses, realestate is just one of many businesses. But in the case of
the Nomura Real Estate Group, all businesses are related
to real estate. While I am not dissatisfied with the plan,
which was completed by our real estate professionals
after a series of thorough discussions, it is a fact thatplans related to real estate are more likely to be greenlighted. In other words, I’m a little anxious about the factthat the management tends to agree with plans regarding real estate projects. That is why, as we hold our
discussions, I have made efforts to check with the executive side regarding the assumptions of how they
perceive the economic environment and internationalsituation 10 years from now. I believe that it is importantfor external directors to speak freely from their own
points of view.
Regarding the plan itself, I think it was good for theCompany to clarify its intentions of developing its overseas business operations, especially in Southeast Asia, asa driver for annual profit growth of 8%. While it is true that
there are risks, the need to expand overseas businesswith obtaining appropriate human resources, has been
discussed numerous times in the past at meetings of theBoard of Directors, and I have the impression that we areengaged in active efforts for recruitment and structuraldevelopment.
Miyakawa Overseas business tends to be an all-roundaffair, dispersed across multiple countries. But on thisoccasion, I think it was good that we were able to set theone major goal of settling in the Philippines and growing
our business, including the establishment of a joint venture with Federal Land, Inc. The level of difficulty requiredfor businesses in Japan, including environmental measures, will continue to increase, and I think that making
use of the strengths that the Company develops overseas
is an appropriate strategy.
As for “the Nomura Real Estate Group 2030 Vision,”
which was announced at the same time as the plan, I got
the impression that the initial proposal presented by the
executive side was somewhat difficult to understand. The
opinion that it would be better to reconsider was
expressed at a meeting of Board of Directors, and theinitial proposal was remitted. The next proposal, presented a short after, was “Be a ‘Life & Time Developer,’ asnever seen before.” For me, personally, it was a good fit,
and the entire Board of Directors was able to decide upon
it with adequate satisfaction. My surprise at the fact that
the Company was able to revise the Vision in such a shortperiod of time is still fresh in my memory.

Assessments of the Company’s Stance of Emphasizing
Human Rights and Active Participation for Women
What are your thoughts on the Sustainability
Policy and Priority issues for 2030 (materiality)?
Miyakawa I think many of priority issues (materiality) that
the Company tackles are challenging. With the cooperation of the dedicated Sustainability Committee, I havelearned a lot, and I feel that the level of my understanding
has gradually deepened. In particular, Nomura Real Estate
Holdings has also appointed a female executive officer,
and I recognize that the active participation of women
within the Group is steadily advancing.
Mogi As seen in the past with the SOX Act, and more
recently with the SDGs, the demands of society change
depending on the era; however, I don’t think that weshould be influenced excessively by the perspectives ofsuch trends. What is particularly important is whether wecan become a company where women can participate
actively. Going forward, the importance of women’s
evaluations will increase, not only in businesses regarding
residences but also in offices and commercial facilities.

Integrated Report 2022

101

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )External Directors’ Roundtable Discussion

I believe that in the future it will be necessary to further
promote diversity, with 40 to 50 percent of employees
being women, and around one-third of directors being
women. These figures are reasonable from the perspective of a business with diverse customers.

Yoshio Mogi

Miyakawa To increase the percentage of women in
management positions, first, it is necessary to increase
the number of female graduates hired and create anenvironment where they can work for a long time. It is also
important to have a long-term perspective of steadily
increasing the number of management candidates while
improving retention measures and ensuring ease of working. I think there is still room for us to devise strategies
with regard to these points.
Takahashi Various companies in the real estate industry,including the Company, have set KPIs relating to theenvironment, with a prime focus on decarbonization, andare all heading in the same direction. In this context, theCompany has established “Society and employees” as apriority issue, with diversity and inclusion and humanrights at the forefront of its activities. This is a very impressive point. Since I am also a lawyer, I hold the Company invery high regard for its emphasis on human rights.
I believe that companies are social entities, and that
we should make efforts, as members of society, to createa society in which every individual is respected. Rather
than limiting this to mere slogans, I hope that the Company’s senior management will put this into practice withregard to stakeholders, and with a firm understanding ofwhat actions they should take.

Takahashi I agree. I believe that Nomura Holdings also
wants to take a shared interest as a business. For theGroup, this is an advantage that other companies do not
have, so I would like the Company to use it meaningfully.
On the other hand, in the event of any conflict of interest in
the relationship of control as a major shareholder, I believethat it is one of our key missions to protect the interests ofminority shareholders with a resolute attitude.

Effective GovernanceHow do you assess the Group’s corporate
governance?
Mogi I believe that the Group is operating with a very
high level of awareness when it comes to governance.
From 2021, an external director has been serving as the
Chairman of the Advisory Committee Relating to Nominations and Compensation, which I believe also helps toensure effectiveness.
Takahashi More than half of the members of the Advisory Committee Relating to Nominations andCompensation are external directors, ensuring its fairness
as an objective organization. Matters are decided throughsincere discussions, and I think that it functions as anorganization with effective capabilities of restraint andcontrol over top-level management, who are ultimately incontrol of corporate governance.
The Board of Directors also receives monthly reports
from all Business Units and spends around three hours
reviewing individual agenda items. When any doubts
remain, we actively express our opinions and ask
questions.
Miyakawa The other day, I had the opportunity to talk to
women who serve as external officers of other companies, and I recalled that there was person who said in
response to my statement that “it is the role of an external
director to say what you want to say” that “there are somethings that should not be said.” If I have any doubts about
even the smallest thing, I ask questions, and our executive
personnel respond politely. Other external directors also
speak actively, so I feel that there is an atmosphere makes
it very easy to speak up.

Is there anything you keep in mind when making
remarks at Board of Directors meetings?
Mogi Even if the executive side is reluctant to do this, I
will still say what I have to say. We should dispel any kindof atmosphere that makes us hesitant to comment
actively. In particular, when it comes to business, noteverything goes as planned, and it is difficult to anticipate
and prevent risks before they occur, so, the speed ofreporting is important. A very important question iswhether cases, where things did not go well are being
reported promptly while they are still at the “graze” or“minor cut” stage to prevent them from becoming serious
injuries, or whether they are being reported at the “fracture” or “ICU” stage. To that end, I believe that it isnecessary for us to monitor things closely at Board of
Directors meetings and continue to say things over andover, so that we can deliberate at an early stage.
Miyakawa It is easy for me to speak up when there arepeople like Mr. Mogi who actively express their opinions.

Finally, what are your expectations for theGroup’s sustainable growth?

Akiko Miyakawa

I would like to serve as a catalyst for an increase in thenumber of female directors in the future.
Takahashi With respect to individual proposals, I try to
make points to ensure that they will be polished, and theircontent will be highly accurate. On the other hand, theexecutive side is comprised of real estate professionals.
Sometimes I wonder how useful my suggestions can bewhen dealing with agenda items built on their own experience, intellect, and stance based on their life’s work.
However, I do believe that the correct methodology incorporate management is to check repeatedly fromvarious perspectives, including those of shareholders.

Mogi I would like the Company to rank in the top three asa Japanese real estate company. With that in mind, I havehigh hopes for the Group’s overseas business. I also feelthat there is still room for business expansion in Japan,such as in suburb areas.
Miyakawa The Group has begun its journey to “Be a ‘Life& Time Developer,’ as never seen before.” To that end, it isessential to have diverse human resources who canachieve things that have never been seen before. I hopethat we will work actively to promote diversity and inclusion throughout the Group, including the further active
participation of women.
Takahashi The most important thing for the growth of theGroup is the essential “Nomura Real Estate Group” rootvalue that every employee possesses. There are many
people around me who think highly of the Group’s brandstrength. I am confident that if each of us with our highlevel of motivation and abilities attempt new challenges
with confidence, we will be able to achieve the goals of
the plan and achieve further growth.

The Relationship We Should Seek to Have withMajor shareholders
What are your thoughts on the Company’s
relationship with Nomura Holdings—one of its
major shareholders?
Mogi Nomura Holdings has abundant connections withhigh-net-worth individuals, major investors, and overseas
clientele. Frankly, I think that we should make use of theseconnections in whatever way we can.
Miyakawa If a win-win relationship can be established, I
think that we should actively utilize it as a resource. However, if there are developments that cause conflicts with
the Group, we will immediately raise questions at Board of
Directors meetings. We should aim for a win-win relationship while retaining appropriate control.

Tetsu Takahashi

102 Nomura Real Estate Holdings, Inc.

Integrated Report 2022

103

The Vision of
Nomura Real Estate Group

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )Corporate Governance
Overview of corporate governance

Basic concept of corporate governanceThis section provides details of the Company’s corporate governance system.

Nomura Real Estate Holdings believes that it must be governed in a way that continuously maximizes our Group’s value overthe long term, while consideration is given to the interest of shareholders and all other stakeholders of the Company. We aim
to enhance the earning power of the entire Group, and while acting as a holding company in managing and supervising thebusiness activities of our subsidiaries. Also we endeavor to build a more transparent management system in accordance with
the Basic Corporate Governance Policy formulated in 2015.

Basic concept of corporate
governanceDialogues with external directors
regarding the formulation of theMid- to Long-term Business Plan

P105

Corporate Governance https://www.nomura-re-hd.co.jp/english/company/governance.html
Basic Corporate Governance Policy https://www.nomura-re-hd.co.jp/english/company/pdf/cgpolicy.pdf
P111

Characteristics of our corporate governance system
Characteristics of our corporate
governance system

Strategic shareholdings policy
P105

P111

Corporate governance system

Compensation of directors
P106

P112

Diversity of directors

Sustainability governance
P108

Improvement of the effectiveness of
the Board of Directors

P114

Our efforts to reinforce corporate governanceRisk management
P110

In order to strengthen audit and supervisory functions by providing directors who serve as Audit & Supervisory Committee
Members with voting rights at Board of Directors' meetings and by other means, the Company transitioned to a company
with an Audit & Supervisory Committee in 2015, and then established the Advisory Committee Relating to Nominations andCompensation in 2016. Inviting multiple external directors and establishing the Advisory Committee Relating to Nominations
and Compensation are intended to strengthen the supervisory function of the Board of Directors and achieve fair and highly
transparent management. At the same time, the Company ensures the effectiveness of supervision by the Board of Directors
concerning the directors’ execution of duties and the executive officers’ business operations by establishing the risk management system, compliance system, and internal audit system and having regularly report to the Board of Directors about
initiatives of those systems. Currently, the majority of the members of the Audit & Supervisory Committee and the Advisory
Committee Relating to Nominations and Compensation are independent external directors.
The Company also introduced the executive officer system to separate the business execution function from the management supervision and decision-making functions to enhance the execution function, reinforcing the management of theGroup. Each executive officer selected by the Board of Directors is granted authority based on internal regulations andexecutes business operations pursuant to the Company's policy determined by the Board of Directors and instructions fromthe CEO.

2012

P116

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

•Introduced executive officer system to separate the business execution function from the management and supervisory functions of the holding company•Established the Management Committee at the holding company to help strengthen Group management systems
Organization•Transitioned to a company with an Audit & Supervisory Committee•Established the Advisory Committee Relating to Nominations and Compensation•Appointed an external director as the Chairman of the Advisory

Major Recent Corporate Governance Initiatives

Committee Relating to Nominations and Compensation

The Company’s major recent corporate governance initiatives are as follows.

1. Revision to compensation system for directors

P112

We reviewed our share-based compensation system and introduced
evaluations using non-financial indicators, with the aim of contributing
further to the enhancement of corporate value in the medium to long term.

2. Dialogues with external directors regarding the formulation of
the Mid- to Long-term Business Plan P111
In addition to the opinions of external directors at the time of formulating the plan, we also
provide details of the Company’s response based on them.

Status of Compliance with the Corporate Governance Code
As of June 2022, we have disclosed the following reason for not implementing one of the 83 principles of Japan’s Corporate
Governance Code.

Directors (No.)

6*5

O f which external directors
(No.)

0

O f which independent external
directors (No.)

0

Of which female directors (No.)

5*

8

1

2
1

0

12

104 Nomura Real Estate Holdings, Inc.

12*

5
4

4
4

5
1

2

1

2

1

•Started assessment of effectiveness utilizing a third-party evaluation organization•Raised the maximum number of share acquisition rights used for stock options to increase the •Implemented performance-based share-based compensation
ratio of performance-based incentive in order to share more interest with shareholders•Revised compensation• Proper Supervision of Successor Plans for CEO, etc. (Planning)
The Company believes that the appropriate appointment process of its CEO, i.e. one that is carried out in line with the Company’s corporate philosophy and management strategies and which also considers external candidates, is important forrealizing sustainable growth. As for the plan for the CEO’s successor, based on the respective appointment criteria for officers and for the CEO, the Company has established its training policy and the process up to the CEO’s election. Goingforward, in addition to the Advisory Committee Relating to Nominations and Compensation providing regular monitoring andreporting to the Board of Directors, the Company will strive for the further enhancement of the structure and content oftraining, to ensure that the training of successor candidates, in relation to the aforementioned established successor plan,goes as planned.

13•Started assessment of effectiveness of the Board of Directors

The assessment ofeffectiveness

Compensation

13

system for directors•Transferred authority partially from the Board of Directors to the Management Committee to speed up business execution•Formulated the Basic Corporate Governance Policy

Others•Disclosed reason for appointment of directors•Reorganized and restructured the items, systems, and divisions/departments for risk management in order to strengthen the risk management system*Reduction due to resignation or retirement during the period is not stated.

Integrated Report 2022

105

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Corporate GovernanceCorporate governance system
1

Features of the Group’s governance system
Company with an Audit & Supervisory Committee
Chairman of the Board of Directors is a non-executive
director
Out of 12 directors, four are independent external
directors
Established the Advisory Committee Relating toNominations and Compensation

Chairman of Advisory Committee Relating to Nominations andCompensation is an independent external director
Majority of the members of the Audit & Supervisory Committee and theAdvisory Committee Relating to Nominations and Compensation are
independent external directors

The Board of Directors

Held 21 times during FY22/3

Roles of the Board of Directors

The Board of Directors bears the responsibility of realizing effective corporate governancefor all shareholders, and through this, achieving sustainable growth of the Company andworking to maximize long-term corporate value. To fulfill this responsibility, the role of theBoard of Directors is to ensure the fairness and transparency of management by fully
supervising management, and make the best decisions for the Company throughimportant business execution decisions, etc.

Composition of the Board of Directors

The Company’s Board of Directors comprises seven directors (excluding directors who
serve as Audit & Supervisory Committee Members) (of which one is an external director)
and five directors who serve as Audit & Supervisory Committee Members (of which three
are external directors). The Company appoints diverse directors with various knowledge,
experience, and skills in order to ensure the necessary balance and diversity as a holding
company that manages companies that conduct business in various areas. In order tostrengthen the supervisory function of the Board of Directors and realize highly fair andtransparent management, four out of the 12 directors are independent external directors.
The Chairman of the Board of Directors is Chair and Director, who is a non-executive
director.

Chart of Corporate Governance System
General Meeting of Shareholders
Appointment
Appointment/Dismissal

Nomura Real Estate Holdings

Roles of Independent External Directors

1

Board of Directors

Directors
Non-executive

Nagamatsu Higashi

3

Advisory Committee
Relating to Nominations
and Compensation

Higashi Nagamatsu Mogi

Executive Vice
President andDirector

KutsukakeMatsuoArai

Haga Kurokawa

2

Chairman of theCommittee
Directors(Audit & Supervisory
Committee Members)
Kimura Takayama

Chairman of theCommittee

Audit

Certified public accountants (Auditing firm)

Chairman of
the Board of
Directors

Executive Vice
President andRepresentative
Director

Audit &
Supervisory
Committee Dept.

Executive
President andRepresentative
Director

Mogi

Audit & Supervisory
Committee

Miyakawa Takahashi

Takahashi

Appointment/Dismissal

Appointment of members

President andRepresentative
Director

4

External(Non-executive directors)
Internal(Non-executive directors)
Internal(Executive directors)

Audit & Supervisory
Committee Dept.

 riteria for Determining Impartiality of Independent ExternalC
Directors: Article 14 of the Basic Corporate Governance Policy
https://www.nomura-re-hd.co.jp/english/company/pdf/cgpolicy.pdf

2

The Audit & Supervisory Committee

Held 12 times during FY22/3

The Advisory Committee Relating to Nominations and Compensation Held 7 times during FY22/3

The Company established the Advisory Committee Relating to Nominations and Compensation, as an advisory body to the Board of Directors, where the majority of members arecomprised of independent external directors, to strengthen the objectivity and independence of functions of the Board of Directors in relation to nomination and compensation of
the directors and executive officers. Currently, the Advisory Committee Relating toNominations and Compensation consists of four members, of which three are independent
external directors. An independent external director is the Chairman of Advisory
Committee Relating to Nominations and Compensation. The Advisory Committee Relating
to Nominations and Compensation meets as necessary to discuss matters relating to thenomination of and compensation of directors and executive officers and reports theoutcome to the Board of Directors.

4

Management Committee

Held 50 times during FY22/3

The Committee, which is comprised of the Chief Executive Officer, the Executive Vice
President and Executive Officers, determines certain matters regarding the execution ofbusiness at overall Group companies. Chair and Director and Directors who are Audit &Supervisory Committee Members attend meetings of the Committee, where they express
their opinions as necessary.

5

Budget Committee

Held 11 times during FY22/3

Under the Management Committee, for the compilation of budgets, preparation of Mid- toLong-term Business Plan and other matters, the Committee discusses the planning,
exercise and other matters regarding budgets and Mid- to Long-term Business Plan.

6

Risk Management Committee

Held 7 times during FY22/3

Under the Management Committee, with the aim of securing the continuity and stabledevelopment of business through the exercise of risk management, the Committee
discusses matters in connection with internal controls, risks in the Group’s management
and other matters. The Committee is mainly comprised of directors and executive officersof the Company and Group companies who have been appointed by the Board of
Directors.

Roles of Audit & Supervisory Committee

Management Committee

5

Budget Committee

6

Risk Management Committee

7

Sustainability Committee

8

DX Strategy Committee

9Wellness and D&I Management Committee

Independent

Various departments

In order to strengthen the supervisory function of the Board of Directors and achieve fairand highly transparent management, one independent external director (excluding those
who serve as an Audit & Supervisory Committee Member) and three independent external
directors who serve as Audit & Supervisory Committee Members are appointed. The mainrole of independent external directors is, based on their own knowledge, to give appropriate advice from the viewpoint of the Company’s sustainable growth and improving thecorporate value, to supervise management through significant decision making by the
Board of Directors, to supervise conflicts of interest between the Company and management or major shareholders, etc., and to appropriately express the opinions ofshareholders and other stakeholders to the Board of Directors from a standpoint
independent from management.
The Company has formulated its own criteria for determining impartiality of
independent external directors, in addition to the independence standards for “Independent Directors” set out by the Tokyo Stock Exchange.

3Group Internal Audit Dept.

Guidance/Support/Monitoring, etc.

Group companies

The Audit & Supervisory Committee monitors business management and performs audits
utilizing the Company’s internal control system. We have developed a system throughwhich the Committee receives periodic reports on internal audits and results from theInternal Audit Dept., and has the authority to ask directors, executive officers, andoperating divisions of the Company and Group companies to report such matters whennecessary. Audit & Supervisory Committee Members can attend the Company’s important
meetings, including those of the Management Committee, gather information on thebusiness execution, and express their opinions so that an effective system for audits andsupervision is secured.

Composition of the Audit & Supervisory Committee

The majority of Audit & Supervisory Committee Members comprises independent external
directors; and at least one of the members, who also serves as a director, possesses
appropriate knowledge of finance and accounting. The Audit & Supervisory Committee
consists of five members, of which two are Audit & Supervisory Committee Members(full-time) and three are Audit & Supervisory Committee Members (independent external
directors).

7

Sustainability Committee

Held 5 times during FY22/3

Under the Management Committee, the Committee discusses matters on the promotion ofsustainability and others for the purpose of establishing policies and plans and managing
results regarding the promotion of sustainability, deepening Group employees’ understanding and disclosing various information thereof.

8

DX Strategy Committee

Held 12 times during FY22/3

Under the Management Committee, the Committee discusses matters on DX strategy andinvestment plans for preparing the ICT base and establishing information systems with theaim of establishing policies and plans regarding the promotion of DX and improving the
ICT environment and its effective use.

Main initiatives taken by Audit & Supervisory Committee

Group governance
As a holding company, the Company manages its Group companies under various regulations such as Regulations regarding Group Organizational Management and GroupInternal Audit. Also, its directors (excluding those who serve as Audit & Supervisory Committee Members) and executive officers also hold the post of director, etc. or directors who serve as Audit & Supervisory Committee Members also act as Audit & Supervisory Board Members in major Group companies to strengthen the Groupmanagement. Furthermore, the Company has built systems for risk management, compliance, and internal audits within the Company itself and the entire Group, with theBoard of Directors regularly receiving reports on each of the systems, for an effective monitoring of Group management.

106 Nomura Real Estate Holdings, Inc.

Main matters on the agenda at the meetings of the Audit & Supervisory Committee include
the consent to the election bill of directors who act as Audit & Supervisory Committee
Members, drawing up audit plans, the consent to the internal audit plan by the GroupInternal Audit Dept., preparing audit reports, evaluating on the reappointment of the
Accounting Auditor, giving consent to compensation for the Accounting Auditor andmaking decision for appointment and compensation, etc. of the directors except for Audit& Supervisory Committee Members. The fulltime Audit & Supervisory Committee
Members attend important meetings of the Company and request for reports fromoperating divisions as necessary to gather information on the Company’s businessexecution status.

9

Wellness and D&I Management Committee

Newly established in April 2022

Under the Management Committee, the Committee discusses mid- to long-term goals andvarious measures related to promoting wellness, work style reforms, promoting theempowerment of women, and utilization and active participation of the Group’s diverse
human resources in order to maintain and improve sound, comfortable workplaceenvironments in which people can work with vigor and achieve wellness, and also toenhance efforts for formulating human resource development policies and promotinginternal environment development for ensuring diversity.

Integrated Report 2022

107

The Vision of
Nomura Real Estate Group

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )Corporate GovernanceDirector skills matrix

Diversity of directors

The fields in which the Group expects directors are as follows:
Based on “Basic Corporate Governance Policy,” the Group has a policy of appointing and nominating a diverse range of
people with a variety of knowledge, experience, and skills as senior management.

Fields of expectation for directors
Name

Corporate
management

Finance/
Accounting

Legal/Compliance

Shoichi Nagamatsu

●

●

●

Eiji Kutsukake●●

Daisaku Matsuo●

Satoshi Arai●●

Makoto Haga●●

Hiroshi Kurokawa●●

Tetsuro Higashi●●

Hiroyuki Kimura●●

Yasushi Takayama●●

Yoshio Mogi

●

●

●

●

●

Composition of the Board of Directors and Committees
Percentage of Independent External
Directors on the Board of Directors

Percentage of female Directors on
the Board of Directors

33.3%

66.7%

Percentage of Independent External
Directors on the Audit & Supervisory
Committee

8.3%

91.7%

40.0%

60.0%

Percentage of Independent External
Directors on the Advisory Committee
Relating to Nominations andCompensation

75.0%

25.0%

4

1

3

3

12

12

5

4

Independent External Directors

FemaleMale

Independent External Directors

Independent External Directors

Positions and roles of directors, attributes, attendance, etc.

Name

Position/Responsibilities

Executive/External/
Independent/New

Akiko Miyakawa

Term ofoffice*1

GenderAttendance rate at meeting of Boardof Directors (upper row) and Audit &Supervisory Committee (bottom row)(number of meetings)

Shoichi Nagamatsu

Chair and Director
Chairman of the Board of Directors

Non-executive

2

Male

100% (21/21)

Eiji Kutsukake

President and Representative Director,
and Executive Officer
Group CEO

Executive

8

Male

100% (21/21)

Daisaku Matsuo
Satoshi Arai

Executive Vice President, Representative
Director, and Executive Officer
Group COO
Executive Vice President, Director, andExecutive Officer

Advisory
Committee Relating
to Nominations andCompensation
Member*2○

Tetsu Takahashi

Executive

Executive Newly appointed

1

-

Male

Male

5

Male

100% (21/21)

Hiroshi Kurokawa

Director and Executive Officer
Group CFO
Supervisor of Management Division,
Investor Relations

Executive1

Male

100% (17/17*3)

Non-executive External

Tetsuro Higashi

Director

Hiroyuki Kimura

Director (Audit & Supervisory
Committee Member) (Full-time)

Yasushi Takayama

Director (Audit & Supervisory
Committee Member) (Full-time)

Yoshio Mogi

Director (Audit & Supervisory
Committee Member)

Independent

Akiko Miyakawa

Director (Audit & Supervisory
Committee Member)

Independent

Tetsu Takahashi

Director (Audit & Supervisory
Committee Member)

IndependentNon-executive

Non-executive

Non-executive External

Non-executive External

Non-executive External
IndependentMale

95% (20/21)

1

Male

100% (17/17*3)
100% (9/9 *3)

◎

3

Male

100% (21/21)
100% (12/12)

○

3

Male

100% (21/21)
100% (12/12)○

3

Female100% (21/21)
100% (12/12)

○

Male

100% (21/21)
100% (12/12)○

2*1 Term of office as director as of June 24, 2022
*2 ◎: Committee Chairman*3 Number of meetings held in the fiscal year ended March 31, 2022 since assuming the position of director on June 24, 2021

●

●

●

●

●

●
●

●
●

●

●
●

●

●

●

●

Reason for appointment

Tetsuro Higashi

Tetsuro Higashi has been selected as an external director because it is expected that he will contribute to strengthening the supervisory function of the Board of Directors
and ensuring fair and transparent management by drawing on his wealth of knowledge, experience, and profound insights related to corporate management in his longcareer as a corporate manager.

Yoshio Mogi

Yoshio Mogi has great knowledge, experience and profound insights concerning corporate management acquired through his many years working as a corporate
manager. He has been selected as an external director as Audit & Supervisory Committee Member because it is expected that his extensive experience and knowledge
will contribute to strengthening the supervisory function of the Board of Directors and the corporate governance structure, as well as to enhancing the auditing structure.

Akiko Miyakawa

Akiko Miyakawa has great knowledge, experience and profound insights as an expert at accounting and auditing acquired through her many years working as a Certified
Public Accountant. She has been selected as an external director as Audit & Supervisory Committee Member because it is expected that her extensive experience andknowledge will contribute to strengthening the supervisory function of the Board of Directors and the corporate governance structure, as well as to enhancing theauditing structure, although she has no previous experience directly involved in the management of a company other than as an external director.

Tetsu Takahashi

Tetsu Takahashi has great knowledge, experience and profound insights as a legal expert acquired through his many years working as a lawyer. He has never in the past
been involved in the management of a company except as an external director, however he has been selected as an external director as Audit & Supervisory Committee
Member because it is expected that his extensive experience and knowledge as a representative of a law firm and an external director and outside audit & supervisoryboard member of other companies will contribute to strengthening the supervisory function of the Board of Directors and the corporate governance structure, as well as
to enhancing the auditing structure.

◎3

Sustainability

Reasons for appointment of external directors(Appointed on June 24, 2022)

Executive

ICT/Digital*The above table does not represent all aspects of the knowledge and experience of each director.

100% (17/17*3)

Director and Executive Officer

Overseas Business

●

Name

Makoto Haga

108 Nomura Real Estate Holdings, Inc.

Audit &
Supervisory
Committee
Member *2

Real estate/
Construction

Initiatives to Support and Improve the Skills of Directors○

The Company provides training that takes into consideration the Company’s corporate philosophy and management strategies. The Company also regularly provides opportunities for all directors to receive training from guest lecturers from outside the Company, to improve their knowledge of topics such as corporate governance and DX. Also, when
external directors assume office, they are provided with an explanation regarding topics such as the Group’s history, business framework, and business model, to deepen theirunderstanding of said topics. Then after the external directors’ tenures begin, in addition to ensuring regular opportunities for training, the Company also provides opportunities
for them to tour the Company’s properties. In addition, in order to facilitate smooth deliberations, materials for the Board of Directors meetings are provided in advance, and if
necessary, briefings are held prior to the meeting.
Number ofsessions

Specific initiatives○

Training from guest
lecturers from theoutside the Company

In the fiscal year ended March 2022, we invited outside experts to hold study sessions for directors and executive officers on two
key topics: “Achieving Sustainable Growth through the Combination of Sustainability and Business Management” and “Trends in
Carbon Neutrality and their Impact on Business.”

1

Tour of the Company’s
properties

To deepen understanding of the Group’s wide-ranging business operations, we provide regular opportunities for external directors
to tour the Company’s business properties and hold preliminary briefings for newly appointed external directors during the week ofeach Board of Directors meeting.

1

Integrated Report 2022

109

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

GovernanceFact Data, etc.

(Business, Sustainability, and DX )Corporate GovernanceImprovement of the effectiveness of the Board of Directors

Each director
evaluates theeffectiveness of theBoard of Directors
from their own
perspective

Analysis andevaluation by Boardof Directors

Consideration of
response policy

Execution

By assessing the effectiveness of the Board of Directors each year, the Company
aims to regularly grasp the status of improvement and further improve theeffectiveness of the Board of Directors.

Details of the assessment of effectiveness of the Board of Directors in the fiscal year ended March 2022 are as follows:
Questionnaire survey• Conducted interviews of all directors
by utilizing a third-party evaluation
organization

Response
For the fiscal year ending March
2023, the Company will designate“enhancement of discussions ofstrategy” and “optimization of
governance” as priority measures, asin the previous fiscal year, and it will
promote initiatives aimed at further
improving corporate value andstrengthening corporate governance.

Analysis and evaluation by the Board of Directors
Members

The scale of the Board of Directors and the ratio of independent external directors are broadly appropriate.

Discussions

Discussions are free and lively, exceeding internal and external limits and leveraging the knowledge and experience of each Director. In particular, discussions were enhanced through the opinions, etc. from external directors.

Operation

The Board of Directors has been operating stably with materials provided beforehand and the number of
agenda items being balanced. However, in order to provide further clarification of the discussion points
regarding explanations on agenda items and materials, it is necessary to continue to work on improvements.

The Company makes efforts to enhance discussion aimed at improving governance and risk management
Matters for discussion through progress management, etc. using a “Priority Issue List” set up for organizing the issues that need to bemonitored by the Board of Directors.

Capital policy• C onducted questionnaire surveys ofall directors

IssuesOperation

In order to provide further clarification of the discussion points regarding explanations on agenda items andmaterials, it is necessary to continue to work on improvements.

Matters for discussion

The Company recognizes that discussions for strategy that require a medium- to long-term perspective need
to be enhanced further.

Dialogues with external directors regarding the formulation of the Mid- to Longterm Business Plan and the Company’s response based on them

In formulating the Mid- to Long-Term Business Plan (FY2023/3–2031/3) announced in April 2022, active discussions were
held at meetings of the Board of Directors and opinion exchange sessions. The content of these discussions, including
considerations of the reasonability of the content, is reflected in the management plan, etc.

DX strategy

Conduct questionnaire
surveys andinterviews of all
directors by athird-party
assessment
organization

TOPIC

Profit plan

For continuous improvement of the effectiveness of the Board of Directors, we repeatedly perform a cycle of assessment of
the effectiveness of the Board of Directors and the Board of Directors’ determination and implementation of appropriate
policies based on the assessment results.

Opinions and suggestions fromexternal directors

Our response based on opinions andsuggestions

Stable profit growth is expected in the plan, but is it necessary to assume
unforeseen circumstances such as economic crises and fluctuations in market
conditions?

While downside risks based on unforeseen
circumstances were not incorporated into the
profit plan, stress tests were conducted from theperspective of asset risk management.

The key point of this plan is the growth of the Commercial Real Estate Business Unit
and the Overseas Business Unit. Have you made a suitable judgment that thecompany can compete, based on the strategies of other companies?

The disclosure of a dividend payout ratio of 40% level from Phase II onwards in theshareholder return policy may not necessarily be received favorably by investors
unless the probability of achieving the profit plan is also indicated.
There is a concern that the figures disclosed in the shareholder return policy may betaken as only superficial figures, and that the total payout ratio of Phase I will be
45% and the dividend payout ratio in Phases II and III will decline to 40%. It isnecessary to properly consider how to present the Company’s way of thinking.

In the DX strategy, the “R” in TGR* is evaluated as cost. But if costs can be reducedwith thorough digitalization, then it will become a source of value, and resources
generated can be diverted to growth areas. In addition to consideration of DX as aservice, we ask that consideration also be given to investment in measures that willcontribute to standardizing on-site business process services and improving
productivity.
* TGR：Transform／Growth／Run

In addition to major decisions and reports at meetings of the Board of Directors, we also hold sessions for directors to
exchange opinions and engage in deeper discussions. The main decisions, reports, and discussions during the fiscal year
ended March 2022 were as follows.
Categories

Main themes

Business strategy, business plan

• A nnual budget, policy for shareholder returns, fund procurement(Borrowings, Bonds, etc.)• F inancial results• Investor trends/IR strategy• B usiness Unit strategy• E xamination of M&A• D igital strategy• Promotion of sustainability• Promotion of wellness management• H uman resources strategy

Corporate governance• Evaluating the effectiveness of the Board of Directors• P olicy for responding to Audit & Supervisory Committee audit findings• A dvisory matters to Advisory Committee Relating to Nominations and Compensation• E nhancing group governance• M onthly monitoring of response status to various management
issuesRisk management/Compliance/Audits• A sset risk management• M anagement of investment risk and external risk
• R eport of Risk Management Committee• R isk monitoring report in Overseas Business• F ormulation of the compliance program for the fiscal year
• F ormulation of the group internal audit plan and the report on
the results

In addition to the above items to be deliberated by the Board of Directors, directors hold meetings to exchange opinions
among them to deepen discussions.
Main themes

Directors’ opinion exchange sessions

110 Nomura Real Estate Holdings, Inc.

• N ew Mid- to Long-term Business Plan
• A sset portfolio strategy• D iscussions of strategy (Digital, Sustainability)• B udget plan and the three-year forecast

Human resources strategy

Main discussions of the Board of Directors and Directors’ opinion exchange sessions
The plan will be more persuasive if perspectives such as diversity, DX humanresources and securing human resources responsible for overseas businesses canbe incorporated into the human resources strategy.
In recent years, the number of households where both partners work has increased,
and women’s motivation to work is high. To prevent motivated employees fromleaving their jobs due to inadequate personnel systems, we would like the Company
to enhance various personnel systems and make efforts to ensure that employees
make full use of them.

The following is disclosed in the explanatory materials for
the Mid- to Long-term Business Plan.

A “profit growth roadmap” was disclosed, listing
approximate levels for land bank rate and profit
of property sales, etc.
*Excerpted information is included on P58.

The following is disclosed in the presentationmaterial of the Mid- to Long-term Business Plan.
Materials clearly state the Company’s policy ofraising the medium- to long-term dividend payout
ratio to the 40% level (policy of emphasizing
dividends).

The following is communicated at explanatory
briefings on the Mid- to Long-term Business
Plan, etc.
From Phase II onwards, there is a possibility that
the Company will consider repurchasing treasury
shares based on investment opportunities andshare price levels. However, since this isdependent on future conditions, it is not includedin the plan at this time.

A DX strategy was formulated based on the points
P72-75made.

A human resources strategy was formulated based
P70-71on the points made.

Strategic shareholdings policy
The Group's strategic shareholding policy is that it contributes to the improvement of the Group's corporate value from a comprehensive perspective such as strengthening business relationships withbusiness partners and strategic business alliances.
The Board of Directors annually verifies the rationality of the Group’s continuous holding of shares oflisted companies held for reasons other than pure investment purposes (strategic shareholdings), andbased on that verification it sells off shares with low rationality for holding as the basic policy in consideration of the market environment. As of the fiscal year ended March 2022, the Company has nocross-shareholdings.

Strategic
shareholding status0(zero)

Integrated Report 2022

111

The Vision of
Nomura Real Estate Group

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )Corporate GovernanceCompensation of directors

 ompensation of directors’ ratioC(images)Category of compensation of directors
Fixed compensation

The policy for deciding the details etc. of the compensation of directors etc.

Key points of revisions to compensation system of directors (June 2022)• Increased the performance-based portion of share-based compensation to raise awareness of contribution to the improvement of corporate value in themedium to long term

• Added outside directors (excluding Audit & Supervisory Committee Members) to the list of directors eligible for the non-performance-based portion ofshare-based compensation with the aim of further improving awareness of external directors to share value with shareholders

Non-performance-based
compensation adopts
restricted shares (RS)Share-based compensation
Base compensation

At a meeting of the Board of Directors, the Company resolved the policy for deciding the details of the compensation, etc. foreach individual Director excluding Audit & Supervisory Committee Members. In addition, the Company established theAdvisory Committee Relating to Nominations and Compensation, where the majority of members composing that body are
independent external directors, and the Board of Directors resolved the operation, etc. of the compensation plan for the
directors, based on the deliberation by the Committee and on the Committee’s opinion reported to the Board of Directors.

*A ssuming 100% payment of variable compensation of the basic
amount set by the Group

Variable compensation

Bonuses○

Directors concurrently
serving as executive officers

○

PS*

RS*

○

○

Director and Chairman of theBoard of Directors

○

－

－

○

Internal directors (Part-time)

○

－

－

－

External directors (excluding
Audit & Supervisory Committee
Members)

○

－

－

○

Directors (Audit & Supervisory
Committee Members)

○

－

－

－

Beforerevision

Performance-based
compensation adopts
performance-sharing(PS)

Bonuses

Variablecompensation

Variablecompensation

After
revision

Non-performance-based
compensation adopts
restricted shares (RS)

Performance-based
compensation adopts
performance-sharing(PS)• With the aim of raising awareness of sustainability, added evaluations based on non-financial indicators (sustainability elements, etc.) to the content of key* PS: Performance-based compensation adopts performance-sharing / RS: Non-performance-based compensation adopts restricted shares*BEI: B uilding Energy-efficiency Index. An index that evaluates the energy-saving performance of buildings based on the energy-saving standards of the Act on the Improvement of Energy
Consumption Performance of Buildings (Building Energy Efficiency Act). It indicates the level of primary energy consumption of a given building.

Total amount of compensation, etc. by director category, total amount of compensation, etc. by type and thenumber of directors applicable

performance indicators and calculation methods for bonuses, centering on evaluations based on aspects of business performance such as consolidated
business profit. For the fiscal year ending March 2023, we plan to evaluate using non-financial indicators based on BEI*.

(4) Compensation of directors concurrently serving as executive
officers consists of “base compensation,” “bonus” and “sharebased compensation” so that it works as a clear incentive toimprove performance not only for the short-term, but also for the
medium- to long-term.
(5) Compensation of the Chairman of the Board of Directors ismade up of the “base compensation” and the “restricted shares(“RS”) portion of share-based compensation,” taking into
account the sharing of interests with shareholders, since the
Chairman of the Board of Directors is responsible for supervising execution of business from an objective standpoint and also
for enhancing long-term corporate value.
(6) Compensation of Part-time Internal Directors and external
directors consists only of “base compensation” due to their roleof supervising the business execution from an objective standpoint.

Policy for determining ratios of each type of compensation for individual directors(1) Ratios of compensation for directors and executive officers shall be determined in accordance with items (2) and (4) of the Basic Policy.
(2) Ratios of compensation for the Chairman of the Board of Directors and outside directors shall be determined in accordance with items (2)and (5) of the Basic Policy.
(3) Compensation for non-full-time directors shall be base compensation only, in accordance with items (2) and (6) of the Basic Policy.

Director category

Total amount ofcompensation,etc.
(millions of yen)

Directors (excluding directors who also serve as Audit & Supervisory
Committee Members) (excluding external directors)

Fixedcompensation

Variablecompensation

Determination policy each type of compensation
Determined according to the role and position as a director.

Granted on a basis according to the role and position

Bonuses

Determined according to the Company’s business performance, such as consolidated businessprofit, and evaluation of individuals. The evaluation of individuals evaluates the progress of
initiatives for single-year and the medium- to long-term, for which achievements are difficult tomeasure based only on the figures of financial results.

• T he Company’s business performance, such as
consolidated business profit• Implementation status of single-year measures andmid- to long-term measures, etc.
• Evaluation based on non-financial indicators(sustainability factors, BEI value, etc.)

562

275

118

97

71

9

Directors (Audit & Supervisory Committee Members) (excluding
external directors)

102

102

―

―

―

3

External directors

71

71

―

―

―

6

Total

736

448

118

97

71

18

*1. T he number of directors (directors who also serve as Audit & Supervisory Committee Members) (excluding external directors) is five as of the end of the fiscal year ended March 2022. The reason for the difference with the numberof directors applicable shown above is the inclusion of three directors who retired at the conclusion of the Ordinary General Meeting of Shareholders held on June 24, 2021, and the fact that one director (Audit & Supervisory
Committee Member) as of the end of the fiscal year ended March 2022 has served as an executive director in the past, and the amount of share-based remuneration (performance-based portion) granted during the relevant period
was finalized in that fiscal year.
*2. T he number of directors (Audit & Supervisory Committee Members) (excluding external directors) is two as of the end of the fiscal year ended March 2022. The reason for the difference with the number of directors applicableshown above is the inclusion of one director who retired at the conclusion of the Ordinary General Meeting of Shareholders held on June 24, 2021.
*3. T he number of external directors is five as of the end of the fiscal year ended March 2022. The reason for the difference with the number of directors applicable shown above is the inclusion of one director who retired at theconclusion of the Ordinary General Meeting of Shareholders held on June 24, 2021.
*4. T he compensation amount (“base compensation” and “bonus”) of directors has been set as no greater than ¥550 million per year for directors (excluding directors as Audit & Supervisory Committee Members) according to a
resolution at the Ordinary General Meeting of Shareholders held on June 26, 2018, and at the time of the resolution, the number of directors (excluding directors as Audit & Supervisory Committee Members) was eight (of which,
two were external directors). Furthermore, the compensation amount of directors (Audit & Supervisory Committee Members) is limited to up to ¥170 million per year according to a resolution at the Ordinary General Meeting of
Shareholders held on June 23, 2020. The number of directors as Audit & Supervisory Committee Members at the time of the resolution was six (including four external directors). The compensation amount of directors is shown as
the amount recorded by the Company as an expense during the fiscal year ended March 2022 regardless of whether it was paid during the fiscal year ended March 2022.
*5. S eparately from the compensation amount of directors shown in *4. above, the Company introduced a performance-based stock incentive plan for directors (excluding external directors and directors as Audit & Supervisory
Committee Members) in accordance with a resolution approved at the Ordinary General Meeting of Shareholders held on June 26, 2018. Under the terms of the plan, the Company’s contribution to a trust as compensation for
directors (excluding external directors and directors as Audit & Supervisory Committee Members) is limited to an amount of not more than ¥730 million over the relevant period of three fiscal years, and the number of directors(excluding Directors as Audit & Supervisory Committee Members) who were subject to the plan at the time of the resolution was six (excluding two external directors). In accordance with the resolution approved at the Ordinary
General Meeting of Shareholders held on June 24, 2022, over the new period of three fiscal years beginning from the fiscal year ending March 31, 2023 (or, in the case of a period extension, each of the subsequent three fiscal
years), the Company’s contribution to a trust as compensation for directors (excluding directors who also serve as Audit & Supervisory Committee Members) is limited to an amount of not more than ¥1,650 million and 672,000
shares (of which the limit per external director is ¥9.9 million and 4,030 shares for each of the three fiscal years), and the number of directors (excluding directors who also serve as Audit & Supervisory Committee Members) who
were subject to the plan at the time of the resolution was seven.
*6. With respect to the performance-based compensation, the details of factors including the performance indicators that pertain to bonuses, which are monetary compensation, the calculation method of such bonuses and thereasons for selecting these indicators are as stated in “The policy for deciding the details etc. of the compensation of directors etc.” The actual results that pertain to performance indicators are as presented in the table below.

Share-based
compensation (PS)

Performance-linked evaluation after 3 years(Evaluation index: Business profit, ROE)

Share-based
compensation (RS)The non-performance-based compensation adopts restricted shares (“RS”)
providing an incentive for long-term contributions and enhancement ofcorporate value to delay delivery, etc. until retirement as an officer.

Granted on a basis according to the position (increased
compensation due to rising stocks)

112 Nomura Real Estate Holdings, Inc.

Fiscal year ended March 31, 2020

Fiscal year ended March 31, 2021

Fiscal year ended March 31, 2022

¥82,833 million¥76,448 million¥92,765 million

＋4.0％

-7.7％

＋21.3％

Business profit
Year-on-year change*7. W ith respect to the performance-based compensation, the details of factors including the performance indicators that pertain to share-based compensation, etc., the calculation method of such share-based compensation, etc.
and the reasons for selecting these indicators are as stated in “the Basic Policy stated on the previous page. The ranges of performance indicators were decided as presented in the tables below.

(The ranges for the fiscal year ended March 2021, the third year from the start of thesystem in the fiscal year ended March 2019)
Ranges
The achievement-linked coefficient

The performance-based compensation adopts performance-sharing (“PS”) providing incentive forenhancement of medium- to long-term performance, and implements, after three years of thecommencement of each business year, delivery or payment (“delivery, etc.”) of the Company’s shares
and/or an amount equivalent to the proceeds of converting the Company’s shares into cash (the“Company Shares, etc.”).

Number of
directors
applicable(people)Share-based compensation(Non-monetary compensation, etc.)
Performance-based
Non-performancecompensation
based compensation

Bonus(Performance-based
incentive, etc.)

Evaluation criteria

Base compensation

Total amount by type of compensation, etc. (millions of yen)Basecompensation

Category of compensation of directors
Compensation categoryBasecompensation

Bonuses

Basic Policy(1) C ompensation for directors consists of a structure that is linked
to the Mid- to Long-term Business Plan, etc. in order to sufficiently work as an incentive for the sustainable improvement ofcorporate value, and the Company’s basic policy in deciding
compensation for each director is to provide an appropriate levelof compensation according to the role and position as a director.
(2) Operation and revision of the compensation plan for directors
and the amount of the compensation for directors are determined by the Board of Directors based on the deliberation by
the Advisory Committee Relating to Nominations and Compensation and its opinion reported to the Board of Directors.
(3) In reviewing the appropriateness of the compensation level andthe content of the share-based compensation plan, the Company takes consideration of factors such as the size of theCompany and business characteristics, after obtaining advice
from an external compensation consultant as necessary.

Basecompensation

Business profit
ROE

0%

-

¥75,400 million 6.5%-

(The ranges for the fiscal year ended March 2022, the third year from the start of thesystem in the fiscal year ended March 2020)

22.0%¥105,600 million¥76,448 million

12.5%

7.4%

Results

RangesResults200%

The achievement-linked coefficient
Business profit
ROE

0%¥70,800 million
6.5%

-

200%

127.0%-¥99,200 million¥92,765 million

-

12.5%

9.2%

*8. Non-monetary compensation, etc. consists of the Company’s shares, etc. and the conditions, etc. for delivery are as stated in “The Basic Policy” as mentioned above.
*9. T he amounts of base compensation and bonuses, both of which are monetary compensation, to be paid out are delegated to the President and Representative Director Eiji Kutsukake based on a resolution of the Board of Directors.
Therefore, the President and Representative Director shall decide the details. The reason for this delegation to the President and Representative Director is that the Company has judged the President and Representative Director
as appropriate to conduct the individual evaluation of each director while considering, among other things, performance of the Company overall. The payment level is deliberated by the Advisory Committee Relating to Nominations
and Compensation for the appropriate exercise of the decision authority delegated to the President and Representative Director.

Integrated Report 2022

113

The Vision of
Nomura Real Estate Group

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )Sustainability Governance
The Group tackles changes in the management and business environment head-on, including shared global issues such as climatechange, intensification of natural disasters, and the diversification of human values. The Group has also formulated the Sustainability
Policy entitled “Earth Pride,” describing its vision of 2050. Going forward, the Group will promote sustainability through its businessactivities by recognizing its sustainable growth and contribution to a sustainable society as a unified goal.

Process for identifying priority issues (materiality) and establishing key performance indicators (KPIs)
In line with the formulation of the Sustainability Policy and the new Mid- to Long-Term Business Plan, the Group has
identified priority issues (materiality) and established key performance indicators (KPIs).

Sustainability management structure
The Group believes that sustainability and management are
inseparable, and that business strategy and direction of sustainability should be perfectly aligned. Therefore, the President andRepresentative Director, Group CEO will serve as the Chairman of
the Sustainability Committee from April 2021 in order tostrengthen our system of approach to initiatives. The Committee
consists of directors and executive officers appointed by the
Board of Directors of the Company and is mainly responsible fordeliberating and determining policies and activity plans for sustainability. Results of deliberation by the Committee are reported
to the Management Committee and the Board of Directors andreflected in its business plans and business activities.
During the fiscal year ended March 2022, the Committee
convened five times. In addition, the Sustainability Subcommittee,
Environmental Subcommittee and Human Rights Subcommittee
convened 33 times in total to promote more active internal discussions.

Board of Directors

STEP 1

ReportManagement Committee

STEP 2

ReportSustainability Committee

Determination
Chairman: Group CEOof various
Members: Directors and 13 executive officers
policies
Management officeGroupcompanies
Practice at the businesslevel based on policies

Sustainability Management
Support for
Dept.
implementation

STEP 3

STEP 4

STEP 5

Examine long-term social issues
extensively

The Group selected social issues that are highly relevant to its business by
examining long-term prospects, including global/social environmental issues andtechnological trends, referring to international frameworks and information fromexternal consulting firms.

Identify key themes for the Group

Workshops for young mid-level and young Group employees (183 participants) andworkshops for management employees (214 participants) were held to gather
opinions as to what kind of value they want the Group to provide.

Identify key themes forstakeholders

Opinions on expectations of the Group and social issues to be addressed weregathered via a questionnaire-based survey from 41 external stakeholders, including
sustainability experts, institutional investors, and customers.

Determine Sustainability Policy, threethemes, and priority issues (materiality)

Based on the results of the examinations in Steps 2 and 3, a questionnaire-based
survey of management personnel (approximately 20 people) was conducted. After
linking the results of this survey with the vision outlined by the new Mid- toLong-term Business Plan, the Sustainability Policy, key themes, and priority issues(materiality) issues were determined by the Sustainability Committee. Details werereported to the Board of Directors.

Establish key priority indicators(KPIs) for priority issues(materiality)

Key performance indicators (KPIs) for each priority issues (materiality) identified in
Step 4 were selected based on the new Mid- to Long-term Business Plan,international frameworks such as SDGs and SASB, and various policy trends.
Details were reported to the Board of Directors.

Major achievements since the fiscal year ended March 2022

• Formulated the Sustainability Policy and identified priority issues (materiality)• Signed an agreement with Japan’s Ministry of Agriculand established key performance indicators (KPIs) for actualizing the policy
ture, Forestry and Fisheries and a manufacturer ofhousing construction materials company to promote the• Joined RE100• Considered procurement measures for renewable energy with additionality (see utilization of domestically sourced 2×4 timber building
materials in building construction
Topics below)• Expanded disclosure of information relating to diversity and inclusion (efforts • Considered issues such as waste reduction andled by the Group Human Resources Dept.)
recycling in the Company’s business domains• Conducted research and development of timber building materials through joint • Established a system to implement human rights due
research with general contractors and building materials manufacturers
diligence• Signed a comprehensive partnership agreement with OKUTAMA TOWN, Tokyo • Conducted survey activities at approx. 200 business(co-creation study for the preservation of a rich natural environment)
partners regarding their state of compliance with the
Nomura Real Estate Group Procurement Guidelines

Nomura Real Estate Development × TEPCO Energy Partner

Nomura Real Estate Development leads Japan’s first Virtual Mega Solar power system fordetached housing in the Tokyo Metropolitan Area

Earth PridePursuing humanity

Maintaining harmony with nature

Building the future together

We strive to answer the deep questions of humanexistence and well-being in a world where technology is increasingly progressing and being integrated
into our lives.
By providing an inclusive living environment where
people support and connect with each other, we
contribute to the creation of a society where no one
will be left behind.

Our aim is to achieve true harmony with our naturalenvironment for our future children and healthy
ecosystems by reconsidering how human economic
activities should operate.
While carefully conserving the Earth’s finite
resources, we improve the relationship between
nature and humans.

The ambition we have is to create unprecedented
value from diverse organizations and people working
together to overcome boundaries.
We are continuously challenging ourselves withnovel ideas of living, business and working styles for
an innovative society where all people with various
backgrounds and values can build on their strengths.

Priority issues (materiality) by 2030

Diversity &inclusion

Climate change and natural environment
Human rights• Harnessing the environmental value created by PROUD

Decarbonization

CirculardesignBiodiversity

Virtual Mega Solar contributes tocreate a carbon-neutral society
together with customers

expansion of renewable energy anddisaster-resilient urban (housing)development

SEASON• Widespread popularization andequipment• Maintenance and management of

power generation equipment during thespecified contract period

the natural environment• Installation of solar power generation

Sustainability Policy

Society and employees• Creating renewable energy with additionality while considering

power from solar power generation facilities

As part of efforts to achieve carbon neutrality by 2050,
Nomura Real Estate Development and TEPCO Energy Partner
launched “Virtual Mega Solar” project, introducing solar power
generation on the same scale as mega solar power plants(total power output of 1,000kW) for PROUD SEASON detachedhousing developed by Nomura Real Estate Development,
mainly in the Tokyo Metropolitan Area.
“Mega solar” power generation refers to large-scale solar
power generation systems with a power output of 1,000kW or
more. There are various issues to overcome in creating such
power generation facilities, such as securing sufficient land
and limiting environmental impact in the development process.
The project initiative utilizes detached housing (around 300
properties per year) in the Tokyo Metropolitan Area, and will
be implemented as an initiative for localized generation andconsumption of electric power, to conserve and generateenergy in the Tokyo metropolitan area, where there are few
areas of fallow land to be utilized.

• Acquisition of environmental value and surplus

TOPIC

Priority issues (materiality) and Key Performance Indicators (KPIs)

Key Performance Indicators (KPI)

Key Performance Indicators (KPI)•Female manager and junior manager ratio: 20%•Childcare leave utilization rate by men and women: 100%
•Procurement guideline survey implementation rate: 80%•Creation of human rights due diligence system•Percentage of participation in human rights training: 100%
•Provision of products and services with inclusive design•Percentage of implementation of one-on-one meetings: 100%

•CO2 emissions reduce by 35% (compared to FY2020/3)•Energy conservation performance indicators in new buildings
Maintain ZEH/ZEB-oriented standardsD• evelop timber-based buildings•Obtain biodiversity certification•Initiatives to promote building longevity•Promote waste reduction and increase recycling rate

PROUD SEASON owners• Owners can utilize solar power generation facilities, etc., without incurring initialor monthly costs

114 Nomura Real Estate Holdings, Inc.

Integrated Report 2022

115

The Vision of
Nomura Real Estate Group

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )Risk Management
The Group recognizes that ensuring the soundness of management through appropriate risk management and operation is an important management issue. In the rapidly changing social environment, we will identify risks andopportunities for the Group from a mid- to long-term perspective and take appropriate actions in order to provide
new value and achieve sustainable growth.
For more detailed information, see our Financial Report. https://www.nomura-re-hd.co.jp/cfiles/engnews/n2022062400301.pdf

Details of main risks
The following are the main risks that the management recognizes
that have the potential to significantly influence the financial position, business performance and cash flows of the company andthe consolidated subsidiaries. Among these main risks, the Company has selected several risks requiring particular attention during
the fiscal year ending March 2023, in consideration of factors suchas the magnitude of the potential impact on its businesses and theexternal environment.
Matters concerning the future and the recognition of risks inthe text are as determined by the Group as of the end of the fiscal
year ended March 2022. The following, however, does not include
all risks. Risks that are unpredictable or deemed insignificant at thispoint in time may impact on businesses in the future.

The details of risk categories and each main risk items are as follows.
Basic Policy for Risk Management
The Group regards risk management as a “business management
methodology that aims to improve corporate value by managing all
risks related to the attainment of corporate group organizational andbusiness objectives in an integrated and unified manner while
controlling risk within the company’s risk tolerance limits.” With theaim of ensuring the soundness of business management throughproper management and operation of risks, the Group has formulated the Risk Management Regulations.
As its basic policy, the Group assures business continuity andstable development by implementing risk management and classifies its main risks into four categories, namely “A: Investment risk,”“B: External risk,” “C: Disaster risk,” “D: Internal risk.” Among them,risks listed below are regarded as important risks that should bemanaged, and performing effective and efficient risk management isprovided according to the scale and characteristics of each risk.

“A: Investment risk” and “B: External risk,” while the Risk Management Committee, established as a subordinate organization of theManagement Committee, conducts regular monitoring, evaluation andanalysis of “C: Disaster risk” and “D: Internal risk” and these committees discuss basic response policies regarding risk prevention,
response when risk occurs, and prevention of recurrence after risk
occurs. Moreover, we established the Group Risk Meeting consistingof directors and executive officers of each Group company appointed
by the chairman of the Risk Management Committee to share risk
information and response policies within the Group.
With regard to risk management, each Business Unit manager willsupervise the risk management of their affiliated business unit andreport on the situation to the Management Committee or Risk Management Committee as necessary. Concurrently, the president of eachgroup company (the head of each division at Nomura Real Estate
Development) are responsible for reporting risk management matters to
the Business Unit Manager in a timely and appropriate manner.
In addition, we have defined the organization in charge ofbusiness in each group company as the “first line” of risk management, the organization in charge of corporate operations at theCompany and each group company as the “second line” of risk
management, and the organization in charge of internal audits at theCompany and each group company as the “third line” of risk management. With each “line” playing its role in risk management, forexample, the “second line” and “third line” of the Company providing
support, guidance and cooperation to the “second line” and “thirdline” of the group companies, respectively, we have establishedefficient organizations and processes that support governance andrisk management.
In the event of a major problem requiring urgency, the chairmanof the Risk Management Committee decides the basic policies suchas countermeasures upon consulting with the executives’ responsible for relevant departments in accordance with the Risk
Management Regulations and reports to the President (Group CEO)and provides instructions such as response in accordance with thebasic policy.

Important risks needing to be managed among main risks• Risks that could have a major impact on Group management• Risks that could have a major impact on society• Risk of litigation or other serious problems• Other major risks that should be managed by the Group

Risk Management Structure
To discuss various risks related to group management, the Company
has prescribed the Management Committee as the integrated risk
management body and operates a system to regularly monitor,
evaluate and analyze the state of main risks, provide necessary
guidance and advice to each business unit and Group company
while regularly reporting details to the Board of Directors. The
Management Committee, which is the integrated management
body, directly monitors.

Nomura Real Estate Holdings, Inc.

Board of Directors(A) Investment risk(B) External risk(C) Disaster risk

(D) Internal risk(B) External risk

(D) Internal risk

Each Business Unit Manager / Executive Officer in charge of Overseas Business / Executive Officer in charge of Development Planning / Supervisor of Management Division

2nd line(The organizationin charge ofcorporate
operations)Audit

3rd line(The organizationin charge ofinternal audits)

Risk categories(A) Investmentrisk(C) Disasterrisk

Each Group Company

President of each group company / Head of Each Division at Nomura Real Estate Development

2nd line(The organization in charge ofcorporate operations)Support / Guidance / Monitor

Conduct appropriate risk-taking operations mainly through risk recognitionand control, and the development and operation of systems that handles risk.

116 Nomura Real Estate Holdings, Inc.

3)

Risks associated with market changes

4)

Risks generated by changes in economic conditions5)	Risks generated by changes in political/social conditions/systems (law, tax systems, accounting,others)Risks generated by disasters thathave a large impact on customers
and business continuity

Operational risks occurring at theCompany and each group company

7)	Risks related to disasters (earthquakes, typhoons, floods, tsunamis, volcanic eruptions, major fires,epidemics of infectious diseases, etc.) that have a major impact on customers and business
continuity
8)

Risks related to the violation of laws and ordinances

9)

Risks related to quality defects

10) Risks related to occurrence of information system crisis

Main risk items

Main initiatives, Response policies, etc.

• Risk that the Company will not earn the expected profits due to anincrease in construction expenses caused by soaring materials prices• Investment decisions based on a business plan that anticipates a certain increase inconstruction expenses• Monitoring within business divisions and regular reporting at Management Committee
meetings, etc.
• Establishment of a specialized department for steering large-scale projects such as the
Shibaura Project and Nakano Project• Risk of profitability deterioration and delays in anticipated projectschedule occurring in projects with long-term project timeframes
and large investment budgets, such as redevelopment projects• Risk of inability to secure the expected business volume andslowing profit growth due to intensifying competition for landacquisition, etc.

• Business land bank rate for PhaseⅠ of the Mid- to Long-term Business Plan (FY2023/3–
FY2025/3) is mostly 100%
• Promotion and expansion of legal redevelopment and condominium reconstruction projects,
which are some of the Company’s key strengths• Risks arising from the impacts of prices for housing sales andproperty sales due to changes in Japan’s real estate market andfinancial conditions• Policy on land acquisition for housing sales and rental housing / property sales that not
taking excessive risk of market fluctuations (secure land bank for around 3-4 years)• Risk arising from deterioration in profitability and delay in profit
recovery timing in overseas business due to deterioration ineconomies and real estate markets in countries overseas• Business advancement through joint ventures with excellent local developers• Initiatives to make effective use of know-how cultivated in Japan and improve quality
through the implementation of the KAIZEN Project, etc.
• Regular holding of “overseas business monitoring meetings” and implementation ofmonitoring by second-line organizations• Risk of a reduced strength of the Company’s businesses due todelays in response to changes in lifestyles and values, responseto accelerating advances in digital technology, and response tosustainability, etc.

• The DX & Innovation Management Department drives research and development in new
business fields and planning, promotion, and support for digital strategies, etc.
• Promoting sustainability to achieve priority issues that need to be addressed in particular by2030• Risk of inability to continue business due to increasingly severe
natural disasters such as earthquakes, typhoons, and torrentialrains• Establishment of a system for selecting core operational processes for the purpose of
ensuring business continuity, in the event of an outbreak of COVID-19 infections, forexample• Risk due to inadequate design and construction in the real estatedevelopment business• Rigorous compliance with the Group’s design standards and quality manuals. As anordering party, we conduct quality inspections with regard to construction status.
• Formulating business standards relating to management, formulating safety and temporary
construction guidelines for repair work, and providing damage insurance in case of
accidents, etc.

• Risk due to delay in preparing personnel systems to secure
diverse human resources and enable human resources tocontinue playing an active role

• Promoting Group-wide human resources strategies• Revision of personnel systems, etc. (introduction of a multi-track personnel system thatenables diverse human resources to develop their strengths to achieve growth and play
active roles, etc.)• Establishment of Wellness and D&I Management Committee and formulation of Nomura
Real Estate Group Diversity & Inclusion Promotion Policy• Risk due to information leak by cyberattack, impact on business
continuity, and incurrence and expansion of damage, etc.

• Restrictions on information access via Internet connection, log management, andtoughening of measures against loss of information terminals (portable devices, etc.)• Third-party system security diagnostics, and introduction of a detection system forabnormal behaviors, etc.

Audit
Audit

Support of risk management / Monitor

1st line(The organization in charge of business)

Risks associated with strategic investment (M&A) and new businesses

In the fiscal year ending March 31, 2023, risks requiring particular attention are as follows.

(B) Externalrisk

Three Lines Model

Risks associated with real estate investment

2)12) Risks related to occurrence of fraud and negligence

Management Committee (Comprehensive management entity)(C) Disaster risk

Risks related to external factors
influencing business

1)11) Risks from inadequate responses to matters related to human resources

Guidance / Monitor(A) Investment risk

Risks related to individual investments(real estate investments, strategic
investments (M&A), etc.)6)	Risks due to lagging behind in innovation and changes in the structure of society related to thebusiness

ReportRisk Management Committee

Main risk items

Risk categories

Audit

3rd line(The organizationin charge ofinternal audits)

Guidance / Cooperate / Monitor

Audit(D) Internal
risk

Integrated Report 2022

117

The Vision of
Nomura Real Estate Group

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )Risk Management
The Group recognizes that ensuring the soundness of management through appropriate risk management and operation is an importantmanagement issue. In the rapidly changing social environment, we will identify risks and opportunities for the Group from a mid- to long-term
perspective and take appropriate actions in order to provide new value and achieve sustainable growth.
For more detailed information, see our Financial Report. https://www.nomura-re-hd.co.jp/cfiles/engnews/n2022062400301.pdf(A) Investment risk

Risks related to individual investments (real estate investments, strategic investments (M&A), etc.)(C) Disaster risk

Risks caused by disasters that have a large impact on customers and business continuity

Risk1) Risks associated with real estate investment

Risk7) Risks caused by disasters (earthquakes, typhoons, floods, tsunamis, volcanic eruptions, major fires, epidemics of infectious diseases, etc.) that have a major impact on customers and business continuity

Risk details

In the real estate investment and development business carried out by the Group, there are cases in which business does not proceed as planned due to such factors as unexpected soil pollution, delays in obtaining permits and licenses,
the need for additional construction, and an increase in construction expenses. In such cases, the occurrence of changes in the initial business schedule, delays in completion and recognition timing, and additional costs, and profitability
deterioration associated with an increase in construction costs could affect the Group’s financial position and business performance.

Risk details

Large earthquakes, storms and flood damage, and infectious disease epidemics could make it difficult for the Company and its business partners to undertake normal business and there could be cases of the occurrence of the risk ofloss of earnings and the risk of delay of earnings. Risk of loss of earnings include decreases in leasing revenue and operational revenue due to the suspension of operations or restrictions on facilities that the Group owns and operates
and a decrease in income due to the loss of business opportunities.
Moreover, risk of delay of earnings include changes in sales recording period due to the suspension of operations for housing sales and changes in the timing of sales recording/completion due to the extension of construction
periods owing to such factors as suspension of construction by contractors and these could have an impact on the Group’s business results and financial position. In addition, natural disasters such as earthquakes, fires, storms andfloods, or sudden accidents, could result in damage or loss of real estate owned, operated or managed by the Group and this could have an impact on the Group’s financial position and business performance.

Main initiatives

Decisions on the real estate investment/development business are made at the meetings such as the Management Committee or the Board of Directors of the Company or of group companies upon identifying, analyzing and evaluatingrisk in advance and considering risk taking or risk avoidance policies. In particular, for soil pollution the Company implements a historical survey and a pollution survey in advance and if pollution is confirmed the Company will cease theacquisition of the land or have the pollution removed by an external specialist. In addition, regarding the risk of an increase in construction expenses, the Company includes a certain amount of additional costs when acquiring land fordevelopment and carries out other measures.
Following the acquisition of the land for development, the department in charge of the business ascertains the risk of any schedule delay and the state of construction costs. Should an especially an important event occur, thedepartment shall report this to the Management Committee or the Board of Directors of the Company or group companies when necessary and respond to the issues.

Main initiatives
Risk2) Risks associated with strategic investment (M&A) and new businesses

Risk details

The Group positions M&A as one of its growth strategies and aims to enhance the corporate value of the Group by implementing M&A for which synergies can be expected. However, the inability to achieve profit growth from the M&A
target companies and synergies expected could affect the Group’s financial position and business performance.
The Group goes beyond the existing business domains to explore opportunities in new businesses as well as examines and makes investments in new asset types. However, the inability to execute business according to original plansor achieve synergies with group companies could affect the Group’s financial position and business performance.

The Group recognizes that the frequency of disasters has increased, and this is an important social issue. Based on discussions with government and disaster preparedness experts, we are working to ensure the safety and security in theevent a disaster occurs. We engage in disaster preparedness activities to ensure that, if a disaster occurs, its impact is minimized and the Group and its employees are able to continue business and their normal lives. We have formulated
a business continuity plan (BCP) and action plan and engage in initiatives related to the Group’s business continuity.
In preparing for an earthquake occurring directly under the Tokyo Metropolitan Area, we have established a BCP and an emergency chain of command, assigned duties to ensure business continuity, and established a system tominimize the impact of disasters. Furthermore, once per year we hold Disaster Task Force Establishment Drills to ensure the responses prescribed by the BCP are effective, insuring the safety of executives and employees and establishinga chain of command system, so that we are prepared for restoring business after an emergency.
In addition, the Company has established a checklist of actions to be taken when a typhoon’s landfall is forecast and formulates an action plan for preparations and initial responses when a disaster occurs overseas.
Regarding earthquakes, fires, storms, floods, and other sudden accidents, we have set up regulations for responses to torrential rains and flooding, formulated a disaster response manual, and created a disaster preparedness
guidebook for distribution to residents, management associations, tenants, and facility users in the properties we own to ensure their safety and bring them peace of mind when a disaster occurs.
Moreover, regarding the spread of infectious diseases, particularly COVID-19, the Group selected core businesses for business continuity during epidemics, and formulated an action manual and common rules regarding infection
prevention, etc. These were communicated internally to all officers and employees, and a Group-wide reporting and instruction system has been created for cases of an infected person, or a person who has been in close contact with aninfected person. In addition, the Group has been carrying out various initiatives related to infection prevention measures, including workplace COVID-19 vaccinations for the Group’s officers, employees, etc.

Main initiatives

In executing M&A, the main investment targets and investment purposes shall be defined. At the same time, factors such as the synergies with the Group’s existing businesses, business plans, financial details, and contract-related
matters shall be carefully examined and considered and M&A shall be implemented when it is determined that this will contribute to the Group’s business results in the future. In addition, after the M&A is executed, the Board of Directors
or the Management Committee shall regularly monitor the status of the integration process between the target company and the Group, management issues, and response policies.
In considering new businesses, the Company carefully investigates and examines the synergies with the Group’s existing businesses as well as business plans. A new business is commenced when judgement is made that it willcontribute to the business performance of the Group in the future. After entering a new business, its performance is regularly monitored, and if deemed necessary to make modifications or a re-start, it will put to deliberation by the Boardof Directors or Management Committee.

(B) External risk

3) Risks associated with market changes

Risk details

As the Group carries out a variety of real estate-related businesses, changes in economic conditions or the occurrence of disasters could lead to changes in the business environment or market conditions and have an impact on theGroup’s financial position and business performance. In the Residential Development Business Unit, a decline in customer desire to purchase leads to a decrease in sales prices and an increase in inventories and this could result ina situation whereby expected profits under the business plan cannot be secured and valuation losses on inventories held are recorded. In Commercial Real Estate Business Unit, a decline in rent levels, a rise in vacancy rates and increasein the CAP rate that leads to a decline in asset price could result in a situation whereby expected profits under the business plan cannot be secured and valuation losses on inventories and non-current assets held are recorded. In addition,a decline in demand in the real estate transaction market, a share price decline in the REIT market, a decline in demand for investment funds, and a rise in construction cost could have an impact on the Group’s financial position andbusiness performance.

Main initiatives

The Group regularly updates its awareness of the external environment of each business and works to ascertain impacts on business results, monitor the progress of business and improve precision. When making investment decisions in
the real estate investment/development business, our basic policy is to understand and forecast the current and future market conditions and confirm past market trends and curb to a certain extent the impact from changes in market
conditions. Moreover, we formulate an investment budget upon undertaking risk assessment to ensure a certain level of soundness regarding our financial position even if market conditions change rapidly.

Risk4) Risks caused by changes in economic conditions

Risk details

Domestic and overseas economic recessions, an increase in funding costs due to rising market interest rates, fluctuations in yen-denominated investments and recovered amounts, or amounts of foreign currency assets and liabilities on
the consolidated financial statements due to fluctuations in exchange rates could have an impact on the Group’s financial position and business performance.

Main initiatives

Regarding changes in economic conditions, the Group regularly updates its awareness of the external environment and works to ascertain impacts on business results. In our funding through borrowings, we respond to the risk of rises inshort-term interest rates by using mainly long-term and fixed-rate borrowings. For foreign exchange fluctuation risk, we have established a foreign exchange hedging policy that considers the types of businesses we undertake overseas
and we operate in accordance with this policy.

Risk

Risk details

Main initiatives6) Risks from lagging behind innovation and changes in the social structure related to the business

Risk details

Should technological innovation or the emergence of innovative new participants in a variety of real estate-related businesses that the Group engages in result in a large change in the industrial structure or business environment and theCompany is late in responding to changes in customer needs accompanying changes in the social structure, the Company’s strength could decline and this could have an impact on the Group’s financial position and business performance.
In addition, the Group uses land and other natural resources and energy when conducting its business activities, and recognizes that climate change is a significant risk that could substantially impact its business. The changing needsof customers for real estate include increasing customer demands for functions related to the environment, energy saving, and disaster prevention due to the implementation and strengthening of greenhouse gas reduction regulations,etc. If the Company is late in responding with technologies related to high environmental performance and energy performance, the strength of the Company’s products and services could decline and this could have an impact on theGroup’s financial position and business performance.
In the midst of a changing business environment, the Group has been creating new and highly unique value for society and customers by leveraging its strengths, such as real estate development capabilities based on the “market-in”
concept and a commitment to quality in urban development and real estate-related services. In order to further enhance these strengths, we have established the DX & Innovation Management Dept., which is responsible for research anddevelopment of new business fields, planning, promotion, and support for innovation creation, digital strategies, etc. We have also established the “Business Idea Proposal System,” which allows employees of Group companies to propose
new businesses, products and services beyond the boundaries of their daily work. At the same time, through the Nomura Real Estate Group Awards, an internal award system, we are working to create a corporate culture that encourages
the creation of value through innovation and to strengthen collaboration within the Group. In addition, through the provision of corporate venture capital, the Company is collaborating with the startups that it has taken stakes in, which
possess innovative technologies and services, and has begun to provide services that utilize these digital technologies.
The Group has formulated the Sustainability Policy as its vision for 2050 and identified five priority issues that especially need to be addressed by 2030: “Diversity & inclusion,” “Human rights,” “Decarbonization,” “Biodiversity,” and“Circular design.” In order to respond to decarbonization and climate change, the Group has acquired SBT certification (35% reduction in CO 2 emissions by 2030 compared to FY2020/3 levels) and has joined various international
initiatives, including RE100 (goal of switching to 100% renewable energy for electricity used in business activities of the entire Group by 2050). As a response to risks regarding climate change, the Group ascertains future scenarios, suchas those in the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report, and the Sustainability Committee, chaired by the President and Executive Officer (Group CEO), deliberates strategies and policies for the entire
Group, analyzes the risks and opportunities regarding events assumed in each scenario, evaluates and monitors the target, etc. of reducing greenhouse gas emissions for the Group, and periodically reports to the Board of Directors. The
Group is working to reduce CO 2 emissions in its business through promotion of energy saving, low carbon, and renewable energy. The main initiatives include improving energy-saving performance in buildings being developed, conducting
research and development for promoting use of low-carbon materials and installing solar power plants on the roofs of properties the Group is developing. In particular, the Shibaura Project is planned to achieve carbon neutrality and wasselected by the Ministry of Land, Infrastructure, Transport and Tourism for the 2021 Leading Project for Sustainable Buildings (CO 2 Reduction Type).
Furthermore, the Group endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and the disclosure of four items (Governance/Strategies/Risk Management/Metrics and Targets), which TCFD
recommends to be disclosed in relation to climate change, has been made. For details, please refer to the special topic page on the Company’s sustainability website.https://www.nomura-re-hd.co.jp/english/sustainability/special/
During the fiscal year ended March 31, 2022, the Board of Directors resolved to introduce a non-financial indicator related to officer compensation (set a target value for Building Energy-efficiency Index (BEI) for properties developed andsupplied by the Group) and the Group is working to raise awareness among the Group’s officers and employees regarding climate change and sustainability initiatives.

118 Nomura Real Estate Holdings, Inc.

Major Monitoring items• Matters related to the external environment

Board of Directors / Management Committee
ReportOverseas Business Monitoring Committee
ReportReportDivisions related to Overseas Business (1st line)

As each of the Group’s businesses are developed in Japan and overseas, there is the possibility of the occurrence of rising construction expenses, business schedule delays, etc. due to disruptions in the foreignexchange market, energy market and supply chain in the event of changes to the political and social situation, such as the emergence of geopolitical risks, such as Russia’s invasion of Ukraine. Overseas in particular, there are risks
specific to each country’s political and social situations. In case there are changes in political and social situations that have been unexpected at the beginning of conducting business in each country, they may lead to obstacles to promotebusiness, which could have an impact on the Group’s financial position and business performance.
Various types of laws and regulations in Japan and overseas are applicable to each of the Group’s businesses. For example, in addition to the Real Estate Brokerage Act and the Building Standards Act, other realestate related laws andregulations as well as the Financial Instruments and Exchange Act are applicable in Japan, and overseas, there are risks specific to each country’s laws and regulations that differ from those in Japan. In case there are changes in theselaws and regulations or other laws and regulations become applicable due to an expansion in the business scope in the future, they could have an impact on the Group’s financial position and business performance as a result of theoccurrence of new obligations and expenses.
Also, in the case of changes to various tax systems and accounting systems in Japan and overseas that have an impact on the real estate business, the resulting increased costs for acquiring, holding, and selling assets, a decline incustomer desire to purchase, a shift in corporate facility strategy, and revision of investment plans could have an impact on the Group’s financial position and business performance.
We collect and analyze information on trends in political and social situations, various laws and regulations, tax systems and accounting systems in Japan and overseas from industry groups, external experts, business partners, and consider
responses at each of the Company’s respective organizations on the “second line” and discuss those matters expected to have a significant impact at the Board of Directors or the Management Committee depending on the details.
In overseas business in particular, we seek the knowledge of external experts regarding the forecast of the future political and social situations as well as applicable laws, regulations and tax laws when starting a business overseas,
and after starting a business we regularly confirm the state of changes to the political and social situations as well as important related laws and regulations that have an impact on business strategy, revenue and expenditures, andprogress in countries where we do business through the Overseas Business Monitoring Committee, etc. In the case that there are any changes, discussions are carried out at the Board of Directors or the Management Committee
upon evaluating the impact and discussing response policies.

effectiveness of its risk management and monitoring
functions in Overseas Businesses, the Company established Overseas Business Monitoring Committee in April
2020 and started monitoring trends mainly related to theexternal environment and individual businesses.

Risk Management System in Overseas Business5) Risks caused by changes in political/social conditions/systems (law, tax systems, accounting, others)

Risk

Main initiatives

In the Mid- to Long-term Business Plan, the Company isaiming to expand its Overseas Business profit ratio to
15% of total business profit by the fiscal year ending
March 31, 2031.
The Company plans to develop a more effective risk
management system. With the goal of enhancing theRisks related to external factors influencing business

Risk

Risk management structure that supports overseas business expansion

TOPIC

Overseas
Business Unit

(D) Internal risk

Investment
Management
Business Unit

Property
Brokerage &CRE Business
Unit

ReportGuidance /Monitor

Nomura Real
Estate Holdings /Nomura Real
Estate Development Corporate
Department (2ndline)

Monitor

Nomura Real
Estate Development Residential
Development
Division
Commercial Real
Estate Development &Management
Division

 acroeconomic / political trends, real estate market
M
trends, and various laws and ordinances, etc.
• Matters related to status of individual businesses
Progress at individual businesses, visualization ofmonetary impact when risks arise, conditions with joint
venture partners, etc.
• Matters related to Overseas Business strategies
Current and future business strategies, resource
allocation, etc.

Details of main initiatives in the fiscal year
ending March 31, 2023

• Macroeconomic / political trends• Confirm progress at each business, etc.
• Check real estate market trends accompanying
Evergrande liquidity / debt crisis• Check state of COVID-19 infections in countries in Asia

Operational risks occurring at the Company and each group company

Risk8) Risks of the violation of laws and ordinances

Risk details

In the real estate brokerage business, the main business of the Group, there are cases when the Company receives administrative sanctions from government authorities due to a violation of laws such as an error in explaining importantmatters to customers, misrepresentation of facts, or non-notification of disadvantageous matters. Also, in the case the Group violates the Building Standards Act, the Financial Instruments and Exchange Act, Companies Act, Act on theProtection of Personal Information, Act on Prohibition of Private Monopolization and Maintenance of Fair Trade, and other laws related to the Group’s business, the loss of the Group’s credibility and the imposition of fines could have an
impact on the Group’s business performance.

Main initiatives

The Company has formulated the Nomura Real Estate Group Code of Action that defines the basic code of actions for executives and employees, including
complying with laws and regulations and acting with higher ethical standards, and prescribed internal rules. We are making efforts to familiarize employees with the Code of Action and internal rules through periodic training, promote
education on an ongoing basis and facilitate enlightenment. For primary laws such as the Real Estate Brokerage Act, we formulate a business workflow specific to each law to ensure legal compliance, ensure a thorough awarenessthrough training and on-the-job training (OJT), and implement regular voluntary inspections for the status of compliance.
In addition, regarding the inappropriate entertainment of foreign public officials and other civil servants, the Company has established “regulations to prevent the bribery of foreign public official and other civil servants” and “bribery
prevention guidelines.” The Company is implementing regular training for executives, employees and overseas local hires related to overseas businesses.

Risk9) Risks of quality defectRisk details

In case of deficiencies such as design and construction defects in the Group’s real estate development business or in the case of a management deficiency in the properties for leasing or under management, the loss of trust in the Group,
unexpected costs and delays in development plans and operation plans could have an impact on the Group’s business performance.

Main initiatives

In the real estate development business, to secure quality in design and construction upon placing an order for the design and construction work of a building with a third party who has a certain level of creditability and technicalcapabilities, the Group prescribed the Design and Construction Standards (structure, construction, equipment, and electrical) and the Quality Manuals and ensure thorough compliance from the parties with which we order design andconstruction work while also checking the state of construction and carrying out quality inspections as the ordering party. Regarding leased and managed properties, we will prepare business standard documents related to property
management and safety and temporary construction guidelines for repair work as we undertake business. We will also provide property insurance for damages in the unlikely event of a deficiency or accident.

Integrated Report 2022

119

The Vision of
Nomura Real Estate Group

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )Risk Management

Appropriate information disclosure and transparency

Risk10) Risks of occurrence of information system crisis

Risk details

To achieve sustainable growth as the diversity of products and services provided to customers grows, the Group believes it must further improve productivity and work efficiency and is actively utilizing the benefits of the Internet (theCloud) (speed, flexibility, cost) for establishing an ICT environment and promoting DX to achieve these improvements. In addition, the Group handles a large volume of personal information in each business due to necessity in executing
business.
For this reason, in the unlikely case the Company’s system cannot be used normally or in case personal information is leaked to the outside due to unexpected circumstances such as cyberattacks and unauthorizedaccess, the loss of credibility and the resulting decrease in sales and damage compensation costs could have an impact on the Company’s business performance.

Main initiatives

As we actively promote initiatives that utilize information systems and ICT, we believe that ensuring information security will be of unprecedented importance and we have strengthened measures to restrict access via Internet connections
as well as measures for log management and the loss of information devices and are progressing with the establishment of an ICT environment in preparation for cyberattacks and information leaks by conducting system security
diagnosis by the third party and introducing a behavior detection system for virus scanning and abnormal movements.
The Company is also striving to comply with relevant laws and regulations for personal information and to ensure proper handling of this information. Moreover, with the aim of realizing organized management of information andmaintaining and improving security levels within the Group, we have prescribed the Information Security Regulations and the Information Handling Guidelines, regularly provide education and enlightenment to our employees, protect therights and interests of our customers and ensure the stable operation of an ICT environment within the Group. In addition, the Company has cyber insurance in preparation for an unlikely accident such as an information leakage.

Risk11) Risks of inadequate responses to matters related to human resources

Risk details

We regard human resources as our largest asset and the source of new value creation for the sustainable growth of the Group. Therefore, in the event that the working hours of Group executives and employees are not properly
ascertained and long working hours damage the health of executives and employees and we receive administrative sanctions from government authorities because our personnel system and its operation do not comply with labor
standards and related laws and regulations, the outflow of the Group’s human resources, the loss of trust, and the imposition of fines could have an impact on the Group’s business performance.
There is a risk that delays in the establishment of a labor environment that takes in a diverse range of human resources (employees that work short hours mainly due to childcare and nursing, sexual minorities, people with disabilities,
seniors, foreign nationals and others) may result in the Group being unable to secure the necessary personnel, or the inability of secured personnel to continue working, leading to a decline in corporate competitiveness.
In terms of personnel and labor management at overseas bases, there is risk of administrative sanctions by government authorities for introducing or operating a system that violates local labor laws and customs, the risk of losing
know-how due to the retirement of local employees, and a risk that the health of employees will be damaged due to the lack of systems to provide appropriate support for living in a foreign country.

Main initiatives

The Group prescribes working with vigor and achieving wellness as its action guideline. The Group aims to provide wellness management so that all its executives and employees can carry out their work energetically and in good physicaland mental health, which leads to sustainable corporate growth.
Along with introducing various systems, including recommendations to take paid leave, the promotion of teleworking, and a program for taking time off or working shorter hours for childcare and nursing and to build a labor
environment conducive for a diverse workforce, we are working to improve the level of understanding related to diversity among executives and employees through regular training sessions. In order to properly grasp working hours, wehave introduced an attendance management system to manage it, and especially for long working hours, we regularly monitor the situation. Furthermore, the compliance of our personnel system and its operation is regularly verified byoutside experts to prevent the emergence of risks.
Moreover, overseas there are local laws, cultures, and customs. Therefore, we utilize the knowledge of external experts to build personnel/labor systems, establish consultation desks for staff stationed overseas, and provide services
to help the staffs find, and provide support for visits to, medical institutions.
From the fiscal year ended March 31, 2022, the Group established the Wellness and D&I Management Committee, which is chaired by the President and Executive Officer (Group CEO), in order to integrally promote wellness,work-style reforms and the ensuring of diverse human resources, and newly established the D&I Management Sect. in the Group Human Resources Development Dept. as the dedicated organization for the promotion of diversity &inclusion.

Risk12) Risks of occurrence of fraud and negligence

Risk details

Within the Group, risk could occur due to fraud perpetuated by executives and employees, information leakage due to improper management of information, and operational negligence. In the case this risk
emerges, the loss of credibility and the resulting decrease in sales and damage compensation costs could have an impact on the Company’s business performance.

Main initiatives

Group executives and employees comply with laws and regulations as well as with the internal rules and regulations established by each company of Nomura Real Estate Group. Furthermore, we have established the Nomura Real EstateGroup Code of Ethics with the aim of acting in accordance with even higher ethical standards, and we continuously provide education and training sessions to executives and employees.
In addition, the Company has established a system to enhance the effectiveness of compliance activities in each workplace by assigning a compliance promotion officer to each department, office and branch of the Company andGroup companies. Furthermore, with the “Nomura Real Estate Group Risk Helpline,” an internal whistleblowing system shared by all Group companies, the Company has set up internal and external contact points for reporting wrongdoing
and seeking advice on how to proceed, and has developed and implemented systems based on the Whistleblower Protection Act.

Internal Controls, Compliance/Information Disclosure
Compliance systems
The Group regards compliance, including the observanceof laws and regulations and corporate ethics, as one of ourmost important management issues. As a set of relevant
guidelines, the Company has formulated the Nomura Real
Estate Group Code of Action. We have established the Risk
Management Committee and Group Legal & ComplianceDepartment in the Company to promote continuous education and enlightening activities for the executives andemployees of the entire Group, and to provide advice,guidance, and support to Group companies.
Furthermore, based on our priority of collecting information regarding risks, the Company has set up the
Nomura Real Estate Group Helpline as a point of contact
for internal reporting by Group employees. The Company
imposes confidentiality obligation on employees who are
involved in the helpline business and prohibits unfair treatment for reporting an incident using the helpline.
In an attempt to enhance its efforts, the Group signed
and registered as a participating company in the United
Nations Global Compact in May 2019. Based on the principles of the United Nation’s global initiatives, the Group willremain committed to all types of anti-corruption activities
including extortion and bribery.
T he Nomura Real Estate Group Code of Action
https://www.nomura-re-hd.co.jp/english/sustainability/base/compliance.html

120 Nomura Real Estate Holdings, Inc.

Compliance system
Nomura Real Estate Holdings
About the Risk Management
Committee

ReportBoard of Directors
Management
Committee

President

ReportGroup Compliance Officer

Group Legal & ComplianceDepartment

Committee
Chairmaneld every two months in• Hprinciple
xtraordinary meetings held as• Enecessary
eports to the Board of Directors/• RManagement
Committee at least
once every three months• RolesRisk
Management
Committee

Secretariat• Regular monitoring of risks• Risk evaluation and analysis• Preemptive and preventive measures• Incident response• Measures to prevent repeat
incidents• Improvement of complianceawareness

The Company strives to disclose information about theGroup’s management strategy, financial condition, risk
management, and internal control system, etc., in a fair,timely, and appropriate manner based on the provisions of
the Companies Act and the Financial Instruments andExchange Act, as well as other laws and the listing rules of
the Tokyo Stock Exchange. Specifically, as our timely
disclosure system (on the right) indicates, the person
responsible for information handling (executive officer incharge of the Corporate Communications Department)collects information about the Company through the
Department responsible for information collection (Corporate Planning Department). As for the information requiring
timely disclosure, the Information Disclosure Screening
Team made up of general managers, executive officers, andothers responsible in related departments will screen thematter and report the results to the President. Company
information found to require timely disclosure will be disclosed in a timely manner by the Department responsible
for timely disclosure (Corporate Communications Department) at the instruction of the person responsible for
information handling (executive officer in charge of the
Corporate Communications Department).
The Group Internal Audit Department carries out themonitoring of operations under the aforementioned timely
disclosure system. Audit & Supervisory Committee Members attend Board of Directors and other importantCompany meetings as well as receive reports from directors and view relevant documents to investigate whether
the timely disclosure system is functioning properly.
Timely disclosure system
President(Made up of generalmanagers, executive officers Formed as
and others responsible forneededrelated departments)

Risk Management
Committee Chairman

Incidents withsignificant
urgency

Tokyo Stock
Exchange

ReportInformation Disclosure
Screening Team

Person responsible for
information handling

Timelydisclosure

Department(executive officer in charge of
responsible for timely
the Corporate Communications
Instruction
disclosure
Department)(Corporate Communications
Department)

ReportReportDepartment responsible for
information collection

Report(Corporate Planning Department)

ReportDepartments of Nomura Real
Estate HoldingsGroup companies

Shareholder engagement
The Company strives to disclose information about theGroup’s management strategy, financial condition, risk
management, and internal control system, etc., in a fair,timely, and appropriate manner based on the provisions of
the Companies Act and the Financial Instruments andExchange Act, as well as other laws and the listing rules of
the Tokyo Stock Exchange. Specifically, as our timely
disclosure system (on the right) indicates, the person
responsible for information handling (executive officer incharge of the Corporate Communications Department)collects information about the Company through the
Department responsible for information collection (Corporate Planning Department). As for the information requiring
timely disclosure, the Information Disclosure Screening
Team made up of general managers, executive officers, andCurrent status of investor relations activities
To attract more shareholders and prospective investors, we
strive to enhance understanding of the Group's businessactivities and growth strategy through direct and indirectcommunications with both institutional and individual
investors.
To deepen the understanding of a wide range of investors about the Company’s business and management
strategies, we actively participate in online briefings and IR
fairs via the Internet.

others responsible in related departments will screen thematter and report the results to the President. Company
information found to require timely disclosure will be disclosed in a timely manner by the Department responsible
for timely disclosure (Corporate Communications Department) at the instruction of the person responsible for
information handling (executive officer in charge of the
Corporate Communications Department).
The Group Internal Audit Department carries out themonitoring of operations under the aforementioned timely
disclosure system. Audit & Supervisory Committee Members attend Board of Directors and other importantCompany meetings as well as receive reports from directors and view relevant documents to investigate whether
the timely disclosure system is functioning properly.

Major IR activities during FY22/3
IR activities for institutional investors

Number of times held

Financial results briefings (Including Conference calls on financial results announcement days)

4

Meetings with investors and analysts (including the following meetings)

373

Conferences organized by securities companies

11

CEO small meeting

1

Business Unit Manager small meetings

1

ESG meetings

20

Compliance Officers(Directors and officers of general administrative operations at Group companies)

Risk Management
Committee, etc.

Compliance Leaders(General managers of general administrative

operations at Group companies)

IR activities for individual investors

Number of times held

Conferences for individual investors

1

Online briefing

2Compliance Promoters (Appointed at each company)

Nomura Real Estate Group Companies
Online briefing

For further details and the latest information, visit the IR site.
Japanese https://www.nomura-re-hd.co.jp/ir/
English https://www.nomura-re-hd.co.jp/english/ir/

Integrated Report 2022

121

The Vision of
Nomura Real Estate Group

Directors and Executive Officers

Sources ofCompetitivenessGovernance

Growth Strategy

Fact Data, etc.

(Business, Sustainability, and DX )(As of June 24, 2022)

Directors
Shoichi Nagamatsu

Eiji Kutsukake

Daisaku Matsuo

Tetsuro Higashi

Hiroyuki Kimura

Yasushi Takayama

Date of Birth: July 6, 1958

Date of Birth: September 12, 1960

Date of Birth: October 18, 1964

Date of Birth: August 28, 1949

Date of Birth: March 30, 1962

Date of Birth: February 1, 1964

Chair and Director
Chairman of the Board of Directors
Advisory Committee Relating toNominations and Compensation
MemberPresident and Representative
Director, and Executive Officer
Group CEO

Executive Vice President,
Representative Director, andExecutive Officer
Group COO

Director
Chairman of Advisory Committee
Relating to Nominations andCompensation

Director (Audit & Supervisory
Committee Member)

Director (Audit & Supervisory
Committee Member)

Number of shares held: 1,400*

Number of shares held: 18,500*

Number of shares held: 21,900*

Number of shares held: ----*

Number of shares held: ----*

Number of shares held: ----*

Non-executive

Executive

Executive

Non-executive External Director Independent Director

Non-executive

Non-executive

Apr. 1982 	Joined Nomura Securities Co., Ltd. (currently, Nomura
Holdings, Inc.)
Apr. 2004 	Executive Managing Director of Nomura Securities
Co., Ltd.
Oct. 2008 	Executive Managing Director of Nomura Holdings, Inc.
Senior Managing Director of Nomura Securities Co., Ltd.
Jun. 2010 	Senior Corporate Managing Director Chief Operating
Officer of Nomura Holdings, Inc.
		Senior Corporate Managing Director of Nomura
Securities Co., Ltd.
Jun. 2012 	Representative Executive Managing Director andSenior Corporate Managing Director of Nomura
Securities Co., Ltd.
Apr. 2013 	Executive Managing Director and Chief of Staff ofNomura Holdings, Inc.
		Executive Managing Director and Executive Vice
President of Nomura Securities Co., Ltd.
Apr. 2016 	Deputy President of Nomura Securities Co., Ltd.
Apr. 2017 Representative Executive Officer and Deputy President,
and Chief of Staff of Nomura Holdings, Inc.
		Director of Nomura Securities Co., Ltd.
Apr. 2018 	Representative Executive Officer and Deputy Presidentof Nomura Holdings, Inc.
Jun. 2018 	Director, and Representative Executive Officer and
Deputy President of Nomura Holdings, Inc.
Apr. 2020 	Director of Nomura Holdings, Inc.
Jun. 2020 	Advisor of Nomura Holdings, Inc.
		Director of Nomura Real Estate Holdings, Inc.
Apr. 2021 	Chair and Director of Nomura Real Estate Holdings,
Inc. (present)		Director of Nomura Real Estate Development Co., Ltd.
(present)

Apr. 1984 	Joined Nomura Securities Co., Ltd. (currently, Nomura
Holdings, Inc.)
Apr. 2007 	Executive Managing Director of Nomura Securities
Co., Ltd.
Oct. 2008 	Senior Managing Director of Nomura Securities Co., Ltd.
Apr. 2009 	Senior Corporate Managing Director of		Nomura Securities Co., Ltd.
Apr. 2011 	Senior Corporate Managing Director Chief Operating
Officer of Nomura Holdings, Inc.
		Executive Vice President of Nomura Securities Co., Ltd.
Apr. 2012 	Executive Managing Director of Nomura Holdings, Inc.
Aug. 2012 	Deputy President of Nomura Securities Co., Ltd.
Apr. 2013 	Director and Deputy President of		Nomura Securities Co., Ltd.
Apr. 2014 	Advisor of Nomura Real Estate Holdings, Inc.
Jun. 2014 	Representative Director and Executive Vice Presidentof Nomura Real Estate Holdings, Inc.
Jun. 2015 	President and Representative Director, and Chief
Executive Officer of Nomura Real Estate Holdings, Inc.
(present)
Apr. 2017 	Chair and Representative Director of Nomura Real
Estate Development Co., Ltd. (present)

Apr. 1988 	Joined Nomura Real Estate Development Co., Ltd.
Apr. 2012 	Executive Officer of Nomura Real Estate Development
Co., Ltd.
Apr. 2015 	Managing Executive Officer of Nomura Real Estate
Development Co., Ltd.
Apr. 2018 	Executive Officer of Nomura Real Estate Holdings, Inc.
		Director and Senior Managing Executive Officer of
Nomura Real Estate Development Co., Ltd.
Apr. 2021 	Executive Vice President of Nomura Real Estate
Holdings, Inc. (present)		President and Representative Director, and Chief
Executive Officer of Nomura Real Estate Development
Co., Ltd. (present)
Jun. 2021 	E xecutive Vice President, Representative Director andExecutive Officer of Nomura Real Estate Holdings, Inc.
(present)

Satoshi Arai

Makoto Haga

Hiroshi Kurokawa

Date of Birth: June 3, 1965

Date of Birth: June 22, 1966

Date of Birth: February 2, 1968

Executive Vice President, Director,
and Executive Officer

Director and Executive Officer
Business Unit Manager of Commercial Real Estate Business Unit

Director and Executive Officer,
Group CFO
Supervisor of Management
Division, Investor Relations

Number of shares held: ----*

Number of shares held: 22,100*

Number of shares held: 8,500*

Executive Newly appointed

Executive

Executive

Apr. 1989 	Joined Nomura Real Estate Development Co., Ltd.
Apr. 2012 	Executive Officer of Nomura Real Estate Development
Co., Ltd.
May 2012 	Executive Officer of Nomura Real Estate Holdings, Inc.
Apr. 2015 	Managing Executive Officer of Nomura Real Estate
Development Co., Ltd.
Apr. 2017 	Director and Managing Executive Officer of Nomura
Real Estate Development Co., Ltd.
Jun. 2017 	Director and Executive Officer of Nomura Real Estate
Holdings, Inc. (present)
Apr. 2020 	Director and Senior Managing Executive Officer of
Nomura Real Estate Development Co., Ltd. (present)

Apr. 1990 	Joined Nomura Real Estate Development Co., Ltd.
Apr. 2013 	Executive Officer of Nomura Real Estate Development
Co., Ltd.
Apr. 2015 	Representative Director and Senior Managing
Executive Officer of Nomura Real Estate AssetManagement Co., Ltd.
Apr. 2017 	Executive Officer of Nomura Real Estate Holdings, Inc.
	Managing Executive Officer of Nomura Real Estate
Development Co., Ltd.
Apr. 2020 	Senior Managing Executive Officer of Nomura Real
Estate Development Co., Ltd.
Apr. 2021 	Executive Officer of Nomura Real Estate Holdings, Inc.
(present)	Director and Senior Managing Executive Officer of
Nomura Real Estate Development Co., Ltd. (present)
Jun. 2021 	Director and Executive Officer of Nomura Real Estate
Holdings, Inc. (present)

Apr. 1988 	Joined Nomura Securities Co., Ltd. (currently, Nomura
Holdings, Inc.)
Apr. 2011 	Senior Managing Director of Nomura Securities Co.,Ltd.
Apr. 2014 	Senior Corporate Managing Director of Nomura
Securities Co., Ltd.
Apr. 2017 	Senior Managing Director of Nomura Holdings, Inc.
	Executive Managing Director and Executive Vice
President of Nomura Securities Co., Ltd.
Apr. 2018 	Senior Managing Director of Nomura Holdings, Inc.,
Head of Corporate
Apr. 2019 	Representative Director and Deputy President of
Nomura Securities Co., Ltd.
Apr. 2022 	Advisor of Nomura Real Estate Holdings, Inc.
	Director of Nomura Real Estate Development Co., Ltd.
(present)
Jun. 2022 	E xecutive Vice President and Director of Nomura Real
Estate Holdings, Inc. (present)* As of March 31, 2022

122 Nomura Real Estate Holdings, Inc.

Apr. 1977 	Joined Tokyo Electron Ltd.
Dec. 1990 	Director of Tokyo Electron Ltd.
Apr. 1994 	Managing Director of Tokyo Electron Ltd.
Jun. 1996 	Representative Director, President of Tokyo Electron Ltd.
Jun. 2003 	Representative Director, Chairman of the Board ofTokyo Electron Ltd.
Jun. 2011 	Director, Chairman of the Board of Tokyo Electron Ltd.
Apr. 2013 	Representative Director, Chairman, President & CEO ofTokyo Electron Ltd.
Jun. 2015 	Representative Director, President & CEO of Tokyo
Electron Ltd.
Jan. 2016 	Corporate Director, Corporate Advisor of Tokyo
Electron Ltd.
May. 2018 	Outside Director of Seven & i Holdings Co., Ltd.
(present)
Jun. 2019 	External Director of Nomura Real Estate Holdings, Inc.
(present)	Outside Director of Ube Industries, Ltd. (currently, UBE
Corporation) (present)

Apr. 1984 	Joined Nomura Real Estate Development Co., Ltd.
Apr. 2009 	Executive Officer of Nomura Real Estate Development
Co., Ltd.
Jun. 2009 	Director of Nomura Real Estate Holdings, Inc.
Apr. 2010 	President and Representative Director of Nomura Real
Estate Investment Management Co., Ltd.
May 2012 	Executive Officer of Nomura Real Estate Holdings, Inc.
Jun. 2012 	Director and Executive Officer of Nomura Real Estate
Holdings, Inc.
Apr. 2013 	Director and Managing Executive Officer of Nomura
Real Estate Development Co., Ltd.
Jun. 2013 	Executive Officer of Nomura Real Estate Holdings, Inc.
Jun. 2014 	Director and Executive Officer of Nomura Real Estate
Holdings, Inc.
Apr. 2019 	Director of Nomura Real Estate Holdings, Inc.
	Executive Vice President and Representative Directorof Nomura Real Estate Asset Management Co., Ltd.
Apr. 2021 	Audit & Supervisory Board Member of Nomura Real
Estate Development Co., Ltd. (present)	Advisor of Nomura Real Estate Holdings, Inc. (present)
Jun. 2021 	Director (Audit & Supervisory Committee Member) of
Nomura Real Estate Holdings, Inc. (present)

Apr. 1988 	Joined Nomura Securities Co., Ltd. (currently, Nomura
Holdings, Inc.)
Jun. 2011 	Director, Nomura Financial Products & Services, Inc.
Oct. 2012 	Managing Director and General Counsel of Nomura
Securities International, Inc. (New York)
Sep. 2013 	Managing Director and General Counsel of Nomura
Holding America Inc.
Apr. 2015 	Senior Managing Director and Chief Legal Officer of
Nomura Holdings, Inc.
	Senior Managing Director and Chief Legal Officer of
Nomura Securities Co., Ltd.
Apr. 2019 	Audit & Supervisory Board Member of Nomura Real
Estate Development Co., Ltd. (present)	Advisor of Nomura Real Estate Holdings, Inc.
Jun. 2019 	Director (Audit & Supervisory Committee Member) of
Nomura Real Estate Holdings, Inc. (present)

Yoshio Mogi

Akiko Miyakawa

Tetsu Takahashi

Date of Birth: April 10, 1952

Date of Birth: October 18, 1955

Date of Birth: October 24, 1956

Director (Audit & Supervisory
Committee Member)
Advisory Committee Relating toNominations and Compensation
MemberDirector (Audit & Supervisory
Committee Member)

Director (Audit & Supervisory
Committee Member)
Advisory Committee Relating toNominations and Compensation
MemberNumber of shares held: ----*

Number of shares held: ----*

Number of shares held: ----*

Non-executive External Director Independent Director

Non-executive External Director Independent Director

Non-executive External Director Independent Director

Apr. 1975 	Joined Nichimen Co., Ltd. (currently, Sojitz Corporation)
Apr. 2006 	Executive Officer of Sojitz Corporation
Apr. 2008 	Managing Executive Officer of Sojitz Corporation
Apr. 2012 	Senior Managing Executive Officer, CFO of Sojitz
Corporation
Jun. 2012 	Representative Director, Senior Managing Executive
Officer, CFO of Sojitz Corporation
Apr. 2014 	Representative Director and Executive Vice President,
CFO of Sojitz Corporation
Jul. 2014 	Outside Director of Sojitz Infinity Inc.
Apr. 2017 	Representative Director and Executive Vice President,
CCO of Sojitz Corporation	Director of Sojitz REIT Advisors K.K.
Apr. 2018 	Advisor of Sojitz Corporation
Jun. 2019 	External Director (Audit & Supervisory Committee
Member) of Nomura Real Estate Holdings, Inc.
(present)

Apr. 1978 	Joined Tokyo Branch of Chase Manhattan Bank
(currently JPMorgan Chase Bank, N.A.)
Nov. 1987 	Joined Marunouchi & Co. (currently Deloitte Touche
Tohmatsu LLC)
Jan. 2000 	Joined the Los Angeles Office of Deloitte US
Jun. 2005 	Partner of Deloitte Touche Tohmatsu LLC
Jul. 2008 	Joined the Taipei Office of Deloitte Taiwan
Oct. 2015 	Joined Deloitte Touche Tohmatsu LLC Tokyo Office
Aug. 2018 	Representative of Akiko Miyakawa CPA Office(present)
Jun. 2019 	External Director (Audit & Supervisory Committee
Member) of Nomura Real Estate Holdings, Inc.
(present)

Apr. 1986 	Registered with Tokyo Bar Association
	Joined Miyakezaka Law Offices
Jul. 2003 	Representative Partner of KASUMIGASEKI PARTNERSLAW OFFICE
Jun. 2020 	E xternal Director (Audit & Supervisory Committee
Member) of Nomura Real Estate Holdings, Inc.
(present)
Dec. 2020 	E xecutive Partner of ITN Partners (present)
Mar. 2022 	E xternal Director of McDonald’s Holdings Company(Japan), Ltd. (present)* Tetsuro Higashi, Yoshio Mogi, Akiko Miyakawa and Tetsu Takahashi are external directors prescribed in Article 2, Item 15 of the Companies Act.

Executive officers (excluding those who are concurrently serving as directors)
Takashi Kaku

Koki Miura

Yukio Ichihara

Joji Yamada

In charge of Overseas Business Unit,
Overseas BusinessIn charge of Investment Management
Business Unit

In charge of General Manager of Corporate
Planning Dept.

Akihiro Fukuda

Haruhiko Nakamura

In charge of Group Internal Audit Dept.,
Group Legal & Compliance Dept.,
Secretariat, Internal audit andCompliance

In charge of Property & Facility
Management Business Unit

In charge of Residential
Development Business Unit

Shigeyuki Yamamoto

Tetsumi Yoshimura

In charge of Development Planning

In charge of Quality Management andArchitectural Design

Kenichi Maeda

Masato Yamauchi

Toshihide Tsukasaki

In charge of Property Brokerage &CRE Business Unit

In charge of Corporate Planning Dept., DX &Innovation Management Dept.

In charge of Finance & Accounting Dept.,
Finance Dept.

Motomi Uki
In charge of Group Human Resources
Development Dept., General Manager of Group
Human Resources Dept.

Tokuji Nakamura
In charge of Sustainability Management Dept.,
Corporate Communications Dept., Sustainability
Management

Naoko Usami
In charge of Group Diversity and Inclusion Management,
General Manager of Group Human Resources Development
Dept.

Integrated Report 2022

123

The Vision of
Nomura Real Estate Group

Part

5

Sources ofCompetitiveness

Growth Strategy

Fact Data, etc.

Governance(Business, Sustainability, and DX )Fact Data, etc.
Contents

124 Major Asset Brands
128 Major Development Projects
130 11-year Financial Data
132 Business Unit Information
134 ESG Data

136 Group Company Information
138 External Evaluation
139 Corporate Information
139	Publication of Integrated Report 2022
(Guaranteed by the Director in Charge)

Major asset brands

PROUD SEASON
Detached housing with the concept of“creating housing that will endure as
heritage of people, towns and times”−−−
Cumulative number of housings
supplied: approx. 8,000 units*1

LivingBased on the unique know-how that the Group has cultivated sofar; we develop brands related to housing.
We continue to focus on creating high-quality housings thatconnect closely with each and every customer.

PROUD SEASON Seijo Court

PROUD FLAT
Rental housing with renowned quality by the Group’s abundant know-how−−−
Number of developed properties: 129 properties*1

PROUD FLAT Ryogoku SouthPROUD FLAT Nakano

OUKAS

OHANA

Health promoting senior rental housingdeveloped under the concept of residences tohave the time of one’s life−−−
Number of developed properties:
6 properties*1

Suburban-type condominiums with the conceptof “delivering high-quality housing to as manycustomers as possible”−−−
Cumulative number of housings supplied:approx. 5,000 units*1

PROUD Motoyoyogicho

PROUD
Condominium that pursues the creation of an ideal housing by continuing to be close to customers with the “integrated
development, sales, and management system”−−−
Cumulative number of housings supplied: approx. 74,000 units*1, 2*1. As of March 31, 2022 (number of developed properties including plans)*2. Cumulative number of PROUD condominiums and detached housing supplied

124 Nomura Real Estate Holdings, Inc.

OUKAS Hiyoshi

OHANA Nakaurawa

Integrated Report 2022

125

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

Fact Data, etc.

Governance(Business, Sustainability, and DX )Major Asset Brands
Working

Gathering
H 1O

The Group is developing new office space proposals that aim torealize “HUMAN FIRST” work style that emphasizes the “individual” of work, and high-performance logistics facilities that takethe working environment into consideration.

GEMS

Small office with services to meet the needs ofworkers in a small team−−−
Number of developed properties: 15 properties*(including types that incorporated in developed
property’s floors)

Responding to the diverse needs of ourcustomers, the Group is developing
urban retail facilities that are mainly
located in front of stations, neighborhood retail facilities that enhance theconvenience of the area, and hotels thatvalue ties with the community.

Urban retail facility that mainly features one restaurant oneach floor−−−
Number of developed properties: 22 properties*

PMO
Medium-scale office building with the similar quality and specification as largescale “class A” office building−−−
Number of developed properties: 70 properties*

MEFULL
Urban retail facility mainly focusing
on service industries−−−
Number of developed properties:
8 properties*
H1O Shibuya Jinnan

H 1T
Satellite-type shared office that offers to diversificationand efficiency of work styles−−−
Number of developed properties: 216 branches*(including affiliated offices)
GEMS Roppongi

GEMS Kawasaki

SOCOLAPMO EX Shin-Osaka

PMO Hamamatsu-cho II

H1T Ikebukuro Nishiguchi

Neighborhood retail facility
that integrates grocery
supermarkets, merchandise sales, restaurants,
and service stores−−−
Number of developed
properties: 6 properties*

SOCOLA Yoga

MEFULL Fujisawa

NOHGA HOTEL
Hotel with the concept of“creating memorable
experiences through close
links with the local
community”−−−
Number of developed
properties: 3 properties*

Landport
Logistics facility with advanced andhigh functionality−−−
Number of developed properties:
42 properties*
Landport Ome I, II, III

NOHGA HOTEL KIYOMIZU KYOTO* Number of properties (including plans) and number of bases are as of March 31, 2022

126 Nomura Real Estate Holdings, Inc.

Integrated Report 2022

127

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

Fact Data, etc.

Governance(Business, Sustainability, and DX )Major Development Projects
Large-scale, Mixed-use
Development Project

PROUD TOWER Kameido Cross(residence)*2−−−Completion: FY22/3
Total units: 934

Through mixed-use development that combines a variety of asset classes
such as offices, retail facilities, and residences, the Group is promoting
urban development with superior convenience and comfort.
KAMEIDO CLOCK (retail facility)−−−
Opened: April 2022
Gross floor area: approx. 28,000m2

Nihonbashi 1-chome Central
District Redevelopment*1, 2−−−
Scheduled for completion: FY26/3
Major use: O ffice, retail facility, hotel,
residence, conference venue
Gross floor area: a pprox. 380,300m2

Overseas
Business
In China, Southeast Asia, and theUnited Kingdom, the Group is
promoting the housing sales
business and the property sales
business.

Shibaura Project*1, 2−−−
Scheduled for completion: S outh Tower FY25/3,
North Tower FY31/3
Major use: Office, retail facility, hotel, residence
Gross floor area: approx. 550,000m2

Sunshine Fort*2 Manila, Philippines−−−
Scheduled for completion: R esidence 2023 and onward, retail facility 2022 and onward
Major use: R esidence (Total units: approx. 1,400)
retail facility (Rental floor area: approx. 17,000m2)*1. Gross floor area indicates the equity equivalent area.
*2. Joint Venture project

128 Nomura Real Estate Holdings, Inc.

Okayama City Ekimae-cho 1-chome 2, 3, 4District Redevelopment*2

Nakano Station Shin North Exit
Station-Front Area Redevelopment*2−−−
Scheduled for completion: FY26/3
Major use: R esidence, retail facility, office, hotel, hall−−−
Scheduled for completion: FY29/3
Major use: H alls, office, residence, retail facility,
hotel

Grand Park 2nd period*2
Ho Chi Minh City, Vietnam−−−
Scheduled for completion: 2022
Major use: R esidence (Total units:
approx. 11,000)

Integrated Report 2022

129

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

Fact Data, etc.

Governance(Business, Sustainability, and DX )11-year Financial Data
FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

FY23/3 (forecast)*12

Operating revenue

450,807517,740

532,016

567,159

569,545569,680

623,762

668,510

676,495

580,660

645,049

680,000

Operating profit

49,93958,30874,307

71,89480,912

77,271

76,66081,905――90,500――91,210――76,333Business profit*1―

79,162
79,623

82,83376,44892,76597,000Ordinary profit

34,17345,80664,05863,681

72,67968,952

68,03369,32373,07765,96582,55785,000

Profit attributable to owners of parent

17,591

19,357

26,84438,44147,18247,00546,02945,87348,88642,19855,31257,000Total assets

1,402,624

1,369,949

1,313,887

1,369,226

1,485,449

1,593,093

1,673,099

1,759,455

1,801,273

1,921,306

2,040,506―

Current assets

585,332

535,103496,978

549,300

608,779

684,306

717,635

849,528

906,726

1,043,321

1,126,802

		Inventories

396,857

369,667

349,167

429,764

496,910570,888592,996

636,925

714,734

875,520894,229

		 Equity investments

41,89529,578

7,128

6,316

819

2,567

9,612

18,06630,983

28,77033,871

Non-current assets

817,292

834,845816,909819,926

876,670

908,786

955,464

909,926

894,547

877,985

913,703

Total net assets

376,486

398,276

418,697

461,031456,408

493,813514,982

541,562

565,120586,350

621,398

Interest-bearing debt

758,562

669,268

617,583

616,700

721,900

810,100

877,800

914,000

870,000

1,008,500

1,022,735

Cash flows from operating activities

43,87689,29583,53523,837

13,258(31,889)

21,49889,96456,618(63,504)

52,793

Cash flows from investing activities

7,809(2,588)(20,191)(32,476)(59,714)(54,558)(51,637)(46,699)(30,490)(55,789)(46,277)

Cash flows from financing activities(63,296)(94,666)(57,858)(8,983)53,63776,57543,787

13,723(66,821)112,376(9,619)

Capital investment*2

14,09818,963

21,93838,87150,36761,30071,66520,824

20,36345,66536,618―

Statements of Income / Balance Sheets / Statements ofCash Flows (Millions of yen):

―
―
―
―
―
―
―
―
―

Per Share Data (Yen):
92.38

101.61140.70201.28246.42245.10240.89245.99267.21232.53307.81321.77

1,664.78

1,764.05

1,863.12

2,061.86

2,320.84

2,508.73

2,664.70

2,854.21

3,031.15

3,229.80

3,478.14

―

NAV*3

1,768

1,885

1,997

2,299

2,708

3,063

3,333

3,630

3,833

4,035

4,442

―

Annual dividends

25.00

30.00

35.00

45.00

57.50

65.00

70.00

75.00

80.00

82.50

97.50

110.00190,456,900

190,595,500

190,906,800

191,119,700

191,679,601

191,877,801

192,155,201

192,373,101

192,875,301

193,099,001

182,604,637

―

1,016

1,125

1,206

1,206

1,508

1,709

3,956,956

7,821,664

11,367,181

12,490,613

4,704,422―

Operating profit ratio (%)

11.1

11.3

14.0

12.7

14.2

13.6

12.3

11.8

12.1

13.1

14.1

―

ROA*5 (%)

3.7

4.5

5.6

5.5

5.8

5.1

4.7

4.6

4.7

4.1

4.7

ROE*6 (%)

5.7

5.9

7.8

10.3

11.2

10.1

9.4

8.9

9.1

7.4

9.2

Shareholders’ equity ratio

22.6

24.5

27.1

28.8

29.9

30.2

30.0

29.9

30.5

30.4

30.3

Unrealized profit*7 (billions of yen)

331

372

412

702

1,109

1,539

1,819

2,063

2,096

2,096

2,470

D/E ratio (times)

2.4

2.0

1.7

1.6

1.6

1.7

1.8

1.7

1.6

1.7

1.7

EBITDA*8 (billions of yen)

528

610

728

821

948

937

938

933

1,016

918

1,089

EBITDA ratio*8 (times)

14.4

11.0

8.5

7.5

7.6

8.6

9.4

9.8

8.6

11.0

9.4

Total return ratio*9 (%)

27.1

29.5

24.9

22.4

23.3

26.5

50.8

41.4

46.3

45.0

44.3

―

Dividend payout ratio*10 (%)

27.1

29.5

24.9

22.4

23.3

26.5

29.1

30.5

29.9

35.5

31.7

34.2

Share price (yen)

1,459

2,084

1,970

2,166

2,080

1,774

2,512

2,125

1,755

2,665

2,933

―

PER (times)

18.5

20.9

15.0

14.2

9.9

7.9

10.7

8.5

6.9

12.0

10.2

PBR (times)

0.9

1.2

1.1

1.1

0.9

0.7

1.0

0.8

0.6

0.9

0.9

P/NAV (times)

0.8

1.1

1.0

0.9

0.8

0.6

0.8

0.6

0.5

0.7

0.7

Dividend yield (%)

1.7

1.4

1.8

2.1

2.8

3.7

3.5

4.6

3.1

3.3

Total shareholder return (TSR)*11

―

―

―

―

―

―

2.8
145.5

128.0

111.6

167.6

188.2

Profit attributable to owners of parent
Net assets

Share Information (Shares):	
Number of shares issued at the end of period (including treasury shares)
Treasury shares at the end of period*4
Management Benchmarks:
―
―
―
―
―
―
―

Stock Index (at the end of each period):*1. Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions*2. Capital investment represents the amount shown for “Purchase of property, plant and equipment and intangible assets” in the Consolidated Statements of Cash Flows.
*3. N AV per share = (shareholders’ equity + unrealized gains (after deduction of tax)) / the number of shares issued at the end of period (excluding treasury shares), Unrealized gains (after deduction of tax) = Unrealized gains ×(1-effective tax rate)*4. Treasury shares at the end of period includes shares held by the executive compensation BIP (Board Incentive Plan) trust and shares held by the ESOP (Employee Stock Ownership Plan) trust for granting stock for employees.
*5. ROA = business profit / average assets during the fiscal year Before FY17/3: ROA = (operating income + non-operating income) /average assets during the fiscal year
*6. ROE = profit attributable to owners of parent / shareholders’ equity (average over the fiscal year)

130 Nomura Real Estate Holdings, Inc.

―
―
―
―
―

*7. Unrealized gain= fair value of real estate for rent at the end of the fiscal year – balance of real estate for rent at the end of the fiscal year
*8. EBITDA = profit before income taxes + interest expenses + depreciation, EBITDA multiple = interest bearing debt / EBITDA*9. Total return ratio = (dividend per share + share buyback per share) / EPS*10. Dividend payout ratio = dividend per share / EPS*11. Total shareholder return (TSR) = (stock price as of the end of the fiscal year + accumulated dividend per share from FY18/3 to FY22/3) / stock price as of the end of FY17/3*12. Forecasts as of July 28, 2022

Integrated Report 2022

131

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

Fact Data, etc.

Governance(Business, Sustainability, and DX )Business Unit Information(millions of yen)(millions of yen)

FY21/3Operating Revenue

FY19/3

FY20/3 *1, 2

FY21/3

FY22/3 *3, 4, 5

AssetsResidential Development

375,373

333,966

272,577

309,225

Residential Development

463,277

457,505

505,976

514,546

Housing sales (Japan)

342,055

294,376

247,609

284,015

Commercial Real Estate*6

1,086,064

1,112,664

1,160,805

1,204,549

Rental housing (sales)*7

FY19/3

FY20/3 * 1, 2

FY22/3 *3, 4

11,74017,931

5,035

4,120

Overseas―――

117,010

Rental housing (leasing revenue)*7

495

1,070

925

1,501

Investment Management

42,46343,05342,86843,220Senior

377

451

651

998

Property Brokerage & CRE

28,22819,24025,20135,787

Other

20,701

20,136

18,355

18,590Property & Facility Management

42,294

47,10650,09548,881

171,612212,133

179,227

202,460

Other

929

61,73089,237

777

Leasing (offices)

53,97548,56247,41145,666

Adjustments (elimination or corporate)

96,19759,972

47,12275,733

Leasing (retail facilities)

13,817

12,91011,01812,302

Total

1,759,455

1,801,273

1,921,306

2,040,506

Leasing (other)

7,974

8,375

5,776

4,131

Property for sales (sale)*8

65,350106,816

87,846

106,451

Commercial Real Estate*6

Inventories (land held for development and real estate for sale, etc.)(millions of yen)

4,533

7,037

11,23913,977

Residential Development

391,508

401,119

463,944458,049

Fitness

16,64715,757

11,50913,624

Commercial Real Estate*6

245,575

314,297

412,862

436,810

Other

9,312

12,674

4,426

6,306

Overseas

―

―

―

―

―

Overseas

―

―

2,628

Investment Management

Investment Management

9,641

12,05912,456

12,804

Property Brokerage & CRE

―

―

―

―

Property Brokerage & CRE

37,298

39,11039,436

43,762

Property & Facility Management

397

69

44

Brokerage fee (retail)*5

21,61824,017

23,334

21,825

Other

11

11

11

11

Brokerage fee (middle)*5

―

―

―

8,326

Adjustments (elimination or corporate)

(567)

(762)

(1,342)(712)

Brokerage fee (wholesale)*5

11,517

11,138

11,384

9,681

Total

636,925

714,734

875,520894,229

Other

4,162

3,954

4,717

3,929

Property & Facility Management

91,374

98,274

98,384

99,230Property & facility management

51,52455,53056,78358,264

Residential Development

5.4

5.5

4.4

6.3

Construction ordered

32,371

37,32735,86335,215

Commercial Real Estate*6

3.5

3.5

3.1

3.2

Other

7,478

5,417

5,737

5,750

Overseas

―

―

―

0.2

94

1,143

2,070

126

Investment Management

14.1

16.6

17.7

18.1

Property for sales (leasing)

*8

Other

―

―

―

―
69

Return on Assets (ROA)*10(%)

Adjustments (elimination or corporate)(16,885)(20,193)(23,492)(25,188)

Property Brokerage & CRE

28.9

47.2

35.6

32.7

Total

668,510

676,495

580,660

645,049

Property & Facility Management

17.6

18.2

18.5

18.8

Other

―

―

―

―

Total ROA*11

4.6

4.7

4.1

4.7

Key Results

FY19/3

FY20/3 *1, 2

FY21/3

FY22/3 *3, 4

Operating Profit(millions of yen)

Residential Development

25,06925,351

22,421

32,519Commercial Real Estate*637,60038,94135,13838,286

―

―

―

(512)

Investment Management

5,943

6,853

7,296

7,515

Residential Development

Property Brokerage & CRE

8,170

9,097

8,962

11,713

Housing sales (units)

5,890

4,739

3,669

4,329

Property & Facility Management

7,434

8,474

9,089

9,114

Gross profit ratio of housing sales (%)

19.1

20.4

22.6

23.6

(43)

(1,267)

(798)

(199)

Completed housing inventories at the end of the fiscal year (released for sale) (units)

229

321

239

130

Adjustments (elimination or corporate)(5,013)(5,545)(5,776)(7,227)

Completed housing inventories at the end of the fiscal year (unreleased) (units)

47

187

182

253

Total

79,162

81,90576,333

91,210Net lettable area at the end of the fiscal year (offices, retail facilities) (m2)

955,381915,311829,670

790,776

Vacancy rate at the end of the fiscal year (offices, retail facilities) (%)*12

4.6

4.0

4.9

5.9

145,065

143,663

111,425

110,608

1,669,476

1,798,583

1,815,646

1,948,071

Overseas

Other

Business Profit*9(millions of yen)

Commercial Real Estate*6

Residential Development

25,03225,33922,40432,550Commercial Real Estate*6

38,04339,24735,46938,590

―

―

―

291

Investment Management

5,969

7,149

7,587

7,836

Property Brokerage & CRE

8,170

9,088

8,976

11,716

Brokerage: Number of transactions

Property & Facility Management

7,464

8,566

9,281

9,205

Brokerage: Transaction value (millions of yen)Overseas

Number of MEGALOS members at the end of the fiscal year
Investment Management
Assets under management at the end of the fiscal year (millions of yen)
Property Brokerage & CRE

8,922

9,515

9,322

10,081

767,324872,337

893,423

964,882(43)(1,012)(1,495)(199)

Adjustments (elimination or corporate)(5,013)(5,545)(5,776)(7,227)

Buildings under management at the end of the fiscal year (buildings)

732

786

788

772

Total

79,623

82,83376,44892,765

Housings under management at the end of the fiscal year (units)

177,582

182,259

183,162

186,549

Other*1. S ince FY21/3, condominium development and sale businessoverseas, which had been classified in the Residential Development
Business Unit, as well as office building development and leasing
business overseas and ZEN PLAZA which had been classified in theCommercial Real Estate Business Unit, have been reclassified into
Other. Thus, figures listed for FY20/3 reflect the changes.

132 Nomura Real Estate Holdings, Inc.

*2. A s of April 1, 2020, an absorption-type merger was conducted*3. From FY23/3, the Overseas Business Unit was newly established, and thewith Nomura Real Estate Partners, which had been classified in theclassification of Overseas Business Division of Nomura Real Estate Development
Property & Facility Management Business Unit, as the surviving
and overseas subsidiaries, etc., which had been classified under the “Other”,
company and NREG TOSHIBA BUILDING FACILITIES, which had
have been reclassified. Due to this change, the figures listed for FY22/3 are
been classified in Commercial Real Estate Business Unit, as thechanged.
absorbed company. Thus, figures listed for FY20/3 reflect the*4. A s of April 1, 2022, Nomura Real Estate Development and Nomura Real Estatechanges according to the post-merger categories.
Building were merged (Nomura Real Estate Development as the surviving
company), and the breakdown of operating revenue in the Commercial Real
Estate Business Unit was changed. Due to this change, the figures listed for
FY22/3 are changed.

Property & Facility Management*5. From FY23/3, the breakdown of operating revenue in the Property Brokerage & CRE
Business Unit was changed. Due to this change, the figures listed for FY22/3 arechanged. Breakdown is as follows:
Retail: Real estate brokerage business for individuals
Middle: Real estate brokerage business for small and medium-sized enterprises,business owners, some individual investors and high net worth individuals
Wholesale: Real estate brokerage business for large corporations, funds and overseas
investors*6. In FY20/3, the Leasing Business Unit was renamed to the Commercial Real EstateBusiness Unit.

*7. Rental housing refers to properties developed for the realestate investment market.
*8. Property for sales refers to properties such as office building,retail facility and logistic facility developed for the real estate
investment market.
*9. Business profit = operating profit + share of profit (loss) ofentities accounted for using equity method + amortization
expenses of intangible assets associated with corporate
acquisitions.

*10. ROA of each business unit = business profit / total assets at theend of the fiscal year.
*11. T otal ROA = business profit / average assets during the fiscal year.
*12. A s of April 1, 2022, Nomura Real Estate Development andNomura Real Estate Building were merged (Nomura Real Estate
Development as the surviving company), and partial revision wasmade to the method used to calculate the net lettable area andthe vacancy rate in Commercial Real Estate Business Unit. Dueto this change, the figures listed are changed.

Integrated Report 2022

133

The Vision of
Nomura Real Estate Group

Sources ofCompetitiveness

Growth Strategy

Fact Data, etc.

Governance(Business, Sustainability, and DX )ESG Data
FY20/3E

FY21/3

FY22/3

Environment
Environmental management

S

FY21/3

FY22/3Rate of acquisition of childcare leave*9

―

―

96.2%

Rate among men

―

―

15.8%

92.0%

96.2%

92.9%

SocialUtilizing and improving human resources

Acquisition rate of environmental certifications for newly built property for sales (excluding rental housing)*1

100%

100%

100%

Number of environmental certifications for newly built property for sales (excluding rental housing)*1

14

15

15

3,518,302 t-CO

2

2

1,588,269 t-CO

2,297,026 t-CO

Male

―

100%

100%

Scope 1, 2

150,588 t-CO2

132,206 t-CO2

129,056 t-CO2

Female

―

95.0%

90.6%

Scope 3

3,367,714 t-CO

2

2

1,456,063 t-CO

2,167,970 t-CO

Family care leave takers

7

6

5

Energy Use*2

422,490 MWh per year

381,817 MWh per year

379,428 MWh per year

Investment in training cost per employee*10¥80,393¥70,462¥47,936

Energy use intensity*2

0.208 MWh/m² per year

0.184 MWh/m² per year

0.182 MWh/m² per year

Training hours per employee*10, 11

12.65

9.87

4.21

Solar power generated at Landport logistics facilities

15,194 thousand kWh per year

21,926 thousand kWh per year

22,801 thousand kWh per year

97.8%

97.8%

93.0%

4.05

3.96

3.97

¥9,462,899¥10,116,985¥10,177,382

Percentage of implementation of 1-on-1 meetings

―

―

84%

Procurement guideline survey implementation rate*14

―

―

37%

12

13

12

		 Independent External Directors*15

5

5

5

		 Female Directors*15

2

1

2

16

15

21

Response to climate change
Total CO2 emissions

Rate of reinstatement after childcare leave ratio

*1, 2

2

2

Others

Efficient use of water resources
Total water use*2

Response rate of employee satisfaction survey*12
2,287 thousand m³ per year

1,698 thousand m³ per year

1,920 thousand m³ per year

1.12 m³/m² per year

0.81 m³/m² per year

0.93 m³/m² per year

Water use intensity*2

Employee satisfaction level (5-point scale)

Total waste discharge*2
Waste discharge intensity*2

6,593 t per year

5,112 t per year

7,213 t per year

5.159 kg/m² per year

3.047 kg/m² per year

3.504 kg/m² per year

SocialEmployment / Human resources*12

Average employee compensation*13

Appropriate resource use and pollution prevention

S

FY20/3G

Governance
Number of Directors*15

Number of employees*3

7,176

7,390

7,548

Female employee ratio*4

30.6%

31.8%

32.4%

Number of new graduate hires

306

274

264

Number of the Board of Directors meetings

Female new graduate hires ratio

44.7%

41.9%

39.7%

Average attendance rate of all Directors

99.0%

100%

99.6%

Female manager and junior manager ratio*5

10.3%

11.1%

11.6%

Average attendance rate of Independent External Directors

97.5%

100%

99.0%

Average years of service*4

―

10.4

10.5

Number of the Audit & Supervisory Committee meetings

13

14

12

Male

―

11.5

11.7

Average attendance rate of all Audit & Supervisory Committee Members

100%

100%

100%

Female*4

―

7.9

8.1

Average attendance rate of Independent External Directors (Audit & Supervisory Committee Members)

100%

100%

100%

Number of foreign national employees*6

114

140

303

2.02%

2.05%

2.33%

Average work time over statutory working hours (hours per person/month)

13.51

9.99

13.73

Rate of acquisition of paid leave

61.1%

56.1%

62.1%

0

0

0

0.29%

0.41%

0.45%

*4

Rate of employment of persons with disabilities*7
Health and productivity management

Number of work-related injuries resulting in death
Absentee rate*8*1. Includes properties scheduled to be acquired during FY2023/3.
*2. B oundaries which are subject to aggregation, such as total CO 2 emissions, total water use, total waste
emissions, etc. are different. See the Sustainability Report for more information.
*3. E xcludes employees seconded from the Group (the Company and its consolidated subsidiaries) tooutside the Group, and includes those seconded from outside the Group to the Group (the Company
and its consolidated subsidiaries).
*4. Includes employees seconded from the Group (the Company and its consolidated subsidiaries) tooutside the Group. The calculation is based on 7,692 consolidated employees, excluding thoseseconded from outside the Group to the Group (the Company and its consolidated subsidiaries).
*5. N umber of female managers + Number of female candidates for managerial positions / Number of all
managers + Number of all candidates for managerial positions*6. N umber of foreign national employees does not include foreign technical interns.
*7. R ate of employment of persons with disabilities for each period is as of June of the following fiscal
year. The scope are Group companies which are subject to Act on Employment Promotion etc. of
Persons with Disabilities.
*8. A bsentee rate =total days of absence/ (scheduled working days × number of employees)*9. N umber of employees who took childcare leave during the relevant period / Number of employees who gavebirth to a child during the relevant period*10. From FY2022/3, the figures have been changed from Nomura Real Estate Development on a non-consolidated basis to those for the entire group.
*11. C overs only mandatory training and does not include open and selective training or e-learning courses.
*12. D ata for Nomura Real Estate Development.
*13. Average data of Nomura Real Estate Holdings employees.
Number of employees: 24 in FY20/3, 261 in FY21/3, 283 in FY22/3(From the fiscal year ended March 2021, the number of employees has been changed to the method of
displaying the number of employees including those who also serve as group companies such as Nomura
Real Estate Development.)*14. T he denominator is the amount of transactions with our major companies (total ¥237.0 billion), and thenumerator is the total amount of transactions with companies that responded to the procurement guideline
survey.
*15. Decrease in personnel due to resignation during the term is not stated.

Sustainability data
134 Nomura Real Estate Holdings, Inc.

https://www.nomura-re-hd.co.jp/english/sustainability/
Integrated Report 2022

135

The Vision of
Nomura Real Estate Group

Group Company Information

Sources ofCompetitiveness

Growth Strategy

Fact Data, etc.

Governance(Business, Sustainability, and DX )(As of May 31, 2022)(Note) Some operating companies have integrated or changed their names since the year of establishment.

Nomura Real Estate Holdings

Nomura Real Estate
Development

Nomura Real Estate AssetManagement

Nomura Real Estate
SolutionsMusashi Co.,Ltd.

First Living Assistance

Lothbury Investment
Management

ZEN PLAZA

Established
2004
Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Management of the operation of groupbusinesses through holding stocks andmanagement instruction

Established
1957
Head Office
1-26-2 Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Condominium sales, detached housing
sales, investment and development,
building leasing business, architecturaldesign, asset management, etc.

Established
2003
Head Office8-5-1 Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Investment management business, typeII financial instruments business,investment advisory and agency, realestate trading etc.

Established
2000
Head Office
1-26-2, Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Real estate brokerage for individuals andcorporates, consignment sales of newly
built condominiums and detachedhousings, insurance agency, real estate
information website operation

Established
2006
Head Office
3-13-3 Shibaura, Minato-ku, Tokyo
Shibaura SEC Building 6F
Overview of Businesses
Providing cloud services specializing inreal estate system solutions

Established
2017
Head Office
6-26-12 Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Home/living assistance service

Established2010
Head Office
1 Angel Lane, London, EC4R 3AB, U.K.
Overview of Businesses
Asset management business in the
United Kingdom

Established
1995
Head Office54-56 Nguyen Trai Street, Ben Thanh
Ward, District 1, Ho Chi Minh City,
Vietnam
Overview of Businesses
Ownership and operation business of
ZEN PLAZA

Nomura Real Estate Partners

Nomura Real Estate Life &Sports

Nomura Real Estate Heating
and Cooling Supply

Nomura Real Estate Retail
Properties

Beijing shokai Nomura Real
Estate Management

Tokio Property Services

NOMURA REAL ESTATE ASIA

NOMURA REAL ESTATEHONG KONG

Established
1977
Head Office
1-26-2, Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Facility management for buildings andcondominiums, architecture and interior
design, property management, cleaning,
insurance agency, renovation

Established
1989
Head Office
1-32-2 Honcho, Nakano-ku, Tokyo
Overview of Businesses
Planning and management of sports
clubs and consulting, sales and rental ofsports items, etc.

Established
1987
Head Office
134 Godocho, hodogaya-ku
Yokohama-shi, Kanagawa
Overview of Businesses
Supply of heating / solar power sales
business

Established
1968
Head Office8-5-1 Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Project management of retail facilities,
including commercial surveys, demand
forecasts, market research, businessplanning, operational planning, andmerchandising, property management ofretail facilities

Established
2018
Head Office
5 Dong San Huan Bei Lu Chao Yang
District, Beijing, China
Overview of Businesses
Operation and management of Beijing
Fortune Building

Established
1983
Head Office
20 Kramat Lane #03-12,
United House, Singapore 228773
Overview of Businesses
Brokerage for trading and leasing of
housings, offices, and factories based in
Singapore

Established
2015
Head Office
10 Marina Boulevard, Marina Bay
Financial Centre Tower2 #33-6,
Singapore 018983
Overview of Businesses
Exploring real estate development
opportunities, market research, andbuilding relationships with partnercompanies in Southeast Asia

Established
2016
Head Office
30/F Two International Finance Centre,
8 Finance Street, Central, Hong Kong
Overview of Businesses
Support services for investment to realestate in Japan from foreign investors,
building relationships with local
corporations and investors, exploringbusiness opportunities

Nomura Real Estate Wellness

Nomura Real Estate Hotels

Nomura Real Estate Amenity
Service

PRIME XNOMURA REAL ESTATE(THAILAND)NOMURA REAL ESTATEVIETNAMNOMURA REAL ESTATECONSULTING (SHANGHAI)

Established
2015
Head Office
1-26-2, Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Development planning and managementof senior housings and related services

Established
2017
Head Office
1-26-2, Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Planning, operation, and management ofhotelsEstablished
1990
Head Office8-4-1 Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Building and condominium cleaning,
sales of consumable

Established
2006
Head Office
6-22-1 Nishi-Shinjuku, Shinjuku-ku,
TokyoOverview of Businesses
Internet advertising agency, creative
business, marketing business

Established
2019
Head Office689 Bhiraj Tower at EmQuartier, Unit
3213-3214, 32nd Floor, Sukhumvit Road,
Klongton Nua, Vadhana, Bangkok 10110,
ThailandOverview of Businesses
Investment in local business, market surveys,
identification of new projects and partner
corporations, building business relationships withand monitoring of local partner companies, andsupporting for Group companies and businesses

Established
2019
Head Office
ROOM1201, 12th Floor, Sun Wah Tower
115 Nguyen Hue Boulevard, Ben Nghe
Ward, District 1, Ho Chi Minh City, Vietnam
Overview of Businesses
Local market surveys identification of new
projects and partner corporations, building
business relationships with and monitoringof local partner companies, and supportingfor Group companies and businesses

Established
2021
Head Office
Unit 2037,Level 20,
HKRI Center Tower1, 288 Shimen 1stRoad, Jing‘an District, Shanghai, China
Overview of Businesses
Consulting services for real estate,property and facility management,
corporations management

136 Nomura Real Estate Holdings, Inc.

Integrated Report 2022

137

The Vision of
Nomura Real Estate Group

External Evaluation
Inclusion in ESG indices

Commendations on social activities

Selected for Health andProductivity Management Award
2022 (1, 2, 3, 6, 7, 8, 11)Awarded Bronze in PRIDE
Index (2)Received Good Design Award
2021 for 6 items. The Group hasreceived this award for 20thconsecutive year (2)Selected for MSCI Japan Empowering Women (WIN)
Select Index, a thematic index (1)Selected for FTSE Blossom
Japan Sector Relative Index,
a wide-ranging index (1)Corporate name:
Nomura Real Estate Holdings, Inc.
Representative:	Eiji Kutsukake, President and Representative Director
Head office:	1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo
163-0566, Japan
Date of establishment:
June 1, 2004
Number of employees:
7,548 (consolidated)
From April 1 to March 31
Fiscal year:
General meeting of shareholders: June

Capital:¥118,604,044,550
Number of Authorized shares: 450,000,000 shares
Number of shares Issued:	182,604,637 shares (including 2,181,585 treasury shares)

Signed the United Nations
Global Compact (1)Signed the Principles for
Responsible Investment (3,10)

Joined “Renewable Energy
100%” (1)* T he number of treasury shares above does not include 2,091,166
shares held by the executive compensation BIP (Board IncentivePlan) trust and 431,671 shares held by the ESOP (Employee
Stock Ownership Plan) trust for granting stock for employees.

Listed market:
Minimum trading unit:
Number of shareholders:Major shareholders (top 10)
Shareholding
ratio (%)

Nomura Holdings, Inc.		

64,777,500

35.90

The Master Trust Bank of Japan, Ltd. (Trust account)

19,462,700

10.78

Custody Bank of Japan, Ltd. (Trust account)

10,040,400

5.56

SSBTC CLIENT OMNIBUS ACCOUNT

3,312,272

1.83

Nomura Real Estate Holdings
Employee Shareholding Association

3,077,940

1.70

2,091,166

1.15

STATE STREET BANK WEST CLIENT - TREATY 505234

2,071,784

1.14

JPMorgan Securities Japan Co., Ltd.

1,968,577

1.09

THE BANK OF NEW YORK MELLON 140044

1,820,854

1.00

THE BANK OF NEW YORK 133969

1,705,900

0.94

1.19%

Agreed to Recommendationsof the Task Force on
Climate-related Financial
Disclosures (TCFD) (1, 3)

Joined the Japan Climate
Initiative (3)Signed the Financial Action
Principles for the Formation ofa Sustainable Society (the21st Century Principles ofFinancial Action) (3)Member of the UK Green
Building Council (GBC) (10)Joined the “Task Force for
Nature-related Financial
Disclosures” forum (1)

2.87%

7.78%

20.25%■ Other Japanese firms■ Foreign investors, etc.
■ Financial institutions■ Individuals and others■ Treasury stock■ Financial Instruments firms*1. A lthough the Company holds 2,181,585 treasury shares, it is excluded from the list of major
shareholders above.
*2. The shareholding ratio is calculated after deducting the above treasury stock (2,181,585 shares).

Approved by the Science
Based Targets (SBT) initiative(1, 3)

Tokyo Stock Exchange Prime Market
100 shares
23,452Composition of shareholdings
No. ofshares held

(BIP (Board Incentive Plan) trust account 76272)

36.02%March 31,2022

31.88%

Share price / Total shareholder return*1, 2, 3
(%)
200
180
160
140
120
100
80
60

Selected as the Sompo
Sustainability Index uniquely set
by Sompo Asset Management(1)

Commendations on environmental
activities

Share information

The Master Trust Bank of Japan, Ltd.

Selected for S&P/JPX Carbon Efficient Index, a thematic/
environmental index in the ESG indices (1)Selected as the FTSE4 Good
Index Series, a representativeindex for ESG investment (1)Fact Data, etc.

Governance(Business, Sustainability, and DX )Corporate data

Shareholders’ nameSignatures on initiatives

Selected for FTSE Blossom
Japan Index, a wide-ranging
index (1)Growth Strategy

Corporate Information (As of March 31, 2022)

The ESG indices adopted by GPIF
(Government Pension Investment Fund)

Selected for MSCI Japan ESG Select Leaders Index, awide-ranging index (1, 4)

Sources ofCompetitivenessNomura Real Estate Holdings

2017/3/31

2018/3/31

TOPIX

TOPIX (Including dividends)

2019/3/31

2020/3/31

2021/3/31

2022/3/31

Shareholders’ name2018/3

2019/32020/32021/32022/3

Nomura Real Estate Holdings
TOPIX (Including dividends)

145.5%
115.9%

128.0%
110.0%

111.6%
99.6%

167.6%
141.5%

188.2%
144.3%*1. Calculated with the closing price on March 31, 2017 as 100%.
*2. Total shareholder return is the overall yield for shareholders that takes into account both capital gains and dividends. It is calculated in accordance with the formula prescribed by the Cabinet Office Ordinances.
*3. Total shareholder return is calculated at fiscal year-ends, starting from April 1, 2017, as if the investment was made at the closing stock price at the end of FY17/3.

Joined “the 30by30 Alliancefor Biodiversity” (1)Received the 4 stars rating in thereal estate rating (4, 5) and the level
A in the disclosure evaluation (1, 4)of the GRESB, which is an annual
benchmark for considering ESG in
the real estate sector.

CDP Climate Change A-Ratedand selected as a “Supplier
Engagement Leader” (1)Acquired and registered Eco-Action 21 (Environmental Management
System) certification (4)* A cquired and registered Eco-Action 21 certification for the first time as a JapaneseReal Estate Investment Trust (J-REIT).

138 Nomura Real Estate Holdings, Inc.

Agreed to Declaration of Biodiversity by Keidanren (1)Selected / Concerned / Award-winning companies
1: Nomura Real Estate Holdings, Inc.
7: Nomura Real Estate Partners Co., Ltd.
2: Nomura Real Estate Development Co., Ltd.
8: Nomura Real Estate Life & Sports Co., Ltd.
3: Nomura Real Estate Asset Management Co., Ltd. 9: Nomura Real Estate Wellness Co., Ltd.
10: L othbury Investment Management Limited
4: Nomura Real Estate Master Fund, Inc.
11: PRIME X Co., Ltd.
5: Nomura Real Estate Private REIT Inc.
6: Nomura Real Estate Solutions Co., Ltd.
* T he inclusion of Nomura Real Estate Holdings, Inc. in any MSCI index, and the use of MSCI logos, trademarks, service marks
or index names herein, do not constitute a sponsorship, endorsement or promotion of Nomura Real Estate Holdings, Inc. by
MSCI or any of its affiliates. The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index names andlogos are trademarks or service marks of MSCI or its affiliates.

Publication of Integrated Report 2022 (Guaranteed by the Director in Charge)
I would like to express our gratitude to our investors and otherstakeholders for your consistent support and cooperation.
The Group formulated its new Mid- to Long-term Business Plan in
April 2022, making a new start with the goal of achieving both highprofit growth and high asset and capital efficiency and high shareholder returns. With the aim to explain the certainty of our profit
growth, this report has been prepared with a focus on our Mid- toLong-term Business Plan, the Nomura Real Estate Group 2030
Vision, “Be a ‘Life & Time Developer,’ as never seen before,” andthe three pillars of our Sustainability Policy, “Earth Pride,” whichwere announced at the same time. In pursuit of profit growth, ourapproach of connecting closely with individuals, which is established in the Group, will never change, no matter how much societychanges around us.
I sincerely hope that this report will help you understand ouruniqueness and superiority.
As the Group CFO and director in charge of investor relations
responsible for compiling this integrated report, I hereby declare
the legitimacy of its compilation process and the accuracy of thecontent.
I would like to conclude by taking this opportunity to express ourappreciation to all the readers of this report and to all those whohave helped compile and issue it.

Director, Group CFO

Integrated Report 2022

139

Nomura Real Estate Holdings, Inc.
Shinjuku Nomura Building, 1-26-2 Nishi-Shinjuku, Shinjuku-ku,
Tokyo 163-0566, Japan
URL: http://www.nomura-re-hd.co.jp/english

Printed in Japan