New Value, Real Value
Integrated Report 2020

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

Our Group Vision/Action guideline

Editorial policy

Our Group Vision “New Value, Real Value”

Editorial policy
This integrated report is published in order to foster understanding and serve as a tool for a deeper dialogue
among shareholders, investors, and other stakeholders of the Nomura Real Estate Group. It explains the Group’s

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

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.
This report focuses on explaining the Nomura Real Estate Group’s value creation process and distinctive
business models and other initiatives to realize value creation. It also strives to communicate the likelihood ofcreating the kind of value the Group aspires to through the messages from top managements and dialogue
between the Chairman of the Board of Directors and an External Director.
The editing and layout of this report follow guidelines such as the International Integrated Reporting Frameworkof the International Integrated Reporting Council (IIRC) and the Guidance for Integrated Corporate Disclosure andCompany–Investor Dialogues for Collaborative Value Creation of the Ministry of Economy, Trade and Industry. In
addition, feedback and requests raised during dialogues with investors have been also incorporated.

About the cover
The Nomura Real Estate Group engages in the businesses of developing real

Action guideline “What We Value”

estate and providing real estate-related services. We strive to create new value by
resolving social issues through “building cities—dynamic stages that connect today

Client-first approach
We maintain our “client-first” approach as well as our attitude to ensure
trust and fulfill expectations, which we have valued since the foundation

New Value, Real Value
Integrated Report 2020

with tomorrow’s possibilities” and “embracing every moment of life’s pursuits.”
By effectively utilizing our corporate colors, specifically orange (hospitality, spiritof challenge) and purple (originality, dignity), the cover of this report expresses oururban development and unfaltering commitment to the achievement of Our Group
Vision.

of the company.

Creating new value based on 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 growth with societyEver mindful of our responsibility and pride in creating the future forpeople and cities, we contribute to society and continue to be acompany on which it relies.

Referenced guidelines• Global Reporting Initiative (GRI) Standards• ISO 26000–Guidance on Social Responsibility• International Integrated Reporting Framework of the International Integrated
Reporting Council (IIRC)• Guidance for Integrated Corporate Disclosure and Company–Investor Dialogues for
Collaborative Value Creation of the Ministry of Economy, Trade and Industry

Period covered by the report
This report covers the period from April 1, 2019 to March 31, 2020.
Parts may discuss information from times prior to this period or activities or outlooks for times following
this period.

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

Forward-looking statements

Working with vigor and achieving wellness
Recognizing that working with vigor brings growth to both the company
and ourselves, we take the utmost care of our mental andphysical health.

This integrated report contains forward-looking statements about the future plans, strategies, andperformance of Nomura Real Estate Holdings, Inc. (“the Company”) and its consolidated subsidiaries (“theGroup”). 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 of risks and uncertainties, which include economic trends,
intensification of competition in the real estate industry, legal and taxation systems, and other regulations.
As such, actual results may differ from those projected.

Integrated Report 2020

1

Contents

About the4 The Nomura Real Estate Group’s history of challenge

Nomura Real

8 The Nomura Real Estate Group at a glanceIndex
I would like to know about • • •Estate GroupCEO message

10 CEO message

Value creation by

20 Value creation process

the Nomura Real22 Sources of corporate value

Estate Group

24 Business model

President andRepresentative Director,
Group CEOGrowth strategy of

30 Message from the COO and Chairman of the Sustainability Committee

the Nomura Real36 Mid- to Long-term Business Plan overview and progress

Estate Group➡CEO message➡Value creation process

1020

the Group’s strengths andcompetitive edge

Business model(position in the competitive landscape)➡The Nomura Real Estate Group at a glance➡Sources of corporate value➡Business model➡External evaluation

8
22
24
108

the Group’s profit structure➡Business modelBusiness model➡Message from the COO and(essential elements for ensuring a competitive
the Chairman of the Sustainability Committee
advantage)➡Interview with the CFO➡Business at a glance

24
30

Sustainability and growth(recognition of ESG factors)➡Four value creation initiatives➡Message from the COO andthe Chairman of the Sustainability Committee➡Sustainability

26
30

Sustainability and growth(relationships with key stakeholders)➡Environment➡Safety/Security, Community, Health and Well-being➡Human resources

72
74
76
10
30

Sustainability and growth(risks within changing environment)➡CEO message➡Message from the COO andthe Chairman of the Sustainability Committee➡Interview with the CFO➡Risk management➡Awareness of the external environment(opportunities and threats)

30

the Group’s specific strategies

Strategy➡Message from the COO andthe Chairman of the Sustainability Committee➡Mid- to Long-term Business Plan overview andprogress➡Strategies by Business Unit

the Group’s indicators for measuring
the progress of its strategies➡Mid- to Long-term Business Plan overview and
Performance and key performance indicators
progress(KPIs)➡Strategies by Business Unit
➡ESG data36

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

Strategy➡Mid- to Long-term Business Plan overview and
Performance and key performance indicators
progress(KPIs)➡Interview with the CFO

36➡Dialogue between the Chairman of the Board of
Directors and an External Director➡Roundtable discussion with External Directors➡Corporate governance

44

•••

38 Interview with the CFO
the likelihood of the Group achieving
sustainable growth•••Seiichi Miyajima
Sustainability/ESG

44 Dialogue between the Chairman of the Board of Directors
and an External Director

Executive Vice President andRepresentative Director,
Group COO

48 Roundtable discussion with External Directors
52 Directors and Executive officers
55 Corporate governance
64 Risk management•••

69 Internal controls, compliance/Information disclosure
70 Sustainability
72 Environment•••

74 Safety/Security, Community, Health and Well-being
76 Human resources

Makoto Haga

80 Topic: Response to COVID-19

Director,
Group CFO•••the Group’s governance systemthat supports strategy•••Business portfolio/

84 Business at a glance

Data, etc.

85 Awareness of the external environment (opportunities and threats)
86 Strategies by Business Unit

Page

Values•••

26 Four value creation initiatives

Contents

the Group’s values and direction
toward growth•••

Eiji Kutsukake

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

Governance

86 Residential Development Business Unit

Information disclosure on the website

88 Commercial Real Estate Business Unit

Additional information can be found on our website.

38
84

70

38
64
85

36
86

86
104

38

48
55

90 Investment Management Business Unit

Home page92 Property Brokerage & CRE Business Unit
94 Property & Facility Management Business Unit

https://www.nomura-re-hd.co.jp/english/

96 Major asset brands
97 Major development projects

Financial information

98 Major development projects in progress

Integrated report and financial report

99 Overseas business initiatives

https://www.nomura-re-hd.co.jp/english/ir/ir_library/annualreport.html

100 11-year financial data
102 Business Unit information
104 ESG data
106 Corporate information
107 Group company information
108 External evaluation
109 Publication of Integrated Report 2020
(Guarantee by the Director in charge)

2

Nomura Real Estate Holdings, Inc.

Non-financial information•Investor relations
https://www.nomura-re-hd.co.jp/english/ir/-Management policy-Financial information-IR library-Stock information
etc.

•Company information•Business overview•Sustainability/ESG
https://www.nomura-re-hd.co.jp/english/csr/-CSR report PDF download
https://www.nomura-re-hd.co.jp/english/csr/
download/

etc.

Integrated Report 20203

About the Nomura Real Estate GroupThe Nomura Real Estate Group’s history of challenge
We have continued to take on challenges amid these changing times while anticipating the needs of customers andsociety. Our past initiatives created the current and future values.
1991–2002

High economic growth period—Bubble economy

Bubble burst—Recession in the 1990’s/Lost decadeSocial situation

Social issues

The Group at the time

Social situation

Social issues

The Group at the time1964 Tokyo Olympics held
1985 Plaza Accord
1989 Nikkei Stock Average
recorded all-time high• Shortage of high-quality housing toaddress population growth and inflow
occurred in urban areas• Development of urban infrastructureaccompanying rapid economic growth• Nomura Real Estate Development established (1957)• Transferred from Nomura Securities’ asset
1957
management company to real estate developer• Started large-scale residential land lot development Spun off from Nomura Securities and launched real estatebusiness focused on leasing and management of officeand condominium salesbuildings

1991-1993	Economic stagnation due to bubble
burst
1995
Great Hanshin-Awaji Earthquake
1997-	Financial crisis (Bankruptcy of Yamaichi
Securities, etc.)• Increasing demand for residences with higher quality, safety, and security, taking
into account of the necessity for higher seismic adequacy in consideration of thedamage caused by the Great Hanshin-Awaji Earthquake• Accelerated population inflow toward urban centers, buying motivation of thosewith actual demand due to falling land prices in urban centers increased• Recovered from sluggish trends inprofit caused by the economic crisis• Downsized balance sheets andreinforced the financial soundness

Initiatives at the time

Initiatives at the time

Entered into the residential development businessIn 1957, the Company was established as a company to hold and manage Nomura
Securities’s new head office building. Subsequently, the Company took its first step inentering the residential development business by developing the Kajiwarayama residential
area (Kanagawa Pref.) in 1961, to solve the housing shortage during the postwar
reconstruction boom. In 1963, the Company advanced into the condominium development
business and firmly established its position as a major private developer. In addition, when
only short-term loans were available for housing, we established a housing trust systemthat pioneered the current housing loans and set the possible installment period for 10
years. The Company’s market-in approach, which promotes thinking from the customers’
perspective, has been cultivated ever since.

1961
Launched real estate development businesswith development of Kajiwarayama residential
area in Kanagawa

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

Developed the Shinjuku Nomura Building,a skyscraper integrating the latest technologies

Concentrated business resources into the residential
development business and generated the PROUD

Started asset management and property
development for sales business

Made use of IT in the real estate
brokerage business ahead of competitors

The office building business isthe origin of the Group, startingfrom the construction of the newbuilding for Nomura Securities, andhas steadily expanded, including
the completion of the Nomura Real
Estate Edobashi Building (currently
Dai-ni Edobashi Building) in 1973.
Later, construction of high-risebuildings was facilitated by therevision of the Building Standards
Act. In 1978, the Shinjuku Nomura
Building was completed, a cuttingedge skyscraper featuring the latest
disaster prevention equipment
and resource conservation.
Through this construction together
with the Group-wide activities,
including leasing tenants, valuable
expertise was accumulated, which
contributed to the subsequent
expansion of the office building
business.

When the bubble burst, the economy and the real estate market
conditions rapidly deteriorated. Under the harsh environment, the Groupgrasped the residential needs that were returning to urban centers
due to falling land prices and concentrated its business resources on
the condominium business. In 2002, the Group announced its unified
residential brand, PROUD. With proactive advancement centered on thebrand strategy, the Group refined its characteristics of the integrated
development, sales, and management system.

Since the dawn that took place in the latter half ofthe 1990s, the Group focused on the future potentialof the real estate securitization business and enteredin the asset management business utilizing externalfunds. As we continued to accumulate expertisethrough the structuring of real estate funds, westarted the property development for sales business.
In 2001, the retail facility Fab Minami-Osawa,
developed on the premise of selling to investors,
was completed.

Noticing the potential for the use of IT systems
supported by rapid improvement of the Internet
infrastructure ahead of competitors, the Grouplaunched nomu.com, its real estate information
website, in 1999. Because nomu.com functioned
as a point of contact with customers, it became
possible to grasp their needs via both real storesand the Internet, which facilitated the growth of thereal estate brokerage business.

1978
Completed construction of the Shinjuku Nomura
Building. Head Office was moved from Nihonbashi tothe building

Now and toward the future

An array of residences developed by emphasizing the market-in approach and thecommitment to quality since its foundation have maintained their beautiful townscapesand residential quality, which constitute the Group's DNA. In addition, the large-scale
repair works by the Property & Facility Management Business Unit and the brokeragebusiness for condominiums and detached housings by the Property Brokerage & CRE
Business Unit have continually generated value.

4

Nomura Real Estate Holdings, Inc.

2002
Announced PROUD as the unified residential brand of products andservices
Completed construction of PROUD Kugayama (2003)

2001
Completed construction of Fab Minami-Osawa, a retailfacility developed using the real estate securitization
scheme1999
Launched the real estate information website
nomu.com

Now and toward the future

Build residences that can maintain high quality
over the years ahead

The Kajiwarayama residential area in
Kanagawa that maintains its beautiful
townscapeAbout the Nomura Real Estate Group

About the Nomura Real Estate Group

1957–1990

Co-op Takenomaru that maintains high quality
even after 50 years of construction

Expand the mixed-use development businessIn 2020, the construction of TOKYO TORANOMON GLOBAL SQUARE was completed
to facilitate the convenience and comfort of working people. Meanwhile, theNihonbashi 1-Chome Central District Redevelopment, including Nomura Securities’s
former headquarters the Dai-ni Edobashi Building, showcases the Group's businessperformance in the past, present, and future.

2020
Completed construction of TOKYOTORANOMON GLOBAL SQUARE

2026
Nihonbashi 1-Chome Central District Redevelopment
Project scheduled to be completed

Make use of high-quality real estate stock:“re:Premium”
Condominiums that the Group has continued to supply have become
high-quality real estate stock and contribute to the growth of theProperty Brokerage & CRE Business Unit and Property & Facility
Management Business Unit. To enable the reduction of buildings’
life-cycle cost, the Property & Facility Management Business Unit
developed “re:Premium” as an initiative for long-term, large-scale
repair works for many properties of PROUD that undergo the firstlarge-scale repair works because approximately 20 years havepassed since the announcement of PROUD. Aiming to provide
housing where people can always live with comfort and safety/
security, the Group will continue to offer better services.

Expand asset managementbusiness
Leveraging the expertise accumulated overyears of operations in the asset managementbusiness, the Group has managed Nomura Real
Estate Master Fund, which is one of the largest
J-REITs, and Nomura Real Estate Private REIT,
which is the first private REIT in Japan. Including
the real estate investment manager Lothbury
in the UK, which joined the Group in 2018,the assets under management (AUM) amount
to approximately ¥1.8 trillion.Through theacceleration of the initiatives for environment,social, and governance (ESG) and othermeasures, we have continued to be a leading
company in the industry.

nomu.com, the top real estatecompany website (brokerage)
There are approximately 220,000 nomu.com
members since its launch more than 20 years
ago, and it is the top* real estate company
website (brokerage) in terms of access andusers. It has made great contributions because
many inquiries about sales transactions for theretail brokerage business came from nomu.
com. Advanced services have been introduced
by using AI and VR, among others, to facilitatetransactions for customers.

2015
Announced “re:Premium,” thelarge-scale repair work for
condominiums to realize thelong-term guarantee exceeding
the industry standard*In February 2020, the number of users of Nielsen NetView (excluding access/apps from computers at home or in the office) was approximately 926,000
and the number of users from smartphones of Nielsen Mobile NetView (including access/apps from iOS or Android) was approximately 1,683,000 (thetop in terms of the monthly number of users in the real estate company (brokerage) section). The total number of PCs and smartphones is estimated inhouse based on Nielsen Digital data. The comparison target between the real estate agency and the real estate portal site is selected by the Company.

Integrated Report 20205

About the Nomura Real Estate GroupThe Nomura Real Estate Group’s history of challenge

2011–

Economic recovery—Global financial crisis

About the Nomura Real Estate Group

About the Nomura Real Estate Group

2003–2010

Great East Japan Earthquake—Increase in ESG values andprogress of globalization

Social situation

Social issues

The Group at the time

2001-2006	Structural reform by Koizumi
administration
2003 	Mass supply of new officebuildings
2008
Global financial crisis• Increasing needs for the use of corporate
real estate (CRE), such as idle assets andunnecessary assets, caused by changes
in the industry• Peaking of the population in Japan,
moving toward a super-aging society• Nomura Real Estate Holdings became listed on theFirst Section of the Tokyo Stock Exchange (2006)• Further expanded of the residential development
business• Developed the brands of property for sales (including
offices, retail facilities, logistics facilities and rental
housings)

2006
Nomura Real Estate Holdings became listedon the First Section of the Tokyo Stock
Exchange

Initiatives at the time

Social situation

Social issues

The Group at the time2011 Great East Japan Earthquake
2013-2020 Abenomics
2015 Sustainable Development
Goals (SDGs) adopted• Changing life/work styles due to increasing dualincome households and declining birthrate with theaging population• Progress of globalization• Rising awareness of sustainability including resilienceagainst natural disasters and environmental issues• Made challenges to create urban
development unique to the Group,
which is a recycling-oriented type thatemphasizes the community• Utilized our experience accumulated inJapan for overseas business expansion

2015
Established NOMURA REAL ESTATE ASIA in
Singapore
Launched overseas business expansion in Asian
countries

Initiatives at the time

Made the housing sales business growand established the PROUD brand

NREG TOSHIBA BUILDING (currently Nomura
Real Estate Building) joined the Group

Created the brands of property
for sales

The residential development business that achieved growthalong with PROUD contributed to the Group's businessexpansion. The track record of the accumulated developments
based on the market-in approach and the commitment toquality led to the established reputation of PROUD. Backed
by the high evaluations of PROUD from customers, the Groupbegan aggressive land acquisition after the global financial
crisis ahead of competitors, which significantly contributed tothe subsequent further business expansion.

In 2008, we conducted an M&A with NREG TOSHIBABUILDING as the disposition of real estate held by nonreal estate companies progressed due to the heightenedawareness of the compression of balance sheets and capitalefficiency. This company owns a large number of leasing
properties, and by joining the Group, the leasing businesshas expanded as a stable source of income, which is amajor step leading to future large-scale development.

Through the market-in approach, the Group discovered
the diversified needs of the tenants and people working
there and created unique property brands such as
PMO (offices) and Landport (logistics facilities). The
Group exploited a new market of mid-sized high-grade
offices by PMO, and its initiative to rebuild buildingsthat are aging and concerned about earthquake
resistance, and then build a city that is resilient todisasters have contributed to resolving social issues.

Accelerated overseas businessInitiatives for urban-type compact town
In response to the changing social structure, such as the declining birthrate and aging society, the Group has promoted
the multi-functional and highly convenient urban-type compact town. Funabashi Morino City, completed in 2014, isequipped with necessary functions for people’s lives, such as a shopping center and hospital centered around residential
areas. In 2017, the elderly housing with supportive services, OUKAS Funabashi, opened there and contributed urban
development for many generations.

Mainly in the cities of rapidly growing ASEAN countries,
the Group has accelerated its overseas expansion byleveraging the expertise cultivated in Japan, including
the market-in approach and commitment to quality. In
the housing sales business, based on collaborations
with local developers, the Group has promoted theprovision of products and urban development by
accurately grasping needs in the areas with Japanese
high-quality project management.

2016
Acquired ÉcoQuartier certification for the first time in theworld (except the projects in France) promoted by the
French Ministry of the Ecological Transition (eco-districtcertification)

2006
Completed construction of PROUD Minamiaoyama

2008
NREG TOSHIBA BRUILING (currently Nomura Real Estate Building)joined the Group2007
Completed construction of
Landport Atsugi

2008
Completed construction of
PMO Nihonbashi Honcho

Now and toward the future
Take initiatives for the redevelopment
business
In order to acquire development opportunities in highly
convenient area mainly near city center and urban
railway stations, it is essential to take initiatives in theredevelopment business. The high appreciation of thecustomers for PROUD*1 has given the Group a largeadvantage in the redevelopment business. Due to thesynergy effect with the expertise accumulated over many
years, the number of residential redevelopment projects
participated is ranked at the top of the industry.*2

2014Completed construction of the urban-type compact town Funabashi
Morino City

2017
Opened the Group’s first elderly housing with supportive
services, OUKAS Funabashi

2017
Joined the housing sales
business in Bangkok,
ThailandNow and toward the future
Make a challenge for the largest-scale, mixeduse development project ever for the GroupThe Shibaura 1-chome District Project to rebuild theHamamatsucho Building owned by Nomura Real Estate
Building into twin towers of 230m high, with 550,000m2
of gross floor area is now in progress. The twin towers
will become one of the largest high-quality leasing
assets in the history of the Group, equipped with area
management, top-class environmental functions, andconsideration for safety/security, aiming for future urban
development.

Grow mutually with the Group REITs
For further growth of the property development
for sales business, the Leasing Value Chain was
concluded for mutual growth with the Group REITs
and funds through selling-off properties to the
REITs and funds. Since 2015, the cumulative totalof the transactions amounted to over ¥300 billion,
significantly contributing to the growth of theGroup.

Take initiatives for urban development toward the future
The experience of Funabashi Morino City contributes to the further expansion of the urban-type compact town,
sustainable urban development that the Groups has pursued. A variety of developments are now in progress in
Hiyoshi, Kichijoji, and Kameido. In 2018, activities for the community-based urban development initiative of ACTO
were launched in the course of our urban development toward the future.

Strengthen sustainability/
ESG promotion
In order to pass on the Group’s history to the future
and continuously achieve sustainable growth withall stakeholders in the coming years, the Group hasenhanced its initiatives for and information disclosureof sustainability/ESG. In 2016, the Group’s COO wasappointed as the Chairman of the CSR Committee(currently the Chairman of the Sustainability Committee).
Under the belief that all of the Group’s businessactivities should be integrated with sustainability/ESG,
a variety of initiatives have been enhanced as wellas the signing of the United Nations Global Compact
and the Principles for Responsible Investment (PRI) by
investment management companies.
United Nations
Global Compact

2016
Completed construction of PROUD TOWER
Tachikawa

2017
Joined the mixed-use
development business,
including residential andretail facilities, in Manila,
the Philippines

2021
Shibaura 1-chome District Project scheduled to start construction(scheduled for completion: S Building FY25/3, N Building FY31/3)

2020
Completed construction of PROUD CITY Hiyoshi(Residence I)

Principles for
Responsible
Investment (PRI)2022
KAMEIDO PROJECT and PROUD TOWER Kameido Cross
scheduled for completion*1 PROUD was ranked first in 7 out of 10 categories in the Nikkei, Inc. 2019 Condominium Brand Survey. *2 Source: Based on in-house research

6

Nomura Real Estate Holdings, Inc.

Integrated Report 20207

About the Nomura Real Estate GroupThe Nomura Real Estate Group at a glance
We are a group of companies that creates high added value by leveraging the business resources
accumulated over many years and by cooperation of Development Sector and Service Management Sector.
The Nomura Real Estate Group in figures

Operating revenue/Business profit*1, 2[Output] Value created by business resources■Operating revenue (left scale) ■Business profit (right scale)(Billions of yen)(Billions of yen)800

FY20/3Operatingrevenue

676.4 billion¥

FY20/3Business
profit*1

600

82.8 billion

400

¥

150

517.7

450.8

532.0
74.3

49.9

58.3

567.1
71.8

569.5

569.6

80.9

77.2

623.7
76.6

668.5
79.6

676.4
82.8

■Commercial Real Estate Business Unit
■Property Brokerage & CRE Business Unit
■OtherTotal return ratio

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3(Billions of yen)

■Operating revenue (left scale) ■Business profit (right scale)(Billions of yen)

Development Sector

Residential
Development

333.9

200

• Development and sales of rental housings

100• Internet advertising business for housings• Home/living assistance business, etc.

See pages 88-89 for the strategies and performance

50

300

• Development planning and managementbusiness for elderly housing with supportive
services

25.3

0(Billions of yen)

• Property development for sales business

Commercial
Real Estate• Consignment of planning and operation ofretail facilities, etc.
• Management of fitness clubs, etc.

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3See pages 90-91 for the strategies and performance

FY20/3■Operating revenue (left scale) ■Business profit (right scale)

212.1

39.2

20

50

0

0
FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3■Operating revenue (left scale) ■Business profit (right scale)

20

15
10

Service & Management Sector

Investment
Management

7.1

5

5
0

(Billions of yen)

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3■Operating revenue (left scale) ■Business profit (right scale)• Consignment of sales of newly built
condominiums and detached housings, etc.
• Insurance agency business

Property
Brokerage& CRE• Operation of real estate information website, etc.

FY20/339.1

40• Real estate brokerage and consulting business

20
15

9.0

20

D/E ratio

30.5%

Ａ-

Cumulative gross profit onsales of properties for the last
five fiscal years*

1.6 times

Japan Credit Rating Agency, Ltd. (JCR)Ａ

Approx. ¥388.0 billion*Cumulative gross profit on sales of properties from housing sales and property sales (Residential Development Business Unit, Commercial Real Estate Business Unit) for the last five fiscal
years•Human capital
Number of employees

7,176

Percentage of female
employees

Number of first-class licensed
architects

30.6％

Investment in training
per employee

281¥80,393•Manufactured capital, intellectual capital, social capital, natural capital, and customer base
Net lettable area (NLA)(offices, retail facilities)

Accumulated development
expertise

Product planning and design
capabilities

Number of residential
redevelopments projects
participated

Percentage of acquired environmental
certifications on properties developed inCommercial Real EstateBusiness Unit%
(excluding rental housings)

ESG asset management
evaluation

Fitness clubs evaluation

Condominium brandReal estate brokerage evaluation

Condominium management rating

Number of tenants(offices, retail facilities)

Approx. 913,000 m2
No.1

Nikkei, Inc.
Condominium Brand Survey

No.1

10

10

5

0

0

Approx. 60 years

Good Design Award for100

Oricon Customer
Satisfaction Report

No.1

Number of H T members

Number of institutional investors
customers through assets managementin Japan (excluding listed REITs)

Number of MEGALOS
members

Approx. 225,000

Approx. 900 tenants

Number of partnerships with financial
institutions through property brokeragebusiness

182,259 units

193

No.1

Woman Research
Customer Satisfaction

No.1“SumaiSurfin” Customer
Satisfaction Survey

Number of housings undermanagement

Approx. 24,500¥1,798.5 billion

GRESB 5 stars

Number of nomu.com
members

Approx. 129,000

Assets under management

18 years

Number of Nomura Real EstateGroup Customer Club members

1(Billions of yen)

30

77 companies

Approx. 144,000*The figures are for the fiscal year ended March 2020 or as of the end of March 2020. See P22-23 for notes on manufactured capital, etc.

Operating revenue(Billions of yen)700
FY12/3See pages 94-95 for the strategies and performance(Billions of yen)

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

Over ¥500 billion

FY20/3■Operating revenue (left scale) ■Business profit (right scale)

500

20

Over ¥300 billion

98.2• Management of condominiums, office buildings,
and educational and other facilities

90• Contract work for repair and tenant-related
construction work60

• Contract work for condominium anddetached housing renovation, etc.

30

• Cleaning business of condominiums,
office buildings, and other properties, etc.

0600(Billions of yen)120

Property &Facility
Management

100FY12/3See pages 92-93 for the strategies and performance

15

12.0

Shareholdersʼ equity ratio

RatingRating and Investment Information, Inc. (R&I)(Billions of yen)

20

• Asset management of real estate securitization
products including REITs and private funds, etc.

40

100

(Billions of yen)

4.7％

ROA

80
60

150

FY13/3¥550.1 billion(Billions of yen)200

FY12/39.1％

ROE

48.8 billion¥

See pages 22-23 [Sources of corporate value] for the details of business resources

30

10

0

250

• Development, leasing, and management ofoffice buildings, retail facilities, logistics facilities,
and hotels, etc.

4020FY12/3

Profit attributableto owners of parent[Input] Business resources cultivated by the Company to realize mid- to long-term value improvement

Shareholdersʼ equity

400• Development and sale of residences including
condominiums and detached housings, etc.

82.8 billion¥•Financial capital

Operating revenue by Business Unit/Business profit by Business Unit*1, 2, 3
See pages 86-87 for the strategies and performance

46.5%

100

0

0
FY12/3Business profit

50

200■Residential Development Business Unit
■Investment Management Business Unit
■Property & Facility Management Business Unit

676.4 billion¥

Operating revenue

野About村不the
動産
グルー
プEstateとは Group
NomuraReal

About the Nomura Real Estate GroupThe Nomura Real Estate Group’s businesses

FY20/38.5

400

676.4 billion

15

¥

10

300

Over ¥100 billion

200

5

100

0
FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/30*1 Business profit = Operating profit + share of profit (loss) of entities accounted for using equity method + amortization expenses of intangible assets associated with corporate acquisitions*2 Prior to FY18/3, figures are equivalent to operating profit.
*3 The figures for each fiscal year may differ due to business transfers, etc. For details, see the outline of consolidated financial statements, etc.

FY1957/3 FY1965/3

FY1970/3

FY1975/3

FY1980/3

High economic growth period—Bubble economy

FY1985/3

FY1990/3

FY1995/3

FY2000/3

Bubble burst—Recession in the
1990’s/Lost decade

FY2005/3

FY2010/3

Economic recovery—
Global financial crisis

FY2015/3

FY2020/3

Great East Japan Earthquake—
Increase in ESG values andprogress of globalization*The operating revenue before FY2004/3 is for Nomura Real Estate on a non-consolidated basis.

8

Nomura Real Estate Holdings, Inc.

Integrated Report 20209

CEO message

Our desire of “New Value, Real Value”

Building a better tomorrow by enriching people’s lives andhow they spend their time
Our Group Vision “New Value, Real Value”
I will explain our Group Vision that we crafted in 2016

Our Group Vision “New Value, Real Value”

CEO message

Estate Group.
We cherish this Vision and always keep it in mind in

CEO message

to provide a more clear understanding of the Nomura RealNew Value, Real Valueeverything we do in undertaking our business activities.
This Vision of “New Value, Real Value” is also our promise
to customers and society that “ through our real estatedevelopment and real estate-related services we will create
secure, safe, and comfortable urban development and enrich
the lives and times of people living in these communities toIntegrating all that is precious to people andcommunities, we build cities—dynamic stages thatconnect today with tomorrow’s possibilities, andembrace every moment of life’s pursuits. We create
new value, social value, and above all, real value.

create an even better tomorrow well into the future.”
We use this Vision as the basis for all our activities and aim for sustainable value enhancement. We have cherishedthe people who live and spend time in the communities.
Rather than merely developing high-quality towns and properties, we, as a group, also deeply consider the ways
customers can nurture their time and experiences after completion. We also think about ways to create enrichedcommunities where people can live and work securely, safely, and comfortably for a long term.
We strive to consistently offer new value through real estate development and real estate-related services thatenrich people’s lives and time. The Vision represents this desire. We must always pursue the Vision even in the current
environment with drastic changes. The Vision is concrete, and let us adapt changes and create new value.

The Group’s strengths

Competitiveness and business resources cultivated throughout
our history
P4-7 [The Nomura Real Estate Group’s history of challenge]

P22-23 [Sources of corporate value]

The Group’s four strengths
The Group traces its origins back to 1957 when the real estate business division of Nomura Securities was spunoff during Japan’s period of rapid economic growth. Along with leasing and managing the company’s retail outlets
and buildings, the Group started out by commencing large-scale residential development aimed at alleviating theWe will achieve remarkable growth through focus on ourvalue creation while fully leveraging the Nomura Real EstateGroup’s competitive strengths and business resources.

chronic housing shortage, an urgent social issue at that time. Since its inception, the Group has continued to grow byaddressing social issues through “real estate development” and “real estate-related services.”
As a key characteristic, the Group achieved growth driven by our unique business model. This model focuses onreal estate development and real estate-related services. The Development Sector develops such areas as housing
and offices based on the market-in approach and sells them to raise capital turnover and reinvest for growth. The
Service & Management Sector provides services as property and facility management and property brokerage tofurther enhance customer satisfaction and then continuing our involvement even after we sell the developed real

Eiji Kutsukake

estate. We have attained consistent growth by differentiating ourselves from industry competitors that have adopted astrategy of focusing on the leasing business by holding assets.

President and Representative Director,
Group CEO

10

Nomura Real Estate Holdings, Inc.

Integrated Report 202011

CEO message

We entered the field of real estate securitization in the early

The Group’s strengths• Development capabilities based on market-in
approach• Development and expertise of various typesof assets• Commitment to the quality of products andservices

fund management businesses such as Real Estate Investment
Trusts (REITs). Throughout our history, we have built a
distinctive corporate group that undertakes value creationby combining “development and service management”
excessively without depending on holding assets.
We used to face major upheavals in the Japanese
economy and the real estate market which derailed ourbusiness plans. Even during such challenging times, we neverabandoned our market-in approach of meeting the needsof customers. We also upheld our commitment to quality inproducts and services.
During Japan’s economic downturn in the 1990s after the collapse of the economic bubble, we concentrated
management resources on the housing sales business, for which there was a strong demand in society and has
high capital efficiency. During these tough times, we adhered to the market-in approach and commitment to quality
and built an “integrated development, sales, and management system” that still earns high acclaim. We also created
PROUD, that is still highly evaluated today. We were a forerunner of formulating housing brand strategy. Following our
public listing in 2006, we expanded business and emphasized our “market-in approach” and “commitment to quality.”This allowed us to develop and expand our portfolio of competitive products in various asset classes such as PMO(offices) and Landport (logistics facilities) in the property for sales business.
Consistently meeting the needs of society and customers by developing high-quality real estate and providing realestate-related services and realizing profits is the hallmark of our business that we have honed throughout our history.
We have defined the Group’s four strengths as “Development capabilities based on market-in approach,”“Commitment to the quality of products and services,” “Development and expertise of various types of assets,” and“Group synergy.” These are the major driving forces for realizing “New Value, Real Value.”
The impact of COVID-19 is set to dramatically reshape society and the ways of living. We must now consider ourcustomers’ wants and needs using our market-in approach and further demonstrate our commitment to quality. We
are confident to continue providing products and services that are popular with our customers amid new lifestyles andwork styles we call “post COVID-19 social environment.”

Strong business resources that underpins our businesses
To the present, the Group has steadily built up its business resources that underpin our business. We areenhancing various types of strong business resources in both financial and non-financial aspects. These resources
include 281 in-house first-class licensed architects who continuously take on the challenge of achieving high quality;
brands within various asset types, such as PROUD and PMO, which are highly applauded by customers; and ourproperty and facility management service that has been ranked No. 1 for customer satisfaction in condominium
management for over 11 years. Another invaluable business resource is our broad customer base built up over longyears. This includes approximately 130,000 members of the Nomura Real Estate Group Customer Club and over
220,000 users of the real estate information website (nomu.com).
Unless they are constantly upgraded, business resources cannot serve as a basis for meeting the expectations ofsociety. For example, securing new human resources who will take a key role for the Group business in the future isdifficult without parallel efforts to further promote diversity and bolster trainings for employees. Without being satisfied
with the current business resources, we must keep trying to improve them.

Backcasting from the future
P85 [Awareness of the external environment (opportunities and threats)]

P80-81 [Topic: Response to COVID-19]

Approach to a changing environment
As for my background, I worked in the securities industry business for about 30 years. When I assumed the helm
as the President of the Company, I was advised by numerous people that “the real estate business has a long timeline.
This means you need to manage from a different perspective than in the securities business.” I agreed, but at the

CEO message

CEO message• Group synergy

Business environment (opportunities and threats)

stage where we have recorded significant growth in real estatesame time, I felt a concern that this is too conservative and could hinder us from rapid changes in society.
From the planning and concept stages to the actual provision of real estate to the public, our business requires
a long lead time. For this reason, it is imperative that we always look forward and forecast future trends. In addition,in times or situations like today with the environment in a constant state of flux, we must simultaneously consider
strategies such as where to concentrate our investments and what actions to take at present. Otherwise, the Groupwill face risks of being left behind by changes. Forecasting to predict the future based on current conditions and socialchanges and backcasting that guides strategies we must adopt now based on these predictions will both be crucial
in the days ahead. In other words, in looking to the future real estate industry, we must further anticipate changes orascertain needs to proactively spur change and deliver new value to customers.
The Group has a proven track record of successfully, understanding and responding flexibly to shifts in theenvironment. After the bursting of the economic bubble, we accelerated asset turnover to jump-start new businesscycles that spawned opportunities for a fast business recovery and further growth. Moreover, following the global
financial crisis, we executed an M&A deal that made NREG TOSHIBA BUILDING (currently Nomura Real Estate
Building) a member of the Group, which added a stable leasing income structure to our business. We are enhancing
a strong financial base through various initiatives in times of major changes. We are confident that we are firmly
positioned to connect the current major changes to our next profit opportunities.

Important opportunities and threats that we must recognize
The long-term shrinking of Japan’s population poses a major threat to the housing sales business. Diversehousehold composition, people’s values, lifestyles, and work styles occur as a result of these changes. Thinking about
what steps we should take now to address them, we will be able to provide products and services that anticipate
these changes and create opportunities from threats.
Overseas markets also offer tremendous opportunities. In rapidly growing ASEAN cities, people are now seeking
quality in addition to quantity for housing and urban development. I regard this trend as a major opportunity for us.
This means the know-how we have cultivated in Japan has started to be accepted by those who are seeking moresecure, safer, and environment-friendly homes, and convenient and comfortable offices.
The recent spread of COVID-19 has drastically upended social conditions and the business environment.
COVID-19 is exposing people to extremely difficult circumstances in their daily lives in addition to creating great
economic risk. In view of this situation, the Group places top priority on the safety and security of executives,
employees, and people involved in our business. As prime examples, we launched various measures such as working
from home and promoting teleworking to ensure everyone can work energetically in good physical and mental healthand perform their jobs as smoothly as possible in this difficult environment.
During these times, we must of course thoroughly implement all immediate measures and agilely perceive
any possible changes in the situation. The possibilities we envision for the future are diverse. These include rapidtransformations in the ways people live and work, the advance of teleworking, the evolution of ICT, and theprogression of DX. Under these conditions, we must decide what action the Group should take. The thinking
embodied in Our Group Vision “New Value, Real Value” will serve as a cornerstone for these decisions. We need toask ourselves what exactly are the enriched lives and times that people will demand in the future. We must make ourbest efforts with anticipating these future demands.

12

Nomura Real Estate Holdings, Inc.

Integrated Report 202013

CEO message

Mid- to Long-term Business Plan and responses to social issues

Value creation by the GroupP26-27 [Four value creation initiatives]

P70-81 [Sustainability]

Four value creation initiatives
The four value creation initiatives under the Mid- to Long-

Looking at the future real estate business,
I believe we will increasingly need to
anticipate changes or create changes on
our own by grasping needs to provide newvalue to customers.

Four value creation initiatives

term Business Plan clarify the value that the Group creates as• Realization of enriched lifestyles and work styles

CEO message

CEO message

we take advantage of opportunities and transform threats into
opportunities.
We aim to generate both social and economic value by
leveraging the strengths and business resources nurtured
since our founding backed by the Group’s unique businessmodel. We will always consider and closely examine ourshort-term numerical targets and plans and be vigilant of the
major shifts in the economic environment triggered by the
spread of COVID-19. As we do so, we remain committed to• 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 andservices

realizing our aspired target over the long term.
A key issue will be responding to the diversification and sophistication of needs by developing distinctive assets
and improving the quality of services in anticipation of future changes.
In overseas business, we will leverage our know-how and value creation cultivated in Japan and deploy them in the
rapidly growing cities of Asia, where demand is now shifting from quantity to quality. Connecting this urban growth tothe enhancement of our corporate value is an extremely important measure.

such as urban-type compact towns and the Shibaura 1-chome District Project. Our value creation aims to enhancethe value of the town continuously working in unison with the local community. We will achieve the vision by enhancing
function of the town through creating safe and secure urban development and by the ongoing participation in town
management fostering the community. Through the realization of the four value creation initiatives, we will makeGroup-wide efforts to address the demands of society, work together to solve social issues, and ensure this leads tofurther business growth. In doing so, to address social issues, the Group has formulated the four key themes of “Safety/
Security,” “Environment,” “Community,” and “Health and Well-being” and established even more specific material
issues for social issues and set goals linked to business activities.
We intend to firmly recognize social issues from a long-term perspective that looks beyond 2030, the target year
for attaining the SDGs, and plan to present an ultra-long-term vision for the ways the Group can make contributions.

Initiatives toward social issues through value creation
Major risks that could undermine the sustainability of corporate activities include climate change such as global

Our unique business model

warming and the increase in and intensification of natural disasters as well as various social issues and changes suchas human rights and labor issues. A vital mission of companies is to contribute to the attainment of the Sustainable
Development Goals (SDGs) that address these social issues around the world. We believe we can take various actions
unique to the Group, which has solved social issues through our businesses.
The Group’s core business is real estate development and this means we must pay particular attention toenvironmental sustainability. Alongside reducing negative impacts on the environment, the importance of generating
positive environmental impacts through real estate development and real estate-related services are essential.
We are also moving ahead to reduce CO2 and to create and use renewable energy. To indicate these efforts,
we have set a target for 2030 of achieving a 30% reduction in CO2 emissions from real estate owned by the entire
Group compared with the FY14/3 level. We will redouble these efforts and aim to acquire Science Based Targets(SBT)*1 Initiative Certification that also commits to the environmental performance of real estate that we have sold. In
tandem with setting strict environmental standards during developing properties, we make Group-wide efforts such as
promoting various initiatives related to environmental, social and governance (ESG) matters for properties owned by
REITs and funds in the Investment Management Business Unit. We also have endorsed the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD)*2 in September 2020.
In 2019, we signed the United Nations Global Compact. Utilizing these opportunities, we intend to play an evengreater role in human rights and labor issues. Promoting closer communication with each stakeholder, including

Generating social and economic value through collaboration
between two sectors
P24-25 [Business model]

P38-41 [Interview with the CFO]

Two business sectors that create social value
Real estate is used over a long period of time and serves as the foundation of people’s lives. On the other hand,the preferences of people who live, work, and gather using the real estate change time to time. We must develop
high-quality real estate as well as keep providing real estate-related services that address these changes. This will
ensure that the Group consistently creates social value and attracts customers.
With the market-in approach, we will continue urban development through the Development Sector, whichdevelops distinctive real estate through its “commitment to quality,” and the Service & Management Sector, which
provides services such as investment management, property brokerage, and property and facility management. Thisis our unique business model that the Group has refined for over 60 years. With this model, we continue providing
value by flexibly responding changes in the social environment.

application of the Group’s CSR Procurement Guidelines, and focusing on coexistence and co-creation with thetrust of stakeholders, are above all essential to the sustainability of the Group. Regarding this point, we must pay

Creating economic value that exceeds the capital cost

particularly close attention and respond to issues pertaining to foreign technical intern trainees and the problems of
local residents related to timber procurement.
The Group’s value creation is evolving and expanding into large-scale urban development and area management

Companies need to raise funds through a variety means and deploy these funds efficiently to generate economic
value that exceeds the capital cost. The Group creates value and provides shareholder returns through a business*See P72 about SBI*1 and TCFD*2.

14

Nomura Real Estate Holdings, Inc.

Integrated Report 202015

CEO message

The Group creates value and provides
shareholder returns through a businessmodel that combines development profits
in the Development Sector with capitalefficiency and stable fee revenue in theService & Management Sector.

An assessment of the effectiveness of the Board of Directors, which was implemented for the fifth time, advised
further enhancing strategic discussions and building an even more efficient group governance system. We havealready launched efforts to address these issues.

Strengthening risk management
With regard to risk management, understanding the Company’s risk tolerance limit and thoroughly controlling risks
within this range will reduce the risk of loss of corporate value and lead to an improvement in it. In keeping with thisCEO message

CEO message

idea, the overall risk management body has been shifted from the Risk Management Committee to the Management
Committee directly under the control of the Board of Directors to raise the positioning. In parallel, we encompass
redefining risk categories and setting up defense lines. We also recognize that there are areas requiring further
improvement, such as devising more effective control methods. We will continue to promote ongoing initiatives in risk
management.
model that combines development profits in the Development Sector with capital efficiency and stable fee revenue in

The importance of human resources as our foundation

the Service & Management Sector.
By appropriately allocating resources to these two sectors, we will continue to achieve ROE exceeding the capitalStrengthening human resources as our foundation is also indispensable for improving corporate value. The Group

cost, balance growth investment with high returns to shareholders, and always maximize both social and economic

recognizes that employees are our most valuable and indispensable business resources and thus places greatvalue.

importance on the management of these human resources. We are implementing various measures toward realizing

As targets of our Mid- to Long-term Business Plan, our target for the total return ratio is approximately 40–50% forPhase 1 and ROA of over 5% and ROE of over 10% for Phase 2 and onward. We are making our utmost efforts to“wellness management” whereby all executives and employees can work energetically in good physical and mental
health to enable sustainable growth of the Company.
We also believe there is ample room for improvement in encouraging the active roles of employees. This includes

achieve these targets.

promoting the participation of women and responding for flexible work styles such as teleworking. We will continue totake our initiatives and creative efforts that enable our diverse human resources to maximize their abilities and workwith satisfaction.

Promotion foundation for sustainability

Initiatives for human resources and management structure
P55-69 [Corporate governance, risk management, internal controls, compliance/Information disclosure]P76-79 [Human resources]

We have positioned “human resources” and “management structure (corporate governance, compliance, risk

For stakeholders

To realize Our Group Vision “New Value, Real Value”

management)” as the foundation for promoting initiatives for sustainability that supports the continuity of our corporate
activities and are accelerating specific initiatives.

The Group has achieved growth through a distinctive business model that provides high-quality real estatedevelopment and real estate-related services. Looking ahead, we will realize remarkable growth through our ongoing

Corporate governancefocus on value creation while fully leveraging our competitive strengths and business resources.
Our Group Vision “New Value, Real Value” will remain solid even in the present drastic changes in economic

The Group aims for a monitoring-oriented supervisory system and has made efforts to continuously evolve its
corporate governance. As part of these efforts, the Group transitioned to a company with an Audit & Supervisory
Committee in 2015 and established an Advisory Committee Relating to Nominations and Compensation the following
year. External directors of the Company have experience in management, a high knowledge of global business, asconditions and the social environment arising from COVID-19. This will continue to be our philosophy and discipline as
our key to further growth.
I sincerely appreciate our shareholders, investors, and other stakeholders for their ongoing support and I hope you
to look forward to our sustainable growth.

well as extensive expertise in legal affairs and accounting. Board Members with such a wealth of knowledge havedeep discussions in a wide range of fields.
Turning to our compensation system for directors, in 2018 we introduced a share-based compensation systemthat evaluates mid- to long-term performance and measures as we make ongoing efforts to devise ways to maintaina long-term perspective and avoid a short-term orientation. In 2019, we also incorporated initiatives for environmental
and social issues into the performance evaluation of executives. In doing so, we have also clarified that the Group
must fulfill our role in undertaking business activities. This is also management’s commitment to promoting businesses
with an awareness of sustainability.

16

Nomura Real Estate Holdings, Inc.

Eiji Kutsukake
President and Representative Director,
Group CEO

Integrated Report 202017

Value creationby the Nomura Real
Estate Group
20 Value creation process
22 Sources of corporate value
24 Business model
26 Four value creation initiatives

Value creation by the Nomura Real Estate Group

Value creation by the Nomura Real Estate Group

Hamamatsucho Building and Hi-NODE
Shibaura 1-chome district is home to the Group’s large-scale, mixeduse development project currently underway. Regarding the Hinode
Pier on the east side of the Hamamatsucho Building as a tourism
resource, we opened Hi-NODE, a vibrant waterfront boat facility
complex where people can gather. We are endeavoring to enhancethe value of the area in its entirety.

18

Nomura Real Estate Holdings, Inc.

Integrated Report 202019

Value creation by the Nomura Real Estate Group

Value creation process

Our unique business model identifies areas in which the Group should engage in value creation activities by capturingsocial changes and utilizes sources of corporate value. We aim to resolve social issues through the creation of newvalue and to realize Our Group Vision “New Value, Real Value” by using our business model.

Sources of corporate value

Value creation

Our strengths cultivated over 60 years

Value creation target in the Mid- to Long-term Business Plan (FY28/3)

The Group’s strengths

Awareness ofexternal environmentP22-23

Resolving social issues through new value creation

Past
Awareness of external environment (opportunities andthreats) that will lead to the resolution of social issues
through the creation of new value

Group synergy

550.1 billion

D/E ratio

1.6 times

Shareholders’ equity ratio

Outcomes

communities,
Offices,etc.

Safety /Security

Safety /Security
Environment

Community

Community

Health andWell-being

Living388.0 billion

Approx. ¥Urban development andcommunity building
concerning the future of
the global environment
and local communities

Value creation throughreal estate development
Environment

Health andWell-being

Safety /Security

Environment

Community

Safety /Security

Health andWell-being

Development Sector(Residential Development/Commercial Real Estate)
Environment

Safety /Security

Community

Health andWell-being

Environment
Community
Health andWell-being

Environment

Gathering

Residential Development

1

Safety /Security
Environment

281

Investment in training per
employee¥

Health andWell-being

Environment

Environment
Community

Community
Health andWell-being

Environment

Health andWell-being

Environment

Safety /Security

Community
Health andWell-being

Service & Management
SectorEnvironment

Investment
Management

Property & facility management,
repair and tenant-related
Environment construction work

Input

No.

Sustainability promotion system

ESG asset management
evaluation*5

Number of the Nomura Real EstateGroup Customer Club members

Four key themes for sustainability P70-75

GRESB

Approx.

1

129,000

Number of nomu.com members

Number of MEGALOS members

Approx.

Approx.

144,000(The figures are for the fiscal year ended March 2020 or as ofthe end of March 2020.)

Nomura Real Estate Holdings, Inc.

Community

Community
Health andWell-being

Health andWell-being

Safety /Security

Safety /Security

Property Brokerage& CRE

Real estate brokerage

Environment
Community
Health andWell-being•Contribute to resolvingsocial issues throughbusiness

Related key SDGs defined by the Group

Environment

Property & Facility
Management

Safety/Security

dynamic stages that

Health andWell-being

P70-71

Environment
Community•Promote initiatives toaddress environmental
issues, such as CO2
emission reduction

Health andWell-being

Safety /Security

Health andWell-being

Community
Health andWell-being

P72-73

Environment

Community

Health and Well-being

Human resources Achieving wellness, promotion of diversity, etc.
Management structure Corporate governance/Compliance/Risk management

CO2 emission reduction target

moment of life’s pursuits.
We create new value,
above all, real value.

30 %(compared to FY14/3)

Key initiatives and indicators of economic value

ROE over

P76-79
P44-69and embrace every

Reduce byby 2030
per unit floor space•Achieve ROE that exceeds
cost of equity of 7-8%

Promotion foundation for sustainability

tomorrow’s possibilities

social value, and,Community

Environment

Community*1 Cumulative gross profit on sales from housing sales and property sales (Residential Development Business Unit, Commercial Real Estate Business Unit) for the last five fiscal years*2 PROUD was ranked first in 7 out of 10 categories in the Nikkei, Inc. 2019 Condominium Brand Survey.
*3 2020 Oricon Customer Satisfaction Report for real estate brokerage in the detached housing (sales) category

20(Investment Management/
Property Brokerage & CRE/
REIT, fund management
Property& Facility Management)

Environment

Safety /SecurityNo.

225,000

Key initiatives and indicators relating to social value

健康・
快適

Safety /Security

Safety /SecurityLe

1

Condominium management
satisfaction*4

5 stars

コミュ
ニティ

Safety /Security

Real estate brokerage
evaluation*3

1

Mixed-usedevelopment

Prosa pert
le y
s

No.

60 years

環境

as
in
g

•Manufactured capital, intellectual capital, social
capital, natural capital, and customer base

Approx.

安心・安全

Provision of real estate-related services

Safety /Security

Environment

Condominium brand evaluation*2

Key initiatives and indicators to be achieved throughvalue creation

Environment
Community

Health andWell-being

we build cities—
connect today with

Health andWell-being

Safety /Security

Health andWell-being

Community

Global expansion ofhigh-quality products
and services

Community

Retail facilities, etc.

80,393

Accumulated development
expertise

Safety /SecuritygNumber of first-class licensed
architects

30.6％

Safety /Security

Health andWell-being

Commercial Real Estate

Le
as
in

7,176

Community
Safety /Security

2

CommunityProsa pertle ysPercentage of female employees

Safety /Security

ResidentialProsa pertle ys

Number of employees

precious to people andWorking

Cumulative gross profit on sales ofproperties for the last 5 fiscal years*1

New Value,
Real Value
Integrating all that isP24-25

Input

30.5％

•Human capital

Creation of multifunctional
urban development toward
exceptional convenience,
comfort, and safety

Business modelthat allows sustainable urban development•Financial capital¥

Realization ofenriched lifestyles
and work styles

Input
P22-23“New Value, Real Value”

P36-4110 %*4 “SumaiSurfin” 11th Property Management Company Customer Satisfaction Survey ranking 2019*5 Nomura Real Estate Master Fund (NMF) and Nomura Real Estate Private REIT (NPR) obtained a GRESB Real Estate the highest 5 stars rating for three consecutive years

Integrated Report 2020

21

Value creation by the Nomura Real Estate Group

Value creation by the Nomura Real Estate Group

Commitment to the quality of
products and services

Business resources

Our Group VisionP26-27

Future predicted

Identifying the gap between
present and future(backcasting)Present

Development and expertise ofvarious types of assets

Shareholders’ equity

Four value creation initiatives

Mid- to long-termsocial changes(forecasting)

P85

Development capabilities based onmarket-in approach

VisionValue creation by the Nomura Real Estate Group

Sources of corporate value

Since its foundation, the Nomura Reals Estate Group has refined its strengths featuring a market-in approach
designed to connect customer needs drawn up on the spot to specific product development, a commitment to thequality of products, and various capital as well as a customer base that have been accumulated along with its history.
These initiatives are sources to create new values for the Group.
more than 60 years since its foundation, the Group has developed its four strengths while
The Group’s strengths: For
working to meet the expectations of its customers and society by tackling their issues.
競争優位性：当社グループは創業から60年超にわたり、お客さまや社会が抱える課題に真正面から向き合ってきた中で、Development capabilities
based on the market-in
４つの競争優位性を培ってきました。
approach

Development and expertise of various typesof assets

Commitment to quality of products and services

With a client-first approach, the Group has delivered new products
マーケットイン発想に基づく開発力

The Group has a long history of property sales since
it provided
幅広いアセットタイプでの開発実績・
ノウハウ

has gained
confidence from its customers and society, receiving highモノ・サービスに関する品質へのこだわり

and services based on needs and ideas inspired by continued
dialogues with customers and markets. The Group will remain「お客様第一」の精神に基づき、お客さまや市場との対話を続けることでcommitted to creating new added value for urban development
得られたニーズやヒントを基に、これまでにない新たな商品・サービスを
in the future, while addressing four
value creation initiatives (see
提供してきました。
P26-27) under the今後も中長期経営計画で取り組む４つの価値創造のMid- to Long-term Business Plan.
を通じて、未来の街づくりにつながる新たな付加価値
テーマ（→P26–27）
Development of PMOを生み出します。

多様な収益不動産の開発（累計※）5429

properties

properties

54棟
22
properties
22棟

29棟
92
properties
92棟*As of the end of March 2020
(including planned projects)※2020年3月末時点（計画中のプロジェクト含む）

P96 [ Major asset brands]
P96【主なアセットブランド】

Business resources: Various capital and customer base are assets that the Group has accumulated throughout its history.
経営資本：各種資本と顧客基盤は、当社グループが歴史と共に積み上げてきた財産です。
Financial capital

P100-101 [11-year financial data]

Human capital

P76-79 [ Human resources]

人的資本•Diverse human resources: 7,176 employees*3•D/E ratio: Approx. 1.6 times*
自己資本比率30％水準を維持した強固な財務基盤•Credit rating: Rating & Investment Information, Inc.(R&A): A-/倍※3Credit Rating Agency, Ltd. (JCR): A
Ｄ/Ｅレシオ 1.6
Japan
格付
：
格付投資情報センター（R&I）：Ａ-／日本格付研究所
JCRyears:）：Ａ•Cumulative gross profit on salesof properties
for the last 5（
fiscal•Percentage of female employees: 30.61%*
連結従業員数7,176人※3の多様な人材•Number of first-class licensed architects: 281*3
女性従業員比率 30.61%※3•Diverse human resources development program to secure※3
一級建築士数
281人
sophisticatedhuman
capital:
人的資源高度化に向けた多様な人材開発プログラム(Investment
in training per employee: ¥80,393)*3※3（従業員1人当たりの研修費用 80,393円）

約3,880億円※4
直近5カ年の売却粗利益累計額
Approx.
¥388.0 billion*4Interest-bearing debt/Shareholders’ equity ratio(Billionsof yen)
有利子負債／自己資本比率
1,000
（億円）

10,000
750

7,500
500

9,140

8,778

8,101

45
30

30.2
5,000
250

914.0

877.8

810.1

Shareholders’ (%)
equity ratio:
60
Approx. 30%（%）
自己資本比率
870.0
30%水準
60
45
8,700

30.0

30.2

29.9

30.0

29.9

30.5

2,500
0

FY19/3

FY20/3Long-term
2017 Short-term
2018
2019
Shareholders’
長期
短期 equity ratio (right scale)

2020

0

FY17/3

FY18/3

Percentage offemale employees

Investment in training
per employee(%)
女性従業員比率(Yen)
従業員
1人当たりの研修費用
90,000

（%）

40
30

（円）

29.75

30.76

30.61

29.75

30.76

30.61

79,984 80,393

90,00060,00030
2060,00030.5
3015

P76-79【人材】

340

59,482

79,984 80,393

30,000
15
0

10
0

0

0

（3月期）

（3月期）

0

FY18/3 FY19/3 FY20/3
2018

2019

2020

0

（3月期）

FY18/3 FY19/3 FY20/3
2018

2019

2020

自己資本比率（右軸）*1 Ranked first in 7 out of 10 categories in the Nikkei, Inc. 2019 Condominium Brand Survey*2 National Condominium Market Trend 2019 (Annual Report) by the Real Estate Economic Institute Co., Ltd.
*3 As of March 31, 2020
*4 Cumulative gross profit on sale from housing sales and property sales (Residential Development Business Unit, Commercial Real Estate Business Unit) in the last five fiscal years※1.
日本経済新聞社
マンションブランドアンケート
10項目中
7項目で第
1位を獲得 ※2. 不動産経済研究所 全国マンション市場動向2019年（年間まとめ） ※3. 2020年3月末時点*5Total
net lettable areaof offices and retail facilities 2019
underにおいて
the Group's
long-termownership※4.
直近5on
事業年度の住宅分譲および収益不動産（住宅部門、都市開発部門）における累計売却粗利益 ※5. 当社グループが長期保有するオフィスおよび商業施設の賃貸可能床面積の合計*6
Basedin-house research※6. 当社調べ ※7.「住まいサーフィン」第11回管理会社満足度調査ランキング2019 ※8. 2020年オリコン顧客満足度調査「売却 戸建て」の評価

22

Nomura Real Estate Holdings, Inc.

evaluations in terms of external evaluations. We maintain ourcommitment in a range of areas, encompassing from the supervision
創業時から培ってきた品質へのこだわりは、
お客さまや社会から確かな信頼of the construction process to the pursuitof stylishness and comfort.
を獲得し、各種外部指標においても高い評価を得ています。
建築工程におけThe Group
will transmit this concept into our human resources
る監理からデザイン性
・快適性の追求に至るまで、多様なシーンでこだわり
development, passing
this DNA on to future generations.
を持ち続けます。さらには、
この考え方を人材育成に結び付けることで、次の世代にDNAとして受け継いでいきます。

organizations within the Group in pursuit of value creation basedon a unique approach. This corporate culture has fostered an
当社グループは、
独創的な発想による新たな価値を生むために、一人ひと
integrated development,
sales, and management system, which
are
りが多様な役割をこなすとともに、
sources of corporate value in the組織同士が連携し合って成長を遂げてform of the synergy of the Group.
きました。そうした風土から生まれた「製・販・管一貫体制」
は、グループの総合力として、
Integrated 大きな価値の源泉となっています。
development, sales, and management systemin the condominium sales business
分譲マンションにおける「製・販・管一貫体制」

Received Good Design Award for 18 consecutive years
グッドデザイン賞18 年連続受賞

Residential Development Business Unit

用地取得

PROUD Ichigaya Sadoharacho
プラウド市谷砂土原町

Manufactured capital, intellectual capital, social capital,
natural capital, customer base
Manufactured capital【製造資本】•Net lettable area (NLA) (offices, retail facilities)*5: Approx. 913,000m2※5Intellectual
capital
約91.3万㎡
賃貸可能床面積（オフィス・商業施設）•Condominium development expertise established over the past 60 years;【知的資本】
quality management, design, and construction standards and instruction
約60年にわたり培ってきたマンション開発のノウハウとmanual
品質管理設計基準＆マニュアル•Productplanning capabilities and design competitiveness underpinned by
グッドデザイン賞
18年連続受賞の商品企画
・デザイン力Good
Design Awards
for 18 consecutive years•Visionary
creativity driven by design reviews and Nomura Real Esate Group
デザインレビューや野村不動産グループアワードを通してAwards
生み出される構想力•In the real estate securitization business, accumulated over 20 years of
不動産証券化事業における20年以上にわたる商品運用を通じて
know-how in diverse asset management and assets under management
蓄積されたノウハウと約1.8兆円の運用資産残高(AUM) totaling approximately ¥1.8 trillion【社会資本】
Social capital
マンションブランド、
不動産仲介、
マンション管理、
フィッ
トネスNo.1•Highly
trusted by stakeholders
including
condominium
brands,real estate
brokerage,
condominium management, and No.1 ranked fitness clubs
評価などステークホルダーからの高い信頼•Highly
trusted as the top player No.1
in the※numberof residential redevelopments
6の信頼性
住宅系再開発案件取り組み数
projects participated*5

主な外部評価Main external evaluation

ブランド評価Ranked No. 1 for
fiveconsecutive years
5年連続
Oricon real estate brokerage
オリコン(salesfor detached housing)
9
不動産仲介
（売却
戸建て）
Three
consecutive
years*

3年連続
GRESB
NMF, NPRGRESBNMF、NPR

Planning
and企画
design・設計

運営管理部門Construction
and施工・
supervision監理P86-95 [ Strategies by Business Unit]※7

11 consecutive years
No.1“SumaiSurfin” Condominium No.1
「住まいサーフィン」
management satisfaction survey rankings
マンション管理満足度
First received award*8※8※9
in FY2019
2019
年度初受賞
No.1
No.1
Woman Research
No.1
No.1
ウーマンリサーチ
Fitness*7

No.1*10 フィットネス

※10

Services

P96 [ Major asset brands]

P97【主な開発実績】

Natural capital【自然資本】•Utilizingof environment evaluation challenge sheet in development for
housingsales (PROUD)
分譲住宅開発（プラウド）
における環境評価チャレンジシートの運用•Percentageof acquired
environmental
certifications of properties developed
収益不動産（賃貸住宅を除く）の新規開発における環境認証取得率
100％
in Commercial Real Estate Business Unit
※10
資産運用部門におけるGRESB
5
star
獲得
•Obtained a GRESB 5 stars rating*10 in Investment Management Business Unit
【顧客基盤】
Customerbase•Abilityさまざまなビジネスの展開によりもたらされる多様なユーザーとのto contact diverse customers leveraging diverse business engagement
タッチポイント

Diverse customer base*3※3
多様な顧客基盤
Living
住まうWorking
働く

Number of Nomura Real Estate Group
野村不動産グループ
CustomerClub members:
カスタマークラブ会員数

Number of tenants
テナン
ト数facilities):*11(offices,
retail※11（オフィス・商業施設）

Number of nomu.com members:
ノムコム会員数

Number of H¹T members:
Ｈ¹Ｔ会員数

129,000

Approx.
約

129,000人

225,000

225,000人

No. 1 for*1 11Ranked
年連続

Property andfacility

management サービス
運営管理

P97 [ Major development projects]
P86-95【部門別戦略】
P96【主なアセットブランド】

Approx.
約
※1

Sales

販売

Ranked 1st in the condominium brand rankings*1
マンションブランドランキング 全国1位 ※1
Ranked 3rd in the number of condominium supplied*2
マンション供給戸数ランキング 全国3位 ※2

PROUD CITY Itami
プラウドシティ伊丹

No.1

Property & Facility Management Business Unit

住宅部門

Land
acquisition

Ranked first in seven
10項目中7項目で第1位
out of 10 categories
PROUD brand assessment「プラウド」

59,48230,00020
10

The Group has achieved growth, with each employee performing

a diverse role while leveraging collaborative efforts among
グループ連携・総合力

製造資本、知的資本、社会資本、自然資本、顧客基盤

P100-101【財務11カ年データ】
財務資本•Sound financial base with a shareholders’ equity ratio of around 30%
3With our strong commitment to quality since our founding, the Group

Value creation by the Nomura Real Estate Group

Value creation by the Nomura Real Estate Group

Social issues and needs•While there
are social issues to rebuild small and medium-sized
PMOの開発
properties built under the old earthquake resistance standards, the社会課題
ニーズ
market has・
few
adequate small and medium-sized buildings with highquality.
旧耐震設計の中小ビルの建替えが社会課題となる中で、•Certaindemand to use an entire floor, similar to large-scale “class A”
高品質な中小規模のビルが少ない
officebuildings in terms of quality and specifications
大規模ビルと同等の機能性とグレードのビルで、Featuresand strengths of PMO
1フロア全体を使いたい•Floor plan offering high individuality mainly for each tenant to use an
PMO の特徴・優位性
entire floor basically
PMO Nihonbashi
１フロア
1テナントを原則とする独立性の高い設計•Stylishexterior
designHonchoスタイリッシュな外観デザイン•Entrywith security gates
セキュリティゲートを設置したエントランス
PMO日本橋本町

condominiums for the first time in 1963. With its expertise and themarket-in approach, the Group has developed a wide range of
1963年に第1号のマンションを供給して以降、これまでに多くの分譲実績
assets with added value such as PMO mid-size high-end offices,を積み重ねてきました。そこで培われたノウハウとマーケットイン発想にGEMS urban retail facilities, and Landport large-sized high-perforPMOvalue」、都市型商業施設の基づき、
中規模ハイグレードオフィスの「 newmance logistics
facilities, thereby offering
to customers.
、大規模高機能型物流施設の「Landport」など、付加価値を伴う「GEMS」
幅広いアセットを開発し、
新たな価値を提供していきます。
Development
of diverse
properties for sale (cumulative*)

Group synergy

Number of housings under management:
住宅管理戸数

182,259

182,259戸*9Gathering憩う

Number of MEGALOS members:

144,000

メガロス会員数
Approx.

144,000人

約

900
900社

Approx.
約

395 companies;
39524,500
社
約24,500人
individuals

Approx.
Approx.

Number of institutional investor
customers
through assets management
国内資産運用を通じた機関
in 投資家顧客数
Japan (excluding
listed REITs):
REIT除く）
（上場

193
193機関

Number of partner financial institutions
through brokerage business:
仲介ビジネスを通じた金融機関との提携数
77

77社*7 “SumaiSurfin” 11th Property Management Company Satisfaction Survey ranking 2019*8 2020 Oricon Customer Satisfaction Report for real estate brokerage in the detached housing (sales) category*9 Fitness Club Satisfaction Ranking, SANKEI LIVING SHIMBUN “Woman Research” conducted in 2020
*10 Nomura Real Estate Master Fund (NMF) and Nomura Real Estate Private REIT (NPR) obtained a GRESB Real Estate the highest 5 stars rating for three consecutive years※9.Number
2020年実施のサンケイリビング新聞社
における「女性が選ぶフィットネスクラブ利用満足度」*11
of tenants occupying in offices 「ウーマンリサーチ」
and retail facilities under
the Group’s
long-term ownership※10. 野村不動産マスターファンド投資法人（NMF）、野村不動産プライベート投資法人（NPR）は、GRESBリアルエステイト評価において3年連続で最上位の「5 star」を獲得※11. 当社グループが長期保有するオフィスおよび商業施設に入居するテナント数

Integrated Report 202023

Value creation by the Nomura Real Estate Group

Business model

Value creation through real estate development

We are working on resolving social issues through the creation of new values even in post COVID-19 social
environment, making full use of our unique business model. This business model enables us to engage continuously
in community building thanks to urban development by the Development Sector and services offered by the Service& Management Sector.
The Group creates value through real estate development in the Development
Sector, leveraging its four strengths, including a market-in approach thatprioritizes living, working, and gathering and a commitment to quality, whichfacilitates the approach. We have the same attitude toward value creation
through the real estate-related services in the Service & Management Sector.
One of the major features of the Group is continuously engaging in urban
development and creating value even after selling and development ofproperties.
Even in post COVID-19 environment, we are creating new value by
tackling social issues based on the market-in approach that meet needs,
such as gathering while maintaining social distancing and diverse ways ofworking including working from home. Through these initiatives, we focus
on the four key themes of Safety/Security, Environment, Community, andHealth and Well-being.

Development Sector

Service & Management Sector(Residential Development/Commercial Real Estate)(Investment Management/Property Brokerage & CRE/Property & Facility Management)

Residential
Development
Business Unit

Investment
Management
Business Unit

Commercial
Real EstateBusiness Unit

The Group’s real estate development business has always been ahead of thetimes, focusing on the needs of the people who live, work, and gather in thearea. Our major strength and characteristic are urban development through thedevelopment of various assets enabled by the market-in approach, where
primary consideration is given to people spending time in the area or property,
and a commitment to quality, which facilitates the approach.
In the Development Sector, we created PROUD and PMO, among manyother distinctive and competitive assets. Based on our experience andexpertise obtained through developing these assets, we create new value,
which reflects the market-in approach and a commitment to quality.

Working
Offices,etc.

Safety /Security
Environment
Community

Provision of real estate-related services

Property Brokerage& CRE
Business Unit

Property & Facility
Management
Business Unit

For sustainable urban development, it is indispensable to maintain and improvethe value through continued engagement in urban development, whether wehold properties or not. In the Service & Management Sector, each business
unit continues to contribute to sustainable urban development by providing realestate-related services.
Consistently providing high-quality services improves the value of real estateand significantly contributes to increasing the competitiveness of the Group,
including the Development Sector, and seizing business opportunities.

Safety /Security
Environment
Community

Health andWell-being

Health andWell-being

LivingSafety /Security
Environment

Value creation by the Nomura Real Estate Group

Value creation by the Nomura Real Estate Group

Community

Safety /Security

Health andWell-being
Environment

Safety /Security

Community
Health andWell-being

Environment
Community

Safety /Security

Health andWell-being

Environment

Residential

Gathering2

Community
Health andWell-being

Safety /Security1

Safety /Security
Environment
Community
Safety /Security

Safety /Security

Health andWell-being

Environment

Environment
Community

Community
Health andWell-being

Environment
Community
Health andWell-being

Safety /Security

Health andWell-being

Environment

Retail facilities, etc.

ty
per
Pro sales

Community
Health andWell-being

Environmentgasin

Value creation in a variety of areas

Community

Le

Safety /Security

Health andWell-being

Environment
Community

Safety/Security

HealthEnviron- Commu- andnity Well-being
ment

Health andWell-beingty
per
Pro sales

Safety /Security
Environment
Community
Health andWell-being

Development capabilities basedon the market-in approach

Mixed-usedevelopment

Safety /Security
Environment
Community

Environment

Health andWell-being

ing
eas

L
ty
per
Pro sales

Nomura Real Estate Holdings, Inc.

Health andWell-being

Safety /Security
Environment
Community
Health andWell-being

Safety /Security
Environment

Community
Health andWell-being

PROUD TOWER Sagamiono, a condominium, and bono SAGAMIONO, a large retail facility, werecompleted in 2013 in a large redevelopment project around Sagamiono Station. They are 100%
fire-resistant buildings and have improved disaster prevention functions. Boasting features
necessary for daily life, including retail and medical facilities, the project has significantly
increased convenience in the area.
By capturing demand for diverse work styles, we opened a satellite-type shared office, H¹T, in
the retail facility to meet the needs for people working in the area they live. That accelerates
urban development based on the market-in approach.

Community
Health andWell-being

Property & facility management,
Safety /repair and tenant-related
Security
Environment construction work

The market-in approach and the commitment to quality, etc., as ourstrengths enable us to resolve social issues through value creation.

(PROUD TOWER Sagamiono × bono SAGAMIONO × H¹T)

Safety /Security
Environment

Real estate brokerage

Community

Group synergy

Large-scale mixed-use redevelopment projectManagement of REIT and funds

Safety /Security
Environment

Commitment to the quality of
products and services

1

Health andWell-being

Safety /Security

Community

Development and expertise ofvarious types of assets

24

Safety /Security

Community
Health andWell-being

2

Shared office H1T inbono SAGAMIONO(Opened in 2020)

Acquires a development opportunity in cooperation with Group REIT

P35

PROUD TOWER Sagamiono,
bono SAGAMIONO

Nomura Real Estate Master Fund sold a retail facility with declined competitiveness to Nomura Real Estate Developmentwith the preferential negotiating rights. Nomura Real Estate Development developed the facility, and it changed to alogistics facility with advanced functions, which enabled the REIT to incorporate competitive assets. In terms ofdevelopment by Nomura Real Estate Development, it identified the local government’s needs for job creation by ourown market-in approach and the characteristics of the location as well, and has transformed the facility into a
cutting-edge logistics facility where many people can work.
In addition to the high competitiveness of its assets, the Group is further creating new value, including creating jobs
in each area and reducing the environmental impact through solar power generation on the roof in cooperation with
the Development Sector and the Service & Management Sector.

After redevelopment:
Landport Higashinarashino
Redevelopment,
sold to REIT

Sold tothe sponsor

Before redevelopment:
Ito Yokado
Higashinarashino Store

Integrated Report 202025

Value creation by the Nomura Real Estate Group

Four value creation initiatives
Resolving social issues through new value creation

The Group is developing our business by making the best use of the Group’s strengths we have cultivated over theyears. We aim to create social and economic values through resolving social issues by implementing the Four Value
Creation Initiatives set forth in the Mid- to Long-term Business Plan.

Realization of enriched lifestyles and work styles

Multifunctional urban development toward exceptional convenience,
comfort, and safety

The Group provides highly original products and services such as PROUD and PMO based on a market-in approach. At atime when lifestyles and work styles are changing at an accelerated pace and values are diversifying due to the impact of
COVID-19, the market-in approach is one of the Group’s major strengths. We aim to provide products and services thatstay ahead of the needs of our customers and the changes in society.

Business expansion of H¹O (small office with services)

Case

The Group has actively promoted the development of “urban-type compact towns” and mixed-use redevelopment withdiverse urban functions mainly for residences, but also for retail and medical facilities. Changes in lifestyles are accelerating
due to the advent of the aging society and the diversication of household composition, as well as the impact of COVID-19.
Against this backdrop, we will create new value in response to the growing need for multifunctional urban development thatoffers safe and secure, comfortable, and convenient facilities within walking distance.
Case

We are developing H¹O (small offices with services) to respond to the demand for more flexible offices, such as the needs of the start
up companies, law offices, and other professional offices with a select few staff, the demand of new project bases of large
companies, and the needs of satellite offices in terms of preventing the spread of infection. With the H¹T (satellite shared office), we
propose a new work style that combines core offices, working from home, and satellite offices based on “HUMAN FIRST” concept,
which gives first priority to the realization of an office environment where people working there can maximize their performance.

Mixed-use development with community-based retail facility SOCOLA and residences with over 700 units

SOCOLA Musashi-Koganei Cross is a vibrant, bustling community-based retail facility consisting of some 50 stores, ranging fromgroceries to fashion, sundries, and lifestyle support. On the upper levels is PROUD TOWER with a total of 716 units (including
condominium units not for sale). This is a prime example of an urban-type compact town, which is a multifunctional urban development with superior convenience and comfort, such as direct elevator access from the residential floors to the retail floors, and fully
outfitted open spaces. We will continue to promote similar developments.

Satoru Nakano
Development &Management Division II
Nomura Real Estate Development

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

Global expansion of high-quality products and services
We are steadily expanding global business opportunities by harnessing our know-how and strengths that the Group has
cultivated in Japan over the years. We will expand value creation globally through the provision of high-quality products
and services, particularly in development businesses in Asian countries, which are moving into a phase where the demandfor quantity will give way to the demand for quality.

The Group is creating urban development that reduces the burden on the environment and can add value continuously in bothtangible and intangible elements, as well as engaging in far-sighted urban development that is environmentally friendly andcontributes to local communities by achieving community building. We aim to enhance the value of “urban development where
people live” by activating local communities, looking ahead to the spread of new lifestyles based in neighborhoods where people
live owing to the increase in working from home and teleworking.
Case

The KAMEIDO PROJECT equipped with community facilities and the latest environmental features

The KAMEIDO PROJECT is a large mixed-use development project with a total of 934 residences, a large retail facility accommodating more than 100 tenants, an extension building for an elementary school, and multiple open spaces. As the developer of thisproject, the Group is planning to introduce ACTO, which aims to activate the local community, by maintaining a space for shared
use with the town and allocating an area designer. Through daily management and other operations after completion by the Group,
we will also promote initiatives to ensure that people can live and gather comfortably for many years to come.
OPEN

Value creation by the Nomura Real Estate Group

Value creation by the Nomura Real Estate Group

Natsumi Sato
Commercial Real Estate Development &Management Division I
Nomura Real Estate Development

Case

Business expansion in Asian countries and quality management improvement initiatives in Thailand

We are contributing to increasing the value of individual businesses by utilizing our know-how cultivated in Japan over the years inareas such as residential development, serviced apartment development, and investment and property management business ofoffice buildings in ASEAN countries and China. In Thailand and the Philippines, KAIZEN teams were formed with the involvement ofJapanese general contractors, local design companies, and other external companies. Based on the concepts of “localization,”“organization,” and “structuring,” each project is scrutinized at every phase, from planning and design to sales and completion of
construction, with the aim of managing costs and processes appropriately and improving quality and merchantability.

Open and gather

Five activities for community development
aimed at activating the community of theentire area and district

Yuichiro Ono
Residential Development Division
Nomura Real Estate Development

26

Nomura Real Estate Holdings, Inc.

Floor is ownedby the Group andthe space is opened
for shared use
with the town

❶Set up a “Shared community” space❷Assign an “Area Designer” who connects
peopleACTION❸Establish a community action group named Move and spread out“Community company (tentative name)”❹Launch a “Community website” as a basefor virtual interactions❺Commence activities before property completion

Assign “Area Designer”
and implement initiatives
to activate the area

In the future,utilize IoT to achieve
town to town
cooperation

CONNECT
Connect and enjoy

Masaya Hirao
Overseas Business Division
Nomura Real Estate Development

Integrated Report 202027

Growth strategyof the Nomura Real
Estate Group30 Message from the COO andthe Chairman of the Sustainability Committee
36 Mid- to Long-term Business Plan overview
and progress
38 Interview with the CFO

Growth strategy of the Nomura Real Estate Group

Growth strategy of the Nomura Real Estate Group

Musashi-Koganei City Cross(Musashi-Koganei Station South Entrance 2nd District Urban
Redevelopment Project)This is a large-scale redevelopment project encompassing PROUD
Tower Musashi-Koganei Cross, a condominium, and SOCOLA
Musashi-Koganei Cross, a retail facility offering diverse stores andfacilities convenient for everyday life.
The Group is promoting multifunctional and highly convenient urban
development through developing urban-type compact towns such as
this project.

28

Nomura Real Estate Holdings, Inc.

Integrated Report 202029

Growth strategy of the Nomura Real Estate Group

Message from the COO
and the Chairman of the
Sustainability Committee

To achieve the Mid- toLong-term Business Plan

With an eye toward the next 30 or even 50 years, we are aspiring togrow together with society and to continue being a corporate entity that
contributes to achieving a sustainable society.

Seiichi Miyajima
Executive Vice President andRepresentative Director,
Group COO

In April 2019, the Group announced its new nine-year Midto Long-term Business Plan, concluding in the fiscal year
ending March 2028. Under the Plan, we specified our FourValue Creation Initiatives: Realization of enriched lifestyles
and work styles; multifunctional urban development toward
exceptional convenience, comfort, and safety/security; urban
development and community building toward the future of
the global environment and local communities; and global
expansion of high-quality products and services. The initiatives
serve as our guideposts for reaching our goals of “building
cities—dynamic stages that connect today with tomorrow’s
possibilities” and “embracing every moment of life’s pursuits.”
In addition, the Development Sector, which develops awide range of assets, and the Service & Management Sector,
which continues to generate value by providing related services
after property development, play key roles in our businessmodels. Our plan is to grow earnings over the nine years byexecuting our Four Value Creation Initiatives, and upholding
the mid- to long-term targets of achieving ROA of 5% or overand ROE of 10% or over. We will promote our unique business
management defined by high capital efficiency and asset
efficiency.
After we had formulated the Mid- to Long-term Business
Plan, COVID-19 broke out, precipitating drastic changes inour society, lifestyles, and the economy on a global scale. In

In 2016, I was appointed as the Chairman of the CSR
Committee (the Sustainability Committee from April 2020) of
the Nomura Real Estate Group, and in the following year as
its Group COO to oversee the business execution of the entire
Group. For me to be concurrently responsible for businessexecution and sustainability sends out a message to bothwithin and outside the Group, that sustainability is inseparably
integrated with every aspect of the Group’s business, andthat we are determined to resolve social issues through ourbusiness activities and promote a sustainable society, while
also securing growth as a corporate entity.
The Group assumes an important social responsibility as acorporate entity engaged in real estate development and related
services provision. Needless to say, it is crucial to be profitable
as a company. However, if we are to continue growing byoffering value to society, it is critically important for us todevelop properties that generate long-standing value, without
fixating on short-term earnings. Furthermore, we must keep
providing essential real estate-related services that maintainand raise the value of cities. Our basic stance is to perpetually30

Nomura Real Estate Holdings, Inc.

enhance the value of cities.
From a long-term perspective, this stance leads to building
trust in the Group and its brand value, which in turn, reducesbusiness risks and generates new business opportunities andearnings. I myself have experienced this firsthand during mylong engagement in the real estate development business.
In the Group’s real estate projects, it takes many years
to construct the buildings and subsequently complete urban
development, including the creation of local communities.
To enable people to lead a rich life at home and at work andgather, the Group needs to meet its key challenge of achieving“Sustainable Cities and Communities,” which is also one of the
Sustainable Development Goals (SDGs) upheld by the United
Nations. In other words, we will create safe and comfortable
cities and communities that are friendly to all human beingsand the natural environment, as well as resilient against
disasters. Through our high-quality real estate development andrelated services, we will continue offering diverse value to ourcustomers and society, and also enhance our corporate value.

P36-37 [Mid- to Long-term Business Plan overview and progress]

response, we will flexibly review our strategies and profit plans
for the immediate future, but will not make any major changes
to our mid- to long-term business strategies under the Plan.
The Plan has clarified that the Group aims for its property
sales business, leasing business, and service & managementbusiness to account for 40%, 20%, and 40% of its totalbusiness profit, respectively. This is a key strategy for the entire
Group to achieve its targeted profit, ROA, and ROE under thePlan.
Our property sales business is centered on housing sales
and property development for sales an area in which the Groupholds a strong competitive edge. Our service & managementbusiness mainly generates earnings, not by using assets,
but from fee revenues received in exchange for services weprovide, such as investment management, property brokerage& CRE, and property & facility management. By increasing
the proportion of profits generated by each of the property
sales business and the service & management business to
40% of the total, we enhance asset efficiency. With regard to
our leasing business, which generates stable cash flows but
may drive down asset efficiency, we will build a better leasing
asset portfolio while modulating its profit at 20% of the totalbusiness profit. Needless to say, we will continue to grow all
businesses, pushing them forward by setting targets in view of
their respective business environment.

P84 [Business at a glance]

P85 [Awareness of the external environment (opportunities and threats)]

P86-95 [Strategies by Business Unit]

P99 [Overseas business initiatives]

In the fiscal year ended March 2020, we reported a businessprofit of ¥82.8 billion, ROA of 4.7%, and ROE of 9.1%— solid
results that exceeded our initial forecast. Since the beginningof 2020, some businesses such as our fitness clubs and hotels
were affected by the COVID-19, but the shortfall was more thancompensated for by strong performances displayed by otherbusiness units across the Group, including the rise in the grossmargin ratio for the housing sales business in the Residential
Development Business Unit, realization of unrealized gains
achieved by property sales appropriately tuned to the market
environment in the Commercial Real Estate Business Unit, andthe stable growth of the Service & Management Sector.
In light of these financial results, the business units will adopt
the following policies.

Residential Development Business Unit
The Residential Development Business Unit is required togain stable earnings in the mature market in Japan by providing
diverse forms of housing and services that cater to changing
lifestyles and work styles and continue to be attracted bycustomers.
In Japan, prominent changes are seen in the family structure

due to an increase in the number of dual-income and single
households, both young and senior. The spread of COVID-19
has increased the number of people working from home andteleworking, transforming how they live and work, which is also
expected to accelerate the transformation and diversification of
housing needs.
The Group has already embarked to provide new productsthat meet the changing and diversifying values and residential
needs of our customers. We will pursue the market-in approachand commitment to quality to the maximum possible extent
and provide high quality housing that meets the varied needsof diverse customers, including single, dual-income, and senior
households as well as families with one or more children, byoffering a wide selection of floor areas, room layouts, facilities,
and locations.
We are also strongly committed to multifunctional andhighly convenient mixed-use urban development that provides
solutions for customers’ preferences for the convenience ofdaily life such as shopping and childcare and quick accessto transportation. Station-front redevelopment and rebuildingin the Tokyo metropolitan area and regional core cities andthe development of urban-type compact towns equippedwith a wide range of the essential facilities necessary for

Integrated Report 202031

Growth strategy of the Nomura Real Estate Group

Growth strategy of the Nomura Real Estate Group

Business results for FY20/3
and initiatives going forward
Enhancing corporate valueP26-27 [Four value creation initiatives]

Growth strategy of the Nomura Real Estate Group

Message from the Group COO and Chairman of the Sustainability Committee

daily life and functions are also businesses drawing on theGroup’s strengths. We are thus making dedicated efforts inurban development that offer safe and comfortable living to all
generations.
The large-scale mixed-use development KAMEIDOPROJECT currently underway is an urban development project
aimed at offering superior environmental performance, safety,
and comfort in harmony with the local community, an approachwith the Group's strengths. Encompassing housing, retailfacilities, and a school on the premises, the project has been
well received by local residents and customers, and has been
enjoying strong sales.

Commercial Real Estate Business Unit

(Investment Management Business Unit, Property Brokerage& CRE Business Unit, and Property & Facility Management
Business Unit)
The Service & Management Sector aims to increase its profit
to 40% of the Group’s total profit in the fiscal year ending March
2028, the final year under the Mid- to Long-term Business
Plan. To achieve this target, the sector essentially maintains
stable growth and ambitiously takes on new challenges. The
Investment Management Business Unit is steadily expanding
its assets under management by leveraging the Leasing Value
Chain established in collaboration with the Development Sector.
The business unit is also exploring growth opportunities throughM&A of overseas asset managers such as Lothbury Investment
Management (UK), which joined the Group in November 2018.
The Property Brokerage & CRE Business Unit is further
strengthening its services using ICT, including the nomu.com
real estate information website. The business unit will continue
expanding its business collaboration with Nomura Securities
and local financial institutions, aiming for further growth.
For the Property & Facility Management Business Unit,
the key strategy is to maintain and enhance the quality ofcompetitive assets developed by the Development Sector
and add value by providing services. A good example of its
initiatives is “Attractive 30.” It is a scheme for working with the
Residential Development Business Unit from the designingstage, to reduce life cycle costs* of condominium buildings
by extending the useful life of them. We utilize the large-scale
repair work product “re:Premium” developed by the Unit.

Overseas business
In April 2020, we established the Overseas Business
Division. We accelerate the growth of overseas business byharnessing our experience and expertise acquired in Japan. At
the same time, we manage the wide-ranging risks involved in it.
We will primarily focus on housing sales and leasing
businesses mainly in Southeast Asia and China, where there
is prominent economic growth and development. In housing
sales, we establish joint venture firms with leading real estatedevelopers in each country or city. Because it is important tounderstand and respond to legal systems, we are promoting
our businesses specific to each country and to meet the needsof prospective residents. Our aim is to integrate their expertisewith the Group’s property development quality control andefficient sales methodologies. We will also invest in and manage
high-quality office buildings featuring high specifications andsuperior management levels desired by Japanese and global
corporations.
While continuing to keep an eye on the impact of COVID-19
globally, we will leverage the experience and expertise
accumulated in Japan to develop our overseas business into
one of the Group’s core businesses by taking advantage of thegrowth momentum of the cities in which we do business.

Initiatives for sustainability

P70-71 [Sustainability]

In addition to pursuing short-term profit, companies arecalled on to tackle diverse social issues including thoserelated to the environment, human rights, and labor toward
the goal of achieving a sustainable society as upheld by
the Paris Agreement and the SDGs. Investments based on
environmental, social, and governance (ESG) indexes are
expanding, as exemplified by the incorporation of ESG issues
in the investment practices set forth by the Principles for
Responsible Investment. Companies must endeavor to resolve
various social issues to help achieve a sustainable society andfulfill their responsibility to future generations.
Although these social issues pose risks to the Group’sbusiness continuity, we can reduce the risks and generate
new business opportunities by accurately ascertaining anddealing with their impact on our business. In addition, wemust also promptly and appropriately announce the Group’sbusiness activities and initiatives to resolve social issues
through value creation in order to get better understanding
from our stakeholders. To this end, we should work harder toacquire relevant certifications, disclose related information, andstrengthen our dialogue and engagement with stakeholders.
In our sustainability efforts, we have identified current andfuture social issues and are working on them under four key
themes: Safety/Security, Environment, Community, and HealthP72-79 [Environment, Safety/Security, Community, Health and Well-being, Human resources)]and Well-being. Targets have already been set for each key
theme as well as for the specific material issues identified
toward which efforts are underway. Going forward, sustainable
management will be further incorporated into our Group-widebusiness strategy so that we can develop our business from a
mid- to long-term perspective.
In each business unit of the Group, we are pursuingsustainability more in line with our business activities both in our
day-to-day business operations and in our endeavor “to build
cities—dynamic stages that connect today with tomorrow’s
possibilities—and “to embrace every moment of life’s pursuits.”
One example is “Yukai-full,” a unit-by-unit central airconditioning system that takes advantage of the double floor
structure of condominiums. Adopted for the first time in the
KAMEIDO PROJECT, the system provides temperaturecontrolled air around the clock throughout the entire living
space including the hallway and restrooms, mitigating the risk ofheat shock and heatstroke, offering comfort and peace of mind,
and saving energy. Also exemplifying our sustainability efforts
are our “Attractive 30” initiative aimed at reducing the life cycle
cost of buildings and ACTO, an urban development initiative inwhich we strive to activate the surrounding local communities
as well as the towns we create as a real estate developer in an
all-encompassing manner.

Case of the Group’s initiatives toward achieving a sustainable society KAMEIDO PROJECT
Growth strategy of the Nomura Real Estate Group

Growth strategy of the Nomura Real Estate GroupThe core businesses run by the Commercial Real EstateBusiness Unit are the leasing business and the property forsales business.
In the leasing business, we opened TOKYO TORANOMONGLOBAL SQUARE, an office building in the Toranomon
area, where a newly opened subway station is driving rapidchanges in the area, and SOCOLA Musashi-Koganei Cross,a retail facility located in a mixed-use redevelopment site infront of Musashi-Koganei Station, in June 2020. In addition,other large-scale mixed-use development projects are steadily
underway in Shibaura and Nihonbashi, which are scheduled tobe completed in or after the fiscal year ending March 2025. In
preparation of the commencement of operations of such fineproperty stock, we will continue with our strategic replacementof leasing assets from a mid- to long-term perspective to build
a high-quality leasing business portfolio, while selling someassets at the appropriate timing to realize unrealized gains.
in April 2019, we set up the Shibaura Project Division toclarify the responsibilities involved in the Shibaura 1-chome
District Project, one of the largest projects in the Group’s
history, and push the project forward with greater impetus.
The Group is marshalling all its capabilities to undertake
measures befitting this core project, such as applying our longaccumulated expertise in urban development, conducting area
management activities to engage the local community, andaiming for environmental performance at the highest level.
In the property for sales business, we develop diverse andunique property assets under such brand names as PMO,
GEMS, and Landport and sell them to the Group’s REITs orothers. The source of our competitive edge in this business lies
in our market-in approach that focuses on the needs of property
users and our commitment to the quality of our products andservices. Drawing on such strengths, we produce competitive
assets with high added value, which to a certain extent arms us
with resilience against short-term market changes. Considering
the temporary market confusion caused by COVID-19 and the
expected recovery process from it, we will flexibly adjust the
speed and volume of our property sales in the short term. In themid- to long-term, we will work to maximize profit and aim forhigh asset efficiency.

Service & Management Sector

The Group upholds Safety/Security, the Environment, Community, and Health and Well-being as its four key themes foradvancing sustainability. In each of our business operations, we are accelerating the development of proprietary products
and services conducive to a sustainable society.
KAMEIDO PROJECT
Scheduled completion: Fiscal year ending March 2022
Major use: Housing (934 units), retail facility (approx. 28,000 m2), etc.

This large-scale mixed-use redevelopment project is welllocated at a two-minute walk from Kameido Station, with aretail facility. We will introduce ACTO, an all-encompassing
urban development initiative that activates the broader
community including the surrounding areas. Furthermore, by
utilizing our proprietary “Yukai-full” and “Attractive 30,” we aim
for urban development in harmony with the neighborhood
community that offers superior environmental performance,
safety, comfort, and convenience.

Initiatives to achieve a sustainable society through business activities

Attractive 30
A central air-conditioning system that takes advantage ofthe double floor structure to provide temperature-controlled
air throughout each residential unit
Reduces the riskof heat shock andheatstroke▼
Safety/Security

Providestemperaturecontrolled air
throughout eachresidential unit▼
Health andWell-being

Reduces CO2
emissions

Adopts highly durable materials and construction methods
in constructing new buildings and introduces “re:Premium”
to prolong the cycle of large-scale repair work
Alleviates anxiety
and economic
burden of life cycle
cost

Reduces waste
by decreasing thefrequency of largescale repair work

All-encompassing urban development initiative to activate
the broader community including surrounding areas
Community
activatedby an area
designer

Communal spaceused for multiple
purposes▼
Health andWell-being

▼

▼

▼

▼

Environment

Safety/Security

Environment

Community

News release: Announced “Yukai-full”(in Japanese)
https://www.nomura-re.co.jp/cfiles/news/
n2019111501652.pdf

News release: Announced “Attractive 30”(in Japanese)
https://www.nomura-re.co.jp/cfiles/news/
n2018082701466.pdf“ACTO” website (in Japanese)
http://www.acto-nreg.jp/* Life cycle cost: The total cost of a property throughout its life including repair work

32

Nomura Real Estate Holdings, Inc.

Integrated Report 202033

Growth strategy of the Nomura Real Estate Group

Message from the Group COO and Chairman of the Sustainability Committee

Our urban development projects offering superior
environmental performance, safety, and comfort inharmony with existing local communities are well received
by neighborhood residents as well as our customers. By
continuing to develop people- and earth-friendly products andservices, we will achieve a sustainable society through ourdiverse business activities.
In April 2020, to step up our sustainability efforts in closer
coordination with our business across the entire Group, weestablished the Sustainability Management Department, whichplays a central role in strengthening collaboration between
the Board of Directors, the Sustainability Committee and eachBusiness Unit. The Group’s compensation plan for directors
incorporates, as one of the assessment criteria, the level ofsustainability target achievement in the respective businessfields they oversee.
As a measure against the particularly pressing issue ofclimate change, we set, in the form of a non-financial key
performance index (KPI), a Group target of reducing CO2
emissions by 30% compared with the fiscal year ended March2014 level by 2030. Going forward, we are stepping up ourefforts to address climate change and human rights issues.
Also for climate change, we will expand the scope of ourexisting CO2 emissions reduction targets for Scopes 1 and 2
to include Scope 3, revise our mid- to long-term target towardthe 2050 Zero Emission goal, and obtain approved Science
Based Targets (SBT)*1. As property sales account for a highpercentage of the Group’s operating revenue, we are aware

We are taking Group-wide measures against COVID-19,
giving top priority to securing the health and safety of
our employees, customers, tenants, suppliers, and otherstakeholders. When the Japanese government issued an
emergency declaration and prefectural governments made selfrestraint requests, we responded by closing our MEGALOS
fitness clubs, all our housing sales galleries, and all the “Nomura
no chukai + (PLUS)” retail branches. The Group has long
upheld wellness management with the aim of offering a work
environment where all employees can work energetically,
accommodating diverse work styles including working fromhome and teleworking and flexible working so as to place
the health and safety of employees first. Anticipating a postCOVID-19 world, we intend to further develop our wellness
management.
On the business front, thanks to the Group’s solid financialbase sustained by our policy of maintaining the shareholders’equity ratio at 30%, our future investment for growth andlong-term projects remain stable even in the face of market
confusion, a downturn in business confidence, and the ensuing
short-term decline in financial performance resulting from the
COVID-19 woes. While keeping a close eye on economic
trends and the real estate market, we can adapt our strategies

P80-81 [Topic: Response to COVID-19]

as necessary.
Looking back over our history, we can see that the Group
has taken advantage of significant environmental changes toexpand its business and achieve growth. Economic crises
trigger enormous changes in the environment, which spawn
new businesses. The Group’s PROUD condominium brand andPMO (premium mid-sized office) brand were also created andfostered amid such adversities. The prevalence of teleworking
that allows employees to work regardless of their time andplace and the diversification of the office environment will
provide new business opportunities for the Group’s H¹O small
office with services and H¹T satellite shared office. Meanwhile,on the housing front, the growing number of persons working
from home and teleworking is expected to increase the timethey spend at home and in their local neighborhood, leadingthem to increasingly value their local communities. Such trends
will provide the Group with ever more opportunities to advanceits community building and area management schemes thatengage the surrounding areas in addition to the developmentareas.
In this time of difficulty, the Group will draw on its market-in
approach and commitment to quality, which are its strengths,
to take decisive steps in business to gain new opportunities.

New offices based on the market-in approach

Meeting the needs ofworkers in small teams
Small officewithservices

Staffed reception

We analyze the needs of small businesses, in which
productivity directly affects financial performance, andprovide offices with facilities and services that help
maximize the “Potential of their workers.” The extensive
facilities and services for shared use enable tenantcompanies to streamline their leased space and reduce
their initial cost, helping them flexibly expand their networkof business sites.

Secured private space

Shared meeting room

Catering to diversifying
work styles and the needfor higher efficiency
Sharedsatellite
offices

Spacious open space

Diverse development projects including construction of H1O
dedicated type and single-floor offices (Major projects)

It is becoming increasingly important for people to secure
workplaces where they can work comfortably andproductively regardless of the location or infrastructure of
their offices. Placing great value on “Workers’ precious
time,” we are developing our network of shared satellite
offices, including in station-front retail facilities, in order tooffer convenient and comfortable workplaces that serve as
workers’ “second office.”

Meeting room where
guests can be invited

Private booth

Satellite offices with convenient accessTokyo metropolitan area

●Offices inserviceOmiya

29 offices
Ikebukuro
Tachikawa

Chiba

Shinjuku
ShibuyaOtemachi

Sagamiono

Other areas
H¹O Kanda(to open in 2020)

H¹O Toranomon(to open in 2021)

Mishima

Yokohama Kawasaki

15 offices○Partner offices

Shinagawa

H¹O Nihonbashi Kobunacho(opened in 2020)●Offices to beopenedSendai
NagoyaUmeda
Namba
Honmachi

20 offices(As of August 24, 2020)

Growth strategy of the Nomura Real Estate Group

Growth strategy of the Nomura Real Estate Group

Response to COVID-19

of our serious responsibility for properties after they havebeen sold as well as properties we own. We will also further
promote the concept of Net Zero Energy Houses (ZEH)*2,
promote the use of renewable energy, and make environmental
efforts from a long-term perspective by taking measures
after sales of properties as well as in the development phase.
Furthermore, Nomura Real Estate Asset Management, which
manages real estate funds such as J-REITs at the Investment
Management Business Unit, announced its support for the
Task Force on Climate-related Financial Disclosures (TCFD)*3
recommendations in July 2020, and the Company itself alsoannounced its support in September 2020, in order moreclearly to express our stance, which could lead to reducing
business risks and obtaining new business opportunities byassessment and analysis on risks and opportunities of climatechange.
In 2019, we signed the United Nations Global Compact toexpress our commitment to resolving social issues concerning
the environment, human rights, labor, and other matters to help
achieve a sustainable society. In addition, we jointly worked
with our suppliers on industry-wide material issues, including
problems responding to the Technical Intern Training Act inJapan and local residents involved in timber procurement.
Deeming that our relationship of trust and collaboration with our
suppliers constitutes the foundation of the Group’s business
continuity, we will practice our CSR Procurement Guidelines
more exhaustively and strengthen our engagement with our
suppliers.

For further growth
While consistently valuing the bonds with customers throughthe development of high-quality products and services, theGroup is continuously enhancing its corporate value andcompetitiveness by creating new value toward the goals of“building cities—dynamic stages that connect today withtomorrow’s possibilities” and “embracing every moment of life’s
pursuits.” Furthermore, I am convinced that we will generate
new business opportunities that will produce a virtuous circle.
Unexpectedly faced with such a drastic change causedby the COVID-19, we are now reexamining the impact on our
Mid- to Long-term Business Plan. However, we will remaincommitted to our business strategy of maintaining a high asset
efficiency on the back of the growth achieved in our property
sales business and the service & management business andthrusting forward our urban development projects. With an eye
toward the next 30 or even 50 years as a real estate group, weare aspiring to grow together with society and to continue beinga corporate entity that contributes to achieving a sustainable
society. We will live up to the expectations and trust of ourcustomers, shareholders, suppliers, employees, and all otherstakeholders toward a bright future society.

Seiichi Miyajima
Executive Vice President and Representative Director,
Group COO

See page 72 for details on *1 (SBT), *2 (ZEH), and *3 (TCFD).

34

Nomura Real Estate Holdings, Inc.

Integrated Report 202035

Growth strategy of the Nomura Real Estate Group

Mid- to Long-term Business Plan overview and progress

The Group is promoting its Mid- to Long-term Business Plan (FY20/3-FY28/3), which was announced in April 2019.
The Plan aims to achieve the four value creation initiatives as well as maintain and enhance high asset efficiency andsustainable profit growth by leveraging awareness of the external environment (opportunities and threats) as well as
the Group’s strengths and business resources that it has cultivated since the Company’s inception.
Awareness of the external
environment (opportunities
and threats)

Mid- to Long-term Business Plan/Business strategies
Strategies bybusiness unit

P85

Major development projects inprogress

P86-95•Residential Development P86-87
Business Unit
•Commercial Real EstateP88-89Business Unit
•Investment Management P90-91
Business Unit
•Property Brokerage & CRE P92-93
Business Unit
•Property & Facility
P94-95
Management Business Unit

The Group’s strengths/
Business resourcesP22-23

P98

Four value creation initiatives under
the Mid- to Long-term Business Plan

Financial and capital policies
Achieve a balance between profit growth and shareholder returns. The total return ratio is targeted to be 40–50% in Phase 1.
Mid- to long-term targets
Asset efficiency

Capital efficiency

Shareholder returns (Phase 1)

ROA:

ROE:

Total return ratio:P26-27

5% or more 10% or more

• Realization of enriched lifestyles and work styles

Approx.

40–50%

FY20/3(Results)

Phase 1
(FY20/3‐FY22/3)

Phases 2 & 3(FY23/3‐FY28/3)

ROA

4.7%

Approx. 4-5%

5% or more

ROE

9.1%

Approx. 8-9%

10% or more

• Multifunctional urban development toward exceptional
convenience, comfort, and safety

Overseas business initiatives• Urban development and community building toward the futureof the global environment and local communities

P99• Global expansion of high-quality products and services

Investment plan
Accelerate new investments while increasing asset turnover, controlling net investment, and increasing asset efficiency.
(Billions of yen)

Profit plan (business profit)

End of
FY19/3

Realize sustainable profit growth while maintaining high asset and capital efficiency.
FY20/3(Results)

FY22/3(Phase 1)

FY25/3(Phase 2)

FY28/3(Phase 3)

82.8

85.0

100.0

120.0–140.0

Residential Development Business Unit

24.9

30.0

36.0

Commercial Real Estate Business Unit

39.2

33.0

36.0

Service & Management Sector

24.4

28.0

35.0

Investment Management Business Unit

7.1

9.0

12.0

Investment

—

14.0

Recovery—Business profit bybusiness unit*(Billions of yen)

9.1

Property Brokerage & CRE Business Unit

11.0

Property & Facility Management Business Unit

8.1

8.0

9.0

Adjustments

(5.6)

(6.0)

(7.0)

Deve
lop
m
e

Business profit
FY20/3¥82.8 billion

r
cto
Se
nt

32%

40%

43%

25%

Property Sales
Business

Leasing
Business

Service & Management
SectorService &Management BusinessProfit classification

Development profit

Leasing profit

Fees

Recovery of capital

Short termLong term–

Profit fluctuation

High

Low

Low

Development Sector

Business profit
FY28/320%

Expand businessRealize development profits Build a competitive portfolio
through development and through the development of opportunities through M&A
sales in the short term, both valuable leasing properties and partnerships, in addition
to utilizing the Group’s
in Japan and overseas
and strategic property
business stocks
replacement

Mid- to long-termtargets

Expand overseas business profit ratio to 15-20% of total business profit in Phase 3 by capturing overseas growth markets.
Business development

Overseas platform

Business expansion in existing business areas

Establishment of local offices

Thailand, Vietnam, the Philippines, China and the UK

Business profit
FY28/3Business in new areas
Target countries in terms of market size,
growth potential, and stability

Global network
Expansion through M&As, capital alliances

36

Nomura Real Estate Holdings, Inc.

Capital and business allianceswith local companies
Overseas human resource development

FY20/3(Results)

Residential Development Business Unit
Investment

—

297.3

1,100.0

1,250.0

1,250.03,600.0

Recovery—257.4

1,000.0

1,200.0

1,250.03,450.0

164.4

550.0

650.0

700.0

1,900.0

125.2

400.0

500.0

550.0

1,450.0

Total
investment¥5.5
trillion

Total
recovery¥4.9
trillion

Net investment¥0.6 trillion

Total investment(of whichoverseas)
Total recovery(of whichoverseas)

—

461.7

1,650.0

1,900.0

1,950.0

5,500.0

—

29.9

50.0

100.0

150.0

300.0

382.6

1,400.0

1,700.01,800.0

4,900.0

3.3

0.0

50.0

100.0

150.0

Total balanceof assets*

1,759.4

1,801.2

2,000.0

2,200.02,400.0—*Total balance of assets is the assumed total assets balance as of the end of the last fiscal year of each phase. Since the investment/recovery plan only shows the figures of the Residential
Development Business Unit and Commercial Real Estate Business Unit, the change in the total balance of assets does not match the calculation result from total investment and total
recovery.
*It does not reflect the change in the classifications of overseas business as of April 1, 2020 from the Residential Development Business Unit and Commercial Real Estate Business Unit to
Other.

Strategic investment
In addition to the investment plans described above, we are making strategic investments for future growth.
In the fiscal year ended March 2020, we acquired an additional shares in Nomura Real Estate Building (formely NREGTOSHIBA BUILDING) and made it a 100% subsidiary.

ROA: 5% or more ROE: 10% or more

Overseas business strategies

Overseas businessratio
15-20%

Total

Major investment goals

Expand business in Service &Management Sector and overseas

Develop business in new fields

Gain external expertise and resources

Risk management

Business risks
Monitor risks related to the business environment,
financial markets, laws and regulations

Stress tests

Impact of COVID-19
The Plan was formulated in April 2019 and does not take into account the impact of the spread of COVID-19. As of the end of
September 2020, we are scrutinizing the impact on the profit targets for Phase 1 (FY22/3).

Confirm soundness of shareholders’ equity ratio
and business balance based on assumed risks

Integrated Report 2020

37

Growth strategy of the Nomura Real Estate Group

Achieve a business portfolio that combines high asset efficiency and profit stability.

r
cto
Se
nt

Growth strategy of the Nomura Real Estate Group

Optimizing our business portfolio

40%

Phase 3Total

Business portfolio strategy (profit structure)

Dev
elo
pm
e

Phase 2

Commercial Real Estate Business Unit

*Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions*It does not reflect the change in the classification of overseas business as of April 1, 2020 from the Residential Development Business Unit and Commercial Real Estate Business Unit to Other.

●Property Sales Business●Leasing Business●Service & Management Business

Phase 1

Growth strategy of the Nomura Real Estate GroupInterview with the CFO

Q

Please assess performance of the Group for
the fiscal year ended March 2020.

Q

The Mid- to Long-term Business Plan calls forhigh capital efficiency. What is the reason forand background of this policy?

the importance of future prospects that are based on thecharacteristics of the real estate industry. The management of
the Group is imbued with a culture of steadily observing themarket, objectively ascertaining the Company’s own strengths

In Japan, there are Japanese Real Estate Investment

and weaknesses, and taking in investors’ opinions. We regard

Business Plan (the Plan) that runs from the fiscal year ended

Trusts (J-REITs) and other several fund schemes which arethese features as the foundation of our corporate governance.

March 2020 to the fiscal year ending March 2028, and the fiscal

also suitable for long-term holding of real estate thanks toyear ended March 2020 was the first year.

preferential tax breaks. The Group also manages Nomura Realownership structure of leasing assets in Japan and the required

Under the Plan, we will target ROE of over 10% and ROA of

Estate Master Fund (NMF), which is top-ranked in the size

returns in terms of cost of equity, we believe that on a businessover 5% in the medium term and will work to create corporateof assets under management in J-REITs, and Nomura Realprofit basis, a balance combining 40% for the property sales

value that exceeds cost of equity. We will improve ROE by

Estate Private REIT (NPR), an unlisted REIT. We think that it is abusiness, 20% for the leasing business, and 40% for the service

increasing ROA while preserving financial soundness with ourrational approach to separate developer arms and leasing asset& management business is an optimized business portfolio

discipline of maintaining a level of 30% for the shareholders’holding entities. This change in ownership structure would be aover the mid-to long term. Through this combination, we will

equity ratio.

main stream in Japan as well.

strive for ROA of over 5% and utilize financial leverage with the

Looking at our consolidated business results for the fiscal

In terms of risk/return, the cost of equity of REITs engaged

year ended March 2020, business profit increased 4.0% fromin the long-term holding and management of leasing assets isthe previous fiscal year to ¥82.8 billion and profit attributablearound 3-5%. However, developers are required higher cost of

to owners of parent increased 6.6% to ¥48.8 billion. Theseequity due to their development risk. As a developer, we believe

increases were driven by an improvement in the gross profit

it is our duty to leverage our experience and expertise to takemargin in the housing sales business in the Residential

mainly real estate development risks and to generate ROE

Development Business Unit, realization of development profit

that exceeds cost of equity which is 7-8%. Even though weand unrealized profit in the Commercial Real Estate Businessdescribe this as high capital efficient management, in reality thisUnit, and solid growth in the three business units comprising

is only “highly efficient” compared with domestic developers up

the Service & Management Sector. Meanwhile, ROE wasto the present. When looking globally we must still improve our

uncertainties that are difficult to forecast (as of September

9.1%, ROA was 4.7%, and the shareholders’ equity ratio

capital efficiency even further.

30, 2020). We monitor changes in social trends and assume

was 30.5%, as each of these indicators progressed following

flexible business portfolio.”

and the asset value on the balance sheets. For these reasons,

For example, realizing development profit and unrealized

delighted with these acclaimed results.

holding a certain level of excellent leasing assets is essential.

profit by property sales will be a pillar of the Group’s business

100

6

5.1

4.7

4.7

3

25

0

FY18/3

FY19/3

FY20/3

ROA

ROE = Net profit/Shareholders’ equity (average over the fiscal year)
ROA = (Operating profit + Non-operating profit) / Total assets (average over the fiscal year)

38

80

75

50.6

41.4

28.9

Nomura Real Estate Holdings, Inc.

best timing for selling them. Assuming that property priceleasing business, and service & management business thatfluctuations are cyclical, asset fire sales based on only a short-have different risk/return characteristics. We will commit to highterm perspective are not a good idea. The Group maintains

asset efficiency and capital efficiency while maintaining stability

financial soundness with a shareholder’s equity ratio at theby constructing an optimized business portfolio and continuing

30% level. This means we have the option of ascertaining theto manage our size of balance sheets as we keep a close

environment and deciding independently whether to hold or sell.

watch on business opportunities and market trends.

We believe that effectively utilizing this option is also important.

Q

Q

30.5

100

80

46.5

75

47.3

25

30.1

FY19/3

FY20/3

FY21/3(Forecast)■Annual cash dividends per share (left scale)
Dividend payout ratio (right scale)

Could you explain what is an “optimized
business portfolio”?

Risk management is essential for securinghigh returns. What are the Group policies?

500FY18/3model. In view of this, we must ascertain whether it is the(%)(FY20/3–FY22/3)

Total return ratio:
Approx. 40–50%

70

To balance these, we will build a portfolio that combines our
three businesses consisting of the property sales business, thePhase 10

FY17/3
ROE

75
50

4.7

multiple scenarios for real estate price trends that affect asset

cash dividends and the acquisition of treasury shares. We are

(Yen)

9.1

The impact of COVID-19 on the real estate business includes

values. This is an environment in which we should truly “build a12
8.9

Please describe your approach to the current
changes in the business environment.

continuity, we must also be aware of the stability of cash flows

Shareholder returns

9.4

Q

procurement encompassing credit ratings as well as business(%)

9

over 10%.

Plan, we achieved a total return ratio of 46.5% as a result of

Director, Group CFO

10.1

On the other hand, from the perspective of debt

shareholders’ equity ratio at the 30% level to attain ROE of

the Plan. For shareholder returns as well, as we targeted the

Makoto Haga

ROE/ROAAs I explained previously, considering changes in the

Total return ratio (right scale)

Total return ratio = (Total amount of dividends + Total amount of acquisition of treasury
shares) / Profit attributable to owners of parent
Dividend payout ratio = Total amount of dividends / Profit attributable to owners of parent

We regard “optimized” as “flexible to appropriately respondto market changes,” and this encompasses future forecasts.
Our business portfolio should be changed through market

Risk management is a means for sustainably maximizing
corporate value.
To properly manage the risks we must assume, for the asset

adaptation and forward-looking approaches. We believe this willside of our business portfolio we carry out risk management

allow us to deliver high performance to our investors.

using the Value at Risk (VaR) approach, which quantifies the

There are numerous companies that lacked this flexibility

amount of risk in each business. This is a method to put stressand have fallen by the wayside. The Group implements its Planon each business and assume the maximum losses based onover a long term spanning nine years because we recognize

an analysis of historical data for the changes in macro markets

Integrated Report 2020

39

Growth strategy of the Nomura Real Estate Group

Growth strategy of the Nomura Real Estate GroupBy building a flexible business portfolio, wewill promote both investment for growth andshareholder returns through highly efficientmanagement.

The Group is promoting a nine-year Mid- to Long-term

Growth strategy of the Nomura Real Estate GroupInterview with the CFO

Q

What is your thoughts on shareholder returns?

strategy from the dual perspectives of capital and real estate

has become increasingly important for both companies andmarkets.

investors.

The market situation is now changing drastically due to

For shareholder returns, we set a total return ratio of
approximately 40-50% in the Phase 1 period of the Plan (upto the fiscal year ending March 2022). We will strike a balance

The Group operates businesses that are directly connected

the impact of COVID-19. From now on, we can keep growing

to people’s lives and society. Our business growth is always

by grasping these changes and adapting to the environmentaligned in the same direction as our contributions to resolve

flexibly and actively.

social issues responses and ESG initiatives will become one

The Group has earnestly taken in the investors’ opinions andimportant “return” to investors.

between investment for growth and shareholder returns throughreflected feedback in business activities. In my communications

profits generated by high capital efficient management.

with investors recently, I feel strongly their clear intention toand making social contributions through the Group’s businesses“change society through ESG investments.” Social responsibility

and will work to earn the trust of our investors.

During my dialogue with investors, I am often asked whether

As CFO, I will continue to commit to achieving profit growth

we prioritize investment for growth or shareholder returns. I
always tell them that in the real estate industry, we can achieveboth.
Investment for growth by non-real estate companies such

ROE logic tree

as manufacturers are usually for facilities with low liquidity
and in the Group’s business and compare this with the amount

like manufacturing equipment and plants as well as for R&D,

of shareholders’ equity. In other words, VaR is one basis forand recovery of these investments takes a long time. In

setting the Group’s shareholders’ equity ratio standard at thecontrast, investment for growth in the real estate industry is for

30% level.

investment in developing properties, which can be a productConcurrently, impacts on cash flows are also subject to risk

itself. When we sell property after completion, we recover the

management. Real estate developers are involved in the transfer

investment amount in a relatively short span. Thus, we canof large amounts of funds through their investments andreinvest as well as provide shareholder returns with the realized

recoveries. For this reason, we also carry out risk management

profit.

that includes cash management.

continually expands the balance sheets. We are confident the

procurement environment. In response to the risk of interest

Group’s business model, which centers on the property sales

rate hikes, we are taking advantage of the current low interest

business and realize development profits, is a rational strategy

rate environment and have moved ahead with the conversion

for the balance of investment and shareholder returns.

average loan maturities. Both the ratio of long-term maturities

and high total return ratio. In order to achieve them, we should

and fixed-rate loans to current interest-bearing debt are 97.5%.

be a company that consistently generates profits. In the fiscal

We are also executing hybrid financing in this environment thatyear ending March 2021, I expect COVID-19 will have ais conducive to various means of financing.

significant impact on our businesses, and we forecast declines

Regarding the fund procurement risk, we are assuming

in revenue and profits. Despite this, we have announced thata worst-case scenario due to COVID-19 and have issued

we will maintain cash dividends at the same level. I believe wecommercial papers and already executed commitment line

have clearly demonstrated our policy of emphasizing stableagreements to keep funds at a level higher than in normal

shareholder returns as well as the soundness of the Group’s

times.

financial base that enables these shareholder returns.

Interest-bearing debt/Shareholders’ equity ratio(Billions of yen)

1,000
914.0

870.0

Shareholders’ (%)
equity ratio at 60
the 30% level

45

Q

What are your thoughts on your role as Group
CFO and the director in charge of investor
relations.

Property Sales BusinessLeasing Business

Service & Management
Business
Fees

Profit classification

Development profit

Leasing profit

Capital recovery

Short termLong term̶Profit fluctuation

High

Low

Low

ROA

High

Low

Very highProfit composition ratio

40%

20%

40%

Equity story balancing growth investments and shareholder returns
Total return ratio
40–50%
Net
profitTargetROE 10%Retainedearnings

ReturnReturnGrowth inequity

FY

FY+1

Net
profitRetainedearnings

TargetROE 10%

1.95

1.70

1.80

Total investment¥

5.5 trillion

Total recovery

1.40

¥

4.9 trillion
Net investment

500

30
30.2

30.0

29.9

Within Japan’s real estate industry, the Group has devised

250

15

0

0

high capital efficient management, realizing development profits

¥
2.40

2.20

2.00

1.75

0.15

0.20

0.25

the unique form of a developer that includes concentrating on

30.5

and unrealized profit, and emphasizing shareholder returns
FY17/3■Long-term

40

FY18/3■Short-term

FY19/3

FY20/3

Shareholders’ equity ratio (right scale)

Nomura Real Estate Holdings, Inc.

along with articulating a clear capital policy. I have long engaged

FY19/3in the asset management business and corporate planning.
With such backgrounds, I have promoted the Group’s business

FY22/3Phase 1

■Total assets■Investment

FY25/3Phase 2

■Recovery• Distribute profits generated throughhigh captal efficient management toinvestment for growth and shareholder
returns in a balanced manner• Control increase of shareholders’equity by retained earnings toapproximately 5% annually

P37 [Mid- to Long-term Business Plan overview and progress; investment plan]

Choose properties for salefrom the entire portfolio.
1.90

Growth inequityFY+2Investment plan that focuses on balance sheet management

1.65

POINTS

Total return ratio
40–50%

Growth in profit

EquityIn this manner, the Group emphasizes high capital efficiency

810.1

Financial discipline
Shareholders’ equity
ratio at the 30% level

Equityof floating-rate loans to fixed-rate loans and the extension ofService & Management
Sector

Net investment

FY28/3Phase 3

0.6 trillion

POINTS• Control an increase in the balance
sheets to an annual rate of approximately
5% to improve assets efficiency overthe medium term and to maintain theshareholders’ equity ratio at the 30%
level• Pursue both growth investment that
does not miss business opportunities
and investment recovery that realize
development profits at appropriate
timing while paying attention tomarket conditions

Integrated Report 2020

41

Growth strategy of the Nomura Real Estate Group

rate hikes and the risk of unexpected changes in the fundP36 [Mid- to Long-term Business Plan overview and progress; business portfolio strategy]

Development Sector

EquityGrowth strategy of the Nomura Real Estate Groupmodel that continuously holds the developed assets andBuilding a portfolio that strikes a balance between
high asset efficiency and profit stability(profit composition ratio)

ROA ofover 5%

however, it is difficult to realize both of these using a businessrisk management for two types of risks, the risk of interest

750

ROE ofover 10%

I should point out that even in the same real estate industry,

As for the liability side, we believe it is crucial to undertake

877.8

Cost of equity
7-8%

Sustainability/ESG
44 Dialogue between the Chairman of the Board of
Directors and an External Director
48 Roundtable discussion with External Directors
52 Directors and Executive officers
55 Corporate governance
64 Risk management
69 Internal controls, compliance/Information
disclosure
70 Sustainability
72 Environment
74 Safety/Security, Community, Health and Well-being
76 Human resources
80 Topic: Response to COVID-19

Index by content
Sustainability (structure, materiality determination process, policy on CSR/ESG, etc.)

E

Environment • Responding to climate change, etc.

P72-73

Four key themesS
P74-81

Safety/Security

P72-73• Securing safety and security in disasters, etc.

P74-75

Community • Care for communities and support for activation

P74-75

Health and • Response to aging population and diversity andsupport for health, etc.
Well-being

P74-75

Human
resources• Achieving wellness, promoting diversity, etc.
• Topic: Response to COVID-19

Management
system• Dialogue between the Chairman of the Boardof Directors and an External Director/
Roundtable discussion with External Directors• Directors• Corporate governance/Risk management, etc.

P76-79P80-81

P44-51
P52-54

Sustainability/ESG

P44-69Promotion foundations

Sustainability/ESG

G

P70-71

P55-69Watching over the Community(a program for visiting elementary schools)
The Group aims to achieve urban development in harmony with local
communities through sustainably interacting with the locality andsociety. Through elementary school visits, the program seeks to foster
children’s interest in their local area and community to build a better
future.

42

Nomura Real Estate Holdings, Inc.

Integrated Report 202043

Sustainability/ESG

Dialogue between the Chairman of the Board of Directors and an External Director

Atsushi Yoshikawa

Akira Ono

Director andChairman of the Board of Directors

Director(Audit & Supervisory
Committee Member)(External)

YoshikawaInsightful commentaries provided by these newly appointed
directors has spurred extremely active debate and provided
fresh stimulus for the Company. For example, director Higashi,
backed by his experience in the global semiconductor industry,and director Mogi, who had been in center of the corporate
division for many years at a trading company, have provided
thought-provoking suggestions precisely because they have
responded successfully many times to drastic market changes
through a commitment to their business models and innovation.
I am especially impressed because these directors keenly
perceive changes in the external environment not as threats but
as new business opportunities.
Turning to a different topic, as another new perspective on
the composition of Board members, the Advisory Committee
Relating to Nominations and Compensation set a six-year termof office for external directors as a guideline. This applies to
Audit & Supervisory Committee Members to be appointed in
the future. I believe six years is an ideal length of time in termsof understanding the Company’s business, keeping continuityof discussions at the Board, and securing the independence of
external directors.

Diversified composition of the Board of
Directors

Transitions in the state of the Board of
Directors and discussions

Nomura Real Estate Holdings’“ever-evolving” governance

Sustainability/ESG

Q. There have been significant changes in composition of
the Board of Directors over the past one or two years.
Can you tell us about the background and aims of thesechanges?
YoshikawaI assumed the position of Chairman of the Board of Directorsof the Company in 2017. Back then, lawyers, certified public
accountants, and academics had been appointed as external
directors. Soon after the Company transitioned to a company
with an Audit & Supervisory Committee in 2015, the Board wascomprised of optimal members given that creating corporate
governance was a key issue then. At the same time, however,in the next step, when envisioning a governance system that
could support our mid- to long-term development, I realizedthat we also needed the involvement of persons with greater

44

Nomura Real Estate Holdings, Inc.

experience in business and corporate management, such as
those with a knowledge of overseas business and business
investments prioritization.
Ono
My appointment as an external director in 2015 coincidedwith the transition to a company with an Audit & Supervisory
Committee. For this reason, I thought our first mission at thattime was to add functions that support the establishmentof legal and financial auditing systems. Having finished thatstage, we are now set to embark on a new phase that includes
expanding overseas business, our strategic investments, andour business portfolio by leveraging this governance structure
we have built as a foundation. Naturally, the roles that theBoard of Directors will fulfil are diversifying. The addition of awide range of persons with company management experienceand a knowledge of IT and overseas business during the past
one or two years is a welcome change that is aligned with our
growth and business strategies. I think that the new directors'
remarks triggered the active discussions.

Q: P lease tell us about operational aspects such as detailsof discussions at the Board of Directors.
Ono
The Company’s Board of Directors has been quite active
and has exchanged frank opinions since my appointment.
Initially, at times we mainly deliberated on individual projects.
Recently, however, I have the impression that the Board of
Directors has been undertaking enhanced discussions focusedon matters of high importance in terms of business strategy.
YoshikawaIn 2019, we reevaluated the ways we should hold meetings
giving consideration to the assessment of effectiveness of
the Board of Directors. Specifically, to enhance the functionsof the Company’s Board, which is responsible for Group

Ono
With concerning changes in the external environment,
one new noteworthy achievement is an improvement in risk
management. We held long discussions about them. We
carefully reviewed the risk management method for the entire
Group starting from the basic framework and are now able toclassify, assess, and manage risks along with the expansion of
our business strategy and business portfolio (see P64-68 Risk
management). In particular, besides just so-called compliancein risk management such as internal control, we have organized
the risks arising from changes in the external environment that
affect our business and established a system for managing
these risks. This represents a major leap forward in ourbusiness strategy.
Yoshikawa
As Mr. Ono explained, risk management is a crucial
perspective. Execution of the Company’s dynamic businessplan that includes expanding asset types, improving asset
quality on the balance sheets, and expanding overseas
businesses requires sophisticated judgment capabilities. Our
executive directors are generally sensitive to risks. Additionally,
realizing a balance in a manner akin to optimally stepping on theaccelerator and applying the brakes based on risk analysis fromthe viewpoint of non-executive directors is crucial for achieving
healthy growth of the entire Group. We must also consider the
emergence of new risks such as the recent impact of COVID-19
which might lead to a change of behavior in society. Continuous
monitoring by the Board of Directors is essential.

Evolution of the Directors’ compensation
systemQ. C
 an you explain the design of the system for directors’compensation introduced in 2018? What is the reaction
after its introduction?
Yoshikawa
Our director’s compensation system consists equally of
fixed and variable compensation, while the variable part isdivided between short-term and long-term incentives. The
performance-based portion of long-term incentives has been
Integrated Report 2020

45

Sustainability/ESG

Nomura Real Estate Holdings’ governance is also continually evolving in step with the times andbusiness models as the Group aims for new growth based on its Mid- to Long-term Business Plan.
Atsushi Yoshikawa, Director and Chairman of the Board of Directors, and Akira Ono, who has
served as an external director for many years, discuss the features of and changes in the Group’s
governance. We hope this dialogue helps a deeper understanding of the Group’s governance.

Ono
External directors play key roles as representatives ofminority shareholders. It is important that these directors
maintain an appropriate sense of distance and objectivity in
the Company’s business execution. Serving continuously
as a director for several years will likely help foster a deeper
understanding of the Company and its business strategies
and enable optimal discussions about the current state of theCompany. Alternatively, when directors serve too long, this infact could even sow the seeds of distrust in their objectivity andindependence as external directors. My sense is that six years
is probably the ideal length of time needed for injecting a breathof fresh air into the Company.

management, we clearly separated roles of the Company’s
Board from those of our subsidiaries. This move enables theCompany’s Board of Directors to hold even more strategic
discussions from broader perspectives and has alreadygenerated positive results. Besides the meetings of the Boardof Directors, twice per year we convene Directors’ opinion
exchange sessions where we engage in long hours of in-depth
discussion. We also hold free-ranging discussions focused on
mid- to long-term themes. The most recent discussion featured
some heated debates on themes about the Mid- to Longterm Business Plan, M&A, digital strategies, and trends of theIntegrated Resort Bill in Japan. These debates are still fresh in
my mind.

Sustainability/ESG

Dialogue between the Chairman of the Board of Directors and an External Director

the reason for non-compliance. Concisely, the Company
has made no significant position changes such as changing
CEO and COO following the announcement of the Corporate
Governance Code in 2015. Therefore, we have had noopportunity to verify effects of the new process. We have not
yet had an opportunity to evaluate the results of whether theseactually work effectively and reliably preserve corporate value.

tied to the achievement of performance goals after three
years, thereby having a system in place that is tailored to thecharacteristics of the real estate industry, where it takes time
before profits are realized. We introduced the system in justtwo years. Given this short span, we will probably need a bit
more time to analyze the outcome of changes. The important
point is to closely link the director compensation system with
the Mid- to Long-term Business Plan. With three years as a
general timeline, the concept is to execute a management
strategy that emphasizes profit and efficiency while taking into
account capital cost and then pay compensation according
to the results. The current challenging business environment
especially requires us to maintain an awareness of mid- to longterm growth and not just pursue short-term results.
Ono
We have set business profit and ROE as performanceindicators and this is in line with the Company’s stance offocusing on both profit amount and capital efficiency. Based ona business plan that flexibly changes in tandem with shifts in theenvironment, we must constantly strive to optimally shape ourcompensation system in terms of the balance between fixedand variable compensation. For example, perhaps we could
also deliberate the pros and cons of including sustainability
elements as achievement goals.

Response to the Corporate Governance CodeQ. Please tell us about items in the Corporate Governance
Code for which you explain your non-compliance(“Explain”) and the reasons for this.
Yoshikawa
The Company explains non-compliance for two items.
These are Proper Supervision of Successor Plans for CEO, etc.
(Planning)*1and Training Policy for Directors*2. Let me explain

Yoshikawa
We also explain the reason for not implementing theTraining Policy for Directors, which is for the same reason
as just described. We have no track record of implementing
training for newly appointed CEOs and COOs, which are themost important positions. However, the Advisory Committee
Relating to Nominations and Compensation gathers detailed
information regularly concerning the names of CEO and COO
candidates as well as those for other important positions andwhat those candidates should experience in the future. Basedon this information, the Committee makes suggestions andreports to the Board of Directors to ensure that the groomingof successor candidates is undertaken in a systematic manner
while strengthening the training system.
Ono
As one example of progress in this area, training forexternal directors has been improved by leaps and bounds
compared with five years ago when I assumed my position.
Training is implemented via a variety of formats that encompass
inspections of properties, including those overseas, as wellas individual meetings. That said, we also chose to “Explain”
because we still have ample latitude for improving training and
we need to constantly raise the level of our training. We will aim
for further improvements in the future.

YoshikawaI started my career at NHI myself. However, I mustemphasize that fulfilling accountability to minority shareholders
is first and foremost a major precondition. Even supposing asituation arose where I could be the subject of a conflict as
mentioned by Mr. Ono, then I will of course remove myself
from any relevant decision-making processes. Exactly for thisreason, I believe my responsibility is to make my utmost daily
efforts to ensure the participation of external directors who canfind any satisfactory conclusion from the perspective of ourshareholders even in such a situation.
Ono
External directors including me must make our very best
efforts to protect the interests of our minority shareholders.
This is a major premise. On the basis of mutual trust between
the major shareholders and the Company, further advancing
healthy communication that fully considers that the other parties
are also listed companies will also contribute to increasing theCompany’s corporate value.

Relationship with major shareholders

For building sustainable governance

Q. Investors pay close attention to the relationship withmajor shareholders. What are your thoughts on this?

Q. P lease tell us about your own determination towardrealizing the Company’s sustainable growth.

Ono
Investors pay close attention to the relationship between
the Company and Nomura Holdings (NHI), which holds 35%
or more of our shares. I think the primary concern of investors
is whether or not there is a conflict of interest with NHI, themajor shareholder, on a daily basis or under certain special
circumstances.
First of all, I must point out there is no daily business
relationship between the Company and NHI of any nature

Ono
I believe the Company has now put into place a fundamental
governance system. Presently, however, I expect to see major
shifts in society and the economy that will require further
changes to our governance. As functions of the Board of
Directors, together with newly appointed external directors, I
hope to discuss the essential points for the Company’s mid- tolong-term growth such as digital strategies and mid- to longterm strategies for overseas business, from the perspectives ofstrategies for sustainable growth in the future, of course, fromthe perspectives of “post COVID-19” and sustainability as well.
At the same time, I would like to play my role both as a memberof the Board of Directors and as an external director.
In doing so, risk management will be an important theme.
Risk management needs to be undertaken with an awarenessthat in the first place the shape of the managed risk willcontinually evolve along with shifts in the external environment.
Building a more balanced business portfolio is also a form ofrisk management for the Company as a whole. In view of this,while taking on major challenges in one area, it will also be
crucial to earn stable profits in other businesses.
Yoshikawa
The impact of COVID-19 is the risk that no one had
anticipated until last year. Even if the pandemic is overcome in
the near future, people’s work styles and lifestyles, our businessdomain, will surely change. In order to continue sustainablegrowth, no matter what unexpected risk event occurs, it isessential for the Company to build a governance system
supporting a corporate culture that accepts the reality honestly
and is not afraid of change. Besides just using governance asa defensive measure, I will enhance the Company's proactive
challenges in new fields in line with changes in the social
environment by implementing our unique business model. With
this in mind, I believe the role of the Board of Directors is todetermine the optimal allocation of business resources withconsciousness of capital cost and the balance between returns
to shareholders and investment for growth.
With an eye to the future, we will continue to monitor thebusiness performances from the perspective of governanceand work with executive directors to create long-term corporate
value and to achieve sustainable growth.

*1 The Corporate Governance Code Supplementary Principle 4-1-3*2 The Corporate Governance Code Principle 4-14, Supplementary Principle 4-14-1, and Supplementary Principle 4-14-2

46

Nomura Real Estate Holdings, Inc.

Integrated Report 2020

47

Sustainability/ESG

Sustainability/ESG

Yoshikawa
I agree with that. We need to further evolve the compensation
system rather than arbitrarily stick with the status quo. We will
also continuously review the system from new perspectives
to foster the growth of our human resources, who form thecornerstone of our company management.

Ono
We must explain not only because we have no results toreport but also because we are aiming for higher standards.
Of course, we recognize that we have sufficiently createdframeworks for succession in the future and are constantly
undertaking reviews to improve the quality of these.

that would unilaterally benefit the interests of NHI, the major
shareholder. Conversely, I’m sure there are mutually beneficial
relationships that contribute to enhancing the corporate valueof both companies. For example, in the Property Brokerage& CRE Business Unit, NHI introduces customers to us and in
turn, we meet the specialized needs of these NHI customers.
Also, from the perspective of supplying human resources, thisrelationship functions as an important management resource,
such as complementing human resources with management
experience.
On the other hand, there is no assurance the risk of astructural conflict between major shareholders and minority
shareholders will not arise in unforeseen circumstances thatdiffer from normal times. In such circumstances, we must
form a special committee centered on external directors
and take proper measures to assure the interests of minority
shareholders are protected. I believe the members of theCompany’s Board of Directors including Mr. Yoshikawa arehighly sensitive to the importance of this type of process.

Sustainability/ESG

Roundtable discussion with External Directors

Impressions of the Group through theiractivities during the past year

Information provision to Directors for
enforcing proper governance

Q: O ne year has passed since you were appointed as

Q: D id the Company provide sufficient information for theCompany directors. What are your impressions about

effective governance?

the actual state of the Group?
Miyakawa
HigashiPrior to my appointment, I envisioned the real estate industry

I was taken on property tours and my understanding
was deepened with viewing properties in themselves. My

as being a worthwhile business in that it is closely related toimpression was that the Company is quite cooperative in thispeople’s lives and their ways of working, and helps shape theregard. For example, whenever I asked questions, such as

future together with them. At the same time, I also pictured

about questionable points in the Securities Report, persons

this as a business that focuses on holding properties. Once I

from the Finance and Accounting Department provided me

looked at the actual state of the Company, however, I foundwith thorough explanations. I also strengthened my interactionout that it utilizes a quite unique business model based on

during exchanges with executive directors such as throughbrand formation by creating distinctive concepts such as its

opinion exchange sessions with the CEO, COO, and CFO,PROUD for residences and PMO for offices. This is an intriguing

individual interviews with executive officers and attendance

management method that raises the added value of realat Budget Committee meetings. Additionally, I was invited

estate by enhancing the brand concept rather than just putting

to online social gatherings held by staffs, and these venues

emphasis on holding properties.

provided me with valuable opportunities for listening to people’s

The Company separates its management into real estate

frank opinions.

development that involves holding properties, and Service &Management such as investment management. At the sametime, it utilizes schemes like REITs to bring real value in bothdevelopment and services. I reaffirmed that rapid asset turnover

Q: How was information provision for the Board of
Directors meetings?

and efficient management are other features of the Company’s
operations.

Mogi

Mogi

information provided in advance was more thorough thanAs was mentioned previously, the response including
In my days working for a trading company I was involved

I had anticipated. Explanations of the agenda of the Boardin the real estate business and had a variety of experiences,of Directors meetings were provided from the viewpoint of

so I imagined that there are also high-risk aspects to thisthe Corporate Planning Department after they analyzed andindustry and business. However, the perspectives and businessprovided their own input. The quality of information is further

practices of the corporate side are very precise and closely

improving.

Akiko Miyakawa

Yoshio Mogi

interwoven, and I was impressed with their financial analysis

Director(External)

Director(Audit & Supervisory
Committee Member)(External)

Director(Audit & Supervisory
Committee Member)(External)

corporate side and the business side is also very close. For

As for the information provision for the Board of Directors

this reason, I also sometimes worry that they will spend muchmeetings, including preliminary information sessions, this wastime and effort to respond politely to the requests of external

handled thoroughly. Actually, at first I thought the information

directors.

provision was so thorough that I was receiving too many

capabilities and insights. I felt that collaboration between the

Miyakawa

materials. However, this has changed significantly over the past
Miyakawa

DialogueWith one year having passed since their appointment in June 2019,
three External Directors talk about their assessment of the Group andvarious issues.

As they have pointed out, I felt again that the real estateindustry is a difficult business requiring skillful management in

one year as pointed out by Mr. Higashi and Mr. Mogi. I think
there is tremendous value in striving for improvements throughsincere engagement in external opinions.

balancing two contrasting imperatives, namely taking a longterm view for significant investments and having the stringent
perspectives of investors, who have a short-term view. In

Higashi
Since Mr. Mogi and Ms. Miyakawa are both Audit &this respect, I am impressed that the Company highly values

Supervisory Committee members, I think they have moreboth long-term and short-term perspectives. The Company isdetailed information. Even so, the Company sets up prioralso firmly imbued with an attitude and spirit of taking on new

briefing sessions each time before I attend the Board ofchallenges, and this gives me an interest and enjoyment.

Directors meeting. Through this effort, I am confident I receive
sufficient information.

48

Nomura Real Estate Holdings, Inc.

Integrated Report 2020

49

Sustainability/ESG

Sustainability/ESG

Tetsuro Higashi

Sustainability/ESG

Roundtable discussion with External Directors

We should engage in discussions from a long-term perspective,that includes seeking direction on what type of value we will add toactual real estate by utilizing ICT after consideration of changes inpeople’s lifestyles and work styles.—Tetsuro Higashi

Issues and points for improvements to further
enhance governance
Q: You have discussed the positive aspects of theCompany. Tell us about issues and points requiring
improvement as well.
Higashi
The role of external directors is to examine the Company
from a broad perspective and provide advice on its direction,

I heard from Mr. Yoshikawa (Chairman of the Board of

make meaningful contributions to such meetings.

Directors) that during the formulation of the Mid- to Longterm Business Plan announced last year, he spent much timeengaging in detailed discussions through opinion exchange

about my experience at a trading company, especially aboutbusiness investments and fund utilization. I will try to proactively

Miyakawa
I wish to have thorough discussions on the direction of our

express my opinions and hope to contribute to the developmentof the Company in the future as well.

sessions with executive members in addition to holding

overseas business expansion, which will be strengthened in

discussions at the Board of Directors meetings. This year,

the future. Overseas expansion tends to be a general all-roundthe impact of COVID-19 has made it difficult to create suchinitiative. So I think we need to increase strategic discussions

opportunities. I hope to have the opportunity to delve moreon how and where to deploy the strengths of the Group. Also,

awareness and standpoint as an accountant and from theextensively into one theme and spend time having heatedjudging from my experience working overseas, I think theperspective of minority shareholders. With the diversity of the

discussions.

Company should pay even closer attention to risk management

Board of Directors becoming important, I hope that besides

in its overseas business.

appointing female directors from outside, female candidates will

strategies, differentiation from competitors, and areas where

Also, it is important for the Board of Directors to deepen

it is lacking. For me as well, I make every possible effort todiscussions and determine the direction as a company rather

convey my knowledge and ideas on strategic areas. In thisthan just trying to draw conclusions. Directors in charge ofsense, besides discussions premised just on “the current state

execution should also share details with general managers andof policy,” I hope to see the Board of Directors engage in moresenior managers. I think that this process will make the Groupinvigorated discussions on the way strategies ought to be andeven better.

the background of these strategies.

I think now is the time we must have major discussions about
where to position ourselves in the industry, how to expand ourbusinesses, and where to accelerate our M&A and overseas
business expansion.—Yoshio Mogi

I would also like to see the issue of “clarifying responsibility”

For our overseas business in particular, instead of simply

given more consideration. The trading company where I worked

explaining result of individual projects, now is the time to further

had clearly defined responsibility for planning and responsibility

deepen discussions on our mid- to long-term directions,for results. Because of this, details of projects were strictly

specific measures, and methodologies.

pointed out and discussions were held repeatedly. This

Miyakawa
I wish to continue stating my opinions on matters from myalso emerge from within the Group. Nomura Real Estate Group
has agility and a wealth of ideas. I would like to enhance these

Expectations for the Nomura Real EstateGroup and the role of External Directors
Q: T ell us about your expectations of the Company andyour own determination for the future.

positive attributes of the Group.
HigashiBased on my involvement with the Company as a director,
I feel this is a very rewarding company and a worthwhile
company for all employees. Furthermore, the Company carries

Mogi
I have a strong sense that the Company has rapidly built

out highly transparent management in an extremely uniqueform. I hope to see Nomura Real Estate Group become a group

approach will help intensify a commitment to projects. I believe

its management structure during about 60 years since its

in which employees and management work as one with a clear

experience from working at a semiconductor productionthat both individuals and companies can build up their strengths

establishment. For this reason, I think that during the next stage

long-term vision of the social significance of its existence as aequipment manufacturer. The use of ICT as a part of sales sites

through savoring successes and experiencing failures.

the time will be ripe for major discussions about issues such asreal estate company and how it will shine brightly in the future.

where to position ourselves in the industry, how to expand ourTo achieve this, as a person with management experience,businesses, and where to accelerate our M&A and overseas

I hope to provide useful advice regarding the direction the
Company is heading and about strategic areas.

and management is already widespread. In the future, however,
we should probably carry out discussions that focus even more

Higashiclosely on the ideal way to apply ICT to raise the added value

I agree. Even under such circumstances, I also wish for abusiness expansion. I have high hopes that such discussionsof real estate. We should engage in discussions from a long-

little more time to discuss strategies and hope to utilize mywill be held. In this area, I believe there is much I can convey

term perspective and about overseas business expansion thatown knowledge and ideas in these discussions to the extent

include seeking direction on what type of value we will add topossible. Also, I feel expectations for this point from Mr.

actual real estate by utilizing ICT after consideration of changes

Yoshikawa as well.

in people’s lifestyles and work styles.

The semiconductor production equipment manufacturer
I worked for held offsite strategic meetings focused on one

Mogi
I also agree with this point. We receive ample information

theme for about two days once per year. At these meetings,
key discussions were held with a mix of directors and top

and explanations from the persons on the corporate side

executives. I hear the Company also holds similarly positioned

and undertake active debates at meetings. To make further

meetings. I believe we can realize fruitful meetings that help

improvements, I believe we will need to spend more time

drive the Company’s value creation by holding fundamental

discussing key issues such as overseas business expansion,

discussions on further innovating business and management

ICT strategies, and M&A.

and on how we can achieve this with foresight. I hope I can

50

Nomura Real Estate Holdings, Inc.

Nomura Real Estate Group has agility and a wealth of ideas.
I would like to enhance these positive attributes of the Group.
—Akiko Miyakawa

Integrated Report 2020

51

Sustainability/ESG

Sustainability/ESG

I also regard ICT as an important theme based on mySustainability/ESG

Directors and Executive officers (As of June 23, 2020)

Directors

Atsushi Yoshikawa

Eiji Kutsukake

Seiichi Miyajima

Tetsuro Higashi

Shoichi Nagamatsu

Takao Orihara

Date of birth: Apr. 7, 1954

Date of birth: Sep. 12, 1960

Date of birth: Aug. 3, 1958

Date of birth: Aug. 28, 1949

Date of birth: Jul. 6, 1958

Date of birth: Feb. 6, 1958

Director and Chairman of theBoard of Directors
Chairman of Advisory Committee
Relating to Nominations andCompensation

President and Representative
Director, Group CEO

Executive Vice President andRepresentative Director,
Group COO

Director
Advisory Committee Relating toNominations and Compensation
MemberDirector
Advisory Committee Relating toNominations and Compensation
MemberDirector (Audit & Supervisory
Committee Member)
Chairman of Audit & Supervisory
Committee

Non-executive

Apr. 1978	Joined Nomura Securities Co., Ltd.
(currently Nomura Holdings, Inc.)
Jun. 2000 Director of Nomura Securities Co., Ltd.
Oct. 2001 Director of Nomura Securities Co., Ltd.
Jun. 2003 Executive Officer of Nomura Securities Co., Ltd.
Apr. 2004	Executive Managing Director of Nomura Holdings, Inc.
Senior Corporate Managing Director of
Nomura Asset Management Co., Ltd.
Apr. 2006	Executive Vice President of
Nomura Asset Management Co., Ltd.
Apr. 2008	Director and President of
Nomura Asset Management Co., Ltd.
Oct. 2008	Executive Managing Director of Nomura Holdings, Inc.
Director, President, and CEO of
Nomura Asset Management Co., Ltd.
Jun. 2011	Executive Vice President and Senior Managing Director of
Nomura Holdings, Inc.
CEO and President of Nomura Holding America Inc.
Aug. 2012	Representative Executive Officer and Group COO of
Nomura Holdings, Inc.
Jun. 2013	Director, Representative Executive Officer, and Group COO
of Nomura Holdings, Inc.
Jun. 2016 Advisor of Nomura Holdings, Inc.
Apr. 2017	Director of Nomura Real Estate Development Co., Ltd.
(present)
Advisor of Nomura Real Estate Holdings, Inc.
Jun. 2017	Chairman of the Board of Directors of
Nomura Real Estate Holdings, Inc. (present)
May 2018 Outside Director of Ryohin Keikaku Co., Ltd. (present)

Executive

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 President of
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)

Executive

Apr. 1981 Joined Nomura Real Estate Development Co., Ltd.
Jun. 2004 Director of Nomura Real Estate Development Co., Ltd.
Apr. 2008	Senior Executive Officer of
Nomura Real Estate Development Co., Ltd.
Apr. 2009	Managing Executive Officer of
Nomura Real Estate Development Co., Ltd.
Apr. 2012	Representative Director and Senior Managing Executive
Officer of Nomura Real Estate Development Co., Ltd.
May 2012 Executive Officer of Nomura Real Estate Holdings, Inc.
Apr. 2014	Representative Director and Executive Vice President of
Nomura Real Estate Development Co., Ltd.
Jun 2014	Representative Director and Executive Officer of
Nomura Real Estate Holdings, Inc.
Apr 2015	President and Representative Director, and Chief Executive
Officer of Nomura Real Estate Development Co., Ltd.
(present)
Apr. 2017	Executive Vice President and Representative Director of
Nomura Real Estate Holdings, Inc. (present)

External Director

Newly appointed

Independent Director

Non-executive

Non-executive

Part-time

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.
Jun. 2012 Outside Director of Ube Industries, Ltd.
Apr. 2013	Representative Director, Chairman, President & CEO ofTokyo Electron Ltd.
Jun. 2015	Representative Director, President & CEO ofTokyo 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. (present)

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 and SeniorCorporate 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 Presidentof Nomura Securities Co., Ltd.
Apr. 2016 Deputy President of Nomura Securities Co., Ltd.
Apr. 2017	Representative Executive Officer and Deputy President, andChief of Staff of Nomura Holdings, Inc.
Director of Nomura Securities Co., Ltd.
Apr. 2018	Representative Executive Officer and Deputy President of
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	Director of Nomura Real Estate Holdings, Inc. (part-time)(present)

Toshiaki Seki

Makoto Haga

Yasushi Takayama

Akira Ono

Date of birth: Mar. 27, 1958

Date of Birth: Jun. 22, 1966

Date of birth: Feb. 1, 1964

Date of birth: Dec. 28, 1971

Executive Vice President andRepresentative Director,
Business Unit Manager ofCommercial Real EstateBusiness Unit

Director and Executive Officer,
Group CFO,
Supervisor of Management
Division, Investor Relations

Director (Audit & Supervisory
Committee Member)

Director (Audit & Supervisory
Committee Member)
Advisory Committee Relating toNominations and Compensation
MemberNon-executive

Apr. 1980 Joined Nomura Real Estate Development Co., Ltd.
Jun. 2005	Director of Nomura Real Estate Holdings, Inc.
Director of Nomura Real Estate Development Co., Ltd.
Apr. 2008	Director and Senior Executive Officer of
Nomura Real Estate Development Co., Ltd.
Apr. 2009	Director and Managing Executive Officer of
Nomura Real Estate Development Co., Ltd.
Apr. 2010	Director of NREG TOSHIBA BUILDING Co., Ltd.
(currently Nomura Real Estate Building Co., Ltd.)May 2012	Director and Executive Officer of
Nomura Real Estate Holdings, Inc.
Apr. 2014	Audit & Supervisory Board Member of
Nomura Real Estate Development Co., Ltd. (present)
Audit & Supervisory Board Member of Geo Akamatsu Co., Ltd.
(currently Nomura Real Estate Retail Properties Co. Ltd.)
Advisor of Nomura Real Estate Holdings, Inc.
Jun. 2014	Audit & Supervisory Board Member of
Nomura Real Estate Holdings, Inc.
Audit & Supervisory Board Member of
Nomura Real Estate Urban Net Co., Ltd. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Partners Co., Ltd. (present)
Audit & Supervisory Board Member of MEGALOS CO., LTD.
(currently Nomura Real Estate Life & Sports Co., Ltd.)(present)
Jun. 2015	Director (Audit & Supervisory Committee member) of
Nomura Real Estate Holdings, Inc. (present)
Audit & Supervisory Board Member of NREG TOSHIBABUILDING Co., Ltd. (currently Nomura Real Estate Building
Co., Ltd.)
Apr. 2018	Audit & Supervisory Board Member of
Nomura Real Estate Wellness Co., Ltd.
Audit & Supervisory Board Member of
Nomura Real Estate Hotels Co., Ltd.

External Director
Independent Director
Executive

52

Nomura Real Estate Holdings, Inc.

Apr. 1989	Joined Nomura Real Estate Development Co., Ltd.
Oct. 2011	Director and Senior General Manager of
Investment Management Division of
Nomura Real Estate Capital Management 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.
Director of NREG TOSHIBA BUILDING Co., Ltd.
(currently Nomura Real Estate Building Co., Ltd.)
Director of Nomura Real Estate Life & Sports Co., Ltd.
Director of Geo Akamatsu Co., Ltd.
(currently Nomura Real Estate Retail Properties Co., Ltd.)
Director of PRIME X Co., Ltd.
Director of Nomura Real Estate Wellness 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)

Non-executive

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.
Jun. 2016	Outside Director of Japan Securities Depository Center,
Incorporated
Apr. 2019	Audit & Supervisory Board Member of
Nomura Real Estate Development Co., Ltd. (present)
Advisor of Nomura Real Estate Holdings, Inc. (present)
May 2019	Audit & Supervisory Board Member of UHM Co., Ltd.
(present)
Jun. 2019	Director (Audit & Supervisory Committee Member) of
Nomura Real Estate Holdings, Inc. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Asset Management Co., Ltd. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Urban Net Co., Ltd. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Partners Co., Ltd. (present)
Audit & Supervisory Board Member of NREG TOSHIBABUILDING Co., Ltd. (currently Nomura Real Estate Building
Co., Ltd.) (present)
Audit & Supervisory Board Member of
Nomura Real Estate Wellness Co., Ltd. (present)
Audit & Supervisory Board Member of
Nomura Real Estate Hotels Co., Ltd. (present)
Audit & Supervisory Board Member of PRIME X Co., Ltd.
(present)

Non-executive

Apr. 1998	Registered with Tokyo Bar Association
Joined Tokyo Aoyama Law Office(currently Baker & McKenzie [Gaikokuho Joint Enterprise])Mar. 1999	Joined Okinobu, Ishihara & Sei Law Office (currently Spring
Partners)
Jan. 2006 Partner of Spring Partners (present)
Jun. 2012	External Audit & Supervisory Board Member of MEGALOS
CO., LTD. (currently Nomura Real Estate Life & Sports
Co., Ltd.)
Jun. 2015	External Director (Audit & Supervisory Committee Member)of Nomura Real Estate Holdings, Inc. (present)

Sustainability/ESG

Sustainability/ESG

Apr. 1980 Joined Nomura Real Estate Development Co., Ltd.
Jun. 2003 Director of Nomura Real Estate Development Co., Ltd.
Mar. 2007	Managing Director of Nomura Real Estate Development Co.,Ltd.
Apr. 2007	President and Representative Director of NOMURA LIVINGSUPPORT CO., LTD. (currently Nomura Real Estate Partners
Co., Ltd.)
Apr. 2008	President and Representative Director, and Chief Executive
Officer of NOMURA LIVING SUPPORT CO., LTD.
May 2012 Executive Officer of Nomura Real Estate Holdings, Inc.
Apr. 2013	Director of NOMURA BUILDING MANAGEMENT CO., LTD.
(currently Nomura Real Estate Partners Co., Ltd.)
Apr. 2014	President and Representative Director, and Chief Executive
Officer of Nomura Real Estate Partners Co., Ltd.
Jun. 2014	Representative Director and Executive Officer of Nomura
Real Estate Holdings, Inc.
Apr. 2015	Director of Nomura Real Estate Urban Net Co., Ltd.
Chair and Representative Director of
Nomura Real Estate Partners Co., Ltd.
President and Representative Director of
Nomura Real Estate Wellness Co., Ltd.
Jun. 2015	Director of MEGALOS CO., LTD. (currently
Nomura Real Estate Life & Sports Co., Ltd.) (present)
Apr. 2018	Executive Vice President and Representative Director of
Nomura Real Estate Holdings, Inc. (present)
Apr. 2019	Executive Vice President and Representative Director of
Nomura Real Estate Development Co., Ltd. (present)
Director of NREG TOSHIBA BUILDING Co., Ltd. (currently
Nomura Real Estate Building Co., Ltd.) (present)

Executive

Integrated Report 202053

Sustainability/ESG

Sustainability/ESG

Directors and Executive officers

Corporate governance

Basic concept of corporate governanceYoshio Mogi

Akiko Miyakawa

Tetsu Takahashi

Date of birth: Apr. 10, 1952

Date of birth: Oct. 18, 1955

Date of birth: Oct. 24, 1956

Director (Audit & Supervisory
Committee Member)
Advisory Committee Relating toNominations and Compensation
MemberDirector (Audit & Supervisory
Committee Member)

Director (Audit & Supervisory
Committee Member)
Newly appointed

External Director

External Director

External Director

Independent Director

Independent Director

Independent Director

Non-executive

Non-executive

Non-executive

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 (present)
Mar. 2006	Outside Audit & Supervisory Board Member ofApple Japan Co., Ltd.
Mar. 2007	External Auditor of McDonald’s Holdings Company(Japan), Ltd.
External Director of McDonald’s Company (Japan), Ltd.
(present)
Jun. 2007	Outside Audit & Supervisory Board Member of
Gro-Bels Co., Ltd.
Oct. 2007	Outside Audit & Supervisory Board Member of
Bit-isle Inc. (currently Bit-isle Equinix Inc.)
Jan. 2012	Outside Audit & Supervisory Board Member ofBoox Co., Ltd.
Feb. 2012	Outside Audit & Supervisory Board Member of
ZOOM CORPORATION
Jun. 2015	Outside Director (Audit and Supervisory Committee Member)of ZOOM CORPORATION (present)
Oct. 2016	Outside Audit & Supervisory Board Member of
eBOOK Initiative Japan Co., Ltd. (present)
Jun. 2020	External Director (Audit & Supervisory Committee Member)of Nomura Real Estate Holdings, Inc. (present)

Nomura Real Estate Holdings believes that it must be governed in a way that continuously maximizes our Group’s value over the long term,
while consideration is given to the interest of shareholders and all other stakeholders of the Company. We aim to enhance the earning powerof the entire Group, and while acting as a holding company in managing and supervising the business 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.
Corporate Governancehttps://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

Characteristics of our corporate governance system
In order to strengthen audit and supervisory functions by providing directors who serve as Audit & Supervisory Committee Members withvoting 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 and Compensation 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 ensuresthe 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 theBoard of Directors about initiatives of those systems. Currently, the majority of the members of the Audit & Supervisory Committee and theAdvisory 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 supervisionand decision-making functions to enhance the execution function, reinforcing the management of the Group. Each executive officer selectedby the Board of Directors is granted authority based on internal regulations and executes business operations pursuant to the Company's
policy determined by the Board of Directors and instructions from the CEO.

Our efforts to reinforce corporate governance*Tetsuro Higashi, Akira Ono, Yoshio Mogi, Akiko Miyakawa and Tetsu Takahashi are External Directors prescribed in Article 2, Item 15 of the Companies Act.

2012
●

2013

2014

2015

2016

●

●

In charge of Group Human Resources

Akihiro Fukuda

Tetsumi Yoshimura

Toshihide Tsukasaki

In charge of Property & Facility Management

In charge of Quality Management and Architectural Design

In charge of Finance & Accounting, Finance

Shigeyuki Yamamoto

Masato Yamauchi

In charge of Development Planning

In charge of Corporate Planning, ICT & Innovation Planning

Tokuji Nakamura

Daisaku Matsuo

Yukio Ichihara

In charge of Residential Development

Kenichi Maeda
In charge of Property Brokerage & CRE

In charge of Internal Audit and Compliance, Group Audit,
Group Legal & Compliance, Group Corporate Administration,
Secretariat

In charge of Sustainability Management,
Corporate Communication, Sustainability Management

Directors (No.)

6*5Of which External
Directors (No.)

0

Of which Independent
External Directors (No.)

0

Of which Female
Directors (No.)

5*

8

1

2

13

1

4

0

13

2

1

5

1

●

Started assessment of effectiveness of the Board of Directors
●

●

12

5

The assessment ofeffectiveness

Compensation

Established the Advisory Committee Relating to Nominations and Compensation

Raised the maximum number of share acquisition rights used for stock options toincrease the ratio of performance-based incentive in order to share more interest with shareholders●

Sustainability/ESG

Sustainability/ESG

Yoichiro Ishikawa

In charge of Investment Management

2020

Transitioned to a company with an Audit & Supervisory Committee●

Koki Miura

2019

Established the Management Committee at the holding company to help strengthen Group management systems

Executive officers (Excluding those who are concurrently serving as Directors)

In charge of Overseas Business2018

Introduced executive officer system to separate the business execution function from the management and supervisory functions of the holding company

Organization

Takashi Kaku

2017

Started assessment of effectiveness utilizing a third-party
evaluation organization●

Implemented performance-based stock incentive plan

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 forrisk management in order to strengthen the risk management system*Reduction due to resignation or retirement during the period is not stated.

54

Nomura Real Estate Holdings, Inc.

Integrated Report 202055

Sustainability/ESG

Corporate governanceCorporate governance system

The Audit &Group governance

Characteristics of the governance system•Company with an Audit & Supervisory Committee•Chairman of the Board of Directors is a non-executive director•Out of 13 directors, five are independent external directors•Established the Advisory Committee Relating to Nominations andCompensation

2 Supervisory Committee

As a holding company, the Company manages its Group companies under various
regulations such as Regulations regarding Group Organizational Management
and Group Internal Audit. Also, its directors (excluding those who serve as
Audit & Supervisory Committee Members) and executive officers also hold thepost 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 Group management. Furthermore, the Company
has built systems for risk management, compliance, and internal audits within
the Company itself and the entire Group, with the Board of Directors regularly
receiving reports on each of the systems, for an effective monitoring of Groupmanagement.

•Majority of the members of the Audit & Supervisory Committee
and the Advisory Committee Relating to Nominations andCompensation are independent external directors

1 The Board of Directors

Held

16 times during FY20/3

Roles of the Board of Directors
The Board of Directors bears the responsibility of realizing effective corporate
governance for all shareholders, and through this, achieving sustainable growthof the Company and working to maximize long-term corporate value. To fulfill
this responsibility, the role of the Board of Directors is to ensure the fairness andtransparency of management by fully supervising management, and make the best
decisions for the Company through important business execution decisions, etc.

Independence standards for Independent External Directors: Article 14 of
the Basic Corporate Governance Policy
https://www.nomura-re-hd.co.jp/english/company/pdf/cgpolicy.pdf

3 Relating to Nominations and Compensation7
The Advisory Committee

Heldtimes during FY20/3

The Company established the Advisory Committee Relating to Nominations andCompensation, as an advisory body to the Board of Directors, where the majorityof members are independent external directors, to strengthen the objectivity andindependence of functions of the Board of Directors in relation to nominationand compensation of the directors and executive officers. Currently, the Advisory
Committee Relating to Nominations and Compensation consists of five members, ofwhich three are independent external directors. The Advisory Committee Relating
to Nominations and Compensation meets as necessary to discuss matters relating
to the nomination of and compensation of directors and executive officers andreports the outcome to the Board of Directors.

56

Nomura Real Estate Holdings, Inc.

Appointment

Appointment/Dismissal

Main initiatives taken by Audit & Supervisory Committee
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 planby the Audit & Supervisory Committee Dept., preparing audit reports, evaluating on
the reappointment of the Accounting Auditor, giving consent to compensation for
the Accounting Auditor and making 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 theCompany and request for reports from operating divisions as necessary to gather
information on the Company’s business execution status.

Nomura Real Estate Holdings
1

Board of Directors

Chairman of
the Boardof Directors

President andRepresentative
Director

Executive Vice President Director andand Representative
Executive
Director
Officer★

Directors

Chairman of theCommittee

4 Management Committee

3
Yoshikawa

KutsukakeMiyajima Seki

Haga

Higashi Nagamatsu★

★

Audit/Supervision

2★

Yoshikawa Higashi★

Ono

Chairman★

★

Audit & Supervisory
Committee Members

Mogi Nagamatsu★

Audit & Supervisory
Committee
OriharaTakayama

Ono

Mogi

Miyakawa

Takahashi

Representative Directors

Held

41 times during FY20/3

The Committee, which is comprised of the Chief Executive Officer and Executive
Officers, determines certain matters regarding the execution of business at overall
Group companies. The Chairman of the Board of Directors and Directors who are
Audit & Supervisory Committee Members attend meetings of the Committee, where
they express their opinions as necessary.

5 Budget Committee

Held

10 times during FY20/3

For the compilation of budgets, preparation of medium-term business plans, andother matters, the Committee discusses the planning, exercise, and other mattersregarding budgets and medium-term business plans as a subordinate organizationof the Management Committee.

Appointment/
Dismissal

Audit

Roles of Audit & Supervisory Committee
The Audit & Supervisory Committee monitors business management and performs
audits utilizing the Company’s internal control system. We have developed a systemthrough which the Committee receives periodic reports on internal audits and resultsfrom the Internal Audit Dept., and has the authority to ask directors, executive
officers, and operating divisions of the Company and Group companies to reportsuch matters when necessary. Audit & Supervisory Committee Members can attend
the Company’s important meetings, including those of the Management Committee,
gather information on the business execution, and express their opinions so that aneffective system for audits and supervision is secured.

Audit & Supervisory
Committee Dept.

4Management Committee

5

Budget Committee

External (Non-executive directors)

6

Risk Management Committee

Internal (Non-executive directors)

7

Sustainability Committee

With the aim of securing the continuity and stable development of business throughthe exercise of risk management, the Committee discusses matters in connection
with internal controls, risks in the Group’s management, and other matters as
a subordinate organization of the Management Committee. The Committee ismainly comprised of directors and executive officers of the Company and Group
companies who have been appointed by the Board of Directors.

8

ICT Planning Committee

7 Sustainability Committee

Internal (Executive directors)★ Independent

Various departments

Group Internal Audit Dept.

Guidance/Support/Monitoring, etc.

Group companies

6 Risk Management Committee

Held

Held

6 times during FY20/3

3 times during FY20/3*

The Committee discusses matters on the promotion of sustainability/ESG andothers for the purpose of establishing policies and plans and managing results
regarding the promotion of sustainability/ESG, deepening Group employees’
understanding, and disclosing various information thereof as a subordinate
organization of the Management Committee.

8 ICT Planning Committee

Held

12 times during FY20/3

The Committee discusses investment plans and other matters for preparing the
ICT base and establishing information systems with the aim of improving the ICT
environment and its effective use as a subordinate organization of the Management
Committee.
*Number of the CSR Committee (currently the Sustainability Committee) meetings held

Integrated Report 2020

57

Sustainability/ESG

Sustainability/ESG

Roles of Independent External Directors
In order to strengthen the supervisory function of the Board of Directors andachieve fair and highly transparent management, one independent external director(excluding those who serve as an Audit & Supervisory Committee Member) and
four independent external directors who serve as Audit & Supervisory Committee
Members are appointed.
The main role of independent external directors is, based on their own
knowledge, to give appropriate advice from the viewpoint of the Company’ssustainable growth and improving the corporate value, to supervise management
through significant decision making by the Board of Directors, to supervise conflictsof interest between the Company and management or major shareholders, etc.,
and to appropriately express the opinions of shareholders and other stakeholders
to the Board of Directors from a standpoint independent from management.
The Company has formulated its own standards for determining theindependence of independent external directors, in addition to the independence
standards for “independent directors” set out by the Tokyo Stock Exchange.

General Meeting of Shareholders

Advisory Committee
Relating to Nominations
and Compensation

13 times during FY20/3

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 adirector, possesses appropriate knowledge of finance and accounting. The Audit& Supervisory Committee consists of six members, of which two are Audit &Supervisory Committee Members (full-time) and four are Audit & Supervisory
Committee Members (independent external directors).

Corporate governance system

Certified public accountants (Auditing firm)

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 six directors who serve as Audit & Supervisory Committee Members(of which four are external directors). The Company appoints diverse directors
with various knowledge, experience, and skills in order to ensure the necessarybalance and diversity as a holding company that manages companies that conductbusiness in various areas. In order to strengthen the supervisory function of theBoard of Directors and realize highly fair and transparent management, five out of
the 13 directors are independent external directors. The Chairman of the Board of
Directors is a non-executive director.

HeldSustainability/ESG

Corporate governanceStatus of Directors
Gender5 people

Male

Director and Chairman of
the Board of Directors

Non-executive

3 years

100% (16/16)

Male

Eiji Kutsukake

President andRepresentative Director,
Group CEO

Executive

6 years

100% (16/16)

Male

Seiichi Miyajima

MaleToshiaki Seki

Male

Makoto Haga

Male

Tetsuro Higashi(April 7, 1954)(September 12, 1960)(August 3, 1958)■Independent External Directors

Percentage of Female Directors
on the Board of Directors

7.7%

1person13 people
92.3%

Male
■Female■Male

Percentage of Independent External
Directors on the Audit & Supervisory
Committee

Gender(March 27, 1958)(June 22, 1966)(August 28, 1949)

Shoichi Nagamatsu(July 6, 1958)

Name (date of birth)

66.7%
33.3%

Male

Yasushi Takayama

Sustainability/ESG■Independent External Directors

Male

Akira Ono

Percentage of Independent External
Directors on the Advisory Committee
Relating to Nominations andCompensation

60.0%

Male

(February 6, 1958)(February 1, 1964)(December 28, 1971)

Yoshio Mogi
(April 10, 1952)

Executive Vice President
and Representative
Director,
Group COO
Executive Vice President
and Representative
Director,
Business Unit Manager
of Commercial Real
Estate Business Unit
Director andExecutive Officer
Group CFO,
Supervisor ofManagement Division,
Investor Relations

FemaleAkiko Miyakawa(October 18, 1955)

Executive

Executive

6 years

6 years◎

Finance *

●

●

●

●

Financeand audit

Legal andaudit

Tetsu Takahashi(October 24, 1956)

Overseasbusiness

100% (16/16)

ArchitecturaldesignICT

Independent

Director(Part-time)

Position/Responsibilities

Newly appointed
Non-executive

Executive/External/
Independent/New

Eiji Kutsukake has extensive business and management experience in the Nomura Group as well as experienceas President of the Company. He has been appointed because it is expected that he will continue contributing tostrengthening the supervisory function of the Board of Directors and achieving sustained growth and increased
corporate value of the Company by drawing on his substantial management experience and knowledge.
Seiichi Miyajima has extensive business and management experience in the Group as well as experience as
Executive Vice President of the Company. He has been appointed because it is expected that he will continue
contributing to strengthening the supervisory function of the Board of Directors and achieving sustained growthand increased corporate value of the Company by drawing on substantial experience and knowledge he has
accumulated on property development, architecture, and other operations.

●●

Toshiaki Seki has extensive business and management experience in the Group as well as experience as Executive
Vice President of the Company. He has been appointed because it is expected that he will continue contributing
to strengthening the supervisory function of the Board of Directors and achieving sustained growth and increased
corporate value of the Company by drawing on substantial experience and knowledge he has accumulated on
property development, property & facility management, and other operations.

●●

Makoto Haga has extensive business and management experience in the Group as well as experience as a directorof the Company. He has been appointed because it is expected that he will continue contributing to a strengthening
the supervisory function of the Board of Directors and achieving sustained growth and increased corporate value of
the Company by drawing on substantial experience and knowledge he has accumulated on corporate planning andfinancial and capital policies of the Group, and other operations.

●

3 years

100% (16/16)

1 year

100% (13/13)*4

〇

●

●

—

(Appointed onJune 23, 2020)

〇

●

●

●

Term of office*1

Attendance rate (number ofattendances/holdings)
Board of Directors meeting(upper)/ Audit & Supervisory
Committee meeting (lower)

Advisory Committee
Relating toNominations andCompensation
Member*2

Corporate
management

Finance *3

Financeand audit◎〇

Director(Member of the Audit &Supervisory Committee)(Full-time)Non-executive

5 years

100％ (16/16)
100％ (13/13)

Director(Member of the Audit &Supervisory Committee)(Full-time)Non-executive

1 year

100% (13/13 *4)
100% (9/9 *4)

5 years

94% (15/16)
100% (13/13)

1 year

100% (13/13 *4)
100% (9/9 *4)

1 year

100% (13/13 *4)
100% (9/9 *4)

Director(Member of the Audit &Supervisory Committee)

Director(Member of the Audit &Supervisory Committee)

Director(Member of the Audit &Supervisory Committee)

External
IndependentNon-executive

External
IndependentNon-executive

External
IndependentNon-executive

Audit & Supervisory
Committee Member*2

〇

〇

〇

●

●

●

●

●

●

Shoichi Nagamatsu has extensive business and management experience in the Nomura Group. He has been
appointed because it is expected that he will contribute to strengthening the supervisory function of the Boardof Directors and achieving sustained growth and increased corporate value of the Company by drawing on his
substantial experience and knowledge he has accumulated on management.

Legal andaudit

Director(Member of the Audit &Supervisory Committee)

External
Independent—(Appointed onJune 23, 2020)〇

Overseasbusiness●

ArchitecturaldesignICT

Reason for appointment●●

Yasushi Takayama has extensive business experience in the Nomura Group. He has been appointed as a director
as an Audit & Supervisory Committee Member because it is expected that his extensive experience and knowledge
concerning legal affairs will contribute to strengthening the supervisory function of the Board of Directors and thecorporate governance structure, as well as to enhancing the auditing structure.

●●

Akira Ono has great knowledge, experience, and profound insights as a legal expert acquired through his many years
working as a lawyer. He has been appointed as an external director as an Audit & Supervisory Committee Member
because it is expected that his extensive experience and knowledge will continue to contribute to strengthening thesupervisory function of the Board of Directors and the corporate governance structure, as well as to enhancing theauditing structure, although he has no experience in the management of a company.

●●

Tetsuro Higashi has been appointed for an external director because it is expected that he will continue contributing
to strengthening the supervisory function of the Board of Directors and ensuring fair and transparent management bydrawing on his wealth of knowledge, experience, and profound insights related to corporate management in his longcareer as a corporate manager.

Takao Orihara has extensive business experience in the Group as well as experience as a director and an Audit &Supervisory Board Member. He has been appointed as a director as an Audit & Supervisory Committee Member
because it is expected that his extensive experience and knowledge concerning finance and accounting will continue
to contribute to strengthening the supervisory function of the Board of Directors and the corporate governancestructure, as well as to enhancing the auditing structure.

〇〇

Reason for appointment

Atsushi Yoshikawa has extensive business and management experience in the Nomura Group as well as experience
as Chairman of the Board of Directors of the Company. He has been appointed because it is expected that he willcontinue contributing to strengthening the supervisory function of the Board of Directors and achieving sustained
growth and increased corporate value of the Company by drawing on his substantial management experience andknowledge.

●●

100% (16/16)

Non-executive

Nomura Real Estate Holdings, Inc.

3

●

●

Newly appointed

Male

58

Fields of expectation for directors
Corporate
management

Non-executive

5 people■Independent External Directors

Advisory Committee
Relating toNominations andCompensation
Member*2

External

Director

40.0%

3 people

Executive

Audit & Supervisory
Committee Member
*2

●

●

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 appointed as an external director as an
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 governancestructure, as well as to enhancing the auditing structure.

●

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 appointed as an external
director as an 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 the auditing structure, although she has no previous experience
directly involved in the management of a company.
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 outside
director; however he has been appointed as an external director as an Audit & Supervisory Committee Member because it isexpected that his extensive experience and knowledge as a representative of a law firm and an outside director and outside
audit & supervisory board member of other companies will contribute to strengthening the supervisory function of the Boardof Directors and the corporate governance structure, as well as to enhancing the auditing structure.

*1 Years as director as of June 23, 2020*2 ◎: Committee Chairman*3 Knowledge of capital markets and business experience in capital procurement, etc.
*4 Number of meetings held in the fiscal year ended March 31, 2020 since assuming the position of Director on June 25, 2019

Integrated Report 2020

59

Sustainability/ESG

MaleTakao Orihara

4 people
6 people

Attendance rate at meeting ofBoard of Directors (number ofattendances/holdings)

Atsushi Yoshikawa

13 people
61.5%

Term of office*1

Position/Responsibilities

Percentage of Independent External
Directors on the Board of Directors

38.5%

Executive/External/
Independent/New

Name (date of birth)Sustainability/ESG

Corporate governanceImprovement of the effectiveness of the Board of Directors

Compensation of directors

For continuous improvement of the effectiveness of the Board of Directors, we repeatedly perform a cycle of assessment of the effectivenessof the Board of Directors and the Board of Directors’ determination and implementation of appropriate policies based on the assessment
results.
Details of the assessment of effectiveness of the Board of Directors in the fiscal year ended March 2020 are as follows:

Outline of the system
Compensation of the Company’s directors (excluding Audit &Supervisory Committee Members and external directors) consists offixed compensation, comprising base compensation, and variable
compensation, comprising bonus and share-based compensation.
Policy on the payment ratio of fixed and variable compensation anddetails of compensation are as follows.

Results of analysis and assessment

Details of the implementation•Conduct the questionnairesof all directors (including
those who serve as Audit& Supervisory Committee
Members) and their interview
through a third-party
assessment organization.
•Conduct analysis andassessment and determine thepolicy for response throughdeliberation by the Board of
Directors based on the above
results.

Highly regarded points

Issues and future improvement measures[Composition]

The size of the Board of Directors and the ratio ofindependent external directors are generally appropriate.

—[Discussions]

Directors have free and active discussions beyond theirpositions based on their knowledge and experience.
Particularly in the fiscal year ended March 2020, the Boardof Directors aimed to enhance their discussions throughinsight provided by newly appointed external directors.

—[Operation]

Initiatives to improve operations continuously implemented,
including the thorough prior provision of meeting materials,
were assessed as fair for generally contributing to improvethe effectiveness of the Board of Directors.

There is still room for improvement of operation such as clarificationof issues in the explanation and materials for the agenda. By
pursuing the thorough improvement of operation continuously, we
will pursue the further effectiveness of the Board of Directors.

[Matters fordiscussion]

By narrowing down the agenda to be discussed in themeetings of the Board of Directors and continuously
improving operations such as providing discussion
opportunities other than the regular meetings of the Board of
Directors, they enriched discussions of management issues.

In the fiscal year ending March 2021, we will enrich the strategic
discussion to further increase corporate value and improve corporate
governance.

Base compensation
The amount of base compensation is determined according to therole and position of the director.
▶

Bonuses
The amount of bonuses is determined according to the Company’sbusiness performance, such as consolidated business profit,and evaluation of individuals. The individual evaluation is used toevaluate the progress of initiatives for single-year and the mediumto long term, the performance concerning sustainability and ESG
for which achievements are difficult to measure based only on
financial results.
▶

In the future, by assessing the effectiveness of the Board of Directors each year, the Company will regularly grasp the status of
improvement and will further improve the effectiveness of the Board of Directors.

FY19/3

FY20/3Business profit¥79,623 million¥82,833 million

Year on year

—

+4.0%

*Business profit = Operating profit + Share of profit (loss) of entities accounted for using
equity method + Amortization of intangible assets associated with corporate acquisitions

Main discussions of the Board of Directors
Main matters approved by or reported to the Board of Directors in
the fiscal year ended March 2020 are as follows:
Categories

Business strategy,
business plan

Corporate governanceIndividual businesses• Annual budget, policy for shareholder returns, fundprocurement (Borrowings, Bonds, etc.)• Financial results• Investor trends/IR strategy• Overseas business strategy• Examination of M&A• Promotion of sustainability• Promotion of wellness management• Evaluating the effectiveness of the Board of Directors• Policy for responding to Audit & Supervisory Committee audit
findings• Advisory matters to Advisory Committee Relating to Nominations
and Compensation• Policy for strategic shareholdings• Monthly monitoring of response status to various management
issues• Improvement of risk management(Review of risk management framework and operation method)• Report of Risk Management Committee• Risk monitoring report in overseas business• Formulation of annual compliance program• Report on the results of the group internal audit plan• Business progress report of Shibaura 1-chome District Project• Vietnam Ho Chi Minh City Residential Development ProjectIn addition to the above items to be deliberated by the Boardof Directors, directors hold meetings to exchange opinions among
them to deepen discussions.
Categories

Directors opinion
exchange sessions

60

Main themes• ESG investment (opinion exchange with investors)• Policy to respond to the assessment ofeffectiveness of the Board of Directors• M&A strategy• Overseas business strategy• Digital strategy

Nomura Real Estate Holdings, Inc.

Number ofmeetings

Number ofmeetings

Items

Specific details

Preparatory briefingof the Board of
Directors

In order to activate discussions by the Board of Directors,
members of the Corporate Planning Department provide
briefings on the agenda items to external directors prior
to the meeting of the Board of Directors.

12

Development
property inspection
by external
directors

External directors regularly inspect business sites inJapan and overseas to deepen understanding about thewide range of businesses of the Group. In the fiscal year
ended March 2020 newly appointed external directors
inspected the sites of residential developments, officebuildings, retail facilities, logistics facilities, hotels, andlarge-scale mixed-use development projects.

1

Main matters discussed and deliberated by the Audit &Supervisory Committee
In the fiscal year ended March 2020, the Audit & Supervisory
Committee mainly discussed and deliberated the following matters:
Categories

Main discussions

Composition andoperation of theCommittee• Agreement on a proposal for election of a director who serves as an
Audit & Supervisory Committee Member

Audit activities of
the Committee• Formulation of the basic audit plan

• Election of Committee Chairman and Committee Members (full-time)• Agreement on the internal audit plan of Group Internal Audit
Department• Preparation of audit report

Accounting auditor• Agreement on accounting auditor’s compensation, etc.
• Revision of criteria for the assessment and election of an accounting
auditor3

Share-based compensation
The share-based compensation consists of a performance-based
portion and a non-performance based portion. The performancebased compensation adopts performance-sharing (“PS”) providing
incentive for enhancement of medium-term performance such as
by delivering the Company’s shares and payment of an amountequivalent to the proceeds of converting the Company’s shares
into cash (“delivery, etc.”) after three years of the commencementof each business year, and non-performance-based compensation
adopts restricted shares (“RS”) providing an incentive for long-term
contributions and enhancement of corporate value by delaying
delivery, etc. until retirement as an officer.
This share-based compensation system is expected to have aneffect that it will function as an incentive to improve corporate value
in the medium to long term and align interests with the Company’s
shareholders by linking Directors’ compensation to the Company’s
share price.
Also, this share-based compensation system adopts the systemof executive compensation BIP (Board Incentive Plan) trust (the“Trust”). The number of shares, etc. to be delivered, etc. is set at
one Company’s share per one point according to the number ofpoints calculated based on the below formula.
▶

[Purpose of the introduction of the share-based compensation plan]
Characteristics

Performance-based(PS) portion

Fluctuates depending on the three-year performance
Clearer incentive for medium-term performance improvement

Non-performance-based(RS) portion

Delivery, etc. is deferred to the retirement of an executive
Incentive for long-term contribution and corporate value
improvement[The ranges for the fiscal year ending March 2021, the third year
from the start of the system in the fiscal year ended March 2019]
Achievement-linked
coefficient
Business profit
ROE

Range

Results

0 – 200%̶

¥75,400 million – ¥105,600 million̶

6.5 – 12.5%

̶[The ranges for the fiscal year ending March 2022, the third year
from the start of the system in the fiscal year ended March 2020]
Achievement-linked
coefficient
Business profit
ROE

Range

Results

0 – 200%̶

¥70,800 million – ¥99,200 million̶

6.5 – 12.5%

̶•Restricted Share (RS) portion
The number of points (the “Number of RS Points”) to be granted
to target directors, etc. for each fiscal year during the covered
period is calculated by dividing the amount of predetermined basecompensation with respect to each executive position by the shareprice as of the acquisition of the Company’s shares by the Trust.
By delaying the delivering, etc. of shares until retirement of each
Director, etc. from the Group, this portion creates incentives tocontribute to the Group and enhance corporate value over the
long-term.

• Determination of whether to reappoint the accounting auditor basedon assessment
Nominations andcompensation of
directors, etc.

• Determination of opinions regarding the nominations andcompensation of directors excluding those who serve as Audit &Supervisory Committee Members
Integrated Report 2020

61

Sustainability/ESG

Sustainability/ESG

Risk management,compliance, audits

Main themes

Information provision and support for external directors
The Company reinforces information provision and support required
for the execution of the external directors’ duties.

Calculation formula of points•Performance Share (PS) portion
The number of points (the “Number of PS Points”) to be granted
to target directors, etc. for each fiscal year during the covered
period is calculated by dividing the amount of predetermined basecompensation with respect to each executive position by the shareprice as of the acquisition of the Company’s shares by the Trust.
The number of achievement-linked points shall be calculated bymultiplying the Number of PS Points granted for each fiscal year by
the achievement-linked coefficient determined based on the level of
performance three years after the beginning of the applicable fiscal
year. The achievement-linked coefficient may vary in a range of0 – 200% depending on the level of achievement of target
ranges set based on the “business profit” from the viewpoint of
profit growth, and return on equity (ROE) from the viewpoint ofmaintaining the capital efficiency, from the financial performancetargets listed in the Mid- to Long-term Business Plan. This portion
enhances the consistency with the features of the real estatebusiness, which spans the mid to long term, and provides a clearer
incentive toward better performance for the mid to long term.
The range of management benchmarks was determined by
the Board of Directors as shown in the table below based on theMid- to Long-term Business Plan and the like after passing throughthe deliberation process of the Advisory Committee Relating toNominations and Compensation, a majority of whose members are
Independent External Directors.
▶

Sustainability/ESG

Corporate governance

Composition of Director’s compensation

Policy on payment ratio of fixed and variable compensation
Compensation of directors concurrently serving as executive
officers (executive director) consists of base compensation,bonuses, and share-based compensation so that it works as aclear incentive to improve performance not only for the short term,
but also for the mid- to long-term. The policy for the ratios of thecompensation items is shown on the right.
Compensation of the Chairman, who is a non-executive director
and Chairman of the Board of Directors, is made up of the basecompensation and the RS portion of share-based compensation,
taking into account the sharing of interests with shareholders basedon holding a role of supervising execution of business from an
objective standpoint and also holding a role of enhancing long-term
corporate value.
Also, compensation of external directors, directors as Audit &Supervisory Committee Members and internal directors (part-time)
consists only of base compensation due to their role of overseeing
the business execution from an objective standpoint.
▶

Directors concurrently serving
as executive officers

50%

External directors/Audit &Supervisory Committee Members/
Internal directors (part-time)

50%

100%

25%
50%

100%

25%

■Fixed compensation ■Variable compensation■Base compensation ■Bonuses ■Share-based compensation (PS & RS)

Fixed compensation
Base compensation

Evaluation/Criteria

Timing of payment/
Delivery

Criteria for each position

Variable compensation
Share-based compensationPS

Cash compensation
Bonuses• Performance such as consolidated businessprofit• Progress of initiatives, etc. for a single-year
and the mid to long term
• Performance in terms of sustainability/ESG

Monthly

Annually• Achievement-linked evaluation after three years• Evaluation indicator: Business profit and ROE

RS

Criteria for each position

Range of FY22/3• Achievement-linked coefficient: 0 – 200%
• Business profit: ¥70,800 million to ¥99,200 million• ROE: 6.5 – 12.5%
After three years from the beginning of
the applicable fiscal year

Directors (excluding Audit & Supervisory Committee Members andexternal directors)
Directors (Audit & Supervisory Committee Members)(excluding external directors)
External directors
Total

Total compensation,etc. (millions of yen)

When a director resigns

Total compensation, etc. by type (millions of yen)
Share-based
Base compensation
Bonusescompensation

Number of directors
applicable

467

259

101

106

6

102

102

—

—

3

69
639

69
431

—
101

—
106

8
17

Total amount of consolidated compensation, etc. of those who received a total amount of ¥100 million or more in compensation, etc.
Name

Eiji Kutsukake
Seiichi Miyajima

Category

Director
Director

64
55

35
30

29
21

Total compensation,etc. (millions of yen)

130
107

*The payment amount in the Share-based compensation in the above table is the amount recorded in the expenses for the fiscal year ended March 31, 2020.

Decision-making process for director’s compensation, etc.
▶Compensation frame
The maximum amount of compensation, etc. for Directors (excluding
Directors as Audit & Supervisory Committee Members) is limited
to up to ¥550 million per year in a separate framework from theshare-based, etc. according to a resolution at the Ordinary General

62

Nomura Real Estate Holdings, Inc.

Meeting of Shareholders held on June 26, 2018. The number of
directors (excluding Directors as Audit & Supervisory Committee
Members) at the time of the resolution was eight (including two
external directors).
Furthermore, as for the share-based compensation, themaximum amount of money to be contributed to the trust byCompliance with Japan’s Corporate GovernanceCode
Our reasons for not implementing two of the 78 principles of Japan’s
Corporate Governance Code, “Explain,” non-compliance, as ofJune 2020 are provided below.
Proper supervision of successor plans for CEO, etc.
(planning)
The Company believes that the appropriate appointment processof 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 for realizing sustainablegrowth. As for the plan for the CEO’s successor, based on therespective appointment criteria for officers and for the CEO, theCompany established its training policy and the process up to
the CEO’s election. Going forward, in addition to the Advisory
Committee Relating to Nominations and Compensation providing
regular monitoring and reporting to the Board of Directors, theCompany will strive for the further enhancement of the structure

and content of training, to ensure that the training of successor
candidates in relation to the aforementioned established successor
plan goes as planned.
[Supplementary Principle 4-1-3] Proper Supervision of Successor Plans for CEO,etc. (Planning)

Training policy for 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 toreceive training from guest lecturers from outside the Company, toimprove their knowledge of topics such as finance and corporate
governance. Also, when external directors assume office, they areprovided 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 fortraining, the Company also provides opportunities for them to tour
the Company’s properties inside and outside Japan. Going forward,
the Company will continue to investigate the aforementioned topics,
mainly through the Advisory Committee Relating to Nominations
and Compensation, in order to further enhance the structure andcontent of training primarily for directors.
[Principle 4-14, Supplementary Principle 4-14-2] Training Policy for Directors

Strategic shareholdings policy
The Board of Directors annually verifies the rationality of the Group's
continuous holding of shares of listed companies held for reasons
other than pure investment purposes (strategic shareholdings), andbased on which it sells off shares with low rationality for holding as
the basic policy in consideration of the market environment.
With regard to the strategic shareholdings, for each stock name,the Company regularly checks the transaction status with theGroup and the business conditions of the investee companies. The
Board of Directors verifies the rationality of continuous holding fromthe viewpoint of whether it contributes to the enhancement of theCompany’s corporate value.
As of the end of March 2020, holding of shares by Nomura Real
Estate Development, which posted the largest amount of equity
investments on the balance sheet compared to the Company andother consolidated subsidiaries, is as shown below. Incidentally, theCompany has not held shares subject to cross-shareholdings.
Status of shareholdings

Number of companies and total amount recorded on balance sheet
Number of companies

Total amount on balance
sheet (millions of yen)

Non-listed shares

11

165

Shares other than non-listed shares

1237

Category

Number of shares by company, information of the amount recordedon the balance sheets and other data
FY20/3
Number ofsharesAmountPurpose of holding, quantitative holding
recorded on theeffectsbalance sheets(millions of yen)

Onward Holdings 500,000

Enhancement of corporate value
by strengthening business ties
can be expected. Continuoustransactions are made mainly by
the Property Brokerage & CRE
Business Unit.

Company

237

Whetherthe sharesof theCompany
are held ornotNotholding*The description of quantitative holding effects is difficult, because individual transaction
conditions cannot be disclosed.

Integrated Report 2020

63

Sustainability/ESG

Sustainability/ESG*1. As of the end of the fiscal year ended March 2020, there are five directors (excluding Audit & Supervisory Committee Members) (excluding external directors). The reason for the differencein the number of directors applicable in the above table is that one director who retired at the end of the Ordinary General Meeting of Shareholders held on June 25, 2019 is included.
*2. As of the end of the fiscal year ended March 2020, there are two directors (Audit & Supervisory Committee Members) (excluding external directors). The reason for the difference in thenumber of directors applicable in the above table is that one director (Audit & Supervisory Committee Member) who retired at the end of the Ordinary General Meeting of Shareholders
held on June 25, 2019 is included.
*3. As of the end of the fiscal year ended March 2020, there are five external directors. The reason for the difference in the number of directors applicable in the above table is that threeexternal directors who retired at the end of the Ordinary General Meeting of Shareholders held on June 25, 2019 are included.
*4. The payment amount in the Share-based compensation in the above table is the amount recorded in the expenses for the fiscal year ended March 31, 2020 (including the compensation
amount of stock option (¥3 million)).

Total compensation, etc. by type (millions of yen)
Share-based
Base compensation
Bonusescompensation

Operation of compensation plan, etc.
Operation and revision of the compensation plan for directors
and the amount of the compensation for directors are determinedby the Board of Directors based on deliberation by the Advisory
Committee Relating to Nominations and Compensation andreporting to the Board of Directors.
The Advisory Committee Relating to Nominations andCompensation held in the fiscal year ended March 2020 carriedout periodic monitoring of the compensation plan of directors
and deliberates on general matters concerning the compensation
for directors. Furthermore, in reviewing the appropriatenessof the compensation level and the content of the share-based
compensation system that has been introduced at present, theCompany makes a determination on the basis of factors suchas the size of the Company and business characteristics, after
obtaining advice from an external compensation consultant.
▶

Compensation, etc. by category of director (FY20/3)
Category

Amount of compensation for each director
The amount of compensation for each director excluding a director
who is an Audit & Supervisory Committee Member is determinedat the Board of Directors following discussions at the Advisory
Committee Relating to Nominations and Compensation, for which
the majority of committee members are independent external
directors, and the amount of compensation for each director who
is an Audit & Supervisory Committee Member is determined byconsultation between Audit & Supervisory Committee Members,
within the maximum amount resolved at the aforementioned
Ordinary General Meetings of Shareholders.
▶

*1. The ratios above indicate a basic model when the Company pays 100% of its standard
variable compensation amount.
*2. Compensation of the Chairman of the Board of Directors is comprised of basecompensation and share-based compensation (RS portion).

Breakdown of compensation of directors
Compensation

the Company during the covered period (three fiscal years) is¥730 million, and the maximum number of Company shares tobe delivered, etc. to directors of the Company is 423,000 sharesaccording to a resolution at the Ordinary General Meeting of
Shareholders held on June 26, 2018. The number of directors who
were subject to this system at the time of the resolution was six(excluding two external directors).
The maximum amount of compensation, etc. for directors as
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).

Sustainability/ESG

Risk management

The Group recognizes that ensuring the soundness of management
through appropriate risk management and operation is an importantmanagement issue. To further strengthen our risk management
system, the Group organized and restructured risk management
items, systems, and management departments in April 2020. At thesame time, we revised “the Risk Management Regulations,” which
stipulates basic matters regarding risk management.
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 newvalue and achieve sustainable growth.
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 organizationaland business objectives in an integrated and unified manner while
controlling risks within the company’s risk tolerance limits.”
With the aim of ensuring the soundness of business
management through proper management and operation of risks,
the Group has formulated the Risk Management Regulations. As
its basic policy, the Group assures business continuity and stabledevelopment by implementing risk management and classifies its
main risks into four categories, namely “A: Investment risk,” “B:External risk,” “C: Disaster risk,” and “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.
Important risks needing to be managed among main risks•Risks that could have a major impact on the Group management•Risks that could have a major impact on society•Risk of litigation or other serious problems including litigations, etc.
•Other major risks that should be managed by the Group
Risk management structure
To discuss various risks related to group management, theCompany has prescribed the Management Committee as theintegrated risk management body and operates a system toregularly monitor, evaluate, and analyze the state of main risks,

Regulations and reports to the President (Group CEO) and provides
instructions such as response in accordance with the basic policy.
Details of main risk items and responses
The following are regarded as main risks that could make asignificant influence on the financial position, business performance,and cash flows of the Group.
Matters concerning the future and the recognition of risks inthe text are those determined by the Group as of the date of thesubmission of the Financial Report (June 23, 2020). The Report,
The details of each major risk items and main initiatives are as follows.
Risk categories (definition)(A) Investment risk(B) External risk(C) Disaster risk

(D) Internal risk

(A) Investment risk
Risk

Risk details

The Company

Report

2nd line*2

Main risk items

Basic response policies① Risk associated with real estate investment② Risk associated with strategic investment (M&A) and new businesses

Risk related to external
factors influencing
business⑤ Risk caused by changes in political/social conditions/systems (laws,
tax system, accounting, others)

Risk caused by disasters
that have a large impact on
customers and business
continuity⑦ Risk 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

Operational risk occurringat the Company and eachgroup company⑧ Risk of violations of laws and ordinances⑨ Risk of quality defects⑩ Risk of occurrence of information system crisis⑪ Risk of inadequate response to matters related to human resources⑫ Risk of occurrence of fraud and negligence⑥ Risk from lagging behind innovation and changes in the social
structure related to the business

Make appropriate responses to risk items forwhich returns shall be obtained according to thelevel of risk

Make appropriate responses to risk items that
result in reduced competitiveness and lost
opportunities

Make appropriate responses to risk items forwhich that should be responded to and managed
so that the risk does not materialize or the risk isminimized when it materializes

Details of major risk items and initiatives are as follows.

initiatives

Board of Directors

Risk related to individual
investments (real estate
investment, strategic
investment (M&A), etc.)③ Risk associated with market changes④ Risk caused by changes in economic conditions

Main

Defense line (conceptual diagram)

however, does not cover all risks. Risks that are unpredictable ordeemed insignificant at this point in time could have an impact on
businesses in the future.
In the fiscal year ended March 31, 2020, many events occurredthat were related to main risk item (7) “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.” These included storm andflood damage caused by typhoons No. 15 and No. 19 and the
spread of COVID-19.

3rd line

Risk related to individual investment (real estate investment, strategic investment (M&A), etc.)① Risk associated with real estate investment
In the real estate investment and development business carried out by the Group, there are cases in which business does not proceed asplanned due to such factors as unexpected soil pollution, delays in obtaining permits and licenses, and the need for additional construction. In
such cases, the occurrence of changes in the initial business schedule, delays in completion and recognition timing, and additional costs could
affect the Group’s financial position and business performance.
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 evaluating risk 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 the acquisition of the land or have the pollution removed by an external specialist. Moreover, 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 ofconstruction costs. Should an especially important event occur, the department 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.

Sustainability/ESG

Sustainability/ESG

Risk management system (conceptual diagram)provide necessary guidance and advice to each of business units
and Group companies while regularly reporting details to the Boardof Directors.
The Management Committee, which is the integrated
management body, directly monitors “A: Investment risk” and “B:External risk,” while the Risk Management Committee, established
as a subordinate organization of the Management Committee,
conducts regular monitoring, evaluation, and analysis of “C: Disasterrisk” and “D: Internal risk” as well as discuss basic response
policies regarding risk prevention, response when risk occurs, andprevention of recurrence. Moreover, we established the Group
Risk Meeting consisting of directors and executive officers of eachGroup company appointed by the Chair of the Risk Management
Committee to share risk information and response policies within
the Group.
With regard to risk management, each business unit manager
will supervise the risk management of their affiliated business units
and report on the situation to the Management Committee or Risk
Management Committee as necessary. Concurrently, the presidentof each Group 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 appropriatemanner.
In addition, we have introduced a three-line management
system (three defense lines) in tune with the restructuring of the risk
management system to clarify the role of each business unit in therisk management.
We have defined the organization in charge of business ineach Group company as the “first line” of risk management, theorganization in charge of corporate operations at the Company andeach Group company as the “second line” of risk management,
and the organization in charge of internal audits at the Company
and each Group company as the “third line” of risk management.
With each “line” playing its role in risk management, for example,
the “second line” and “third line” of the Company providing support,
guidance, and cooperation to the “second line” and “third line” ofGroup companies, respectively, we have established an appropriate
defense line.
In the event of a major problem requiring urgency, the Chair of
the Risk Management Committee decides the basic policies such ascountermeasures upon consulting with the executives responsible
for relevant departments in accordance with the Risk Management

Management Committee
*2

*3

*2
*3

Risk

*1

X business unit
Company a*1

X business unit
Company b

Y business unit general manager*1

Y business unit
Company c*1

Nomura Real Estate Holdings, Inc.

*3

1st line*4

2nd line*5

Risk details

3rd line

Y business unit
Company d*1 Each company reports on risks to the business unit manager of the affiliated business unit and thebusiness unit manager provides guidance and monitors the risk management of each company.
*2 The head of each business unit reports to the Management Committee on “A: Investment risk” and “B:External risk” that pertains to their own department and the Management Committee provides guidance
and monitors the risk management associated with “A: Investment risk” and “B: External risk” of eachdepartment.
*3 The head of each business unit reports to the Risk Management Committee on “C: Disaster risk” and“D: Internal risk” that pertains to their own department and the Risk Management Committee provides
guidance and monitors the risk management associated with “C: Disaster risk” and “D: Internal risk” ofeach business unit. Furthermore, the Risk Management Committee reports to the Management
Committee on the details of its own deliberations and on the status of each business unit’s risk
management associated with “C: Disaster risk” and “D: Internal risk.”64*2

Each Group company*3

X business unit general manager*2*1

Risk Management Committee*1 The Company’s second defense line provides appropriate support and guidance for each Group
company’s second defense line with respect to overall risk management based on the Group’s
management policy and strategic objectives and monitors each Group company’s second-line activities.
*2 The Company’s third line monitors activities of Group companies by providing appropriate guidance toand cooperating with the third line of each Group company. Concurrently, it audits matters relating to risk
management of the second line of the Company, or of the first and second lines of each Group company
when necessary, and verifies their effectiveness and efficiency and provides necessary advice.
*3 The first line of each Group company recognizes, evaluates, and controls risks associated with eachbusiness, establishes and operates a system that responds to risks, and carries out appropriate
risk-taking.
*4 The second line of each Group company supports the risk management of the first line of its own company
while monitoring to verify whether the risk management of the first line is being properly undertaken.
*5 The third line of each Group company audits matters related to risk management of each department of
the first line and second line of its own company, verifies the effectiveness and efficiency, and provides
necessary advice.

Main
initiatives② Risk associated with strategic investment (M&A) and new businesses
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 whichsynergies 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 plans or achieve synergies with Group companies could affect
the Group’s financial position and business performance.
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 isexecuted, 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 will contribute 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 Board of Directors or Management Committee.
Integrated Report 2020

65

Sustainability/ESG

Risk management(B) External risk
Risk

Risk details

Main
initiatives

Risk

Risk details

Main
initiatives

Risk

Risk details③ Risk associated with market changes
The Group carries out a variety of real estate-related businesses and any changes in the business environment or market conditions in eachbusiness could have an impact on the Group’s business performance. In addition, changes in economic conditions or the occurrence of disasters
could have an impact on the business environment or market conditions of real estate-related businesses.
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 in a situation whereby expected profits under the business plan cannot be secured and valuation losses oninventories held are recorded. In the Commercial Real Estate Business Unit, a decline in rent levels, a rise in vacancy rates, and increase in the
CAP rate that leads to a decline in asset prices 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 costs, could have an
impact on the Group’s financial condition and business performance.
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 thecurrent 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 secure a certain shareholders’ equity ratio even if market
conditions change rapidly.
Since the impact of COVID-19 on the real estate-related business environment and market emerged from the last part of this fiscal year ended
March 31, 2020, the Group has continued to verify the impact on each business according to each business’ characteristic. In addition, when
making investment decisions at each Group company, we are reviewing the operation of certain internal business’ rules such as investment
standards and responding to risk arising from market changes.

Main
initiatives(C) Disaster risk

⑦Risk caused by disasters (earthquakes, typhoons, floods, tsunamis, volcanic eruptions, major fires, epidemics ofinfectious diseases, etc.) that have a major impact on customers and business continuity, etc.

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 of loss 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 the 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 condition. In addition, natural disasters
such as earthquakes, fires, storms, and floods, 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 condition and business performance.

Domestic and overseas economic recessions, an increase in funding costs due to rising market interest rates, fluctuations in yen-denominatedinvestments and recovered amounts, or amounts of foreign currency assets and liabilities on the consolidated financial statements due tofluctuations in exchange rates could have an impact on the Group’s financial condition and business performance.
Regarding changes in economic conditions, the Group regularly updates its awareness of the external environment and works to ascertain
impacts on business results. In addition, since the emergence of the impact of COVID-19, we are paying particularly close attention to trends incorporate earnings, personal income, and consumption. In our funding through borrowings, we respond to the risk of rises in short-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.

Various types of laws and regulations in Japan and overseas are applicable to each of the Group’s businesses. For example, in addition to theReal Estate Brokerage Act and the Building Standards Act, other real estate-related laws and regulations as well as the Financial Instruments
and Exchange Act are applicable in Japan. In case there are changes or additions to these laws 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 andbusiness performance.
Also, in the case of changes to various tax systems and accounting systems in Japan and overseas that have an impact on the real estatebusiness, the resulting increased costs for acquiring, holding, and selling assets, a decline in customer 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.
Overseas, there are risks specific to each country’s social situations and risks related to laws, regulations and tax laws different from those inJapan. In the case of changes in social situations or changes or the establishment of laws, regulations, and tax laws that have been unexpected
at the beginning of conducting business in each country, the occurrence of new obligations, and expenses as well as obstacles to promotebusiness could have an impact on the Group’s financial position and business performance.
We collect and analyze information on trends in various laws and regulations, tax systems and accounting systems, from industry groups,
external experts and business partners and consider responses at each of the Company’s respective organizations on the “second line” anddiscuss those matters expected to have a significant impact at the Board of Directors or the Management Committee depending on the details.
During the fiscal year ended March 31, 2020, we held discussions on “Response to the Revision of the Japanese Civil Code (Law of Obligations).
Moreover, in overseas business, we set up a country-specific investment limit in accordance with the Group’s financial risk allowance after
conducting investigations and analyses of each country’s social situations. In addition, we seek the knowledge of external experts regarding
applicable laws, regulations, and tax laws when starting a business overseas, and after starting a business we regularly confirm the state ofchanges to important related laws and regulations that have an impact on business strategy, revenue, and expenditures, as well as proceed incountries where we do business. In the case 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.

Main
initiatives

Risk details(D) Internal risk
Risk

66

⑥ Risk from lagging behind innovation and changes in the social structure related to the businessShould 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 the Company is late in responding to changes incustomer needs accompanying changes in the social structure, the Company’s competitive advantage could decline and this could have an
impact on the Group’s financial position and business performance.

Nomura Real Estate Holdings, Inc.

The Group recognizes an increase in occurrence of various disasters as an important social issue. Based on various information transferredfrom central and local governments, we are working to ensure the safety and security in the event of a disaster. If a disaster occurs, we engage
in disaster prevention activities so that its impact is minimized and the Group and its employees can continue business and a normal life. At
the same time, 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 that directly hits under the Tokyo Metropolitan Area, we have established a BCP, set up an emergency chainof command, and assigned duties to ensure business continuity, and established a system to minimize the impact of disasters. Furthermore,
once per year we hold Disaster Task Force Establishment Drills to confirm responses prescribed in the BCP (assuring the safety of the lives ofexecutives and employees, establishing a chain of command system, and restoring businesses) as we prepare for emergencies.
Regarding an occurrence of earthquakes, fires, storms, floods, or other sudden accidents, we have set up regulations on how to respond totorrential rain and flooding, formulated a disaster prevention response manual, and created a disaster prevention guidebook for distribution toresidents, 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.
<Matters related to COVID-19>
Based on the BCP that had been formulated to respond to a new influenza outbreak, we established a basic policy for the Group’s
countermeasures and continuously update it. We have established a task force chaired by the Group CEO, gathered information fromgovernment and administrative authorities, and considered and implemented measures that place top priority on ensuring the health ofcustomers, employees, and their families and preventing the spread of infection while considering and implementing countermeasures forbusiness continuity. From the perspective of preventing the spread of infection, we suspended the operation of fitness clubs and deferred or
reduced rent payments to a certain level to provide support for the business continuity of tenants who were impacted by the closure of retailfacilities at the government’s and local authorities’ request. Including the hotel business, which was directly affected by a significant decreasein the number of tourists, many businesses are experiencing a temporary decline in revenue. However, these corporate actions align with ourapproach to promote the Company’s sustainability efforts, which are to resolve social issues through business activities and respond to customer
needs, and therefore contribute to enhance corporate value in the mid to long term.

Risk details
Risk

Risk caused by disasters that have a large impact on customers and business continuity, etc.

Risk

④ Risk caused by changes in economic conditions⑤ Risk caused by changes in political/social conditions and systems (laws, taxation, accounting, and others)

Amid the changing business environment, the Group has created unique new value and provided this to society and our customers by leveraging
our strengths that include real estate development capabilities based on the market-in approach and our commitment to the quality in urban
development and real estate-related services. To further enhance this strength, we have established the ICT & Innovation Planning Department
and this department is undertaking R&D in new business domains and planning, promoting and supporting the emergence of innovation and
ICT digital strategies. We have also established the Business Idea Proposal System that enables employees of each Group company to makeproposals on new businesses that transcend the framework of their everyday work and promote new businesses and the commercialization of
new products and services. Moreover, we will make efforts to create a corporate culture that takes on the challenge of realizing value creation bypromoting reforms and strengthen Group collaboration through the Nomura Real Estate Group Award, an award system within the Group. We
are also making efforts to create new business by collaborating with venture companies possessing innovative technologies and services throughcorporate venture capital.

Main
initiatives

Operational risk occurring at the Company and each Group company⑧ Risk of violations of laws and ordinances
In the real estate brokerage business, the main business of the Group, there are cases when the Company receives administrative sanctions fromgovernment authorities due to a violation of laws or ordinances such as an error in explaining important matters to customers, misrepresentation,or non-disclosure of disadvantageous facts. Also, in the case the Group violates the Building Standards Act, the Financial Instruments andExchange Act, Companies Act, Act on the Protection of Personal Information, Act on Prohibition of Private Monopolization and Maintenance ofFair Trade, and other laws and ordinances 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.
The Company has formulated the Nomura Real Estate Group Code of Action that defines the basic code of actions for executives andemployees, including complying with laws and regulations and acting with higher ethical standards, and prescribed internal rules. We aremaking efforts to familiarize employees with the Code of Action and internal rules through periodic training, promote education on an ongoingbasis, and facilitate enlightenment. For primary laws such as the Real Estate Brokerage Act, we formulate a business work flow specific to eachlaw to ensure legal compliance, ensure a thorough awareness through training and on-the-job training (OJT), and implement regular voluntary
inspections for compliance.
Integrated Report 2020

67

Sustainability/ESG

Sustainability/ESG

Main
initiatives

Risk related to external factors that has an influence on businessSustainability/ESG

Sustainability/ESG

Risk management

Internal controls, compliance/Information disclosure

Risk

Risk details

Main
initiatives

Risk

Risk details

Main
initiatives

Risk

Risk details

Main

Risk

Risk details

Main
initiatives

68

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 plansand operation plans could have an impact on the Group’s business performance.
In the real estate development business, to secure quality in design and construction upon placing an order for the design and construction workof a building with a third party who has a certain level of creditability and technical capabilities, the Group prescribed the Design and Construction
Standards (structure, construction, equipment, and electrical) and the Quality Manuals and ensures thorough compliance from the parties withwhich we order design and construction 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 andtemporary construction guidelines for repair work as we undertake business. We will also provide property insurance for damages in the unlikely
event of deficiency or accident.

⑩ Risk of occurrence of information system crisis
To achieve sustainable growth as the diversity of products and services provided to customers increases, the Group believes it must further
improve productivity and work efficiency and is actively utilizing the benefits of the Internet (the Cloud) (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 eachbusiness 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 unauthorized access, the loss of credibility and the resulting decrease in sales anddamage compensation costs could have an impact on the Company’s business performance.
As we actively promote initiatives that utilize information systems and ICTs, 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 lossof information devices and are progressing with the establishment of an ICT environment in preparation for cyberattacks and information leakage.
The Company is also striving to comply with relevant laws and regulations for personal information and to ensure proper handling of thisinformation. Moreover, with the aim of realizing organized management of information and maintaining and improving security levels within the Group,
we have prescribed the Information Security Regulations and the Information Handling Guidelines, regularly provide education and enlightenment toour employees, protect the rights 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.

⑪Risk of inadequate response to matters related to human resources
We regard human resources as our largest asset and the source of new value creation for the sustainable growth of the Group. Therefore, inthe event that the working hours of Group executives and employees are not properly ascertained and long working hours damage the health ofexecutives 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 theimposition of fines could have an impact on the Group’s business performance.
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 customs, the risk of losing know-how due to the retirement of local employees, anda risk that the health of overseas employees will be damaged due to the lack of systems to provide appropriate support for living in a foreigncountry.
The Group prescribes “working with vigor and achieving wellness” as its action guideline. The Group aims to provide “wellness management” sothat all its executives and employees can work energetically in good physical and mental health, which leads to sustainable corporate growth.
To properly grasp working hours, we have introduced and operate an attendance management system and for particularly long working hours,
this situation is monitored regularly. Furthermore, the compliance of our personnel system and its operation is regularly verified by outside 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, and provide support for visits to, medical
institutions.

⑫ Risk of occurrence of fraud or negligence
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 the relevant risk materializes, the loss of credibility and the resulting decrease in sales anddamage compensation costs could have an impact on the Company’s business performance.
The Group executives and employees comply with laws and ordinances as well as with the Company rules and regulations formulated by eachof Nomura Real Estate Group companies. Furthermore, establishing “the Nomura Real Estate Group Code of Action with the aim of acting inaccordance with even higher ethical standards,” we continuously provide education and enlightenment to our executives and employees.

Nomura Real Estate Holdings, Inc.

Compliance systems
The Group regards compliance, including the observance of laws
and regulations and corporate ethics, as one of our most importantmanagement 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 & Compliance Department in the Company to promote
continuous education and enlightening activities for the executives
and employees 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 EstateGroup 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 andregistered 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 will remain committed to alltypes of anti-corruption activities including extortion and bribery.
The Nomura Real Estate Group Code of Action
https://www.nomura-re-hd.co.jp/english/csr/base/compliance.html

Appropriate information disclosure andtransparency
The Company strives to disclose information about the Group’s
management strategy, financial condition, risk management, andinternal control system, etc., in a fair, timely, and appropriatemanner based on the provisions of the Companies Act and the
Financial Instruments and Exchange 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 Executive
Officer in charge of the Corporate Communications Departmentcollects information about the Company through the Corporate
Planning Department from each business unit and Group company.
As for the information requiring timely disclosure, the Information
Disclosure Screening Team made up of general managers,
executive officers, and others responsible in related departments will
screen the matter and report the results to the President. Company
information found to require timely disclosure will be disclosed ina timely manner by Corporate Communications Department at
the instruction of the Executive Officer in charge of the Corporate
Communications Department. The Group Internal Audit Department
carries out the monitoring of operations under the aforementioned
timely disclosure system. Audit & Supervisory Committee Members
attend Board of Directors’ and other important Company meetings
as well as receive reports from directors and view relevant
documents to investigate whether the timely disclosure system isfunctioning properly.

Compliance system
Nomura Real Estate Holdings

About the Risk Management
Committee

ReportBoard of Directors
President

Management
Committee

Group Compliance Officer
Group Legal &Compliance Department

Committee
Chairman
Secretariat

ReportRisk
Management
Committee•Held every two months in principle•Extraordinary meetings held as necessary•Reports to the Board of Directors/
Management Committee at least once
every three months•Roles-Regular monitoring of risks-Risk evaluation and analysis-Preemptive and preventive measures-Incident response-Measures to prevent repeat incidents-Improvement of compliance awarenessNomura Real Estate Group Companies
Compliance Officers(Directors and officers of general administrative operations at Group companies)

Compliance Leaders(General managers of general administrative operations at Group companies)

Compliance Promoters(Appointed at each company)

Timely disclosure system

Information Disclosure
Screening Team

(Made up of general managers,
executive officers and others
responsible for related departments)

Risk Management
Committee
ChairmanPresident

FormedasneededTokyo Stock Exchange

ReportTimelydisclosure

Person responsible for
information handling(Executive Officer in charge oftheCorporate
Communications
ReportDepartment)

Direction

Department responsible
for timely disclosure(Corporate
Communications
Department)

ReportDepartment responsible for
information collection(Corporate Planning Department)

Incidents withsignificant Reporturgency

ReportDepartments of Nomura
Real Estate HoldingsGroup companies

executive management team, and regularly reports to the Boardof Directors, which discusses this information. We established
Regulations Concerning the Prevention of Insider Trading to ensure
the fairness of information disclosures and prevent leakagesof information that affect our stock price. We manage insider
information appropriately according to these regulations, and asilent period was also established.

Current status of investor relations activities
In order to attract more shareholders and prospective investors, we
strive to enhance understanding of the Group's business activities
and growth strategy through direct and indirect communications
with both institutional and individual investors.
Major IR activities during FY20/3
Number of times
held

IR activities for institutional investors
Financial results briefings
Conference calls on financial results announcement days
Meetings with investors and analysts (including the following meetings)

Shareholder engagement
The Company conducts proactive and constructive engagementwith shareholders based on established systems and policy on
initiatives to promote greater engagement. The director in chargeof Investor Relations (The Group CFO) takes the lead in engaging
with shareholders, while the Investor Relations Section of the
Corporate Communications Department supports these efforts.
At the financial results briefings, the Group CEO explains businessresults and future strategies. The Investor Relations Section meetswith internal departments and shares information on a daily basis
to gather information and promote engagement with shareholders.
The director in charge of Investor Relations reports the views andconcerns of shareholders found during the engagement to the

Risk Management
Committee, etc.

CEO small meetings
Overseas IR activities (in Europe, U.S., and Asia) (including overseas conferences)

2
3
346
1
8

Conferences organized by securities companies (Japan)(including video and telephone conferences)

6

Property tours

4
12

SR meetings

Number of times
held

IR activities for individual investors

2
1
1

Conferences for individual investors
Company information session organized by securities companies
Company information session via the Internet
For further details and the latest information, visit the IR site.
https://www.nomura-re-hd-co.jp/english/ir/

Integrated Report 2020

69

Sustainability/ESG

Sustainability/ESG

initiatives⑨ Risk of defective quality

Sustainability/ESG

Sustainability

The Group implements sustainability initiatives in all its business activities to address social issues that requireconsideration while meeting the expectations of stakeholders. In line with the framework of the four key themes
and two promotion foundations set out under the Nomura Real Estate Group’s Policy on CSR/ESG, the Group has
now set qualitative and quantitative goals linked to the SDGs or business activities to push ahead with sustainability
activities through the steady implementation of the plan-do-check-act (PDCA) cycle.

Nomura Real Estate Group’s policy on CSR/ESG

The Sustainability Committee is mainly responsible for confirming progress of the policy on CSR/ESG and its goals described below anddeliberating and determining activity plans.
Material issues

Group targets/Indicators

Reducing CO2 emissions

Environment

E

Board of Directors

P72-73

Management Committee
ReportSustainability Committee
Chairman: Group COO
Members: 12 Directors andExecutive Officers
Management officeSustainability Management Department(Newly-established in April 2020)

Group companies
Determinationof various
policies

Practice sustainability
at a business level inaccordance withthe policy

Promoting solar power generation
Reducing energy use
Reducing water usage

Consideration for biodiversity

Acquiring biodiversity certifications (ABINC/JHEP/SEGES)

Appropriate utilization of resources andpollution control

Reducing waste discharge

Improved safety/security in design and construction

Complying with design and construction standards and quality manuals

Safety/Security

Improved quality of safety/security in operationand management

Improved management quality and expanding after-sales service

P74-75Initiatives for longer life and increased durability

Providing of long life and high durability products and services

Safety and security in disasters

Expanding disaster preparedness

CommunityP74-75

Support for
implementation

Responding to climate change
Effective utilization of water resources

ReportFour key themes

The Group organizes the Sustainability Committee (chairedby the Executive Vice President, Representative Director
and Group COO) to further strengthen and promotesustainability activities. The Committee consists of Directors
and Executive Officers appointed by the Board of Directorsof the Company and is mainly responsible for deliberating
and determining policies and activity plans for sustainability.
Results of deliberation by the Committee are reported to theManagement Committee and the Board of Directors andreflected in its business plans and business activities.
In April 2020, we further established the Sustainability
Management Department to strengthen sustainability
initiatives more linked with business.

Promoting use of domestic and FSC certified timber

Expanding planning and design for activation of communities

Care for and activation of communities

Health andWell-being

Response to aging population and diversity andsupport for healthP74-75

Improved customer satisfaction and comfort

Supporting activation of communities in operations and management
Promoting universal design
Supporting health and increasing healthy life expectancy
Promoting communication to improve customer satisfaction
Improving comfort

S

Preventing work-related accidents

Materiality determination process

STEP 1

Identify key themes via CSR Committee (currently the Sustainability
Committee) meetings, such as the impact on the Company’sbusiness, relevance, and degree of risk

Identify key themes
for stakeholders

Identify key themes via questionnaires and feedback fromstakeholders pertaining to expectations for the Company andsocial issues that we must address

Finalize four key themes

Identify four key themes by allocation based on importance fromthe perspectives of stakeholders and the Company

STEP 5

Identify activities andbusiness related toeach key theme

Determine policies and priorities for each key theme to promote
CSR activities. Identify activities and business for each key theme
via the CSR Promotion Council

Importance for our business

STEP 6

Evaluate anddiscuss issues

Conduct evaluations and hold discussions based on policy trends
and international frameworks, such as the SDGs and the SASB

Determine andapprove policies andmateriality

Determine policies and material issues after the CSR Committee(currently the Sustainability Committee) and the CSR Promotion
Council conclude discussions and submit to the Board of Directors
for approval

STEP 3

STEP 4

Four Key Themes
Safety/Health andEnvironment Community
Security
Well-being

STEP 7

G

70

Nomura Real Estate Holdings, Inc.

Promoting active participation by women
Supporting childcare and nursing care

Promotion of diversity

Promoting hiring of seniors and persons with disabilities

P76-79Implementing fair assessment and compensation

Creation of fair and rewarding workplaces

Improving employee satisfaction

Improvements to human capital

Enhancing cultivation of human resources
Complying with CSR Procurement Guidelines

Supplier safety

Ensuring supplier safety

Corporate governance

Ensuring diversity in Board of Directors

Management
structure

ComplianceObserving compliance requirements

Risk management

Implementing thorough risk management

P44-69Human rights

Implementing thorough human rights training

Improved supplier management

Compliance with CSR Procurement Guidelines

Value chain and sustainability material issues
In all business activities, the Nomura Real Estate Group implements sustainability initiatives to address social issues that require considerationand meet the expectations of stakeholders.
Residential Development Unit and Commercial Real Estate Business Unit
Acquisition of land
Ⅰ and properties
Fund procurement

Planning and
Ⅱ designing
products

Sales
Ⅳ (Sales andtenant recruiting)

Promoting
Ⅲ construction

Four key
themesHolding
properties
Selling
properties

Ⅵ
Operation andmanagement

Investment
Management
Business Unit

Contribution to achieving the Sustainable Development Goals (SDGs)
The 17 goals included in the Sustainable Development
Goals (SDGs) which were adopted by the United Nations
summit in September 2015 are global common goals, and
the Group also recognizes the importance of contributing
to their achievement. The Group will contribute to achieving
the SDGs through initiatives to address the four key themesof Safety/Security, Environment, Community and Healthand Well-being as well as the material issues.

Humanresources

Selling properties
Acquisition of
Ⅰ properties
Fund procurement

Asset

Ⅴ management

Ⅴ

Feedback

Returns toinvestors

Related key SDGs defined by the Group
Offering information for development site

Requests for brokerage

Property Brokerage & CRE Business Unit Ⅶ
Business
activity

Main stakeholders

Related material issues

Ⅰ

Sellers, brokers, financial institutions, investors, real estate appraisers, etc. ⑩

Ⅱ

Customers, local communities, NPOs, design companies, administrative
bodies, etc.

①⑥⑧⑨⑩⑪⑫

Ⅲ

Customers, local communities, construction companies, etc.

②③④⑤⑥⑨⑩

Ⅳ

Customers, local communities, NPOs, judicial scriveners, etc.

⑪⑫

Business
activity

Property &Facility
Management
Business Unit

Material Issues by theme

Upgrades to environmental management①
Responding to climate change②③ Environment Effective utilization of water resources
Consideration for biodiversity④
Appropriate utilization of resources and pollution⑤
control
Improved safety/security in design and⑥
construction
Safety/ Improved quality of safety/security in operation⑦
Security and management
Initiatives for longer life and increased durability⑧
Safety and security in disasters⑨⑩ Community Care for communities and support for activation
Response to aging population and diversity and⑪ Health and support for healthwell-being
Improved customer satisfaction and comfort⑫

Main stakeholders

Related material issues

Ⅴ

Investors, customers, financial institutions, property managementcompanies, etc.

①②③⑤⑦⑨⑩

Ⅵ

Customers, local communities, business owners, service outsourcing
companies, construction companies, etc.

②③⑤⑦⑨⑩⑪⑫

Ⅶ

Customers, brokers, financial institutions, real estate appraisers, etc.

⑩⑪⑫

Integrated Report 2020

71

Sustainability/ESG

Sustainability/ESG

Importance for our stakeholders

STEP
2~4

Identify and select social issues highly relevant to business byidentifying social issues referring to international frameworks,
such as the GRI Guidelines and ISO 26000

Identify key themes
for the Group

STEP 2

Four Key Themes

Examine social issues
extensively

Promoting taking of paid leave
Preventing overwork

Two promotion foundations

Decline of urban function, increased
natural disasters, climate change,
diversification of lifestyles, etc.

Promoting thorough physical and mental health management

Health and safety of employees

The Group selected its four key themes in the fiscal year ended March 2016. In the fiscal year ended March 2018, we advanced step 5
through 7 and formulated the Nomura Real Estate Group’s Policy on CSR/ESG and determined the Group’s material issues. (Report to theBoard of Directors was made in the fiscal year ended March 2019)

STEP
1

Related SDGs

Acquiring of advanced environmental management certifications(DBJ Green Building, LEED, CASBEE, etc.)

Upgrades to environmental management

Sustainability management structure

Key social issues for the GroupFor further details and the latest information,refer to the CSR report at the link below.
https://www.nomura-re-hd.co.jp/english/csr/

Sustainability/ESG

Environment

Environment

The Group is aware of climate change, natural resource depletion, and ecosystem destruction as important social
issues. Therefore, we will contribute to the realization of sustainable society through environmentally-friendly urban
development including initiatives for an energy-saving and low-carbon society while using renewable energy andengaging in the appropriate utilization of resources. We also comply with environmental laws and regulations
to implement an appropriate environmental management. Recognizing the following five items as particularly
important issues, we will work to step up our initiatives in these areas with our stakeholders including tenant
corporations and suppliers.

Environment
Material issues

Upgrades toenvironmental
management

Group targets/Indicators

Acquiring of advanced
environmental management
certifications (DBJ Green
Building, LEED, CASBEE, etc.)
Reducing CO2 emissions

Responding to climatechangePromoting solar power
generation
Reducing energy use

Effective utilization ofwater resources

Reducing water usage

Consideration forbiodiversity

Acquiring biodiversity
certifications (ABINC/JHEP/SEGES)

Appropriate utilizationof resources andpollution control

Reducing waste discharge
Promoting use of domestic and
FSC certified timber

Response to climate change

The Group uses land and other natural resources and energy in the course of conducting business activities, and we are fully aware that
responding to climate change is a major management issue. For example, increased natural disasters resulting from climate change andstricter environmental regulations could cause increase in costs and impede the continuation of business. On the other hand, we believe that
low-carbon/decarbonized products and services will lead to new business opportunities. After organizing the risks and opportunities related toclimate change, we are collaborating with stakeholders to promote various initiatives.

Targets• Numerical targets to reduce CO2 emissions• Reducing CO2 emissions

The Group has set the following targets to advance a response to
climate change in March 2019 and is taking various initiatives toachieve them.

Results of main initiatives in FY20/3

Main challenges and future initiatives• Acquisition environmental management
certifications for newly built properties forsales (excluding rental housing): 100% (No.
of properties: 14)• Strengthen environmental measures atvarious properties (including acquiring
environmental management certifications)• Reducing energy use• Strengthen analysis of risks andopportunities for climate change (including
response to TCFD*2 recommendations)

Example of main initiatives• Acquired ZEH-M oriented certification*1(PROUD TOWER Kameido Cross, etc.)• Analyzed and disclosed climate change
related risks and opportunities• Responded to CDP’s climate change
questionnaire (“B” score)• Announced PROUD Kanda Surugadai,a high-rise condominium with structuralelements made from wood materials(domestic timber)• Implement PDCA cycle steadily acrossthe Group and investigate expansion ofnumerical targets (for Scope 3*4 and SBT
approval*3)• Further strengthen information disclosureand further improve ESG rating

The Company’s awareness of environmental issues
climate change, water resources, biodiversity, use of resources andpollution control) are particularly important, and we are working tostep up our initiatives in these areas with our stakeholders including
tenant corporations and suppliers on supply chains of procurement,
our own operations, and products and services.
We signed the United Nations Global Compact (UNGC) in May
2019 and announced our support for the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD)*2
in September 2020 to realize the Nomura Real Estate Group
Environmental Philosophy and further promote responses tothese priority matters. We will continue to support a precautionary
approach to climate change mitigation, and other environmental
problems, and proactively fulfill our responsibility to address suchenvironmental problems.

[Nomura Real Estate Group Environmental Philosophy]
The Group’s mission is to create urban development in harmony with the natural environment.
To this end, we utilize the power and blessings of nature to pass on our beautiful planet to future generations.
We have high aspirations, enhance our sensitivity to the environment, and pursue the realization of ideal environmental quality.

• Promoting solar power generation

Indicater

We believe that low-carbon/decarbonized products and services
including net zero energy house (ZEH) will lead to new business
opportunities, and we actively engage in such products andservices.

72

Nomura Real Estate Holdings, Inc.

Reduce by

Reduced by

30%

16%

We are also examining how to set reduction targets for total CO2
emissions in the entire business including Scope 3*4.

Risks

Our responses

Main initiatives

Market:Changes in customer needs for real estateTechnology:
Increase in the development cost for CO2 emissions
reduction technologies
Physical:Increase in damage to buildings due to increasing
frequency of localized severe rain and flooding, andresulting changes in asset value and quality of realestateEvaluation:
Negative feedback in ESG evaluation by stakeholders

Market and services:
Confirmation and grasp of future scenarios (IPCC
Fifth Assessment Report)• Acquisition of ZEH-M oriented certification(PROUD TOWER Kameido Cross, etc.)• Development of high-rise condominium withstructural elements made from wood materials(PROUD Kanda Surugadai)• Certification as a top-level office under the
Tokyo Metropolitan Environmental Security
Ordinance (Nihonbashi Muromachi Nomura
Building)• Implementation of disaster-preparedness
concept: Advances in Disaster Preparedness in
Housing• Set up of disaster preparedness centers fortenant businesses

Grasp of customer needs (implementation ofcustomer satisfaction surveys)
Products and technology:
Development of ZEH-M in condominiums
Environmental performance assessments during
product planning and design (including developing
and exploring new technologies)
Resource efficiency:
Development of real estate securing of highenvironmental performance and energy efficiency
including PMO and others and the acquisition ofenvironmental management certifications

Opportunities
Products and services:
Expanded customer needs for low-carbon products
and services
Resource efficiency:
Expanded utilization of high energy efficient buildings
and properties
Energy sources:
Expanded utilization of renewable energy, etc.
Evaluation:
Acquisition of high ESG evaluation from stakeholders

Physical:Confirmation of hazard maps released by each
local governments during real estate development,
and implementation of severe rain and flooding
countermeasures
Evaluation :Ongoing communication with all shareholders
Continued enhancement of ESG information
disclosures and investigation into improving of ESG
evaluation

PROUD Kanda Surugadai, a high-rise
condominium with structural elements made fromwood materials

Performance
GHG (CO2) emission performance
Total CO2 emission and CO2 emissions intensity(1,000t-CO2 per year)

250

0.091

0.094

0.088

0.080

150

131

131

133

130

Energy use performance

Compare to FY14/3

Reduced by
16%
0.077
140

0.079
143

(t-CO2/m2
per year)

0.100
0.076
135

0.075

0.025

50
0

0

FY14/3

FY15/3

FY16/3■Total CO2 emissions (left scale)

FY17/3

FY18/3

FY19/3CO2 emission intensity* (right scale)

FY20/3

Total energy use (crude oil equivalent) and energy use intensity(1,000kl per year)(kl/m2 per year)

0.060

150

0.046

0.046

0.046

0.045

66

65

69

74

100

0.050

100

*1: Net Zero Energy House: Residences designed to achieve a net zero annual primary energy consumption (air conditioning, hot-water supply, lighting, and ventilation) by increase in thermal
insulation and energy saving performance, while creating energy by solar power generation, etc.
*2: Task Force on Climate-related Financial Disclosures: Established to develop recommendations for climate-related information disclosures and response to these disclosures by financial
institutions*3: Science Based Targets: Initiative requiring companies to set science-based reduction targets to limit the rise in global average temperature to “less than 2 degrees Celsius”*4: Scope : Scope of calculation and reporting of CO2 emissions by companies
Scope 1: Direct emissions from fuel burning, etc.
Scope 2: Indirect emissions resulting from the use of electricity or heat purchased by the Company
Scope 3: Indirect emissions other than those for Scope 1 and 2 (use of products sold, employees' commuting and business trips, etc.)

Compared to
FY14/3

Analysis of risks and opportunities for responding to climate change and our responses

200

For information about initiatives other than “Response to Climate Change,” refer to the CSR report.
https://www.nomura-re-hd.co.jp/english/csr/environment/

CO2 emissions per unit area of realestate held by the Group (Scope 1
and 2*4)• Initiatives for product development

Performancein FY20/3

TargetSustainability/ESG

Sustainability/ESG

Responding to environmental problems has become an urgent
social issue as environmental problems including climate change,
the depletion of natural resources, and the destruction of
ecosystems become increasingly severe. Meanwhile, the global
common frameworks such as the Paris Agreement and theSustainable Development Goals (SDGs) have been created.
In our real estate business and urban development, the Group
enjoys various benefits from the natural environment, but at thesame time, imposes certain burdens on the environment in ourbusiness activities. In addition, the Group interacts with various
customers including residents, tenant corporations, and facility
users over the long term, and consequently we are aware that
responding to environmental problems associated with our
products and services is an important duty of the Group.
We consider the above five items (environmental management,

For further details and the latest information,refer to the CSR report at the link below.
https://www.nomura-re-hd.co.jp/english/csr/

50

0.042

0.042

0.041

77

77

73

0.045
0.030
0.015

0

0

FY14/3

FY15/3

FY16/3

FY17/3■Total energy use (crude oil equivalent) (left scale)

FY18/3 FY19/3 FY20/3
Energy use intensity* (right scale)*Intensities are calculated by dividing the total amount of CO2 emissions and energy use by the gross floor area of the target facility. Some figures for CO2 emissions, energy use, and theirintensities before FY19/3 are different from the figures shown in the Integrated Report 2019 due to some changes in the calculation method.

Integrated Report 202073

Sustainability/ESG

Safety/Security, Community, Health and Well-being

Safety/Security
Community
Health andWell-being

The Group has identified Safety/Security, Community, and Health and Well-being as priority themes for social (S)initiatives. For example, on the theme of Safety/Security, the Group is aware that the aging and obsolescence ofbuildings and infrastructure and increases in natural disasters are important social issues and is working to increasebuilding lifespan. On the theme of Community, the Group is cognizant of important social issues such as dysfunction
and stagnation of local community resulting from the low birthrate, aging of society, increases in vacant residences,and other factors, and we are implementing a range of initiatives aimed at activating communities. Meanwhile, on
the theme of Health and Well-being, the Group is making an approach to help various people to live healthy andcomfortable lives regardless of their characteristics and attributes as lifestyles are becoming more diverse.

Safety/Security
Main targets• Providing long life and high durability products and services• Expanding disaster preparedness, etc.

Example of main initiatives• Initiatives for extension of large-scale repair work cycles

Safety/Security
Material issues

Improved safety/
security in design andconstruction
Improved qualityof safety/security
in operation andmanagement

Group targets/Indicators

Complying with design andconstruction standards andquality manuals
Improved management quality
and expanding after-sales
service

Initiatives for longer life Providing of long life and highand increased durability durability products and services
Safety and security indisasters

Group targets/Indicators

Expanding planning and design
for activation of communities
Care for and activationof communities

Main challenges and future initiatives• Formulated Design and Construction
Standards and Quality Manuals for newly
developed assets (small offices withservices, etc.)• Formulate action plans for each business
unit in line with material issues, targets, andindicators for Safety/Security• Properties covered by the “re:Premium”
service, which is designed to lengthen
large-scale repair cycles, were recognizedfor "good condominium management"
under the long-life quality housing
renovation promotion project supported by
Ministry of Land, Infrastructure, Transport
and Tourism

Expanding of disaster
preparedness

Community

Material issues

Results of main initiatives in FY20/3

Supporting activation ofcommunities in operations andmanagement• Ensure compliance with Design andConstruction Standards and Quality
Manuals and develop Design andConstruction Standards and Quality
Manuals for newly developed assets (retailfacilities)• Push ahead with projects under large-scale
repair work plans focusing on “re:Premium”
service“re:Premium” is a product designed to extend large-scale repair work cycles, at completed
PROUD condominiums. The collection of a repair reserve fund is important for proper
maintenance and management of the condominiums, but is often in shortage. Responding to thissocial issue, “re:Premium” extends the cycle for large-scale repairs, which is normally plannedfor every 12 years, to 16 to 18 years. As a result, ultra-long-term repair plans extending up to 60
years after the completion of construction can be formulated. The service enables the extensionof building lifespan and reduction of demolition waste. The psychological and economic burdens
on residents can also be reduced by substantially cutting lifecycle costs.

Main challenges and future initiatives• Activated communities open to everyone
through urban development in harmony andtogether with the surrounding community
based on the “BE UNITED concept”→1st project of ACTO: Started operation
at Hiyoshi→2nd project of ACTO: Prepared for
operation at Inagi Minamiyama andKameido• Formulate action plans for each business
unit in line with material issues forCommunity• Consider expansion of various events tomitigate negative impacts in communities
where projects are underway

Of around 6 million units ofcondominiums nationwide, just 40%
of condominiums are able to carryout repair works as scheduled(Source: The Ministry of Land,
Infrastructure, Transport andTourism’s Result of General Survey
on Condominiums Fiscal 2013)

Repair works
carried out
as scheduled

40%

Social value

Economic value

Helps decrease residents'
burden through reduction of
repair cost and create highquality housing stock

Number of completedlarge-scale repairs that
adopt the “re:Premium”:
29 (cumulative)*Plan to gradually expand to cover 750
completed PROUD properties• Number of completed large-scale repairs that adopt the “re:Premium”:
17 (3.4 times the number year-on-year)

Community
Main targets

Social issue• Supporting activation of communities in operations and management

Dysfunction in communities as a result of the low birthrate
and aging population, increases in vacant residences, andother factors

Example of main initiatives

Social value

Economic value

Helps activate local
communities and nurture
residents’ fondness for andpride in their city

Urban development
incorporating ACTO makes
properties more competitive•Number of contracts concluded at
PROUD CITY Hiyoshi: Approx. 550
units (as of end of March 2020)•Sales of PROUD Season Inagi
Minamiyama progressed steadily.
(41 units out of total units sold out
quickly)•Sales of PROUD TOWER Kameido
Cross progressed steadily.
(150 units out of total units soldout quickly)• Activation of communities based on the “BE UNITED concept”
The “BE UNITED concept” is urban development which nurtures “civic pride” through residents’fondness for and pride in their city. Through this concept, we aim to achieve urban development inharmony and together with the surrounding community based on cooperation with condominium
residents and active members of the community. We have labeled the activities necessary torealize the “BE UNITED concept” as ACTO. As a first project, we introduced these activities at
PROUD CITY Hiyoshi. Taking advantage of our relationships with administrative bodies, educational
institutions, neighborhood associations, and other community members, we have begun
community activities, which have been well received and condominium sales are also brisk.

Results in FY20/3• Facilities that contribute to local communities: 6*1(double the level year-on-year)• Number of community social events held: 138 (down 10% year-on-year*2)*1. Nursery schools, cafes, etc. built together with residential developments, which were recorded for the
fiscal year ended March 2020.
*2. Some events were cancelled due to the spread of COVID-19.

Events related to ACTO

For further details and the latest information on ACTO,
visit the following link:
http://www.acto-nreg.jp (in Japanese)
Sustainability/ESG

Sustainability/ESG• Engaged in communication withincommunities in which projects areunderway(Held Christmas events in collaboration
with regional development section ofadministrative body, etc.)• Strengthen collaboration to resolve
community issues at ACTO Hiyoshi, where
facilities went into operation in July 2020,
and to generate a sustainable urban growthSocial issue

Results in FY20/3• Expanding of planning and design for activation of communities

Results of main initiatives in FY20/3

For further details and the latest information,refer to the CSR report at the link below.
https://www.nomura-re-hd.co.jp/english/csr/

Health and Well-being
Health and Well-being

Material issues

Group targets/Indicators

Promoting universal design
Response to aging
population and diversity
and support for health Supporting health and increasing
healthy life expectancy

Improved customer
satisfaction and comfort

Promoting communication to
improve customer satisfaction
Improving comfort

Main targets
Results of main initiatives in FY20/3

Main challenges and future initiatives• Supporting health and increasing healthy life expectancy• Acquired CASBEE-Wellness Officecertification for some properties• Formulate action plans for each business
unit in line with material issues for Healthand Well-being• Improving comfort, etc.

• Publicly disclosed the results of customer
satisfaction surveys for various assets• Started introduction of the “Yukai-full”
underfloor air-conditioning system for
healthy, comfortable living*Received the FY20/3 Nomura Real EstateGroup Awards (→P79)• Launched HUMAN FIRST LAB to research
the nature of offices for increasing creativity
and well-being• Make it a basic policy to acquire CASBEEWellness Office certification for all newly
developed office buildings• Expand coverage of disclosure of customer
satisfaction surveys and strengthen
initiatives to improve satisfaction• Increase properties with “Yukai-full”
underfloor air-conditioning system• Consider actual contents to be researchedat HUMAN FIRST LAB, etc.

Example of main initiatives• Development of OUKAS elderly housing with supportive services toincrease healthy life expectancy
OUKAS elderly housing aims to help seniors maintain and improve their health and achieveautonomy in their day-to-day lives. The housing incorporates support systems which enableseniors to live with peace of mind, including unique wellness programs covering exercise,diet, and sleep for maintaining a healthy routine and a 24-hour monitoring service. OUKAS
Funabashi, our first OUKAS project, has a high occupancy rate exceeding approximately 90%.

Results in FY20/3

Social issue
Increase in social security costs due to increasing of aging
population
Social value

Economic value

Helps independent elderly
persons who do not requirenursing care stay healthy
and contributes to curbingsocial security costs byproviding unique healthpromotion programs

Secures development andoperation projects of a totalof 6 properties with a total ofaround 830 units
Funabashi

KaihinMakuhari

Kichijoji

Hiyoshi

Shiki

Sengawa

For further details and the latest information on OUKAS
elderly housing, visit the following link:
https://nomura-re-wn.co.jp/brand/ (in Japanese)• Development of OUKAS elderly housing (cumulative units completed)
382 units (3.5 times the level year-on-year)
For more detailed information about targets, initiatives, and performance for each topic, refer to the CSR report.
https://www.nomura-re-hd.co.jp/english/csr/social/

74

Nomura Real Estate Holdings, Inc.

Integrated Report 202075

Sustainability/ESG

Human resources

Human
resources

The Group recognizes that employees are the most important business resources for a company and fostering humanresources is essential for a company to achieve sustainable growth. The Group aims to provide Wellness Managment
so that all of its executives and employees can work energetically in good physical and mental health, which leads
to sustainable corporate growth. The Group also promotes the occupational safety and health maintenance of its
employees and suppliers, recognizing that those matters are important management issues. Also, recognizing that
innovations through diversity are indispensable for the continuous creation of new value, the Group works to promote
diversity and create fair and rewarding workplaces so that employees with a variety of perspectives and ways ofthinking, regardless of their social attributes, can fully demonstrate their individualities and capabilities.

Human resources
Material issues

Group targets / Indicators

Preventing work-related
accidents
Health and safety of
employees

Promotion of diversity

Promoting thorough physicaland mental health management

Main challenges and future initiatives• Each company implemented initiatives topromote work style reforms with their own
quantitative targets• Examine new ways of working in response
to COVID-19• Evaluate effectiveness of each company’s
quantitative targets

Promoting taking of paid leave• The Group CEO and COO held Wellness
Promotion Meetings with employees

Preventing overwork• Partial introduction of one-on-one meetings• Hold one-on-one meetings on a groupwide basis

Promoting active participation by
women• Considered how to operate CSR
Procurement Guidelines• Start considering formulation of humanrights policy

Supporting childcare andnursing care

• Gained understanding of human rights
issues through study meetings with othercompanies (issues regarding of foreigntechnical interns, etc.)• Start actually operating CSR Procurement
Guidelines

Promoting hiring of seniors andpersons with disabilities
Creation of fair andrewarding workplaces

Results of main initiatives in FY20/3

Implementing fair assessment
and compensation
Improving employee satisfaction• Conduct further research on human rights
issues and examine policy for addressing
issues (issues regarding foreign technicalinterns, etc.)

Improvements to human Enhancing cultivation of humancapitalresources
Supplier safety

Complying with CSR
Procurement Guidelines
Ensuring supplier safety

Wellness Management

For further details and the latest information,refer to the CSR report at the link below.
https://www.nomura-re-hd.co.jp/english/csr/

Health and safety of employees

The Group is aware that the physical and mental health and safety of employees are essential for a company's business to grow continuously
and sustainably. Based on this understanding, we made working with vigor and achieving wellness a part of the Nomura Real Estate Group
Action Guideline, “What We Value,” and we think that the basis of everything is that employees can work energetically in good physical andmental health.

Targets• Enhancement of health management• Preventing work-related accidents

The Group requires employees to undergo thorough annual
medical checkups and established the “Physical and Mental Health
Consultation Hotline,” to provide access to outside specialists for
consultations, and the “Health Consultation Office,” which is staffedby full-time physicians and nurses, within the Group. In the fiscal
year ended March 2020, the rate of employees undergoing annual
medical checkups at Nomura Real Estate Development was 100%.

• Promoting thorough physical and mental health management• Promoting taking of paid leave• Preventing overwork

Examples of main initiatives• Management of work time over statutory working hours• Health and safety risk management

Each month, the Nomura Real Estate Holdings Board of Directors
receives reports on and confirms the status of compliance with the
Article 36 Agreement of each Group company. In addition, eachmonth, information on working hours and the status of employees
taking vacation for each business unit is reported and any issues
are shared.

At Nomura Real Estate Development, general managers andsenior managers who supervise employees based on stresschecks share information regarding employees who require healthcare with the responsible officers and officer responsible for the
Human Resources Department. In addition, the responsible officers
take measures to determine the health and safety status of theabove-mentioned general managers and senior managers andshare information regarding issues with the Human Resources
Department.

• Prevent overwork
As a part of the work style reforms that the Group initiated in thefiscal year ended March 2018, we have implemented a variety of
programs intended to prevent overwork by employees.
In addition, “employees who work more than a certain numberof hours in a single month” are required to check their physicalcondition using a Cumulative Fatigue Self-Diagnosis Checklist andprovide feedback to a supervisor. Other measures are also taken to
ensure good health such as consulting with an industrial physician.

Comment by General Manager of the Group Human
Resources Department

Main measuresin life and maintaining and improving health, and reported to theBoard of Directors twice a year. Furthermore, in the fiscal year
ending March 2021, the Group launched the Group Wellness
Promotion Committee chaired by the President and Group CEO,aiming to further develop the Work Style Reform Promotion
Committee and promote wellness, work style reform, and diversity
in an integrated fashion.

• Working hours made visible
Tadataka Yano

• No Overtime Days designatedGeneral Managerof the Group
Human Resources
Department• Clock-out time declaration program• PCs turned off at 8 p.m.
• Various measures to encourage employees to take vacation timesuch as allowing employees to take the day off on their birthday

Overview of wellness management

Employee Happiness and Corporate Growth
We realize employee happiness and corporate growth throughwork style reforms and diversity management.

Performance
Preventing work-related accidents

Promoting taking of paid leave

Preventing overwork

Absentee rate (%)

Paid vacation acquisition rate (%)

Average work time over statutory working hours(hours per person/month)

0.4

0.3

Work style reforms• Build an environment where each person can maximize theirabilities• Cultivate a work climate that accepts and expresses diverse
valuesWellness
Employees can work energetically in good physical and mental health = our fundamental policy

Nomura Real Estate Holdings, Inc.

0.38

20

0.37

Diversity• Enhance work–life balance by improving productivity,
which leads to increased employee happiness and motivation• Become a corporate group that contributes to employee
growth and satisfaction

76

70

0.29
0.2

54.93

15

47.31

35

19.66

61.19 62.62

59.55

14.07

13.51

FY19/3

FY20/3

10
0.1

5

0

0

FY18/3

FY19/3

FY20/3*Absentee rate: Total number of lost days due to absence/(Predetermined working days×Number of employees)

0

FY18/3■The GroupFY19/3

FY20/3

FY18/3■Nomura Real Estate Development only

Integrated Report 2020

77

Sustainability/ESG

Sustainability/ESG

The Group is promoting initiatives to realize Wellness Management.
In April 2017, the Nomura Real Estate Group Work Style Reform
Promotion Committee was established, comprising Nomura Real
Estate Holdings and Group company directors and others, andis chaired by the Executive Vice President and Group COO. The
Committee discussed issues and measures, approved targets,and monitored the results of activities for wellness management,
including enhancing employees’ happiness and a sense of purpose

I believe the fact that all Group executives and employees
already shared the understanding that “the wellnessof employees comes first” was hugely significant inresponding to COVID-19. We were able to promptly
introduce a range of crisis measures, such as the decisionof stand by at or working from home in considerationof employees’ family situations and other measures inrelation to customers and people using the facilities
without spending time on discussion. The Group can
not grow unless safety and health are ensured forour employees and stakeholders. Moving forward, we
will all go about our activities based on this common
understanding. And we have also begun examining
measures for new working styles based on the lessons
learned from this experience.

Sustainability/ESG

Human resources

For further details and the latest information,refer to the CSR report at the link below.
https://www.nomura-re-hd.co.jp/english/csr/

Promotion of diversity/Creation of fair and rewarding workplaces

Improvements to human capital

The Group established the Nomura Real Estate Group Code of Action, which stipulates respect for fundamental human rights and prohibits
discrimination and harassment. We also conduct diversity management to ensure equal hiring and employment for all persons regardless of
individual attributes so that all employees can fully demonstrate their diverse individuality and capabilities. We also promote the creation of fairworkplace environments where employees can work with reassurance, and we are implementing various work style reforms aiming to be acompany in which each employee can actively work and is kept motivated.

The Group seeks to carry out the Nomura Real Estate Group Action Guideline “What We Value” and works to improve human capital. We
offer programs to enhance the qualifications and capabilities of each Group employee so that they can perform they work as a professionalwith a high degree of specialization.

Targets• Promotion of work style reforms and diverse work styles• Promoting active participation by women

The Group discusses and promotes work style reforms and various
systems and programs at the Group Wellness Promotion Meeting.

• Promoting diverse work styles• Hiring and utilizing diverse human resources, etc.

Main programs
Promoting diverse
work styles

Examples of main initiatives• Initiatives for promoting active participation by women
The Group is working to promoting active participation by womenin the workplace based on the belief that leveraging diverse
perspectives in business is a key to creating new corporate value.
Nomura Real Estate Development held “Health Seminars for
Women” for all female employees in 2019.

• Establishing teleworking programs(including working from home)• Securing satellite offices• Expanding flex time working programs

Encouraging employees
to take vacation• Setting regular days off at sales offices• Encouraging employees to take leave such as
making employee birthdays a day off

Raising awarenessregarding shorter working
hours• Working hours made visible• Clock-out time declaration program• Establishing “No Overtime Days”• Introducing productivity assessments• PCs turned off at 8 p.m.

• Initiatives to promote active participation of diverse humanresources
Booklet distributed at
the seminar

The Group believes that utilizing diverse perspectives in business isessential to create new corporate value and is working to promote
the active participation of diverse human resources regardless ofgender, age, or nationality. Also, in terms of hiring foreign humanresources, Nomura Real Estate Amenity Service has hosted a
total of 39 foreign technical intern trainees to date. We are also
promoting the employment of persons with disabilities.

Scene of the seminar• Supporting childcare and nursing care
The Group has instituted personnel programs that make it possible
for employees to continue working even after certain life events
such as childbirth or the need to provide childcare or nursing care.
We provide information on and raise awareness of these programs
though the Group intranet, etc., and are working to create
workplace environments that encourage the use of these programs.
Main measures• Encouragement of taking childcare leave

Targets• Enhancing cultivation of human resources• Skill development program
Nomura Real Estate Development has offered N-COLLEGE, a self-skill development system for
employees, which provides programs to study for real estate-related certifications for professionals,
such as a real estate notary, real estate appraiser, or first-class architect, and programs covering
general business skills, such as programs in finance and foreign language study.

The Group has the Business Idea Proposal Program, which allows all employees to propose new
businesses, products, or services that go beyond the boundaries of their ordinary work. There havebeen 60 entries in total (including 12 entries in the fiscal year ended March 2020), of which seven ideas
are currently being examined and four ideas are already materialized.
• The Nomura Real Estate Group Awards

The “Yukai-full,” underfloor air-conditioning system, which won
this year's award, provides around the clock air conditioning
for the reduction of CO2 emissions and a healthy, comfortable
life. We encountered various problems along the way, and I
am proud that we overcame these obstacles as a team. The
Yasuhiro Yoshida fact that we have this award system to properly recognize
Residential
employees’ efforts increases employees’ motivation.
First Place Award winner of the Group Award 2020:“Yukai-full,” an underfloor air-conditioning system
for a healthy, comfortable life

Hire and utilize diverse human resources

Female employee ratio and female manager ratio (%)

Childcare leave takers and nursing care leave takers(persons)

Rate of employment of persons with disabilities (%)

300

3.0
253 (10)

30.61
200

2.0

178 (6)

1.90

1.96

2.02

148 (3)

20

1.0

100
6.14
0

78

FY20/3■Female manager ratio

4

4

7

FY18/3

FY19/3

FY20/3■Number of childcare leave takers(Number in parentheses indicates number of men)

Nomura Real Estate Development has established its original Construction Safety and Security
Measures Guidelines to prevent accidents and disasters at demolition and new construction sites.
The Group conducts health and safety training for construction contractors to raise awareness, andperforms inspections in major building construction processes to ensure the safety not just of suppliers,
but also of neighboring residents and local community members.
• Safety and health initiatives by Nomura Real Estate Partners and Nomura Real Estate Heating
and Cooling Supply
With the aim of implementing comprehensive safety management systems and raising awarenessregarding health and safety, Nomura Real Estate Partners and Nomura Real Estate Heating andCooling Supply regularly hold briefing sessions on health and safety for business partner companies
who are their suppliers.

10■Female employee ratio

Development Division,
Nomura Real Estate
Development

Sustainability/ESG

Sustainability/ESG

Promoting diverse work styles

FY19/3

FY18/3 FY19/3 FY20/3

1: Reform and innovation
2: Improvement incustomer satisfaction
3: Group synergy
4: C SR activities andsocial contribution
5: C ontinuity andperseverance• Inspections at construction sites in accordance with the Construction Safety and Security
Measures Guidelines

Promoting active participation by women

FY18/325,000

0

Examples of main initiatives

Performance059,48250,000Asian Night 2019 social event• Reduced working hours for nursing care

5.58

80,393• Ensuring supplier safety, etc.

• Paternity leave programs for male employees

5.45

79,984

Comments of the First Place Award winnerTargets

30.76

100,000

Selection criteria• Holiday childcare support program and subsidies for a portion ofbabysitter expenses

29.75

Investment in training per employee (yen)The Group believes that fostering a corporate culture which encourages challenges is essential forachieving the work-style reforms goal of “becoming a corporate group that contributes to employee
growth and satisfaction” and the diversity goal of “building an environment where each person can
maximize their abilities.” As part of this belief, we have held the Nomura Real Estate Group Awards
since the fiscal year ended March 2017.

Ensuring supplier safety

40

Enhancing cultivation ofhuman resources

75,000• Business idea proposal program• Encouragement of taking nursing care leave

30

Performance

Examples of main initiatives

0

FY18/3

FY19/3

FY20/3

Performance
Number of suppliers attending theMeeting on Health and Safety
Council organized by the property
management companies*
250
200

188

198

198

150
100
50
0

FY18/3 FY19/3 FY20/3*Nomura Real Estate Partners and Nomura Real
Estate Heating and Cooling Supply■Number of nursing care leave takers

Nomura Real Estate Holdings, Inc.

Integrated Report 202079

Sustainability/ESG

Topic: Response to COVID-19

TOPIC

Response to COVID-19

Basic approach to COVID-19
The Company has adhered to the policy of appropriately
collaborating with shareholders, employees, customers,
suppliers, and all other diverse stakeholders inconsideration of their interests. In responding to
COVID-19, we are taking a wide range of measures
based on this policy to secure the safety of our
stakeholders and prevent the further spread of infection.

Maintaining residents’ healthy lifestyles
Major Stakeholders

Initiatives at OUKAS, elderly housing with supportive services

Shareholders and investors

Suppliers

Customers

Employees and parties concerned

Community and residents

人生を、謳歌する住まい。
今日より健康な、明日を。

Initiatives to protect people who are sustaining the Group’s businesses and services

Yasutomo Nakamura
OUKAS Funabashi Manager
Nomura Real Estate Wellness

Measures for employees and parties concerned, suppliers, etc.
Basic approach
The Group aims to provide wellness management so that all of our executives and employees can work energetically in good physical andmental health, which leads to sustainable corporate growth. Based on this understanding, we take numerous measures putting the safety of
our employees, parties concerned, and suppliers first.
Specific initiative examples• Special paid leave for employees with children whose
schools are closed• A selection of training programs for employees toenhance their skills while they remain at home
• Guaranteed pay for condominium resident managers• Flexible rescheduling of projects under development andgiving maximum consideration to the safety and securityof contractors

Residents’ comments

About OUKASOUKAS aims at enabling its
residents to lead healthy lives
and prolong their healthy life
expectancy. To this end, a wide
range of services are provided,
including exercise programs
run by dedicated trainers anddietary management.

I can stay healthy because
I’m able to exercise within
the facility.

Online broadcasting within
the facility

Online yoga lesson
A Group employee working from homeduring school closure

Amid COVID-19, we are giving top priority to providing a safe and secure living
environment for our residents, while focusing especially on maintaining their healthy
lifestyle. Specifically, to prevent the spread of infection, we thoroughly disinfected
our facility, ensured ventilation, prohibited face-to-face seating in the dining room,and changed our health management service from group-based programs toindividual programs, while providing healthy meals and an environment for gettingsome exercise. In addition, we divided our operation staff into two teams in aneffort to reduce the risk of infection, giving full consideration to the health of ouremployees.
Currently, we are devising ways to continue providing services while dealing with
COVID-19. We have resumed group-based programs in our health management
service with various measures taken against COVID-19, such as offering online
programs alongside in-person programs and setting rules for participation.

I can go about my daily
life with peace of mind
because the facility is always
thoroughly disinfected.

It’s reassuring to have someone toturn to whenever I have concerns
about my medical condition,
exercising, and daily life.

I’m grateful for being able toenjoy different dishes every
day without having to go out.

General manager/branch manager meeting
held with social distancing

Pursuit of well-being
Management meeting safety & health standards

Initiatives at MEGALOS fitness clubs

Measures taken in our hotel business

Commercial Real Estate Development& Management Division II
Nomura Real Estate Development

About our hotel businessWe have arranged a collaborative
scheme between NOHGA HOTEL,
our directly managed hotel brandestablished in 2018, and HOTELNIWA TOKYO and Tokyo Green
Hotel Korakuen, both of which
joined the Group in 2019, to provide
unique added value including bonds
forged with the local communities
and Japanese-style hospitality.

80

Asami Yamazaki
MEGALOS Soka Manager
Nomura Real Estate Life & Sports

In response to the government’s declaration of the state of emergency, we had nochoice but to close our fitness clubs, but we continued providing services in new
ways and strived to maintain our valued bonds with our customers by distributing
online training videos and live lessons and having our instructors send letters tojunior members.
Meanwhile, we also offered online training programs to our employees during
the closure to enable them to provide our customers with enhanced services.
After reopening the fitness clubs, we have been disinfecting and cleaning ourfacilities and applying anti-virus coating. We also introduced anti-virus filters andinstalled an automatic thermometer at facility entrances in an effort to create anenvironment where our customers can come with peace of mind.

Sustainability/ESG

Sustainability/ESG

Akira Kawatsuji

At the end of January 2020, when COVID-19 become a pandemic, our hotels
kept ahead of its competitors to have all front desk and restaurant staff wear facemasks to prevent the spread of infection among customers and employees.
In addition, we formulated the Nomura Real Estate Group Hotels Safety &Cleanliness Policy based on the guidelines set by an industry association in
Japan, among others. Our hotels also became the first hotels in Japan to acquire
the SAFEGUARD Label, demonstrating that they meet the international safety
and health standards set by Bureau Veritas, one of the world’s leading testing,inspection, and certification services providers.
Acquisition of the label reassured us of the high rating given to the safety andhealth measures of our Group hotels. Also, through our preparation to acquire thelabel, we were able to strengthen our commitment to deliver safety and security to
our customers through our concerted efforts.
About MEGALOSMEGALOS fitness clubs pursue
well-being, namely, a favorable
physical, mental, and social
condition that allows for afulfilling life as a human being
and strives to provide the best
service possible.

SAFEGUARD Label (valid for six months;
renewal available)

Nomura Real Estate Holdings, Inc.

Serving customers while wearing a face mask

Performing thorough disinfection
Introduced online lessons

Instructors and junior members sent letters to each other

Integrated Report 2020

81

Business portfolio/
Data, etc.
84 Business at a glance85 	Awareness of the external environment(opportunities and threats)
86 Strategies by Business Unit
86 Residential Development Business Unit
88 Commercial Real Estate Business Unit
90 Investment Management Business Unit
92 Property Brokerage & CRE Business Unit
94 Property & Facility Management Business Unit
96 Major asset brands
97 Major development projects
98 Major development projects in progress
99 Overseas business initiatives
100 11-year financial data
102 Business unit information
104 ESG data
106 Corporate information
107 Group company information
108 External evaluation
109	Publication of Integrated Report 2020

(Guaranteed by the Director in charge）

Business portfolio/Data, etc.

Business portfolio/Data, etc.

Shinjuku Nomura Building
The Shinjuku Nomura Building, where the Company’s head office
is located, has undergone several renovations and has adopted
damping devices as a measure against long-period ground motion.
As a result, even 40 years after its completion, the building still offersa safe, secure, and comfortable office environment.

82

Nomura Real Estate Holdings, Inc.

Integrated Report 202083Business portfolio/Data, etc.

Business portfolio/Data, etc.

Business at a glance

Awareness of the external environment (opportunities and threats)

Performance in FY20/3

Regarding the mid- to long-term business environment surrounding
the Group, there are social issues such as the extreme aging of the
population, the decline in population, and labor shortages in Japan.
In addition, diversification in household composition, such as thedecline in family households and increase in single-person/dualincome households, the diversification of needs associated withchanges in lifestyles and work styles, and the evolution of digitaltechnologies will become increasingly evident.
The impact of COVID-19 has further transformed the way people

Residential Development Business Unit

Residential Development Business Unit

Commercial Real Estate Business Unit

Commercial Real Estate Business Unit

47.9% (¥333.9 billion)
Operatingrevenue*1,2

28.7% (¥25.3 billion)

30.4% (¥212.1 billion)
1.7% (¥12.0 billion)

676.4

¥

Investment Management Business Unit

8.1% (¥7.1 billion)

82.8

¥

Property Brokerage & CRE Business Unit

5.6% (¥39.1 billion)

billion44.4% (¥39.2 billion)

Business profit*1,2,3

Investment Management Business Unit

Property Brokerage & CRE Business Unit

10.3% (¥9.0 billion)

billion

Property & Facility Management Business Unit

live, work, and gather, and their consumption inclination, and we
recognize the need to closely observe trends in the domestic realestate market as well as the economic conditions in Asia, North
America, and Europe, which up to now have been favorable.
In light of such awareness of the external environment(opportunities and threats), each business unit has formulated abusiness strategy and is working toward business growth in orderto maximize the Group’s competitive advantage and management
capital.

Property & Facility Management Business Unit

14.1% (¥98.2 billion)

9.7% (¥8.5 billion)

Other

Relevance between awareness of the external environmentand business strategy of each business unit

Other

0.2% (¥1.1 billion)-1.1% (¥-1.0 billion)

Opportunities
Threats

Performance by business unit/Key indicators
Business unit

Operating revenue*2

Business profit*2, 3, 4(Billions of yen)355.4 375.3

333.9(Billions of yen)

24.5

25.0

25.3

Business strategies/Awarenessof the external environment(opportunities and threats)

Key figures
Number of housing contracted(Units)

Housing sales/Gross margin ratio
Housing sales

6,055

5,917

336.8 342.0

Development Sector

19.1%

20.4%

P86-87
FY18/3 FY19/3 FY20/3

FY18/3 FY19/3 FY20/3(Billions of yen)(Billions of yen)

212.1
35.2

171.6

38.0

39.2

FY18/3 FY19/3 FY20/3

FY18/3 FY19/3 FY20/3

Vacancy rate(%)

Tokyo metropolitan area
5.1
All areas

134.9

4.0

Gross profit(Billions of yen)

106.8

4.5

4.7

Commercial
Real Estate

Sales of property development*5/Gross profit*5
Sales of property development

FY18/3 FY19/3 FY20/3

FY18/3 FY19/3 FY20/3(Billions of yen)(Billions of yen)

FY18/3 FY19/3 FY20/3

Assets undermanagement (AUM)

12.0
9.3

5.9

Investment
Management

Service & Management Sector

FY18/3 FY19/3 FY20/3

5.9

35.7

7.1

FY18/3 FY19/3 FY20/3(Billions of yen)

37.2

(Billions of yen)

1,669.4 1,798.5

9.6(Billions of yen)

11.7

10.0

0.5

1,285.9

Brokerage fee (retail)(Billions of yen)

17.6

8.4

8.1

9.0

24.0

21.6

20.7

Breakdown of AUM(Billions of yen)Overseas asset
managementcompanies
300.6

Listed REIT
1,131.1

FY18/3 FY19/3 FY20/3(Billions of yen)(Billions of yen)

FY18/3 FY19/3 FY20/3

Buildings/Housings under management
Buildings, etc.
Housings

104.5

FY20/3

Investment
Management Strengthening of the private equity
Business Unit fund business as a growth engine
P90-91

Private REIT
236.6

Brokerage fee (wholesale)(Billions of yen)

10.8

11.5

11.1

98.2

Property &Facility
Management

7.0

7.4

8.5

72.3

73.2

17.3

78.6

Provide high-quality and extensive
services by leveraging digital

Sales of construction ordered (Billions of yen)

17.7

31.6

32.3

37.3

18.2

FY18/3 FY19/3 FY20/3

FY18/3 FY19/3 FY20/3

Property& Facility Expand business domain andManagement service offerings
Business Unit

FY18/3 FY19/3 FY20/3*1. The percentage breakdown is calculated based on the total amount for each segment. The resulting figure is rounded to the first decimal place, which in some cases may mean the total
does not add up to 100.0%. The total shown at the center of the pie chart includes “eliminations or corporate” amount within segment information. As a result, data differs when totaling
operating revenue and business profit from each business unit.
*2. Figures for FY20/3 reflect the change in classification of overseas business from the Residential Development Business Unit and Commercial Real Estate Business Unit to Other.
*3. Business profit = operating profit + share of profit (loss) of entities accounted for using equity method + amortization of intangible assets associated with corporate acquisitions*4. As for FY18/3, figures are equivalent to operating profit.
*5. Rental housing business has been transferred to the residential development business since FY20/3. Following this change, figures after FY19/3 represent figures after deducting those ofrental housing business, and figures for FY/18/3 represent figures including those of rental housing business.

Build extensive customer baseby expanding partnerships withfinancial institutions
Strengthen customer satisfaction
through proposal-based
management

P94-95
FY18/3 FY19/3 FY20/3

Building of the global network

Propertytechnology
Brokerage & Strengthen “solution selling” aimed
CRE Business at solving customers’ issues
Unit

FY18/3 FY19/3 FY20/3(No. of properties/
Thousands of unit)

following REIT business

Overseas
Business
P99

Business portfolio/Data, etc.

Business portfolio/Data, etc.

91.3

providing new services utilizing
digital technology

Steady growth of REIT business,
which is the core businessleveraging the Leasing Value Chain

P92-93
FY18/3 FY19/3 FY20/3

Offer services that sustain safe andsecure living

Property development andmanagement based on highly
Commercial unique planning and in pursuit ofhigher user satisfaction

P88-8939.1

Property
Brokerage
& CRE

Labor
shortages

FY18/3 FY19/3 FY20/3

Privatefunds, etc.
130.2
FY18/3 FY19/3 FY20/3

Rapidchanges in
economic
conditions

Real EstateBusiness Unit Highly value-added business by

65.3
43.3

0.7

Decrease in
the numberof family
households

Residential
Development Supply high-quality housing catered
Business Unit to diversifying customer needs

294.3

19.1%

Japan’sdeclining
population

Provide multifunctional andsustainable urban development andcommunity building

Gross margin ratio

4,353

Residential
Development(Billions of yen)

Improving Demand for
Growing
Expansion of
Increase in
Growth ofgrow- compact Accumulation demand for real estate Continuous Diversification Diversification
single, dual- Tokyo’sof values
Rapid
e-commerce
ing
city
power
renovation
lifestyles
income,cities inof property and rebuilding investment
growth in the ofand
towardadvances in and changing
andglobal
needs
and
work
and seniorregional corestock
housing and technology
consumerof agedcross-border Asian market
styleshouseholds competitivecities
officestrendsness
properties
growthIncrease number of orders forlarge-scale repair works and otherconstruction orders
Responding to expectations for
quality and services, and providing
new value overseas through theutilization of know-how cultivated inJapan and strong partnerships withlocal developers*Parts with high relevance between awareness of the external environment (opportunities and threats) and the strategy of each Business Unit are shown in colors.

84

Nomura Real Estate Holdings, Inc.

Integrated Report 202085

Business portfolio/Data, etc.

Strategies by Business Unit

Residential Development Business Unit

Daisaku Matsuo
Executive Officer, Business Unit Manager of Residential Development Business Unit
Group companies•Nomura Real Estate Development•PRIME X•Nomura Real Estate Wellness•First Living AssistanceBusiness environment

Strategies going forward
The diversifying housing needs are generating new business
opportunities. By drawing on our market-in approach, we are

Sustainability initiatives
The four key themes of sustainability set by the Group are
all directly linked to the businesses undertaken by our Business
Unit. We will continue providing sustainable housing throughmultifunctional and convenient urban development featuring
superior environmental performance, such as the urban-typecompact towns, and services sustaining safe and secure living.
“Yukai-full,” a highly efficient air-conditioning system featuringhigh insulation, and effective use of wood, are examples ofour environmental initiative. To be introduced at the KAMEIDOPROJECT, “Yukai-full” helps save energy by utilizing high thermal
insulation and highly effective air-conditioning units, and offersa healthy and comfortable life by maintaining a consistent room
temperature. “Yukai-full” and other initiatives have been highly
rated, resulting in two of our residential development projects tobe selected for the government-led Net Zero Energy House (ZEH)
Demonstration/Support Project.
Another example of our environmental initiatives is our effective
use of wood as displayed in PROUD Kanda Surugadai. The building
is Japan’s first wood-frame high-rise residential condominium using
domestic wood for its structural elements including pillars andwalls. This initiative is aimed at supporting to preserve the global
environment through recycling forest resources.
Community development based on the ACTO area management
activities is another initiative for urban development eyeing thefuture. We believe that such endeavors by our Business Unit willcontribute to environmental preservation and urban developmentthat provides a setting for people to lead fulfilling lives.

Business environment in focus• Decrease in the domestic population andfamily households

The Group’s strengths

Business resources• Product planning capability generated
by integrated development, sales, andmanagement system• Land bank in the housing sales business:• Number of Nomura Real Estate Group Customer Club members:• Diversified housing needs resulting fromlifestyle changes• Solid customer base, highly value-added
services and development capability
tailored to diverse customer needs• Expand development of compact cities
in regional core cities• Expertise in urban-type compact town,
redevelopment, and rebuilding projects• Increase in single, dual-income, andsenior households

Approx.

Approx.

21,600 units
129,000• Number of residential redevelopment projects participated:

No.1

※

Business strategies• Provide multifunctional and sustainable urban development and community building• Supply high-quality housing catered to diversifying customer needs• Offer services that sustain safe and secure living

Main initiatives

Multifunctional and sustainable urban development

KAMEIDO PROJECT•Location:
Koto-ku, Tokyo•Access: 	2-minute walk from JR Sobu Line
Kameido Station•Major use:
Residence (934 units)
Retail facility (approx. 28,000 m2)•Scheduled completion: FY22/3

Urban-type compact town integrating
diverse city functions

Sustainable urban development based on environmental/
energy-saving initiatives and measures against disasters
Emergency power
generation system

PROUD TOWER Kameido Cross“Yukai-full”
Insulated concrete slab ceiling
Total heat exchange ventilation system Built-in air-conditioning system
IntakeLarge-scale retail facility

Underfloor air-conditioning
outlets near outer wall(for each room)

Radiant
floor
heating

Cogeneration
systemExhaustReturnExhaustunclean air

Retail facility

Elementary
schoolExhaust into double floor space(heating/cooling; fresh outside air)In response to a growing preference for convenient housing, we arefocusing on the development of urban-type compact towns that
consolidate diverse city functions. The KAMEIDO PROJECT is a typicalexample of a compact town. By including within the project premises
high-quality residences, a large-scale retail facility, an elementary school,
and a communal space open to the local community, we will offer amultifunctional and convenient urban development.

Emergency
elevator

Basement
electrical room

Water supply pump
Wastewater pump
Disposer

We are striving for sustainable urban development by implementing
advanced environmental and energy-saving initiatives and measuresagainst disasters. By introducing the “Yukai-full” unit-by-unit central airconditioning system, we aim to offer healthy and comfortable lifestyles
and high environmental performance at the same time. In addition, we
will realize housing that is highly resilient against disasters by placing an
emergency power source based on a cogeneration system on the roof ofthe retail facility in the town and installing flood barriers in anticipation of theinundation risks due to typhoons and heavy rains, etc.

*Source: Based on in-house research

86

Nomura Real Estate Holdings, Inc.

Integrated Report 202087

Business portfolio/Data, etc.

Business portfolio/Data, etc.

The Residential Development Business Unit has offeredresidential developments itself and a variety of other highly valueadded products and services related to housing based on oursignature integrated development, sales, and management system,
as well as our market-in approach and commitment to quality. Our
highly rated PROUD condominium brand and our solid customer
base, as represented by the Nomura Real Estate Group Customer
Club, are a significant competitive advantage for the Group.
In the environment surrounding the residential development
business, an ongoing decline in the domestic population is
anticipated in the long term. In that environment, some significant
changes are seen recently, including the diversification of thehousehold composition. Family households, the main buyers of our
housing products, are dwindling in number, while the number ofsingle, dual-income, and senior households is on the rise.
This change is leading to diversified housing needs and a
growing customer preference for convenience in various forms. As
a way to respond to such trends, the Group has focused on thedevelopment of urban-type compact towns, which offer a varietyof city functions within walking distance. We are leveraging our
extensive know-how acquired over the years to generate highadded value through this urban development.
In addition, due to the impact of COVID-19, more people are
spending longer hours at home mainly by the spread of working
from home, which is raising their interest in the future direction of
housing. The resulting changes in their needs are not uniform, withsome customers preferring to live in more spacious housing in thesuburbs and others desiring to reside in convenient locations in thecity center. We believe the preexisting diversification trend will be
accelerated by the transformation in people’s lifestyles.

endeavoring to expand our product lineup by focusing on compact
condominiums for single and dual-income households anddetached housing in the city center to add to our mainstay product,
housing for family households.
We will also continue with our development of urban-typecompact towns that consolidate diverse functions of a city. In
these “compact towns,” we will also promote the introductionof ACTO, an all-encompassing urban development initiative thataims to invigorate the broader community including its surrounding
areas. ACTO is the new initiative to enhance value of the town by
establishing a community as a platform in addition to creating urban
development.
Furthermore, with a view to delivering highly value-added
housing to more customers, we are also proactively pushing
forward our residential redevelopment projects, an area in which theGroup has a top-tier track record among its competitors. Anotherfocal point is the development of compact cities in regional corecities, a project we have already accomplished in 14 cities acrossJapan, receiving strong demand from local governments.
Moreover, we will further fortify our PROUD brand strategy
by aligning it with the Group’s four key themes of sustainability.
We will place particular emphasis on creating products that giveconsideration to the environment and local communities andproviding services that develop communities and enrich people’s
lives, thereby delivering products and services that cater to ourcustomers’ changing housing needs.

Business portfolio/Data, etc.

Strategies by Business Unit

Commercial Real Estate Business Unit
In 2019, we launched H1O (small office with services) andH T (satellite shared office), based on “HUMAN FIRST” conceptof providing offices and services that closely cater to workers’
needs and allow individuals to fully display their capabilities. Offices
under both brands allow for diverse work styles, and contribute toenhancing the productivity of workers and corporations by utilizing
biometric identification and IoT and other technologies.
In addition to developing mid-sized offices by PMO and largescale pivotal offices based in Shibaura, Nihonbashi and otherareas, we will continue responding to a variety of corporate needsfor distributed business sites, including suburban and project-byproject offices and office relocations to accommodate corporate
growth, by utilizing our diverse office lineup.
With regard to logistics facilities, an area we entered aheadof our competitors, we will continue with our initiatives that placefacility users first with the aim of seizing the expanding demand
for logistics facilities. Specifically, we will continue developing such
unique products as industry-focused facilities, help tenants secure
personnel, and provide a range of services including automatedfunctions.
As for retail facilities, which have been hit hard by COVID-19,
SOCOLA Musashi-Koganei Cross centered on food and daily
necessities opened in June 2020 and has been enjoying strong
sales. Meanwhile, restaurants have faced difficult situations due toseating restrictions and other measures that had to be imposed on
customers to combat COVID-19. Situations are changing by theday. In our efforts to quickly identify signs of recovery in social andeconomic activities and changes in market needs while also taking
long-term measures, we changed the name of GEO-AKAMATSU
to Nomura Real Estate Retail Properties effective October 1, 2020and consolidated the planning and management operations of
the Group’s retail facilities. Going forward, the renamed company
will play a leading role in pushing forward the Group’s retail facility
business.
1

Toshiaki Seki
Executive Vice President, Business Unit Manager of Commercial Real Estate Business Unit
Group companies•Nomura Real Estate Development•Nomura Real Estate Retail Properties•Nomura Real Estate Building•Nomura Real Estate Hotels•Nomura Real Estate Life & Sports•UHM

Business environment

Strategies going forward
Even before the impact of COVID-19, we regarded the diversificationof office needs stemming from work style changes as the source ofbusiness opportunities, taking concrete steps to seize them.

88

Nomura Real Estate Holdings, Inc.

The Group’s strengths

Business resources• Diversifying work styles and changing
perceptions of the value of offices• Track record for developing diverse asset
types• Advances in digital technology• Brands (PMO, GEMS, Landport) createdbased on the market-in approach• Expansion of e-commerce• Changes in consumption and leisurepreferences• Participation in major large-scale
development projects in central Tokyo,
including Shibaura 1-chome District
Project and Nihonbashi 1-chome Central
District Rebuilding Plan

•Net lettable area (NLA) (offices/retail facilities)*1:
Approx.

913,000 m

2•Number of tenants (offices/retail facilities)*2:
Approx.

900 companies•Number of H1T branches and their members*3:

22branches/395 companies;
Approx. 24,500 members•Number of MEGALOS fitness clubs and their members:

44clubs/Approx. 144,000 members

Business strategies• Property development and management based on highly unique planning and in pursuit of higher user satisfaction• Highly value-added business by providing new services utilizing digital technology

Main initiatives

Development based on market-in approach
We strive to understand our customers’ diversifying needs through dialogue and connect them for new development.
Responding to diversifying office needs
with broad lineup

Developing logistics facilities with uncompromisingefforts to meet user needs

Changing needs from a traditional office to diverse officethat responds to various work styles
Small offices withservices for small teams
of workers

Medium-sized high-grade
offices catered to theneeds of companies withseveral dozen employees

Large-sized offices
catered to needs forlarge space

Sustainability initiatives
We are implementing a wide range of environmental initiatives.
Specifically, we have acquired environmental certifications forall our new properties for sales and use green electricity at ourhotels, thereby contributing to sustainable urban development.
Such initiatives cater to the needs of tenants and users, heighten
environmental awareness, and help us enhance our competitive
strength. In 2020, we established the HUMAN FIRST LAB, which
conducts research on ideal future offices. We are studying how
offices can help individuals work in more fulfilling ways and will
incorporate our findings into the Company’s businesses.
Furthermore, all our businesses are stepping up efforts tocontinue delivering safe and secure services, as demonstrated by
the Company’s directly managed hotels acquiring Japan’s first
SAFEGUARD label in recognition of their proprietary safety andhealth standards. In particular, our fitness club business, aimed
at promoting health, is itself an initiative to address a key social
challenge in an aging society. By taking rigorous measures against
infection, including providing online fitness lessons, we will keep up
our efforts to help our customers maintain their health and boost
their immune system.

Landport Ome II (industry-focused)

Features of Landport logistics facilities
Satellite shared officespaces catered toindividualized user needs

TOKYO TORANOMON GLOBALSQUARE

Shibaura 1-chome District Project(S Tower: Scheduled forcompletion in FY25/3;
N Tower: Scheduled forcompletion in FY31/3)

In addition to the PMO brand, mid-sized high-grade offices for which theGroup has cultivated a new market, we offer a broad lineup of differentsized offices for various purposes to cater to diversifying needs, including
distributed business sites and project-by-project offices. We aim to
help companies and their workers further enhance their productivity byproposing the use of a network of office sites in addition to stand-alone
sites.

*1 Total net lettable area of offices and retail facilities under the Group’s long-term ownership*2 The number of tenants in the Group’s long-term holding offices and retail facilities*3 Branches of the Company and its partners are included.

Equipped with facilities that fit the needs of tenants

Shared cafeteria offering excellent
work environment

Widely spaced pillars for high storage
efficiency

Double ramp way system that allows
direct access to each floor

We develop uniquely competitive logistics facilities with uncompromisingefforts to meet users’ needs for a comfortable workplace. One example
is installing around-the-clock cafeterias in facilities that operate day andnight. In 2018, we introduced industry-focused logistics facilities to respondflexibly to diversifying tenant needs. The facilities offer both the featuresof a multi-tenant facility equipped with multi-purpose specifications toaccommodate tenants in a broad range of industrial sectors and thebenefits of a build-to-suit (BTS)-type custom-made facility tailored to
specific tenants.

Integrated Report 202089

Business portfolio/Data, etc.

Business portfolio/Data, etc.

The Commercial Real Estate Business Unit has been placing
facility users’ needs first based on the market-in approach,generating unique brands with high product value, including PMO(offices), GEMS (retail facilities), and Landport (logistics facilities), to
expand property for sales business. The source of our strengths
lies in these competitive brands, our expertise accumulated throughnumerous developments, our high-quality services, and our
extensive customer base.
The office market lately has been strong in terms of vacancy
rate and rent, but due to the growing momentum for work stylereform and the impact of COVID-19, corporations are increasingly
implementing or examining diverse work styles including working
from home and teleworking in addition to the conventional in-office
work style. We therefore expect corporate and individual officeneeds to diversify even more.
In addition, the business environment for each type of asset
is becoming varied due to COVID-19. For example, retail facilities
and hotels have faced difficulties due to the need to restrict theirbusiness operations, while demand for logistics facilities has been
increasing on the back of the ever-growing e-commerce market.
In such an environment, it is indeed that the Group’s development
and management expertise based on the market-in approach, in
addition to the value of our individual brands, serve as the sourceof our competitive edge for staying ahead of market changes andexpanding business opportunities. We believe that now is thetime for the Group to fully demonstrate its competitive advantage
by capitalizing on its strength in high-value-added property
development.

Business environment in focus

Business portfolio/Data, etc.

Strategies by Business Unit

Investment Management Business Unit
Strategies going forward

Koki Miura
Executive Officer, Business Unit Manager of Investment Management Business Unit
Group companies•Nomura Real Estate Development•Nomura Real Estate Asset Management•Lothbury Investment Management

Business environment
We have established the Leasing Value Chain between theGroup and the funds managed by the Investment Management
Business Unit for the sake of mutual growth. This business modelallows us to acquire high quality properties developed by thesponsor and achieve strategic property replacements, providing
both our Business Unit and its funds with an immense competitiveedge. In addition, the relationships built with institutional investors
through our management of private REITs and private funds andour broad product lineup form a solid earnings base.
In March 2020, the share prices of listed REITs temporarily
plunged sharply due to the impact of COVID-19. The prices
subsequently recovered, but not to the pre-pandemic level.
Meanwhile, although situations differ by asset type, real estate is
attracting strong demand as an investment asset because of its
stability and profitability. Investment demand for private REITs andprivate funds, which are unaffected by unit price fluctuations, isstable among institutional investors, including pension funds.
In a world in which we will have to live with COVID-19 as well as
in a post-pandemic world, investments in real estate will draw evenmore attention as an alternative investment amid the ongoing lowinterest rate environment. The trend is highly likely to develop intocross-border investments beyond the domestic market, which will
provide us with important business opportunities.

We intend to achieve continued growth in our REIT businessin Japan, the main source of earnings for our Business Unit, byleveraging the Leasing Value Chain. Nomura Real Estate MasterFund (NMF), a listed REIT, will capitalize on its strength as adiversified REIT with an excellent portfolio. We will explore optimal
strategies to maximize value for unitholders in view of market
conditions, such as seizing the opportunity purchase of own
investment units and making a public offering. Meanwhile, Nomura
Real Estate Private REIT (NPR), a non-listed private REIT, will work
to keep driving its external growth on the back of stable demand
from institutional investors.
It is also crucial for us to establish another profit-generating
business in addition to our domestic REIT business.
As an initiative to take on this challenge, we added private
funds to the assets handled by our property acquisition pipelinein the fiscal year ended March 2020 to expand our opportunities
to acquire properties. With a track record of managing private
funds for more than 20 years, the Group is capable of structuring avariety of funds that meet the needs of investors by drawing on ourstrong relationships built with institutional investors and our diverse
product lineup. We will take advantage of the rising demand for realestate funds as an alternative investment and endeavor to expand
our assets under management (AUM).
In our overseas business, we will further solidify our relationshipwith existing business partners, as well as Lothbury Investment
Management Group, a real estate investment manager in the UK,
which joined the Group in 2018. Furthermore, we hope to swiftly
address the overseas investment needs of institutional investors
in Japan by striving to forge partnerships with asset managementcompanies in North America, Europe, and Asia.

Sustainability initiatives

The Group’s strengths

business resources• Growing alternative investment needs
for real estate• Business growth model based on the
Leasing Value Chain• Expanding and diversifying global
investment needs of investors• Relationships built with institutional
investors through many years of asset
management experience• Rapidly increasing ESG investment
needs• Product structuring capabilities that meetthe needs of investors• Assets under management (AUM):

1,798,583 million¥• Institutional investor customers through asset
management in Japan (excluding listed REITs):

193 institutions

Business strategies• Steady growth of REIT business, which is the core business leveraging the Leasing Value Chain• Strengthening of the private equity fund business as a growth engine following REIT business• Building of the global network

Main initiatives
Expanding AUM by leveraging
the Leasing Value Chain

Proactive ESG initiatives
for further growth

Property acquisition pipeline
Stable supply of high quality
properties for funds undermanagement

Funds undermanagement
Management pipeline
Strengthen brand power andenhance asset value of
REIT-owned properties
Private funds*

Property sales toward
redevelopment
Provide development
opportunities to the Group

Properties acquired by private funds from the GroupWe are actively implementing ESG initiatives, and received the Ministerof the Environment Award under the “21st Century Financial Behavior
Principles” as an asset management company in the fiscal year ended March
2020. We have also received the highest 5 stars rating in the Global Real
Estate Sustainability Benchmark (GRESB), a global ESG benchmark for thereal estate sector, and have been included in the MSCI Japan ESG SelectLeaders Index, an index of corporations with high ESG performance, which
testifies to the high ratings given to our ESG initiatives in fund management.

Further expansion of overseas business

Partner company

Japan
Partner company

NOMURA FUDOSAN TENNOZU BUILDING

Partner company

PMO Yaesu-dori

We are leveraging our property acquisition pipeline within the Group todrive ongoing external growth of our funds under management through amutual growth model based on the Leasing Value Chain. The pipeline has
started including private funds in addition to listed REITs and private REITs.
In the fiscal year ended March 2020, we structured multiple private fundswith properties acquired from the Group.

Business portfolio/Data, etc.

Business portfolio/Data, etc.

In real estate, as in other types of assets, investors’ interest
in ESG initiatives is increasing. Also, the trend will undoubtedly
gain momentum going forward. We regard ESG initiatives as animportant point for differentiation and have implemented a variety ofleading-edge ESG initiatives.
NMF became the first J-REIT to acquire a third-party certification
under the EcoAction 21 environmental management system. The
Minister of the Environment Award (General Category) was awarded
to NMF in the fiscal year ended March 2020 in recognition of its
sustainability efforts as an Example of Best Initiatives under the “21stCentury Financial Behavior Principles” proposed by the Ministry of
the Environment. NMF is highly regarded by ESG-focused investors
including the Government Pension Investment Fund (GPIF).
More recently, Nomura Real Estate Asset Management
announced its support for the recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD).

Business environment in focus

In 2018, we formed a partnership with Lothbury Investment Management,a real estate investment manager in the UK, to expand our overseas
business. We will further develop our overseas business by exploring
strategic partnerships with asset management companies in North
America, Europe, and Asia.

*The property acquisition pipeline started including private funds in the fiscal year ended March 2020.

90

Nomura Real Estate Holdings, Inc.

Integrated Report 202091Business portfolio/Data, etc.

Strategies by Business Unit

Property Brokerage & CRE Business Unit
as corporations selling off their assets or restructuring.

Kenichi Maeda
Executive Officer, Business Unit Manager of Property Brokerage & CRE Business Unit
Group companies•Nomura Real Estate Development•Nomura Real Estate Urban Net•Tokio Property Services

Business environment

Nomura Real Estate Holdings, Inc.

• Increase in stock of quality existing
housing

Given the uncertainty in the outlook regarding the impact of
COVID-19, we now need to keep a closer eye on the day-to-day
changes in the market and customer sentiments, and establish asystem that allows us to respond appropriately regardless of how
the environment changes.
In retail business, our Business Unit will further strengthen its
signature sales methodology of combining face-to-face service
and ICT to capture the actual residential demand that are likely torecover soon.
By leveraging ICT, we will serve customers through video calls
and other means online, providing services of equivalent quality to
our face-to-face sales activities at “Nomura no chukai +” branches.
We will also offer a virtual reality (VR) home staging service and 3D
walkthrough tours on our nomu.com website by leveraging newtechnologies so that customers can gain a hands-on feel for our
properties. Through such measures, we aim to further improve ourservice quality and efficiently draw more customers.
In wholesale business, we will closely monitor for changes inthe environment surrounding our customers to promote “solution
selling,” in which we make proposals that help customers solve theirproblems. This includes, for example, suggesting that they utilize
assets by rebuilding properties or use our leasing and management
services, expanding beyond simply selling off assets or reorganizing
idle assets. By maximizing our Group synergy based on diverse
products and services offered by the Development Sector andthe Service & Management Sector, we are poised to secure evengreater business opportunities.
We will also continue with our efforts to expand our strategic
partnerships with Nomura Securities and other regional financial
institutions with the aim of increasing our customer base.
Furthermore, we intend to forge new partnerships with financial
institutions to establish a structure that enables us to capture abroader range of customer needs.

• Heightening needs for businesssuccession and inheritance-related
measures

Sustainability initiatives
In Japan, a shrinking and aging population are now resulting
in a higher ratio of vacant houses. Meanwhile, the increase in thenumber of buildings that have been built for a long time and havenot been properly maintained, raises concerns over their insufficientearthquake resistance, which could jeopardize public safety andsecurity as well as exert a negative impact on the environment.
Our Business Unit engages in the brokerage of existing housing
for residential customers with an actual demand and proposes
solutions to corporate customers, contributing to making effective
use of real estate stock. In wholesale business, we also help our
corporate customers achieve sustainable growth by proposing
solutions from the viewpoint of sustainability as well.
Our retail brokerage branches, which provide retail services
rooted in the local community they serve, also engage in various
community and social contribution initiatives. As part of their efforts,
the retail branches offer the “Nomura no chukai +” branches as
refuge areas where children can seek shelter and safety if they findthemselves in danger. Branch staff will also contact their parents
and report to the police if necessary.

Business resources• Expertise in ICT services• Number of property brokerage transactions:• High customer satisfaction rating in retailbusiness• Partnerships with Nomura Securities andregional financial institutions• Advances in digital technology

9,515• Number of partner financial institutions including
Nomura Secutrities and regional financial institutions:77• Number of retail brokerage branches:

85

Business strategies• Provide high-quality and extensive services by leveraging digital technology• Strengthen “solution selling” aimed at solving customers’ issues• Build extensive customer base by expanding partnerships with financial institutions

Major initiative examples
Sales method combining face-to-faceservice and ICT

Providing real estate solutions by capitalizing
on Group synergy

Provision of ICT-based services
through nomu.com website, whichboasts the highest number of visits*1

Number ofmembers:
Approx.

225,000“Nomura no chukai +” has earned
the highest customer satisfaction
rating*2

Number of
branches:

85

Services utilizing ICT•Mansion Data Plus
Provides estimates on pricesof popular condominiums inTokyo metropolitan area andKansai and Tokai regions•AI ANSWER
Q&A chatbot that supports
real estate purchase and sales•VR home staging
Virtual interior coordination
using computer graphic
furniture
To engage in transactions involving our customers’ valuable real estate, weneed exhaustive and in-depth knowledge and expertise. Our 85 “Nomura
no chukai +” branches ranked No. 1 in customer satisfaction provide highquality services rooted in their locality, which results in a large number ofcontracts signed. Our nomu.com website, which boasts a membership of
225,000 and is the most popular real estate brokerage website by numberof visits, has introduced diverse leading-edge ICT-based services and has
fortified its function as an entry point for transactions.

Customer network:
Approx.

6,000 companies

Number of partner financial institutions
including Nomura Secutrities andregional financial institutions

77

Customers’ •Make the most effective use of idle assets or real estate held
•Downsize balance sheet, reduce cost ofissuesownership, and own properties for sale, etc.
Providing solutions integrated with the Group’s functions•Closed search for buyers and sellers by using customer network•Acquisition of real estate by the Group’s Development Sector•Optimization of real estate repair work planning by the Group’s Service &Management Sector, etc.
Development Sector
Diverse track record of development
and leasing

Service & Management Sector
Provision of services such as real estate
securitization and management

DesignReal estate
securitization

Construction
Leasing

Propertyand facility
management

The Group’s strengths lie in its solid customer base sustained by 77
regional financial institutions including Nomura Securities and ourpartnerships through co-working. For customers with various issues, we go
beyond simply offering brokerage services and selling real estate solutions
by capitalizing on our Group synergy to act as a gateway.
For example, we may suggest customers who own idle real estate
to consider selling it to the Group for a development site, rebuilding totransform it into a leasing property, or replacing it with another property.
The Group unifies its resources to provide a full spectrum of services
including designing, developing, and leasing properties as well as property
management after completion.

*1 The number of visits was approximately 926,000 according to the February 2020 Nielsen NetView (page views from home or work computers, excluding apps) and approximately 1,683,000
from smartphones according to Nielsen Mobile NetView (page views from iOS or Android, including apps). This represents the largest number of monthly website visits among real estatecompanies (brokerage). The total number of computer and smartphone users represents an estimate made by the Nomura Real Estate Group based on the Nielsen Digital Consumer
Database. The real estate brokerage companies and portal sites for comparison were selected by the Group.
*2 2020 Oricon Customer Satisfaction Survey Report for real estate brokerage in the detached housing (sales) category
Integrated Report 2020
93

Business portfolio/Data, etc.

92

Strategies going forward

The Group’s strengths

Customer
Base

Business portfolio/Data, etc.

In retail business targeting individual customers, we offer a
range of high-quality services at our retail brokerage branches
under the “Nomura no chukai + (PLUS)” brand. Our services havebeen given high ratings by customers, as shown in the Oricon
Customer Satisfaction Report, in which we were ranked No. 1 over
five consecutive years in the “detached housing (sales)” category forreal estate brokerage business. In addition, our nomu.com website
boasts approximately 225,000 members and the highest numberof visits among websites run by real estate brokerage companies,
serving as an important gateway for customers, many of whose
inquiries lead to transactions. Our sales method of combining finely
tuned face-to-face service and ICT is a unique competitive edge of
the Property Brokerage & CRE Business Unit.
Though we had to suspend our sales activities at branches
due to the impact of COVID-19, inquiries via nomu.com increased
significantly. As housing needs are changing stemming from thewidespread shift to working from home and the longer hours
spent at home, we see the possible signs of an early recovery inresidential demand, such as an increase in relocation needs. The
stock of quality properties is also steadily building up in the retailbusiness market. We therefore expect the market for the retailbusiness to continue on its growth trajectory.
In our wholesale business targeting corporate customers, wehave established a structure for responding quickly to requests
from customers across Japan by expanding our domestic branch
network and drawing on our strategic partnerships with 77 financial
institutions including Nomura Securities, which has an extensive
customer base. We are therefore capable of addressing all kindsof customers and needs, including reorganizing and utilizing idle
assets to increase asset efficiency and real estate transactions
associated with business succession and inheritance required due
to small and medium-sized company owners reaching the age ofretirement.
Transactions may temporarily become stagnant due to
COVID-19, but we are carefully monitoring the situation for changes
that will lead to business opportunities over the medium term, suchBusiness environment in focus

Business portfolio/Data, etc.

Strategies by Business Unit

Property & Facility Management Business Unit
Furthermore, we are also keeping a close eye on new
construction demand that may be generated by the progressive
work style reforms and increase in working from home, suchas offices adopting free address systems and condominiums
redesigning their common area as a shared workspace.

Strategies going forward

Akihiro Fukuda
Executive Officer, Business Unit Manager of Property & Facility Management Business Unit
Group companies•Nomura Real Estate Partners•Nomura Real Estate Heating and Cooling Supply•Nomura Real Estate Amenity Service

Business environment

94

Nomura Real Estate Holdings, Inc.

Business resources• Growing needs for high-quality
management and extensive services• Stable increase in property undermanagement through Group cooperation• Increase in number of aged buildings
and condominiums that require largescale repair works• High level of external evaluation for
management quality• Difficulty in securing senior staff due topostponement of retirement age, etc.

• Number of housings under management:

182,259 units• Number of buildings, etc. under management:• Competitive construction proposal
capacity, including scheme for extendinglarge-scale repair works cycle• Advances in digital technology

786 buildings

Business strategies• Strengthen customer satisfaction through proposal-based management• Expand business domain and service offerings• Increase number of orders for large-scale repair works and other construction orders

Major initiative examples
Initiative to extend cycle oflarge-scale repair works

Provision of property management services
by leveraging digital technology

Contactless service required
due to COVID-19
Long-term Simulation of Large-scale Repair Works
Total repair costs under
Attractive 30 and re:Premium
Total standard accumulated repair costs
Total maintenance fees
accumulated by residents

Sustainability initiatives
Our Business Unit stays engaged with customers over long
periods of time after buildings are completed such as providing
management services and construction work. We consider it ourimportant duty to make their lives safe and secure, which is asustainability effort in and of itself. We hope to fulfill our responsibility
by developing good quality of communities through high-quality
condominium management and prolonging the lifespan of buildings
based on the “re: Premium” service, among other measures.
Natural disasters are another issue we must tackle. Dealing
with frequent typhoons and flooding caused by torrential rainis particularly important. We make it a rule to examine the local
flooding hazard map and check the inundation risk for all theproperties we manage. For condominiums with a particularly highrisk of inundation, we will make meticulous preparations such as
briefing the residents’ association on details of the flooding hazard
map and proposing to execute flood drills.

The Group’s strengths

Firstlarge-scale
repairworks

Newconstruction

Secondlarge-scale
repairFirst
works
large-scale
repair
works

12
years

12 years

16
years

24
years

12 years

16 years

Thirdlarge-scale
repairworks

Secondlarge-scale
repairworks
32
36
years years
12 years

16 years

Fourthlarge-scale
repairworks

16 years

Increasing necessity to employ management services
by leveraging digital technology

Fifthlarge-scale
repairworks

Significant
reduction
in repair costs<Condominium Management
Case Example><Building Management
Case Example>

Condominium
app

Online board
meeting

Smart glasses

Cleaning robot

Execute unmanned
24-hour management▼

Participation available
from anywhere▼

Display remotely
provided directions
and other information▼

Save labor incleaning▼

Fourthlarge-scale
repairThird
works
large-scale
repair
works

48
years
12 years

Difficulty securing humanresources on the back of shrinking
and aging population

60
years
12 years
16 years• Conventional large-scale repair works: 12-year cycle• Large-scale repair works under “Attractive 30” and “re:Premium”:

16-year cycle

For properties employing the “re:Premium” scheme, we succeeded inextending the cycle of large-scale repair works from 12 years to 16 to 18
years. The surplus funds generated by reducing the number of repair work
cycles can be allocated to improving the property value, which is a valuable
initiative for residents.
In the fiscal year ended March 2020, three properties adopting“re:Premium” were certified for “excellent condominium management”
under the renovation promotion project aimed at promoting long-termhigh-quality housing, which is sponsored by the Ministry of Land,
Infrastructure, Transport and Tourism.

Enhanceresidents’ senseof security

Enhanceconvenience forresidents

Increase work
efficiency

Responding tosecuring humanresources

We will strive to provide labor-saving and contactless management services
by leveraging digital technology. Property management tasks can bestreamlined by introducing websites and apps through which residents canmake reservations for use of shared facilities and residents’ associations
can post notices. In addition, as a way to offer high-quality management
services to residents regardless of time and place, we also promote online
board meetings of residents’ associations.
Furthermore, in managing office buildings, we are introducing smart
glasses for inexperienced staff members to wear so that information anddirections can be remotely sent to help them execute high-quality service.
Along with the use of cleaning robots, we are thus moving forward to savelabor in our property management services.

Integrated Report 2020

95

Business portfolio/Data, etc.

Business portfolio/Data, etc.

The Property & Facility Management Business Unit has
its competitive edge in the high level of quality of its property
management, which has been highly rated by third parties. For
example, we have been ranked No. 1 for 11 consecutive years
in a property management satisfaction survey of condominium
residents conducted by ”SumaiSurfin,” a website for purchasersof condominiums. Armed with this strength, our Business Unit
plays a key role in ensuring that real estate primarily developed by
the Group continues to generate value after completion. The longterm value of real estate is significantly affected by its adequate
maintenance and management. Engagement based on the Group’s
integrated development, sales, and management system from theproduct development stage and designing and developing projects
by taking into consideration their future management and repair
works sustains the Group’s continuous value creation. The strengthof our Business Unit also lies in steadily adding superior properties
to its management stock.
Meanwhile, property and facility management is largely
dependent on manpower, but due to the shrinking and aging
population in Japan, securing human resources is a tremendous
challenge. On top of this, COVID-19 has forced us to partiallydownsize our management services to protect the safety of ourcustomers and employees. To overcome such challenges andmaintain the quality of our management, it is essential to save laborin operations and adopt contactless services, which urgently calls
for the use of digital technology to enhance operation efficiency.
Turning to the business environment for construction ordered,
we see that an increasing number of condominiums developedby the Group are approaching the time when they will requirelarge-scale repair works. We are looking to capture the abundantbusiness opportunities by making on-target proposals for repair
works through our day-to-day management operations.

As part of our efforts to streamline property and facility
management and shift to contactless services by using digitaltechnology, we are holding residents’ association board meetings
online and employing labor-saving and unmanned management
services by using apps. The online board meetings, which members
can join from anywhere, and the 24-hour management service
through apps and the Web, meet the needs of condominium
residents who spend a lot of time away from home due to work, suchas dual-income households. Likewise, in building management,
we will promote labor-saving by employing new technologies
such as cleaning robots and smart glasses. Such initiatives not
only help enhance operational efficiency, but also enable us toprovide services that more closely meet the needs of our diverse
customers, which will lead to further enhancement of customer
satisfaction.
As a measure to expand construction ordered business, wewill strive to boost orders for large-scale condominium repair
works by harnessing such products as “re:Premium,” which wasdeveloped to extend the cycle of large-scale repair works for
PROUD condominiums. To make the best use of our abundantcondominium management stock, we will explore developing similar
products and broaden our proposals.
In addition, we will proactively take orders for renovation workof the condominium exclusively owned space, renewal work ofcommon areas and layout change of office buildings, mainly due towork style reforms.

Business environment in focus

Business portfolio/Data, etc.

Business portfolio/Data, etc.

Major asset brands

Major development projects

Housing

Rental housing

PROUD
Condominium that
residents, developers,
and even people who live
nearby can feel “proud” of

PROUD FLAT
Rental housing withrenowned quality by
the Group’s abundantknow-how

PROUD SEASON

OHANA

Detached housing with theconcept of “creating housingthat will endure as heritage of
people, towns and times”

Suburban-type condominiums
named after the words
meaning “family and familybonds”

Elderly housing withsupportive services

Completion: 2013
PROUD Minamiazabu
Total units: 88

Completion: 2013
PROUD Funabashi
Total units: 1,497

Completion: 2016
PROUD CITY Asagaya
Total units: 575

Completion: 2017
PROUD TOWER Akashi
Total units: 216

Completion: 2015
Tomihisa Cross Comfort Tower
Total units: 1,084

OUKAS
Elderly housing withsupportive services
developed under
the concept ofresidences to havethe time of one’s life

Offices

Retail facilities
Completion: 2020
PROUD CITY Kichijoji
Total units: 678

PMO
Medium-scale office building
with the similar quality andspecification as large-scale“class A” office building

H1O

GEMS

MEFULL

Small office with services to meetthe needs of workers in a small
team

Urban retail facility that mainly
features one restaurant on eachfloor

Urban retail facility mainly focusing
on service industries
Completion: 1978
Shinjuku Nomura Building
Gross floor area: 58,512m2*

Completion: 1990 and onward
Yokohama Business Park
Gross floor area: 245,200m2*

Completion: 2010
Nihonbashi Muromachi Nomura Building
Gross floor area: 44,989m2*

SOCOLA

H1T
Satellite-type shared office thatoffers to diversification andefficiency of work styles

Landport
Logistics facility with advanced
and high functionality

HotelsNOHGA HOTEL
Hotel with the concept of “creating memorable
experiences through close links with the local
community”

Business portfolio/Data, etc.

事Business
業ポーportfolio/Data,
トフォリオ／
etc.データ

Logistics facilities

Neighborhood shopping center
retail facility that integrates grocery
supermarkets, merchandise sales,
restaurants, and service stores

Completion: 2013
bono Sagamiono
Gross floor area: 43,059m2*

Completion: 2017
Yokohama Nomura Building
Gross floor area: 58,755m2*

Completion: 2020
TOKYO TORANOMON GLOBALSQUARE
Gross floor area: 20,860m2**Gross floor area indicates the calculated area owned.

96

Nomura Real Estate Holdings, Inc.

Integrated Report 202097Business portfolio/Data, etc.

Business portfolio/Data, etc.

Major development projects in progress

Overseas business initiatives

Our Group sets the target in overseas business at 15-20% of the business profit (for the fiscal year ending March 2028) by expanding
the development and operation business of residential and office buildings, mainly in rapidly growing ASEAN cities where a transition
from quantity to quality is taking place.
We plan to make a total investment of ¥300 billion over the course of the nine years of the Mid- to Long-term Business Plan, with theaim of expanding our business while ensuring thorough risk management.
Business development
Business expansion in existing business areas

Overseas business ratio
15-20%

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

Business in new areas
Select target countries in terms of market size, growth potential, and stability

Beijing
KAMEIDO PROJECT (Koto-ku, Tokyo)
Scheduled for completion: FY22/3
Major use: Residence (934 units), retail facility (Approx. 28,000m2)

Global network
Expansion through M&A, capital alliances

Shibaura 1-chome District Project (Minato-ku, Tokyo)
Scheduled for completion: S Building FY25/3,
N Building FY31/3
Land area: Approx. 40,000m2
Gross floor area: Approx. 550,000m2
Major use: Office, retail facility, hotel, residence

Overseas platform

Business profit
FY28/3

Changzhou

Establishment of local offices
Capital and business alliances with local companies
Overseas human resources development

Risk management
Awareness of business risks

ManilaMonitor risks related to the business environment,
financial markets, laws and regulations

BangkokStress test

Ho Chi Minh City

Confirm shareholders’ equity ratio and soundness ofbusiness balance based on assumed risks

Ho Chi Minh City, Vietnam

Nihonbashi 1-chome Central District Redevelopment (Chuo-ku, Tokyo)
Scheduled for completion: FY26/3
Land area: Approx. 18,900m2
Gross floor area: Approx. 380,000m2
Major use: Office, retail facility, hotel, serviced apartment, residence, conference
venue

Nishi-Azabu 3-chome Northeast District Redevelopment(Minato-ku, Tokyo)
Scheduled for completion: FY28/3
Land area: Approx. 7,500m2
Gross floor area: Approx. 96,000m2
Major use: Residence, retail facility, office, hotel

Midtown*
Residence development: Approx. 2,400 units

Grand Park*
Residence development: Approx. 10,000 units

SUN WAH TOWER*
Holding office

ZEN PLAZA
Holding office

Bangkok, Thailand

Minamikoiwa 6-chome District Redevelopment(Edogawa-ku, Tokyo)
Scheduled for completion: FY23/3 / FY26/3
Major use: Residence, retail facility

Shuwa Aoyama Residence
Rebuilding
Rebuilding (Minato-ku, Tokyo)
Scheduled for completion: FY25/3
Major use: Residence

Minami-Ikebukuro 2-chome C District
Redevelopment (Toshima-ku, Tokyo)
Scheduled for completion: FY25/3
Major use: Residence, office, retail facility

Ratchayothin*
Residence development:
Approx. 823 units

On Nut*Residence development:
Approx. 601 units

Ramkhamhaeng*
Residence development:
Approx. 685 units

Thong Lo*
Residence development:
Approx. 1,236 units

Sunshine Fort*
Residence development: Approx. 1,400 units,
Retail facility development

Tianning*
Residence development: Approx. 2,300 units

Business portfolio/Data, etc.

Beijing and Changzhou, China

Business portfolio/Data, etc.

Manila, the PhilippinesThong Lo*
Serviced apartment
development: 303 rooms

Nishiki 2-chome No.7 Town
District Redevelopment (Naka-ku,
Nagoya-shi, Aichi)
Scheduled for completion: FY22/3
Major use: Residence, retail facility,
parking98

Nomura Real Estate Holdings, Inc.

Katamachi No.4 Seaside District Redevelopment(Kanazawa-shi, Ishikawa)
Scheduled for completion: FY26/3
Major use: Hotel, retail facility, residence (underconsideration)

Okayama-shi Ekimaecho 1-chome No. 2, 3, 4 District
Redevelopment (Kita-ku, Okayama-shi, Okayama)
Scheduled for completion: FY26/3 (residential building),
FY27/3 (town area)
Major use: Residence, hotel, retail facility, parking*JV project or building unit ownership

Beijing Fortune Building
Managing officeIntegrated Report 2020

99

Business portfolio/Data, etc.

11-year financial data

FY10/3

FY11/3

FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3450,80749,939517,740
58,308532,016
74,307567,159
71,894

569,545
80,912569,680
77,271

623,762
76,660676,495
81,90582,83373,07748,886
1,801,273
906,726
714,734
30,983
894,547
565,120
870,000
56,618(30,490)(66,821)
20,363

Statements of Income / Balance Sheets / Statements of Cash Flows (Millions of yen):
Operating revenue
Operating profit
Business profit*1
Ordinary profit
Profit attributable to owners of parent
Total assets
Current assets
Inventories
Equity investments
Non-current assets
Total net assets
Interest-bearing debt
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Capital investment*2

434,226
39,274

480,983
42,083

̶

̶

̶

̶

̶

̶

̶

̶

̶

23,9674,660
1,405,424
709,618
458,92194,889695,805
349,437
759,636
19,266(24,571)
13,09826,79626,1495,471
1,474,331
636,925
433,386
60,948
837,406
357,365
816,91033,947(33,730)(7,485)37,57034,173
17,591
1,402,624
585,332
396,857
41,895817,292
376,486
758,562
43,876
7,809(63,296)
14,09845,806
19,357
1,369,949
535,103369,667
29,578834,845398,276
669,268
89,295(2,588)(94,666)
18,96364,05826,844
1,313,887
496,978
349,167
7,128
816,909418,697
617,583
83,535(20,191)(57,858)
21,93863,681
38,441
1,369,226
549,300
429,764
6,316
819,926
461,031
616,700
23,837(32,476)(8,983)38,871

72,67947,182
1,485,449
608,779
496,910819
876,670
456,408
721,900
13,258(59,714)53,63750,367

68,95247,005
1,593,093
684,306
570,8882,567
908,786
493,813810,100(31,889)(54,558)
76,57561,30068,03346,0291,673,099
717,635
592,996
9,612
955,464
514,982
877,800
21,498(51,637)
43,787
71,665

668,510
79,162
79,62369,32345,873
1,759,455
849,528
636,925
18,066
909,926
541,562914,000
89,964(46,699)
13,723
20,82425.69
1,583.63
1,685
25.00

28.74
1,599.57
1,719
25.00

92.38
1,664.78
1,768
25.00

101.61
1,764.05
1,885
30.00

140.701,863.12
1,997
35.00

201.282,061.86
2,299
45.00

246.42
2,320.84
2,708
57.50

245.102,508.73
3,063
65.00

240.892,664.70
3,333
70.00

245.992,854.21
3,630
75.00

267.213,031.15
3,833
80.00

190,331,000

190,387,000

190,456,900

190,595,500

190,906,800

191,119,700

191,679,601

191,877,801

192,155,201

192,373,101

192,875,301

853

924

1,016

1,125

1,206

1,206

1,508

1,709

3,956,956

7,821,664

11,367,181

9.0
2.8
1.7
21.4
32.5
2.5
37.7
20.1
97.3
97.3

8.7
2.9
1.8
20.7
36.9
2.7
46.0
17.7
87.0
87.0

11.1
3.7
5.7
22.6
33.1
2.4
52.8
14.4
27.1
27.1

11.3
4.5
5.9
24.5
37.2
2.0
61.0
11.0
29.5
29.5

14.0
5.6
7.8
27.1
41.2
1.7
72.8
8.5
24.9
24.9

12.7
5.5
10.3
28.8
70.2
1.6
82.1
7.5
22.4
22.4

14.2
5.8
11.2
29.9
110.9
1.6
94.8
7.6
23.3
23.3

13.6
5.1
10.1
30.2
153.9
1.7
93.7
8.6
26.5
26.5

12.3
4.7
9.4
30.0
181.9
1.8
93.8
9.4
50.6
28.9

11.8
4.7
8.9
29.9
206.3
1.7
93.3
9.8
41.4
30.5

12.1
4.7
9.1
30.5
209.6
1.6
101.6
8.6
46.5
30.1

1,442
27.4
0.9
0.9
1.7

1,261
34.2
0.8
0.7
2.0

1,459
18.5
0.9
0.8
1.7

2,084
20.9
1.2
1.1
1.4

1,970
15.0
1.1
1.0
1.8

2,166
14.2
1.1
0.9
2.1

―

―

―

―

―

―

2,080
9.9
0.9
0.8
2.8
98.7

1,774
7.9
0.7
0.6
3.7
87.6

2,512
10.7
1.0
0.8
2.8
124.9

2,125
8.5
0.8
0.6
3.5
110.5

1,755
6.9
0.6
0.5
4.6
97.1

Per Share Data (Yen):
Profit attributable to owners of parent
Net assets
NAV*3
Annual dividends
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:
Operating profit ratio (%)
ROA*5
ROE*6
Shareholdersʼ equity ratio
Unrealized profit*7 (billions of yen)
D/E ratio (times)
EBITDA*8 (billions of yen)
EBITDA ratio (times)
Total return ratio*9 (%)
Dividend payout ratio (%)
Stock Market 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 NAV 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 = (operating profit + non-operating profit) / total assets (average over the fiscal year)

100 Nomura Real Estate Holdings, Inc.

*6 ROE = profit attributable to owners of parent / shareholders’ equity (average over the fiscal year)*7 Unrealized profit = 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 ratio = interest bearing debt / EBITDA*9 Total return ratio = (total amount of dividends + total amount of acquisition of treasury shares) / profit attributable to owners of parent*10 	Total shareholder return (TSR) = (stock price as of the end of the fiscal year + accumulated dividend amount per share from FY16/3 to FY20/3) / stock price as of the end of the FY15/3

Integrated Report 2020

101

Business portfolio/Data, etc.

Business portfolio/Data, etc.

Share price (yen)PER (times)
PBR (times)
P/NAV (times)
Dividend yield (%)
Total shareholder return (TSR)*10

Business portfolio/Data, etc.

Business Unit information(Millions of yen)

Operating Revenue
Residential Development
Housing sales (Japan)
Rental housing (sales)*7
Rental housing (leasing revenue)*7
SeniorOther
Commercial Real Estate*6
Leasing (offices)
Leasing (retail facilities)
Leasing (other)
Property for sales (sale)*8
Property for sales (leasing)*8
Fitness
Other
Investment Management
Property Brokerage & CRE
Brokerage fee (retail)Brokerage fee (wholesale)
Other
Property & Facility Management
Property & facility management
Construction ordered
Fitness club & elderly care
Other
Other
Adjustments (elimination or corporate)
Total

FY21/3(forecast)

Assets334,710294,376
17,931
1,070
451
20,880215,820
48,792
12,9108,375
106,816
7,037
15,757
16,131
12,05939,11024,017
11,1383,954
92,98253,21034,354

333,966
294,376
17,931
1,070
451
20,136
212,133
48,562
12,9108,375
106,816
7,037
15,757
12,674
12,05939,11024,017
11,138
3,954
98,27455,53037,327290,000

Residential Development
Commercial Real Estate*6
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (elimination or corporate)
Total

―

―

―

ー

7,478
94
(16,885)
668,510

5,417
168(18,356)
676,495

5,417
1,143
(20,193)
676,495

1,000(22,000)
600,000

FY18/3*1

FY19/3*2,3

FY20/3329,787
308,960

355,445336,819

―

―

―

―

―

―

20,827
115,009
51,981
11,6495,954
35,3504,054

18,626
134,941
53,312
12,686
7,193
43,301
4,724

―

―

6,018
9,662
34,82020,038
10,244
4,536
95,76448,301
26,857
15,523
5,081
106(15,470)569,680

13,722
9,378
35,703
20,791
10,845
4,065
104,581
50,386
31,604
16,064
6,526
107(16,396)623,762

375,373
342,055
11,740495
377
20,701
171,61253,975
13,817
7,974
65,3504,533
16,647
9,312
9,641
37,29821,618
11,517
4,162
91,374
51,52432,371(after change segment)

Operating Profit
Residential Development
Commercial Real Estate*6
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (elimination or corporate)
Total

24,52335,232
5,911
8,452
7,078
(10)
(4,527)76,66025,06937,600
5,943
8,170
7,434
(43)
(5,013)
79,162

24,92538,669
6,853
9,117
8,089
(106)
(5,644)81,90525,351
38,941
6,853
9,097
8,474
(1,267)(5,545)
81,905Business Profit*9102 Nomura Real Estate Holdings, Inc.

ー
ー
ー
ー

190,000
ー
ー
ー
ー
ー
ー
ー

12,00034,000ーーー

95,000
ー
ー
ー

ー
ー
ー
ー
ー
ー
ー
ー

(Millions of yen)

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

25,032
38,043
5,969
8,170
7,464
(43)
(5,013)
79,62324,90539,238
7,149
9,109
8,181
(106)
(5,644)
82,83325,33939,247
7,149
9,088
8,566
(1,012)(5,545)82,83318,00032,000
7,000
4,000
7,000
(3,000)(5,000)60,000FY17/3

FY18/3*1

FY19/3*2,3

FY20/3450,698
993,985
35,64922,87356,529929
32,427
1,593,093

448,4121,060,815
34,84017,18162,781921
48,147
1,673,099

463,277
1,086,064
42,46328,22842,294929
96,197
1,759,455

505,710
1,126,619
43,053
19,13644,474937
61,3401,801,273

Inventories (land held for development and real estate for sale, etc.)
Residential Development
Commercial Real Estate*6
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (elimination or corporate)
Total

FY20/3*4,5(after change segment)

457,505
1,112,664
43,053
19,24047,106
61,73059,972
1,801,273(Millions of yen)403,232
166,997

401,030
187,299

391,508
245,575

401,119
314,311401,119314,297

964
13
(319)
570,888

5,091
13
(437)
592,996

397
11
(567)
636,925

55
11
(762)
714,734

69
11
(762)
714,734

6.2
3.3
16.9
39.9
12.3

5.5
3.3
17.0
49.2
11.3

5.4
3.5
14.0
28.9
17.6

4.9
3.5
15.9
47.6
18.3

5.5
3.5
15.9
47.3
18.1

5.1

4.7

4.7

4.7

4.7

―
―

―
―

―
―

―
―

―
―

Return on Assets (ROA)*10
Residential Development
Commercial Real Estate*6
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Total ROA*11

Key Results

(%)

―

―

FY17/3

Residential Development
Housing sales (units)
5,567
Gross margin ratio of housing sales (%)
21.7
Completed housing inventories at the end of period (released for sale) (units)
252
Completed housing inventories at the end of period (unreleased) (units)
402
Commercial Real Estate*6
Net lettable area at the end of period (offices, retail facilities) (m2)
975,974
Vacancy rate at the end of period (offices, retail facilities) (%)
0.8
Number of MEGALOS members at the end of period
140,743
Investment Management
Assets under management at the end of period (millions of yen) 1,260,064
Property Brokerage & CRE
Brokerage: Number of transactions
8,272
Brokerage: Total transaction value (millions of yen)
745,147
Property & Facility Management
Buildings under management at the end of period (buildings)
702
Housings under management at the end of period (units)
168,999―

FY18/3*1

FY19/3*2,3

5,865
19.1
239
218

―

―

FY20/3*4,5

FY21/3(forecast)

5,890
19.1
229
47

4,739
20.4
321
187

3,700

1,021,004
0.7
139,836

953,6204.7
145,065

913,446
4.0
143,663ーーー

1,285,903

1,669,476

1,798,583

ー

8,561
800,739

8,922
767,324

9,515
872,337

ーー

723
173,705

732
177,582786
182,259

ーー(after change segment)ーーー*1	Since FY19/3, Nomura Real Estate Reform has changed the segment from the Residential Development Business Unit to the Property & Facility Management Business Unit. Thus,
figures for FY18/3 reflect the changes.
*2	Since FY20/3, the rental housing business, which had been classified in the Commercial Real Estate Unit, and the senior business, which had been classified in the Property & Facility
Management Business Unit, have been reclassified into the Residential Development Business Unit. Thus, figures for FY19/3 reflect the changes.
*3	Since FY20/3, the fitness business has been reclassified from the Property & Facility Management Business Unit to the Commercial Real Estate Business Unit. Thus, figures for FY19/3
reflect the changes.
*4	Since FY21/3, condominium development and sale business overseas, 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 the Commercial Real Estate Business Unit, have been reclassified into Other. Thus, figures for FY20/3
reflect the changes.
*5	As of April 1, 2020, an absorption-type merger was conducted with Nomura Real Estate Partners, which had been classified in the Property & Facility Management Business Unit, as
the surviving company and NREG TOSHIBA BUILDING FACILITIES, which had been classified in Commercial Real Estate Business Unit, as the absorbed company. Thus, figures for
FY20/3 reflect the changes according to the post-merger categories.
*6	In FY20/3, the Leasing Business Unit was renamed to the Commercial Real Estate Business Unit.
*7	Rental housing refers to properties developed for the real estate 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) of entities accounted for using equity method + amortization expenses of intangible assets associated with corporate acquisitions.
*10	ROA of each business unit = (operating profit + share of profit (loss) of entities accounted for using equity method) / total assets at the end of the period.
*11	Total ROA = (operating profit + non-operating profit) / average assets during the period.

Integrated Report 2020

103

Business portfolio/Data, etc.

Business portfolio/Data, etc.

Residential Development
Commercial Real Estate*6
Investment Management
Property Brokerage & CRE
Property & Facility Management
Other
Adjustments (elimination or corporate)
Total

ー

(Millions of yen)

27,78732,567
6,016
9,124
6,939
(30)
(5,132)
77,271(Millions of yen)

FY20/3*4,5

FY17/3

Business portfolio/Data, etc.

ESG Data

Sustainability/ESG information
https://www.nomura-re-hd.co.jp/english/csr/

FY18/3E

FY19/3

FY20/3

S

Environmental management
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)*2

11

15

14

FY19/3

FY20/3

148

178

253

Male

3

6

10

Female

145

172

243

92.59%

91.46%

92.08％

4

4

7¥59,482¥79,984¥80,393

12.53

12.65

12.65

95.1%

97.4%

97.8%

3.81

4.04

4.05

¥10,136,875¥10,223,680¥9,462,899

13

13

12

Independent External Directors

5

5

5

Female Directors

1

1

２

Number of the Board of Directors meetings

19

14

16

Average attendance rate of all Directors*12

98.6%

100%

99.0%

Average attendance rate of Independent External Directors

96.8%

100%

97.5%

12

11

13

Average attendance rate of all Audit & Supervisory
Committee Members

98.3%

100%

100%

Average attendance rate of Independent External Directors(Audit & Supervisory Committee Members)

97.2%

100%

100%

Utilizing and improving human resourcesChildcare leave takers

Response to climate change

Rate of reinstatement after childcare leave

140 thousand
t-CO2/year

143 thousand
t-CO2/year

135 thousand
t-CO2/year

0.077t-CO2/m²
per year0.079t-CO2/m²
per year0.076t-CO2/m2
per year

Total energy use of our properties*3

77 thousand
kl/year

77 thousand
kl/year

73 thousand
kl/yearTraining hours per employee*9

Energy use intensity of our properties*3

0.042kl/m²
per year0.042kl/m²
per year0.041 kl/m2
per year

Others11,550 thousand
kWh/year

12,081 thousand
kWh/year

15,194 thousand
kWh/year

1,949 thousand
m³/year2,027 thousand
m³/year1,914 thousand
m³/year1.27m³/m²
per year

1.31m³/m²
per year

1.16m³/m²
per year

CO2 emissions of our properties*3
3

CO2 emission intensity of our properties*

Solar power generated at Landport logistics facilities

Family care leave takers
Investment in training cost per employee

Response rate of employee satisfaction survey
10

Employee satisfaction level (5-point scale)*

Efficient use of water resources3

Total water use*

Water use intensity*3
Appropriate resource use and pollution prevention
3

S

FY18/3

G

Total waste discharge*

6,060t/year

6,832t/year

6,594t/year

Waste discharge intensity*3

4.343kg/m²
per year

4.867kg/m²
per year

5,159kg/m²
per year

Employment / Human resources
Number of employees

6,980

7,176

29.75%

30.76%

30.61％

256

258

306

Female hires ratio

34.38%

36.82%

44.77％

Female manager ratio

5.45%

5.58%

6.14％

15.08%

16.07%

15.87％

14

16

114

1.90%

1.96%

2.02%

19.66

14.07

13.51

Number of hires

4

Female junior manager ratio*

5

Number of foreign national employees*

Rate of employment of persons with disabilities*6
Business portfolio/Data, etc.

Health and productivity management
Average work time over statutory working hours(hours per person/month)
Rate of employees to take paid vacation*7
Number of work-related injuries resulting in death8

Absentee rate*

104 Nomura Real Estate Holdings, Inc.

̶ (59.55%)

47.31% (54.93%) 61.19% (62.62%)

0

1

0

0.38%

0.37%

0.29%

Corporate governance
Number of Directors

Number of the Audit & Supervisory Committee meetings*1 For FY20/3, some properties under application are included.
*2 If two types of certification are acquired for the same property, each is recorded. For FY20/3, some properties under application are included.
*3	Environmental data covers facilities subject to reporting under the Act on the Rational Use of Energy. Data concerning waste discharge and water use; it covers only some facilities.
Some data are provisional values in the aggregation work. CO2 emission intensity and energy use intensity are calculated by dividing the total amount of each by the gross floorarea of the target facilities. CO2 emission intensity and energy use intensity of FY18/3 and FY19/3 are different from the figures shown in the Integrated Report 2019 due to somechanges in the calculation method.
*4 Junior managers are candidates of promotion to manager.
*5 Number of foreign national employees does not include foreign technical interns.
*6	Rate 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.
*7 Figures in parentheses for Nomura Real Estate Development only.
*8 Absentee rate =Total days of absence/(Scheduled working days × Number of employees)*9 Covers only mandatory training and does not include open and selective training or e-learning courses.
*10 Data for Nomura Real Estate Development. Beginning from FY19/3, “Satisfaction with the workplace” is used as the reference index.
*11	Average data of Nomura Real Estate Development’s employees (Number of employees: 24 in FY18/3, 31 in FY19/3, 24 in FY20/3)*12	In FY18/3, the number of times that some directors withheld attendance at the Board of Directors meeting based on the purpose of Article 369, Paragraph 2 of the Companies Act
is excluded.

Integrated Report 2020

105

Business portfolio/Data, etc.

6,636

Female employee ratio

Average employee compensation*11

Business portfolio/Data, etc.

Business portfolio/Data, etc.

Corporate information (As of March 31, 2020)

Group company information (As of April 1, 2020)

Corporate data

Share information

Nomura Real Estate Holdings, Inc.

Corporate name:

Nomura Real Estate Holdings, Inc.

Captal:¥117,822,180,050

Representative:

Eiji Kutsukake,President and Representative Director

Number of
Authorized shares:

450,000,000 shares

Head office:1-26-2 Nishi-Shinjuku, Shinjuku-ku,
Tokyo 163-0566, Japan

Number of shares
Issued:192,875,301 shares(including 9,399,164 treasury shares)

Date ofestablishment:

June 1, 2004

Number of
employees:

7,176 (consolidated)

Fiscal year:

From April 1 to March 31

General meetingof shareholders:

June

Head Office: 1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Nomura Real Estate Development Co., Ltd.

*The number of treasury shares above does not include
1,715,202 shares held by the executive compensation BIP(Board Incentive Plan) trust and 252,815 shares held by the
ESOP (Employee Stock Ownership Plan) trust for granting
stock for employees.

Listed market:

First Section of the Tokyo Stock Exchange

Minimum tradingunit:

100 shares

Number ofshareholders:

26,113Major shareholders (top 10)
No. of shares held

Shareholding
ratio (%)

Nomura Holdings, Inc.

64,777,500

35.30

Japan Trustee Services Bank, Ltd. (Trust account)

8,276,000

4.51

The Master Trust Bank of Japan, Ltd. (Trust account)

8,190,900

4.46Japan Trustee Services Bank, Ltd. (Trust account 9)3,154,000

1.71

Nomura Real Estate Holdings Employee Shareholding Association

2,873,444

1.56Japan Trustee Services Bank, Ltd. (Trust account 5)2,442,600

1.33

BNYMSANV AS AGENT / CLIENTS LUX UCITS NON TREATY 1

2,384,700

1.29Japan Trustee Services Bank, Ltd. (Trust account 7)2,103,500

1.14

JP MORGAN CHASE BANK 385151

2,015,901

1.09

STATE STREET BANK WEST CLIENT – TREATY 505234

1,952,384

1.06

Head Office: 8-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Overview of Investment management, type II financial instruments, investment advisory and agency, real estate brokerage, etc.
Businesses:
Head Office: 1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Nomura Real Estate Urban Net Co., Ltd.

Overview of Resale housing brokerage, real estate brokerage for investment and business purposes, consignment sales of newly built
Businesses: condominiums and detached housing, insurance agency, real estate information website operation
Head Office: 1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Nomura Real Estate Partners Co., Ltd.

Overview of Facility management of buildings and condominiums, architecture and interior design, property management, cleaning,
Businesses: insurance agency, renovation
Head Office: 1-1-1 Shibaura, Minato-ku, Tokyo

Nomura Real Estate Building Co.,Ltd.

Composition of shareholdings

Shareholders’ name

Nomura Real Estate Asset Management
Co., Ltd.

Overview of Condominium sales, detached housing sales, corporate real estate brokerage, investment and development, building leasing,
Businesses: architectural design, asset management, etc.

2.60%

FY20/3
FY19/3

8.16%
8.87%

19.63%

35.72%
35.18%

20.49%

Head Office: 1-32-2 Honcho, Nakano-ku, Tokyo

Nomura Real Estate Life & Sports Co., Ltd.
Nomura Real Estate Heating and Cooling Supply
Co., Ltd.
Nomura Real Estate Retail Properties Co., Ltd.*

1.76%

Overview of Ownership, management, trading, leasing, brokerage, agent, consulting, and appraisal for real estate; design andBusinesses: construction for residential land development, building development, repair work, etc.
Overview of Planning and management of sports clubs and consulting, sales and rental of sports equipment, etc.
Businesses:
Head Office: 134 Godocho, Hodogaya-ku, Yokohama-shi, Kanagawa
Overview of Supply of heating
Businesses:
Head Office: 8-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Overview of Project management of retail facilities, including trading area surveys, demand forecasts, market research, businessBusinesses: planning, operational planning, and merchandising; property management of retail facilities
Head Office: 1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Nomura Real Estate Wellness Co., Ltd.

Overview of Development planning and management of senior housing
Businesses:
Head Office: 1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Nomura Real Estate Hotels Co., Ltd.
33.67%

Head Office: 1-1-16 Kanda-Misakicho, Chiyoda-ku, Tokyo

UHM Co., Ltd.

33.86%*1. Although the Company holds 9,399,164 treasury shares, it is excluded from the list of major shareholders above.
*2. Treasury shares excluded from the total number of shares issued do not include the Company shares held by the
executive compensation BIP trust and the ESOP trust.
*3. Japan Trustee Services Bank, Ltd. changed its name to Custody Bank of Japan, Ltd. on July 28, 2020.

Overview of Planning, operation, and management of hotels
Businesses:
Overview of Management of hotels and restaurants
Businesses:
Head Office: 8-4-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Other Japanese firms
Foreign investors, etc.
Financial institutions
Individuals and others
Financial Instruments firms

Nomura Real Estate Amenity Service Co., Ltd.

Overview of Building and condominium cleaning, sales of consumable goods and beverages
Businesses:
Head Office: 6-22-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

PRIME X Co., Ltd.

Overview of Internet advertising, creative business, marketing
Businesses:
Head Office: 6-26-12 Nishi-Shinjuku, Shinjuku-ku, Tokyo

First Living Assistance Co., Ltd.

Share price(%)

Overview of Home/living assistance service
Businesses:
Head Office: 155 Bishopsgate, London EC2M 3TQ, U.K.

150

Lothbury Investment Management Limited
Nomura Real Estate Holdings

TOPIX

TOPIX (Including dividends)

Overview of Asset management business in the United Kingdom
Businesses:
Head Office: 54-56 Nguyen Trai Street, Ben Thanh Ward, District 1, Ho Chi Minh City, Vietnam

125

ZEN PLAZA CO.,LTD100

Beijing shokai Nomura Real EstateManagement Co., Ltd.

Overview of Ownership and operation business of ZEN PLAZA (office building)Businesses:
Head Office: 5 Dong San Huan Bei Lu Chaoyang District, Beijing, China
Overview of Operation and management of Beijing Fortune Building
Businesses:
Head Office: 20 Kramat Lane #03-12 United House, Singapore 228773

75

2.60%

2020年3月期
2019年3月期

8.16%

Tokio Property Services Pte Ltd

Head Office: 10 Marina Boulevard, Marina Bay Financial Center Tower2 #33-6, Singapore 018983

NOMURA REAL ESTATE ASIA PTE. LTD.

8.87%

50
2016/3/31

2017/3/31

2018/3/31

2019/3/31
19.63%
22.25%

Total shareholders return**1, 2

2020/3/31

2018/3

2019/32020/3

Nomura Real Estate Holdings

98.7%

87.6%

124.9%

110.5%

097.1%TOPIX (Including dividends)

89.2%

102.3%

118.5%

112.5%

101.8%

33.67%

33.86%*1. Total shareholders 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.
*2. Total shareholders return is calculated at fiscal year-ends, starting from April 1, 2015, as if the investment was made at the closing stock price at the end of FY15/3.

その他の法人
外国法人等
金融機関
個人・その他

Overview of Support services for investment in real estate in Japan from foreign investors, building relationships with local corporations
Businesses: and investors, and exploring business opportunities
Head Office: 689 Bhiraj Tower at EmQuartier, Unit2307, 23rd Floor, Sukhumvit Road, Klongton Nua, Vadhana, Bangkok 10110, Thailand

NOMURA REAL ESTATE (THAILAND) CO., LTD

2017/3106 Nomura Real Estate Holdings, Inc.

Head Office: 30/F Two International Finance Centre, 8 Finance Street, Central, Hong Kong

NOMURA REAL ESTATE HONG KONG LIMITED

35.72%
35.18%

2016/3

Overview of Exploring real estate development opportunities, market research, and building relationships with partner companies in
Businesses: Southeast Asia

Overview of Local market surveys, identification of new projects and partner corporations, building business relationships with andBusinesses: monitoring of local partner companies, and supporting for Group companies and businesses
Head Office: 11th floor, Sun Wah Tower 115 Nguyen Hue Boulevard, HCMC, Vietnam

NOMURA REAL ESTATE VIETNAM CO., LTD
Nomura Real Estate Consulting (Beijing)Co., Ltd.

Overview of Local market surveys identification of new projects and partner corporations, building business relationships with andBusinesses: monitoring of local partner companies, and supporting for Group companies and businesses
Head Office: Room 708, Beijing Fortune Building, 5 Dong San Huau Bei Lu, Chaoyang District Beijing, China
Overview of Consulting services for real estate, property and facility management, corporate management
Businesses:*Geo Akamatsu Co., Ltd. changed its name to Nomura Real Estate Retail Properties Co., Ltd. on October 1, 2020.

Integrated Report 2020

107

Business portfolio/Data, etc.

Business portfolio/Data, etc.

2015/3/31

Overview of Brokerage of housings, offices and factories for Japanese corporations based in Singapore
Businesses:

Business portfolio/Data, etc.

Business portfolio/Data, etc.

External evaluation

Publication of Integrated Report 2020 (Guaranteed by the Director in charge)

We started issuing integrated reports in 2014 with the aim of helping our stakeholders

Inclusion in ESG indicesgain a better understanding of the mid- to long-term value creation undertaken by
our Group. We are pleased to hereby issue our Integrated Report 2020 , our seventh
integrated report.
Selected for MSCI Japan ESG Select Leaders
Index, a wide-ranging index in the ESG indicesadopted by the Government Pension Investment
Fund (GPIF) (1, 4)

Selected for S&P/JPX Carbon Efficient Index, athematic/environmental index in the ESG indicesadopted by GPIF (1)Selected as a component of the SOMPO
Sustainability Index uniquely set by Sompo AssetManagement (1)and business models. Notably, our new value creation through real estate development
and the continuous provision of real estate-related services, with emphasis on theCommendations on environmental activities

Group’s signature market-in approach and commitment to quality, is an essential

Received the Minister of the Environment Award(best practices case) for the Principles for Financial
Action for the 21st Century 2019
Acquired and registered Eco-Action 21(Environmental Management System)
certification (4)*Acquired and registered Eco-Action
21 certification for the first time as aJapanese Real Estate Investment Trust(J-REIT).

This integrated report focuses on explaining the value creation pursued by theGroup by elaborating on its process, sources of corporate value, the Group’s strengths,

Nomura Real Estate Master Fund received
this award for the acquisition and registrationof Eco-Action 21 certification, Japan’s uniqueenvironmental management system (EMS)
established by the Ministry of the Environment, forthe first time as a J-REIT (3)element in achieving sustainable urban development, and it is the important point that
we particularly wish to convey to our stakeholders.
Annual benchmark for the real estate sector established by major
pension funds in Europe to measure environmental, social, andgovernance (ESG) considerations. Received the highest 5 stars
rating in the real estate assessment (4, 5). Received the highest
level A in the disclosure evaluation (1,4)

In our efforts to foster understanding of our mid- to long-term management policies
and strategies, the Group CEO, Group COO, and other executive officers communicate
in their messages how the Group is aware of its external environment and pushes its
initiatives forward from a mid- to long-term perspective.
Furthermore, in the hope of promoting readers’ in-depth understanding of ourCommendations on social activities

Group’s corporate governance, an area drawing much attention lately, we have
expanded the content to include a dialogue between the Chairman of the Board of
Received Good Design Award for 18 consecutive years

Directors and an external director and a roundtable discussion among three external
directors with one year having passed since their appointment in June 2019.

Selected for Health and Productivity Management Award 2020 (forLarge Corporation – White 500) jointly certified by the Ministry of
Economy, Trade and Industry and Nippon Kenko Kaigi (1, 2, 3, 6)

Received Good Design Award 2019 for 12 items, a record high.
Group has received this award for 18 consecutive years (2, 8, 9)

In my capacity as the Group CFO and director in charge of investor relations, I have
had numerous discussions with investors, each of whom has shared with me theirvaluable opinions and requests. I have taken the input seriously as valuable information

Signatures on initiatives

to tap into. I sincerely hope that this integrated report will help our stakeholders,
including shareholders and investors, gain an in-depth understanding of and develop asense of affinity for the Group.
As the Group CFO and director in charge of investor relations responsible for

Signed the United Nations Global
Compact (1)Signed the Principles for Responsible
Investment (3,10)Signed the UNEP FinanceInitiative (3)Agreed to Recommendations of the
Task Force on Climate-related Financial
Disclosures (TCFD) (1, 3)

compiling this integrated report, I hereby declare the legitimacy of its compilation
process and the accuracy of the content.
Amid the drastic changes in society primarily caused by the COVID-19, we would
like to adhere to our editorial policy of embracing our communication with you, providing

Joined the Japan Climate Initiative (3)Signed the Financial Action Principles
for the Formation of a Sustainable
Society (the 21st Century Principles ofFinancial Action) (3)Member of the UK Green Building
Council (GBC) (10)Agreed to Declaration of Biodiversity
by Keidanren (1)better. We would be grateful if you could provide us with your opinions of this integrated
report.
I would like to conclude by taking this opportunity to express our appreciation to all
the readers of this report and to all those who have helped compile and issue it.

Information disclosure
Sustainability Site Award
2020
The Company’s IR website
was selected as the mostexcellent website in the overall
ranking and in the ranking
by industry on Nikko IR's
Website Rankings of All Listed
Companies 2019 (1)Selected / Concerned / Award-winning companies
1: Nomura Real Estate Holdings, Inc.
4: Nomura Real Estate Master Fund, Inc.
7: Nomura Real Estate Partners Co., Ltd.
10: Lothbury Investment Management Limited

108 Nomura Real Estate Holdings, Inc.

The Company’s IR website
was selected for the
Excellence Award 2019 in theInternet IR commendation by
Daiwa Investor Relations (1)2: Nomura Real Estate Development Co., Ltd.
5: Nomura Real Estate Private REIT Inc.
8: Nomura Real Estate Life & Sports Co., Ltd.

The Company’s IR website
was selected for the SilverAward of the Gomez IR Site
Ranking 2019 (1)The Company’s CSR Report2019 received the ExcellenceAward in the Sustainability
Site Award 2020 hosted by
the CSR Communication
Association (1)Business portfolio/Data, etc.

Business portfolio/Data, etc.

Excellent Integrated Report
selected by GPIFThe Company’s Integrated
Report 2019 was selected
as an Excellent Integrated
Report and Most-improved
Integrated Report by GPIF’s
asset managers entrusted withdomestic equity investment (1)substantive disclosure, and enhancing transparency to make our integrated reports

Makoto Haga
Director, Group CFO

3: Nomura Real Estate Asset Management Co., Ltd.
6: Nomura Real Estate Urban Net Co., Ltd.
9: Nomura Real Estate Wellness Co., Ltd.

Integrated Report 2020109