Creating Value through Change
Integrated Report 2014

INDEXGroup Philosophy of the Nomura 2
Real Estate Group

Group Structure

3
4
5
6

Message from the President

7

History
Presence
Business Model

Review of Operations
Residential Development
Business
Leasing Business
Investment Management
Business
Property Brokerage &CRE Business
Property & Facility
Management Business
Major Completed
Properties (April 2013 toMarch 2014)

15
17
21
25
27
29
31

Corporate Social
Responsibility (CSR)
Promotion of CSR-CentricManagement
Raising Quality and Service
LevelsEngaging inEnvironmental Initiatives
Developing Human
Resources
Social Contribution Activities

33
34
35
36
37

Corporate GovernanceCorporate GovernanceDirectors and Executive
Officers
Audit & Supervisory Board
Members
Messages from External
Directors and External
Members of the Audit &Supervisory Board

39
40
45

Financial Data
Group Company Profile
Investor Information
Website

51
53
55
56

47
49

38

Editorial Policy

Forward-Looking Statements

This report is published in order to foster understanding among shareholders, investors and other stakeholders about the Nomura
Real Estate Group’s strategies and measures geared toward the creation of mid- to long-term value. The editing and layout of thisreport follows the international integrated reporting framework of the International Integrated Reporting Council (IIRC).

This integrated report contains forward-looking statements about the future plans, strategies and performance of Nomura Real
Estate Holdings, Inc. (“the Company”) and its consolidated subsidiaries (“the Group”). These forward-looking statements are
not historical facts. They are estimates, forecasts and projections based on information currently available to the Company andare subject to a number of risks and uncertainties, which include economic trends, intensification of competition in the realestate industry, the legal and taxation systems, and other regulations. As such, actual results may differ from those projected.

Nomura Real Estate Holdings, Inc.

1 Integrated Report 2014

Group Philosophy of the Nomura Real Estate GroupThe Group Philosophy is acommitment to both ourselves
and to our customers and society.

Group Message

By showing this commitment andcontinuously delivering a level ofcustomer satisfaction at least
commensurate with it, we are

The Group Message crystallizes the philosophy of the Nomura Real Estate Group.

Group
Messagedetermined to be a group thatpeople can count on even morethan in the past.

Bringing Tomorrow TodayGroup
MissionGroup Mission

We hold each and every meeting in high esteem and are
grateful for the fruit it has born. Our enthusiasm due tothe dynamism of group effort and highly creative
individuals enables us to produce the best quality service
and product. Giving back to the customers and society isalso a high priority for us.
The Group Mission is positioned at the core of the philosophy of the Nomura Real Estate Group.
It expresses the shared mission, sense of identity and goals for which the Nomura Real Estate Groupeverlastingly works.

Group
SpiritGroup Spirit

Aim to be a very unique business group with creativity
The customers first
To the future with a youthful spirit and enthusiasm
Pursuit of a completely trustworthy brandBeing a part of a society
The Group Spirit is the Group’s attitude toward achieving its mission, and represents the valuethat all members of the Nomura Real Estate Group should continually share and treasure.

Nomura Real Estate Holdings, Inc.

2 Integrated Report 2014

History

The Nomura Real Estate Group has continually been a forerunner in responding to thetimes and market changes while also tackling challenges and expanding its operations
1957

1978
Completes constructionof the Shinjuku Nomura
Building and moves theheadquarters from
Nihonbashi.

Spun off from Nomura Securities Co.,
Ltd. and launches real estate businessfocused on leasing and management ofoffice buildings.

1988

2002

2003

Starts construction of Yokohama
Business Park (YBP), the largest
business development solely in theprivate sector.

Unified brand name “PROUD” forresidential products and service
established.

Nomura Real Estate Office Fund, Inc. listed on
the Tokyo Stock Exchange.

Operating revenue¥532.0 billion

Operating revenue(Billions of yen)*Non-consolidated data for Nomura Real Estate Development only until the fiscal year ended March 31, 2004

1960

1970

1980

1990

2000

2010

1961

1963

2006

2010

2011

Launches residential land development
business with development of
Kajiwarayama residential area in
Kamakura, Kanagawa.

Launches condominium development
business with the construction of Co-op
Takenomaru in Yokohama.

Nomura Real Estate Holdings, Inc. listed on theFirst Section of the Tokyo Stock Exchange.

Completes construction of the
Nihonbashi Muromachi Nomura
Building.

Launches a condominium brand“OHANA.”

2008
Completes construction of PMO Nihonbashi Honcho,
the first development in the PMO series.

Nomura Real Estate Holdings, Inc.

3 Integrated Report 2014

Presence

Our established presence in the market is proof positive of trust earned
from customers
Residential Development Business

Number of condominium units supplied(2nd in Japan in 2013)

6,517

units

Leasing Business

PROUD brand image

1

Vacancy rate of leased properties(Roughly half the 6.70% vacancy rate*2 for the five wards of central Tokyo)

2

1

Number in Japan

3

2.9

%

According to a study carried out by the Real Estate Economic Institute Co., Ltd.,the Nomura Real Estate Group ranked second in Japan in terms of the numberof condominiums supplied in 2013. Our medium-term sales target calls for thecreation of a structure that can achieve a stable supply of 7,000 units annually
and as a forerunner in the condominium sector we are committed to continually
supplying high quality units to market and accommodating customer needs.

According to the 2013 Condominium Brand Survey*1 conducted by Nikkei Inc., ourcore condominium brand PROUD received the top ranking in eight of ten categories,
including “peace of mind,” “sense of luxury,” and “excellence.” We will continue tomaintain and improve the image of the PROUD brand moving forward.

Investment Management Business

Property Brokerage & CRE Business

Property & Facility Management Business

Assets under management“nomu.com” membership

Property management satisfactionof condominium residents(among Japan’s largest real estate asset management companies)

Approximately¥1.1

trillion

The Group is one of Japan’s largest real estate investment firms with morethan one trillion yen in assets under management. The Group accommodates
a broad range of investment needs through three listed J-REIT,
privately-placed J-REIT, privately-placed funds, and privately-placed stock
funds, among others.

Approximately

210,000

The Group was the first in the industry to launch a real estate brokerage site andtoday nomu.com boasts the largest number of users and traffic in the industry.*3
The number of nomu.com members who belong to the membership service forbuyers broke through 210,000 as of June 2014, making it a widely used site bymany customers.

The Group has continually reinforced its tenant-focused sales and marketing
activities and managed its properties to enhance tenant satisfaction. As a result,the vacancy rate of our leased buildings remains just 2.9%.

1

Number5years in a row

2

1 3

2

1 3

2

1 3

2

1 3

2

1 3

The Group has earned the top ranking five years in a row in terms of customer
satisfaction from a property management satisfaction survey conducted by
SumaiSurfin (Home Surfing) of Attractors Lab Co., Ltd. (currently, Style Act Co.,
Ltd.). We will continue to improve customer satisfaction further by providing evenmore comfortable living environments, including Living Q Call which provides
condominium residents with services for private areas.

*1 2013 Condominium Brand Survey was compiled based on 1,000 responses (786 male and 214 female) selected from the 1,824 responses received online following an ad placed in the morning edition of the May 22, 2013 Nikkei Newspaper calling for participants in the 2013
Condominium Brand Survey.
*2 Source: Office Report published by Miki Shoji Co., Ltd. (as of March 31, 2014)*3 The number of users was approximately 1.5 million per the January 2014 Nielsen NetView (page views from home or work computers) and approximately 900,000 from smartphones per Nielsen Mobile NetView (page views from iOS or Android). This represents the largest numberof monthly users for a real estate company (brokerage). There are redundant users among computer and smartphones, but Nielsen does not announce the number of non-redundant users for computers and smartphones. Therefore, the total number represents an estimate made by
the Nomura Real Estate Group.
Nomura Real Estate Holdings, Inc.

4 Integrated Report 2014

Business Model

A business model that creates new value for customers and society

Primary Formsof Capital

Generated Value

Financial capital

Financial capital

The Nomura Real Estate Group’s Business Model•Total assets: ¥1.3 trillion•Operating income:¥74.3 billion•Assets under management:¥1.1 trillion•Shareholders’ equity ratio:
27.1%•ROA: 5.8%

Human capital

Residential
Development•Employees: 5,747•Temporary workers: 3,027

Sale of property

Management

Income from saleFee income

Human capital

Investment
Management•Enhance capabilities ofhuman resources andorganizational performanceIntellectual capitalIntellectual capital•Expertise in productdevelopment, sales
and management•R&D investment

Manufacturing
capitalLand acquisition
Redevelopment/
reconstruction
project involvement

DesignSupervision

Landowners

Property& Facility
Management

BuyersResidents
Completion
Investors•Real estate for development•Redevelopment/
reconstruction projects•Further enhancebrand value

Customers

Tenant companies

General contractors

Leasing

Property
management
Fee income

Leasing

Brokerage

Incomefrom leasing

Fee income

Social capital•PROUD Owners Club:
about 42,000 members

Repair work
Remodeling

Property
Brokerage& CRE

Manufacturing
capital•Stock of sound assets,
including residential
and office•Formation of high quality
townscapes

Social capital•Improve customer
satisfaction•Tenants:
about 1,100 companies•Revitalize local communities•Corporate sales:
over 5,000 companies

Development
Environmental
capitalRedevelopment
Reconstruction•New next-generation
products, such as
eco-friendly housing

Service and management•Help companies maximize
their real estate holdings

Environmental
capitalBusiness flow

•Amount of CO2* reduced(YoY): 2,717 t•Energy usage*: 28,777 kl•Waterworks usage*:
291,201 m3•Amount of waste* reduced(YoY): 246 t*See page 52 for applicable buildings
Nomura Real Estate Holdings, Inc.

5 Integrated Report 2014

Group Structure

The Nomura Real Estate Group’s collective strengths andpresence as an integrated developer

Residential
Development Business

Investment Management Business

The Residential Development Business Segment isengaged in development, redevelopment, andsales of condominiums and detached housing. Bytaking advantage of our integrated development
and sales operation, we are developing the“PROUD” brand primarily in the Tokyo
metropolitan area, offering condominiums anddetached housing. In addition, we launched a
new brand named “OHANA” in August, 2011 foroperations in the suburbs of the Tokyo
metropolitan area.

The Investment Management Business Segment is engaged
in investment management under the consignment byinvestment corporations and private funds. In October,
2011, the Nomura Real Estate Group’s three investment
management companies merged to form one of the largest
single real estate investment management companies inJapan with over ¥1 trillion in assets under management.
Group companies engaged in this business•Nomura Real Estate Development Co., Ltd. •Nomura Real Estate Asset Management Co., Ltd.

Property Brokerage &CRE BusinessGroup companies engaged in this business•Nomura Real Estate Development Co., Ltd.
•Nomura Real Estate Reform Co., Ltd.
•PRIME X. Co., Ltd.

Service andmanagement

Development

Leasing Business
The Leasing Business Segment owns and leases
office buildings such as Shinjuku Nomura
Building and Hamamatsucho Building (Toshiba
Building), and commercial facilities such as
Lazona Kawasaki Plaza. This business segment
is also engaged in the development of
profit-generating properties including officebuildings, commercial facilities, and logistics
facilities for investors.
Group companies engaged in this business•Nomura Real Estate Development Co., Ltd.
•NREG TOSHIBA BUILDING Co., Ltd.
•Yokohama Business Park Heating and Cooling Supply Co., Ltd.
•Geo-Akamatsu Co., Ltd.
•NREG TOSHIBA BUILDING FACILITIES Co., Ltd.

In property brokerage services for individual customers, theProperty Brokerage and CRE Business Segment is satisfying
its customers’ needs for relocation by having enhanced its
website and the network of branch offices in the Tokyo
metropolitan area. For corporate property brokerage, thisbusiness segment has taken advantage of direct networks
with more than 5,000 corporate clients.
Group companies engaged in this business•Nomura Real Estate Development Co., Ltd. •Nomura Real Estate Urban Net Co., Ltd.

Property & Facility
Management Business

Other
Business
The Other Business Segment mainly operates fitness
clubs, running 28 establishments primarily in theTokyo metropolitan area as of June 30, 2014.

The Property & Facility Management Business Segment isengaged in property management of housing and officebuildings by utilizing the knowhow elaborated through longyears of operation and strives to increase the asset value andprofit of buildings.

Group companies engaged in this business•MEGALOS Co., Ltd.

•Nomura Real Estate Partners Co., Ltd. •Nomura Amenity Service Co., Ltd.

Nomura Real Estate Holdings, Inc.

Group companies engaged in this business

6 Integrated Report 2014

Message from the President

Realizing an enriching tomorrow for
people and communities alike“The best way for us to contribute to society is to put our full weight behind theconstruction of large-scale new towns to solve Japan’s housing problems.” This
statement embodies the spirit of the social mission set forth by Nomura Real Estate
Development Co., Ltd. when it opened its doors more than 50 years ago; and wehave strived to live up to this ideal through the creation and development ofcommunities that are in harmony with the environment and provide comfortableand enjoyable places for people to live and interact.
What the consumer public and society are looking for in communities andhousing has been undergoing great change, and the issues that we are now
addressing have expanded in scope to become much larger than anything we faced
50 years ago. These issues include changes in demographics caused by Japan’s
declining birthrate and aging population, the growing importance of energy
conservation, the need to provide safe, secure and high quality real estate to society,and the value of people-to-people and people-to-community connections.
To tackle these issues, we have been developing an understanding of theunderlying causes of these changes, leveraging our unique expertise and experience
as a developer and mobilizing all of our management resources. Furthermore, wehave been developing our human resources and using organizational strengths
driven by the diverse individual values of our people to face the future head on. I
believe this approach will enable us to accurately identify changes in our increasingly
complex and diverse management environment and open a path to sustainablegrowth and a continuing ability to give back to society.
“Bringing Tomorrow Today.” With this Group motto in mind, we strive todeliver new value ahead of the rest as changes take place in the world and continue
to embrace the challenge of realizing a more enriching tomorrow for people andcommunities alike.

President
Nomura Real Estate Holdings, Inc.

7 Integrated Report 2014

Message from the President

Review of Performance and Outlook
Recorded our highest ever operating
revenue and operating income.
Achieved our operating incometarget from Phase 1 of the Mid- toLong-term Business Plan two years
ahead of schedule.
For the fiscal year ended March 31, 2014, we posted operating
revenue of ¥532.0 billion and operating income of ¥74.3 billion,
both record highs. At the same time, we achieved the operating

income target (¥65.0 billion) laid out for the final year of Phase 1of the Mid- to Long-term Business Plan a full two years aheadof schedule.
Specifically, the Residential Development Business enjoyedrecord sales from growth in its mainstay brand PROUD, OHANA
brand condominiums for suburban areas, as well as redevelopment and rebuilding projects, enabling us to establish a solidpresence in the housing-for-sale market nationwide. The Leasing
Business saw the PMO brand of midsize office buildings in Tokyo’s
downtown area capture a strong position in the market as well as
steady growth in the number of development projects for the
GEMS brand of urban-type commercial facilities and Landport
brand of logistics facilities. The fact that we strived through thesebusinesses to deliver products and services in tune with the needsof the market made it possible to leverage the opportunities
afforded by positive market conditions to the fullest.
We anticipate this business environment will continue
going forward. As for performance in the fiscal year ending
March 31, 2015, we anticipate that profits will dip compared to
the fiscal year ended March 31, 2014 due to the impact felt fromthe partial relocation of Toshiba Corporation, our main tenant in
the core Hamamatsucho Building. At the very least, however, weshould be able to reach our operating income target (¥65.0 billion)
for Phase 1, and we forecast an increase in profits for the fiscal
year ending March 31, 2016 and beyond. Additionally, reinforcing our financial foundation aimed at future growth is another

Progress under the Mid- to Long-Term Business Plan

Shareholders’Equity Ratio (%)

24.5

27.1
74.3

58.3

30.0
100.0 (Level)

Phase 1 (April 2012 to March 2016)

80.0 (Level)
65.0

Operating income of ¥65.0 billion
Shareholders’ equity ratio of 30%

Consolidated
Operating Income(billion yen)

ROA (%)

Quantitative Targets

Phase 2 (April 2016 to March 2019)

4.6

2013/03

Operating income of ¥80.0 billion level
ROA of 5.5%

5.8

5.5

Phase 1

Phase 2Phase 3

2019/03 (Target)

2022/03 (Target)

2014/03

2016/03 (Target)

Nomura Real Estate Holdings, Inc.

8 Integrated Report 2014

Phase 3 (April 2019 to March 2022)
Earnings base for operating income of¥100.0 billion levelMessage from the President

challenge we face. Yet, we fully expect to reach our targets forthis indicator as well.
Given these factors, the Nomura Real Estate Group will
shift to a more aggressive posture to unlock the next stage of its
growth. We have already stepped up efforts on multiple redevelopment and mixed-use development projects in the downtown
core of Tokyo in order to accumulate sound assets that will generate
stable income streams well into the future.
In the fiscal year ended March 31, 2014 our dividend was¥35, up ¥5 compared to initial forecasts, because of our strong
earnings growth. For the fiscal year ending March 31, 2015, we
expect to increase the dividend a further ¥5 to ¥40 to reflect our
future outlook on performance.

Management IndicesWe are building a solid financial
foundation and enhancing asset
efficiency with an eye on further
growth by pursuing a shareholders’equity ratio of over 30% and an ROA
over 5.5%.
It goes without saying that a solid financial foundation is essential for the aggressive investments needed for future growth. For
this reason, Phase 1 of the Mid- to Long-term Business Plan for
April 2012 to March 2016 is the time to reinforce our financial
foundation, with the achievement of a shareholders’ equity ratioof over 30% as the target. Our shareholders’ equity ratio as ofPrivate Sector Condominium Supply and Nomura Real Estate Group’s Market Share(Units)Number of condominium units supplied by the private sector

Nomura Real Estate Group’s market share (%)

180,000

3rd
2nd

150,000

1st

6.0

2nd

120,000
PROUD launchedComparison of ROA (Vertical) and Total Assets (Horizontal)of Major Real Estate Companies(%) ROA

6.0
5.0
4.0

90,000March 31, 2014 stood at 27.1%, which marks a solid improvement over the previous fiscal year end of 24.5%, inching us closer
to the ultimate goal of 30%.
Another important performance indicator is achieving an
ROA of over 5.5%, which is the target for Phase 2. This represents
the highest ROA of any major company in the sector. Comparedto our peers in the sector that have been around since before
World War II, the Nomura Real Estate Group has a rather shorthistory and does not have a huge portfolio of assets. Therefore,
we will focus on enhancing asset efficiency to generate higher
profits while leverage our strength in flexibility. In this regard,
ROA represents a performance indicator closely in line with thedirection we are seeking. We will steadily increase ROA by enhancing the profitability of our housing sales business and property development operations, and by growing businesses that do
not use the balance sheet, such as Investment Management,

Nomura Real Estate Group
5.0
Company C

3.0

Company A

4.0
60,0002.0
9th30,0001.0

00Company D
3.0
Company E

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

(Year)

Source: Real Estate Economic Institute Co., Ltd.

Company B00

10,00020,00030,00040,00050,000 Total Assets(100 million yen)

*The size of the circle is determined by the amount of operating income.
*ROA: (Operating income + Non-operating income) / Total assets at end of fiscal year
Source: Created from the most recent year-end financial results documents of each company

Nomura Real Estate Holdings, Inc.

9 Integrated Report 2014

Message from the President

Property Brokerage & CRE, and Property & Facility Management.

Growth Strategy
Rebuild our business portfolio to ensureeach of our three core businesses
accounts for an equal share of earnings
and stabilize performance whileachieving profit growth.
To obtain profit opportunities, developers face the inevitableneed to anticipate volatility in the real estate market. Management, therefore, must give equal weight to both profit growthand performance stability. Given that our profit structure isslanted toward the Residential Development Business at the

moment, we will seek to stabilize growth in this business while
increasing profit growth in our leasing, service and managementbusinesses. The ultimate goal is to restructure our business portfolio
to strike an equal balance among these three businesses toachieve stable performance.

Residential Development Business
It is unlikely that Japan’s housing market will see further growth
going forward due to an expected contraction caused by the prolonged decline in population. Nevertheless, if addressed correctly,
changes in demographics caused by an increase in single-personand senior households, and further changes in customer needs
caused by the diversification of lifestyle present sufficient potential
to achieve stable business growth.
The strength of our Residential Development Business canbe found in our ability to quickly reflect customer needs in products

Population Pyramid (Greater Tokyo Metro Area)2010 (total population: about 35 million)
Men

Women
Over 90
85–89
80–84
75–79
70–74
65–69
60–64
55–59
50–54
45–49
40–44
35–39
30–34
25–29
20–24
15–19
10–14
5–9
0–4

Working-age
population(15 to 64)
About
23 million(10,000
people)200 150 100

50

0 (Age) 0

50

100 150 200

50

100 150 200

Business Portfolio of the Nomura Real Estate Group2035 (total population: about 33 million)
Prior to establishment of the Mid- to Long-term Business Plan
Aggressive growth

Property
Brokerage &CRE

Investment Management
Property
Brokerage &CRE

Investment
Management

Property &Facility
Management

Residential
Development

Non-asset
approachAssetutilization
Leasing
Property & Facility
Management

Future business portfolio

Non-asset
approach
Service & Management Sector
Aim to aggressively expand
business in the real estatemarkets where stock is growing

Stable growth

Men

Women

Aggressive growth

Leasing
Aim to aggressively
expand business byleveraging expertiseas a developer

Residential
Development

Over 90
85–89
80–84
75–79
70–74
65–69
60–64
55–59
50–54
45–49
40–44
35–39
30–34
25–29
20–24
15–19
10–14
5–9
0–4

Development
SectorWorking-age
population(15 to 64)

Assetutilization

About
19 million

Aim to achievesustainable andstable growth as acore businessStable growth(10,000
people)200 150 100

50

0 (Age) 0

Source: Graph created based on “Regional Population Projections for Japan” publishedby the National Institute of Population and Social Security Research

Nomura Real Estate Holdings, Inc.

10 Integrated Report 2014

Message from the President

through an integrated structure that combines development,
sales, and management. This strength is what has propelled
PROUD brand condominiums to the top of the housing market.
Leveraging this strength, we will work to develop the standard
products of tomorrow ahead of our peers, products that meetthe needs of rising environmental awareness and the increase insenior households, and products that provide new value to the
housing market. This represents not only a key to business stability,
but also our responsibility to society as a market leader.
With the rising number of people choosing condominiums
as their primary residence, building up relations with existing customers has become more important than ever. Currently, we areworking to build a Residential Value Chain that will serve as aplatform as we link each of the businesses within the Nomura
Real Estate Group. Deepening our brand value further and delivering life-long value to our customers through this value chain isa key to stable growth.

Leasing Business
The Leasing Business has been positioned as a key growth driverof future profits. Moving forward, we will agilely own and selldevelopment properties in a manner that helps to boost profits.
As for ownership, we will stipulate the proper degree ofinvestment and project volume in advance and expand our asset
portfolio by incorporating only sound properties to ensure competitiveness over the long term. This in turn will enable us to realize growth in profits. On the sales side we will promote close
cooperation with the Investment Management Business. We arecommitted to growing and expanding our Investment Management Business as well as selling development properties to REITs
offered by the Nomura Real Estate Group.
Services and Management
Our Investment Management, Property Brokerage & CRE, andProperty & Facility Management businesses help to generate stableearnings without increasing the balance sheet. Growing thesebusinesses is essential to improving ROA and rebuilding our business portfolio.
In the Investment Management Business, heightened
expectations for Japan’s economic growth and inflation since thestart of Abenomics have brought massive amounts of money into
Japan’s real estate fund market from individual and institutional
investors in and outside of Japan, and from various national
governments. The targets of real estate investments are also

Nomura Real Estate Holdings, Inc.

11 Integrated Report 2014

increasingly diversified. Given this situation, the Nomura Real
Estate Group will leverage its strengths in property acquisition
and fund structuring as a pioneer in Japan’s real estate fundmarket to continually deliver new products. We will also maintainour strong performance as an asset manager and expand profit
opportunities by meeting investor expectations.
In the Property Brokerage & CRE Business, increasing housing
stock in the retail segment has raised expectations for expansion
in the existing housing market. The wholesale segment has also
seen an increase in demand for Japanese real estate from foreign
funds and requests from companies to more effectively utilize
their real estate holdings. We will respond by working to establish
an even stronger presence as a major property broker and bybalancing both the retail and wholesale segments.
In the Property & Facility Management Business, withhousing and building stock increasing in society, demand willgrow to not only manage these buildings and homes, but also tomaintain their asset value. To address these needs, we merged
two of our real estate management companies in April 2014. Thismerger has established a structure through which we can leverage
our collective strengths by combining the technological capabilitiesof the building management company and the operational
know-how of the housing management company. Capitalizingon these collective strengths, we will move into new segments
where growth is anticipated, such as large-scale repair work and
PPP/PFI projects.

Message from the President

Aggressively Investing in Large-Scale
Redevelopment Projects / Mixed-Use
Development Projects
With momentum growing for urban
renaissance in Tokyo’s downtown areas, wewill actively pursue the redevelopment
business where we have a solid track recordand experience.
“Being an enterprise group that continues to create high value
through sustainable change.” This long-term vision was adopted
as a guideline for our Mid- to Long-term Business Plan andindicates the importance of our role as a real estate company inmeeting the increasingly diverse needs of both customers andsociety while contributing to the resolution of social issues related
to urban functions and housing, both key components of people’s

lives and social infrastructure, through sustainable growth.
A major social issue and business opportunity emerging
today is the aging nature of real estate stock in the central areaof downtown Tokyo. Most of Tokyo’s urban infrastructure wasbuilt for the 1964 Tokyo Olympics. The reconstruction of buildingsthat are now more than 50 years old and fail to meet current
earthquake resistance codes is fast becoming a major issue as aresult of heightened awareness for safety and security in thewake of the Great East Japan Earthquake that hit in March 2011.
The National Strategic Special Zone program created as part of
the government’s growth strategy calls for the Greater Tokyo
Metropolitan Area to be developed into the world’s foremost
business environment and made more competitive internationallywith an eye on the 2020 Tokyo Olympics. Regulations such as
floor-area ratio will be eased for this urban development in aneffort to encourage the private sector to use its capital and know-how
as much as possible. Revisions in the law* expected to come into
effect in December will ease the requirements that must be met

Nationwide Condominium Stock(10,000 units)

New units supplied

Units in stock (10,000 units)

to sell and demolish aging
condominium buildings.
These factors are all
working together to create alarge-scale urban renaissance.
Building a high quality
stock of real estate that canbe used for the next several
decades or longer throughredevelopment and reconstruction will help the public
to regain their sense of safety and security in communities andprovide a sense of rejuvenation to both people and society, which
represents the unique type of contribution to society that only adeveloper can make; and these efforts will allow us to makedramatic growth as a real estate company.
To reinforce this business, in April 2014 we set up a dedicated team that covers residential, office and commercial facility
asset classes. As a leader in the redevelopment and reconstructionof housing, the Nomura Real Estate Group will leverage its trackrecord and know-how to further strengthen its management
capabilities through Group collaboration and pave the way forthe success of multiple mixed-use development projects.

30

600

25

500

*	The Act Revising Part of the Act on Facilitation of Reconstruction ofCondominiums (the Revised Act on Facilitation of Reconstruction ofCondominiums) passed in June 2014.

400

Example of Station-front Redevelopment

Former earthquake
resistance standards

20
15

300

10

200

5

100

0

0
1968

1972

1976

1980

1984

1988

1992

1996

2000

2004

2008

2012

(Year)

Source: Ministry of Land, Infrastructure, Transport and Tourism

Nomura Real Estate Holdings, Inc.

12 Integrated Report 2014

Message from the President

New Business Creation with an Eyeon the Future
We will continually produce new
businesses that deliver value to society,with an eye on future changes.
The Nomura Real Estate Group is aspiring to create new, highly
competitive businesses based on a long-term perspective in
response to changes expected to take place in customer needs
and social environment. To that end, we are pursuing researchand development while collaborating with outside partners suchas universities and companies in different sectors to collectively
address a truly broad range of domains as a Group.

Environmental Business
Addressing environmental concerns and energy shortages is a
critical issue for society, and private sector companies will not beable to continue as going concerns if they are unable to consider
these elements in their business activities. The real estate industry, too, has seen rising demand for environmentally friendly products and services. Given this situation, the Nomura Real EstateGroup has been steadily rolling out its electricity receiving service
for entire buildings at new condominiums to help residents reduce their energy bills and improve the energy efficiency of theentire community. In the future, we will cultivate more new businesses, such as the commercialization of smart cities and smart
condominiums, and the aggregation business once electricity retailing is deregulated.

Building Life Cycle Management
With need for high quality real estate stock increasing, it has
become more important than ever to enhance the value ofbuildings not as durable goods, but rather as assets. The Nomura
Real Estate Group is researching ways to streamline costs by
preparing optimized long-term maintenance and repair plans,
and ways to maintain and improve asset value based on anunderstanding of building life cycles.

Large-Scale Redevelopment/Mixed-Use Development Projects in Downtown Tokyo
Downtown Tokyo Area
Tomihisa Cross (Residential*)

Location: Tomihisacho, Shinjuku-ku
Area slated for redevelopment: about 2.5 ha
Schedule: Completely sold out; handover slated for 2015

Location: Nishi-Shinjuku 3chome, Shinjuku-ku
Area slated for redevelopment: about 2.6 ha
Schedule: Established general partnership for
redevelopment preparations

MejiroUeno

Soto-Kanda 1chome South
Redevelopment Project (Mixed-use)

Akihabara

Location: Soto-Kanda 1chome, Chiyoda-ku
Area slated for redevelopment: about 1.9 ha
Schedule: TBD

中野

Shinjuku

Akasaka Yagenzaka West
Redevelopment Project (Residential*)

Kanda
Shinjuku-gyoen

Location: Akasaka 7chome, Minato-ku
Area slated for redevelopment: about 1.1 ha
Schedule: Established general partnership for
redevelopment preparations

Harajuku

Nishi-Azabu 3chome Redevelopment
Project (Mixed-use*)

ShibuyaLocation: Nishi-Azabu 3chome, Minato-ku
Area slated for redevelopment: about 1.2 ha
Schedule: Established general partnership for
redevelopment preparations in 2014

ShinTakashima

Minato Mirai

Takashimacho

13 Integrated Report 2014

SakuragichoTokyo

Hamamatsucho

Shinagawa
馬車道

Nihonbashi 1chome Redevelopment
Project (Mixed-use*)
Location: Nihonbashi 1chome, Chuo-ku
Area slated for redevelopment: about 2.3 ha
Schedule: Established general partnership for
redevelopment preparations in April 2014

Shibaura 1chome Redevelopment Project(Mixed-use)

Tokyo Tower

TamachiYokohama

Location: Block No. 46, Minato Mirai 21 Central
District, Nishi-ku, Yokohama-shi,
Kanagawa Prefecture
Area slated for development: about 0.9 ha
Schedule: Plan to break ground in 2015

Imperial Palace

Yokohama Area

MM21 Block No. 46 Development
Project (Office)Nomura Real Estate Holdings, Inc.

Location: Higashi-Ikebukuro 4chome, Toshima-ku
Area slated for redevelopment: about 0.4 ha
Schedule: Established general partnership for
redevelopment preparations

Ikebukuro

Nishi-Shinjuku 3chome Redevelopment
Project (Mixed-use*)

Higashi-Ikebukuro Station-front
Redevelopment Project (Residential)

Location: Shibaura 1chome, Minato-ku
Area: about 3.4 ha
Schedule: Included in the Designated Urban Areas for
Urgent Redevelopment in January 2012

Shirokane 1chome Redevelopment
Project (Residential*)
Location: Shirokane 1chome, Minato-ku
Area slated for redevelopment: about 1.8 ha
Schedule: Plan to receive permissions to establish generalpartnership for redevelopment in 2014

Asterisk inside parenthesis indicates JV property

Message from the President

Community Building and Town Management
It is said today that people-to-people connections are growing
more distant. This poses a major challenge because there are many
issues such as childcare and community rejuvenation that can
only be resolved through the power of communities. The Nomura
Real Estate Group is researching ways to build real communities
and management methods for the communities surrounding its
large-scale mixed-use projects because our commitment is toproviding more than just a place to live. In condominiums where
young people and seniors live, for example, we are examining
ways to utilize the knowledge that older residents have aboutchildrearing for the benefit of young people. In this manner, we
hope to provide a variety of communities to residents.
Senior Business
The senior market will continue to grow. In order to provide products
and services that allow seniors to live in health and comfort witha sense of affluence in life, the Nomura Real Estate Group is
drawing on its collective strengths to examine business ventures
tailored to senior citizens. We hope to be able to announce aGroup-wide policy on our senior business sometime this fiscal year.
Global BusinessJapan’s real estate business has traditionally been driven by
domestic demand, but we hope to tackle the challenge of expanding
more actively into global markets. A key point will be how we
capture growth in emerging countries, especially in Asia. We
recognize this to be an important management task facing theentire Nomura Real Estate Group, and we are currently searchingfor business opportunities through which we can utilize ourestablished track record and the know-how we have accumulated
in the Japanese market.

Diversity and Governance
Incorporating diverse perspectives is the
key to sustainable growth. We willcontinue to focus on diversity-based
management.
In order to continually create new value in response to theincreasingly more complex and diverse needs of customers andsociety, it will be critical for us to revitalize our organization while
fully leveraging the individuality of each and every employee.
Since becoming president, I have taken the lead in building anenvironment to achieve this end.
Revitalizing our organization through the promotion ofdiversity represents another important management task for the
Nomura Real Estate Group. I hope to foster an environment inwhich we openly accept the unique vantage points, thinking andwork styles of our diverse human resources regardless of differencesin age, gender, career or job title, and then leverage this for the
benefit of our business performance. This represents the sourceof the company’s long-term growth, and it is the vision we haveestablished for the Group. If each and every one of our people
can leverage their uniqueness, I am confident that we will be able
to transform ourselves into something that exceeds the goals of
the Mid- to Long-term Business Plan (through 2022/3). Afterseeing the latent capabilities of our people, I truly believe this morewith each passing day.
The importance of diversity is also clear when it comes togovernance. We have appointed two External Directors and three
External Audit & Supervisory Board Members. These officers
examine our operations from an objective standpoint and point
out issues and problems, which provides opportunities for us to

Nomura Real Estate Holdings, Inc.

14 Integrated Report 2014

make changes in our status quo. Our External Directors include
Mr. Shigeru Matsushima, a professor at the Tokyo University of
Science Graduate School of Innovation Studies, who joined us
last year, and Ms. Satoko Shinohara, a professor at the Japan
Women’s University, who joined us this year. I hope to further
strengthen the Group’s governance while incorporating diverse views.

A Message to Stakeholders
We will continually enhance corporate
value by creating the new value thatsociety demands.
The environment surrounding the Nomura Real Estate Group will
undergo great change moving forward, and this will inevitably
have an impact on our business operations. In response to thesemajor changes, we will mobilize all of our management resources
to provide pioneering new value and deliver affluence to bothpeople and communities. This represents the very essence of ourGroup message “Bringing Tomorrow Today.” The Group willcontinually transform itself to tackle new challenges with thismessage and long-term vision in mind to contribute to its
sustainable growth in the future. We look forward to working
with you and for you as we move into the future.

President

Review of Operations

Residential
Development
Business

Leasing
Business

Investment
Management
Business

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

400

40

160

40

20

10

308.4 310.5

300

32.7 33.7
30

120

123.4

30

106.6
200

217.5

20

20.9

27.0

96.9

80

15

19.6

10

11.1

8.0

8
6

12.9

23.3
20

18.3

6.5

4
2

100

10

40

10

0

5

−2
0

0

’12/03 ’13/03 ’14/03

0’12/03 ’13/03 ’14/03

Composition of Operating Revenue and Operating Income (%)
Composition of operating revenue
Composition of operating income0’12/03 ’13/03 ’14/03

Composition of Operating Revenue and Operating Income (%)
Composition of operating revenue
Composition of operating income

56.9%
40.8%

’12/03 ’13/03 ’14/03

15 Integrated Report 2014

−2.7
’12/03 ’13/03 ’14/03

Composition of Operating Revenue and Operating Income (%)
Composition of operating revenue
Composition of operating income

17.8%
32.7%
Nomura Real Estate Holdings, Inc.

−4

0

’12/03 ’13/03 ’14/03

3.4%
9.7%

Review of Operations

Property
Brokerage &CRE Business

Property &Facility
Management
Business

Other Business

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

Operating Revenue (Billions of yen)

Operating Income (Billions of yen)

40

12

80

6.0

25

0.6

34.3
30

26.0

29.1

67.3 66.3
9

8.3

5.1
4.5

60

4.4

4.4

20

15

6.1

6

20

72.1

0.5

18.6
14.5 14.9

0.4

0.4

0.4

3.0

40

10
0.2
3

10

1.5

20

5

1.9
0

0

’12/03 ’13/03 ’14/03

Composition of Operating Revenue and Operating Income (%)
Composition of operating revenue
Composition of operating income00’12/03 ’13/03 ’14/03

5.3%
10.1%

’12/03 ’13/03 ’14/03

Composition of Operating Revenue and Operating Income (%)
Composition of operating revenue
Composition of operating income

Nomura Real Estate Holdings, Inc.

0

0

’12/03 ’13/03 ’14/03

13.2%
6.2%
16 Integrated Report 2014

’12/03 ’13/03 ’14/03’12/03 ’13/03 ’14/03

Composition of Operating Revenue and Operating Income (%)
Composition of operating revenue
Composition of operating income

3.4%
0.6%

Note: The composition ratio of operating revenue and operating income foreach business segment is calculated based on the simple total of each.

Residential Development Business
Aiming to realize stable, sustained growth as a core business of the Group
Highlights from the fiscal year ended March 31, 2014
Operating revenue

Operating income

Number of housing
units sold

6,700
8.0% 20,500¥310.5

¥33.7

6,209

YoY UpYoY UpYoY Upbillion0.7%

billion2.9%

Number of sites purchased

units

units

Site stock

Changes in Housing Sales and Gross Margin Ratio(Units)6,000

The Residential Development Business in thefiscal year ended March 31, 2014 achieved record
net sales and operating income thanks to record
high housing sales totaling 6,209 units (460
more than the fiscal year ended March 31,2013) driven by an improving economy, the implementation of strategy, low interest rates andan expanded scope of home loan tax deductions.
Our marketing efforts have also produced solid results with all 992 units of Tomihisa
Cross, one of the largest mixed-use redevelopment projects inside the JR Yamanote loop, being
sold within six months after being placed on
the market in September 2013. Some 72% of
the 7,000 housing units we plan on selling in
the fiscal year ending March 31, 2015 werealready under contract at the start of the year,
keeping the contract rate at elevated levels.

Seiichi Miyajima
Executive Officer
In charge of Residential Development
Business

Nomura Real Estate Holdings, Inc.

2,000

Promoting a strategy closely
in tune with medium- to longterm changes in the market
Japan’s aging population and declining birthrate
will create further changes in householdcompositions. Given this, the mission of the
Nomura Real Estate Group’s core Residential
Development Business will be to achieve continual and stable growth. We will promote
three strategies to realize this growth.
First, our 3-year Mid- to Long-term Plan
through 2016/3 calls for the creation of a structure that can achieve a stable supply of 7,000
units annually. To achieve this ambitious plan,in the fiscal year ended March 31, 2014 weacquired land for the development of 6,700
units, which follows the 7,700 units’ worth ofland for development acquired in the fiscal year
ended March 31, 2013. In terms of supply, we
provided more than 7,000 units for the second
consecutive year when combining both condominiums and detached houses. Second, we aredeveloping a product lineup that meets theneeds of customers and society. Currently, we are

17 Integrated Report 2014

5,077

4,000

(excluding pending projects)

units

Record sales of housing units

Number of housing units sold

Gross margin ratio (%)

8,000

16.4

23.3
4,028

5,749
22.5

6,209

7,000

40
30
20

21.7

10

0

0
’11/03’12/03’13/03’14/03’15/03(Forecast)developing products based on the increase insingle-person and senior households, and theacquisition of major mixed-use development
projects that include residential, commercial
and office components. Finally, we are improving
customer services by creating a Residential Value
Chain and developing a business model thatutilizes existing residential properties further.
Group companies will provide seamless services
according to the residential lifecycle, frommove-in to remodeling to purchase of another
home, which will increase our contact points
with customers after they move in and enable
us to build deeper relationships. The platformof this strategy, the PROUD Owners Club,*continues to see steady membership growth.
Going forward, with a structure leveraging
the collective strengths of the Nomura Real Estate Group that integrates development, sales
and management, we will be able to respondto the needs of customers and fulfill each ofthese strategies.
*	PROUD Owners Club: An exclusive membershiporganization for owners and residents of condominiums ordetached houses sold by Nomura Real Estate Development.

Residential Development BusinessResidential Development Business Strategy in the Mid- to Long-Term Business Plan

MarketbackgroundFundamental strategy

Results from the fiscal year
ended March 31, 2014

•Expand business while aiming toestablish a system to supply 7,000
housing units annually•Oligopolistic market
dominated by major
corporations•Achieved 7,000 units in terms of supply
and land for development, following
similar results from the fiscal year ended
March 31, 2013

•Expand product lineup to meetchanging customer needs andleverage diverse business expertise(redevelopment, rebuilding,rezoning, mixed-use
development)•Declining birthrate
and aging
population, andchanges in thecomposition ofhouseholds•Grew redevelopment and rebuilding
projects, detached homes and the OHANA
brand condominiums into core businesses•Increased membership in the PROUD Owners
Club, which functions as a platform for the
Residential Value Chain, to over 40,000•Enhance customer satisfaction andbrand value by providing services
according to the residential
lifecycle•Large housing stock•Inflow of people
to cities

Measures for the fiscal year
ending March 31, 2015 andbeyond•Achieve annual sales of 7,000 units
and build a stable supply structure•Reinforce product development forhigh net worth individuals,
single-person households, seniors
and investors, and expand customer
segments•Promotion of Residential Value
Chain and expand service menu

•Funabashi Morino City received theWorld Smart Cities Award

In Focus

In Focus

Expanding customer services by promoting a Residential Value Chain

Providing homes that meet the needs of the changing market and society

We are enhancing customer satisfaction throughout the lifecycle of condominiums and detached houses
by providing seamless services through Group collaboration, from maintenance and repair work tointerior furnishings, utilization of vacant homes, remodeling, and property sales.

In addition to our PROUD and OHANA condominium brands for families, we are expanding our lineup of
housing products to meet the needs of senior and single-person households.

•Buying and selling using PROUD Master•Accommodate changes infamily composition andsenior households•Renovations using the latest
facilities and designs

UpgradingRemodeling•NEXT PASS 10 (maintenance programthat includes an extended homewarranty, small repairs, andlong-term inspections)Move-in

Customers

Leasing(utilizationof vacanthousing)•Living Q Call (emergency on-callservices and assistance services)•Living support services, such as
housekeeping and house cleaning•Relocation (subleasing)•Property management services

Home purchase
Houses for saleCompact home

Single-personhouseholds
DINKS

Families
Owner held property(for leasing or relocation)

MaintenanceInterior•Integrated marketing and sales,from order-made designs andoptions to interior furnishings•Sales of jointly developed furniture
Nomura Real Estate Holdings, Inc.

Expansion

Mainstayproducts

Serviced apartment

Expansion

Lease

18 Integrated Report 2014

Lease housing(studio to 1 bedroom)

Seniorinvestors
Mainstayproducts

Residential Development BusinessHighlight 2013 1

Funabashi Morino City wins
World Smart Cities Awardin the Project Category
A new initiative for the creation of sustained
environmental value

Funabashi Morino City

Mixed-use development project under
the Smart & Share Town Concept

presented with this award because of its initiatives based on this concept.

Funabashi Morino City is an eco-friendly town
development project undertaken by the Nomura
Real Estate Group. It was recognized with aWorld Smart Cities Award in the Project Category during Smart City Expo World Congress2013 in Barcelona, Spain.
Completed in May 2013 on a 17.6-hectare
parcel of land in Funabashi City, Chiba Prefecture, Morino City represents one of the Tokyo
Metro Area’s largest mixed-use developments,
comprising the PROUD Funabashi condominium
tower with 1,497 units, 42 detached homes,
and a number of commercial, medical, daycare
and park facilities. The development has a total
population of around 4,500.
The project, led by Nomura Real Estate
Development and Mitsubishi Corporation, involves a number of other companies. Under
the Smart & Share Town Concept, the project
employs the latest in environmental technologies
and community building systems to generate
sustained environmental value. The project was

Developing connections between
residents and the community while
incorporating leading environmental
technologies
As part of its efforts to reduce environmental
impact, Morino City strives to optimize energy
consumption through the use of leading environmental and telecommunications technologies
such as the Smart Condominium Energy Management System.
Additionally, we have begun a survey onenergy conservation awareness and effectiveness* with the assistance of about 500 households from PROUD Funabashi to monitor theeffect that differences in fee systems and thepresence of electricity conservation information(reports on visualization of energy consumption
and energy saving advice) has on energy conservation. This represents one of the energy conservation trials in Japan for collective housing withthe same types of features and functions.

Nomura Real Estate Holdings, Inc.

At the same time, we are supporting thedevelopment of a community that will become
the foundation for sustained environmental
value. As part of this effort, town meetings involving residents, companies and organizations
have been set up. These meetings have becomea place for people to meet and interact to build
a more attractive and comfortable community.
Through these initiatives, we are working
to create connections between people, natureand technology as well as build a sustainablecommunity.
*Please visit the following website for more information
about the survey on energy conservation awareness andeffectiveness:
http://www.nomura-re-hd.co.jp/csr/special/special01.html

Stakeholder VoiceThe energy conservation trials at PROUD
Funabashi are extremely valuable for both
Japan and the world as a case study in verifying the effectiveness of demand response for homes. The results so far haveshown that energy usage is quite conservative. Perhaps this is because people withvery strong awareness of the environment
moved in. I anticipate that this lifestyle will
spread around the world once the PROUD
brand’s smart and comfortable lifestyle, alifestyle that includes energy conservationand community building, becomes known
to all.

Yumiko Iwafune
Associate Professor
Collaborative ResearchCenter for Energy
Engineering
Institute of Industrial
Science
The University of Tokyo

19 Integrated Report 2014

Residential Development Business

Shibuya
Yoyogi Park

Highlight 2013 2

Promoting redevelopment/rebuilding projects to address
aging buildings

Nearly 1.06 million units of Japan’s total condominium stock of about 5.9 million units (as ofDecember 31, 2012) were built prior to thecountry’s revised building code on earthquake
Rebuilding Projects Involving Condominiums
Constructed Prior to the New Earthquake
Resistance Standards
In compliance with
old earthquake resistance standards
About 1.06 million units

resistance standards enacted in 1981. Morethan 30 years have passed since then, but only
about 14,000 units have been rebuilt. Tokyo inparticular has a large number of buildings thatneed to be redeveloped or rebuilt due to aging.
The role of Nomura Real Estate Group in
redevelopment projects is to realize community
design based on its expertise as a developer. By
improving and upgrading community functions,
we are able to revitalize entire communities.
Number of Redevelopment/Rebuilding
Projects Involving our Site Stock by Year
Booked (Excluding Pending Projects)(Units)1,800

Of which about
14,000 havebeen rebuilt

1,500
1,200
Nationwide stock
About
5.90 million units

900
600
300
0
’14/03

Source: Ministry of Land, Infrastructure, Transport and Tourism

Shinjuku Subcenter

Shinjuku Gyoen
National Garden
Shinjuku-gyoenmae Station

Tomihisa Cross, one of the largest
mixed-use redevelopment projects
inside the JR Yamanote loop, sells out
completely

Revitalizing older buildings in urban
areas to create new safe and securecommunities

Shinjuku Station’15/03(Forecast)’16/03(Forecast)’17/03 After ’18/03(Forecast)(Forecast)

Nomura Real Estate Holdings, Inc.

Tomihisa Sakura Municipal Park

Artist’s Rendering of Tomihisa Cross

One of our missions in society is to proactively
engage in various redevelopment and rebuilding
projects. As a forerunner in the industry withan aggressive stance toward business development, we have 4,500 units ready for redevelopment and 4,900 units undergoing redevelopment
and rebuilding projects.

Encouraging residents to take thelead in community building that
fosters lifelong bonds
Tomihisa Cross is a definitive redevelopment
project located in Shinjuku Ward. This community
redevelopment project began with reviews in
the 1990s by local residents who considered
excessive buying and selling of real estate
during Japan’s bubble economy to be a major
issue. As a result of these reviews, an industry–
government–academia–private sector project
was launched. Plans call for the construction of
Comfort Tower, a 55-story condominium thatwill stand as the tallest within the JR Yamanote
loop, lease housing, a large supermarket, certified daycare, commercial facilities, a disaster20 Integrated Report 2014

preparedness storehouse and large plaza, allon a 2.5-hectare plot of land. The creation ofshared spaces and services has been based on
100,000 ideas collected from discussions andonline surveys to realize a community that isboth the most comfortable in the world andfully prepared for disaster.
With the highly positive feedback fromthese initiatives, all 992 units of Comfort Tower
sold out in the space of only six months.

Leasing Business
Expanding business by balancing fixed asset development and property development
Highlights from the fiscal year ended March 31, 2014
Operating revenue

Operating income

Vacancy rate

Vacancy Rate
(%)

¥96.9

¥27.0

2.9

YoY Down

YoY UpYoY Upbillion

9.1%

billionExecutive Officer
In charge of Leasing Business3%

15.9% 0.7percentage points
Securing profit gains throughthe utilization of core assets

Tadashi Nakajima

4

The Leasing Business seeks to achieve growthby balancing its fixed asset development business,in which we own and lease properties developed by the Nomura Real Estate Group andobtain stable income streams from tenant lease
payments, and the property development business, in which we sell real estate to Nomura
Real Estate Group affiliated J-REITs and othervehicles for a profit.
In the fiscal year ended March 31, 2014
we leased the entire LAZONA Kawasaki Toshiba
Building, one of our core assets, to the Toshiba
Group and began operations with full occupancy
in November 2013. Our other leased properties also
enjoyed elevated utilization rates throughout theyear. In the property development business, inaddition to further development in our PMO
midsize office and Landport logistics facility
brands, we sold the first GEMS brand commercial
facility to Nomura Real Estate Master Fund to
mark the launch of this new brand. As a result,the Leasing Business posted an increase in profits

Nomura Real Estate Holdings, Inc.

2.9

2

2.3

2.2

’12/03’13/0310during the fiscal year ended March 31, 2014.

Redevelopment projects inthe central downtown area ofTokyo heating up
The property development business will accelerate development of PMO, Landport, andGEMS properties in the fiscal year ending
March 31, 2015 and beyond given improving
market conditions in the central downtown areaof Tokyo, rising demand for highly functional
logistics facilities, and increasing demand forthe reconstruction of aging buildings.
Meanwhile, to unlock mid- to long-term
growth, we will look to expand our ownershipand leasing of fixed assets. In particular, we will
focus on major mixed-use developments thatcombine office, commercial and residential in
the same project. Already we have begun examining a number of large-scale development
projects in the central downtown area of Tokyo,
and in April 2014, a new dedicated organization
called the Development Planning Division was
set up within Nomura Real Estate Development.

21 Integrated Report 2014

4.0

’11/03’14/03

Additionally, leveraging our expertise gained
from the development of PMO properties, weare stepping up development of office buildingsthat are larger than PMO properties and expanding our real estate portfolio.
Expanding the Leasing Business will also
help other businesses grow as well, including
Investment Management, Property Brokerage,
and Property & Facility Management. Goingforward, we will seek to develop the Leasing
Business into a core business that drives thegrowth of the entire Nomura Real Estate Group.
Vacancy Rate and Rents in the Five Wards
of Central Tokyo (As of March 31)(Yen/tsubo)

20,00016,000Rent level

Vacancy rate (%)

18,264 17,495 16,716 16,504
16,325
9.19
8.75
9.04
8.56

12,0001086.70 6

8,000

4

4,000

2

0
2010

2011

Note: 1 tsubo equals 3.3 m2
Source: Miki Shoji Co., Ltd.

2012

2013

0
2014 (Year)

Leasing BusinessLeasing Business Strategy in the Mid- to Long-Term Business Plan

Marketbackground•Increase in demand
for redevelopment/
rebuilding of aging
buildings•Tenant needs forsophisticatedlogistics facilities
driven by the
expansion in the
e-commerce market

Fundamental strategy

Results from the fiscal year
ended March 31, 2014

•Diversify development
capabilities (office, residential,commercial and logistics)•Established the Logistics Property
Department and Retail Property
Department•Provide management services
that deliver high levels ofsatisfaction to tenant andfacility users•Achieved land acquisition target in theproperty development business(acquired five buildings for PMO, twofor Landport and two for GEMS)•Maintained high utilization rate

Measures for the fiscal year
ending March 31, 2015 andbeyond•Expand the property development
business (six buildings for PMO, fourfor Landport and four for GEMS)•Make inroads into an expanded
version of PMO and theneighborhood shopping center(NSC) business•Reinforce large-scale development
projects•Increase lease income bystrengthening marketing and sales

In Focus

In Focus

Fixed asset development

Property development

Reinforcing large-scale redevelopment and mixed-use development
projects in the central downtown area of Tokyo

Accelerating the pace of property development in three brands

Large-scale development projects require a development timeline of between five and ten years. Nomura
Real Estate Development is proactively increasing the number of large-scale redevelopment andmixed-used development projects mainly in the central downtown area of Tokyo, led by its newly established
Development Planning Division and with an eye on medium- to long-term growth.
Development project

We will increase the size of our property development business by stepping up our development of office,logistics and commercial properties to 6/4/4 in the fiscal year ending March 31, 2015 and 8/5/5 in the fiscal
year ending March 31, 2016.
OfficeLogistics facilities

Commercial facilities

6 buildings annually

4 buildings annually

4 buildings annually

Area of land
being developed

Location

MM21 Block No. 46 Development Project

Nishi-ku, Yokohama, Kanagawa Prefecture About 0.9 ha

Nishi-azabu 3-chome Redevelopment Project

Nishi-azabu 3-chome, Minato-ku

About 1.2 ha

Soto-kanda 1-chome South Redevelopment Project Soto-kanda 1-chome, Chiyoda-ku

About 1.9 ha

Nihonbashi 1-chome Redevelopment Project

Nihonbashi 1-chome, Chuo-ku

About 2.3 ha

Nishi-shinjuku 3-chome Redevelopment Project

Nishi-shinjuku 3-chome, Shinjuku-ku

About 2.6 ha

Shibaura 1-chome Redevelopment Project

Shibaura 1-chome, Minato-ku

About 3.4 ha

Nomura Real Estate Holdings, Inc.

Sell

Sell

Sell

Our REIT
Nomura Real Estate Office Fund

22 Integrated Report 2014

Nomura Real Estate Master Fund

Nomura Real Estate Private REIT

Leasing BusinessHighlight 2013 1

2

Equipped with the latest
environmental building technologies,
LAZONA Kawasaki Toshiba Building
begins full-scale operations
Developing the next-generation environmentallyconscious buildings
Achieving a high degree of energy
efficiency and comfort
In November 2013 the LAZONA Kawasaki
Toshiba Building opened. This office building
development has been leased entirely to the
Toshiba Group. The building features over
100,000 m2 of floor space and offers large andopen spaces.
Comparison of CO2 Footprints with
Ordinary Office Buildings(kg-CO2/m2)

100
80

50% reduction

60
40
20
0
Average amount ofordinary officebuilding in Tokyo(April 2005 to
March 2006)
99 kg-CO2/m2 year

Energy efficiency
value for LAZONA
Kawasaki Toshiba
Building at the timeof design

Expected energy
efficiency value of
LAZONA Kawasaki
Toshiba Building at
the time ofcompletion

Consideration for the environment formed
an important part of the development process.
The building uses energy efficient facilities andequipment as well as the latest building energy
management system (BEMS), delivering a comfortable environment to office workers while
optimizing energy efficiency. The building produces about 50% less*1 CO2 than ordinary
buildings and was awarded DBJ Green Building*2
Platinum ranking and an S ranking from CASBEE
Kawasaki,*3 both of which are the highest certifications in their respected programs.

Consideration also given to business
continuity during a disaster andgiving back to the community
With business continuity plan (BCP) consideration an important element today, the building
adopts a seismically-isolated design and has
emergency backup generators that can supply
the building with electricity for up to 72 hours
in case of a blackout. This ensures tenants will
be prepared and ready to continue operations
in case of a disaster.

Nomura Real Estate Holdings, Inc.

3

1
1
2
3

Unique exterior design that reduces the use of heating and air conditioning
The first floor covers an area of 6,600 m2 and has a large office space that can accommodate up to 800 workers
The Toshiba Science Museum, featuring exhibits of cutting edge technologies and hands on opportunities to learn about science

With an eye on harmonizing and revitalizing the surrounding community, the building
has also been connected to pedestrian overpasses branching out from JR Kawasaki Station
while part of the low-rise section is open to the
public, providing an added degree of convenience for local residents and workers alike.
The development of this building was
carried out as part of our initiatives for constructing a highly profitable business portfolio
laid out in the Mid- to Long-term Business Plan.
Going forward, we will develop and manage
properties with significant value to society as
well as continually seek to expand our foundation of stable income streams and enhance corporate value.
*1	Compared to the average amount produced by ordinary
office buildings in Tokyo (April 2005 – March 2006).
*2	A certification scheme for environmentally and sociallyfriendly real estate developed by the Development Bankof Japan.
*3	A certification scheme based on the Institute for
Building Environment and Energy Conservation (IBEC)’s
Comprehensive Assessment System for Building
Environment Efficiency (CASBEE) localized by the City of
Kawasaki.

23 Integrated Report 2014

Stakeholder VoiceThe LAZONA Kawasaki Toshiba Building is
considered a showcase for our Smart Community Business, which is positioned as
one of our key management pillars, as thebuilding was built with Toshiba’s latest
technologies, facilities and systems fromthe planning stage. Image sensors are used
to control the building’s various facilities,
providing a comfortable office environmentand satisfying energy efficiency at thesame time.

Susumu Fujishima
Chief Specialist
Human Resources andAdministration Div.
Human Resources andAdministration Support
Center Toshiba
Corporation

Leasing BusinessHighlight 2013 2

Accelerating development andbrand promotion for PMO,GEMS and Landport
Developing two PMO properties jointly with Tokyo Metro

Reinforcing property development as
a new pillar of growth
The Nomura Real Estate Group is focused onincreasing development of high value added
and high margin real estate as a new growth
pillar. We are currently acquiring land anddeveloping properties centered on the threebrands of Premium Midsize Office (PMO),
Balance of Investments in the PMO, GEMS
and Landport Brands¥90.0 billion

Landport

which are midsize office buildings with the qualityof large-scale buildings, GEMS urban-type commercial facilities, and Landport logistics facilities.
Going forward, we plan on investingaround ¥50 billion in all three brands every year
to expand the size of these businesses as profit
growth drivers after Phase II of the Mid- toLong-term Business Plan.
We will also establish a unique brandpresence in the marketplace by continually expanding these businesses.
In the PMO brand, we have completed
15 buildings (as of July 31, 2014) since the firstone in 2008, PMO Nihonbashi Honcho, witheach maintaining a very high utilization rate,
making PMO as a highly visible and well regarded office building brand.

GEMS

About
¥15.0 billion

2013/03

PMO

2019/03(Target)Contracted by Tokyo Metro todevelop office buildings directly
connected to Shinjuku-gyoenmae
and Hanzomon stations
With the visibility of the PMO brand rising, wehave been contracted to develop properties that

Nomura Real Estate Holdings, Inc.

deliver upon our exceptional expertise in the field.
In the fiscal year ended March 31, 2014,
we were contracted by Tokyo Metro to develop
office buildings directly connected to Shinjuku-gyoenmae and Hanzomon stations as partof our PMO business. These projects will raisethe visibility of the PMO brand further because
they are a rare opportunity to develop properties
directly connected to a railway station. We also
anticipate added effects from the announcement of our tie-up with Tokyo Metro.
In the PMO business we will continue to
use our conventional method of purchasing anddeveloping land while also incorporating various other development methods such as contract-based schemes in order to generate new
business opportunities. In turn, this will help us
to build a solid presence in the market.

24 Integrated Report 2014

Conceptual image of
PMO Shinjukugyoenmae (tentativename) uponcompletion

Investment Management Business
Expanding assets under management by delivering a broad range of investment
opportunities through various funds
Highlights from the fiscal year ended March 31, 2014
Operating revenue

Operating income

Assets under management

Assets Under Management(Billions of yen)

¥18.3

¥8.0

¥1,132.2

YoY UpYoY UpYoY Upbillionbillion64.6% ¥10.7billion 0.4%
Accommodating a wide range
of investment needs with threelisted REITs

Yasuaki Fukui
Executive Officer
In charge of Investment Management
Business

The real estate investment trust (REIT) market
has been rejuvenated thanks to low interest
rates in Europe, the United States and Japan,
and the expectation among investors that bothstock and real estate prices will appreciate. At
the same time, there is rising demand among
institutional investors for privately-placed REITs
and funds.
Given this environment, the Investment
Management Business focused on stable fundmanagement in the fiscal year ended March
31, 2014 while acquiring ¥130 billion in real estate properties, including the massive Kojimachi
Millennium Garden (office and residential)
development. In June 2013 Nomura Real Estate
Master Fund, which focuses on logistics andcommercial properties, was listed on the Tokyo
Stock Exchange. Together with our other two
listed investment corporations focused on office
and residential properties, this means that we
now offer three different REITs that enable us

Nomura Real Estate Holdings, Inc.

billion

1,600
1,200

1,153.8

1,127.4

1,132.2’11/03’12/03’13/03’14/03800
400

to meet the needs of a broad range of investors.
As a result, the Investment Management
Business enjoyed a significant boost in earnings
in the fiscal year ended March 31, 2014.

Focus on the private-placementbusiness and FORF arrangement
to unlock further growth
Japan’s markets for privately-placed REITs andfunds are expected to grow in a fashion similar
to Europe and the United States. These private-placement businesses demand customization tailored to the needs of institutional investors, which makes this segment an attractive
new area for the Nomura Real Estate Group,with expertise in property acquisitions andidentification of client needs. We will continue
to expand our presence in the business as we
increase our partnerships with external asset
management firms and expand investment scope.
With the advent of Japan’s NISA program,
there is rising interest among individual investors
in real estate as an asset class. This has shined
the spotlight on risk-diversified instruments

25 Integrated Report 2014

1,126.6

0geared toward these investors in which multiple
funds are combined together into a Fund of
REIT Funds (FORF). In December 2013, a pilot
FORF fund was established, with the fund being
managed by Nomura Asset Management andNomura Real Estate Asset Management serving
as advisor. This fund will begin full-scale management during the fiscal year ending March
31, 2015. Moving forward, we will consider
incorporating foreign real estate assets into
FORF to form a new investment vehicle for individual investors.

Landport Atsugi(logistics facility)

Morisia Tsudanuma(commercial facility)

Investment Management Business

Investment Management Business Strategy in the Mid- to Long-Term Business Plan

MarketbackgroundFundamental strategy

Results from the fiscal year
ended March 31, 2014

•Capture stable income
streams from the steady
growth of listed andprivately-placed REITs•Expansion anddiversification of
the REIT market•Inflow of investment
capital from overseas

Measures for the fiscal year
ending March 31, 2015 andbeyond•Nomura Real Estate Master Fundlisted on the Tokyo Stock Exchange•Achieve stable growth from listed
and privately-placed REITs•Public offerings for two listed REITs•Expand product lineup to
meet investor needs•Arrange new privately-placed
funds and consider arranging
new products•Enhanced product lineup byarranging new privately-placed funds•Increasing asset
management needs
for individuals•Begin full-scale managementof FORFIn Focus

In Focus

Robust growth expected in J-REIT market

Improving performance of listed REITs

In the fiscal year ended March 31, 2014, market capitalization of J-REIT increased robustly from ¥4 trillion
to ¥7.1 trillion, marking the largest rise on record. The number of listed J-REITs has also increased, andthe market is likely to see even greater growth going forward.
REIT Market Size by Country/Region

We are improving the performance of our three listed REITs by acquiring real estate properties developed by
the Nomura Real Estate Group and identifying excellent properties without the need for competitive bidding.

Management

Europe,Middle East
and Africa:¥18.0 trillion

Asia: ¥9.0 trillion
United States: ¥69.5 trillion

Japan: ¥7.1 trillion

Oceania: ¥9.4 trillion*Market capitalization as of October 31, 2013
Source: Vol. 17 of “Real Estate Securitization Journal” published by The Association for Real Estate Securitization
Nomura Real Estate Holdings, Inc.

Management fee

REITHigh quality assets based on
the Nomura Real EstateGroup’s expertise in planning,development and operations

Officebuildings

Commercial
facilities

Residential

Logistics
facilities

26 Integrated Report 2014

Financing
AcquirerealestateLoan
Assetstargeted forinvestment

Interest

Lender(bank, etc.)

Investment

EquityDividend

Investor

Property Brokerage & CRE Business
Aspiring to be the top brand in customer satisfaction for both the retail and wholesale segments
Highlights from the fiscal year ended March 31, 2014
Operating revenue

Operating income

Number of transactions

Number of Transactions / Total Transaction Value(Billions of yen)

¥29.1

¥8.3

7,437

YoY UpYoY UpYoY Upbillion

11.8%

billion

34.9%

Achieved highest everoperating income since listing
In retail operations, we moved forward withthe expansion of our branch network andlaunched a new retail brand, Nomura no Chukai+ (Plus), to attract greater numbers of customers
and broaden our customer base. In wholesale
operations, we focused on proposals optimized
to corporate needs for effective use of theirreal estates, and sales and marketing efforts
sensitive to changes in user needs.
As a result, in the fiscal year ended
March 31, 2014, the Property Brokerage & CRE
Business achieved its highest ever operating
income since listing.

Moving toward achieving thegoal of 100 branches and 1,000
sales staff in retail operations
Seishi Miyajima
Executive Officer
In charge of Property Brokerage & CRE
Business

The retail side of the real estate market is expected to grow with a focus on existing homes
with a push from government policy andchanges in the social structure, such as popula-

Nomura Real Estate Holdings, Inc.

600

14.5%

400

5,774
425.2

5,762
452.9

6,494

7,437
672.7

540.6

(Contracts)

30,00020,00010,0000’14/03

Source: Real Estate Information Network for East Japan

6,000

2,000
0
’11/0340,000

8,000

4,000

0

Number of Existing Condominium Contracts(Greater Tokyo Metropolitan Area)

27 Integrated Report 2014

Number of transactions (Transactions)200

tion inflow from rural areas and a growing
outstanding housing stock. To capitalize on thispositive business environment, we are taking
advantage of business opportunities in the retailproperty brokerage business through our realestate information website nomu.com and
Nomura no Chukai + (Plus) brand outlets. Our
goal is to expand our branch network to a totalof 100 outlets in the greater Tokyo and Kinki
metro areas. Additionally, we will work to enhance
the quality and quantity of our workforce utilizing
a new human resources development program
implemented in the fiscal year ended March’04/03

Total transaction value

800’12/03’13/03’14/0331, 2014 and the recruitment to increase oursales force to 1,000.

Becoming a market leader inthe wholesale segment
In wholesale operations, there is growing
demand from international funds and high net
worth individuals for investments in Japanesereal estate and from companies for utilizing
their real estate holdings. To meet this demand,since the fiscal year ended March 31, 2014 wehave expanded our organizational structure byadding corporate sales departments and teams
dedicated to serving international investors.
We will focus on enhancing our ability toidentify and respond to customer needs, whichhave also been the strengths of the Nomura
Real Estate Group. As a group of professionals
in the wholesale segment, which lacks a solid
dominant player, our goal will be to build an
overwhelming brand presence and become amarket leader.

Property Brokerage & CRE Business

Property Brokerage & CRE Business Strategy in the Mid- to Long-Term Business Plan

MarketbackgroundFundamental strategy

Results from the fiscal year
ended March 31, 2014

•Expand retail operation
headcount and branch
network, strengthen online
strategy, and establish brand•Rising high quality
housing•Increasingly
borderless nature of
real estate
investments•Aggressively expanded retail branch
network (opened six new branches)•Established Nomura no Chukai + (Plus)and spread the brand•Strengthen CRE solution
capabilities utilizing thefunctions of the Group within
the wholesale segment•Growing demand forcompanies to utilize
their real estateholdings•Encouraged information sharing
within the Group regarding thewholesale segment•Promoted diversity and expanded
employee training

Measures for the fiscal year
ending March 31, 2015 andbeyond•Expand branch network andheadcount in retail operations•Enhance the brand value of nomu.com
and Nomura no Chukai + (Plus)•Pursue greater collaboration within
the Group and enhance customer
satisfaction through teamwork

In Focus

In Focus

Expanding our retail operations branch network and sales force

Promoting a dual brand strategy with Nomura no Chukai + (Plus) and nomu.com

Our goal is to double our branch network to 100 outlets with an emphasis on central downtown locations ofTokyo, where there is a large volume of high-price transactions, and areas with the large numbers of condominiums that Nomura Real Estate Development has built and sold to clients. Additionally, we will almost double
our sales force to some 1,000 while enhancing employee skill sets through expanded training opportunities.

We are promoting branding at physical branches and online. Our goal is to become the undisputed
leader in customer satisfaction by enhancing the quality of our information, services and people.

Branches and Sales Force(Outlets)

Branches

1,000

100

75

750

50

500

25

250

0

0
’13/03

Website brand nomu.com•Branch expansion with clear marketing vision•Sales activities rooted in the local community•Development of talented employees that can secure
customer trust•Enhance the quality and volume of property information•Expand real estate-related content•Improve usability•Manage website with specific targets in mind, such as
investors and womenSales force (Persons)

1,000

100

’12/03

Nomura no Chukai + (Plus) retail store brand’14/03’22/03(Plan)

Improve sales and marketing skills•Establish permanent training center•Establish proprietary human resource capacity
building programs

Areas of new branch openings•Areas with the large numbers of condominiums
that Nomura Real Estate Development has built
and sold to clients•Central downtown locations of Tokyo with large
volumes of high-price transactions

Nomura Real Estate Holdings, Inc.

Aspiring to be number one in customer satisfaction through the mutual growth of both brands

Establish a position as a major brokerage company by being the customer’s choice

28 Integrated Report 2014

Property & Facility Management Business
Pursuing growth by maximizing merger effects and providing services
Highlights from the fiscal year ended March 31, 2014
Operating revenue

Operating income

Buildings under Management and Floor Area

¥72.1

¥5.1

(Buildings)

YoY UpYoY Upbillion

8.7%

Toshiaki Seki
Executive Officer
In charge of Property & Facility
Management Businessbillion14.6%

Number of buildings

Condominiums under Management andCondominium Associations

Floor area (10,000 m2)

Condominiums(Units)Condominium associations

2,500

1,000

150,000

800

120,000

600

90,000400

400

60,000

1,000

200

200

30,000

500

0

0

0

1,000
800
600

684

’11/03

899

849

805

750

696

’12/03723’13/03703’14/03

Nomura Real Estate Partners
Co., Ltd. established

Leveraging collective strengths
to expand the business domain

The Property & Facility Management Businessin the fiscal year ended March 31, 2014 enjoyedan increase in both sales and income thanks toan increase in contract works in building management operations and an expansion of ourservice lineup in housing management operations.
However, the mid- to long-term outlook of themarket environment indicates the once ever-increasing new housing stock has peaked due toJapan’s declining birthrate and aging population.
Given this, the Property & Facility Management Business must respond to the overall needsof the market in order to expand the domain
further and unlock higher growth going forward.
In April 2014, we merged our building and housing management companies within the Group toform Nomura Real Estate Partners Co., Ltd. Our
goal is to apply our technological prowess inbuilding management to housing management
and our management prowess in housing
management to building management, andachieve synergistic effects as quickly as possible.

Through this business merger, we will be able
to deliver building management services forlarge-scale mixed-use developments using
Nomura Real Estate Partners Co., Ltd. This willcontribute to the Group’s policy of focusing on
the mixed-use development business and enhance the quality of our property and facility
management operations. Additionally, we planon leveraging our strengths in total property
management to aggressively expand into the
PPP*1 and PFI*2 markets, which are forecast to
grow to ¥12 trillion.
We will maximize merger effects in the
housing management segment as well. For
example, leveraging expertise in energy management developed through our building management operations, we are moving forwardwith preparations to provide bulk electricity
supply service for entire condominium buildings.
With demand for smart condominiums rising,
we believe this will provide excellent added value.
Additionally, we anticipate an increase in contract

Nomura Real Estate Holdings, Inc.

29 Integrated Report 2014

130,987

127,567

1,937

1,883

137,745

147,516

2,145 2,000

2,034

1,500

0
’11/03’12/03’13/03’14/03work in the fiscal year ending March 31, 2015
and beyond as major repairs will be needed at
PROUD buildings as they reach their twelfth
year. In carrying out this repair work, we planon proposing new services that leverage ourexpertise in property and facility management.
*1	Public–Private Partnership (PPP): A scheme in which the
public and private sector work together to provide apublic service.
*2	Private Finance Initiative (PFI): A scheme by which
private sector capital, and management expertise andtechnologies are utilized to construct, maintain andmanage public facilities.

Property Management Company Rankings(1st Five Years Running)
Company

Rank

Total satisfaction(points)

Nomura Living
Support Co., Ltd.
(Nomura Real Estate
Partners Co., Ltd.)

1

73.2

Company A2

66.0

Company B

3

64.7

Company C

4

64.1

Company D

5

61.3

Source: SumaiSurfin (Home Surfing), Attractors Lab Co.,
Ltd. (currently Style Act Co., Ltd.)

Property & Facility Management Business

Property & Facility Management Business Strategy in the Mid- to Long-Term Business Plan

Marketbackground•Increasing housing
stock•Increase in demand
for maintenance andremodeling due toaging buildings

Fundamental strategy

Results from the fiscal year
ended March 31, 2014

•Expand business base bybuilding up stock of buildings
under management

Measures for the fiscal year
ending March 31, 2015 andbeyond•Merged two management companies
to form Nomura Real Estate Partners
Co., Ltd.

•Pursue ancillary business
opportunities utilizing this stock•Crystallize merger effects(capture mixed-use development
projects and fully expand into the
PPP/PFI businesses)•Increased orders for housing
management operations•Tackle new domains (initiatives
for bulk electricity supply service
for entire condominium
buildings)•Increased orders by expanding thenumber of office buildings undermanagement•Acceleration in
public–private
partnerships for the
management ofpublic facilities

In Focus

In Focus

Pursuing synergies between building management and housing management

Expanding into growth sectors to leverage technical and management prowess

Established in April 2014, Nomura Real Estate Partners Co., Ltd. will leverage the synergies of technological prowess in building management and management prowess in housing management to expand thedomain and profit opportunities.

We will continue to aggressively expand into the PPP/PFI business and other growth sectors that are
expected to see strong growth moving forward.
Entering the PPP/PFI Business

Nomura Building Management
Technological prowess in managing adiverse pool of facilities, including
office buildings, educational facilities
and data centers, etc.

Educational facilities Public
facilities
Office buildings

Condominiums

Nomura Living Support
Management prowess that hasestablished it as the leader incondominium management
customer satisfaction

Expandbusiness base

¥12 trillion

Cleaning ofprivate spaces

Expand profit
opportunities

Data centers
Logistics
facilities

Set to increase to

PPP/PFI

Sports andcommercial Large-scale
facilities
repair work

Bulk electricity
supply service
for entire
buildings

Tenant move-in/
move-out workover the next 10 years(2013 to 2022)

Market expanding¥4.
1 trillion(cumulative toMarch 2013)

Target strategy
Enter the management service
market for public educational,
cultural, accommodation andhousing facilities.

Source: Cabinet OfficeNomura Real Estate Holdings, Inc.

30 Integrated Report 2014

Public Facilities and Floor Area under
Designated Facility Manager Contracts
(m2)

Area

Buildings

120,000

30

80,00020

40,00010
0

0’09/03 ’10/03 ’11/03 ’12/03 ’13/03 ’14/03

Major Completed Properties (April 2013 to March 2014)
1

PROUD TOWER Shinonome Canal Court

2

PROUD Minami-azabu

2

1

2

Nomura Real Estate Holdings, Inc.

3

31 Integrated Report 2014

3

OHANA Tamagawajosui Gardenia

Major Completed Properties (April 2013 to March 2014)
4

PROUD SEASON Fujimino-Kamifukuoka

5

PROUD CITY Motosumiyoshi

6

PMO Yaesu-dori

7

PMO Tamachi

8

PMO Kanda-Tsukasamachi

4

6

5

7

8

Nomura Real Estate Holdings, Inc.

932 Integrated Report 2014

9

NREG Kawasaki Logistics Center

Corporate Social
Responsibility(CSR)

Kayabuki-no-sato Project
Local residents, Tsukuba University students, PROUD
residents and employees helped to relocate andrestore a traditional Japanese farming house that isover 150 years old. (See page 38 for more details.)

Nomura Real Estate Holdings, Inc.

33 Integrated Report 2014

Promotion of CSR-Centric Management

Carrying out CSR-centricmanagement based on thefour key themes in order toquickly and aptly respond todiversifying customer needs
and social issues

CSR Implementation Activities and the Four Key Themes

Resolving social issues andcreating new value for society

Yukoh Yoshida Executive Officer in charge of CSR
As a group of companies engaged in real estate, a core piece of social infrastructure, the Nomura
Real Estate Group recognizes that it has a responsibility to help realize a sustainable and affluent
society through products and services and by addressing social issue head on together with customers
and communities.
For this reason, we have established four key themes and are carrying out CSR-centricmanagement. Among these, “Raising Quality and Service Levels” stands as the most important. We
have come up with safety and security measures as well as a solid BCP, which have seen rising

Key Theme 1

Key Theme 2

Raising Quality andService Levels by Putting
Customers First P35

Engaging inEnvironmental
Initiatives P36

Key Theme 3

Key Theme 4

Developing Human
Resources P37

Ensuring
Compliance P43

demand from society in the wake of the Great East Japan Earthquake. At the same time, we haveSocial Contribution

provided assistance to community building as a cornerstone of these efforts.

P38

The other three themes, “Engaging in Environmental Initiatives,” “Ensuring Compliance,” and“Developing Human Resources” serve to support “Raising Quality and Service Levels.” Environmental
consideration has become a truly indispensable requirement for enhancing the asset value of realestate and this has led us to develop and supply smart condominiums and other ventures. In terms ofhuman resource development, we are focusing on diversity-based management in order to leverage
the perspectives and values of our diverse pool of human resources in our business operations.
Compliance forms the foundation of all of our business activities and we continue to reinforce our

CSR Implementation Base P40

compliance system.

Corporate Governance / Risk Management

In the fiscal year ending March 31, 2015 we will further reinforce our CSR-centric management

Group Philosophy

by revamping systems and adding external directors to the CSR Committee, among other changes.
Going forward, we will continually strive to enhance corporate value further in order to live up to the
expectations and trust of our many stakeholders.

Nomura Real Estate Holdings, Inc.

34 Integrated Report 2014

Raising Quality and Service Levels

Basic Viewpoint
Delivering products and services that reflect
and meet the needs of customers basedon a customer first approach. This represents the very foundation of the Nomura
Real Estate Group’s business operations.
To sustain growth in a society with diversifying life and work styles, we will need to
not only provide high quality and safe
products and services that meet the needsof customers, but also generate new value
required for tomorrow.
For this reason, we are tackling a numberof new challenges for future to addresssocial issues, such as making condominiums
barrier free, helping develop community
spirit in condominium developments, andaddressing business continuity plan (BCP)
needs in office buildings.

Initiatives for the Fiscal Year Ended March 31, 2014

Guidebook Created for Seniors and People
with Disabilities

Helping Develop a Community Spirit inCondominium Buildings

Together with Sonoda Lab of Meiji University Graduate School, we
created the Barrier Free & Quality of Life Guidebook as part of anindustry-academia joint research project. The guidebook represents acompilation of major design points required for a layout friendly to seniors,
people in wheelchairs or the visually or
hearing impaired, based on actual floor
plans from Nomura Real Estate Group’s
custom-built condominium unit business launched in 2000. These floor plansprovide spaces that are comfortable forthose in need of care as well as supporting family members.

The Nomura Real Estate Group, recognizing that a sense of community
is indispensable to sustainable urban development, helps develop a
spirit of community in various projects. For example, for the mixeduse development called Funabashi Morino City, we set up the Morino
City Community Building Committee as a self-governing bodycomprising residents and companies and organizations related to theproject that are working together to make the neighborhood more appealing. The
Committee is involved in various
initiatives, including discussing
community development issues,
beautification activities, anddisaster preparedness workshops, among others.

Wheelchair accessible bathroom
and sink area

Meet-and-greet meal held during aneighborhood block party

Disaster Preparedness Hub Set up for
Office Building Tenants

Stakeholder VoiceI don’t think that seniors or persons with disabilities have special
needs or require a special design when it comes to their home. I
prefer to look at it as individual design preferences instead. On
this occasion, I had the opportunity to come up with minutedesigns that met the individual preferences of people receiving
care and their families. I hope that this type of effort to unearth
diverse design preferences will spread into other sectors as well,where they can be used in the designs ofoffice environments or public spaces.

The Nomura Real Estate Group is developing premium midsize offices(PMO) for small- and medium-sized enterprises that feature the samefunctions and design standards found in much larger office buildings. To respond to the disaster preparedness and BCP needs oftenants in PMO series buildings, we opened N-FORT, a type of disaster
preparedness hub in April 2013, at PMO Nihonbashi Muromachi.
N-FORT houses food rations
for some 2,000 people and an
emergency generator that can
supply power for up to 72
hours following a blackout
caused by a major disaster.

Mariko Sonoda
Professor
School of Science and Technology
Meiji University

Nomura Real Estate Holdings, Inc.

Disaster preparedness supplies at N-FORT

35 Integrated Report 2014

Engaging in Environmental Initiatives

Basic Viewpoint
Addressing environmental issues andenergy shortages represent critical issues
facing society. A company will not be able
to continue as a going concern without
addressing these issues. Additionally, environmental consideration now is considered
one indicator for assessing asset value inthe entire real estate sector, including
residential and commercial properties.

Initiatives for the Fiscal Year Ended March 31, 2014

Initiatives in the Residential Development
Business“SMART & GROWING” PROUD Smart Design
PROUD developments are planned and designed based on the“SMART & GROWING” PROUD smart design.
SMART:	vision for using advanced technologies and reducing environmental impacts through co-existence with nature.
GROWING: vision for comfortable, safe and sustainable living.

Given this, the Nomura Real Estate Groupis focusing a great deal of effort on developing and managing residential and commercial properties that are considerate of
the environment thanks to advanced environmental and information communication
technologies, passive designs that achieve
co-existence with nature, and design features intended to create energy.
Additionally, we recognize that community
involvement is essential to making environmental value sustainable and for thisreason we support community building
through events and town meetings as wellas actively contribute to environmental education.

Initiatives in the Leasing BusinessYokohama Business Park Receives ABINC Certification(Urban/SC Ver.)
Yokohama Business Park (YBP) received Association for Business
Innovation in harmony with Nature and Community (ABINC) certification (urban/SC ver.)* for its consideration given to conserving
biodiversity. YBP regularly holds
the Exhibit of Urban Design
for Firefly Habitats, rice-harvesting lessons, and biotope
tours, where tenant companies and the surrounding
community together thinkand learn about biodiversity
and environmental issues.
Exhibit of Urban Design for Firefly Habitats2013*	Association for Business Innovation in harmony with Nature and Community (ABINC)(urban/SC ver.): A certification program where ABINC reviews office buildings andcommercial facilities considerate of biodiversity in accordance with the JBIB
Guidelines for Sustainable Business Sites published by the Japan Business Initiative for
Biodiversity. The purpose of the certification program is to encourage harmony
between people and nature in corporate activities.

PROUD Environmental Guidelines
We created the PROUD Environmental Guidelines for construction
partners to help reduce environmental impacts from construction
sites. These guidelines include
design consideration, such as
greenery and use of recycledmaterials, and the promotion of
the 3Rs (Reduce, Reuse, Recycle).

Summary•	Improve environmental awareness•	Reduce greenhouse gas emissions•	Reduce waste emissions andincrease recycling rate
•	Proper management and reduced
usage of chemicals•	Reduce impacts on the naturalenvironment and surrounding
environment•	Promote the use of products,
technologies and methods withfewer environmental impacts

Nomura Real Estate Holdings, Inc.

36 Integrated Report 2014

Encouraging CASBEE Assessments and Certification
PMO and office buildings developed by NREG TOSHIBA BUILDING
Co., Ltd. are required to obtain an A ranking or above under theComprehensive Assessment System for Built Environment Efficiency(CASBEE) according to their development plans. In the fiscal year
ended March 31, 2014, the LAZONA Kawasaki Toshiba Building wasawarded an S ranking, while three other PMO series office buildings
were also certified.

Developing Human Resources

Basic Viewpoint
The Nomura Real Estate Group unveiled its
Mid-to Long-term Business Plan through2022/3. The theme of the plan is “Creating Value through Change.”
We recognize that individual employees
maximizing their abilities as part of a diverse workforce is essential in order tocontinually create products and services
with value and new approaches using a
speedy response to the diversifying needs
and changes of our business environment.
Based on this, the Nomura Real EstateGroup promotes diversity management
and human resource development to fostera corporate culture in which every employee
accepts one another regardless of age,gender, or personality and shares theirunique viewpoints and values.

Initiatives for the Fiscal Year Ended March 31, 2014

Promotion of Diversity Management andHuman Resource Development
The Nomura Real Estate Group is promoting diversity management
so that individual employees can maximize their abilities regardless ofage, gender or personality. As part of these efforts, in June 2013
Nomura Real Estate Development established the Diversity Promotion
Committee, chaired by the president and comprising male andfemale members from various departments and ranks. The Committee deliberates a broad range of matters, from work-life balance andways to reinforce management abilities to mid- to long-term careerdevelopment. The results of these deliberations will be incorporated
into specific measures as part of a three-year plan.
Nomura Real Estate Urban Net Co., Ltd. established the Diversity
Promotion Section within its Human Resource Department in April
2014. This organization is working on measures that will help employees achieve worklife balance andmake the company
a more rewarding
place to work.

Diversity Promotion Committee

Main Activities (April 2013 to March 2014)
Employee Satisfaction Survey
In September 2013, Nomura Real Estate Development conducted its
first-ever employee satisfaction survey.
In addition to overall satisfaction, the109-question survey covered othertopics including how employees perceive work, supervisors, workplaceenvironment and the company, andfuture career ambitions, among others.
Responses were received from 1,415of the company’s 1,495 employees, or
94.6%.

Overall Satisfaction(6) 2.8%(5) 3.7%(7) Dissatisfied
2.0%

Policy Changes for Childcare Support
Nomura Real Estate Development, recognizing that raising a child provides anopportunity for people to gain diverse perspectives and values, made changes
to its human resource programs to ensure that both men and women are able
to balance childcare with their professional life.
(1) Holiday daycare support program(2) Extended age of child eligible for shortened working hours for childcare andnursing care leave to the start of fourth grade(3) Birth leave program for male employees

Policy Changes for Contract Workers
Nomura Real Estate Development currently employs 387 contract workers as ofApril 1, 2014. We recently made changes to our policies in order to provide greater
motivation to these employees and help them advance their career.
(1) Starting from the fiscal year ending March 31, 2016 we will eliminate employment contract renewal limits for contract workers that have been with thecompany more than one year(2) Instituted career advancement program where contract workers can become
main career track employees after a three-stage process based on their skills(3) Increased base pay

Strengthening Engagement with Employees
We fostered greater understanding of diversity by strengthening engagementwith employees through a results briefing of the employee satisfaction survey,
meetings to discuss individual issues, meetings with expectant mothers, and ablog on diversity.

Nomura Real Estate Development’s Ongoing Challenges for the
Fiscal Year Ending March 31, 2015 (Excerpt)•Strengthen management abilities•Support mid- to long-term career development•Expand nursing care leave program•Revamp re-employment system for retired employees•Offer employees the opportunity to work from home

(1) Satisfied
14.6%

Rainbow Forum(4) Neither
satisfied nor
dissatisfied
15.2%(2) 35.5%(3) 26.2%*	Responses given using a 7-step rating
between satisfied and dissatisfied

Nomura Real Estate Holdings, Inc.

37 Integrated Report 2014

Nomura Real Estate Urban Net hosted the Rainbow Forum between June and
September 2013 in which male and female employees from various departments
and ranks gathered to talk about measures for promoting expanded roles for
women in the workplace. The results of the forum’s discussions were reported tosenior management in the form of a recommendation on measures for work-lifebalance and for making the company a better place to work for all employees.

Social Contribution Activities

Basic Viewpoint
The Nomura Real Estate Group’s business
operations are closely rooted in the local
community and supported by the people
who live and work in these communities.
We recognize that building relationshipsof trust and contributing to a better community are some of the most importantelements of our business operations.
As a result, we carry out various initiatives
that utilize the unique aspects of our businesses, including creating platforms forinteracting with the local community andplatforms for supporting culture and children’s education.
Additionally, we are committed to continually supporting the rebuilding effort following the Great East Japan Earthquake
together with local communities and NGOs.

Initiatives for the Fiscal Year Ended March 31, 2014

Donated Rice from the Kayabuki-no-Sato
Project to Family Camp in Fukushima

Supporting the Education of Children in
Tohoku through Donations from Used Books

The Nomura Real Estate Group donated a portion of the rice harvestedby the Kayabuki-no-sato Project* to a family camp in Fukushima.
Organized by volunteer group Karchanz, this project arranges forparents and children living in Fukushima Prefecture to go camping in
Kanagawa Prefecture. The
goal is to provide mental
and physical healing by
having participants enjoy
nature and safe food.

With the assistance of Chance for Children, we donated the proceeds from the sale of used books collected from employees to help
fund extracurricular educational activities for children living in the
Tohoku region.
Following the Great East Japan Earthquake, the disaster-stricken
areas have seen a growing disparity in
educational opportunities and academic
ability caused by economic disparities.
The goal of these activities is to provide
children with equal opportunities foreducation and growth. As of June
2014, a total of 2,543 books had beencollected and sold, with the proceeds
benefiting from support
used to fund private tutoring classes or Children
Photo by Natsuki Yasuda / studiocultural lessons.
AFTERMODE

A mother and child eating o-nigiri made fromdonated rice*	The Kayabuki-no-sato Project is an industry-private sector-government-academia
project for passing down the traditions and satoyama culture of a rural community andenvironmental education. Under the project, our employees and people who live in
PROUD condominiums work together to cultivate rice at the foot of Mt. Tsukuba in
Ibaraki Prefecture. The project received a Good Design Award 2013 in three categories.

Stakeholder Voice
Karchanz is a volunteer group created by parents of children
attending the Tsuchinoko Club Kindergarten. Children who at thestart of the camp ran a fever or who were unhappy always recoverafter playing to their hearts content in nature. The rice we
received was very delicious and the children asked for seconds a
number of times. This direct and indirect
involvement of various people hashelped to encourage and uplift thepeople of Fukushima.

Aki Takeuchi
Representative
Karchanz

Nomura Real Estate Holdings, Inc.

38 Integrated Report 2014

Next-Generation Development Activities at
Kokubunji Izumi Hall
The Nomura Real Estate Group, with the assistance of NPO Kids Arts
Tokyo Conference, regularly holds hands-on arts events at Kokubunji
Izumi Hall, one of the properties
it manages. These events areheld as part of the company’s
support for revitalizing the local
community and attempt tobroaden interaction and foster
greater sensibilities in local families through the creation of art.
Roba Roba Festival

Corporate
GovernanceNomura Real Estate Holdings, Inc.

39 Integrated Report 2014

Corporate Governance(as of June 27, 2014)

Basic Viewpoint

Audit & Supervisory Board

Corporate Governance System

The Company believes that it must be governedin a way that continuously maximizes corporate
value over the long term, while consideration is
given to the interest of shareholders and allother stakeholders related to the Nomura Real
Estate Group. Furthermore, we aim to enhancethe earning power of the entire Group, andwhile acting as a holding company in managing
and supervising the business activities of our
subsidiaries, we will strive to build a highly
transparent management organization.

The Company has adopted Audit & Supervisory
Board Member system. Audit & Supervisory
Board Members comprises five Audit & Supervisory Board Members, three of whom areexternal Audit & Supervisory Board Members.
The Board formulates such matters as audit
policies and the division of auditing roles, andreceives reports and conducts discussions
regarding important matters relating to audits
carried out on the basis of those policies anddivided roles.
The Company believes that management
supervision should be conducted primarily by
Audit & Supervisory Board Members. The Company enhances the effectiveness of its audit

Board of Directors
The Company’s Board of Directors comprises
eight directors (of which two are external
directors). The Board of Directors with theexecutive officers in attendance decides important
corporate matters and supervises the executionof business operations by directors and executive
officers. The Company has accepted an external
director in order to strengthen the supervisory
function of the Board of Directors and realize
highly fair and transparent management. Audit& Supervisory Board Members attend meetingsof the Board of Directors and provide theiropinions as the need arises.

Corporate Governance System
General Meeting of Shareholders

Appointment

Appointment/dismissal

Appointment/dismissal
Audit

Board of Directors (8 directors)

Representative Director

Office of Audit & Supervisory Board Members

Management Committee

Nomura Real
Estate Holdings

Audit

CSR Committee
Risk Management Committee

Various departments

Internal Audit Department

Guidance and support

Monitoring

Operating companies

Nomura Real Estate Holdings, Inc.

Executive Officers System
The Company has introduced a system of executive officers with an aim to strengthen Groupmanagement, to separate and enhance thebusiness execution function from the decision-making and supervisory functions of theBoard of Directors. Each executive officer appointed by the Board of Directors is delegatedmanagement authority based on the Company’s
internal rules and other stipulations to executebusiness under the direction of the president &CEO and policies approved by the Board of
Directors of the Company.

Management Committee
The Management Committee includes Chief
Executive and Executive Officers from Group
companies so that the environment, needs andopinions of the entire Group can be accurately
represented and reflected to management policy.
Audit & Supervisory Board Members attend theManagement Committee meetings as needed
to contribute their opinion and expertise.

Audit & Supervisory Board(5 Audit & Supervisory Board Members)

Appointment/dismissal

activities through measures that include theestablishment of an Office of Audit & Supervisory Board Members and the assignment ofspecialized staff to assist the Audit & Supervisory
Board Members.

40 Integrated Report 2014

Certified Public Accountants(Auditing Firm)

Corporate Governance

External Directors
Supplementary
information

Reason for appointment as
External Director

Attendance
recordShigeru
Matsushima

Shigeru
Matsushima is a
professor at theTokyo Universityof Science,
Graduate Schoolof Innovation
Studies.

Shigeru Matsushima specializes inbusiness administration. We selected
him as an External Director toenhance the supervisory function of
the Board of Directors and realize
highly transparent management withhis wealth of knowledge andexperience, and his keen perception.

Attended 10 of 10
Board of Directors’
meetings held
since he wasappointed on June27, 2013.

SatokoShinohara

Satoko Shinohara
is a professor at
Japan Women’s
University, Facultyof Human Sciences
and Design,
Department of
Housing andArchitecture.

We selected Satoko Shinohara as anExternal Director because she has
wealth of knowledge andexperience, and profound insights
acquired through her many years
working as an architect.

—

Name

Independent
Director

External Audit & Supervisory Board Members
Independent Supplementary
Director
information

Reason for appointment as External
Audit & Supervisory Board Member

Attendance
recordShigekiFujitani—

We selected Shigeki Fujitani as anExternal Audit & Supervisory Board
Member to enhance the supervisory
function of the Board of Directors andimprove the audit system with his
wealth of knowledge and experience,and his keen perception.

Attended 13 of 13
Audit & Supervisory
Board meetingsand 10 of 10 Boardof Directors’
meetings held since
he was appointed
on June 27, 2013.

SatoshiOgishi

Satoshi Ogishi isa Partner at
Nishimura &Asahi.

Satoshi Ogishi has practiced law for anumber of years. We selected him as anExternal Audit & Supervisory Board
Member to enhance the supervisory
function of the Board of Directors andimprove the audit system with his
wealth of knowledge and experience,and his keen perception.

Attended 17 of 17
Audit & Supervisory
Board meetings and
12 of 14 Board of
Directors’ meetings
held in the fiscal
year ended March
31, 2014.

Akira Yamate has served as a Certified
Public Accountant for a number of years.
We selected him as an External Audit &Supervisory Board Member to enhance
the supervisory function of the Board of
Directors and improve the audit systemwith his wealth of knowledge andexperience, and his keen perception.

Attended 13 of 13
Audit & Supervisory
Board meetingsand 10 of 10 Boardof Directors’
meetings held since
he was appointed
on June 27, 2013.

Name

Akira
Yamate—Nomura Real Estate Holdings, Inc.

Internal Audit System and Audit &Supervisory Board Member System
Internal Audit System
The Nomura Real Estate Group has established
an internal audit department at each Group
company, with the exception of some small
companies. Each department is supervised under
the direct jurisdiction of the Group company
president or an officer who does not hold anadditional office in a business operations division, which allows the department to maintainorganizational independence.
In addition, we have established the Internal Audit Department in the Company that,in collaboration with the auditing firm, supervises
the internal audit functions of the entire Groupand performs monitoring, evaluation and auditing in each division within the Company.

Audit & Supervisory Board Member
Audit System
The Company has appointed full-time staff in
the Office of Audit & Supervisory Board Members
to support Audit & Supervisory Board Member
audits. Each Audit & Supervisory Board Member

Auditing Firm
Ernst & Young ShinNihon LLC

attends meetings of the Board of Directors andother important meetings and audits the execution of the duties of directors and executive
officers while cooperating with the Internal Audit Department and the auditing firm as needed.
Audit & Supervisory Board Member
Takao Orihara has prolonged experience in financeand accounting, Audit & Supervisory Board
Member Shigeki Fujitani has experience infinance and audit work over many years andAudit & Supervisory Board Member Akira
Yamate possesses a qualification as a Certified
Public Accountant. All three individuals thus
have a considerable degree of professional insight regarding finance and accounting.

Accounting Audits
The Company has concluded an auditing contract
with Ernst & Young ShinNihon LLC (the auditingfirm). In addition to regular accounting audits
by the auditing firm, the Company discusses
and verifies accounting issues with the auditing
firm as needed and strives to follow appropriate
accounting procedures.
Certified Public Accountants involved in
auditing are listed below.

Names of Certified Public Accountants
Designated and Engagement Partner

Tadayuki Matsushige

Designated and Engagement Partner

Kazunori Takenouchi

Designated and Engagement Partner

Hisashi Yuhara*	Length of auditing service of each of the above-mentioned Auditors is seven years or less; therefore, the number of years isomitted.
*	Ernst & Young ShinNihon LLC takes measures to ensure that individual Engagement Partners do not continue theirinvolvement in our accounting audits over an extended period of time.
*	Assistants involved in auditing are listed below.
Certified Public Accountants 7/ Assistant Certified Public Accountant 5/ Other 4

41 Integrated Report 2014

Corporate Governancewell as to individual contribution to that performance. Stock-related compensation, in the formof stock options, is designed to align executives’ interests with those of the Company’s
shareholders, and to further enhance corporate
value. Stock options are either market-value
stock options, on which the exercise price (theCompensation of Directors and Audit& Supervisory Board Members andCompensation of Accounting Auditors
Policy and Decision-making Method
Regarding the Amount and Calculationof Compensation and Other
Remuneration for Directors and Audit& Supervisory Board Members

Compensation of Certified Public
Accountants in Detail (fiscal year ended
March 31, 2014)

It was resolved that the maximum annualcompensation limit for directors and Audit &Supervisory Board Members would be ¥650
million and ¥150 million, respectively.
The Company’s compensation of directors
and Audit & Supervisory Board Members consistsof fixed monthly compensation and variable
compensation, comprising bonuses andstock-related compensation. Bonuses are determined according to the Company’s businessperformance during the relevant fiscal year, as

Compensation Compensation
paid forpaid for audit
non-audit
certification
activities
activities(¥ million)(¥ million)
The Company

58—

Consolidated
subsidiaries

113

22

Total

171

22

Total compensation by type of remuneration(¥ million)
Basic
compensation

Retirement
Stock
Bonus
benefits
optionChairman, Risk Management Committee

Headcount

298

Audit & Supervisory
Board Members(excluding external Audit& Supervisory Board
Members)

71

External directors andAudit & Supervisory
Board Members

60

50

—

9

—

6

Total

429

256

54

119

—

13

54

91

—

The Company takes factors such as the days
spent performing accounting audits, and thescale and business characteristics of the Company
comprehensively into consideration in reachingan appropriate decision regarding the compensation of its auditing firm’s certified public accountants and other accounting audit personnel.

Nomura Real Estate Holdings

Directors (excluding
external directors)

153

Policy for Deciding the Compensationof Accounting Auditors

Flow of Communication

Total Compensation of Directors and Audit & Supervisory
Board Members by Type of Remuneration (fiscal year ended March 31, 2014)
Total
compensation(¥ million)

amount payable when the right is exercised) is
determined on the basis of market prices, orshare compensation stock options, which haveexercise prices of ¥1 per share. Stock-relatedcompensation is not provided for Audit &Supervisory Board Members.

Group Compliance Department

—

19

—

Risk Management System
The Nomura Real Estate Group has establisheda Risk Management Committee whose members
include directors and executive officers of theCompany and Group companies, for the purposeof deliberating on risks facing the managementof the Group. Group companies have establishedtheir own individual meeting bodies for risk
management through which they strive toproperly manage risks that arise from theirbusiness operations.

Risk Management Regulations
The Nomura Real Estate Group believes that
ensuring sound management by properly addressing risks is fundamental to corporations.
Accordingly, the Group has established Risk
Management Regulations as its fundamental
risk management guidelines. Risk management
is predicated on the crucial task of understanding
risk. The Group has thus established timely andproper reporting rules, including prompt escalation of situational reports to management
after unforeseen incidents have occurred, in
addition to regularly monitoring risks.

5

Nomura Real EstateGroup companies
52

Risk Management

2

Communication Manager•Communication at Group companies
and formulation of guidelines, etc.
•Establishment of emergency communication
networks at Group companies

Employees of Group companies

Notes:	The number of directors at the end of the fiscal year ended March 31, 2014, which is five, includes one director who
retired effective June 27, 2013.

Nomura Real Estate Holdings, Inc.

42 Integrated Report 2014

Summary of the Risk Management
Regulations•Risks that should be managed on aGroup-wide level•Establishment of Risk Management
Committee•Information conveyance system forincidents•Emergency responses

Corporate GovernanceRisk Management Committee Meetings
The Risk Management Committee meets, inprinciple, monthly to deliberate on mattersconcerning the risk management, complianceand information security within the entire
Group. It also discusses response measureswhen risks do occur. Details of all deliberations
and discussions are reported to the Board of
Directors on a regular basis.
The Risk Management Committee provides necessary guidance, advice and support
to Group companies, with the execution ofregular inspections on legal compliance being
once such example. Compliance with relevantlaws is thoroughly ensured through complianceinspections for laws that relate to every Group
company, such as the Building Lots and Buildings Transaction Business Act and Financial
Instruments and Exchange Act, in which issues
that require remedy are pointed out.

Establishment of a Business Continuity
Plan (BCP)
Each company that belongs to the Nomura
Real Estate Group has established a BCP withthe scenario of a major earthquake striking
directly underneath Tokyo. Group companies
have also established command systems for
emergencies and assigned duties for ensuring
the continuity of the business. These systems
will ensure that the Group can minimize any
effects incurred from a disaster.

Compliance
Compliance Systems
The Nomura Real Estate Group regards compliance as one of the most important management
issues. As a set of relevant guidelines, it has
formulated the Nomura Real Estate Group
Code of Action. To promote continuous educational and awareness activities for executives
and employees of the entire Group, we haveestablished a Group Compliance Departmentin the Company. It provides advice, guidanceand support to Group companies.

Nomura Real Estate Group Risk Hotline
The Nomura Real Estate Group Risk Hotline
serves as a point of contact for whistle-blowing

by Group employees. Two internal reporting
channels are available: one to internal directors
and the other to outside legal counsel. In theevent that a compliance issue cannot be resolvedin the workplace or in other related circumstances,
employees may choose to consult with either
point of contact.

Compliance Program
The Nomura Real Estate Group has established
a compliance program under which it carries
out training throughout the year. Compliance
Hour is a program streamed to all officers andemployees of Group companies over the Internet on a monthly basis in order to raise awarenessabout compliance.

Board of Directors
Chairman and President
ChairmanGroup Compliance Officer(Director in charge of Group ComplianceDepartment, Nomura Real Estate Holdings)

Secretariat

Group Compliance Department

Committee members(Directors in charge of administrative
operations at Group companies)

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

Compliance Promoters, etc.
(Appointed at each company)

Nomura Real Estate Holdings, Inc.

Number of times
held in the fiscal
year ended March
31, 2014

For

Compliance
Hour

11

All Group
officers andemployees

Group Officer
Training

1

All Group
officers

Group GM &BranchManager
Meeting

1

All Group
GMs andbranchmanagers

Corporate Information Collection

Nomura Real Estate Holdings

Compliance Officers

Program

Disclosure System Concerning
Timely Disclosure

Nomura Real Estate Group Compliance Promotion Framework

Nomura Real Estate Group Companies

Training and Educational Activities for
Officers and Employees

43 Integrated Report 2014

Risk Management
Committee

Committee members

Risk Management
Committee, etc.

Corporate information of the Company isaggregated by the person responsible for information handling (the corporate officer incharge of the Corporate Communications &Investor Relations Department) through thedepartment responsible for information collection (Corporate Planning Department) from
responsible individuals in each department
within the Company. Regarding Nomura Real
Estate Group companies, corporate information
is aggregated by the person responsible for information handling (the corporate officer incharge of the Corporate Communications &Investor Relations Department) through the department responsible for information collection(Corporate Planning Department) from responsible individuals in each Group company. Information on incidents with significant urgency isaggregated by the person responsible for information handling (the corporate officer incharge of the Corporate Communications &Corporate Governance

Investor Relations Department) through the
Chairman of the Risk Management Committee.

Decisions on Timely Disclosure of
Corporate Information
The person responsible for information handling(the corporate officer in charge of the Corporate
Communications & Investor Relations Department) forms an Information Disclosure Screening
Team, which is made up, as needed, of generalmanagers, corporate officers and others responsible for related departments, if a decision
is required on whether or not to disclose corporate information aggregated by the aforementioned system. This team decides whether or
not to disclose information after looking at thenecessity for timely disclosure, the disclosure
details and other matters, and at the same timereports to the president.

Timely Disclosure
Corporate information that must be disclosed
in accordance with the timely disclosure rulesof the Tokyo Stock Exchange and corporate
information that the Company decides needs
to be disclosed in a timely manner is disclosedby the department responsible for timely disclosure (Corporate Communications & Investor
Relations Department) under the direction of
the person responsible for information handling(the corporate officer in charge of the Corporate
Communications & Investor Relations Department). The department responsible for timely
disclosure (Corporate Communications & Investor Relations Department) prepares the materials for disclosure and makes them public
after receiving the approval of the person responsible for information handling (the corporate
officer in charge of the Corporate Communications & Investor Relations Department).

Timely Disclosure System
President
Formed asneededInformation Disclosure
Screening Team
(Made up of general managers,
corporate officers and others
responsible for related departments)
Risk Management
Committee Chairman

Incidents withsignificant
urgency

ReportReportTokyo Stock Exchange

ReportPerson responsiblefor information handling(Corporate officer incharge of the Corporate
Communications & Investor
Relations Department)

Investor Relations Activities
Building Relationships with Analysts
and Institutional Investors
Nomura Real Estate Holdings, Inc. regularly
holds earnings briefings at the time of announcing
annual and semi-annual results delivered by
the representative as an opportunity to engage
analysts and investor. During these briefings,
an overview of earnings results is given andcorporate strategy explained, and the streamingof earnings briefings is provided on the Company’s website. We also conduct a conference
call on the days when quarterly earnings results
are announced, briefing sessions for businessactivities and property tours to help analysts
and investors to better understand the Company.
Given the increasing shareholdings offoreign investors, we regularly provide financial
closing information and streaming of earnings
briefings in English. In addition, company
representatives or Directors visit institutional
investors in the U.S.A., Europe, and Asia to
explain business and financial strategies andbuild relationships.

Given the increase in the number of individual
investors following the rollout of the Nippon
Investment Savings Account (NISA) program,
Nomura Real Estate Holdings, Inc. regularly
holds information sessions for individual investors
held by the Tokyo Stock Exchange and company
briefings at branches of securities companies.
In addition, we have expanded the Investor
Relations section of our corporate website aspart of our efforts to broaden understanding
about the Company.

TSE IR Festa 2014

Main IR Activities (April 2013 to March 2014)
IR activities for institutional
investors
Earnings briefings
Teleconferences

Timelydisclosure

Direction

ReportMeetings with investors andanalysts (This number includes
the following meetings)

Department responsible
for timely disclosure(Corporate Communications &Investor Relations Department)

Department responsible for
information collection(Corporate Planning
Department)

Overseas IR (Europe, U.S., Asia)
Conference organized by
securities companies

Corporate website (Investor Relations)

Number oftimes held
2 times
3 timesCumulatively
410
meetings
3 times
Participated
6 times

Briefing sessions for businessactivities and property tours

3 times

Small meetings for the Residential
Development Business

1 timeIR activities for individual
investors

ReportDepartments of
Nomura Real Estate Holdings

Communication with Individual Investors

Group companies

Nomura Real Estate Holdings, Inc.

44 Integrated Report 2014

Securities company branch briefings

7 times

IR fairs

1 timeDirectors and Executive Officers(Front row from left)
3 Seiichi Miyajima
1 Kamezo Nakai
2 Eiji Kutsukake
4 Toshiaki Seki

(Back row from left)
6 Yukoh Yoshida
8 Satoko Shinohara
7 Shigeru Matsushima
5 Hiroyuki Kimura

Nomura Real Estate Holdings, Inc.

45 Integrated Report 2014

Directors and Executive Officers(as of July 1, 2014)

Directors

Executive Officers

1 Kamezo Nakai

3 Seiichi Miyajima

5 Hiroyuki Kimura

7 Shigeru Matsushima

President (Representative Director) & Chief
Executive Officer

Director (Representative Director) &Executive Officer

Director & Executive Officer

Director (External)

Head of the Residential Development Businessand Supervisor of Development Planning

CFO and Head of Investor Relations

 pr. 1974:	Joined Nomura Securities Co., Ltd.
A
Jun. 1995:	Director of Nomura Securities Co., Ltd.
Apr. 1999:	Managing Director of Nomura Securities Co.,Ltd.
Apr. 2003:	Director and Executive Vice President of
Nomura Asset Management Co., Ltd.
Jun. 2003:	Executive Vice President and Executive
Managing Director of Nomura AssetManagement Co., Ltd.
Jun. 2003:	Executive Managing Director of Nomura
Holdings, Inc.
Apr. 2008:	Advisor of Nomura Asset Management Co.,Ltd.
Apr. 2009:	Advisor of Nomura Land and Building Co., Ltd.
Jun. 2009:	President (Representative Director) of Nomura
Land and Building Co., Ltd.
Jun. 2011:	President (Representative Director) of Nomura
Real Estate Holdings, Inc.
Apr. 2012:	President (Representative Director) and Chief
Executive Officer of Nomura Real Estate
Development Co., Ltd. (To present)
May 2012:	President (Representative Director) and Chief
Executive Officer of Nomura Real Estate
Holdings, Inc. (To present)

Apr. 1984:	Joined Nomura Real Estate Development Co., Ltd.
Feb. 2006:	General Manager of Finance & Accounting Dept.
of Nomura Real Estate Development Co., Ltd.
Apr. 2009:	Executive Officer of Nomura Real Estate
Development Co., Ltd.
Jun. 2009:	Director of Nomura Real Estate Holdings, Inc.
Apr. 2010:	President (Representative Director) of Nomura
Real Estate Investment Management Co., Ltd.
Apr. 2010:	Director of Nomura Real Estate CapitalManagement Co., Ltd.
Apr. 2010:	Director of Nomura Real Estate AssetManagement Co., Ltd.
Oct. 2011:	Managing Director of Nomura Real Estate
Asset Management Co., Ltd.
May 2012:	Executive Officer of Nomura Real Estate
Holdings, Inc.
Jun. 2012:	Director and Executive Officer of Nomura Real
Estate Holdings, Inc.
Apr. 2013:	Director and Managing Executive Officer of
Nomura Real Estate Development Co., Ltd. (Topresent)
Jun. 2013:	Executive Officer of Nomura Real Estate
Holdings, Inc.
Jun. 2014:	Director and Executive Officer of Nomura Real
Estate Holdings, Inc. (To present)

Apr. 1973:	Joined Ministry of International Trade andIndustry (currently, Ministry of Economy,
Trade and Industry)
Jun. 1998:	Deputy Director-General for Agency ofIndustrial Science and Technology of Ministryof International Trade and Industry
Sep. 1999:	Director-General of Chubu Bureau ofInternational Trade and Industry of Ministryof International Trade and Industry
Apr. 2001:	Professor, Faculty of Business Administration,
Hosei University
Mar. 2007:	External Director of CAC Corporation(currently CAC Holdings) (To present)
Apr. 2008:	Professor, Tokyo University of Science
Graduate School of Management of Science& Technology (currently, Graduate School of
Innovation Studies) (To present)
Jun. 2008:	Audit & Supervisory Board Member of
Nomura Real Estate Holdings, Inc.
Apr. 2012:	Audit & Supervisory Board Member of
Nomura Real Estate Development Co., Ltd.
Jun. 2013:	Director of Nomura Real Estate Holdings, Inc.
(To present)

Apr. 1981:	Joined Nomura Real Estate Development Co.,
Ltd.
Jun. 2002:	General Manager of Residential Development
Dept. (1) of the Residential Development
Division, 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:	Director (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:	Director (Representative Director) and
Executive Vice President of Nomura Real
Estate Development Co., Ltd. (To present)
Jun. 2014:	Director (Representative Director) and
Executive Officer of Nomura Real Estate
Holdings, Inc. (To present)

2 Eiji Kutsukake

4 Toshiaki Seki

6 Yukoh Yoshida

8 Satoko Shinohara

Director (Representative Director) &Executive Officer

Director & Executive Officer

Director (External)

Apr. 1984:	Joined Nomura Securities Co., Ltd.
Apr. 2007:	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:	Executive Vice President of Nomura Securities
Co., Ltd.
Apr. 2011:	Senior Corporate Managing Director of
Nomura Holdings, Inc.
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:	Director (Representative Director) and
Executive Vice President of Nomura Real
Estate Holdings, Inc. (To present)

Head of the Property & Facility Management Business

Head of Management Planning, Affiliate Control,
Corporate Social Responsibility Management
Dept., Group Human Resource Dept., andCorporate Communications & Investor Relations
Dept., and Co-Head of the Leasing Business

Apr. 1983:	Joined Kohyama Atelier (currently Hisao
Kohyama Atelier)May 1987:	Director of Spatial Design Studio
Oct. 1990:	Director of Kengo Kuma and Associates
Nov. 2000:	Representative Director of Spatial Design
Studio (To present)
Mar. 2009:	Representative Director of Kengo Kuma andAssociates (To present)
Feb. 2010:	Representative Partner of Satoko Shinohara
Living Design Institute LLC (To present)
Apr. 2010:	Professor of Japan Women's University (Topresent)
Jun. 2014:	Director of Nomura Real Estate Holdings, Inc.
(To present)

Apr. 1986:	Joined Nomura Real Estate Development Co.,
Ltd.
Jun. 2005:	General Manager of Corporate Planning
Dept. of Nomura Real Estate Development
Co., Ltd.
Jun. 2005:	General Manager of Corporate Planning
Dept. of Nomura Real Estate Holdings, Inc.
Apr. 2009:	Director and Executive Officer of Nomura Real
Estate Development Co., Ltd.
Jun. 2009:	Director of Nomura Real Estate Holdings, Inc.
Apr. 2012:	Director and Managing Executive Officer of
Nomura Real Estate Development Co., Ltd. (Topresent)
May 2012:	Director and Executive Officer of Nomura Real
Estate Holdings, Inc. (To present)

Nomura Real Estate Holdings, Inc.

46 Integrated Report 2014

Property Brokerage & CRE BusinessTakashi Kaku
	
Executive Officer in charge of
Quality Management andArchitectural Design

Yasuaki Fukui	
Executive Officer in charge ofInvestment Management Business

Tadashi Nakajima	Executive Officer in charge of
Leasing Business

Shigeyuki Yamamoto
	
Executive Officer in charge ofCustomer Relations of Residential
Development

Kouzou Ise	
Executive Officer in charge of
Secretariat, Group IT Planning &Implementation Dept., Group
Corporate Administration Dept.,
Internal Audit, and ComplianceDirector (Representative Director) &Executive Vice President

Apr. 1980:	Joined Nomura Real Estate Development Co.,Ltd.
April 2001:	General Manager of Human Resource Dept. of
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 (Representative Director) of Nomura
Living Support Co., Ltd.
Apr. 2008:	President (Representative Director) and Chief
Executive Officer of Nomura Living Support
Co., Ltd.
Dec. 2010:	President (Representative Director) of Nomura
Real Estate Reform Co., Ltd.
May 2012:	Director 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 (Representative Director) and Chief
Executive Officer of Nomura Real Estate
Partners Co., Ltd. (To present)
Jun. 2014:	Director (Representative Director) and
Executive Officer of Nomura Real Estate
Holdings, Inc. (To present)

Seishi Miyajima	Executive Officer in charge of

Minoru Hatada	
Executive Officer in charge ofDevelopment Planning

Makoto Haga	
Executive Officer in charge ofCorporate Planning Dept.

Haruki Nakamura
	
Executive Officer in charge ofFinance & Accounting Dept. andGeneral Manager of Finance
Dept.

Noriyuki Jimbo	
Executive Officer and General
Manager of Group Human
Resource Dept.

Audit & Supervisory Board Members(From left to right)
5 Akira Yamate
2 Takao Orihara
1 Yoji Kurihara
3 Shigeki Fujitani
4 Satoshi Ogishi

Nomura Real Estate Holdings, Inc.

47 Integrated Report 2014

Audit & Supervisory Board Members(as of June 27, 2014)

1 Yoji Kurihara

3 Shigeki Fujitani

Full Time Audit & Supervisory Board Member

Full Time Audit & Supervisory Board Member (External)

Apr. 1976:	Joined Nomura Securities Co., Ltd.
Jun. 2000:	Director of Nomura Real Estate Development Co., Ltd.
May 2004:	Director of Nomura Real Estate Holdings, Inc.
Jun. 2004:	Managing Director of Nomura Real Estate Development Co., Ltd.
Apr. 2008:	Director and Managing Executive Officer of Nomura Real Estate Development Co., Ltd.
Apr. 2010:	Director of Nomura Real Estate Asset Management Co., Ltd.
Apr. 2010:	Director of Nomura Real Estate Investment Management Co., Ltd.
Apr. 2010:	Director of Nomura Real Estate Asset Management Co., Ltd.
Oct. 2011:	President (Representative Director) of Nomura Real Estate Asset Management Co., Ltd.
Apr. 2012:	Audit & Supervisory Board Member of Nomura Real Estate Development Co., Ltd. (To present)
Jun. 2012:	Audit & Supervisory Board Member of Nomura Real Estate Holdings, Inc. (To present)

Apr. 1981:	Joined Nomura Securities Co., Ltd.
Apr. 2008:	Executive Managing Director of Nomura Asset Management Co., Ltd.
Oct. 2008:	Executive Officer of Nomura Holdings, Inc.
Apr. 2013:	Audit & Supervisory Board Member of Nomura Real Estate Development Co., Ltd. (To present)
Jun. 2013:	Audit & Supervisory Board Member of Nomura Real Estate Holdings, Inc. (To present)

4 Satoshi Ogishi
Audit & Supervisory Board Member (External)
Dec. 1981:	Registered with Dai-ichi Tokyo Bar Association
Dec. 1981:	Joined Nishimura & Sanada (currently, Nishimura & Asahi)Jan. 1987:	Partner of Nishimura & Sanada (To present)
Apr. 2005:	Professor of Tokai University Law School
Apr. 2005:	Director of Nozomi Servicing Co., Ltd. (To present)
Aug. 2011:	External Director of Oracle Corporation Japan (To present)
Jun. 2012:	Audit & Supervisory Board Member of Nomura Real Estate Development Co., Ltd. (To present)
Jun. 2012:	Audit & Supervisory Board Member of Nomura Real Estate Holdings, Inc. (To present)

2 Takao Orihara
Full Time Audit & Supervisory Board Member
Apr. 1980:	Joined Nomura Real Estate Development Co., Ltd.
Oct. 2004:	General Manager of Corporate Planning Dept. of Nomura Real Estate Holdings, Inc.
Jun. 2005:	Director of Nomura Real Estate Holdings, Inc.
Jun. 2005:	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.
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. (To present)
Apr. 2014:	Advisor of Nomura Real Estate Holdings, Inc.
Jun. 2014:	Audit & Supervisory Board Member of Nomura Real Estate Holdings, Inc. (To present)

5 Akira Yamate
Audit & Supervisory Board Member (External)
Nov. 1977:	Joined Price Waterhouse & Co.
Jul. 1991:	Representative Partner of Aoyama Audit Corporation
Jul. 1991:	Partner of Price Waterhouse & Co.
Apr. 2000:	Representative Partner of Chuo Aoyama Audit Corporation
Apr. 2000:	Partner of PricewaterhouseCoopers
Sep. 2006:	Representative Partner of PricewaterhouseCoopers Arata
Jun. 2013:	Audit & Supervisory Board Member of Nomura Real Estate Development Co., Ltd. (To present)
Jun. 2013:	Audit & Supervisory Board Member of Nomura Real Estate Holdings, Inc. (To present)

Nomura Real Estate Holdings, Inc.

48 Integrated Report 2014

Messages from External Directors and External Members of the Audit & Supervisory Board

External Directors

Involved in the management of
the Nomura Real Estate Group, whichconstantly strives to enhance realestate value, from the perspective ofarchitects, consumers and residents

Helping develop spaces thatmeet the expectations of society
both from a consumer’s andholistic point of view
Shigeru Matsushima

Satoko Shinohara

Every day we travel between spaces for living, working and entertaining. The Nomura RealJapan’s cities feature rather unique compositions. In most European cities blocks are clearly

Estate Group is involved with the creation of all of these spaces. To make these spaces moredefined and whenever new construction takes place it does so within the confines of these

comfortable, we need to engage in our business from a consumer’s point of view.

blocks. In Tokyo, if you venture just a little ways from the downtown core you will find

The future of Japan’s society is one of globalization for two reasons. First, more andcountless voids both large and small. Each building has a major influence on the characteristics

more Japanese people will live and work overseas. Second, more and more foreign nationalsof the community depending on how it is constructed. For this reason a great deal ofwill live and work in Japan. Therefore, to forecast the future, we need to have a holistic point

responsibility goes along with each individual development plan. A single development canof view.

make the community more attractive or less attractive. If a development can make a location

Employees of the Nomura Real Estate Group are working hard to fulfill the expectationsof society both from a consumer’s and holistic point of view. As an external director, I hope tomore attractive, then the value of the buildings will undoubtedly rise over the long term.
As an external director, I hope to play a supporting role in Nomura Real Estate Group’s
projects from the perspective of architects, consumers and residents so as to enhance the value

be involved in these efforts.

of the location and the city.

ProfileProfileShigeru Matsushima is a professor with the Tokyo University of Science’s Graduate School of Innovation Studies.
As an expert in business administration, Mr. Matsushima retains a wealth of knowledge, experience andunderstanding of corporate innovation processes, industrial policy, corporate management, and organizational
theory, among other fields. He has been a member of our Audit & Supervisory Board since 2008 and a director
since 2013.

Satoko Shinohara is a professor with the Department of Housing and Architecture, Faculty of Human Sciences andDesign, Japan Women's University, and is Representative Director of Spatial Design Studio. Ms. Shinohara has
worked professionally as an architect for many years and has accumulated a wealth of knowledge, experience andunderstanding as a researcher of common spaces for collective housing. She was appointed as director in 2014.

Nomura Real Estate Holdings, Inc.

49 Integrated Report 2014

Messages from External Directors and External Members of the Audit & Supervisory Board

External Members of the Audit & Supervisory Board

Fulfilling my duties as an external
member of the Audit & Supervisory
Board to ensure the Group
continually serves an indispensablerole in society

Helping realize sound governanceusing the objective perspective of
an independent officer to secure
the trust of all stakeholders

Satoshi Ogishi

Akira Yamate

This is my third year serving as an external member of the Audit & Supervisory Board. As a

The Nomura Real Estate Group has a broad range of stakeholders while views on corporate

lawyer, I have had the opportunity to serve on the boards of many companies. Compared tovalue are also far from uniform. To accommodate the diverse needs of these stakeholders, it isthese other companies the Nomura Real Estate Group’s governance structure is functioning

no longer sufficient just to disclose conventional information about financial indicators, suchvery soundly. The Board of Directors candidly discusses the many resolutions and reports

as business plans and management results. Instead, truly comprehensive corporate

submitted for review. I have watched over these discussions with peace of mind and have also

information disclosures are necessary that also contain non-financial information, such as

at times shared my honest opinion. Scandals and improprieties cannot be completely

initiatives for human resource, the environment and energy issues. At the same time,

prevented in human society, but the Nomura Real Estate Group is steadily taking measures toestablishing and operating an in-house system for ensuring the reliability and timeliness ofimprove its structure and prevent these from ever happening.

these information disclosures has become an important management task.

I believe the Mid- to Long-term Business Plan launched in the fall of 2012 will serve as a

As an independent officer, my role is to contribute to the sound implementation ofcompass for the Group’s solid future growth. Nevertheless, occasionally companies can’t avoid

governance with an objective perspective. Leveraging my many years of professionala business environment plagued by storms and upheavals. I will fulfill my duties as an external

experience as a certified public accountant, I hope to provide an external perspective for themember of the Audit & Supervisory Board to the best of my abilities so that the Nomura Realmanagement of the Nomura Real Estate Group to take notice of important issues.

Estate Group continues to serve an important and indispensable role in society providing
sound living and working environments, regardless of business environment.

ProfileProfileSatoshi Ogishi is an attorney and partner at Nishimura & Asahi. Mr. Ogishi has developed advanced expertise anda wealth of experience in corporate law, M&A, and business restructuring as a law practitioner. He was appointed
as a member of the Audit & Supervisory Board in 2012.

Akira Yamate is a certified public accountant and former Representative Partner and Head of Operations with
PricewaterhouseCoopers Arata. Mr. Yamate has developed advanced expertise and a wealth of operational
experience in audits and advisory operations for many Japanese and foreign companies, centered on banks,
because of his many years as a certified public accountant. He was appointed as a member of the Audit &Supervisor Board in 2013.
*Comments from part-time officers only

Nomura Real Estate Holdings, Inc.

50 Integrated Report 2014

Financial Data

Consolidated Financial Highlights(Millions of yen)(Thousands of U.S. dollars)(Note 5)

2009/03

2010/03

2011/032012/032013/3

2014/03

2014/03¥  448,656¥  434,226¥  480,983¥  450,807¥  517,741¥  532,016$ 5,169,221

Gross profit

100,764

105,576

107,222

114,910

134,571

159,336

1,548,151

Operating income

34,01339,27542,08349,93958,30874,308

721,997

Ordinary income

23,702

23,967

26,14934,17445,80764,058622,410Net income

13,770

4,660

5,472

17,591

19,357

26,844$   260,825

For the Year:
Operating revenue

Cash flows from operating activities(108,031)

19,26633,94843,87789,29583,535

811,651

Cash flows from investing activities(141,789)(24,571)(33,731)7,809(2,588)(20,192)(196,187)

Cash flows from financing activities

295,508

13,098(7,486)(63,296)(94,666)(57,858)(562,165)

Capital investment*1

56,663

26,79637,571

14,09818,963

21,939213,165

Depreciation*2

7,149

10,758

12,836

13,535

13,514

14,333

139,266¥    92.21¥    25.69¥    28.74¥    92.38¥   101.61¥   140.70$      1.37

40.00

25.00

25.00

25.00

30.00

35.00

0.34

Per Share Data:
Net income (yen)Cash dividends (yen)Balance Sheet Data (as of March 31):
¥1,385,532¥1,405,424¥1,474,331¥1,402,624¥1,369,949¥1,313,888$12,766,106

Total net assets

281,376

349,437

357,366

376,486

398,276

418,697

4,068,180

Interest-bearing debt

778,074

759,637

816,910758,562

669,269

617,584

6,000,618

ROA*3 (%)

2.5

2.8

2.9

3.7

4.6

5.8

ROE*4 (%)

5.9

1.7

1.8

5.7

5.9

7.8

Operating margin (%)

7.6

9.0

8.7

11.1

11.3

14.0

Dividend payout ratio (%)

43.4

97.3

87.0

27.1

29.5

24.9

Shareholders’ equity ratio (%)

17.0

21.4

20.7

22.6

24.5

27.1

D/E ratio (times)

3.3

2.5

2.7

2.4

2.0

1.7

4,998

5,195

5,300

5,399

5,581

5,747

Total assets

Ratios:Number of employees (people)

Notes: 1. Capital investment represents the amount shown for “Purchase of property, plant and equipment and intangible assets” on the consolidated statements of cash flows. 2. Depreciation and amortization represents the amount shown for “Depreciation
and amortization” on the consolidated statements of cash flows. 3. ROA = (Operating income + Non-operating income) / Total assets at end of fiscal year 4. ROE = Net income / Equity (as average over the fiscal year)
5. The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of the reader, using the rate of exchange prevailing on the Tokyo Foreign Exchange Market on March 31, 2014, which was ¥102.92 = U.S.$1.

Key Points ofOperating Results

Overview: During the year ended March 31, 2014, we achieved higher earnings on higher
revenue thanks to an increase in the number of units sold in the housing sales business andbecause of a loss on valuation of equity investments in the previous year. Furthermore, figures
for operating revenue, operating income and ordinary income were each the highest on record.

Nomura Real Estate Holdings, Inc.

Dividends: The year-end dividend per share for the year ended March 31, 2014 was ¥35,
which was ¥5 higher than the initial forecast, given the positive future outlook regarding themanagement environment and performance. We plan to increase the year-end dividend afurther ¥5 in the year ending March 31, 2015 to ¥40 per share.

51 Integrated Report 2014

Financial Data

Main Financial Indicators

Non-Financial Data

Operating Revenue and Operating Margin(Millions of yen)

Operating revenue

16

600,000
450,000

434,226

480,983

517,741
450,807532,01614.0

80’11/0380,00074,30860,00042,08339,2758(kl)

Energy usage’12/03’13/0320,0000

0’14/03

Net income

ROE (%)

8

40,0005.7
17,591

10,00030,000’10/03’11/03

69.2

4.6

4

20,000

2.8

2.9

2

10,0000

031,09367.2

57.7’10/03’11/03’12/03’13/03’14/03’12/03’13/03

6’11/03’12/03

Total Assets, Net Assets and Shareholders’ Equity Ratio

CO2 Emissions and Intensity*(Millions of yen)

Shareholders’ equity ratio (%)(t-CO2)40

60,000Total assets

Net assets

2,000,000

CO2 emissions

1,500,000

1,405,424

1,474,331

1,402,624

1,000,000

2500,00000’14/03

21.4

20.7

349,437

357,366’10/03’11/03

1,369,949

22.6
376,486’12/03

1,313,888

24.5

398,276’13/0327.1

418,69730

107.0

45,00047,303

101.5

669,26900

0’10/03

617,584

Consolidated dividend payout ratio (%)

80
35.00

30

500,000’11/03’12/03

25.00

10

0

29.5
24.9

’13/03’14/0320
0

0’12/03’10/03’11/03’12/03

99

90
72

40
27.1

’14/03

83

60

25.00

20
250,000’13/03

120

60

30.00
25.00

90

30

’14/0387.0

43,87581.4

15,000

100
97.3

86.4

10

50
40

46,59260

1,000,000
758,562’14/0330,000No. of Childcare Leave Takers’11/0340

20(Number of people)

Cash dividends per share’13/03

87.7

Consolidated Cash Dividends and Dividend Payout Ratio’10/0360

120
52,387(Yen)

816,910

28,777
53.4

Emissions intensity (kg-CO2/m2)

Interest-Bearing Debt

759,63756.8

0’10/03(Millions of yen)

750,000

30,61620

52,7384

19,357

5,472

4,660

0

5.9

26,844

1.8

1.7

80
34,6715.8

7.8
30,00020,000

Energy use intensity (l/m2)

40,00034,1096

58,30840,0004

Net Income and ROE(Millions of yen)

ROA (%)

3.7

150,000’10/03Operating income

49,939

8.7

9.0

12

(Millions of yen)

11.3

11.1

300,000

Oil Converted Energy Usage and Intensity*

Operating Income and ROA
Operating margin (%)’13/03’14/03

41

47

30
0

’10/03’11/03’12/03’13/03’14/03*	Applicable buildings: Of those buildings in the Nomura Real Estate Group’s portfolio, those buildings applicable to the Tokyo Metropolitan Ordinance on Environmental Preservation and buildings in which the Nomura Real Estate Group retains an interest of morethan 50,000 m2 (mainly office buildings): Shinjuku Nomura Building, Toshiba Hamamatsucho Building, Hamamatsucho Building (Toshiba Building), Nihonbashi Muromachi Nomura Building, Fukagawa Gatharia Tower N, Fuchu Toshiba Building, and Yokohama
Business Park. However, the Nihonbashi Muromachi Nomura Building has been included in the calculation from October 1, 2010, since it was completed at the end of September 2010.
Nomura Real Estate Holdings, Inc.

52 Integrated Report 2014

Group Company Profile

Nomura Real Estate Development Co., Ltd.

Nomura Real Estate Asset Management Co., Ltd.

Nomura Real Estate Urban Net Co., Ltd.

http://www.nomura-re.co.jp/english/

http://www.nre-am.co.jp/english/

http://www.nomura-un.co.jp/ (Japanese only)

Nomura Real Estate Development
conducts a range of businesses. The
residential development business provides quality residential accommodation under the PROUD and OHANA
brands. Meanwhile, the building business, the commercial facility business,and the logistics facility business plan,develop and manage commercial, logistics and other facilities, including
office buildings such as PMO, andGEMS urban-type commercial facilities.
In addition, the corporate real estate(CRE) strategic support and corporate
brokerage business helps maximize
the value of real estate.

In October 2011, three investment
management companies in the Nomura
Real Estate Group merged and became
one of the largest real estate investment
management companies in Japan withmore than ¥1 trillion in assets undermanagement. Nomura Real Estate AssetManagement provides one-stop shopping for a broad variety of financial
products and investment management
services that meet a wide range ofreal estate investment needs, including
privately placed real estate funds, to listed
real estate investment trusts (REIT),
debt investment in domestic real estate,overseas real estate fund of funds, anddiscretionary investment management
contracts with institutional investors.

This company provides solutions forsatisfying customers in the real estateservices and consulting fields. These
include residential real estate brokeragefor helping customers in changing
their place of residence, and commercial
real estate brokerage, which addresses
the real estate needs of companies
and investors. The company also operates a consignment sales businesswhere it sells condominium units anddetached housing as a sales agent.

Nomura Real Estate Partners Co., Ltd.

NREG TOSHIBA BUILDING Co., Ltd.

http://www.nomura-pt.co.jp/ (Japanese only)

http://www.toshiba-building.co.jp/ (Japanese only)

Yokohama Business Park Heating andCooling Supply Co., Ltd.

The Nomura Real Estate Grouplaunched Nomura Real Estate Partners
Co., Ltd. in April 2014. This new realestate management company represents the merger of building andcondominium management operations
with the capability to perform overallmanagement of various building
types. Nomura Real Estate Partners
combines expertise in building andcondominium management with property management to realize effective
real estate management and construction aimed at handling large-scale
repair, remodeling, and interior work.

NREG TOSHIBA BUILDING offers service
spanning the development, leasing
and management of office buildings,
commercial facilities, warehouses,
condominiums and other properties,
as well as property brokerage andconsulting on corporate real estate(CRE) utilization.

Nomura Real Estate Holdings, Inc.

53 Integrated Report 2014

This company is responsible for the
supply of heating and cooling services
to Yokohama Business Park, a largescale business facility, through its
district heating and cooling system.
Using a “best-mix” system that combines gas and electricity, the company
uses energy efficiently to curtail costs
and minimize environmental impact.

Group Company Profile

Geo-Akamatsu Co., Ltd.

Nomura Real Estate Reform Co., Ltd.

http://www.geo-akamatsu.co.jp/ (Japanese only)

http://www.nomura-rf.co.jp/ (Japanese only)

Geo-Akamatsu provides a full rangeof property consulting and other services that maximize its 40 years ofaccumulated expertise. These services
include surveys of commercial facilities, project planning, leasing, commercial space design and property
management.

Nomura Real Estate Reform offers
assistance in remodeling and repairing
residential accommodation to provide
people with comfortable places to live.
This includes reform plans that match
family growth and lifestyle changes.

Nomura Amenity Service provides
cleaning services of office buildings,
schools, and condominiums to maintainscenic beauty of properties as a cleaning company of the property and facility
management business of the Nomura
Real Estate Group.

NREG TOSHIBA BUILDING FACILITIES Co., Ltd.

PRIME X. Co., Ltd.

MEGALOS Co., Ltd.

http://www.toshiba.co.jp/tfs/ (Japanese only)

http://www.prime-x.co.jp/ (Japanese only)

http://www.megalos.co.jp/ (Japanese only)

NREG TOSHIBA BUILDING FACILITIES
offers services to maintain or improve
the property value through facility
management, inspection, cleaning,
security and construction, while provides
safe and comfortable environment toall customers.

Based on the accumulated real estateexpertise of the Nomura Real EstateGroup, Prime X develops Internet
advertising businesses that specialize
in business in the real estate andhousing industries. Prime X delivers
proposals that maximize customer
benefits, ranging from the creation of
corporate websites and project homepages to creating and managing
membership organizations, and handling project sales promotions.

Under the philosophy of “transforming
customer satisfaction into happiness,”
MEGALOS plans, develops and manages fitness facilities offering top-ofthe-line service and equipment thatare housed in the best facilities ineach area.

Nomura Real Estate Holdings, Inc.

54 Integrated Report 2014

Nomura Amenity Service Co., Ltd.

Investor Information(as of March 31, 2014)

Corporate Data

Stock Information

Corporate Name: Nomura Real Estate Holdings, Inc.

Common Stock

Representative: Kamezo Nakai, President

Number of Authorized Shares 450,000,000

Head Office:	Shinjuku Nomura Building,
1-26-2 Nishi-Shinjuku, Shinjuku-ku,
Tokyo 163-0566, Japan

Number of Shares Issued

190,906,800

Market ListingFirst Section of Tokyo
Stock Exchange

Minimum Trading Unit

100 shares

Number of Shareholders

48,613

Date of Establishment: June 1, 2004

Ten Largest Shareholders¥116,024,154,350

Number of Employees: 5,747 (on a consolidated basis)
Fiscal Year: From April 1 to March 31
General Meeting of Shareholders: June

13.46

30.72

19.80

Composition by
Number of
Shareholdings(%)

Name of Shareholder

No. of Shares

Nomura Land and Building Co., Ltd.
Master Trust Bank of Japan (Trust account)
Japan Trustee Services Bank, Ltd. (Trust account)
Japan Trustee Services Bank, Ltd. (Trust account 9)
Employees’ Stockholding
THE BANK OF NEW YORK, NON-TREATY JASDEC ACCOUNTState Street Bank-West Pension Fund Clients - ExemptJAPAN RE FIDELITY
Japan Trustee Services Bank, Ltd. (Trust account 1)
Japan Trustee Services Bank, Ltd. (Trust account 6)

64,777,500
11,743,500
5,979,200
3,274,000
2,882,482
2,477,329
2,392,333
2,239,100
2,092,600
1,948,900

Shareholding
(%)
33.93
6.15
3.13
1.71
1.50
1.29
1.25
1.17
1.09
1.02

Stock Price and Trading Volume on the Tokyo Stock Exchange

Stock Price
(Yen)

2,500
2,000

1.45

1,500
1,000

34.57
Composition by Number of Shareholdings (%)
Financial Institutions

500
Trading Volume(Thousands ofShares)080,00019.80

Financial Instruments Firms

1.45

Other Japanese Firms

34.57

Other Foreign Investors

30.72

Individuals and Others

13.46

60,00040,00020,000

0

4 5
2011

6

7

8

9 10 11 12 1 2
2012

Nomura Real Estate Holdings, Inc.

3

4

5

6

55 Integrated Report 20147

8

9 10 11 12 1 2
2013

3

4

5

6

7

8

9 10 11 12 1 2
2014

3

4

Website• Investor Relations
http://www.nomura-re-hd.co.jp/english/ir/
Find the latest financial results, reports, shareholder
information and future IR schedule for the Nomura
Real Estate Group.

• CSR
http://www.nomura-re-hd.co.jp/english/csr/
Learn more about the Nomura Real Estate Group’s
four key CSR themes, social contribution activities,
and CSR implementation base.

Nomura Real Estate Holdings Website
http://www.nomura-re-hd.co.jp/english/

Nomura Real Estate Holdings, Inc.

56 Integrated Report 2014

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